David Dodge sees red flags from current government borrowing
Former Bank of Canada Governor David Dodge says investors are correct to be worried about the current standoff over the Trans Mountain pipeline expansion project, adding that he worries the latest ruling from Canada’s Supreme Court could add more fuel to those fears.
“It does appear that we have trouble getting our act together and have trouble giving private industry clear signals as to what they ought to do,” Dodge told BNN in an interview Thursday.
The dispute over the Trans Mountain pipeline continues to heat up with British Columbia promising to take its fight against the project to the provincial court by April 30.
The federal and Alberta governments have vowed to get the project built, while Alberta has threatened to cut off oil and gas shipments to B.C. if it is shelved.
The dispute is tarnishing Canada’s reputation among investors both at home and abroad, and could result in less investments in the country, Dodge said.
“When there is uncertainty, the private sector naturally backs away,” Dodge, now senior advisor at Bennett Jones, said.
Kinder Morgan said earlier this month it was suspending all non-essential spending on the $7.4-billion pipeline project as a result of regulatory uncertainty and opposition from B.C.
A Supreme Court ruling earlier today on bringing beer from Quebec into New Brunswick is only adding to those concerns, said Dodge.
“It’s quite understandable that investors worry about our ability to get things done in this country,” he said.
Canada’s courts have consistently sided with provincial concerns over the national interest, often leaving the trade and commerce powers of the federal government “torn in tatters,” said Dodge.
“The courts are going to weigh in on the side of local interests, provincial interests on the side of NIMBYism to prevent national development,” he said. “The courts have come down pretty solidly on the side of provincial interests and the national interest has suffered.”