Jay Khosla: ‘Fires of recent years are forcing us to evolve — to rethink how we build’

PPF’s Executive Director of Economic and Energy Policy Jay Khosla delivered the following speech at the November 2025 session of the Administrators’ Colloquium, which focused on a discussion of John Vaillant’s book Fire Weather: The Making of a Beast. 

Good evening, and thank you to Brent Mills for inviting me to be with you tonight. It is an honour to join this conversation about the choices Canada must make to secure our economic future — and our environmental future.

Let me begin with a tension at the heart of John Vaillant’s Fire Weather, the book that brings us together. Vaillant argues that the same fossil fuels that powered our rise as an industrial nation have also intensified the wildfires that now threaten our communities, landscapes and climate. His thesis captures a difficult truth: the very energy systems that built our prosperity have contributed to the warming that makes today’s fires more extreme. “The industry and this fire represent super charged expressions of two trends that have been marching in lock step for the past century and a half. Together, they embody the spiralling synergy between the head long rush to develop hydrocarbons at all costs and the corresponding increase in heat trapping GHGs that are altering our atmosphere in real time.”

And that tension mirrors the one facing Canada now. On one hand, we need industrial development — the kind that creates jobs, strengthens our economic foundations and drives productivity and growth. On the other, we face an urgent need to cut emissions, combat climate change and build resilience in a world where extreme events are becoming more frequent. Too often we frame these imperatives as competing, as if we must choose between economic security and environmental stewardship.

But there is a third way — and that path runs straight through innovation. Innovation is how Canada has always reconciled competing pressures, turning complex challenges into global advantages. We have a long history of using technology not just to expand our economic capacity, but to reduce our environmental footprint at the same time.

Think of the oil sands: an engineering feat once considered impossible to commercialize. Through decades of technological improvements — from extraction methods such as in-situ, to emissions-reducing processes — the sector has driven down emissions intensity by over 30 percent while continuing to contribute to national prosperity.

“Canada has the chance to lead, again — not by abandoning what built our prosperity, but by transforming it.”

And consider something that rarely gets the attention it deserves: carbon capture, utilization and storage. Canada is a global leader in CCUS research, home to pioneering projects and world-class science that is shaping how heavy-emitting sectors can meaningfully reduce emissions. From cutting-edge research hubs to full-scale commercial projects, Canada has built some of the most advanced CCUS expertise and infrastructure in the world. And we’re going to apply it to the oilsands to cut emissions further. Would be remiss in not mentioning that Canada and Alberta are on the cusp of a historic cooperative agreement that includes the “Pathways” project to be signed on Thursday.

Also, think of the CANDU reactor — a homegrown nuclear technology with one of the strongest safety records in the world. It remains a symbol of Canadian engineering leadership and global contribution. Nuclear is primary reason our electricity system is more than 80 percent non-emitting. And, we are now a Tier 1 nuclear nation!

And finally, think of the AVRO Arrow which had hand in making us a player in the “Space Sector” — perhaps ahead of its time, but a reminder that when Canada aligns ambition with talent, we can achieve world-class breakthroughs.

These are not just historical achievements — they are proof points. They show that Canada knows how to innovate when the stakes are high. And today, the stakes could not be higher. The path to reconciling economic growth with emissions reduction — the path out of the tension Vaillant describes — will depend on our ability to deploy this same ingenuity again.

Over the past year, I’ve been criss-crossing across the country on the biggest consultative project I’ve ever undertaken. I’ve consulted with literally hundreds of leaders representing more than 95 percent of all the energy producers and mining activities in Canada — from renewables and nuclear to oil and gas — along with critical minerals producers, industry associations, Indigenous leaders, and representatives from financial services, civil society, and federal, provincial and territorial governments. Their message was clear: the climate crisis is not our only existential threat. Canada also faces an investment and productivity crisis. We are falling behind our peers in attracting capital, building infrastructure, and delivering projects at scale.

Simply put, if we wish to innovate, decarbonize and diversify our markets while building big things, then investment attraction is at the heart of the matter.

Canada is entering a pivotal period in its economic development. Compared to the United States and other advanced economies, we face a persistent gap in productive capacity, limiting growth, competitiveness and resilience.

• Over the past decade, Canada’s total capital investment has been essentially flat in real terms, while the U.S. increased its investment by nearly 40 percent.
• On a per-worker basis, Canada invests only about 55 cents for every dollar invested in the U.S. This chronic underinvestment has contributed to a widening productivity gap: Canadian workers now produce roughly 27 percent less output per hour than their U.S. counterparts, the largest gap in over 40 years.
• This underperformance is also reflected in lagging living standards—between 2015 and 2024, Canada recorded just 1.4% growth in real GDP per capita, which ranks it second-last among all OECD countries, underscoring Canada’s “lost decade” of per-person income gains.

If this wasn’t enough, the final wake up call – Trump and his tariffs. The good thing is that Canadians are now watching and becoming conversant on economic goals.

“The path to reconciling economic growth with emissions reduction — the path out of the tension Vaillant describes — will depend on our ability to deploy this same ingenuity again.”

And, what do we need to change? We have regulated in the belief that “if you build it, they will come.” But regulation does not beget investment nor building things. A country’s ability to attract investment is defined not just by what it offers, but by how effectively it delivers. Countries widely recognized for having the world’s most effective Foreign Direct Investment (FDI) attraction models, such as Singapore, Ireland and the Netherlands, act as de facto “investment locator agencies,” offering integrated, one-window approaches that proactively generate and manage deal flow functions, and aggressively bundle functions such as financing, permitting and infrastructure to land high-value investment. In contrast, Canada’s investment promotion and attraction landscape is crowded, complex and fragmented.

That’s why we wrote Build Big Things, a playbook to turbocharge investment for economic growth, which says that four things need to come together to get energy, critical minerals and infrastructure projects to final investment decision (FID):

1. Better coordination of public and private financing;
2. Streamlined regulation to reduce timelines;
3. Indigenous economic participation; and
4. Enabling infrastructure, the roads, ports, transmission lines and the skilled people needed.

That report fanned the embers, so to speak, of the beginnings of a consensus in Canada to build big things. It included me and my colleague testifying before the Senate’s Committee of the Whole, the House of Commons Standing Committee on Transport, Infrastructure and Communities, as well as dozens of panels and conferences. The report has had extraordinary impact.

But the Build Big Things Playbook also makes clear that the type of projects matter. Canada’s next nation-building project list must be guided by four strategic outcomes:

1. Prosperity – Increasing economic growth, productivity, employment and affordability.
2. Security – Diversifying export markets and ensuring economic and resource sovereignty.
3. Environmental responsibility – Reducing emissions while positioning ourselves to win in the post-transition, low-carbon economy.
4. Reconciliation – Supporting Indigenous ownership and economic participation.

I am thrilled that the federal government has taken up many of our recommendations through Bill C-5, the Building Canada Act — from naming nation-building projects to establishing a Major Projects Office to fast-track them. So far, it has identified strong projects: the Darlington SMR in Ontario; the North Coast Transmission Line in British Columbia; five critical minerals projects across Ontario, Quebec, New Brunswick, B.C. and Saskatchewan that will supply clean-energy and enable clean technologies; and two LNG projects expected to produce some of the world’s lowest-emission LNG, with emissions roughly 94% below the global average. Taken together, these projects reflect the four strategic outcomes in Build Big Things and align Canada’s economic and social goals with climate action — ensuring that every fast-tracked project advances prosperity, security, sustainability and reconciliation.

And Canada can go further. We can reduce global emissions by exporting cleaner energy to the world. Capital expenditure on electricity generation, transmission and distribution, for example, hasn’t even kept up with the inflation rate over the last decade and we are now an importer of hydro – think about that! Also, our LNG has a dual climate advantage — it’s cleaner to produce and cleaner to burn than coal. Using mechanisms like Article 6 of the Paris Agreement, we could receive credit for displacing emissions abroad. We should start with Japan, a trusted ally and partner.

And, perspective matters. Canada contributes about two percent of global greenhouse gas emissions. Even if we reached net-zero tomorrow, wildfires would still rage across our forests unless the world acts together. The answer is not isolation — it’s leadership. By leveraging our resources, technology, and credibility, we can help bend the global curve.

“Fire is not only a destroyer — it is a mirror. It shows us what happens when our combustion-based civilization meets a warming planet. But Vaillant also reminds us that fire is a fuel for evolution.”

And here’s the hopeful part. As Chris Turner (co-author of BBT) recently wrote in his article which appeared in The Globe and Mail, “A decade after Paris, the clean economy is winning.” Solar and wind are now the cheapest forms of new electricity in history. Battery costs are falling. Every major automaker is electrifying. This transition is real — and we are not looking back. Canada has the chance to lead, again — not by abandoning what built our prosperity, but by transforming it.

We can use the same technological ingenuity that developed the oil sands to build carbon capture hubs, advanced nuclear systems, and the digital infrastructure that will underpin a cleaner grid. We have the capacity to produce the world’s cleanest oil and gas and use the revenues they generate to fund the clean-energy systems of the future. Bottom line is that to do so, we will need to attract a lot of investment capital and chase “final investment decisions” on all projects.

Now, I want to offer four policy prescriptions that we may wish to discuss going forward.

First, I was ADM of Energy during the time of the Fort MacMurray fire, and what I learned is that there needs to be a joined-up national entity to coordinate immediate, medium-term, and long-term wildfire responses, including insurance and re-builds. I am particularly thankful that 100K people were evacuated with no injuries or deaths.

As an aside, in early May, 2016, as the Fort McMurray fire took hold. My days and nights were spent working in the Government Operations Centre in Ottawa, or GOC for short, taking calls from CEOs as they shut down their production in real time.

What Canadians didn’t see during the Fort Mac fire was that the fuel system in Canada was in peril with those facility shutdowns. At the peak of the shutdown, roughly 1 million barrels per day of Canadian oil production were offline. You’ll know from the shocking graphic in Fire Weather the extent to which the network of pipelines flows from Alberta – 70 cross US border. Parts of Canada’s fuel supply was at risk amongst all the other things. Energy is life as we know it.

There are others – Lac Megantic, Kalmazoo pipeline, Gulf Oil spill, Fukushima to name a few.

So, it’s about solid governance and institutional gravitas and we don’t currently have that on fires or disasters per se. Fires don’t respect provincial boundaries. In Build Big Things, we argued that the federal government must ask what’s truly in the national interest — and fire and disaster management surely qualifies.

Second, I believe that to unlock Canada’s full FDI potential and to address the global competitiveness headwinds for FDI, we need a strategic, coordinated single-window approach to FDI, similar to best in class countries like Singapore, that aligns investment attraction, financing and deal flow to national priorities and drives high-value projects from interest to final investment decision.

Third, Canada needs a sovereign wealth fund, modelled on Norway’s, to capture revenues from our natural resource wealth and invest them in a sustainable future: in AI, clean technologies and most importantly, in people. And we need more nuclear physicists, permitting specialists, Indigenous negotiators and project managers to deliver the next generation of major projects for economic growth and environmental resilience.

Fourth, we need to lean into LNG displacement and use Article 6 of the Paris Agreement to partner with countries like Japan. Canada should be credited for helping other nations reduce their emissions.

Now, let’s return to the image of fire. John Vaillant’s Fire Weather reveals that fire is not only a destroyer — it is a mirror. It shows us what happens when our combustion-based civilization meets a warming planet. But Vaillant also reminds us that fire is a fuel for evolution. It clears space for renewal. I was taken by an incredible recent piece in The New York Times about nature returning to the Palisades after the terrifying fires in California in Jan 2025.

That’s the moment we are in now. The fires of recent years are forcing us to evolve — to rethink how we build, how we power our lives, and how we cooperate as a global community. The path forward is one of “revirescence” — that wonderful word Vaillant uses – and I’m not ashamed to say I had to look it up. It means to grow green again. To renew. To begin anew.

Revirescence — that’s Canada’s opportunity: to turn our ingenuity toward solutions, to build big things again, and to grow greener and stronger with every challenge we face.

I say: Let’s go! Thank you.