While the plan is currently light on detail, recent developments in Canada could provide a suitable framework to evolve the policy.

Nation-building projects – the Canadian approach

In April 2025 Canadian Prime Minister Mark Carney announced he would create a series of ‘nation-building projects’ in response to US-imposed tariffs and threats to Canadian sovereignty from US President Donald Trump’s ‘51st state’ narrative.

Key elements in the enabling One Canadian Economy Act are:

• speeding up the approval process for ‘nation-building’ infrastructure projects, and

• removing federal barriers to internal trade between Canada’s 10 provinces and 3 territories. 

Carney explained his position on the role of government: “In a crisis … the private sector retreats, and government needs to step up. Government must lead and catalyze private investment.” 

Projects would normally require private sector leadership, with the government acting principally as an enabler. However, projects where the government has a core responsibility, for example the development of arctic ports with national security objectives, might be exceptions.

Potential projects will be assessed against five criteria to determine if they will:

• Strengthen Canada's autonomy, resilience and security.

• Provide national economic or other benefits.

• Have a high likelihood of being successful.

• Advance the interests of Indigenous Peoples.

• Contribute to clean growth and Canada's objectives with respect to climate change.

Consultation and partnership with Indigenous communities (First Nations, Métis and Inuit) is a central pillar of the policy. 

The government has created a ‘Major Projects Office’ based in Calgary, Alberta, and referred the first tranche of five projects. These involve:

• expanding liquified natural gas (LNG) production;

• a small modular nuclear reactor;

• expanding the Port of Montreal;

• developing a copper and zinc mine; and

• expanding an existing copper mine.

All projects are well advanced in terms of the nation-building criteria, and are seen as just requiring a ‘nudge’ to get them across the finish line. 

The Major Projects Office is looking at a further tranche of six projects for more detailed assessment.  These cover:

• a critical minerals strategy;

• offshore wind development;

• carbon capture and storage;

• an arctic economic and security corridor;

• upgrading an existing arctic port; and

• a high-speed rail link.

‘Clean and conventional energy’

Canada possesses an abundance of ‘clean’ energy resources (hydro, nuclear, wind and solar) and in 2024 79% of electricity was generated from renewables plus nuclear. Canada has some of the lowest electricity prices globally, for example, the residential rate in Manitoba is NZ 11.9c/kWh.

Nova Scotia has a world-class offshore wind resource with annual average wind speeds similar to those in the South Taranaki Basin of NZ and the potential for 60 gigawatts of installed capacity. Alberta has the potential for considerable wind and solar.

However significant national grid development is required as Canada has very limited east-west grid connections, with most running north-south to serve US electricity markets. Constructing new transmission links is now emerging as a potential nation-building project.

Canada is also the world’s fourth largest oil producer and the fifth largest natural (fossil) gas producer and the term ‘conventional energy’ has been coined to describe these resources. About 80% of Canadian oil is exported to the USA, however bitumen is also exported via the ‘Trans Mountain’ pipeline from Alberta to the British Columbia coast.

Alberta Premier Danielle Smith’s policy is to build new pipelines to British Columbia, eastern Canada, and northern Canada, with the intention of doubling Alberta’s oil production by 2050. Carney has also recently signalled the prospect of doubling Canada’s LNG production by 2040. This strategy echoes OPEC analysis that global oil demand will continue to rise out to 2050. However, the majority of studies don’t support this analysis. Bloomberg NEF, Rystad, Wood McKenzie and the IEA all predict global oil demand peaking between 2030-2032, along with rapid electrification of the global south. Fossil gas demand is predicted to peak around 2035.

No private sector leadership for a new bitumen pipeline has come forward to date and Smith recently announced that the Alberta Government will act as the initial proponent.  Given the emissions implications, Carney and Smith have agreed to a ‘grand bargain’ requiring the parallel implementation of carbon capture and storage technology to reduce the high emissions intensity from bitumen extraction and processing. This has led to the inaccurate term ‘decarbonised oil’ entering the narrative.

However, analysis suggests that carbon capture and storage will be extremely expensive, will take a long time to implement, will capture only a proportion of emissions and that absolute emissions will likely increase if production is allowed to expand.  Furthermore, in 2023 70% of captured CO2 in Canada was used to extract more oil.

The British Columbia government strongly opposes the Alberta pipeline proposal, and British Columbia already has multiple well-advanced development projects in its north, in collaboration with Indigenous partners, many of which rely on an oil tanker ban, among other conditions, for social licence. The pipeline proposal has also attracted considerable criticism elsewhere.

The Canadian Government’s 2025 budget outlines their proposed Carbon Competitiveness Strategy.  This includes tax incentives for clean electricity, clean technology and critical minerals development alongside support for carbon capture, storage and utilization, industrial carbon pricing and carbon market reform.

With China now emerging as the world’s first electro-state, and economist Nicholas Stern recently stating that “growth fuelled by fossil fuels is futile because the damage it causes ends in self-destruction,” the Canadian situation illustrates the opportunities and risks of both clean and conventional energy development.

Nation-building projects for New Zealand?

Using the Canadian criteria, we can evaluate three energy-related projects, which could be considered nation-building for New Zealand:

• seabed mining

• offshore wind development

• pumped hydro energy storage

All three projects have private sector proponents.  

Seabed mining for the critical minerals vanadium and titanium in the South Taranaki Basin is currently progressing under New Zealand’s fast-track legislation. While promising to contribute GDP growth and create jobs, local indigenous and community groups strongly oppose the project, which has no proven track record of success, could have major impacts on the marine environment and would make no contribution to New Zealand’s climate goals.  Given the present global expansion of land-based critical minerals mining, including in Canada which has considerable vanadium reserves, the availability of vanadium from existing mines, and alternatives to vanadium-based battery technologies, seabed mining in New Zealand does not appear to be a crucial factor in the energy transition

The South Taranaki Basin has a world-class offshore wind resource in the same area as the proposed seabed mining activity.  Developing offshore wind in the region would increase energy autonomy, resilience and security, contribute to GDP growth, enable new major industries and provide a large number of jobs. Offshore wind technology is mature with a long record of success in Northern Europe and major projects are currently being developed in Australia, Asia and Canada. Indigenous and community groups have been extensively consulted, including the establishment of a local information hub, and there is no indication of widespread opposition.  The project has both clean growth and climate benefits. 

A pumped hydro energy storage ‘battery’ at Lake Onslow in Otago, with a capacity of 5000 gigawatt-hours, would increase energy autonomy, resilience and security, contribute to clean growth and climate goals, and provide a significant financial benefit through stabilising electricity prices. Although the capital cost has raised some objections, the investment per unit of energy stored is among the lowest in the world. Given the strategic nature of this project, there is a strong case for government investment. Pumped hydro energy storage is a mature technology, accounts for the majority of energy storage globally and is being extensively built out in China to support increasing wind and solar generation. The potential exists for Indigenous partnerships in a similar manner to those in Canada. However, there has been some degree of local opposition to the Lake Onslow site and further consultation will be required.

This preliminary evaluation is summarised below:

The Canadian approach offers both a suitable model for New Zealand policy makers to consider and develop, plus some cautionary points in relation to the energy transition. We would do well to take note of this experience and adapt it wisely to our own situation and long-term goals for a sustainable future.

Ian Mason is visiting research affiliate, Centre for Sustainability Research, University of Otago, and former director of the CNRE Renewable Energy Programme, University of Canterbury.