Written By Serge Dupont, Martin Ignasiak, Laurie Wright, David Bursey and Sharon Singh

In recent months, the Government of Canada took several steps that may alter the regulatory system for natural resource and infrastructure projects, and "clean growth projects" in particular.

• First, Bill C-69, An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024, was given Royal Assent. This omnibus budget bill introduced amendments to the Impact Assessment Act (IAA) to reconcile the Act with the October 2023 opinion of the Supreme Court of Canada that found the Act exceeded Parliament’s jurisdiction. The Government submits that the amended Act includes increased flexibility in substitution of assessments to allow for greater collaboration and to avoid interjurisdictional duplication. An earlier blog by Martin Ignasiak, David Bursey and Lisa Rodriguez suggested that the amendments “offer minimal changes and may leave the IAA once again ripe for constitutional challenges”.¹
• Second, on June 20, the government published “Building Canada’s Clean Future—A plan to modernize federal assessment and permitting processes to get clean growth projects built faster”.² The Plan was developed under the aegis of a Ministerial Working Group on Regulatory Efficiency for Clean Growth Projects established in 2023. The Plan identifies actions intended to “help good projects move forward expeditiously while supporting strong environmental protection and respecting Indigenous rights and interests.”
• Third, at the conclusion of the meeting of Energy and Mines Ministers in Calgary on July 5, the government issued a Cabinet Directive on Regulatory and Permitting Efficiency for Clean Growth Projects.³ The Directive provides guidance to federal ministers and officials on roles and responsibilities for the review and permitting of projects with a goal to get them built in a timely and predictable manner.

This commentary provides context for the Plan and the Directive, with high level advice for project proponents and investors.

The Plan

When the federal government introduced the earlier Bill C-69 in 2018, including the new Impact Assessment Act (IAA) and the new Canadian Energy Regulator Act (CERA), then Minister of Environment and Climate Change Catherine McKenna said:

“Bill C-69 will introduce a modern assessment process that protects the environment, supports reconciliation with indigenous peoples, attracts investment, and ensures that good projects go ahead in a timely way to create new jobs and economic opportunities”.⁴

Even if that Bill C-69 may be considered by some to have delivered on some of its objectives, the overwhelming sentiment among project proponents and investors is that it has not delivered timeliness and predictability of process nor enabled good projects to get built fast.

The limited amendments to the IAA contained in the more recent Bill-C-69 affirm the legislative architecture of the federal regulatory system that is likely to apply for some time (i.e., until either a new decision by the courts, or a re-consideration by Parliament).

To respond to ongoing criticism of the poor functioning of the regulatory system, and to help move forward projects that are essential to its climate change and clean growth agenda, the government is turning its attention to the administration of the system (i.e., how federal regulatory bodies and provincial counterparts can deliver more timely and predictable project reviews and permitting).

The Plan sets out a series of initiatives that in part are reminiscent of the former Major Projects Management Office (MPMO) that had been established in 2007 under the government of Prime Minister Stephen Harper.

The Plan recognizes that “navigating the different assessment and regulatory processes can feel duplicative, confusing and lead to uncertain timelines”.  What is proposed is improved efficiency.“Efficiency does not change the rigour of these processes but will focus our efforts where they can make the most impact and can help make the process more predictable.”

Further to creating the Ministerial Working Group, and then a Clean Growth Office in the Privy Council Office (PCO), the government sets out in the Plan new commitments under five broad themes:

• advancing reconciliation with Indigenous Peoples;
• reducing duplication with provinces and territories;
• increasing impact assessment and permitting efficiency;
• improving regulatory efficiency North of 60; and
• clean growth leadership by federal lifecycle regulators, namely the Canadian Energy Regulator (CER) and the Canadian Nuclear Safety Commission (CNSC).

Actions laid out in the Plan include:

• a new federal Permitting Coordinator, located within PCO;
• an Indigenous Loan Guarantee Program (introduced in Budget 2024);
• a Crown Consultation Coordinator to coordinate and facilitate consultation with Indigenous Peoples;
• a new Federal Permitting Dashboard that will report on the status of clean growth projects that require federal decisions;
• new targets of five years to complete federal impact assessment and permitting processes, and two years or less for permitting of projects that do not require a federal impact assessment;
• working with territorial and Indigenous governments in the North on (non-specified) “transformative changes to their unique project review processes”; and
• a Cabinet Directive.

The Plan does not say when the actions will be implemented and when the new structures or instruments will become operational. The Plan is thus largely that: a plan. 

A Clean Growth Office has been established in PCO under a Deputy Secretary. Authority for the Indigenous Loan Program has been established under the 2024 Bill C-69. A subsidiary of the Canada Development Investment Corporation (CDEV) will provide due diligence on the applications and administer the portfolio of loan guarantees, while Natural Resources Canada will be responsible for intake and capacity building to assist Indigenous applicants. 

Commitments will take time to implement. For example, the government will be consulting with First Nations, Inuit, Métis, and Modern Treaty and Self-Governing Indigenous Peoples on the design of the Crown Consultation Coordinator.

The Directive

The Directive flows from the Plan, and it is basically the guidance provided by Cabinet to Ministers and regulatory agencies and departments for its implementation, with specification of roles and responsibilities in the federal apparatus. 

A Directive does not have the force of law or regulation. Thus, it does not override federal laws or regulations nor fetter the discretion of regulatory authorities.  In introducing the Directive, the Plan states that it: “will support a culture shift across departments issuing federal assessment and regulatory decisions for clean growth projects”. The Directive states that “All federal entities are expected to drive culture change within their organizations that reflects the urgent action required to accelerate clean growth …”. Whether and how such undertakings affect behavior and thus the efficiency of the regulatory system is largely a question of leadership.

The Directive creates a Deputy Ministers’ Regulatory Efficiency Action Council that will include deputy heads of federal entities with a role in issuing key federal permits, licenses or authorizations for clean growth projects to get to construction.

The Deputy Secretary of Clean Growth will act as Federal Permitting Coordinator and oversee the federal permitting coordination function. The Clean Growth Office has overall responsibility for implementation of the Plan and Directive.

The Directive identifies key sectors said to be aligned with a net-zero future and thus fundamental to the domestic and global transition towards net-zero:  critical minerals; power/electricity; nuclear; clean fuels; greening of manufacturing, industry, and hard to abate sectors; and “enabling infrastructure” that includes ports, roads, rails, pipelines and transmission lines. 

Concluding Observations

The Plan and the Directive are largely statements of intent, with elements of what may be described as “inside baseball” for federal authorities. Funding in Budget 2024 of only $9 million over three years for the Clean Growth Office indicates that the initiatives rest largely on the collaboration of regulatory departments and agencies.

Given prior statements going back to 2018 and the uneven track record of the government on implementation of its commitments, the early impact on project reviews and permitting is uncertain. Experience on the ground shows that one of the biggest challenges to delivering efficient outcomes is the limited technical capacity and experience of the agencies to deal with project assessment expeditiously.

This said, the Plan provides a foundation, including the Clean Growth Office, for investors, proponents and other participants in project development to engage with the government and advocate for the efficiency, predictability and timeliness of the project review and permitting processes.

Proponents and investors of major projects should seek early engagement with the Clean Growth Office and regulatory agencies and departments to ascertain the opportunity to chart a road map for project reviews, permitting and Crown consultations, including improved collaboration with provincial authorities, that can support confidence to move forward with projects.

Bennett Jones can assist with the legal and policy analysis to engage in such discussions and to assess opportunities and risks.

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