00:02:32.940But does that look like the election promise, we will be building at speeds not seen in generations?
00:02:40.280Yeah, this is not at the sort of speed that we were led to believe.
00:02:45.880And you'll remember, Jamie, we had Bill C-5.
00:02:50.180That was one of the government's first bills.
00:02:52.120It granted their ministers extraordinary power to set aside their own laws that they passed that prevent pipelines and other major projects from being built.
00:03:07.160It's not the approach we would have taken, but we thought, look, we do have to do something to get pipelines built.
00:03:12.540So the expectation was with C5 that they would actually move at unexpected speeds, not wait a year and a half to simply put, to name a project and put it on the list without any other real tangible signs of actual approval.
00:03:31.600So we had C5 to hopefully get things sped up. It didn't really work all that well because they really haven't approved anything new. Some existing projects that already had shovels in the ground, like in my backyard, the Darlington nuclear plant, there was already construction ongoing when they announced it. So it was no big surprise it was going to get approval. But now we have a new piece of legislation that we're talking about now to give the super, super power for the government to actually approve some of the 500 projects that are in the queue.
00:03:58.460Yeah, it's, you know, the rationale that's being offered by the government to support C-39 is the same, is to meet the same objectives that were supposed to be met by C-5.
00:04:08.620So again, it's not the approach that we would take. The approach we would take would be to actually repeal the red tape and bad laws that this government spent 11 years passing so that private proponents could propose a project, go through known, well-understood criteria, apply, get approval, and build with private investment.
00:04:31.740So John Iveson talks about that. Just talking about the regulatory environment that still exists, some of the roadblocks, the No More Pipelines Bill, C-69, the tanker ban, etc., etc., that has made this complex situation that we call a regulatory environment that the Liberals have set up.
00:04:48.940So now they're saying, we're just going to get around it with these two pieces of legislation, but it doesn't actually level the playing field.
00:04:55.820I think that's the problem you were pointing out just a second ago.
00:04:58.760It still requires control at the government level, the ministerial level.
00:05:03.560So people with an idea have to come begging to government to hopefully get an approval or some resemblance of a, yeah, possibly we'll give it to you.
00:05:12.300But we all know what that means, right?
00:05:13.940Well, yeah, the approach that they're taking under Bill C-5 makes project approval more politicized than it's ever been.
00:05:25.580Because it's now up to the minister to decide which projects the laws of Canada will apply to, because Bill C-69 is still in force.
00:05:35.020so now the minister is the one deciding and cherry picking which projects they're going to
00:05:41.640apply the law to and which ones they're going to exempt from the law so a better approach would be
00:05:46.520to change the law in the first place and get rid of the the red tape they get rid of the whole
00:05:51.400approach of c69 which is to you know not go through normal ordinary environmental scrutiny
00:05:58.180that that a project should have to stand up to to be approved but to to have all of these you know
00:06:04.520the vague and ever-changing goalposts of sustainability
00:06:23.800So again, instead of leveling the playing field
00:06:26.780and letting companies compete with great ideas,
00:06:30.600now we're just still using the government
00:06:33.380as kind of a puppet master deciding who wins and who loses. And that actually doesn't create a
00:06:39.060very transparent process. It usually leads, when you look at other countries, to the ones that
00:06:44.840donate most to the party. Well, it creates a system really of crony capitalism where the
00:06:50.700businesses that are just the best connected to the government get what they want, not the company
00:06:56.720with the best idea, the one that the market, the people with their own, that are prepared to make
00:07:02.080their own risk with their own money would support. In other sad news, last week, we also had the big
00:07:08.700announcement from Stelcon Steel in Hamilton, Ontario, closing down hundreds, if not thousands
00:07:13.840of jobs being lost because there will be spinoff impacts, right? Steel Town, it's known in Ontario,
00:07:20.040maybe the rest of Canada as the place where we make steel. Unfortunately, they're closing one
00:07:25.080of their main facilities here because of a litany of reasons. But the question would be,
00:07:31.520if we're going to build a pipeline similar to BC ferries when they started that process,
00:07:37.220whose steel are we going to use? Play up. Let's cue up cut two. Are we using Canadian steel? Play
00:07:43.420cut two. Is phase two of LNG Canada going to be built with Chinese steel, like phase one,
00:07:49.880or will it be built with Canadian steel? It's a great question for the proponents of phase two.
00:07:56.220They've taken their first investment decision.
00:07:59.340The process runs for the next five, six years.
00:08:03.620I'll leave it to them on the precise timing in early 2030s when expected to be operational.
00:08:10.720There will be full opportunities to buy Canadian steel and we'll continue to invest in the Canadian steel industry to make sure that's the case.
00:08:24.860And this is sadly the legacy of this government over the last 11 years is a hollowing out of our industries, whether it's steel, whether it is the massive capital flight that we saw in the energy industry.
00:08:41.300This government passes laws and imposes taxes that render our businesses unable to compete with international competitors.
00:08:51.080Yeah, and it's just created an environment because when you're an investor, you're sitting at a table with all these options, capital runs like water, the path of least resistance.
00:09:03.740And unfortunately, the government has created this type of thing.
00:09:07.200But as you mentioned a few moments ago, this has been the way the government's been operating since 2015.
00:13:11.520Well, and they failed. You know, there was a moment where the previous prime minister could have used whatever diplomatic capability he had during the last months of the Obama administration to get Keystone XL approved in the United States.
00:13:29.580I mean, it didn't happen. That infrastructure remains, you know, it remains a project that's not complete.
00:13:36.620We had other cancellations of major projects under that government.
00:13:40.060The tech mine in oil sands project in Alberta that the proponent walked away from amid concerns about regulatory uncertainty.
00:13:50.280So it's project after project we saw for 11 years where the opportunity was lost.
00:13:56.720So I don't think that today is so much this generational moment to be seized.
00:14:12.880So, originally, so basically it's Quebec to Ontario from Quebec City.
00:14:17.360Toronto, a new super high-speed rail line that's going to disrupt farmland and private property all throughout the way along the route.
00:14:25.620Not exactly the best option in my opinion, but when the government was proposing this to Canadians,
00:14:31.600it was only about $90 billion in today's dollars. Who knows when it's going to get built. Now it's
00:14:37.280already up to $113 billion, says the parliamentary budget officer. I don't think this is the last
00:14:43.000time we're going to see a number. Yeah, I mean, I don't think anybody doubts that if this project
00:14:47.480is ever built, then it will be for far more than even the worst case scenarios today. But let's
00:14:52.740even go back to the government's $90 billion number and just do some quick arithmetic on this.
00:14:59.020The government borrows money, let's just say at 4% a year, round number, 90 billion, 4% of 90 billion is 3.6 billion a year.
00:15:08.820So that would be the interest cost on 90 billion.
00:15:13.600A University of Montreal study said there would be 12 million passengers per year.
00:15:22.9003.6 billion, divide that out over 12 million passengers, it's 300 bucks a ticket.
00:15:29.020That's interest only. That's just interest. That's not paying it off. That's not amortized over 40 years or 50 years. That's just interest. So you're not even repaying the construction cost. You're just paying the interest on the construction cost. No operating cost. No maintenance. No repayment. $300 a ticket. One way.
00:15:49.480That also assumes, though, but the 12 million or so passengers that the study believed were the market size for this, they're not going to pay 300 bucks a ticket, never mind $1,000 a ticket or whatever it'll cost when you had all the operating and debt repayment and maintenance to the bill.
00:16:12.320And that's just if it's only $90 billion.
00:16:16.800I mean, if this thing is $113 billion, as the Parliamentary Budget Officer said it may be, or some higher number altogether, the price just keeps going up and up and up.
00:16:26.180And the higher the price is, the fewer customers there's going to be.
00:17:11.120People like to hear them, but the follow through and the actual details really do matter.
00:17:19.040And so there's no point in just announcing something if nobody has really even thought through the basic numbers on this project.
00:17:27.400And we had the head of Aalto at the Finance Committee last spring.
00:17:32.700And there were really no, I mean, they're way too early, they say.
00:17:36.000They don't really know what the cost is going to be.
00:17:38.420You know how these things happen. You get a little bit of momentum. They announce a price, and then that leads to funding to study it further and to look at root alignment.
00:17:49.100I mean, they've already committed, I think, what are they up to already? $3.9 billion, I think, just in the preliminaries on this to get engineering studies.
00:17:57.800And then these things end up taking on an inertia of whether they make sense to complete or not.
00:18:02.140And so that's a concern that I have, is that the eventual number will be way worse than anything that's been even projected so far.
00:18:12.240I mean, they're not going to come around and say, hey, good news, it's only going to cost $40 billion to build this only.
00:18:29.760I mean, some have said that the projections of the government exceed all of the current travel in that corridor.
00:18:38.320So it's, you know, they've got to be serious about how many tickets can they sell, what's the debt service cost, what's the construction, what's the operating, and how will that boil down into a ticket price?
00:18:50.020If you don't have a sensible answer for that that is supportable by the market, then the project shouldn't go ahead.
00:18:56.220Exactly. And this is another control mechanism, right? The government wants this. The government's saying you're going to take rail, you do that. We want a pipeline for oil or LNG. Well, you know, there's certain conditions that you have to jump through. You've got to decentralize the government.
00:19:10.380Well, we need infrastructure that will improve the productivity and grow the economy.
00:19:19.340So Canada has a very serious need for it.
00:19:21.820Yes, we talked about pipelines, but there are other infrastructure enhancements that we need.
00:19:26.800The port system in Canada is atrocious.
00:19:29.680We have among the least efficient, worst ports in the world, Port of Vancouver, Port of Prince Rupert, Port of Montreal,
00:19:36.280all need massive improvements in their efficiency.
00:20:01.860We've got the Trans-Canada Highway that is still not twinned through the mountains, and that's an extremely hard country to build in.
00:20:10.940But we need better roads through those mountains.
00:20:13.200And you're in Ontario, where I understand that the northern Ontario stretch of the Trans-Canada is also a very dangerous and heavily used highway that needs tremendous improvement.
00:20:24.100So these are things to get our goods from A to B, to get our people from A to B that really need to be a priority for this government.
00:20:32.820All right, Pat, we're a bit over time, but always a pleasure having you.
00:20:36.160As you know, the guests get the last word. The floor is yours.
00:20:38.520Oh, well, thanks for having me, Jamie.
00:20:40.140I mean, I just wish that, yes, we need this infrastructure, but we need a proper regulatory environment where private sector proponents can come, propose a project, get an approval with reasonable conditions, and get things built.
00:20:52.780All right. Pat Kelly, Member of Parliament for Calgary Crowfoot. Thank you so much for your time. Thank you for yours, as always. Don't forget to like, comment, subscribe, and share this program. Tell your friends, too. They can download it on platforms like CastBox, iTunes, Google Play, and Spotify. You name it, it is out there. New content for you every single Tuesday, 1.30 p.m. Eastern Time. Until next week, remember, low taxes, less government, more freedom. That's the blueprint.