Making National Unity Priority #1: A Plan to Engage the West

To: The new Government of Canada
From: Charles DeLand and Colin Busby
Date: May 1, 2025
Re: Making National Unity Priority # 1: A Plan to Engage the West

Mark Carney’s election victory gives him a sizeable minority government that now gets to deliver on a platform to spark economic growth, sew national unity, and deal with Donald Trump.

One of its first acts should be to address legitimate concerns in the west and ease the growing sense of alienation. This will give a boost to national unity – a major theme in Mr. Carney’s victory speech – at a time when solidarity is needed to confront geopolitical tensions that threaten Canada’s sovereignty. With an enormous landmass and a population smaller than California, Canada cannot afford harmful regional and economic division. We must stick together.

The new government can do a few things right away to help: Eliminate the proposed oil and gas sector greenhouse gas (GHG) emissions cap, depoliticize major project approvals, and unambiguously include oil and gas in its plans for Canadian energy. Doing so would head off growing unease while renewable energy development plans can continue at pace.

Jettisoning the narrow cap on oil and gas sector GHG emissions is job one. This cap is a duplicative policy that unnecessarily targets one sector and region of the Canadian economy (although Newfoundland and Labrador also finds itself in its crosshairs), almost certain to act as a cap on production. It’s inefficient too: Canada’s large-emitter program covers the same ground and with market-based features to encourage reductions at the least cost, with allocations that can protect competitiveness in export markets. The emissions cap is bad economics and a counterproductive political wedge.

Encouragingly, the Liberals committed to speed approvals of major projects, with a proposed two-year maximum timeframe for approval and with the creation of a new, standalone federal entity to manage the process rather than numerous federal departments. In addition to this, the second thing the government should do is to remove threats of political interference.

It should immediately commit to eliminating cabinet-level rejections of approved projects. Non-expert politicians should be nowhere near an independent, robust, specialist-driven regulatory approval system that consults Indigenous communities as partners as well as affected communities. This sows investment uncertainty, the opposite of what’s needed. Committing to getting rid of this politically tempting but economically damaging lever can be done immediately, as part of launching a broad review of the Impact Assessment Act to clarify its muddy procedures and jurisdictional confusion.

Something should also be done for western agriculture, where the three Prairie provinces are the largest producers and exporters of Canola meal and oil. These products are subject to 100-percent tariffs from China, a significant importer, which were put in place as a response to Canada’s 100-percent tariffs on Chinese electric vehicles and 25-percent tariffs on China’s aluminum and steel. This asymmetric sectoral response sows regional divisions – which is surely China’s objective.

Finally, the government needs to talk about the opportunities offered by fossil fuels, including oil. Reading the Liberal platform, which rightly highlights ample opportunities in hydro, wind, hydrogen, and solar power, one scarcely believes Canada produces any oil and gas whatsoever. Yet oil and gas make up 20 percent of our national exports and is the largest goods-producing industry in Canada. Plus, Canada can prosper by producing both oil and gas and renewable power.

Oil and gas are foundational to Canada’s economy, but words matter. They signal priorities, future policy direction, and a willingness to work through inevitable complexities. The government and Prime Minister should say that if private investors want to responsibly produce more oil and gas that there is a clear avenue and process to do so.

In the best of times, the Canadian federation is disparate. Provincial needs and concerns vary, and finding common ground can be a tremendous challenge. But compromises make it work. Right now, the western provinces need the rest of the country, and Ottawa in particular, to hear their concerns and fix their most controversial policies, especially the economically damaging ones.

Repealing the oil and gas emissions cap, taking politics out of the federal major project regulatory process, and recognizing the benefits of oil and natural gas investments would also go a long way to improve Canadian unity and partnerships with key provinces. It would settle the Canadian mood, and bolter the soured Canadian investment picture. Prime Minister Carney should move swiftly on these items and make a promising beginning for a new government for all.

Charles Deland is associate director of research and Colin Busby is director of policy engagement at the C.D. Howe Institute.

To send a comment or leave feedback, email us at blog@cdhowe.org.

The views expressed here are those of the authors. The C.D. Howe Institute does not take corporate positions on policy matters.

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