August 27, 2025 | Category: Government Updates

We are at a pivotal time in our country’s history—our economy was already in a weakened state when the tariff uncertainty began in January. Canada must diversify its exports and invest strategically in trade-enabling infrastructure, while controlling government spending to ensure our debt does not become unruly. This demands diligent expenditure management and that projects be delivered with urgency, certainty, and strategic focus.

The Western Transportation Advisory Council (WESTAC) has been a non-partisan forum of Western Canadian transportation leaders for over 50 years. Our members include carriers across all transportation modes, ports and terminals, labour unions, shippers, and the three levels of government. The ministers responsible for transportation in the western provinces and territories, as well as Transport Canada, are all members. The Council serves as a trusted forum for collaborative dialogue on the challenges and opportunities facing the transportation sector.

The transportation sector continues to face challenges, including disruptions, capacity constraints, declining cost competitiveness, underinvestment in infrastructure, and skills shortages. A responsive, reliable trade transportation system is needed in the face of fundamental shifts in global trade patterns, climate-induced supply chain disruptions, and geopolitical risks.

Focused and impactful actions are required to address these challenges and respond to issues confronting the Canadian economy. As an exporting nation, action and investment are necessary if we intend to move more goods through Western trade corridors. To that end, WESTAC has three recommendations for consideration as you construct the upcoming budget:

1. Make regulatory certainty a priority for all trade transportation projects
2. Finalize and release the National Supply Chain Strategy and the National Infrastructure Assessment
3. Invest in economic corridor competitiveness and trade diversification

Recommendation#1: Make regulatory certainty a priority for all trade transportation projects

Canada has a regulatory problem. The legislation and regulation designed to guide project development while protecting health, safety and the environment has become so constraining that Canada has been losing out on billions of dollars in capital investment. In recognition of this problem, the government introduced Bill C-5, the One Canadian Economy Act, to allow projects deemed by the government to be in the national interest to bypass certain regulations, to speed up approval and construction timelines. While this is positive for a handful of nation-building projects yet to be identified, it does not solve the regulatory intransigence that is stopping or delaying many needed trade transportation projects across the country. With Bill C-5, you've identified the problem, and now you need to fix it for all projects—not just those large nation-building projects. 

A significant result-driven regulatory review focused on “getting to yes” is needed to reduce the regulatory burden for trade infrastructure projects. Done correctly, this regulatory overhaul can result in budget savings for your government, speed up project approvals and provide greater protection for health, safety and the environment.

Recommendation #2: Finalize and release the National Supply Chain Strategy and the National Infrastructure Assessment

It is generally accepted that a good plan can yield dividends in terms of investment, saving time, and communicating challenges to draw in assistance and ideas. This was the case during the peak of the Asia Pacific Initiative (API), when Transport Canada led efforts to position Canada’s Asia Pacific Gateway and Corridor as the premier transportation network connecting North American and Asian supply chains. It resulted in funding and support from the four western provinces and the private sector. According to Transport Canada, federal funds of $1.4 billion leveraged $3.5 billion in total project funding, and the investments had a spinoff effect in private investments exceeding $14 billion. It also contributed to Canada being ranked 10th globally by the World Economic Forum in terms of the quality of transportation infrastructure. As we lost focus and moved away from collaborative planning, our ranking dropped to 32 by 2019. 

In 2021, the federal government committed funding to launch a National Infrastructure Assessment (NIA), beginning in 2021–22, to support better infrastructure planning and inform decision-making across all levels of government. Yet it took three years just to appoint an advisory body, while the focus shifted primarily to housing. We do not have the luxury of time. The federal government must prioritize and expedite the completion of this assessment, including a strong focus on trade and transportation infrastructure

Similarly, your government appointed an independent National Supply Chain Task Force in March 2022, with a mandate to examine the key pressures affecting Canada’s supply chain operations. The recommendations of the Task Force were to help inform the development of a National Supply Chain Strategy, which was referenced in the 2022 federal budget. The Task Force recommended that the government finalize, implement and regularly renew a long-term, future-proof (30- to 50-year) transportation supply chain strategy. The National Supply Chain Office has engaged in industry consultations regarding the strategy since it was established in December 2023. A strategy has been drafted but has yet to be released.

Canada needs both the National Infrastructure Assessment and the National Supply Chain Strategy to guide investment in trade infrastructure, create the cooperative planning environment that existed in the Asia Pacific Gateway & Corridor Initiative days and signal to global partners that Canada is a reliable and capable trading nation. WESTAC recommends that these documents be released expeditiously to guide the discussion on projects of national significance and future investment in trade infrastructure.

Recommendation #3: Invest in economic corridor competitiveness and trade diversification

As a trading nation, Canada is reliant on our ability to transport our natural resources and goods to global markets competitively and efficiently. The price for our commodities is determined in the global marketplace. Canadian companies must remain competitive by delivering products reliably and at a reasonable cost. If we aren’t reliable or competitive, our goods will be replaced by those from a country that is. 

In Canada, the transportation system has been struggling from a lack of vision and investment, which has caused a confluence of challenges, including disruptions and capacity constraints. Meanwhile, competitors (Europe and the U.S.) are investing in infrastructure and supporting their exporters through various tax measures, placing Canadian businesses at a significant disadvantage.

To remain competitive, we encourage the federal government to pursue the following measures:

i. Expedite the implementation of the promised First and Last Mile Fund (FLMF). Investments are required to build connections from critical minerals and other natural resource projects to current transportation networks.
ii. Design the new $5 billion Trade Diversification Corridor Fund in consultation with industry to ensure a focus on infrastructure projects needed to address current capacity constraints and those that will be created as we diversify our trade away from the southern border. 
iii. Implement 100 per cent immediate depreciation for transportation capital assets to level the playing field with the U.S. and improve the Canadian investment climate. 

The table below shows the different treatment of rail capital cost allowances between the U.S. and Canada following the adoption of the One Big Beautiful Bill Act in the U.S. This legislation re-introduced and made permanent 100 per cent immediate depreciation for investments in railway capital assets in the U.S. Without a similar tax treatment in Canada for transportation capital assets, we will continue to lose capital investment to the U.S, and our productivity rates will continue to decline

CANADIAN VS. U.S. TAX DEPRECIATION RATES FOR RAILWAY CAPITAL ASSETS
	Canada 1	U.S. 2
	Track Infrastructure
Year 1	10%	100%
Total by Year 4	34%	100%
	Rail Yard Facility (Building)
Year 1	4%	100%
Total by Year 4	15%	100%
	Railcars
Year 1	15%	100%
Total by Year 4	48%	100%
	Locomotives
Year 1	30%	100%
Total by Year 4	76%	100%
1 The previous government’s Accelerated Investment Incentive is being phased out. 2 In July 2025, the One Big Beautiful Bill Act reinstated and made permanent 100% depreciation for qualified assets that were placed in service after January 19, 2025.

In closing, Canada can attract capital investment, diversity, and grow our trade and transportation infrastructure, increasing economic opportunities for all Canadians. Budget 2025 should focus resources on implementing policies that de-risk projects by ensuring regulatory certainty and predictable timelines. We also urge you to release the studies you have announced, taking demonstrable actions that are clearly communicated because of this work. Finally, take the actions detailed above in support of trade diversification and competitiveness.

Budget 2025 provides an opportunity to advance these priorities and strengthen Canada’s position as a competitive and resilient trading nation. We look forward to your decisive action on these recommendations and remain ready to assist in any manner that will expedite this work. Specifically, as the premier trade transportation organization with the most comprehensive membership base, WESTAC would be pleased to organize and support the industry consultation for you on the Trade Diversification Corridor Fund.