Last year, when the federal government introduced the One Canadian Economy Act, the message was clear: Canada’s response to the trade war launched by the United States would focus on strengthening its own economy.
One of the two pieces of legislation built into the bill, the Building Canada Act, indicated one of the ways the federal government envisioned executing this agenda. When infrastructure projects satisfy certain criteria – like providing economic benefits, advancing the interests of Indigenous peoples, or contributing to Canada’s climate goals – the Building Canada Act allows the federal cabinet to declare those projects as being in the national interest. Upon receiving this designation, a project can then be fast-tracked through the ordinary regulatory hurdles that can sometimes delay projects for years. The federal government’s plan, in other words, was to build out Canada’s infrastructure. And it wanted to build fast.
Since the One Canadian Economy Act received royal assent last June, both the federal and provincial governments have made additional efforts to expedite construction across the country. For energy projects – which range from pipelines to small modular reactors to hydroelectric dams – these efforts have taken the form of provincial legislation, federal strategies, and a memorandum of understanding.
The Building Canada Act and the Major Projects Office, which the federal government launched to facilitate the regulatory approval process for national interest projects, make up only “one piece of the puzzle” when it comes to efforts to expedite Canada’s energy projects, says Katie Slipp, a partner at Blake, Cassels & Graydon LLP who specializes in the energy sector.
There’s a long list of initiatives aimed at quickly expanding Canada’s energy infrastructure, Slipp says. “The current mindset is really an ‘all of the above’ approach to building out the national energy mix – that includes oil and gas, renewables, other forms of energy. There’s this suite of policies in place to try to facilitate that type of development.”
Below, Lexpert talks to Slipp, Blakes partner Reena Goyal, and Dentons partner Laura Estep about some of the most notable efforts by Canada’s federal and provincial governments to streamline or fast-track energy projects across the country.
Federal strategies
In Canada, provinces and territories largely regulate their own energy issues, like generation, transmission, and distribution; the federal government’s jurisdiction is largely restricted to regulating the international and interprovincial movement of energy. Over the past year, however, the federal government’s ambition to expand Canada’s energy infrastructure has prompted it to adopt what Goyal calls a “creative and strategic” approach to encouraging the provinces to participate.
This includes publishing several national strategies this year that outline the federal government’s roadmaps to advance electrification and expand Canada’s nuclear energy infrastructure. Both are the first of their kind in Canada’s history.
Goyal says the nuclear and electricity strategies aim to “foster cooperation between the provinces in terms of trying to develop more energy infrastructure across the provinces.” But she argues they also signal to potential trading partners beyond the US “that Canada is a jurisdiction open for business” and allow the federal government to advance energy infrastructure development across the provinces despite its limited jurisdiction over provincial energy projects.
For example, Goyal points to one of the initiatives outlined in the national electricity strategy, which involves identifying high-priority transmission projects to support. On June 26th, the Minister of Energy and Natural Resources announced it had selected five intertie projects to lend financial and regulatory support to. Ordinarily, expanding or reinforcing an interprovincial transmission line requires submitting an application to the Canada Energy Regulator – a process that can take many months, often more than a year, Goyal says.
“Part of that process includes demonstrating a need for the project, and you might have various interveners or other stakeholders making submissions to the regulator as to why they think that this particular project isn’t warranted at this particular time and for the cost that is being sought,” Goyal says.
In contrast, the national electricity strategy and the subsequent announcement by the Minister of Energy and Natural Resources allow “these projects to be streamlined through that regulatory process because the need has already been demonstrated at the government level,” she adds.
The lawyer offered another example of how the federal government has used a national strategy to encourage the streamlining of provincial projects. Released in June, Canada’s national AI strategy “includes huge support for data center connections,” Goyal says. “Although the national AI strategy doesn't itself include any funding commitments yet… It does encourage provinces to consider seriously the connection of large data centers.”
Since the strategy’s release, Alberta has released new regulations for how data centers connect to the province’s electricity system. Under the new rules, data centers will receive priority access to Alberta’s transmission grid if they bring their own power supply.
Goyal explains that in most of the provinces across Canada, energy regulations “are designed to support and encourage fair and open competitive electricity marketplaces.” With the principle of open access – which allows consumers to choose from a range of suppliers instead of requiring them to buy electricity from their local distribution company – the idea is that “the more generation and the more loads we can have connecting to the transmission grid, the more competitive and economically efficient the marketplaces will be,” Goyal says.
“With these new regulations that have come through, where they’re giving prioritized access to data centers that come with their own power supply or backup power supply, they’re pivoting away from this open access rule by triaging how they’re going to allocate connections,” the lawyer says.
“It’s really interesting to see these provinces issuing regulations which are consistent with… the federal government’s national AI strategy, that really pivot away or create exemptions to what are really long-standing energy market development principles.”
Provincial legislation
In May, the Alberta legislature passed the Expedited 120-Day Approvals Act to accelerate major project development in the province. The legislation “mandates a maximum 120 business day decision window for certain types of qualifying strategic projects in the mining, industrial, and energy sectors that require at least $250 million in capital,” says Estep, who is based in Calgary.
The new law will effectively compress existing review timelines, remove duplicative assessments, and establish what Estep calls single-window decision making, which entails running multiple permitting processes simultaneously rather than consecutively. In her view, these types of streamlining strategies aren’t “about skipping the homework.”
Instead, they’re “all about grading the work that’s been done concurrently rather than passing the paper from one government desk to another,” she argues.
Shortly before Parliament passed the Building Canada Act, British Columbia passed two other laws to fast-track infrastructure projects across the province. The Infrastructure Projects Act effectively centralizes and fast-tracks permitting for major infrastructure projects that have received a special designation from the government.
The same month, the BC legislature passed the Renewable Energy Projects (Streamlined Permitting) Act, which “exempts certain renewable energy projects from environmental assessment requirements and expands the authority of the British Columbia Energy Regulator to act as a one-window permitting authority for wind and solar projects,” Estep says. She notes that Ontario and Quebec have advanced similar project streamlining processes.
There are “efforts across the country to streamline project approval processes in a variety of sectors,” she says.
Memorandum of understanding between Alberta and the federal government
Last November, the governments of Alberta and Canada signed a memorandum of understanding, agreeing to work together to develop energy infrastructure while aiming to achieve net-zero greenhouse gas emissions by 2050. One of the priorities outlined in the MOU was to complete an interprovincial oil pipeline to the southwest coast of British Columbia, so that heavy crude oil could be exported to Asia.
Working together, the two governments have submitted the project proposal to the Major Projects Office for designation as a national-interest project eligible for expedited review.
“In the world that we’ve been operating in for the last number of years, the federal regulatory process – primarily through the Canada Energy Regulator, which regulates major interprovincial pipelines – has historically been one of the biggest hurdles to development,” Slipp says. This process involves stakeholders who the project could potentially impact.
“We’ve seen… projects take years, sometimes even verging on decades, to make their way through the regulatory process, always with the risk that proponents might ultimately walk away from those projects because of a lack of commercial certainty,” Slipp adds.
In contrast, if the West Coast pipeline receives a national interest designation, construction is expected to start about a year later, “provided that obligations to Indigenous communities and any conditions set by the federal government have been met,” Slipp says.