Mark Carney’s major projects have yet to face their ultimate challenge: the courts

Canada’s new Major Projects Office and Building Canada Act are intended to accelerate approvals, but the article argues that years-long litigation and Indigenous consultation disputes remain the main bottleneck. Multiple high-profile project examples are cited, including the $12 billion Prince Rupert Gas Transmission pipeline and broader uncertainty around cabinet’s powers under the new law. The piece suggests the policy could help at the margin, but legal challenges may still delay or quash major infrastructure and energy projects.

Analysis

The market is underestimating how much the bottleneck in Canadian megaprojects has shifted from capital to enforceability. The new regime may accelerate cabinet approvals, but it does not eliminate the real option value that communities and NGOs hold once projects become litigation targets; that raises the cost of capital, lengthens FID-to-first-production timelines, and favors sponsors with the strongest balance sheets and the most patient project finance. In practice, the winners are not just the project owners, but also advisors, lenders, and contractors that get paid during multi-year permitting and courtroom cycles rather than at COD.

For ENB, the article reinforces a familiar but underappreciated point: the asymmetry is not only regulatory delay, it is stranded optionality. Any western export pipe becomes less a linear growth story and more a legal-duration asset, which can compress valuation multiples even if long-run volumes remain attractive. That means the stock can react negatively to headline progress if investors infer more sunk pre-FID spending, while the real catalyst is a judicial or political framework that materially narrows injunction risk and consultation uncertainty.

The contrarian read is that the market may be too focused on project cancellation risk and not enough on project redesign risk. A world where major projects proceed only with heavier Indigenous participation, equity co-ownership, and more local capture could actually be positive for select operators and midstream names with partnership credibility, but negative for legacy incumbents that rely on a pure regulatory fast-track thesis. The time horizon matters: this is a months-to-years litigation overhang, not a next-quarter earnings event, so the trade is about multiple compression and delayed cash flow recognition rather than immediate volume loss.

Near term, the biggest catalyst is not a single project approval but a court case that stress-tests the Building Canada Act or an injunction on a flagship asset. If courts lean into procedural scrutiny, the government’s stock of designated projects could slow sharply despite political momentum, and that would keep Canadian energy and infrastructure valuations capped. If Ottawa survives the first major challenge, the setup flips quickly because the market will start pricing a higher probability that consultation-heavy megaprojects can actually reach construction.

Key Decisions for Investors

• Maintain a tactical underweight in ENB over the next 3-6 months until the first material court test of the new framework is resolved; upside is limited if timelines slip, while downside re-rates faster if litigation broadens.
• Pair trade: long select engineering/construction beneficiaries with Canadian permitting exposure, short ENB or a Canadian infrastructure basket, to express the view that legal friction benefits services more than asset-owning toll-road names.
• Sell cash-secured puts on ENB at strikes 5-8% below spot with 2-4 month tenor if you want to monetize elevated headline volatility; the risk/reward is attractive only if you believe approvals proceed but timing stays messy.
• Avoid initiating fresh long-dated capital-intensive energy infrastructure longs in Canada until there is a clearer injunction standard; the first 12-18 months after designation are where court risk is most mispriced.
• If a major project wins a clean procedural victory, rotate into ENB on the pullback for a tradeable 10-15% re-rating as the market reassigns probability to constructive precedent.