Canada Making Fiscal And Climate Policy Mistakes: Biz Council

MNI (OTTAWA) - Canada is making errors on fiscal policy and investment rules around fighting climate change by leaving nuclear energy and natural gas largely out of its green transition plans, the head of a group representing CEOs of the country's largest corporations told MNI.

Business Council of Canada President Goldy Hyder spoke Thursday after an event where the U.S. ambassador to Canada expressed concern about regulatory overlap and delays as major democracies grapple with China's snapping up of critical minerals. Mining giant Teck's CEO also noted the 15 years it takes Canada to start a copper mine is more than three times longer than it took to build a transcontinental railway in the 1800s. 

Canada earlier this week mostly excluded nuclear energy and further tapping of major natural gas reserves from its climate change strategy, which Hyder called another bad signal. 

“Those are mistakes, because it’s not leveraging your assets, it’s not playing to your strengths, and it’s actually not going to help on the climate agenda. Because those are the minerals and those are the resources that are necessary to help our allies decarbonize, because they are running coal," he said.

Ambassador David Cohen said the United States will favor Canada's critical minerals under national defense legislation, at a time when exporters are worried a new president may impose new trade restrictions. (See: MNI INTERVIEW: Canada Faces Trouble Under Harris Or Trump- EDC) Hyder told MNI Canada should avoid using critical minerals as leverage in any trade discussions and instead seek to prove it's a stable and efficient supplier. 

“What we are facing in the United States is protectionism on one side and protectionism on the other. What we’ve got to say to them is it’s not in your own national interest to keep Canada on the outside looking in or even Mexico on the outside looking in,” Hyder said. 

Canada's emerging climate rules instead are "still taking a very ideological slant on some of these issues," he said. Environment and Climate Change Minister Steven Guilbeault's office didn't respond to a request for comment but he told reporters earlier this week “we understand we need to do more, and we are doing more to fight climate change.”

MATH IS MATH

Hyder also said Justin Trudeau's Liberal government needs more work on fiscal responsibility as it prepares a fall budget update amid opposition threats to force a snap election unless demands for social spending are met. “It’s probably a number one or number two priority for investors and for Canadian business leaders in particular: you have to have the fiscal framework right," Hyder said. Math is Math.”

Government spending continues to rise even though there's little evidence of a major payoff in economic growth, he said. "Neither is happening. Spending is going up and the economy is flat-lining,” Hyder said.

Finance Minister Chrystia Freeland has capped deficits at CAD40 billion or around 1% of GDP, far smaller than U.S. deficits around 6% of output. (See: MNI INTERVIEW: CBO's Swagel Sees Fiscal Headroom In Near Term) The Bank of Canada in July predicted GDP growth of about 1% this year and 2% next year.

Freeland spokeswoman Katherine Cuplinskas said in response to Hyder's assessment that “Canada is leading the G7 in a reaching a soft landing."

"We are projected to have the second fastest growth in the G7 this year, and the fastest growth in the G7 next year. And we accomplished this while having the fastest pace of fiscal consolidation in the G7 since the pandemic,” Cuplinskas said.