Canada Faces “Ambition Deficit” to Fuel Economic Growth
Hydro-Québec CEO Urges Regulatory Overhaul, New Funding Models
Canada’s economic potential is hampered by a lack of bold vision and cumbersome regulations, according to a leading voice in the country’s energy sector. Calls for streamlined approvals and innovative financing are growing as the nation seeks to bolster its economic future.
Regulatory Barriers Stifle Investment
Michael Sabia, CEO of Hydro‑Québec, asserted that Canada is struggling with an “ambition deficit,” hindering its ability to launch large-scale national projects. He believes a significant impediment to economic transformation is the complex web of regulations that discourage both domestic and foreign investment.
Sabia described the current regulatory landscape as a “stack of pancakes,” where well-intentioned rules have accumulated over time, creating a difficult environment for businesses. He emphasized the need for simplification, stating, “We need to stand back and say, ‘There’s got to be a simpler, better way.’”
Prime Minister Mark Carney’s government is responding with the One Canadian Economy Act, aiming to expedite approvals for projects deemed to be of national importance. The legislation proposes a two-year approval timeline for “major projects,” a significant reduction from the current five years. Carney explained the shift in approach, “For too long, when federal agencies have examined a new project, their immediate question has been: Why? With this bill, we will instead ask ourselves: How?”
Indigenous Partnerships Demand Presence and Trust
Beyond regulatory reform, Sabia highlighted the critical importance of rebuilding trust and forging stronger partnerships with Indigenous communities. He stressed that genuine engagement requires leaders to be physically present and actively listen to concerns.
He noted that a history of mistrust has led to frequent legal challenges from First Nations, causing significant delays. “There is no substitute when working on these transactions for human presence,”
he said, “Human presence leads to trust. And we don’t have a lot of that right now.”
According to the Assembly of First Nations, unresolved land claims and treaty rights disputes contribute to approximately 15% of all major project delays in Canada. (Assembly of First Nations)
Rethinking Capital for Nation-Building
Sabia, who previously led the Caisse de dépôt et placement du Québec, cautioned against relying solely on large institutional investors like pension funds to finance early-stage infrastructure projects. He explained that these funds prioritize stable, long-term cash flows, which are not typical of projects in their initial phases.
He proposed a “bridge capital” model, where early-stage risk is absorbed by specialized investors, paving the way for larger institutions to participate once projects become more financially secure. “Asking that source of capital to take all sorts of risk? That’s a crazy question,”
he stated, “It doesn’t work.”
Sabia concluded with a call to action, urging Canada to seize the moment and invest strategically to mitigate potential economic slowdowns. He believes that proactive investment at scale is essential for a resilient and prosperous future.
