Michael Sabia, CEO of Hydro‑Québec, at the Intersect 2025 conference on Monday.Jenna Muirhead/The Globe and Mail
Michael Sabia, former head of Quebec’s powerful pension fund and current chief executive officer of Hydro‑Québec, warns Canada has long lacked the willpower and ambitious thinking needed to spur national projects, and he believes this must change fast in order to transform the country’s economy.
“We have an ambition deficit,” he said on stage Monday at Intersect 2025, The Globe and Mail’s conference designed to foster conversation around building a stronger Canada.
Fixing the economy, he argued, will involve condensing layers of regulation that discourage foreign investment and changing how businesses and governments partner with Indigenous communities. He also said Canada must find a new source of capital for getting these projects up and running, because a lot of long-term capital, such as pension funds, typically avoid riskier early-stage ideas.
“We’ve got a lot to fix on the regulatory side,” Mr. Sabia said, arguing that many rules, such as regulations around energy emissions, were likely implemented with good intentions, but have been piled on top of each other like “a stack of pancakes.”
Because there are now so many, the regulations are tough to navigate and can discourage sources of private capital from making investments here, he said.
“We need to stand back and say, ‘There’s got to be a simpler, better way,’” he said.
Simplifying and shortening the approval process is a focus of Prime Minister Mark Carney. As part of new legislation his government tabled last week, the One Canadian Economy Act, he wants to define and fast-track certain “nation-building” projects, and has set out criteria to declare a “major project” in Canada’s national interest. Regulatory approvals for such projects would be made in two years, as opposed to the current five-year timeline.
“For too long, when federal agencies have examined a new project, their immediate question has been: Why?” Mr. Carney told reporters on Friday. “With this bill, we will instead ask ourselves: How?”
As for relationships with Indigenous communities, Mr. Sabia said there needs to be a new approach to partnerships – something that is starting to materialize.
In his role as Hydro‑Québec’s CEO, he’s spent a lot of time visiting Indigenous communities in the province and said he has a better appreciation of how crucial it is for leaders to show up in person when trying to negotiate business partnerships.
“There is no substitute when working on these transactions for human presence,” he said. “Human presence leads to trust. And we don’t have a lot of that right now.”
Because there hasn’t been much trust, “First Nations understandably have become very good at taking projects and governments to court,” he said. “What happens in court? You lose decades.”
“If we keep doing things the old ways, it’s not going to work,” he added.
Mr. Sabia, who was the federal deputy minister of finance from 2020 to 2023, also stressed that Canada must reconsider how it will finance national resource and power projects.
For so long, the hope has been that major pension funds such as Canada Pension Plan Investment Board and the Caisse de dépôt et placement du Québec – which Mr. Sabia ran for more than 10 years – will help fund new developments. But he said there’s a major mismatch between what these funds require to meet their investment criteria and what these projects can deliver in their early years.
“Big institutional investors, they think about infrastructure as a set of financial characteristics,” he said, such as stable healthy cash flows for decades.
Early-stage infrastructure projects, however, are extremely risky because of variables such as cost overruns.
“Asking that source of capital to take all sorts of risk? That’s a crazy question,” he said. “It doesn’t work.”
Instead, he said Canada needs to think about a form of bridge capital that comes in early, takes some risk, and then once the projects have operating cash flows, major investors such as pension funds can be brought in.
But he was adamant that we’ll figure it out quickly, because now is the time to act. “We’re all worried about economic slowdown, and rightly so,” he said. “But the more we invest, and invest at scale, the more [economic pain] we can mitigate.”
“Just go forward and seize the moment,” he said.
With reports from Steven Chase and Stephanie Levitz