Welcome to Economic Insights, your twice-weekly deep dive into major projects and policy shifts shaping the Canadian economy.

Stories we are following:

• On Friday, Ottawa released a discussion paper laying out a new, aggressive framework for major project approvals, headlined by a promise of a one-year timeline for federal reviews.
• Telecommunications giant TELUS is moving forward on plans to grow its AI data centre footprint in B.C. The company’s AI cluster pitch is the first to be supported by the federal government as part of its calls for large-scale AI centre proposals.

Regulatory reforms (released late on a Friday afternoon)

A one year limit, a new consultation hub for Indigenous groups, and pipelines no longer requiring an Impact Assessment Agency review – these are some of the main changes the Carney government is proposing to speed up major projects. 

• • 12-month sprint: The government intends to enshrine the one-year goal into law. It describes an intention to do assessment and permitting at the same time. 
  • Sector shifts: In a move the oil and gas sector has long demanded, the Canada Energy Regulator (CER) will take back full authority for pipelines, transmission lines, and offshore renewable energy. These projects will no longer face a separate assessment under the Impact Assessment Act
  • Consultation hub: A new centralized hub within the Impact Assessment Agency will coordinate all Crown engagements. The goal is to reduce consultation fatigue. In practice, it would facilitate some of the work that has, until now, partly rested with proponents.

• Special economic zones: The proposal did not go into much detail, but the government would have the power to ‘pre-approve’ certain developments within the zone. 

• 30-day consult: Indigenous groups and industry are invited to submit their comments online. The government also says it intends to hold meetings.

Sovereign AI push 

While the regulatory reforms focus on the physical economy, Ottawa is also moving fast on the digital front. On Monday, Minister of Artificial Intelligence EVAN SOLOMON announced that TELUS projects made the first pick as part of the government’s call for large AI data centre proposals. 

• No money yet: There are no federal dollars involved at this stage, and the government is still “actively considering” some of the other 160 proposals it received as part of the program. 
• Another MOU: Being picked by Ottawa means entering into a non-binding “memorandum of understanding” to explore mechanisms of support. That could mean off-take agreements or contractual arrangements. 
• Sovereign first: The government wants Canadian data and intellectual property to stay on Canadian soil. However, critics like Jim Balsillie are already sounding the alarm, noting that while the hardware might be in BC, Canada still lacks a robust strategy to protect the underlying AI intellectual property from foreign tech giants.
• Powering the future: These facilities are expected to require 150 megawatts of electricity by 2032—underlining why the regulatory reforms mentioned above (which include power transmission) are such a focus of the current government.

By the numbers:

$890 Million: The total federal funding allocated to the new AI Sovereign Compute Infrastructure Program over the next seven years.  

150 MW: The projected power demand for the new TELUS AI data centres in B.C.  

30 days: The length of the public consultation period for the new regulatory reforms.

Major projects watch:

– China and the European Union have joined forces in a bid to create a global alliance on carbon pricing, putting them at odds with the Trump administration’s push to invest more in fossil fuels.

– The Impact Assessment Agency of Canada has opened up a public engagement period for the proposed Crawford Nickel Project, an open-pit nickel-cobalt mine and on-site metal mill near Timmins. It wraps up June 10 and includes the potential conditions for project approval.

– A source of CHRIS VARCOE at the Calgary Herald says Ottawa and Alberta have agreed the price of carbon needs to reach $130 per tonne by 2040. Premier DANIELLE SMITH did not want to comment on that timeline. The Prime Minister’s Office also declined to comment to iPolitics, except to say that the 2035 timeline suggested by another source is incorrect.

– Hydro-Québec is launching a request for proposals to secure the procurement of the wind turbines required to develop its major wind power projects. The process is limited to manufacturers in Europe and North America, with the goal of broadening the participation of Québec companies in the global supply chain of wind turbine manufacturers.

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