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

Stories we are following:

• Ottawa has committed to designating Alberta’s proposed bitumen pipeline a project of national interest by Oct. 1, despite the fact that, more than six months after the original deal was signed, the project still has no confirmed route and no private-sector proponent willing to build or finance it. Legal experts say the Building Canada Act gives cabinet wide discretion to make the call anyway, but warn that discretion is not the same thing as legal certainty.
  
• Speaking of major projects laws built for speed running into trouble: Quebec’s own answer to Bill C-5 died on the order paper this week, buried under opposition obstruction and a parliamentary calendar that ran out before the government could get it across the finish line. Finance Minister Eric Girard isn’t happy about it, but he’s already promising a sequel. Premier Christine Fréchette is striking a nuanced tone on whether the controversial bill will resurface before the fall election.

Can Ottawa grant national interest status to a pipeline with no route or private proponent? (iPolitics)

As Conservatives are fond of pointing out, nearly a year into the Building Canada Act, not a single project has received a national interest designation and its accompanying fast-tracked regulatory powers. Intergovernmental Affairs Minister Dominic LeBlanc has framed this as a success, suggesting the government simply hasn’t needed to pull that legal lever yet. But that’s about to be put to the test.

• Deadlines: Under the current Alberta-Ottawa agreement, Alberta is on track to submit its new bitumen pipeline proposal to the Major Projects Office by July 1, with Ottawa promising to pursue a formal “national interest” designation by October 1.
• Not very specific: Alberta Indigenous Relations Minister Rajan Sawhney confirmed the pitch will only include a general corridor, leaving details to be hashed out later with Indigenous communities. And while Alberta insists it is talking to interested Fortune 500 players, no private proponent has stepped forward.
• Is it legal? Legal experts say the lack of a private company isn’t technically a dealbreaker—pointing to the federally owned Trans Mountain pipeline as precedent. However, holding regulatory hearings for a project without a defined route would be highly unusual.
• The mechanism: Under the Act, Cabinet decides what qualifies as a national interest project based on five non-binding factors, including economic benefits, Indigenous interests, and clean growth. Once designated, a project enters an expedited 18-month review overseen by Major Projects Office head Dawn Farrell, bypassing standard permits.
• The skepticism: Former Canada Energy Regulator chair George Vegh is skeptical that this setup will actually streamline things, noting that if major safety or consultation concerns emerge during the hearings after Cabinet has already given its blessing, it’s unclear how the government handles the fallout.

Québec major project law buried by end-of-session filibuster (iPolitics)

Quebec Premier Christine Fréchette declared her first legislative session as leader of the Coalition Avenir Québec (CAQ) a success after passing 11 laws in a final sprint. But a cornerstone of the province’s economic agenda didn’t make the cut. 

• Mirroring federal laws: Bill Q-5 was pitched as a way to accelerate reviews of major projects, and was officially shelved after a grinding opposition filibuster.
• The derailment: The bill met its end after a wave of amendments pushed by Québec Solidaire MNA Étienne Grandmont ran out the clock. Girard blasted the opposition talks as a “total waste of time” and vowed to take the spirit of the bill directly to voters in the upcoming fall election.
• The pushback: Environmental groups are celebrating the bill’s demise. The Centre québécois du droit de l’environnement, which lobbied fiercely against Q-5, warned that the law would have handed massive discretionary powers to Cabinet, watering down vital public consultations and bypassing crucial eco-protections.
• What’s next: While Girard wants to use the issue as a campaign wedge, Premier Fréchette is keeping her options open. “I have not made up my mind on Q-5 yet,” she told reporters, though she noted there are still “good chances” it could be reintroduced when the National Assembly reconvenes.

By the numbers:

Oct. 1: The date by which Ottawa has committed to designating Alberta’s pipeline a project of national interest.

Oct. 19: The date of Alberta’s referendum, which could include a question on separation, just weeks after Ottawa’s targeted pipeline designation.

77 per cent: How much the Oil Sands Alliance (formerly Pathways) has cut its annual carbon capture target since the pipeline deal was first struck, from 68 megatonnes down to 16.

Major projects watch:

– The Parti Québécois is now facing united criticism from the CAQ, the Bloc Québécois and Montreal-area mayors after leader Paul St-Pierre Plamondon said he’d pull Quebec out of the federal Alto high-speed rail project if elected. 

– Ontario says it has secured the lowest-cost electricity capacity procurement in its history, awarding 20-year contracts to three new battery storage projects through the IESO’s second Long-Term RFP (LT2) process. The 640 MW of new capacity, enough to cover roughly 640,000 homes during peak demand, came in 36 per cent cheaper than the government’s earlier E-LT1 storage round and 16 per cent cheaper than its first LT2 round, Energy Minister Stephen Lecce said. Environmentalists are celebrating this as a sign natural gas is no longer competitive compared to renewables.

– JPMorgan Chase & Co. is expanding its US$1.5-trillion economic security and resilience initiative to Canada, aiming to boost key sectors such as energy, defence and critical

minerals with billions of dollars in new financing and support. The world’s largest bank announced its Security and Resiliency Initiative (SRI) in October last year. 

– The Canada–Newfoundland and Labrador Offshore Energy Regulator has issued two new calls for bids on Atlantic offshore oil and gas exploration, covering 13 parcels off Eastern Newfoundland and three more off the southeast coast. Notably, this is the first round requiring bidders to show written proof they’ve engaged with the provincial government on the Offshore Exploration Fund before submitting.

— Federal lobbying records show Western LNG has logged multiple recent communications with Major Projects Office CEO Dawn Farrell and chief investment officer Kelsen Vallée, with Ksi Lisims LNG and the Prince Rupert Gas Transmission pipeline both on the agenda.

– Denison Mines has marked the start of site preparation and early works construction at the Phoenix In-Situ Recovery uranium mine in Saskatchewan with a ceremonial groundbreaking ceremony.

Headlines: