Summary

• Last week, Prime Minister Mark Carney’s government proposed major changes to the federal assessment process for mining, oil and gas and other infrastructure projects.
• The proposed changes include shifting assessments from an agency under the federal environment minister to regulators that report to the natural resources minister.
• Former ministers, First Nations and environmental advocates are criticizing the proposal, some calling it a more significant rollback of environmental law than was seen under former prime minister Stephen Harper.

Last year, Prime Minister Mark Carney established an office tasked with fast-tracking handpicked major industrial projects. Now, he says that’s not enough. He has a new proposal on the table meant to roll out the red carpet for all projects requiring federal approval, including pipelines, mines, transmission lines and other infrastructure.

The proposal, unveiled last week, would create “federal economic zones” where certain developments can be “pre-approved,” and provide exceptions to several rules governing fossil fuel and nuclear oversight, habitat preservation, species at risk protection and major project reviews.

It would fundamentally change the way the country scrutinizes industrial development and consults with Indigenous Peoples, in some cases shifting reviews at an agency under the purview of the environment minister over to federal bodies that report to the natural resources minister.

The government outlined its plan in two discussion papers, but it will need to flesh out the details and formally introduce them as part of new legislation, before they can be implemented in law. The Liberals are now able to pass legislation much easier, after they secured a Parliamentary majority following April’s byelections and the addition of five floor-crossing MPs to their caucus.

The House of Commons is on a two-week break, scheduled to return May 25. Meanwhile, the proposal is open for public comment through June 7. 

Here’s what you need to know.

Who wanted this change? Who didn’t?

The government says the alterations are necessary so Canada can better compete with other countries for investment dollars, and strengthen the Indigenous consultation process. It said the process to build things is “often slow, expensive and confusing” and the government must “go further to streamline review and approvals processes.”

The Canadian Chamber of Commerce, which represents businesses across the country, also believes the government’s fast-tracking regime has “not gone far enough” and is hoping Carney continues to “peel back some of the red tape layers that have been holding back business success.”

Canada’s oil and gas industry has consistently advocated since Carney took office for his government to overhaul environmental assessments to turbocharge fossil fuel growth. Industry executives have personally pushed this position despite the industry enjoying big profits off the war in Iran, and despite the scientific conclusion that carbon pollution, of which the oil and gas industry is the largest contributor in Canada, is furthering destructive climate change that is leading to myriad health problems and premature death for Canadians.

Two former Liberal environment ministers have harshly criticized Carney’s proposal. Liberal MP Steven Guilbeault, who was the federal environment minister from 2021 to 2025, told the Toronto Star Carney’s plan is “worse” than the changes under former Conservative prime minister Stephen Harper, which resulted in some high-profile legal challenges. Former Liberal MP Catherine McKenna, who held the same post from 2015 to 2019, told the Canadian Press Carney’s proposal will lead to a “lack of trust” and lawsuits, ultimately making the project approval process slower, not faster.

Ecojustice, an environmental law charity, has described the changes as potentially ushering in “the biggest rollback of environmental protections in a generation.” The Assembly of Manitoba Chiefs, which represents 63 First Nations in that province, said it raises “serious concerns that Canada is moving toward a system where speed takes precedence over Treaty obligations, environmental stewardship and First Nations consent.”

The government wants to create ‘federal economic zones’ where developments are ‘pre-approved’

Carney’s government wants to legalize “federal economic zones” which it says could include areas designated for energy production and transmission, industrial regions, transportation and telecommunications. 

Inside these zones, the government would “pre-approve” certain developments, subject to conditions, and exempt projects from requiring individual environmental reviews — instead just requiring one overarching assessment.

It said the zones, and the activities allowed in them, would be “clearly defined.” Consultation with Indigenous Peoples would be a “key part” of the process, it added, including on determining the conditions for development inside the zones. The agreement of provinces is also “essential,” it said.

“This co-operation between federal and provincial governments would allow projects to be fast-tracked under both federal and provincial regimes,” reads the discussion paper. 

Sound familiar? Ontario passed similar legislation last year

A provincial regime is already in place in Ontario, after Premier Doug Ford’s government passed Bill 5 last year. The bill established the similar-sounding Special Economic Zones Act. Inside Ontario’s economic zones, the government can select certain proponents and projects, and exempt them from some municipal by-laws and provincial laws, including environmental protections. 

Critics have said Ontario’s law threatens wetlands, watersheds, peatlands and endangered species, and the Indigenous communities who rely on them. It’s subject to a court challenge from First Nations, asking for the law to be found unconstitutional.

The federal economic zones would be enabled through regional assessments, which are already an approach used by the Impact Assessment Agency of Canada to examine the cumulative effects of development in a given area. 

There is currently an ongoing federal regional assessment in the Ring of Fire, the mineral-rich area in the James Bay Lowlands known as Bakitanaamowin Aki, or “the Breathing Lands,” and Mammamattawa, or “many rivers coming together,” by the First Nations that call it home. 

Days after passing Bill 5, Ford said he would designate the Ring of Fire a special economic zone under Ontario law “as quickly as possible.” But in March this year, in a sudden shift in tone, Ford said he didn’t “need” to use these powers anymore to develop the area due to partnerships with several, but not all, First Nations communities in the region.

The Ontario government has long spoken about the region becoming a major mining hub. But an interim Ring of Fire regional assessment report has pointed to the need for environmental monitoring in the area’s boreal forest and peatlands, and the need for communities to urgently access health care. 

The provincial government, meanwhile, has been withholding scientific data and funding as part of the assessment process, and is not at the table with the First Nations and federal government representatives seeing it through, The Narwhal has reported.

New rules would change the role of the federal environmental review agency

Carney’s proposal would remove the ability of the Impact Assessment Agency of Canada to examine any pipeline projects that cross provincial or national borders, as well as any transmission lines or “offshore renewable energy projects.”

The agency, accountable to Environment, Climate Change and Nature Minister Julie Dabrusin, examines projects for sustainability, environmental protection and Indigenous Rights. It carries out its assessments “grounded in sound science, rigorous process and due diligence,” according to its website.

“Does Canada need to weaken its environmental laws to allow projects to proceed? No,” the agency declares on a frequently asked questions page. “Do federal policies prevent LNG, oil or pipeline projects from moving forward in Canada? No.”

Carney’s government is now of the opinion that issues like “poor coordination between government departments” are slowing down projects like pipelines. The government is proposing to shift assessments of certain projects away from the agency and over to two regulators that report to Natural Resources Minister Tim Hodgson. 

The job of reviewing all cross-border pipelines, transmission lines and offshore renewables would go to the Canada Energy Regulator, while the Canadian Nuclear Safety Commission would handle project reviews related to nuclear and uranium projects.

The government would also have the power to declare major pipelines “in the public interest,” before the energy regulator is required to complete its review of the project’s conditions or where the pipe would actually be laid.

At the same time, the government is proposing that the Impact Assessment Agency become the home of a new “Crown consultation hub” that would “ensure that each Indigenous group affected by a major project goes through one clear and coordinated consultation process for each project.” 

It is also proposing to assign the federal review coordinator at the agency the job of ensuring project assessments and federal permits “stay on track.” The government said it would change the law to ensure project reviews and permit reviews “happen at the same time” and that a federal decision would take no longer than one year.

Sound familiar again? Carney isn’t the first leader to try to fast-track industrial projects

Carney’s proposal is reminiscent of a shift that happened under Harper’s government, which tried to accelerate environmental assessments by moving more oil and gas oversight to the energy regulator’s predecessor, the National Energy Board, in 2012.

Years later, the National Energy Board came under scrutiny after the Federal Court of Appeal quashed the government’s approval of the Trans Mountain oil pipeline expansion project, saying the board’s review of the project was flawed. The former Northern Gateway pipeline proposal also had its federal permits overturned by the Federal Court.

Former prime minister Justin Trudeau’s government passed the Impact Assessment Act and Canadian Energy Regulator Act, collectively through Bill C-69, allowing the government to consider the impact of natural resource projects on issues like climate change. But a Supreme Court of Canada decision in 2023 found the assessment scheme “largely unconstitutional,” forcing Trudeau’s government to introduce a revised version of the law in 2024.

There will be new exemptions to Canada’s species at risk law and fish permits

Carney’s government wants to change “some federal laws” that it argued can make the regulatory process “slow, repetitive and less flexible.” One of these appears to be the Species At Risk Act, a federal law passed in 2002 that is meant to prevent species extinction and help with population recovery. 

The law has a clause known as the “jeopardy test,” that restricts permits for an activity affecting a species or its critical habitat, unless the government believes the activity “will not jeopardize the survival or recovery of the species.”

Carney’s proposal would give the government the power to exempt projects from the application of this test. It said the power would be “limited” and have a “high threshold to be met,” would have to be in the “public interest” and would have to come after the proponent has made “all reasonable efforts” to avoid impacts.

The government also wants to offer more flexibility for permits that impact fish and fish habitat, when it comes to compensating for environmental harm. And it would allow “some early construction activities to start” before the government decides on the merits of a project, “if necessary permits are approved.”

Carney’s proposal also allows ministers to adjust certain conditions of a project assessment “in exceptional circumstances” and “adjust environmental conditions for projects of national interest, when needed.”

And it would hand the environment minister the power to issue a single federal document for certain projects that would include all federal decisions “required for a project to move forward.” It said experts in different departments would still review the project and provide advice, and enforcement would still be handled by the departments responsible. 

The changes come after Ford’s government in Ontario also removed the province’s Endangered Species Act and replaced it with the Species Conservation Act this year. That has had the effect of removing protection from many species.

After Ontario’s change, some threatened fish and birds are now only protected by federal laws. 

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.