The federal government’s One Canadian Economy Act promises to accelerate the approval process for critical infrastructure projects, which could be a much-needed boon to the energy sector. However, lawyers in the industry argue that it must align to help grow Canada’s economy while providing an adequate voice for all rightsholders and stakeholders.
Pitched as a bold solution to Canada’s chronic infrastructure bottlenecks, the act passed into law in late June with tremendous speed after it was introduced by the Liberal government of Prime Minister Mark Carney just at the beginning of the month. With relatively minor amendments, it made its way through Parliament and the Senate with the support of the opposition Conservatives.
However, Indigenous communities have expressed concern over the recent passage of the act and how it might infringe on their rights. Nine Ontario First Nations have even filed a court challenge against the act and Ontario’s similar Bill 5.
Proponents of the act argue it will bring overdue reforms to a fractured permitting process that has left strategic energy and infrastructure projects – from pipelines to ports to transmission lines – mired in years of red tape. But critics say the bill could exacerbate tensions with Indigenous communities, strain federal-provincial relations, and undermine environmental protections that Canadians value.
McMillan LLP partner Sharon Singh points to the government’s stated urgent economic and geopolitical reasons for the creation and passage of this act. “We’re genuinely in a crisis right now,” she says, pointing to the threat of tariffs by the US as a factor, along with the lack of productivity growth. “This government wants to make an impact because the global context for Canada demands action.”
The infrastructure component of the act aims to reduce federal approval timelines for projects deemed in the “national interest” from five years to just two. This could mean faster development of pipelines, nuclear facilities, and other projects. The legislation does not apply to all infrastructure projects, as only a select group of truly “nation-building” projects will qualify for this fast-tracking process.
“It is a set of unique projects that probably meet several criteria,” Singh says. “Not every infrastructure project out there for consideration will make the list.”
Singh’s colleague at McMillan, Catherine Doyle, is optimistic that the proposed changes could unlock stalled private capital and improve Canada’s competitiveness.
“The processes that exist today are seen as flawed by proponents of large, important infrastructure projects,” says Doyle. “If we can get this right, we can see a significant acceleration of project timelines. This speed could become a competitive advantage for Canada, unlocking more investment in this country…
“The demand is there. The capital is there. The challenge is designing a process that works – not just legally, but strategically.”
Melissa Stoesser Young, an energy infrastructure lawyer at McMillan, notes that in Canada, major infrastructure projects often span multiple regulatory frameworks – federal, provincial, and local – and involve environmental assessments, impact assessments, and interdepartmental coordination. Additionally, she notes that it is necessary to consult with Indigenous communities on how a proposed project affects them and their role in its construction and operation.
She says the complexity has made it increasingly difficult to get large projects off the ground, especially those crossing provincial borders. “You’ve got interprovincial tensions, federal overlap, environmental review delays, and Indigenous consultation all happening in silos. That kind of fragmentation scares off investors.”
Still, lawyers in this area say the urgency behind the bill cannot override the need for proper consultation with Indigenous peoples.
“There is distrust around the way this legislation was introduced,” says Singh. “There were promises from the federal government to co-develop major legislation with Indigenous communities. This bill landed without that happening.”
The One Canada Act does not directly amend Canada’s obligations under the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). Still, critics worry it may be interpreted as a means to “fast-track” projects that would otherwise be delayed by Indigenous opposition or complex negotiations.
Kim Howard, a partner with McCarthy Tétrault LLP, says the legislation aims to remove barriers preventing some projects from being built. “It’s about fast-tracking projects that are important, and in the country’s long-term interest,” she says.
Once designated, these projects must meet the standards in existing legislation, such as the Impact Assessment Act and the Species at Risk Act. “You still need all the same authorizations – you’re just not repeating processes unnecessarily,” Young says. “It’s a layered process on top of existing laws.”
Howard says the legislation outlines several factors for determining which projects are in the nation’s best interest. “They look at whether a project strengthens Canada’s autonomy and security, provides economic benefits, contributes to environmentally-responsible growth, and advances Indigenous interests.”
For any project under exclusive provincial jurisdiction, the federal government must consult the province and receive written consent before proceeding. “The provinces aren’t being pushed aside,” Howard says. “The legislation also includes requirements for consultation, including with Indigenous groups and the provinces.”
However, the “real test” for the new legislation, says Howard, will come “when we see how all parties involved – governments, project proponents, Indigenous communities – come to the table and work together. You can’t legislate your way out of the duty to consult.”
She adds, “We’re at a pivotal moment. If this works, it could be a game-changer for how we build critical infrastructure in Canada. But a lot hinges on how this plays out in real-world situations.”
Martin Ignasiak, head of the energy regulatory practice at Bennett Jones LLP, says that over the past ten years, “it’s become increasingly difficult to build important projects in this country.” According to Ignasiak, an increased “pancaking” of policies – one on top of the other – has prevented investors from being certain whether or when their project will be built.
He says that many investors who would like to invest in energy infrastructure projects aren’t prepared to go through the years-long process it could take. However, he hopes the new legislation will ease that problem. “From my perspective, this act is very good in the sense that it provides for the ability to approve projects in the national interest on a more timely basis.”
One key feature of the Act is that it makes the initial “go/no-go” decision at the front end. Once a project is deemed in the national interest, other required federal approvals are expected to follow more efficiently, provided the necessary conditions are met.
Ignasiak emphasizes that Indigenous engagement remains a legal and ethical priority under the new law. “Partnerships with Indigenous communities are critical not only for legal compliance but for legitimacy and long-term success.”
Ignasiak adds that this is just the first step in streamlining project approvals. He points out that “the reality is that 90 to 95 percent of our clients are still going to have impediments to their projects getting built because they may not meet the ‘nation-building’ criteria.” However, he recognizes that the new legislation for critical infrastructure could also provide a template for streamlining the approval of smaller projects.
At Torys LLP, partners Dennis Mahony and Valerie Helbronner argue that the One Canadian Economy Act is a long-overdue response to regulatory inefficiencies. It establishes a framework to expedite the approval process for a select group of economically and strategically significant projects, while maintaining rigorous consultation and environmental review.
“This legislation is a welcome step in addressing the growing challenges of delivering large-scale infrastructure,” says Helbronner, whose practice includes advising on Indigenous relations and regulatory affairs. “It reflects a shared interest across governments, industry, and Indigenous communities to see projects delivered in a more timely and coordinated manner, while respecting constitutional obligations and sustainability goals.”
Mahony, the head of Torys’ environmental practice, points out that Ottawa “has made a deliberate choice to begin with a small number of executable projects.” This “allows the system to adapt while gathering critical operational insights, which can later inform broader reform.”
Mahony says that this phased approach aims to balance ambition and pragmatism. While the legislation does not create a new regulatory regime, it enhances existing tools to promote efficiency. “Now that they have a basic framework in place, the focus will need to be on developing process innovations that can deliver a two-year timeline without compromising environmental integrity or the constitutional right to Indigenous consultation and accommodation,” he says.
“That should probably include a new timeline and information management regulation, which sets out very clear requirements for public engagement and Indigenous consultation; and which requires the preparation and circulation of draft conditions of approval much earlier in the process to help focus the dialogue.”
Helbronner emphasized that streamlining the approval process is not synonymous with shortcuts.
“There’s significant room to optimize the consultation process,” she said. “Rather than sequential, duplicative steps, the Act encourages a one-window approach that still ensures robust engagement, particularly with Indigenous communities, who are essential stakeholders in every major project.”
Mahony notes that the system’s complexity has grown incrementally over the years without a corresponding increase in efficiency. “Our regulations have become layered, and our approval timelines have extended accordingly,” he said. “The Act is part of a broader effort – underway for more than a decade – to bring the regulatory environment back into balance.”
While the Act is federal, its success hinges on alignment with provincial and territorial governments. Mahony notes that tools such as substitution agreements, which allow provinces to lead specific assessments, “have long existed but remain underutilized.”
“The federal government appears committed to enhancing cooperation,” he says. “There’s now momentum to formalize agreements with each province, which will be critical to unlocking full efficiencies.”
Helbronner agrees, pointing to recent commitments from the prime minister’s office to pursue such agreements. “The first ministers’ meeting in June demonstrated a willingness to coordinate across jurisdictions. That spirit of collaboration must continue if we’re to deliver national projects effectively.”