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Slow permit processes undermine Canada's competitiveness

Chris Gardner: From major energy projects to neighbourhood housing, Canada has become a place where it's extraordinarily difficult to build anything. That has to change.
Just not this kind of delays.

It’s a PowerPoint slide I often show in ICBA meetings. It always draws an all-too-knowing groan: in the length of time it takes to get a general construction project approved, Canada ranks 34 out of 35 OECD countries.

It’s a telling and embarrassing statistic for a G7 economy.

It takes nearly 250 days to get a permit in Canada – three times (168 days) longer than our competitors in the United States. In the OECD, only the Slovak Republic takes longer.

A dysfunction has settled into our governments that is leading to serious economic failures, stifling the creation of family-supporting jobs, distorting local housing markets, and making it nearly impossible to get the kind of infrastructure built we need to increase our competitiveness.

Canada is now being labelled a place where it’s simply too difficult to get things done. Or worse, a place where regulatory approvals are not worth the paper they are printed on. The result: businesses and investors taking their ideas, people, and capital elsewhere.

Over the past two years, some of the world’s largest energy companies have passed over Canada for more investor-friendly jurisdictions. According to RBC, the cost to Canada has been more than $100 billion in lost investment, and tens of thousands of lost jobs.

Delays add direct financing costs to builders which are passed along to owners, whether they be taxpayers, home buyers, or end-users. It also slows investment, job creation, and construction by making the process unnecessarily confusing and complex.

A slow permit process makes infrastructure and community projects more expensive.

It’s not just the private sector that suffers. The delays caused by more red tape, the demands to try and please absolutely everyone with an opinion on a project – whether a genuine stakeholder or not – and the reluctance of politicians to make tough decisions, have significant implications for government projects too.

A slow permit process makes infrastructure and community projects more expensive, meaning governments either have to tax or borrow more to build or delay building necessary infrastructure.

Think of the process involved in building the Site C clean energy project. It was April 19, 2010, when then-Premier Gordon Campbell decided to move forward. He hoped to have it up and running by 2020.

But it took nearly five years to finally get all the permits and permissions to start construction. Then it got bogged down in court. By the May 2017 election, more than $1.75 billion had been spent, and the 2020 completion date was distant memory.

When the BC NDP government took over, they delayed Site C further with yet another review. Now completion is expected in 2024 – at a price tag far higher than originally expected at a time when BC prepares for more electrical demand from vehicles, home heating, LNG plants, and other uses, as we transition (slowly) from fossil fuels. And, this was a clean energy project.  Traditional industrial and responsible resource development projects such as Energy East, Northern Gateway, LNG Canada and Teck’s Frontier project face almost insurmountable opposition.

Obviously, Site C is a large, complex project. But even small projects are being delayed by unnecessary red tape and politicians’ fear of making decisions. It can take more than a year for a simple project like installing speed bumps in school zones, as consultation processes drag on and on.

The BC NDP took power in 2017, in part due to a promise to eliminate school portables in Surrey, the province’s fastest growing city. Three years later, there are more portables than ever.

Obviously, Site C is a large, complex project. But even small projects are being delayed by unnecessary red tape and politicians’ fear of making decisions.

The Horgan government also promised to build 114,000 units of affordable housing, mainly in the Lower Mainland. Three years later, they have delivered less than 2 per cent of that total, and their municipal affairs minister lists slow permitting processes as a reason why.

It’s time all orders of government have a long conversation about how to speed up construction permits – the problem has become too expensive to ignore.

Whether it’s a new seniors centre, a townhome complex, high-rise or a new road, as soon as a project is proposed the forces of “no” rally for the status quo and “more consultation.” Traffic, noise, views, and quality of life are trotted out at council meeting after council meeting wrapped up in a dystopian narrative that sends local councils running in full retreat.

In the middle of a full-blown housing affordability crisis, one might think city halls would focus on increasing supply, reducing red tape, and making it easier to bring housing stock on the market faster in an effort to reduce pressure on prices of homes.

However, in communities across B.C., local councils make decisions every week that makes it more difficult to buy affordable homes. They impose red tape and regulations that make it harder and more costly to build homes. In many communities, it now takes longer to get a project approved and permitted than to build it.

If we do not get more responsible – and faster – decision-making from government, the risk of failing an entire generation of young people seeking local jobs and affordable housing will become a harsh reality.

Chris Gardner is president of the Independent Contractors and Businesses Association