On June 6th, the federal government tabled Bill C-5: An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act (Bill C-5). Part 2 of Bill C-5 will enact the Building Canada Act which professes to streamline assessment and regulatory approval processes for projects designated to be in the national interest. But in reality, this legislation will shortcut through existing processes designed to protect the environment, creating a black box of decision-making. The intention is to push Bill C-5 quickly through Parliament to get to the business of rapidly approving projects in the national interest. But is this a case of legislative and regulatory haste making environmental waste?
What does Bill C-5 propose?
Once passed, Bill C-5 will enact two pieces of legislation. Part 1 will enact the Free Trade and Labour Mobility in Canada Act which establishes a statutory framework to remove federal barriers to interprovincial trade. Part 2 will enact the Building Canada Act which allows designation of “national interest projects” (NIPs) which will have a starting point of what conditions need to be applied to the project for environmental protection as opposed to the usual regulatory question of whether a project should be approved and on what conditions. All decision-making authority for NIPs will be vested in one Minister. Given the potential environmental implications of this decision-making approach, this blog post focuses on Part 2 of Bill C-5.
Purpose and Intent of the Building Canada Act
The preamble to the Building Canada Act (BCA) indicates that Canada’s economy, sovereignty and security require urgent advancement of NIPs. According to the preamble, NIPs may include those projects that foster the development of economic and trade corridors, connect different parts of the country and get goods to market, strengthen Canada’s ability to trade, and enhance the development of Canada’s natural resources and its energy production and infrastructure. The preamble also asserts a commitment to rigorous environmental protection standards. As well, the preamble states that there is a need to advance NIPs through an accelerated process that enhances regulatory certainty and investor confidence.
Designation of National Interest Projects
If, on the recommendation of the Minister, the federal cabinet determines that a project should be designated as a NIP, it may be added to Schedule 1 of the BCA (s.5). Additions to Schedule 1 may only be made within 5 years of passage of the BCA into law. If a project has been added to Schedule 1 but is later determined to no longer be in the public interest, then the federal cabinet (on the recommendation of the Minister) may remove that project from the schedule (so long as the NIP Document has not been issued). The decision to add or remove a project may consider any factor that the federal cabinet considers relevant including the extent to which the project can (s. 5):
- strengthen Canada’s autonomy, resilience and security;
- provide economic or other benefits to Canada;
- have a high likelihood of successful execution;
- advance the interests of Indigenous peoples; and
- contribute to clean growth and to meeting Canada’s objectives with respect to climate change.
These considerations are not compulsory, meaning that not everything in this list must be considered. Furthermore, there is no requirement to issue a decision or explanation as to why a project has been added to Schedule 1.
Before making a recommendation for project inclusion on or removal from Schedule 1, the Minister is required to consult with any other federal Minister or provincial/territorial government that they consider appropriate and with any Indigenous peoples who may be adversely affected (s. 5). There is no requirement for public consultation when considering inclusion or removal of a project from Schedule 1.
Once a project is designated as a NIP (i.e. added to Schedule 1), then it is deemed that all determinations, findings and opinions necessary for granting of required authorizations are “in favour of permitting the project to be carried out in whole or in part” (s. 6). In other words, once a project is designated as a NIP, the starting point is to determine what conditions are to be applied to the project rather than a determination of whether the project should be approved.
The National Interest Project Document
The Minister will issue a single document (NIP Document) to function as the authorization under various pieces of legislation as specified in that document (s. 7). Authorizations that can be included in the NIP Document are listed in Schedule 2 of the BCA and include the Fisheries Act, the Canadian Navigable Waters Act, the Migratory Birds Convention Act, 1994, the Canadian Environmental Protection Act, 1999, the Species at Risk Act, the Canadian Energy Regulator Act and the Impact Assessment Act (among others). Section 21 of the BCA allows the addition, amendment or deletion of provisions in Schedule 2 by the federal Cabinet.
Before issuing the NIP Document, the Minister must:
- be satisfied that the proponent has taken all measures that they are required to take in respect of each authorization that is specified in the NIP Document (such as providing information that may be required under a particular piece of authorizing legislation);
- consult the Minister who is responsible for the enactment under which each authorization is required with respect to conditions that should be set out in the document; and
- consult with Indigenous peoples whose rights may be adversely affected.
The NIP Document must set out the conditions that apply with respect to each authorization that is specified in that document (s. 7). The Minister may amend any conditions listed in the NIP Document and may also add authorizations along with new conditions (s. 8). Before making any such amendments or additions, the Minister must consult with the Minister responsible for the relevant enactment to which the amendment applies and with Indigenous peoples whose rights may be adversely affected. Bill C-5 does not set any time restrictions on when amendments may be made to the NIP Document.
For certain enactments, the Minister must consult with the relevant regulatory body with respect to conditions before issuing the NIP Document and with respect to amendments before making amendments. These regulatory bodies are:
- Canada-Newfoundland and Labrador Offshore Energy Regulator (CNLOER) with respect to the Canada-Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act (s.9 BCA);
- Canada-Nova Scotia Offshore Energy Regulator (CNSOER) with respect to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation and Offshore Renewable Energy Management Act (s. 10 BCA);
- Canadian Nuclear Safety Commission (CNSC) with respect to the Nuclear Safety and Control Act (s. 11 BCA); and
- Canada Energy Regulator (CER) with respect to the Canadian Energy Regulator Act (s. 15 BCA).
NIPs and the Impact Assessment Act
Further, section 19 of the BCA provides that if a NIP is also a designated project under the Impact Assessment Act (IAA), then it is not subject to sections 9 to 17 and subsections 18(3) to (6) of the IAA. These particular sections and subsections of the IAA set out the planning phase of the impact assessment process IAA. As well, the Impact Assessment Agency of Canada is deemed by the BCA to have determined that an impact assessment of the project is required by section 18 of the IAA.
Thus, if a NIP is also a designated project under the IAA, the impact assessment will proceed albeit without the planning phase. By operation of section 6 of the BCA (which says every decision and opinion that has to be formed in order to issue an authorization is deemed to be granted), then any applicable decision by the Minister of Environment and Climate Change Canada or by the federal Cabinet under sections 60 or 62 of the IAA is deemed to be in support of the project. The impact assessment process is essentially reduced to a process for gathering information to set out project mitigations and conditions. The timelines set out in section 18(1) of the IAA are not applicable by virtue of section 19 of the BCA..
Although Bill C-5 does not set timelines for issuance of the NIP Document, the Prime Minister has indicated that his goal is to shorten the time for issuing approvals to two years for projects designated as NIPs (see Aiello, Carney gov’t tables bill to reduce interprovincial trade barriers, build national projects (June 6, 2025) CTV News).
Extraordinarily Broad Cabinet Powers
Aside from radically changing the approach to decision-making around NIPs, the BCA also creates significant discretion to completely exempt NIPs from existing environmental laws and from the BCA itself. Section 22 allows the federal Cabinet, on the recommendation of the Minister responsible for an enactment, to pass regulations that:
- exempt a NIP from any provision of that enactment or any regulations under that enactment;
- vary the application of any provision of that enactment or its regulations to a NIP.
Section 23 allows the federal Cabinet to make regulations that exempt a NIP from any provision of the BCA or that vary application of any provision of the BCA to a national interest project. These are extraordinarily broad discretionary powers indeed and allows for existing environmental regulatory requirements to simply be ignored.
Comments on the Building Canada Act
While Schedule 1 of Bill C-5 is currently empty, there appears to be work underway to determine which projects should be designated as NIPs . Potential projects that have been bandied about include a second pipeline from the oilsands to the west coast of Canada, the Pathways Alliance carbon capture and storage network of pipelines, and developments within the Ring of Fire in Ontario (see Thurton, Here’s a look at some major projects Canada’s leaders hope to fast-track (June 4, 2025) CBC News). But to date, this is all speculation because a list has not been formally put forward by the federal government.
Needless to say, these are all significant projects and are likely representative of projects that could be deemed to be in the national interest. These are the types of projects that are currently subject to extensive scrutiny due to their potential for significant adverse environmental impacts. And yet it is the very legislation that is designed to assess and mitigate adverse environmental consequences of developments that Bill C-5 proposes to shortcut or ignore. This approach seems embedded in the idea that environmental regulation causes undue delays. But there is research to demonstrate this may not actually be the case (see Collard et al., Does regulation delay mines? A timeline and economic benefit audit of British Columbia mines (December 11, 2024) FACETS-2024-0083).
While the ELC supports making environmental assessment and regulatory processes more efficient, these processes need to remain effective which includes elements of transparency and public consultation. While the decision to designate NIPs is made by the federal cabinet (albeit on the Minister’s recommendation), the decision to issue the NIP Document is solely in the hands of the Minister. There is no indication of opportunities for public participation or for hearings, only requirements for the Minister to consult other Ministers (who will be advised by their departments no doubt), certain regulatory bodies (CNLOER, CNSOER, CNSC and CER) if applicable, and Indigenous peoples. Bill C-5 is creating a black box of decision-making on projects that are likely to have significant adverse environmental impacts.
Where the IAA applies, the planning phase of impact assessment is to be skipped. This part of the process is critical to identify and delineate potential concerns at a very early stage in order to streamline later parts of the impact assessment process and to increase the odds of avoiding late-stage litigation. Skipping this phase, along with a black box approach to decision-making, is likely to increase public opposition to projects and may lead to project approvals being tied up in litigation. This is especially the case if there is not sufficient attention given to meaningful consultation and accommodation with Indigenous peoples.
Haste makes waste?
Not only is Bill C-5 meant to speed up approvals for projects in the national interest, the intention seems to be to also speed Bill C-5 through parliament. Prime Minister Carney has indicated he would like this bill to pass prior to June 20th but is committed to sit longer if necessary (see Lévesque and Taylor, Carney prepared to sit over the summer to pass new bill to fast-track major projects (June 6, 2025) National Post). There is value in taking more time to craft a bill that streamlines, without diminishing, existing regulatory processes.
Pushing through hastily crafted legislation and projects is very likely to create problems. We will have legislation that shortcuts through, rather than improves, existing environmental legislation. That environmental legislation exists for the purpose of allowing careful consideration of projects in order to avoid and/or mitigate significant environmental damage (some of which may be irreparable). We will be left with a black box approach to decision-making, lacking transparency and public input. In our legislative and regulatory haste, we will no doubt be creating environmental waste.
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