Enbridge moves billions to the US; federal reforms promise improved clarity for Canadian investors
Canada’s largest pipeline operator is directing the majority of its investment south of the border, citing regulatory challenges and lengthy approval processes at home, according to Enbridge Inc. Chief Executive Officer Greg Ebel.
Bloomberg reported that, speaking at an event in Toronto, Ebel said about two-thirds of Enbridge’s $30bn investment program is going to the United States, where he sees better opportunities.
He attributed this shift to policies introduced under former Prime Minister Justin Trudeau, including an emissions cap on energy producers, a carbon levy, a tanker ban off northern British Columbia, and a protracted approval process, all of which have driven capital away from Canada.
“That’s hard for a Canadian to say, but that’s a reality of the situation,” Ebel remarked.
Ebel’s comments come at a time when Prime Minister Mark Carney’s administration is seeking to accelerate infrastructure development and reduce Canada’s economic reliance on the United States.
Carney has appointed former Trans Mountain CEO Dawn Farrell to lead the new Major Projects Office, which is tasked with expediting approvals for projects deemed of “national importance.”
While Ebel acknowledged these moves as positive, he cautioned that they are insufficient.
“I often hear that we have a need to approve projects as fast as other jurisdictions,” he said. “My friends, I’m afraid we don’t have that luxury anymore. That would be too little, too late. We are losing this race”.
In a related development, Alberta’s government has proposed a 1 million-barrel-a-day crude pipeline to the northern coast of British Columbia and is preparing a proposal that could qualify as a major project.
Enbridge, South Bow Corp., and Trans Mountain Corp. are providing technical support for the initiative.
Alberta Premier Danielle Smith expects the private sector to adopt the project once restrictive regulations are lifted.
However, Ebel noted that no private company, including Enbridge, will build the proposed pipeline under current conditions.
He identified the tanker ban as the most significant obstacle, stating that it “effectively makes that export pipeline illegal.” Ebel added, “No company would build a pipeline to nowhere”.
Amid these industry concerns, the federal government is introducing a new Capital Budgeting Framework to distinguish between day-to-day operational spending and capital investment, as announced by the François-Philippe Champagne, minister of Finance and National Revenue.
This framework aims to guide decisions and prioritize investments that generate long-term benefits, such as major projects, housing, clean energy, and infrastructure, according to the Department of Finance Canada.
The new approach is designed to enhance—not replace—existing financial reporting, and the Public Accounts of Canada will remain fully compliant with Public Sector Accounting Standards.
The government is also transitioning to a fall budgeting cycle, beginning with Budget 2025.
This change is intended to provide greater predictability and better planning for organizations, businesses, and budget planners, as per the Department of Finance Canada.
The fall budget will be complemented by an economic and fiscal update in the spring, allowing projects to commence as soon as the construction season starts and enabling parliamentarians to better oversee public expenditures.
The Capital Budgeting Framework broadly defines capital investment as any government expense or tax expenditure that contributes to public or private sector capital formation, whether held directly by the government or by private sector entities, Indigenous communities, or other levels of government.
The framework sets out standardized criteria to assess whether a measure qualifies as capital investment, focusing on conditionality and clear linkage to identifiable sectors or projects.
Spending not categorized as capital investment will be considered day-to-day operating spending, including major government expenditures like transfers to persons, health and social transfers, and the costs of running government operations and services.
According to the Department of Finance Canada, capital investments are fundamental to economic growth, fostering productivity and supporting higher living standards.
However, while US business investment has increased steadily, Canada’s has remained close to its 2015 level.
