Infrastructure continues to be a pressing policy issue in Canada. Our country faces demand for new schools and hospitals to accommodate population growth, new roads and public transit systems to address traffic congestion, new homes to address the national housing crisis and new power generation and transmission development to facilitate energy transition and electrification. With an Ontario election underway and a federal election on the horizon, we expect to see the various political parties and leaders present their vision of how to address these challenges and continue to build up Canada's infrastructure.
On January 29, 2025, McCarthy Tétrault assembled a group of industry leaders to discuss the current landscape and future directions of Canadian government infrastructure policies. They also offered insight on how industry can best position themselves to seize upon these opportunities.
Julie Parla (Practice Lead of McCarthy Tétrault's Toronto Litigation Group, Head of our National Projects Disputes Team and Co-Chair of our National Infrastructure Group) served as moderator. The discussion featured the following panelists:
- Jan O'Driscoll, Partner at Rubicon Strategy;
- Andrea van Vugt, Chief Operating Officer & Trade Practice Lead at Wellington Advocacy;
- Awanish Sinha, Toronto Litigation Partner and Co-Leader of McCarthy Tétrault's Public Sector Group; and
- Brad Nicpon, Partner in McCarthy Tétrault's Toronto Infrastructure Group.
Key Takeaways:
1. Infrastructure as a Political Tool
The panel highlighted that politicians often position infrastructure projects as key job-creators and engines for economic growth. In the current political and economic environment we should expect governments to seek to fast-track infrastructure projects. That said, infrastructure can also be politicized – the panel discussed whether certain policy objectives, such as the federal government's focus on Energy Transition and GHG-reduction would continue were a new government elected.
2. Predicting Infrastructure Reform Under a New Federal Government
The panelists discussed how a new government in Ottawa might align deficit reduction and infrastructure spending. The panelists agreed that were the current opposition to form government, it would likely seek to reform public procurement, streamline regulatory processes to make it easier to bring new projects online, and increase federal investment in oil and gas. The panel noted that the Provinces will continue to make demands of the federal government for cost-sharing in housing, wastewater, and power projects, so any new government would be under pressure to continue to fund these priorities. The panel noted that this political moment offers industry a unique opportunity to voice their perspectives in order to shape public policy.
3. Defense Spending, Northern Development and Arctic Sovereignty
Increased American and Russian interest in the arctic from both strategic defense and resources perspectives has reignited the conversation on arctic sovereignty. The panelists expect to see an expanded interest in military infrastructure in the North, such as deep-water ports and bases. Ancillary to these projects could be broader infrastructure opportunities such as power generation, roads, highways and wastewater systems.
4. Rare & Critical Minerals
With the rise of EVs, sophisticated consumer electronics, and advanced defense systems, the panelists agreed that the extraction of rare and critical minerals could play a pivotal role in both Canada's economic growth and national security. The panel highlighted Premier Doug Ford's road agreement to unlock chromium deposits in the Ring of Fire, suggesting more development is likely to come. They also noted that Canada's critical minerals could soon replace electricity as our key bargaining chip in U.S. trade negotiations.
5. Environmental & Regulatory Challenges
Panelists discussed the delicate balance between infrastructure development and environmental protection. The panelists agreed that slow, expensive and unpredictable regulatory systems are hampering infrastructure development and that bold and visionary leadership was required to navigate these issues. To entice development, outcomes must be predictable for industry and regulatory approvals must be streamlined. The panel noted there would be significant value to industry were the government to adopt a "one project, one assessment" model in which duplicative environmental assessments are removed.
6. Innovation in Infrastructure
The panel highlighted the significance of the Building Ontario Fund as a new agency with the power and flexibility to facilitate the development of innovative new projects and delivery models.
7. U.S. Tariffs, Consequences and Opportunities
The panel agreed that U.S. tariffs could severely impact the Canadian construction industry. The panel considered the possibility that some Canadian companies might relocate to the U.S. However, panelists noted that tariffs also provide opportunities for Canadian businesses to diversify trade and strengthen their domestic supply chains.
8. The Ontario Election and Traffic Congestion
The panelists believe Ontario Premier Doug Ford will continue to emphasize his record as an "infrastructure premier" and commit to large-scale project development in the upcoming Ontario election. The panel also noted the Premier's interest in developing legislative and infrastructure solutions to address traffic congestion in the GTHA. The Toronto Region Board of Trade recently estimated the economic and social cost of congestion in our region at over $40 billion.
Your Strategic Infrastructure Partner
Our team at McCarthy Tétrault is at the forefront of infrastructure and government policy. We have extensive experience advising on large-scale infrastructure projects and helping clients navigate the world of government procurement, permitting and funding. We understand both the legal and business imperatives of infrastructure projects and are here to support you as a trusted advisor.
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