A major carbon bomb sits atop Prime Minister Mark Carney’s first tranche of major projects, sparking backlash from environmental and Indigenous communities who say that doubling down on liquified natural gas is placing a dangerous bet on Canada’s future. 

The LNG Canada terminal in Kitimat, BC, is the primary way to export liquified natural gas (LNG) from the Montney Play. This region of British Columbia and Alberta is home to gas fields that, if fully tapped, would surpass Canada’s 2030 emissions targets 30 times over. It is a globally recognized “carbon bomb,” and LNG Canada Phase 2 — that doubles capacity at the site, making it the second largest facility of its kind in the world — was announced Thursday as a priority for Ottawa.

The remaining projects include:

• The Darlington New Nuclear project in Ontario;

• The Port of Montreal’s Contrecœur terminal expansion in Quebec;

• McIlvenna Bay Foran Copper Mine project in Saskatchewan; 

• Red Chris Mine expansion project in BC.

Thursday’s announcement is a major step on a central campaign promise made by Carney to rapidly build major infrastructure. Speaking in Edmonton, he said the first batch of major projects would add $60 billion to the country’s economy.

“For too long, when federal agencies have examined a project, their immediate question has been, ‘Why?’” Carney said. “From now on, Canada's new government starts by asking ourselves for major projects: How? How can we do it bigger? How can we do it faster?”

Carney did not say how much federal financial support the companies building these projects would receive, but acknowledged projects would likely get some federal funding. Regardless, even by sending them to the newly launched Major Projects Office to help coordinate financing, public resources are being spent to push these projects over the finish line. 

The five projects Carney will now send to the Major Projects Office for review were already well under development, with some scheduled to begin operations next year. He acknowledged as much, noting that the first tranche of projects are owned by proponents who “have already done much of the hard work,” and “already meet many of the necessary regulatory standards.”

In fact, government sources earlier told Canada’s National Observer that having the project already underway was one of two basic criteria used to choose the first round, making it easier for Ottawa to score political points for successfully completing it. The other was that the project is considered “stuck” in the regulatory process.

“I'm not at all surprised they would pick projects that are already in the system,” said Martin Olszynski, an associate professor and chair of energy, resources and sustainability at the University of Calgary. “The idea is they'll be hustled the rest of the way.”

Lighting a carbon bomb

At an estimated cost of $25 billion, LNG Canada Phase 2 is the largest in the first round of major projects. 

Environmental advocates and Indigenous leaders, key constituents and rights-holders who Carney has promised to respect, were quick to condemn it.

Grand Chief Stewart Phillip, Union of British Columbia Indian Chiefs president, said in a statement he was “gravely concerned” that the federal government is “deliberately” sidestepping its duty to consult First Nations.

“Rather than being met with partnership, we are given an ultimatum: accept fossil fuel expansion or be pushed aside,” he said. “LNG Canada is not only a massive source of greenhouse gas emissions, but also drives destructive fracking, further threatening our lands, waters and communities — emissions do not recognize territorial boundaries.

“We reject any process that tramples our inherent and constitutionally protected title and rights, ignores free, prior and informed consent, and sacrifices the climate for foreign corporate profits,” he added.

LNG Canada’s owners are Shell, Mitsubishi, the Korea Gas Corporation, Petronas and PetroChina. 

An analysis from TD described Carney’s inclusion of LNG Canada Phase 2 as “superficial support,” because whether or not the project actually goes ahead depends on its owners. The bank said it would have liked to have seen the Ksi Lisims LNG and related Prince Rupert Gas Transmission Pipeline projects included to indicate federal support for the LNG sector. 

An analysis from Clean Energy Canada, published last year, estimates the greenhouse gas emissions from the already operating LNG Canada site are economically devastating. Doubling the export terminals capacity dramatically increases that harm. 

Specifically, the think tank found that the annual social cost of carbon — a widely used metric to approximate economic damages (such as health care costs) per tonne of greenhouse gas emissions — estimates $11.1 billion in damages by 2030 and annual costs of $14.8 billion by 2050. If Phase 2 were built, by 2050 the annual social cost of carbon emissions from the LNG Canada site soars to $29.6 billion. 

Over the project’s decades-long lifecycle, both phases of the project amount to nearly $1 trillion in damages — a supreme liability hanging over the country’s head, following the International Court of Justice’s finding this summer that countries could be held responsible for knowingly committing climate harm. 

Beyond its climate harm, forecasts suggest a global supply glut of LNG is looming, making new investments economically risky. 

“It's not in our national interest to increase our carbon emissions when we've had devastating fires year after year,” said Richard Brooks, climate finance director with Stand.earth. “They're exactly the opposite of what we should be doing.”

Olszynski said he understands why many will be upset about LNG Canada Phase 2’s inclusion, but given the economic system we have, it’s not surprising to see it included. Even if risking “white elephants” — a term for major stranded assets — if banks are willing to invest, projects are likely to see those investment dollars flow. 

“There's the world that we want, and the world as it is,” he said. There’s a constant tension in market-based economies between planning for the future and market forces looking to profit in the short term. “There will always be forces pushing for more planning [and] for more logic, and then there will be those who push very strongly against them, and say that is contrary to market principles where the market will decide, that markets are efficient, and that markets will figure this out.”

“(Former prime minister) Trudeau probably was prepared to tip the scales more towards planning [than] the current prime minister,” he said. Given the trade threats from the United States and push to diversify Canada’s trading partners, alongside the state of the Canadian economy as is, Carney “is saying I can't keep pissing those guys off — the folks who control the purse strings.”

Other major projects criticized for environmental risks

The Darlington nuclear project is a multi-billion dollar investment in small modular reactors. Once in operation, Carney said it would drive $500 million annually into Ontario’s nuclear supply chain and provide enough electricity to power 1.2 million homes. 

Ontario Power Generation was granted a licence earlier this year to begin construction. 

The two mining projects in the first tranche, the McIlvenna Bay copper mine in Saskatchewan and the Red Chris copper and gold mine in northwestern BC, Carney said would strengthen Canada’s position in the global critical minerals trade. 

The Red Chris copper mine, owned by Colorado-headquartered Newmont — whose majority shareholders include powerful US financial firms Vanguard Group, BlackRock, State Street and Van Eck Associates — has been fought by conservation groups and First Nations warning of risks to the environment. 

In a letter filed with the BC government, the SkeenaWild Conservation Trust warns the planned expansion will lead to sulphate, copper and selenium concentrations “exceeding” BC water quality guidelines. 

Similarly, a letter from the Central Council of the Tlingit & Haida Indian Tribes of Alaska says “we are alarmed by reports of ongoing seepage at the Red Chris site and the failure to contain contaminated surface waters.”

“This is an urgent matter that demands enforcement action — not expansion,” the letter adds. 

Foran Mining Corporation — whose major shareholders include US-based Agnico Eagle Mines, Toronto-headquartered Fairfax Financial and the Public Sector Pension Investment Board — is developing the McIlvenna Bay Copper Mine in Saskatchewan. In recent years, the project has been protested by members of the Peter Ballantyne Cree Nation.

The mining project threatens at-risk woodland caribou and 13 hectares of muskeg — valuable peatlands that absorb carbon dioxide from the air. 

Carney had previously teased that the Contrecœur expansion project at the Port of Montreal would make his list of major projects. The expansion, fought by environmentalists due to its impact on critical habitats for fish and frogs, involves a new container terminal to handle an additional 1.1 million containers per year, and was already planned and receiving cash from Quebec. It is scheduled to begin operations in 2029. 

Earlier this year, Xavier Barsalou-Duval, transportation, infrastructure and communities critic with the Bloc Québécois called on Carney to not include it as a project in the national interest. 

“A project of this magnitude should only proceed if it can be demonstrated that it can be carried out in strict compliance with existing environmental standards,” he said. “This burden, which falls to the Port of Montreal, must not be shirked or truncated by the Liberal government.”

More projects to come

Carney said several other major projects are far from being ready, but are worth considering. He is asking the Major Projects Office to create business development teams to help advance them. 

The Major Projects Office will consider regulations, financing and supply chains for critical minerals, including in the priority areas of Ontario’s Ring of Fire, the Slave Geological Area in the Northwest Territories and in the Labrador Trough overlapping Québec and Labrador.

The office will also study large-scale clean power with a focus on Nova Scotia’s proposed Wind West project. Carney said the offshore wind megaproject could generate one quarter of Canada’s entire electricity demand, and should be studied in tandem with the Energy East Partnership (a proposal to strengthen Atlantic Canada’s power grids) and the development of Gull Island being pursued by Québec and Newfoundland and Labrador.

An “Arctic Economic and Security Corridor” will also be pursued, Carney said. The project would be anchored by a new port at Grays Bay in Nunavut, and include new roads and military capabilities. 

Upgrading the Port of Churchill will also be considered with plans to increase port capacity, rail lines, marine ice-breaking capabilities and an “energy corridor” to be studied, he said. The project would be developed with Manitoba’s Crown-Indigenous Corporation. 

Delivering on high-speed rail between Quebec City and Toronto is also a goal the Major Projects Office will study, with plans to be put in place within four years. 

Carney said the Major Projects Office will also help develop a “Canadian Sovereign Cloud,” to build computing capacity and data centres he framed as essential to economic competitiveness with artificial intelligence and quantum computing. 

The last major initiative the Major Projects Office will study promises to be controversial. The Pathways Alliance’s $16.5-billion proposal to pipe carbon dioxide captured from oilsands sites in northern Alberta to an underground storage site south of Cold Lake, will be considered. 

Carney dubbed the project “Pathways Plus” — with the plus being the possibility of a new oil pipeline being built, if the carbon capture megaproject is built. He framed the possibility as a way to strike a grand bargain as Alberta Premier Danielle Smith has called for, that could see “decarbonized oil” flow to new markets. 

As previously reported by Canada’s National Observer, “decarbonized oil” is not a credible term, leading climate scientists say. 

Carney said a second tranche of major projects to be referred to the Major Projects Office would be announced by Nov. 16.