Ladan Mehranvar, a senior legal researcher at the Columbia Center on Sustainable Investment and an adjunct professor at Princeton University specializing in international law and sustainable development, is based in Toronto. She warns that Canadians are being asked to look the other way, not once but in every direction at once.
While the public is consumed by Donald Trump's trade war and myriad other global confrontations, the Carney government has been executing one of the most sweeping deregulatory agendas this country has ever seen, at a speed designed to overwhelm. Bill C-5, passed with strong Conservative support in June 2025, handed cabinet sweeping powers to fast-track "major projects" by sidelining Indigenous consent, environmental assessment, and labour protections.
The latest proposal extends these powers even further by enabling pre-approval of projects through cabinet decree, with consultation and environmental review happening while shovels are already in the ground. The proposed timeline is one year. Additionally, new "God Squad" powers proposed under the Species at Risk Act would allow cabinet to authorize projects even if they drive endangered species to extinction.
This approach reflects a Canadian adaptation of the "shock doctrine": flood the zone and make it all about Mr. Trump. Then, in the chaos and the flag waving, quietly dismantle the legal architecture that generations of environmentalists, Indigenous leaders, scientists, advocates, and ordinary citizens spent decades building.
But a critical question remains unaddressed: What are the long-term consequences of these policy changes?
The environmental protections being dismantled today were not invented by bureaucrats; they were won through legal battles, royal commissions, and mass mobilization following environmental disasters. They will be demanded again in the future. And when that day comes – with the arrival of a new government, or when a pipeline spill or a species collapse finally breaks through the noise – Canada will face a trap that its own government is now baiting: investor-state dispute settlement or ISDS.
ISDS clauses, embedded in more than 2,500 investment treaties worldwide, including agreements Canada has signed, give corporations the right to sue sovereign governments in private arbitration tribunals when changes in law reduce the value of their investments. Canada knows this pain well. When Quebec imposed a moratorium on fracking under the St. Lawrence River in 2011, Lone Pine Resources, an American company, sued Canada for hundreds of millions of dollars. When Nova Scotia blocked a quarry on environmental grounds, Clayton/Bilcon won a tribunal ruling against the federal government. When a liquefied natural gas project in Quebec was denied a permit over concerns about greenhouse gas emissions and impacts on marine life and Indigenous communities, Ruby River Capital sued Canada for US$20 billion, which was later reduced. The fossil fuel industry is, by far, the most litigious sector in the ISDS system.
Now imagine what happens when corporations pour billions into Canadian pipelines, mines, and oil sands expansions, relying on the regulatory vacuum that Bill C-5 and related legislation have created. When political priorities shift – or when courts strike down provisions as unconstitutional or a climate catastrophe demands policy reversal – those same companies will not simply walk away. They will pursue legal action, and those legal actions will not play out in Canadian courts, where the public interest has legal standing. They will be heard by private arbitration panels where the only question is whether their anticipated profits were diminished. This is already happening around the world. In France, the mere threat of an ISDS lawsuit by a Calgary-based oil company was enough to gut a climate phase-out law before it passed.
Mark Carney – a former governor of the Bank of England and architect of climate finance frameworks – knows that the fossil fuel model being turbocharged right now is incompatible with the world his government has nominally committed to. So does every informed investor in the room. And yet the agenda continues: privatizing airports and ports, subsidizing data centres for corporate AI, investing half a trillion dollars in defence spending over a decade, and dismantling the most important climate measures in the country to get a pipeline built.
These actions represent a deliberate effort to lock in extractivist economic models before the window closes, to create legal and financial facts on the ground that will bind future governments and cost future generations of Canadians dearly. Populations do eventually wake up and demand change. What they will find when they do is a country whose regulatory sovereignty has been mortgaged to private arbitration panels and whose public finances will be on the hook for billions in claims from the very industry that got us into this crisis in the first place.
