Two Bills for One Canadian Economy
A bill to fast-track projects. Immigration has stalled. And Canada finally pushes back on steel tariffs.
The first major legislation under Prime Minister Mark Carney’s Liberal government has passed third reading in the House of Commons. Bill C-5, the One Canadian Economy Act, is actually more like two bills packaged into one.
The first is The Free Trade and Labour Mobility in Canada Act, which seeks to fulfil Carney’s pledge to eliminate federal barriers to interprovincial trade by Canada Day. This has been relatively uncontroversial, likely because it doesn’t touch the long-tail of provincial exceptions and mismatched regulations.
The second is The Building Canada Act, which is intended to fast-track nation-building projects the Liberals campaigned on. The idea is that the cabinet would be able to list specific large projects as national priorities and then exempt them from various laws to speed up the approval process.
The fact that C-5 was basically two separate bills led House Speaker Francis Scarpaleggia to agree on Friday to a request from an NDP MP to split the bill and hold two separate votes at third reading. Both passed after 14 days, and will now head to the Senate, which has agreed to sit for another week to see the bill through.
One pleasantly surprising aspect of the bill’s passage through Parliament has been the willingness of the Conservatives to support it. In return, the Liberals appear to be showing a newfound willingness to accept friendly amendments in committee, something that was lacking under the previous Liberal leadership. As reported by Politico, when the Liberals voted for CPC amendments, Conservative MPs actually thanked them.
Still, not everyone loves the bill, especially the Building Canada Act. Critics say the changes would weaken requirements related to Indigenous consultation and environmental protection. Liberal MP Nathaniel Erskine-Smith spoke out against the bill, saying that “debate on amendments does not need to be rushed.” This led to the bill being amended to ensure that laws like the Indian Act can not be side-stepped, before ultimately being passed.
We at Build Canada are glad to see measures being taken to fast-track critical projects. We’ve seen too many critical projects stalled in multi-year reviews to have any great faith in the process. But people have started pointing out the irony of the situation: if there are so many rules that getting something actually built requires a special exception, why don’t we just change the rules? As Andrew Coyne from the Globe puts it:
Why should some projects be exempt from the sort of scrutiny to which others are obliged to submit? Is this not “picking winners” by another name? If there is consensus that Canada’s approval process is too burdensome and too slow, doesn’t that argue for reforming the process generally – for everyone, not just for the favoured few who tick the right political boxes?
A few other takes on the bill:
“Canada won't become an energy superpower if the prime minister will only back projects that no one opposes” from The Line
“If Carney stops here, he won’t have stepped up to the moment’s potential” from a conversation on X/Twitter
Immigration has stalled
Canada’s population has barely grown so far this year. Between January and April, the overall population grew by just ~20,000 people, or about 0.05% of the population, compared to the ~200,000 we’ve seen on average in the past few years.
This is primarily driven by changes made to temporary resident programs made last fall, like capping the number of student visas and restricting work permits. Non-permanent residents now make up 7.1% of the population. This is down from the peak of 7.4%, but there’s a bit more to go until the government’s 5% target is reached.
Cracking down on foreign steel
Last week’s G7 meeting in Kananaskis was a desultory sort of affair even before Donald Trump decided he’d had enough after one day of it and headed home, ostensibly to deal with urgent Israel-Iran matters. On the way home, he managed to take a crack at French President Macron and make some half-hearted jibes about Canada becoming the 51st state. It’s hard to see what anyone got out of it, though the Canadians were keen to trumpet that they had received a vague commitment out of the Americans to reach some sort of trade deal within 30 days.
One might ask: Or what? On Thursday, Carney announced that at the end of that thirty days (July 21 for those keeping score) Canada will adjust its countertariffs on U.S. steel and aluminum imports “to new levels”, depending on how those trade talks are going. By trade war standards, it is pretty mild stuff, but you can see a threat there if you stare long enough.
At any rate Carney announced that in the meantime he’s limiting imports of foreign steel to 2024 levels. For countries like China and India that don’t have a free trade agreement with Canada, if they ship above that quota, they’ll be tariffed at 50%.
Canadian steel industry executives say that this doesn’t go nearly far enough. The problem, according to those in the steel industry, is that the amount of steel we were importing last year was already extremely high – making up about two-thirds of the market. The CEO of Algoma Steel, Michael Garcia, says, “long-term, over the next 10, 20, 30 years, I think for a strategic, secure steel industry, you want your domestic companies to supply the majority of your needs.”
What else we’ve been reading
Stopping the brain drain
A UofT professor wants to launch a lot more AI companies in Canada:
Axl was ultimately born out of a “trauma” of Mr. Wigdor’s that dates back to Jan. 9, 2007. Like many people that day, he watched Steve Jobs unveil the iPhone, which proved revolutionary thanks to its touch-screen interface. The difference is that Mr. Wigdor watched on a multitouch computing device he built for his thesis at U of T. He didn’t invent the technology, but Bill Buxton had worked on the concept in the early 1980s while at U of T. And now here was Apple’s CEO, about to upend multiple industries with a technology that could be partly traced back to a Canadian university. [Globe & Mail]
Ontario is dragging down Canada
When you look into Canada’s productivity decline, a stark image appears: Ontario is doing much worse than any other province:
Ontario is no longer a natural engine of Canadian prosperity. It has become Canada’s “sick province”: stagnant, slow-moving, and structurally stuck. And while other provinces make headlines over constitutional grievances or pipeline fights, the most serious long-term economic challenge in this country is that Ontario is no longer growing the way it should. [The Hub]
Canada Day parade cancelled in Montreal (again)
For the second year in a row, organisers have cancelled a scheduled Canada Day parade in the country’s second biggest city, citing red tape, workers’ strikes, and unspecified “disruptions.” As the parade lead, Nicholas Cowen, put it:
“When different city departments of workers do disruptions, you no longer just have to focus on the safety of the public but the functional aspect of the event. If something was planned, are they going to do their jobs to the best of their abilities? This is a concern.” [CTV]
Really enjoy your weekly newsletter!