With the recent passage of Bill C-5, the federal government has taken its first major step towards fulfilling its promise to get Canada building again. The idea is pretty simple: under the Building Canada Act, the federal government can now fast-track approvals for projects deemed to be in the national interest. By simplifying and accelerating the approvals process, companies can then get shovels in the ground quicker.
It’s hard to cheer against the sentiment or the urgency with which Prime Minister Mark Carney is acting. For a decade, Canadians have endured policies that have had the opposite effect: making it harder and harder to get anything done. Major projects were subjected to long, onerous, uncertain, and politicized review processes; layers and layers of federal regulations stymied resource sector development. Then, even if a project was finally approved, that approval was contingent upon meeting a ballooning number of costly and time-consuming conditions. Not surprisingly, business investment in Canada flatlined.
And we have the results to show for it. On a per capita basis, the Canadian economy has seen almost no growth since 2017. Over the last decade, we ranked 37 out of 38 OECD countries on this measure. In other words, Canadians are no better off today than they were eight years ago. We’re standing still while nearly every other major industrialized country is pulling farther and farther ahead.
That’s why businesses are cautiously optimistic about the Building Canada Act. It captures the ambition of a country that’s tired of standing still and just wants to get things done. Currently, projects can take half a decade or longer just to get approved. Both the Trans Mountain pipeline expansion (TMX) and the LNG Canada project took seven years just to get greenlighted. While this legislation does not commit to a specific timeline, the federal government wants to get the approval period down to two years for projects considered to be in the national interest.
As well, fast-tracked projects will now be shepherded through a new Major Projects Office (MPO) within the federal government. The MPO is intended to guide projects through the maze of federal ministries and regulators involved in project reviews, ensuring they are coordinated and work together to get things done, on time.
These are all good things. We applaud the prime minister’s desire to identify projects of economic significance and move them forward faster than the current system allows.
But there are some important areas where C-5 misses the mark.
Room for improvement
For one, the federal government doesn’t actually commit to a two-year timeline for major project approvals. And while we would like to see approvals take less than 24 months to complete, there are some significant barriers in the way of achieving even that goal.
Not least of these is that the internal process for federal approvals hasn’t changed, even if the expected timeline has. There’s a real risk that the ambition of C-5 will be undermined by the internal bureaucratic inertia that keeps projects moving at a snail’s pace.
Reaching the two-year goal will demand a much higher level of coordination across departments and agencies. It will mean not only breaking down silos and treating fast-tracked projects with a shared sense of urgency but also driving a massive cultural shift within the public service to prioritize speed and accountability in the approval process.
The second, and more significant, issue is that C-5 faces considerable resistance from Indigenous communities, which are concerned about the accelerated process overriding their Section 35 rights. Indigenous consultation and economic participation are vital to major projects going ahead. But C-5, which itself has generated controversy for its lack of Indigenous consultation, creates the impression that the federal government will run roughshod over these considerations in order to meet the two-year target. With Indigenous communities already mobilizing to protest the proposed development of Ontario’s Ring of Fire, unless these concerns are addressed, C-5 risks stoking tensions and, ultimately, doing more harm than good. For C-5 to be successful, the federal government must engage Indigenous communities intentionally and thoughtfully, building trust through meaningful consultation.
A third issue is that C-5 is unapologetic about picking winners and losers, and gives the federal government extraordinary power to decide which projects get a “fast pass” and which don’t.
The legislation lists a few considerations for how it will determine if a project is in the “national interest”—including national security, economic benefit, and the advancement of Indigenous people—but these criteria are neither exclusive nor binding.
In other words, the federal government can choose whichever projects it wants. Not only that, but it’s unclear which parts of the current review process will be skipped, shortened or glossed over to meet the accelerated timeline.
All this creates enormous asymmetry in Canada’s investment climate: projects the government likes get preferential treatment, while the rest remain in the old, broken system. To be sure, C-5 greatly increases the chances that more projects actually get over the finish line than before, but tackling policy on a project-by-project basis does little to calm the investor uncertainty that led to the problem in the first place.
Finally, our biggest concern is not with the act itself, but with the overall policy environment that made it necessary. The current system of major project approvals is just one part of a broader Canadian policy and regulatory environment that has caused business investment to dry up. Unless the government also addresses issues like the proposed oil and gas emissions cap, the West Coast tanker ban, and the new greenwashing provisions in the Competition Act, C-5 may have limited impact. In other words, even if a pipeline is approved in two years instead of five, there won’t be anything to fill it with if those other policy barriers have not been addressed.
Concerns aside, C-5 represents an improvement over the status quo. But it’s just a first step. What matters most is improving the overall policy and regulatory environment, including the review process for projects not in the “national interest,” so that we can truly build and unleash Canada’s economic potential.
