Ottawa’s Regulatory Assault on the Extraction Sector and Its Impact on Investment

Business investment is a foundational requirement for a prosperous economy. It provides the resources to establish new companies, expand existing ones, and invest in new factories, machinery, and technologies. Business investment in Canada has declined markedly for over a decade. It is a major reason why Canadian living standards are stagnating in absolute terms and declining relative to many peer countries, particularly the United States.1

One factor behind declining business investment is the heavy regulatory burden imposed by the current federal government on the extraction sector, which includes: mining, quarrying, and oil and gas. Since 1990, this sector averaged 17.3 percent of total non-residential business investment, and reached as high as 28.7 percent of the total in 2013.2

The federal government has been particularly critical of the oil and gas sector. As an example of such sentiment, in a 2017 speech Prime Minister Trudeau said it would take time to “phase out” the oil sands, indicating the long-term goal of the federal government to eliminate the fossil fuel industry (Muzyka, 2017). The prime minister’s comments were followed by a number of new regulations that directly or indirectly targeted the oil and gas sector:

• In 2019, Bill C-69 amended and introduced federal acts to overhaul the governmental review process for approving major infrastructure projects (Parliament of Canada, 2018). The changes were heavily criticized for prolonging the already lengthy approval process, increasing uncertainty, and further politicizing the process (Green, 2019).

• In 2019, Bill C-48 changed regulations for vessels transporting oil to and from ports on British Columbia’s northern coast, effectively banning such shipments and thus limiting the ability of Canadian firms to export (Parliament of Canada, 2019).

• Indications from the federal government that a mandatory hard cap on GHG emissions would eventually be introduced for the oil and gas sector. In 2023, such a cap was introduced (Kane and Orland, 2023), excluding other GHG emitting sectors of the economy (Watson, 2022).

• In early 2023, the government announced new fuel regulations, which will further increase the cost of fuels beyond the carbon tax (ECCC, 2023).

• In late 2023, with limited consultation with industry or the provinces, the Trudeau government announced major new regulations for methane emissions in the oil and gas sector, which will almost inevitably raise costs and curtail production (Tasker, 2016).

The growing regulatory burden has a number of implications that impede or even prohibit oil and gas investment, by increasing costs and uncertainty, making it less attractive to invest in Canada. Both a 2022 survey of mining companies and a 2023 survey of petroleum companies identified the same three risks as inhibiting investment in Canadian provinces—uncertainty over disputed land claims, protected areas, and environmental regulations.3

It is also important to recognize that the Trudeau government introduced a carbon tax in 2016, which conceptually should replace regulations related to greenhouse gas (GHG) emissions such as those listed previously rather than be an additional policy lever used to manage GHG emissions.4

The regulations discussed above, as well as direct decisions by the federal government had tangible effects on the oil and gas sector:

• In late 2016, the Northern Gateway pipeline running from northern Alberta to Kitimat, British Columbia was cancelled by the Trudeau government, further limiting the ability of firms in Alberta to get their products to export markets (Tasker, 2016).

• In 2017, TransCanada Corp. cancelled its $15.7 billion Energy East pipeline, which would have transported oil from Alberta to Saint John, New Brunswick. The project was cancelled in large measure due to changes in national policy regarding the approval of large infrastructure projects (Canadian Press, 2017).

• While the Trans Mountain pipeline from Edmonton to Burnaby, BC was approved, Kinder Morgan exited the project in 2018 due to uncertainties and questions about the economics of the project, forcing the Trudeau government to take the ownership. The cost of the project has since increased by more than four times the original estimate to $30.9 billion (Globe and Mail Editorial Board, 2023).

• In 2019, US-based Devon Energy announced plans to exit Canada’s oilsands to pursue more profitable opportunities in the United States (Healing, 2019).

• In 2020, Teck Resources abandoned its $20 billion Frontier oilsands mine in Alberta because of increasing regulatory uncertainty (Connolly, 2020).

• In 2020, Warren Buffett’s Berkshire Hathaway decided not to invest $4 billion in Saguenay LNG, a liquified natural gas plant and pipeline, due to political and regulatory risks (CBC News, 2020).

The divestitures above are not an exhaustive list. Other companies including Norwegian Equinor (formerly Statoil), France’s TotalEnergies SE (formerly Total SA), US-based Murphy Oil, and ConocoPhillips have all reduced their investments in Canada’s oil and gas sector.

The government’s mounting regulations and hostilities towards the oil and gas sector did not go unnoticed outside of Canada. A 2018 article in The Economist listed the many failures to develop pipeline infrastructure in Canada to bring much-demanded oil and gas to market. Indeed, the piece called it a “three-ring circus” that risked “alienating foreign investors who are already pulling back from Canada” (Economist, 2018).

It is first important to acknowledge the overall decline in business investment in Canada since 2014. Overall, total non-residential business investment (inflation-adjusted) declined by 7.3 percent between 2014 and 2022.5, 6

The decline in business investment in the extractive sector (mining, quarrying, and oil and gas) is even more pronounced. Since 2014, business investment excluding residential structures and adjusted for inflation has declined from $101.9 billion to $49.7 billion in 2022, a reduction of 51.2 percent (figure 1).7

A similar decline in business investment of 52.1 percent is observed for conventional oil and gas, falling from $46.6 billion in 2014 to $22.3 billion in 2022 (inflation-adjusted) (figure 1). In percentage terms the decline in non-conventional oil extraction was even larger at 71.2 percent, falling from $37.3 billion in 2014 to $10.7 billion in 2022.8

Simply put, the declines in the extraction sector are larger than the total decline in overall non-residential business
investment between 2014 and 2022, indicating the magnitude of the overall effect of the decline in business investment in this sector.

The importance of business investment to the health of an economy and the rising living standards of citizens cannot be overstated. One of the major challenges facing Canadian prosperity are regulatory barriers, particularly in the oil and gas sector.

In that light, much of the regulatory burden added over the last eight years to the oil and gas sector should simply be eliminated. In some ways this is already being forced on the federal government through court decisions. For instance, in October of 2023, the Supreme Court of Canada ruled that parts of Bill C-69 were unconstitutional as they infringed on areas of exclusive provincial jurisdiction, requiring revisions to the Act (Dryden, 2023).

A careful and clear analysis is needed of the costs and benefits of the regulatory measures imposed on the oil and gas sector, including Bill C-48, the recent methane regulations, and the emissions cap. Based on this analysis, the regulatory measures should be adjusted to help improve the ability of Canada’s energy sector to attract and retain investment.

Author:

Kenneth P. Green

Senior Fellow, Fraser Institute

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Bank of Canada Cuts Rates to 2.25%, Warns of Structural Economic Damage

Published on October 29, 2025

Todayville

Dan Knight

Governor Tiff Macklem concedes the downturn runs deeper than a business cycle, citing trade wars, weak investment, and fading population growth as permanent drags on Canada’s economy.

In an extraordinary press conference on October 29th, 2025, Bank of Canada Governor Tiff Macklem stood before reporters in Ottawa and calmly described what most Canadians have already been feeling for months: the economy is unraveling. But don’t expect him to say it in plain language. The central bank’s message was buried beneath bureaucratic doublespeak, carefully manicured forecasts, and bilingual spin. Strip that all away, and here’s what’s really going on: the Canadian economy has been gutted by a combination of political mismanagement, trade dependence, and a collapsing growth model based on mass immigration. The central bank knows it. The data proves it. And yet no one dares to say the quiet part out loud.

Start with the headline: the Bank of Canada cut interest rates by 25 basis points, bringing the policy rate down to 2.25%, its second consecutive cut and part of a 100 basis point easing campaign this year. That alone should tell you something is wrong. You don’t slash rates in a healthy economy. You do it when there’s pain. And there is. Canada’s GDP contracted by 1.6% in the second quarter of 2025. Exports are collapsing, investment is weak, and the unemployment rate is stuck at 7.1%, the highest non-pandemic level since 2016.

Macklem admitted it: “This is more than a cyclical downturn. It’s a structural adjustment. The U.S. trade conflict has diminished Canada’s economic prospects. The structural damage caused by tariffs is reducing the productive capacity of the economy.” That’s not just spin—that’s an admission of failure. A major trading nation like Canada has built its economic engine around exports, and now, thanks to years of reckless dependence on U.S. markets and zero effort to diversify, it’s all coming apart.

And don’t miss the implications of that phrase “structural adjustment.” It means the damage is permanent. Not temporary. Not fixable with a couple of rate cuts. Permanent. In fact, the Bank’s own Monetary Policy Report says that by the end of 2026, GDP will be 1.5% lower than it was forecast back in January. Half of that hit comes from a loss in potential output. The other half is just plain weak demand. And the reason that demand is weak? Because the federal government is finally dialing back the immigration faucet it’s been using for years to artificially inflate GDP growth.

The Bank doesn’t call it “propping up” GDP. But the facts are unavoidable. In its MPR, the Bank explicitly ties the coming consumption slowdown to a sharp drop in population growth: “Population growth is a key factor behind this expected slowdown, driven by government policies designed to reduce the inflow of newcomers. Population growth is assumed to slow to average 0.5% over 2026 and 2027.” That’s down from 3.3% just a year ago. So what was driving GDP all this time? People. Not productivity. Not innovation. Not exports. People.

And now that the government has finally acknowledged the political backlash of dumping half a million new residents a year into an overstretched housing market, the so-called “growth” is vanishing. It wasn’t real. It was demographic window dressing. Macklem admitted as much during the press conference when he said: “If you’ve got fewer new consumers in the economy, you’re going to get less consumption growth.” That’s about as close as a central banker gets to saying: we were faking it.

And yet despite all of this, the Bank still clings to its bureaucratic playbook. When asked whether Canada is heading into a recession, Macklem hedged: “Our outlook has growth resuming… but we expect that growth to be very modest… We could get two negative quarters. That’s not our forecast, but we can’t rule it out.” Translation: It’s already here, but we’re not going to admit it until StatsCan confirms it six months late.

Worse still, when reporters pressed him on what could lift the economy out of the ditch, he passed the buck. “Monetary policy can’t undo the damage caused by tariffs. It can’t target the hard-hit sectors. It can’t find new markets for companies. It can’t reconfigure supply chains.” So what can it do? “Mitigate spillovers,” Macklem says. That’s central banker code for “stand back and pray.”

So where’s the recovery supposed to come from? The Bank pins its hopes on a moderate rebound in exports, a bit of resilience in household consumption, and “ongoing government spending.” There it is. More public sector lifelines. More debt. More Ottawa Band-Aids.

And looming behind all of this is the elephant in the room: U.S. trade policy. The Bank explicitly warns that the situation could worsen depending on the outcome of next year’s U.S. election. The MPR highlights that tariffs are already cutting into Canadian income, raising business costs, and eliminating entire trade-dependent sectors. Governor Macklem put it plainly: “Unless something else changes, our incomes will be lower than they otherwise would have been.”

Canadians should be furious. For years, we were told everything was fine. That our economy was “resilient.” That inflation was “transitory.” That population growth would solve all our problems. Now we’re being told the economy is structurally impaired, trade-dependent to a fault, and stuck with weak per-capita growth, high unemployment, and sticky core inflation between 2.5–3%. And the people responsible for this mess? They’ve either resigned (Trudeau), failed upward (Carney), or still refuse to admit they spent a decade selling us a fantasy.

This isn’t just bad economics. It’s political malpractice.

Canada isn’t failing because of interest rates or some mysterious global volatility. It’s failing because of deliberate choices—trade dependence, mass immigration without infrastructure, and a refusal to confront reality. The central bank sees the iceberg. They’re easing the throttle. But the ship has already taken on water. And no one at the helm seems willing to turn the wheel.

So here’s the truth: The Bank of Canada just rang the alarm bell. Quietly. Cautiously. But clearly. The illusion is over. The fake growth era is ending. And the reckoning has begun.

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Bill Gates walks away from the climate cult

Published on October 29, 2025

Todayville

MxM News

Billionaire Bill Gates — long one of the loudest voices warning of climate catastrophe — now says the world has bigger problems to worry about. In a 17-page memo released Tuesday, the Microsoft co-founder called for a “strategic pivot” away from the obsessive focus on reducing global temperatures, urging leaders instead to prioritize fighting poverty and eradicating disease in the developing world. “Climate change is a serious problem, but it’s not the end of humanity,” Gates wrote.

Gates, 70, argued that global leaders have lost perspective by treating climate change as an existential crisis while millions continue to suffer from preventable diseases like malaria. “If I had to choose between eradicating malaria and preventing a tenth of a degree of warming, I’d let the temperature go up 0.1 degree,” he told reporters ahead of next month’s U.N. climate conference in Brazil. “People don’t understand the suffering that exists today.”

For decades, Gates has positioned himself as a leading advocate for global climate initiatives, investing billions in green energy projects and warning of the dangers of rising emissions. Yet his latest comments mark a striking reversal — and a rare admission that the world’s climate panic may have gone too far. “If you think climate is not important, you won’t agree with the memo,” Gates told journalists. “If you think climate is the only cause and apocalyptic, you won’t agree with the memo. It’s a pragmatic view from someone trying to maximize the money and innovation that helps poor countries.”

The billionaire’s change in tone is sure to raise eyebrows ahead of the U.N. conference, where climate activists plan to push for new emissions targets and wealth transfers from developed nations. Critics have long accused Gates and other elites of hypocrisy for lecturing the public about fossil fuels while traveling the globe on private jets. Now, Gates himself appears to be distancing from the doomsday rhetoric he once helped spread, effectively admitting that humanity faces more immediate moral imperatives than the weather.

(AP Photo/Alex Brandon)