The Prime Minister announced the first five projects to be fast-tracked through the Major Projects Office, and we took note that the Conservative opposition has been more focused on cost-of-living issues than major projects. With all that power, what could a budget possibly look like? What is the outlook for industrial development that is important but doesn't qualify as a major project? With me today to talk about it is Dr. Tim Sargent, an economist and former federal deputy minister who is now Director of Domestic Policy at the McDonnell-Laurier Institute in Ottawa.
00:04:58.840It needs to change the story about Canada out there in the world, which is that you just can't get projects done.
00:05:05.820And if we're going to convince people that we really have turned the page and that we really are now serious about moving ahead and developing our resource sector and our energy sector in particular,
00:05:17.220we're going to have to show people that all of the things that got in the way of projects, all of the political opposition,
00:05:25.300And that we're willing to stand up to that and actually say, no, we're making a choice as a country that we're going to value the resource sector more and we're going to work a lot harder to develop it.
00:05:37.320And we're going to stand up to people who, for various reasons, don't want development to go ahead.
00:05:43.440And the FAQ projects that are announced, this isn't showing that Canada has the intestinal fortitude and the government has the intestinal fortitude to stand up to all of these special interests.
00:05:53.700because they're all ones that everybody supports.
00:05:56.980One of the special interests is obviously the indigenous interest,
00:06:01.300and it's indeed built into the major project's office.
00:06:07.860It seems to me and has seemed all along that Mr. Carney is very good about stating an intention
00:06:17.380When we come to these very large projects that we want to see and would be good for the country,
00:06:22.420would be a great flywheel to generate activity. Nevertheless, there's always, well,
00:06:29.540there's an indigenous office that has to be satisfied. There are provincial interests
00:06:33.940that need to be satisfied. Does he have a plan for getting around that, or is that his actual
00:06:44.500get-out-of-jail-free card when he finds himself confronted with something that's not in accord
00:06:49.380with his green plan. What was he sort of promised to do? What do you think is going on there?
00:06:55.540Well, I think the Prime Minister has made the transition to being a politician in the sense that
00:07:01.940politicians like to be all things to all people. And they don't want to annoy anybody. They want
00:07:07.940to live in a world where everyone will be happy with the decisions that they take.
00:07:11.860And that's not the reality of governing. The reality is that, as the French Prime Minister
00:07:16.100once said to governors to choose um i'll put another way thomas soul the great economist once
00:07:22.060said um there are no solutions there are only trade-offs um so at the end of the day you're
00:07:27.740going to have to you if you're wanting a lot of projects to get done um you're going to have to
00:07:31.600make some of those trade-offs um at the moment though what we seem to see is you know a project
00:07:37.220needs to not only do all indigenous people anywhere near the project have to agree to it
00:07:42.660We also have to have provincial agreement. So that means the province of BC has to sign off on any pipeline that goes to tidewater from Alberta. And there's also a Greenland. So you've got these three constraints. So I don't think there's a lot of camels that can go through the eye of that needle.
00:07:59.900And I think the instinct from politicians, and I think the prime minister is in this space, is, well, if there's a problem, we're going to throw money at it.
00:08:11.380And so we're just going to provide a subsidy here or a subsidy there to move the project along.
00:08:17.860So a year ago, as we all remember, Mr. Carney was advising the former prime minister, Mr. Trudeau.
00:08:24.340So many of the things that he has inherited are the consequence of the years during the decisions taken during the time that Mr. Trudeau was Prime Minister.
00:08:37.340And I myself am still wondering whether Mr. Trudeau was given good advice that he ignored, or that the advice that he took came from Mr. Carney, and we are now witnessing the consequences of that advice.
00:09:00.000Well, you know, at the end of the day, what matters is the actual results.
00:09:06.140And, you know, we have, you know, a system, an environmental system, assessment system that is very, it was already complicated.
00:09:15.980The Trudeau government made it even more complicated, even more inaccessible.
00:09:22.000Certainly, you know, Mark Carney, before he was prime minister, was pressing very hard for Greenland to worry very much about climate change impacts.
00:09:31.540You know, we haven't really heard him backtrack on that.
00:09:34.280So, you know, in some ways, yes, I mean, this is a system that he has certainly been involved with.
00:09:41.320But I will say that it's probably only now that he's getting to grips with exactly what this system is doing to resource development in this country.
00:09:51.260And, you know, you see him with the Bill C-5, for instance, look for a way to get around the system.
00:09:58.560But the reality is what's really needed is a wholesale reform of this system.
00:10:02.740And a big part of that would be getting the federal government out of a lot of areas where it's really the province's responsibilities.
00:10:11.900Do you think Mr. Carney is behaving like somebody who thinks there is a business case for selling Alberta natural gas to Germany?
00:10:45.800They are developing the resource sector, talks about cutting the size of government.
00:10:50.320There's a bunch of other things that I think every economist would agree with.
00:10:54.580The real question is, how are you going to get there?
00:10:57.440And, you know, if you're going to make this omelette, you know, what eggs are you willing to break?
00:11:03.380So, everybody has, before he became prime minister, everybody liked to call him a technocrat.
00:11:11.280And certainly somebody who has managed two, not one, but two national banks probably is something of a technocrat.
00:11:19.180But if we then translate technocracy into running a country, do you see in the things
00:11:28.820that he says and the actions that he has so far taken, the mind at work of somebody who
00:11:36.180thinks that government is best advanced when decision-making is concentrated in a small
00:11:43.960group of people but that small group of people are the most competent and the cleverest and
00:11:50.360of course the most virtuous then that they will make good decisions and everybody else
00:11:55.400will will come along i mean this is a government that seems to want to make
00:11:59.640investments decisions that would normally made by private companies again what do you think his
00:12:06.200game is here well i mean prime minister comes from central bank world i mean that's kind of
00:12:13.480the pinnacle of technocracy. You have a very, very small group of people that are deciding on
00:12:18.920interest rates, which is crucial for the economy, very much shielded from political input, and
00:12:24.680there's a lot of good reasons to do it that way. But that's in the context of the Bank of Canada
00:12:29.080or the Bank of England. These are elite institutions, they're full of PhD economists,
00:12:34.840and at the end of the day, you're looking at just one segment of the economy. The federal government
00:12:41.560is a very very different beast it's it's it's huge you're talking about more than 400 000 public
00:12:46.440servants um and of course he's not just thinking about interest rates he's there's a whole range
00:12:51.880of policies tax transfer substitutes all kinds of things so you're dealing with something that's an
00:12:56.200order of magnitude more complicated and you know i think certainly uh you know he certainly you're
00:13:05.240a very competent individual. He has a great CV, as we all know. But you just can't manage
00:13:11.960the government of Canada even the way you manage a central bank. And the federal government can't
00:13:17.320manage the Canadian economy the way a central bank can manage interest rates. Just too big,
00:13:22.520it's just too complicated. Okay, I want to turn shortly to the budget that's coming on November
00:13:28.680the fourth but before we go there two things the united states has backed away from the green
00:13:34.840agenda even europe is backing away from it but mr carney seems to want to stay green
00:13:45.080even as everybody else is changing their minds um does he know something that they don't know
00:13:51.800I think it's more that Mark Carney has written a whole book in which climate change featured
00:14:02.200very strongly. He spent a lot of years invested in a climate change issue, especially since he
00:14:07.160left the Bank of England, putting together coalitions of businesses to advance net zero.
00:14:13.440So when you invested a lot in an idea, it's hard to move away from it, certainly hard to move away
00:14:20.420from it very quickly. But the reality is, as you say, the rest of the world by and large is moving
00:14:27.920away from it. And we've seen the prime minister having to move away from some of the elements of
00:14:35.480that agenda, at least like the EV mandate, for instance, because he's reduced the consumer
00:14:40.480carbon tax to zero. But we haven't yet seen him go all the way on a lot of that agenda. I think
00:14:48.960He's still hoping that by making these kinds of concessions, by making a few changes like this,
00:14:56.880that he'll still be able to have something that he can hold up as a proper green agenda.
00:15:01.260But he's going to be in a pretty lonely spot internationally doing that.
00:15:06.040In Alberta, we have some hopes of what Premier Daniel Smith calls the grand bargain.
00:15:12.620And that is where somehow we find a way to bury enough carbon dioxide to achieve net zero as we increase production of oil and natural gas.
00:15:26.560I'm told that it is technically feasible.
00:15:30.340Do you have any sense of whether this is something that Mr. Carney is advancing, not just Premier Smith?
00:15:38.640Do you think they can actually make money at it?
00:15:41.160Or is this just another exercise in bait and switch?
00:15:44.640Well, the last price tag I saw for this was $16.5 billion.
00:15:48.680And I don't think anybody believes that that would be the final number.
00:15:52.620I'm sure it would be much higher than that.
00:15:54.480Technically feasible is not the same thing as economically feasible.
00:15:58.900The reality is companies are only going to get involved with this
00:16:02.500if the governments pick up the tab for that cloud and capture and storage.
00:16:06.540and I wouldn't be surprised if Premier Smith thinks the federal government's going to pay that
00:16:12.080tab and the federal government thinks the Premier Smith is going to pay that tab and I think the
00:16:17.600reality is fiscally provider level of government that's just that's just not on so the thing about
00:16:25.560carbon capture and storage is it's it's this mythical beast that will solve everyone's problems
00:16:31.780It allows the prime minister to be able to say he's still fully on with a net zero agenda, while at the same time providing Premier Smith with a way to providing that social license from the federal government to ship hydrocarbons to Tidewater.
00:16:52.280So the politicians very much want this to exist.