Climate Monster -THE HEAVY HAND OF CLIMATE REGULATION

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Contributed by Robert Lyman © 2026. Robert Lyman’s bio can be read here.

EXECUTIVE SUMMARY

One of the problems most frequently cited by businesses in Canada is the growth, cost and pervasiveness of regulations. They are often referred to as “red tape”, meaning the seemingly endless paperwork and reporting requirements imposed by governments that add to operating costs. In fact, the problem of over-regulation is far more extensive and includes almost all aspects of the Canadian administrative state.

This article will focus on the adverse effects of only one set of regulations in Canada – the commitment of the federal government and many provincial governments to the goal of achieving “net-zero” greenhouse gas (GHG) emissions by 2050. Attached as annexes A and B are partial lists of the federal regulations implemented in pursuit of climate policy objectives. There is almost no part of the Canadian economy left unaffected.

Of increasing interest and concern to Canadian firms are the growing number of allegedly voluntary requirements to decrease GHG emissions and to report on the progress in doing so. An example is the International Civil Aviation Organization (ICAO), which runs the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Another are the guidelines from the Office of the Superintendent of Financial Institutions (OFSI). OFSI demands that all federally regulated financial institutions (federal trust and loan companies, life insurance companies, property and casualty insurance companies, and federally regulated private pension plans) disclose their operational and “financed” greenhouse gas emissions.

For the Canadian energy industries, the focus of regulatory concern has long been their effect on the time required to obtain approval for major capital projects. The times required for pipeline reviews have recently ranged from 17 to 104 months; those for oil sands from 20 to 77 months, far exceeding the service standards set out in legislation.
The Carney government has passed legislation (the Building Canada Act, or BCA) intended to accelerate the regulatory review of major projects. The BCA did not rescind, or even significantly amend, any of the statutes that place the attainment of net-zero emissions at the forefront of government climate and energy policies. It remains unclear whether the BCA and the process it establishes will provide the efficiency and clarity of process that project proponents need.

The prospect of possible closer integration with the European Union raises a new set of questions about the future burden of regulation. European firms are confronted with a heavy cumulative regulatory burden problem resulting from years of intensive regulatory activity and a recent push to accelerate the EU’s green and digital transitions. It would be ironic if actions intended to protect Canada’s sovereignty over trade were to result in a far great loss of sovereign control to European elites.

Please read the full report in PDF format.