On June 6, 2025, the federal government introduced Bill C‑5, an Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act. Among proposed measures, the legislation would create a new framework to fast-track federal approvals for infrastructure projects deemed to be in the “national interest.” For pipeline proponents, this could offer a pathway around the existing federal Impact Assessment Act—though not without important limitations and legal risks, as outlined below.
“National interest” designations: Scope, process and limitations
If the federal government designates a pipeline project a “national interest project” by adding it to Schedule 1 of the Building Canada Act (BCA), the Impact Assessment Act (IAA) will not apply to it. The Minister designated under the BCA must issue the proponent an authorization that is deemed to cover all approval requirements under federal enactments (or parts thereof) that are listed in Part 1 of Schedule 2 of the BCA. A certificate of public convenience and necessity (CPCN) for federal pipelines is on that list.
There are, however, several conditions and potential hurdles—though none appear to be insurmountable. The Minister must establish conditions for the authorization and consult with the Canadian Energy Regulator, ministers responsible for other enactments covered in the deemed authorization and Indigenous peoples whose section 35 constitutional rights may be adversely affected by the project. There is no legislated timeframe for this consultation or the ultimate issuance of the authorization that must be issued. Presumably, this is intended to fall within the anticipated two-year timeline.
At any time before the Minister issues the authorization with conditions, the federal government can remove a project from Schedule 1 of the Building Canada Act—the list of projects designated as being in the national interest. This removal would effectively take the project out of the approval process and result in denial. However, the legislation appears to allow the federal government to make regulations that would override the risk of project deletion.
An additional limitation for oil pipeline projects proposed to the west coast is that the BCA does not currently provide for the override of the Oil Tanker Moratorium Act (Tanker Ban). The federal government can later add the Tanker Ban to the list of enactments in Part 1 of Schedule 2 of the BCA, allowing it to exempt a designated national interest pipeline from the Act’s restrictions. Presumably the federal government would do so at the same time as designating an oil pipeline to the west coast a national interest project by adding it to Schedule 1.
The legal limits of consultation
The recent constitutional challenges to Bill C-5, that includes the Building Canada Act, argue that the federal government had a duty to consult Indigenous groups prior to passing the legislation. However, the Supreme Court of Canada has already addressed this issue.
In the case of Mikisew Cree First Nation v. Canada, which challenged the Harper government’s 2012 Budget Bill, the Court found that the duty to consult does not apply to the development and passage of legislation. Rather, the duty to consult arises when the legislation is acted upon through enforcement or administration, such as through the issuance of project approvals. These challenges were ultimately made to approvals issued under the 2012 legislation and several were successful in having further consultation directed by the courts.
The 2012 legislation also included a provision enabling the federal government to approve or deny projects contrary to the decisions of regulators. In one notable case, the Trudeau government exercised these powers to deny an oil pipeline that had been found to be in the national interest by independent regulators. This decision taken early in the first mandate of the Trudeau government had a chilling effect on large-scale project development.
Consultation requirements for projects
The Building Canada Act is clear that before the upfront political decision is made to designate a national interest project, consultation must be undertaken with Indigenous groups that may be adversely affected by a project. After this designation is made, but before regulatory approvals can be issued for a project, there must again be consultation with Indigenous groups that could be adversely affected by the project through a process that allows for their active and meaningful participation. Until this consultation process is complete, it is not possible to assess the potential impacts on any Indigenous group or whether they will ultimately support or oppose a project. Any court challenge brought before the required consultation has taken place is therefore premature and would be unlikely to succeed.
Any Indigenous group alleging inadequate consultation in violation of their constitutional rights will still have full access to the courts. Indigenous groups should be given direct recourse to the Supreme Court of Canada to determine the merits of their constitutional claims through a leave to appeal process. If they are not given expedited access to determine their consultation claims following the issuance of ultimate approvals, legal challenges could take years to progress through the courts, effectively stalling national interest projects if the Building Canada Act remains subject to the standard judicial review timeline.
Conclusion
As Bill C‑5 progresses through the legislative process, its potential to reshape federal infrastructure approvals—particularly for pipeline projects—warrants close attention. While the proposed framework may streamline certain steps, it leaves unresolved legal, regulatory and procedural risks that will be critical to monitor in the months ahead.
For more information on this topic, please contact the author, Bernard J. Roth, KC.
