The Liberal government is being cheered for its proposed new law, Bill C-5, which is aimed at growing the economy by fast-tracking so-called national interest projects. In one sense, the applause is warranted: Ottawa is finally focused on growing Canada’s wealth rather than simply redistributing it. But, if you look closer, Bill C-5 is not the right solution.
The building Canada act will give cabinet the power to exempt “national interest” projects over the next five years from certain requirements imposed by laws that have caused investors to flee Canada. Yet those laws will remain in place for all other projects.
C-5 is thus a classic case of governments picking winners and losers rather than creating the conditions that will allow the best proposals to succeed, as determined by the markets.
Making matters worse, if the bill passes, Parliament won’t even get an opportunity to sign off on the specific projects, raising the risk that they’ll be carefully selected for maximum political gain for the Liberal Party of Canada.
A better solution would be to simply repeal the laws, or parts thereof, that have prevented the private sector from pursuing these projects in the first place, starting with the unconstitutional Impact Assessment Act (IAA).
The IAA was passed in 2018, replacing the Canadian Environmental Assessment Act, which was focused on the federal government’s environmental responsibilities.
The IAA is a stunning federal overreach that purportedly gives Ottawa the power to freeze any large project until the government has assessed its “impact” and the environment minister has decided whether it’s in the “public interest” to green-light.
The assessment is based on a list of 20 subjective factors, including “Indigenous knowledge,” whether the project “contributes to sustainability” and “the intersection of sex and gender with other identity factors.”
The result is that every major project gets mired in years of expensive studies and negotiations, without any ability for investors to predict whether a project will get built.
In its first several years, a single major project — the Haisla Nation-led Cedar LNG facility in Kitimat, B.C. — actually made its way through the marathon federal decision-making phase and ended up declared “in the public interest.” Germany, meanwhile, has manged to not only approve, but build LNG facilities in a couple of years.
In 2023, in a case brought by the Government of Alberta, the Supreme Court of Canada ruled that the IAA was partially unconstitutional, since it allowed the federal government to control projects that mostly fall under provincial jurisdiction.
Ottawa claimed it could freeze and veto projects based on its exclusive constitutional powers over things like fisheries, migratory birds and “Indians, and lands reserved for the Indians.”
The court pointed out that this didn’t give the federal government the right to control projects within the provinces, which have exclusive law-making authority over property and civil rights, local works and undertakings, along with non-renewable natural resources, forestry resources and energy.
Ironically, Ottawa has the constitutional power to control projects that cross provincial borders, such as pipelines, but Prime Minister Mark Carney recently insinuated that provinces can veto those.
Although the Trudeau government passed minor tweaks to the IAA, the Liberals have decided to mostly ignore the Supreme Court’s ruling, prompting Alberta to threaten another challenge last fall.
Carney should reconsider his pledge not to repeal the act. If Ottawa can exempt big projects from the IAA whenever it wants to for politically popular projects, why not simply repeal it and put in place less complicated laws focused on areas within federal jurisdiction?
The provinces are well positioned to take on the environmental assessments and mandatory Indigenous consultations for projects within their jurisdictions. Ottawa can focus on projects that cross provincial boundaries, like pipelines and electricity corridors.
Doing so would give investors more certainty that their projects will get built as long as they’re economically viable, and they wouldn’t need to worry about successfully lobbying Liberal ministers to get on a special list. That would respect the Constitution and give our economy the boost it so badly needs.
National Post
Josh Dehaas is counsel for the Canadian Constitution Foundation (CCF), a non-profit that protects Canada’s constitution through education and strategic litigation. The CCF intervened in the 2023 Impact Assessment Act reference.