Royal Bank of Canada chief executive Dave McKay recently added his voice to those warning that Canada’s overly risk-averse attitude was damaging its economy. He zeroed in on priorities in trade and infrastructure that should be addressed immediately. Speaking shortly after the Alberta government announced funding for early work on a new pipeline proposal aimed at the northern British Columbia coast, McKay emphasized the need for Canada to become less risk-averse to navigate the complexities of global trade.
Not only are McKay’s comments refreshing, they come at a critical time. The Alberta government will soon file the first such proposal with the province’s newly established Major Projects Office. The federal government created this office to help expedite nationally and regionally significant infrastructure projects. Making these projects happen is critically important to Canada’s national interest. As McKay explained, fear on the part of the federal, state, and local governments has resulted in years-long approval processes for new projects.
“We bubble wrap way too many things in this country because we’re afraid of making a mistake,” McKay stated. He noted that over-caution has resulted in false starts on some of the biggest infrastructure projects. As a consequence, companies are afraid to bet their capital.
Federal policies are deepening the Canadian economy’s malaise. These policies, featured in their climate leadership plan, land a ban on oil tankers off the northern B.C. coast and a very strict emissions cap. Premier Danielle Smith and various industry leaders have expressed that such regulations have rendered it challenging for private companies to justify investing in new projects.
The whole notion of the world just preying on America and taking advantage of America… It’s not just shared with the president. “It’s a deeply held conviction among the White House and the Republican party,” McKay concluded. This gets to the larger issues of political economy that are at play.
McKay echoed the need for a more proactive approach, encouraging all stakeholders to understand that “time is money” and “uncertainty is expensive.” He stressed that all of these things delay Canada’s progress and sap its confidence. This, in turn, affects Canada’s global competitiveness on the world stage.
So we need to move forward and get these things approved and then start securing the financing because it’s there. It’s simply a matter of us getting out of our own way,” he said. This urgency is indicative of his belief that if we can get over the bureaucratic hurdles there’s a ton of investment that could be unleashed.
