Fast-tracking National Interest Projects in Canada: Bill C-5 – An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act

On June 6, 2025, the federal government tabled the much anticipated Bill C-5 - An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act (“Bill C-5”).^[i]  Sponsored by the Honourable Dominic LeBlanc, the minister responsible for Canada-U.S. Trade, Intergovernmental Affairs and One Canadian Economy, Bill C-5 is divided into two parts:

• Part 1: the Free Trade and Labour Mobility in Canada Act; and
• Part 2: the Building Canada Act (the “Act”).

The Free Trade and Labour Mobility in Canada Act sets out a framework that aims to promote free trade and labour mobility by removing federal barriers to interprovincial movement of goods and the provision of services and to increase labour mobility across provincial and territorial boundaries.

The focus of this blog is on Part 2 – the Building Canada Act, which is intended to streamline the federal regulatory processes for major projects. Several provinces have also enacted legislation to streamline provincial regulatory processes for projects. For more information on this legislation in Ontario and British Columbia, see our previous blog posts here and here.

Building Canada Act

The main purpose of the Act is to ensure that projects deemed to be in the national interest proceed through a new streamlined federal government oversight process intended to enhance regulatory certainty and investor confidence. The new process contemplates two steps:

1. Federal government designation that the project is in the national interest; and
2. Issuance of a new single federal authorization for the designated project, which replaces the need to obtain all other federal permits, decisions, and authorizations found under specified federal legislation.

Step 1: National Interest Designation

A minister of the federal government would be designated by order of the Governor in Council to implement the Act (the “Minister”). The Act also provides for the creation of a new federal office, under the responsibility of the Minister, to coordinate the performance of duties under the Act and to serve as the point of contact for project proponents.

Under the proposed legislation, the Governor in Council may, on the recommendation of the Minister, make an order designating a project as a “national interest project” for the purposes of the Act. This power may only be exercised until the fifth anniversary of the entry into force of the Act.

While the Act affords the federal government discretion in terms of the factors it may consider and rely upon in making this designation, the following factors are enumerated in the Act:

• Ability to strengthen Canada's autonomy, resilience and security;
• Provision of economic benefit and other benefits to Canada;
• High likelihood of successful execution;
• Advancement of Indigenous Peoples’ interests; and
• Contribution to clean growth and meeting Canada’s climate change objectives.

While the Act does not identify specific projects or categories of projects that may meet these factors, the federal government has cited a broad range of projects that could be designated under the Act, such as highways, railways, ports, airports, pipelines, nuclear projects, clean and conventional energy projects, and electricity transmission systems.^[ii]

The proposed legislation requires the Minister to consult with any other federal minister, any provincial or territorial governments that the Minister considers appropriate, and with Indigenous Peoples whose rights are recognized and affirmed by section 35 of the Constitution Act, 1982 that may be adversely impacted by a proposed project before recommending a national interest declaration to the Governor in Council.

Step 2: Authorization Document

(a) Authorization Process

Once a project is designated as a “national interest project”, the proposed legislation would allow the federal government to issue authorizations required under the following statutes and regulations through a single document (an “authorization document”):

For certain statutes listed above, the Act’s scope of application is limited to specific provisions. For instance, the new authorization document may cover key permitting requirements under the Canadian Energy Regulator Act for pipelines as well as international or designated interprovincial power lines, but not for offshore renewable energy or power lines projects. The federal government may, however, broaden  the list of statutes and provisions that can be covered by the authorization document through an order.

Before an authorization document can be issued, proponents of national interest projects must provide any required information and pay any required fees in respect of each authorization required under all of the applicable legislation.

National interest projects that are designated under the Impact Assessment Act (“IAA”) would continue to be deemed to require a federal impact assessment under that act. These projects would, however, no longer need to complete the initial planning phase under the IAA due to a specific non-application provision in the Act. The Act would also empower the federal government to make regulations in order to exempt national interest projects from any provision of the relevant federal laws and regulations, or to vary the application of any such provision.

Consultation with Indigenous Peoples whose rights may be adversely affected by a national interest  project would also need to take place before the authorization document is issued.

(b) The Authorization Document

The authorization document must specify which authorizations have been granted, and can set out conditions that apply to each authorization. Any such conditions would be established in consultation with:

• regulatory bodies specified in the Act;
• the Minister responsible for the enactment under which each authorization is required; and
• Indigenous Peoples whose section 35 rights may be adversely impacted by the applicable project.

With respect to national interest projects that fall within the scope of the Nuclear Safety and Control Act and the Canadian Energy Regulator Act, the Minister must also obtain, as applicable, a prior confirmation from:

• the Canadian Nuclear Safety Commission that the document’s issuance will not compromise the health or safety of persons, national security or the implementation of international obligations; or
• the Commission of the Canadian Energy Regulator that the document’s issuance will not compromise the safety or security of persons or regulated facilities.

Once an authorization document is issued, that document is deemed to be the authorization that would have otherwise been required under each individual piece of legislation for those authorizations specified in the authorization document. For example, a decision statement required under the IAA may be deemed to have been made by the authorization document. A separate decision statement under the IAA will not be required.

Timelines and Provincial Requirements

The proposed Act is silent with respect to the applicable timelines for permitting projects declared to be in the national interest, but the federal government has stated that the intent is to shorten decision timelines from current timelines of about five years to two years.^[iii]

The Act is also silent as to the applicability of provincial authorization requirements with respect to undertakings that would be designated as national interest projects under the Act.

Conclusion

While the Act’s objectives are clear – namely reduction of regulatory uncertainty and shortening the time required to fulfill federal government project approval requirements – it remains to be seen whether the approach contemplated will reduce the current regulatory burden facing project proponents, as opposed to adding another regulatory agency and office to administer these requirements. We will also have to wait and see whether all federal and provincial departments and agencies will indeed be able to work together toward ensuring national interest projects are considered and ultimately authorized in a timely manner. 

Bill C-5 will be considered by the House of Commons and the Senate and may be subject to amendments before it is enacted. Our National Interest Project Team will continue to closely monitor this significant legislative proposal and its potential impacts on major projects in Canada. 

McCarthy Tétrault has established the Accelerated Major Projects Group, a coordinated team of legal experts and Strategic Advisors, to navigate this quickly evolving public policy and legislative landscape. Contact Dominique Amyot-Bilodeau, Kerri Howard and Awanish Sinha for more.

^[i] https://www.parl.ca/DocumentViewer/en/45-1/bill/C-5/first-reading

^[ii] First Ministers’ statement on building a strong Canadian economy and advancing major projects | Prime Minister of Canada

^[iii] One Canadian Economy: An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act - Canada.ca