Canada deserves a project approval process that’s swift by default

At last, Canadians have a federal government that seems serious about getting big and ambitious projects built. Can you hear our collective sigh of relief?

That relief follows the recent passing of Bill C-5, an omnibus bill that includes the Building Canada Act. Having received royal assent in June, it introduces a new mechanism to fast track the approval process for projects deemed in the national interest.

But like everything Ottawa does, there is a catch: the fast lane only applies to projects the government selects. Rather than making the approval process swift by default, Bill C-5 simply makes it swift by exception.

We have seen this story before. The Impact Assessment Act passed in 2019 was sold as a simplification. Yet in its first five years, only one project was approved—Cedar LNG. The approval process, at the federal level, essentially ground to a halt.

There are currently 20 projects undergoing the federal impact assessment process, with 12 in the second phase and five still in preliminary planning. Another three are going through a different route where the federal government deems the provincial assessment as good enough.

Of the 17 projects going through the traditional route, not one is in either of the two final phases.

Under the Building Canada Act, to benefit from an expedited approval process, a government appointee will decide whether a project qualifies as being in the national interest. In other words, any project that does not catch the government’s eye remains stuck in the same broken process.

Under this process, investment in key sectors like energy dried up.

In 2015, the value of projects in Natural Resources Canada’s major projects inventory stood at $711 billion. By 2023, it had dropped to $572 billion. Adjusted for inflation, Canada should have had $886 billion in planned investments. That is a $314 billion gap.

While Bill C-5 sends a positive signal, it does not resolve the core problem: Canada still lacks a stable, transparent, and efficient project approval process.

Meanwhile, the rest of the World keeps investing in energy.

Investment in upstream oil and gas investment was set to increase by seven per cent in 2024 worldwide. This follows a nine per cent rise in 2023.

The kicker? There has been no shortage of demand for Canadian energy.

Since 2022, Japan, South Korea, Germany, Poland, and Greece, among others, have expressed their interest in obtaining Canadian energy products. We turned them away.

That means someone else is eating our lunch.

And while Bill C-5 sends a positive signal, it does not resolve the core problem: Canada still lacks a stable, transparent, and efficient project approval process.

Bill C-5 allows government to bypass its own legislation when it deems it necessary. But should getting good projects built not be the norm?

We need a process that is swift by default, not by exception.

First and foremost, firm deadlines are required. Under Bill C-5, federal assessments for national interest projects must be finalized within two years. That standard should apply to all projects, with an even more timely 18-months as the goal. This would require removing the ability of politicians to pause or extend the deadline.

Expedition also requires scaling back the federal governments reach in its assessment. But this shouldn’t be controversial: Federal assessments should be limited to areas of federal responsibility, respecting constitutional boundaries and reducing legal uncertainty.

When conducting an assessment, the scope of factors under consideration should be limited so that it relates to the core of environmental assessment. Understanding how a project impacts the intersection of sex and gender is so subjective that it complicates the approval process. Make it as expansive as it needs to be, not as expansive as it can be.

This process should also not be rife with duplication. If a province has already conducted a rigorous assessment, Ottawa should automatically accept it.

The passage of Bill C-5 is an implicit admission that our regulatory process is broken. But instead of a system that works for a select few, Canada needs a system that just works, period. If we want a thriving, prosperous economy, we cannot afford to have any more wealth generating projects die in waiting.

Krystle Wittevrongel is Director of Research at the MEI and the author of “Canada Deserves a Project Approval Process That Is Swift by Default.” The views reflected in this opinion piece are her own.