What’s Next Now That Government’s Major Projects Bill Has Passed?

News Analysis

With the Senate officially passing Bill C-5, also known as the One Canadian Economy Act, the Liberals have kept their election promise of passing legislation on major projects and interprovincial trade barriers before Canada Day on July 1.

However, the government is still a long way from approving these projects that are said to be in the national interest, and it could face challenges from those opposed to them, ranging from environmental activists to provinces, as well as indigenous groups.

The legislation passed the third reading in the Senate on June 26 without any amendments being added. The bill had also quickly moved through the House of Commons, with parliamentary committees given just a day and a half to study the bill.

Bill C-5 aims to remove federal impediments to interprovincial trade by stipulating that a good or service that meets provincial or territorial rules has met federal requirements. It also makes it easier for some workers to get federal licences by recognizing provincial or territorial work authorizations.

The tariffs that U.S. President Donald Trump has put on Canada have spurred policymakers to look for alternative trading partners, while also seeking to reduce barriers to trade within Canada. As Transport Minister Chrystia Freeland recently told the House transport committee, a 2019 International Monetary Fund study estimated that the impact of barriers to internal trade is the equivalent of Canada imposing a 7 percent tariff on itself. Besides the federal barriers to interprovincial trade, the provinces themselves also have different barriers to trade between one another, which will not be impacted by the federal legislation.

The second part of the bill aims to support the development of major projects of national interest. Ottawa would be able to allow some projects to bypass provisions of certain laws, such as the Impact Assessment Act, which has been criticized by provinces like Alberta for slowing down major projects. Some Senators raised objections to this part of the bill, saying that indigenous groups may not be properly consulted under the new legislation, while the federal government has given assurances that all parties will be appropriately consulted.

Shortly after the legislation passed the Senate, Ottawa said in a press release that it would “immediately move forward” on consultations with the provinces, territories, indigenous groups, and private sector proponents to identify “nation-building” projects and to implement measures to streamline the processes for other projects.

A new federal major projects office will also be launched in the next few weeks to facilitate this work, the government said.

The Liberal government has yet to outline exactly what projects would be approved, with Prime Minister Mark Carney saying following a meeting with the premiers on June 2 that the list would be refined over the summer.

However, Carney said he and the premiers had discussed specific projects, such as a Western and Arctic energy corridor, an Eastern energy partnership, critical minerals pathways, small modular reactors, and other port and rail projects. He did not confirm whether any of these projects would be approved.

Premiers and Projects

While all of the premiers have said they want to see interprovincial trade barriers brought down, there has been disagreement over which projects should be approved, specifically in cases where they cross provincial borders.

Quebec’s authorities have not been open to new pipelines through the province, which has led Alberta Premier Danielle Smith to promote the idea of shipping oil from the Port of Churchill in northern Manitoba to refineries on the East Coast.

Manitoba Premier Wab Kinew has also expressed support for a “northern trade corridor” to transport resources from Western Canada to external markets via Hudson Bay.

Meanwhile, a pipeline to the West Coast is also facing hurdles in British Columbia. B.C. Premier David Eby said on June 3 that while he is not blocking Alberta’s proposal for a pipeline to B.C.’s north coast, there is currently no proponent or money for the project and the idea is still “many, many years off.”

B.C. Energy Minister Adrian Dix also said on June 26 that the pipeline would be divisive, undermine other projects, and “undermine our collective efforts.” In addition, he said this pipeline would require lifting the federal Oil Tanker Moratorium Act (also known as Bill C-48), which effectively bans oil tankers from operating off the coast of northern B.C.

While the federal government could use the One Canadian Economy Act to override the tanker ban, Carney has also said he will not overrule provinces if they have objections to pipeline construction. As such, the provinces will need to come to agreement to get projects built under the legislation. Premier Eby has said he is opposed to removing the oil tanker ban off the northern B.C. coast.

Indigenous Opposition to Bill

Ottawa has said that indigenous consultation is a priority of Bill C-5, and the legislation facilitates this via the new major projects office, which will be supported by an Indigenous Advisory Council with First Nation, Inuit and Métis representation to ensure the approval of projects honours indigenous rights enshrined in the Constitution Act of 1982.

After Bill C-5 passed the House of Commons on June 20, Carney said he would be holding full-day summits with First Nations, Inuit, and Métis leadership in a bid to address concerns around the approval of projects.

Several indigenous groups have raised concerns that Bill C-5 could potentially weaken existing requirements related to indigenous consultation and environmental protections. The Assembly of First Nations has said the bill’s fast-tracking of project approvals would provide indigenous people with “minimal opportunity” to influence decisions that impact them.

Those concerns were on full display as Bill C-5 went through third reading in the Senate on June 26, with several senators saying the government had not properly consulted indigenous stakeholders.

Senator Paul Prosper said that while indigenous people were not opposed to the construction of projects that would help them prosper, Bill C-5 was a “betrayal” of reconciliation.

Prosper proposed an amendment to Bill C-5 that said projects could not be approved without the explicit free, prior, and informed consent of affected communities, but it failed to pass. A separate amendment that would have recognized the National Strategy Respecting Environmental Racism and Environmental Justice Act also failed to pass.

In response to Bill C-5 becoming law, Canada-U.S. Trade Minister Dominic LeBlanc said on social media that the new Indigenous Advisory Council “will help ensure Indigenous rights are upheld and that communities can gain equity in big projects.” He said the various nation-building projects will connect the country, promote “clean growth,” and grow the economy while reducing Canada’s reliance on the United States.

When it comes to building new projects, it will likely be years before the effects of Bill C-5 materialize. The legislation aims to reduce approval times for projects from five years to two.