The Cost of Saying No

For much of the last thirty years, Canada could afford to behave as though there was very little strategic cost to saying no.

If we chose not to produce something here, someone else probably would.

Food could be imported. Energy could be bought. Manufactured goods would arrive in containers. Capital and production would migrate to jurisdictions more willing to accommodate them, while Canadian consumers continued to enjoy the finished product. That assumption was rarely written into policy. It did not need to be. It was simply part of the economic weather. Global trade was expanding, supply chains were becoming longer and more efficient, and the United States was an exceptionally dependable trading partner.

Mark Carney now describes precisely that model as a source of vulnerability. In a speech earlier this year, he argued that governments and businesses had “prioritised efficiency over resilience,” creating dependencies that can become strategic weaknesses.

That change in worldview may have important consequences for something much less glamorous than global trade: regulation. Canada has spent decades becoming increasingly sophisticated at measuring the potential cost of saying yes. Before approving a pesticide, developing a mine, expanding a farm, building a processing plant or licensing an aquaculture site, government quite reasonably asks what might go wrong.

What are the environmental effects? What are the risks to human or animal health? What happens to neighbouring communities? What happens if the science is uncertain?

All legitimate questions.

But there is another question that has historically received much less attention.

What is the cost of saying no?

Or, perhaps more commonly in Canada, what is the cost of taking so long to say yes that the difference becomes largely academic?

The asymmetry is understandable. The consequences of approving something that subsequently causes harm are visible. There is a regulator, a minister and a decision that can be blamed.

The consequences of preventing something from happening are much harder to see. A farm that was never expanded produces no headline. A processing plant built in another country leaves no contaminated site in Canada. The entrepreneur who quietly gives up on a five-year approval process rarely appears in an Auditor General's report.

And for decades the wider economic system made those decisions relatively painless for consumers and regulators.

Someone else would produce what we needed.

Lambda-cyhalothrin

The recent controversy over the insecticide lambda-cyhalothrin provides an unusually good example of what happens when that assumption begins to break down.

Lambda is a broad-spectrum insecticide used on numerous crops. Following a lengthy re-evaluation, Health Canada's Pest Management Regulatory Agency restricted a number of uses in 2021, including uses on crops destined for animal feed, because dietary health risks had not been demonstrated to be acceptable under the conditions being assessed.

The decision created significant concern among Canadian grain and livestock producers. This was not simply farmers objecting to regulation. PMRA had identified a legitimate human-health issue and was acting within the mandate Parliament had given it.

But the decision exposed another problem.

Removing an effective crop-protection product also had consequences.

Were alternative products actually available? Were they equally effective? What did they cost? What happened to yields? And what happened when American farmers continued to have access to production tools that Canadian producers did not?

Federal and provincial agriculture ministers responded in 2023 by establishing a working group to examine Canada's pesticide-management system. Agriculture and Agri-Food Canada's own briefing material later described the group as having been formed in response to the poorly received decision restricting lambda.

The working group identified a remarkably simple problem: determining that an alternative pesticide is registered is not necessarily the same as determining that farmers have a practical, effective and economically viable alternative.

In other words, regulatory decisions have costs on both sides.

Lambda itself ultimately followed a more nuanced path. Manufacturers supplied additional information, uses were reconsidered, and in 2025 Health Canada reinstated several livestock-feed uses while removing or restricting others. Health Canada concluded that the revised use pattern addressed the human-health concerns.

The lesson is not that the regulator was wrong. It is that risk assessment does not occur in a vacuum. Decisions depend on available evidence, assumptions and the questions regulators are instructed to answer.

Carney's government has now taken that idea considerably further.

Canada's National Food Security Strategy

Launching Canada's National Food Security Strategy in June, the Prime Minister argued that Canada's reliance on foreign suppliers leaves the country vulnerable to conflict, tariffs and supply-chain disruption.

His formulation was unusually stark:

“A country that can't feed itself, fuel itself, or defend itself is not truly sovereign.”

The strategy calls for more domestic food production and processing while specifically promising to accelerate approvals for seeds, feed, fertilizers and veterinary products and clear CFIA and pesticide backlogs.

Parliament has also changed the law.

The Pest Control Products Act now expressly requires consideration, where appropriate, of national and regional economic security and national food security. In specified circumstances involving environmental risk, Cabinet can temporarily intervene in a pesticide registration decision where it considers that necessary to protect those interests.

Parallel changes to the Canadian Food Inspection Agency Act allow Cabinet, subject to safeguards, to provide temporary exemptions from certain agricultural regulatory requirements for economic- or food-security reasons. There will quite properly be debate about how those powers should be used. But the underlying philosophical change is more interesting.

For perhaps the first time in decades, Canada is formally recognizing that not producing something can itself create risk.

Food security changes the regulatory equation because the old assumption—that whatever Canada chooses not to produce can simply be purchased elsewhere—is becoming harder to take for granted.

And that raises an awkward question for aquaculture.

The BC Net Pen Ban

In 2024, the federal government committed to banning open-net-pen salmon aquaculture in British Columbia coastal waters by June 30, 2029. The government cites protection of wild Pacific salmon and the transition toward more sustainable forms of aquaculture as the objectives of that policy.

Those considerations remain relevant.

But Canada now has a National Food Security Strategy based explicitly on increasing domestic production, reducing dependence on foreign suppliers and recognizing food production as part of national sovereignty.

So where is the food-security analysis of the B.C. decision?

Not the employment analysis. Not transition funding. Not retraining workers.

The food-production analysis.

If existing salmon production disappears, what replaces it? Does equivalent closed-containment production realistically emerge by 2029? Does another Canadian seafood sector expand? Does Canadian consumption decline?

Or does production simply move somewhere else and the fish come back across the border?

For most of the globalization era, that last outcome would barely have registered as a strategic concern. Today, the federal government's own food-security policy suggests that it should. This does not mean food security automatically overrides environmental protection. Nor does it determine what the correct policy for B.C. salmon farming should be.

It means food production itself has become one of the things government says it must protect.

And that should alter the calculation.

The same question extends well beyond aquaculture. Every decision that restricts domestic production carries consequences as well as benefits. For decades, those consequences were easy to overlook because imports were readily available and the shelves remained full.

That may be the assumption now changing.

Carney's food-security strategy is built around a world in which dependable supply can no longer simply be assumed. Resilience therefore means more than subsidizing new greenhouses or accelerating a few approvals.

It also means understanding the value of productive capacity before allowing it to disappear.

Canada has become very good at calculating what might happen if government says yes.

A serious food-security strategy requires us to become equally interested in what happens when it says no.