C.D. Howe Institute Calls for Enhanced Project Evaluation Criteria in Canada

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A report from the C.D. Howe Institute advocates for the addition of a sixth criterion, 'additionality,' to the existing five criteria in the Building Canada Act to improve project evaluation and decision-making.

In a recent discourse on the Canadian government’s approach to major project evaluation, David Jones, a fellow-in-residence at the C.D. Howe Institute and director at Cambridge Economic Policy Associates, posits that while the Mark Carney administration is making strides in evidence-based decision-making, it overlooks a crucial criterion commonly adopted by other governments. Jones argues that the government should incorporate 'additionality' as a sixth criterion alongside the five currently outlined in the Building Canada Act (BCA).
Jones expressed his views in a recent interview, highlighting that the five existing criteria—national security, economic security, public safety, Indigenous rights and interests, and climate and environmental objectives—demonstrate the government’s commitment to informed decision-making. However, he noted that these criteria are somewhat vague and high-level, which may hinder effective assessment. "By establishing clear criteria, the government is setting transparent guidelines for accountability," Jones stated, emphasizing the importance of clarity in governmental processes.
The concept of 'additionality' is defined by Jones as evaluating the value of government intervention beyond what would have occurred without it. This includes assessing whether federal involvement can yield incremental benefits, draw private investment, or prevent the displacement of activities that would have proceeded independently. He referenced methodologies from the U.K., where project appraisals routinely incorporate additionality into their evaluations, suggesting that Canada could benefit from a similar approach.
The discussion is rooted in a paper released in September titled 'Making the Cut: How Canada Can Optimize Major Project Prioritization and Add Real Value.' This paper builds on an earlier work co-authored by Jones, which initiated the conversation around the necessity of additionality in project evaluation. In this latest analysis, Jones compiled a list of 44 potential major projects and compared them against the 18 projects that have been prioritized by the Major Projects Office (MPO) to date. He discovered that prioritized projects tend to align more closely with both the existing five criteria and the proposed sixth criterion.
Jones asserts that the government seems to be implicitly considering additionality in its project selections, despite it not being formally recognized in the evaluation framework. He urges the government to be explicit about the need for additionality in its project selection guidance, which could enhance value for taxpayer investments and stimulate private sector involvement.
In terms of scoring the 44 projects, Jones found that additionality accounted for the largest proportion of the score difference at 24%, followed by economic benefits at 21% and environmental considerations at 17%. Addressing the potential oversight of not including additionality, Jones remarked that while the current approach is not fundamentally flawed, its omission is a missed opportunity for ensuring value for money.
Furthermore, Jones emphasized that making these criteria transparent is a crucial democratic practice, allowing the public to scrutinize the government's prioritization methods. "This transparency enables taxpayers to question the government's project selection. Are we in agreement with these priorities?" he queried.
The discourse on project evaluation comes in the wake of the federal government passing Bill C-5 in June 2025, which grants it the authority to designate projects as being in the national interest and expedite the necessary federal approvals. The MPO was established in August 2025 to facilitate the identification and advancement of these significant projects, marking a pivotal moment for infrastructure development in Canada.

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