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Welcome to Economic Insights, a twice-weekly newsletter focusing on major projects and the Canadian economy at large.
Stories we are following:
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The CARNEY government’s flagship economic tool, the Building Canada Act, is moving into a new phase with the first meeting of the committee tasked with overseeing “national interest” regulatory exemptions.
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An LNG tanker from AUSTRALIA arrived in eastern CANADA Thursday for the first time, after a month of travel over some 25,000 kilometers. The news garnered reactions from Industry and Conservatives: “What the f–k?” says Canadian investor W. Brett Wilson. “If only there was a faster way to get Canadian LNG to Eastern Canada…” mused CPC leader Pierre Poilievre. But the shipment reflects global economics, and is set to fuel the northeastern U.S. market as well.
A committee for the ‘National Interest’ The parliamentary committee that serves as the watchdog for Bill C-5, the Building Canada Act, is set to convene for the first time on March 10. This is the body that will oversee the most controversial power in the government’s arsenal: the ability to bypass federal regulations for projects with a national interest designation. The power: Intergovernmental Affairs Minister DOMINIC LEBLANC can grant “national interest” status to a projects by issuing a single conditions document that replaces a a wide range of permits, including those under the Fisheries Act, Species at Risk Act, and Impact Assessment Act. The guardrails: If 10 or more MPs object to a designation, LEBLANC must appear before this joint committee to defend the carve-out. The pipeline factor: While the MAJOR PROJECTS OFFICE expects only “one or two” such designations, the ALBERTA-OTTAWA energy deal positions the proposed northwest bitumen pipeline as a strong candidate. ALBERTA is seeking “national interest” status by July 2026, which would enable an “adjustment” to the oil tanker ban in B.C., “if necessary.” Who’s at the table? The committee includes Conservatives SHANNON STUBBS and AARON GUNN, alongside Liberal MPs like RACHEL BENDAYAN and SUKH DHALIWAL. Environment critic and Bloc Québécois’ PATRICK BONIN also sits on it. Notably, the House chair must be an opposition member.
25,000 kilometers to fill the tank
As Prime Minister MARK CARNEY embarks on an overseas trip that includes a stop in AUSTRALIA, a cargo of LNG from that country is set to arrive on the east coast today after more than a month of travel.
- Market irony: Eastern CANADA is buying the super-chilled gas from the other side of the planet, just as Western CANADA sees record-breaking levels of natural gas production.
- Global slump: After an 11 per cent drop in LNG imports in CHINA last year, AUSTRALIA exporters are working to find new clients in CHILE, TURKEY, and now, CANADA.
- Napkin math: Calgary Liberal MP COREY HOGAN argues shipping LNG from AUSTRALIA costs about the same as shipping on the existing TC ENERGY Mainline from western to eastern CANADA.
“The market is sophisticated, and while I am completely in favour of Canadian self-reliance and making sure we can fuel ourselves, there will always be imports, exports, swaps – and in a free market, that’s a good thing,” he writes.
- Uncertainty: INVESTORS FOR PARIS COMPLIANCE warn the LNG sector is “more like a casino than a pillar of economic security” because of a looming supply glut and uncertain future demand forecasts. But Natural Resources Minister TIM HODGSON says he’ll believe conversations with potential clients over “pundit commentary.”
By the numbers
15x: The amount of gas LNG CANADA has been flaring above what its permits allow due to a flare tip “integrity issue.”
1 million BOE/d: The production milestone CENOVUS ENERGY is nearing as it signals massive confidence in its pipeline egress following the Trans Mountain expansion.
$750,000: The investment BIIGTIGONG NISHNAABEG First Nation made into GENERATION MINING‘s Marathon copper-palladium project.
Major projects watch
— Step forward: NOVA SCOTIA has tabled legislation providing a revenue framework for offshore wind power. This will help proponents fill out their sheets as they consider whether or not to put in bids for licences. Quick numbers: successful bidders will pay $750k for their licence, and an annual levy of $7k per megawatt for the first 10 years of operation.
— Flaring frustrations: The Narwhal reports that LNG CANADA may take up to three years to fix a faulty flare tip at its Kitimat facility. Experts suggest the delay is financial; shutting down to fix the tip is more expensive than paying the penalties for excess burning.
— Management shakeup: GENERATION MINING is beefing up its leadership team as it moves toward construction at its Marathon Project in Ontario.
— Focus on exploration: Ontario Energy Minister STEPHEN LECCE says he held a “productive meeting” with Ontario Prospectors Association CEO STEVE VIRTUE. On the agenda: a new vision for exploration in Ontario underpinned by permit reductions and OJEP expansion.
— Port ambitions: The head of the Vancouver Port Authority, PETER XOTTA, tells Parliament doubling exports is “totally within reach, it’s about us getting busy and making it more streamlined in terms of execution.” He adds he’s looking forward to working with the MAJOR PROJECTS OFFICE on the Roberts Bank Terminal 2 project.
Headlines
The kicker
iPolitics will be at the Prospectors and Developers Association of Canada (PDAC) convention on March 2nd and 3rd.
Book a chat with reporter Aya Dufour.
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