From Resource Works

“Canada is the largest G7 country in terms of landmass, and the smallest in terms of population. We are the only developed country our size physically and economically without a transportation strategy in place”

The concept of national energy corridors does seem straightforward enough, at first glance. It calls to mind a simple right-of-way that slices across Canada, the world’s second-largest landmass, containing pipelines, railways, telecommunications networks, and electricity grids.

Canadians have seen these sorts of physical infrastructure built before, such as the Canadian Pacific Railway during the Confederation era or the more modern Trans-Canada Highway. However, Garrett Kent Fellows will tell you that the true challenge of a national energy corridor is less about the laying of new steel, and more about the careful weaving of institutions to bind the country together.

An Assistant Professor of Economics at the University of Calgary, Fellows is also the Director of Graduate Programs at the School of Public Policy. He is also a Fellow-in-Residence at the prestigious C.D. Howe Institute, where he specializes in competition policy, energy, and infrastructure economics.

Fellows’ curriculum vitae speaks of a scholar whose expertise is routinely sought by politicians, the business community, and thought leaders both in Canada and internationally. He formerly served on Alberta’s Energy Diversification Advisory Committee in 2017, as well as the Economic Corridors Task Force in 2021, and has provided advice to officials from the European Union and the Canadian Senate on economic trade corridors.

At any rate, whenever Fellows has something to say about corridors, people with power and influence listen.

There is a great misunderstanding related to the idea of corridors, which results in an idealized, simplified vision that politicians tend to champion.

“We have a tendency to think about corridors first and foremost as a physical footprint. A right-of-way or area of the country where we are going to put linear infrastructure. That’s not wrong; corridors are that, but they are also an institution,” says Fellows. To him, a national corridor must involve more than simple geography.

A corridor’s success depends upon deep institutional cooperation between all levels of government, First Nations authorities, and the private sector. This is a reality that comes with more challenges than leaders in Ottawa or provincial capitals will care to admit.

Nonetheless, the need for corridors has taken on much greater urgency. The world economy is uncertain, and the threat of trade wars instigated by Donald Trump’s return to the White House has only exacerbated this. Trump’s aggressive tariff policy has revealed the shocking vulnerability of the Canadian economy, which depends on exports.

Fellows is quick to point out that Canada, being massive but sparsely populated, is uniquely exposed as the largest G7 country while having the smallest population and lacking adequate transportation strategies.

“Canada is the largest G7 country in terms of landmass, and the smallest in terms of population. We are the only developed country our size physically and economically without a transportation strategy in place,” Fellows says. This weakness has only strengthened the need for a better-coordinated infrastructure plan that goes beyond simply easing exports, but also increasing Canada’s national economic resilience.

Canada’s history has been marked by impressive infrastructure projects built during periods of hardship, often utilized to boost employment and add to the economic recovery effort. Fellows can see some parallels between the climate of 2025 and the boom in infrastructure construction during the Great Depression.

In the 1930s, projects like the Trans-Canada Highway were developed as part of the federal government’s policy of fiscal stimulus. However, Fellows cautions against simply moving forward with corridor projects as a means of boosting economic security and employment, and says that they are not quick-fix solutions.

“Properly implementing a corridor approach shouldn’t be seen as a shortcut. So it may not be productive to think about this project as shovel-ready.”

Fellows’ concerns are rooted in history, as regulatory uncertainty and rushed processes have contributed to setbacks in the energy sector, such as the cancellation of the Northern Gateway pipeline, the tortured delays on the expansion of the Trans Mountain pipeline, and the death of the Energy East project.

Despite this, the potential of energy corridors remains a compelling and intriguing possibility. Fellows points out that investing in new infrastructure can provide an effective stimulus that remedies stagflationary pressures caused by world trade disputes. “Fiscal stimulus is a natural reaction to stagflation, and a logical one. But we should be thinking about a stimulus that will generate long-term benefits for the country.”

With this approach, stimulus borne of corridors is not just about economic recovery, but also ensuring that it leaves a permanent productive legacy for Canada that helps to secure long-term prosperity instead of temporary relief.

The promise of the corridor also includes the potential of untangling the web of regulations and other complexities that dog new projects. This can be accomplished by improving pre-planning and the environmental assessment process, which can prevent cold feet from investors. Fellows emphasizes that building a better regulatory environment requires cooperation between multiple stakeholders and due diligence.

Fellows is frank about the risk involved, such as stranded capital and white elephants left to rust when market conditions or political priorities change. “As with any infrastructure-based program, there is a risk of stranded capital. We can’t simply take the view that ‘if we build it, they will come.’”

However, he remains firm in his belief that the benefits justify the careful, purposeful efforts required. One of his most interesting insights is that the corridors themselves should not be solely defined as “energy corridors.” Rather, Fellows argues that the model has to bring together diverse infrastructure, telecommunications, transportation, renewable energy transmission, and critical mineral supply chains.

“To maximize the benefits of the corridor approach, we need to be thinking beyond just ‘energy corridors’ and think more broadly about economic corridors.” The rewards of this more holistic vision would lift domestic and international trade and create a foundation for Canada to build a more diversified and resilient economy.

Fellows also hammers home that the idea of corridors lends itself to idealism, but they still demand that people think realistically and be prepared for hard-headed analysis. Corridors are challenging, full of details, bureaucratic, institutional, and diplomatic—hardly an easy task. “Shortcuts make for long delays.”

Being aware of past failures in this regard is important, but Fellows says this makes the difference between accomplishing goals and spouting political rhetoric.

“Realization of any corridor is going to be hard work, but it will be worth it.”

From the Fraser Institute

By Joseph Fournier

While Trump’s trade war continues to grab all the headlines, Canada’s electric vehicle (EV) industry may be steaming toward an iceberg, due mainly to shifts in policy south of the border.

Specifically, the Trump administration has withdrew from the Paris Agreement (and its net-zero 2050 framework) and eliminated the U.S. EV mandate, which required upwards of 56 per cent of new vehicles sold in the United States. to be EV and 13 per cent be plug-in hybrids by 2032. These moves represent an existential threat to Canada’s EV investments and the viability of the large EV battery plants under various stages of planning and construction in Ontario and Quebec.

Indeed, the Trudeau government, along with the Ontario and Quebec governments, negotiated several significant battery manufacturing deals, which included subsidies and construction funding totalling $4.6 billion for the Northvolt AB plant near Montreal, $13.2 billion for the Volkswagen plant in Saint Thomas, Ontario, $15 billion for the Stellantis plant in Windsor, Ontario and $1.6 billion for the Japanese battery company Asahi Kasei plant in Port Colborne, Ontario. (Although both Northvolt AB and Stellantis are reconsidering their EV battery investments in Canada—Northvolt AB is approaching bankruptcy and Stellantis thinks that current federal subsidies are insufficient to justify its investment.)

According to the Parliamentary Budget Officer, taxpayer subsidies (a.k.a. corporate welfare) for these deals will cost Canadians up to $44 billion between 2022/23 and 2032/33. In the U.S., EV sales in 2024 were 1.2 million (7 per cent of auto total sales) buoyed by an EV tax credit of US$7,500 per new vehicle, which translates into US$9 billion in EV consumer subsidies that year alone.

All of this raises the question: can the EV industry stand on its own without massive subsidies from taxpayers?

In 2023, of the two largest EV producers (Tesla and Ford), only Tesla would break even without the EV tax credit subsidies. According to Reuters, Tesla earned approximately US$8,300 in profit per EV in 2023, and of the 1.8 million Tesla vehicles produced globally, only 400,000 were produced in the U.S. Meanwhile, even after the subsidies, Ford lost US$64,700 per EV in 2023 and US$32,700 in 2024. (It’s also worth noting that Ford, with the second-highest EV production in the U.S., produced a mere 72,000 vehicles in 2023.)

While Ford still plans to make EVs, it recently announced plans to shift production at its Oakville, Ontario factory from electric sports vehicles to gas-powered pickup trucks. The news came shortly after General Motors announced it would trim its forecast of EVs produced in 2024 by 50,000.

Clearly, U.S. legacy automakers are worried about overproducing against sluggish consumer demand, knowing that their profitability and fiscal viability resides in their internal combustion engine vehicle production lines. Numerous large European automotive manufacturers also saw a decline in EV sales in 2024 and are re-investing in their combustion engine production lines to protect profits.

Finally, beyond only EVs, Canada’s automotive manufacturing sector is in decline. Between 2014 and 2023, automotive production fell from 2.4 million to 1.5 million vehicles while automobile imports increased from $57 billion to $82 billion. Of the 1.5 million vehicles produced in Canada in 2023, 88 per cent were exported to the U.S., leaving the industry highly vulnerable to shifts in American policy (which currently include President Trump’s threat of a 100 per cent tariff on automobile exports).

The iceberg is in view. The new Carney government and our provincial governments must take stock of the decline in the automotive manufacturing sector, its near total dependence on U.S. exports, and uncertain government-driven EV investments. And they should ask if the push to electrify the automotive manufacturing base is in the long-term best interests of Canadians.