Tuesday, November 25, 2025
By Doug Ewing and Zach Parston
With the passing of Bill C-5, the One Canadian Economy Act, project owners, financiers, and community leaders have reason to be enthusiastic.
Large infrastructure projects are desperately needed to shore up our economy, provide energy security, and protect Canada’s national sovereignty. Everyone agrees it’s time to build. Projects in energy, digital communications, resources, and transportation will build resilience and boost global competitiveness, enable trade, spur innovation, provide jobs, and deliver better utilities and services to Canadians from coast to coast to coast.
Behind that excitement, however, lies reason for concern. Massive projects are inherently risky and complex, wherever they take place. Danish economic geographer Bent Flyvbjerg’s influential research—for his book How Big Things Get Done—across 20 countries and five continents showed that nine out of 10 projects experience significant cost overruns. When projects get off the ground, only half reach completion, KPMG Global research shows. Ballooning budgets and incessant delays lead to project revamps that deliver less than the upgrades and innovations that were first promised, dashing hopes and eroding trust.
Canadians are eagerly awaiting large projects in energy, utilities, rail, ports and data processing, but our national track record on megaprojects needs a reset. There’s too much at stake to put shovels in the ground without devoting every effort to ensuring projects are successful. How can we seize the moment and really deliver?
A fair look at failure
The first step is recognizing that megaproject failures are not, as often believed, black swan events. They fail for predictable and often compounding reasons, such as optimism bias, lack of stakeholder alignment, ineffective oversight, slow decision making, insufficient owner controls, poorly devised contracts, and insufficient risk management and ineffective oversight. And the list goes on.
When projects do circumvent common hazards, their massive scope, complexity, and duration expose them to greater uncertainty. If a ball starts rolling down a hill, even a tiny bump in the road becomes an exacerbating force as momentum builds. The more technical complexities, contractual relationships, diverse stakeholder needs, and political scrutiny, the higher the vulnerability to risk.
There’s too much at stake to put shovels in the ground without devoting every effort to ensuring projects are set up to be successful.
Six pillars for project success
It’s our business to help organizations keep projects on track. We’ve thought strategically about what executives and Boards need to focus on at the outset of large projects. But if an initiative has already started and goes sideways, it is our job to help you turn it around.
For example, we tested a new approach on a multibillion-dollar megaproject that was forecast to go 100 per cent over budget and deliver a year late. These signs of failure appeared in the first year of a five-year construction window. We reorganized the client’s governance and organizational model, establishing a new project culture, and renegotiating the construction contract. Final project costs came in only 30 per cent over budget and on schedule.
Our six-pillar framework drove this dramatic turnaround. It’s designed to help complex initiatives guard against failure. Each pillar provides guidance around questions Boards and executives should be asking, where they should probe for answers, and how they should challenge project teams. Mapping out the pillar areas well gives projects a firm foundation and increases the likelihood of success.
How can Major Projects be successful?
Six pillars of success to deliver major projects on-time, on budget and as promised.
Pillar 1: Investment anD business planning
The first pillar focuses on business case and necessary investment throughout the project’s lifecycle. Success is impossible to achieve if it’s the “wrong” project from the get-go. Is this project worth investing in? Does it have the right financial foundation? Is it viable? How does it compare to other projects?
We recently joined a project that started off in the wrong direction, driven by engineering concerns instead of business outcomes. It’s difficult to reverse course once a project is baked, so the need for proper project business planning cannot be overstated. After revisiting the project objectives, we revised the project scope, reduced costs by 30 per cent and cut project delivery time in half, helping our client avert project failure and significant economic impact to the region.
Pillars 2-5 provide a valuable planning and diligence roadmap at each critical planning stage. Once a project is selected and defined, these pillars set the course for the project implementation to follow.
Too often, however, leadership bypasses pillars 2 and 3 and moves too quickly to pillars 4-6. The rationale is that this is what’s needed to get projects off the ground faster.
Our research shows that pushing governance decisions down the road makes success in subsequent pillars more difficult to achieve. Project owners need to manage this tension between building smart and building fast. Smart requires front-end planning. – not just in design but in deliverability. It’s what ensures you have the right people, the right structures, approvals and processes to acquire the speed and capacity to deliver.
The success of major projects therefore hinges on preliminary decisions and planning by executive leadership and Boards and a smooth integration of all the pillars.
Pillar 2: Governance and oversight
The second pillar revolves around effective governance and oversight. Every project needs a robust governance framework, with structure and rules for delivery and oversight. This starts by ensuring alignment across stakeholders, the public, and contractors.
In a too-familiar story, a large transit project slated for five years turned into a far longer project due to lack of alignment. Project owners weren’t on the same page as stakeholders, and the corporations involved didn’t prioritize the same business objectives. As a result, functions within those organizations worked against each other and toward different outcomes. Misalignment created public and contractor frustration, as outcomes and contracts changed, costs escalated, and schedules deteriorated.
Alongside alignment, effective governance is based on accountability, authority, and disclosure. There needs to be a structure and rules in place for decisions, escalation and reporting, clear project KPIs, and a means to ensure compliance.
Pillar 3: Organization and performance This pillar—organization and performance—focuses broadly on resources, leadership and project culture. Are mechanisms in place that set the right tone, empower the right teams, and support effective and efficient project delivery?
Megaprojects have budgets equivalent to large corporations. They need depth and breadth of experience, but they also employ temporary teams. Managing conflict, accepting change, and establishing the right working cadence are vital to project success. A relentless focus on the clock is essential, making consensus-based decisions unworkable.
Project owners need to remember these projects aren’t business as usual. They need purpose-built delivery organizations and the capacity and capability to deliver under the requirements of a project environment.
Pillar 4: Commercial and financial
The commercial and financial pillar ensures financial structures are in place to support the project. Successful projects rely on strategic contracting and procurement relationships with a clear understanding of the risk allocation between parties. Changing market conditions play a role and different contracting models require different levels of owner oversight. A mismatch between owner controls and contracting model can lead to poor performance. There’s a common misconception that project performance can be outsourced. We’ve seen this up close in oil and gas processing projects that fell behind planned costs and schedule performance with an engineering, procurement and construction management (EPCM) contractors. It took restructuring an experienced owner team and owner controls capability to drive EPCM performance and turn things around.
Pillar 5: Approvals and social license
No project can proceed successfully without the appropriate approvals and social licence. Does the project meet current regulatory requirements and uphold Rightsholders’ legislated rights?
As project owners pursue regulatory and environmental permitting, they must take a strategic approach to protect not only the environment, but the projects cost and schedule. Proactive early communication and participation of Indigenous communities are table stakes. For more and more projects, involving Indigenous communities in the ownership structure helps formalize a long-term commitment and shared benefits. Co-development and equity participation can help ensure Indigenous communities t are appropriately involved in the projects and incentivized to see projects move forward on schedule.
Pillar 6: Delivery and risk management
The final pillar—delivery and risk management—traditionally gets the most attention. Succeeding here means project teams have the delivery capability and technical acumen to be successful.
Independent reviews and due diligence around the accuracy and viability of cost and timing estimates is essential. Project owners need to expunge optimism bias from the process. They need realistic budgets that account for less-than-ideal conditions, not only best-case scenarios.
Too often, projects fail because there wasn’t enough budget or time allotted from the beginning. Projects are often approved in principle before there’s adequate engineering and design. However, once those details are ironed out, teams are reticent to increase budgets for fear the project will be cancelled.
That approach won’t get anyone in the infrastructure industry out of the cycle of failure we’re experiencing. The six-pillar framework is a tried-and-true formula that sets projects on the road to success.
Project success is now a national imperative
The biggest challenge project owners have right now is an enviable one: leading the charge to build the nation Canadians want and deserve. We’ve seen how stalwart Canadians have been with the threat to our economy, trade and sovereignty. In our haste to deliver the things we need to protect—our economy, our security, our resources and biodiversity, our coasts, and trade—we should learn from past failure. It’s not caution or hesitation we need; it’s care.
Doug Ewing is a Partner and the Major Projects Leader for KPMG in Canada.
Zach Parston is a Partner and National Infrastructure Capital Projects Leader for KPMG in Canada.
[This article appeared in the November/December 2025 issue of ReNew Canada.]
Featured image: Large infrastructure projects are desperately needed to shore up our economy, provide energy security, and protect Canada’s national sovereignty. (Consulting Engineers of Alberta)
