Re-Paving The Process: Bill C-5's Impact On Major Project Approvals And Mobility

Introduction

In a bid to reduce interprovincial trade barriers and expedite nation-building infrastructure projects, the federal government has tabled the One Canadian Economy Act ("Bill C-5") in the House of Commons. Bill C-5 is divided into two parts. Part one, the Free Trade and Labour Mobility in Canada Act, seeks to eliminate federal barriers to the interprovincial movement of goods, provision of services, and movement of labour. Part two, the Building Canada Act, aims to "urgently advance" infrastructure projects which serve the national interest, including energy projects.

Below, we summarize Bill C-5's key points and explore potential developments arising from the legislation.

Part 1: Free Trade and Labour Mobility in Canada Act

Part one of Bill C-5 is intended to promote free trade and labour mobility by removing federal barriers to the interprovincial movement of goods and provision of services and to the movement of labour within Canada. The existence of distinct federal regulatory frameworks has historically created internal trade barriers and contributed to delays in the authorization of goods, services, and professionals across jurisdictions.

This section of the legislation makes provincial and territorial requirements comparable to that of federal bodies by enacting the following:

Good and Services: Bill C-5 harmonizes federal regulations with provincial and territorial standards. Goods produced, used or distributed in accordance with a provincial or territorial requirement are now considered to meet the federal requirement so long as the requirements are (1) in respect of the same aspect or element of the good; (2) intended to achieve a similar objective; and (3) meet any conditions set out in the regulations.¹ Similarly, a service meeting provincial standards is treated as meeting equivalent federal standards, reducing duplication in compliance processes.² As a result, duplication in compliance processes will likely be eliminated.
Labour Mobility: Federal regulatory bodies will now recognize authorizations to practice an occupation issued by provincial or territorial regulatory bodies as equivalent to authorizations issued by the federal body.³ Upon application by the holder of a provincial or territorial authorization, the federal body will issue an authorization to practice the occupation.⁴ This means that certified workers (e.g., engineers, tradespeople) licensed in one province will be recognized federally elsewhere, improving labour mobility by permitting those authorized in one province to work in the same occupation in federal jurisdiction anywhere in Canada.
Regulation Authority: Bill C-5 empowers the federal government (Governor in Council) to issue regulations that remove interprovincial trade restrictions on goods, services, and worker movements.⁵ This is intended to enhance fluidity and reduce delays.

The recent legislation could pave the way for more efficient project coordination in the infrastructure sector by removing longstanding barriers to timely project delivery. The Business Council of Alberta (BCA) in 2021 concluded that interprovincial barriers equated to a 6.9 per cent "tariff" on goods traded across Canada, a cost which this act aims to reduce.⁶ For consumers, this will result in more affordable goods, while infrastructure developers should likewise realize meaningful operational improvements and cost savings.

Part 2: Building Canada Act

The second part of Bill C-5 enables an accelerated regulatory process for infrastructure projects which the federal government designates as in the national interest. Such projects would serve to "enhance Canada's prosperity, national security, economic security, national defence and national autonomy."⁷ While streamlining approvals, Bill C-5 also aims to protect the environment and the rights of Indigenous peoples, including those rights recognized and affirmed by section 35 of the Constitution Act, 1982 and set out in the United Nations Declaration on the Rights of Indigenous Peoples.

To these ends, Part two of Bill C-5 contains the following:

Designating national interest projects: Bill C-5 empowers the Governor in Council to designate infrastructure projects as being in the national interest. In deciding whether to designate a project, the Governor in Council may consider any factor it considers relevant, including whether a project will: "(a) strengthen Canada's autonomy, resilience and security; (b) provide economic or other benefits to Canada; (c) have a high likelihood of successful execution; (d) advance the interests of Indigenous peoples; and (e) contribute to clean growth and to meeting Canada's objectives with respect to climate change."⁸
Deeming Provision: Once a project is designated as a national interest project, every determination and finding made and every opinion formed in order for an authorization to be granted in respect of the project is deemed to be made or formed in favour of approving the project. This provision does not exempt a proponent from the requirement to comply with the relevant legislation, but merely frames the regulatory question as how to approve and not whether to approve.
Accelerated One approval: Once a project is designated as in the national interest, the Minister must provide the project proponent with a single authorization and conditions document if the Minister: (a) is satisfied that the proponent has taken all measures, that the proponent is required to take in respect of each authorization that is specified in the document; (b) has consulted with the minister who is responsible for the enactment under which each authorization is required with respect to the conditions that should be set out in the document; and (c) Indigenous peoples whose section 35 rights may be adversely affected by the carrying out of the project are consulted.⁹ A national interest project that is also subject to the Impact Assessment Act is further exempted from certain requirements of that legislation (namely the 180-day planning phase).¹⁰
Protections for Indigenous Rights: Before recommending that a project be designated in the national interest, the Minister must consult with any other relevant federal minister; any relevant provincial or territorial government; and Indigenous peoples whose section 35 rights may be adversely affected by the project.¹¹ The Minister must also consult Indigenous peoples before issuing or amending project authorizations and conditions.¹²
Consultation with Regulatory Bodies: If a project falls under the mandate of the Canada–Newfoundland and Labrador Offshore Energy Regulator, Canada–Nova Scotia Offshore Energy Regulator, Canadian Nuclear Safety Commission, or Commission of the Canadian Energy Regulator, the Minister must consult with those regulatory bodies. If the Canadian Nuclear Safety Commission or Commission of the Canadian Energy Regulator are involved, the Minister may not act before receiving confirmation that their decision would not jeopardize health, safety, security, or Canada's international obligations.¹³
Sunset Clause: The streamlined processes created by Bill C-5 for national interest projects is to be in effect for a projects designated within a fixed five year period. After this time no new national interest projects could enter the accelerated approval stream envisioned by the draft legislation unless such period was extended by legislation.
Power to Exempt from Laws and Regulations: Bill C-5 gives the Governor in Council the power to exempt national interest projects from the application of any law or regulation or to vary the application of laws or regulations to them, including the provisions of the Building Canada Act.¹⁴

Potential Issues

While Bill C-5 includes many favourable developments for proponents of infrastructure projects, it does raise certain legal and practical concerns with its implementation, notably:

Identifying Projects of National Significance: The Building Canada Act component discussed above gives the federal government sweeping authority to designate and fast-track "projects of national significance". Identifying and agreeing on a set of projects that the Building Canada Act provisions will benefit will be a challenge both politically and operationally, particularly given that terms like "unnecessary barriers," "national interest," and "major project" are not yet clearly defined. It remains to be seen how this will play out in practice.
Interaction with Provincial Jurisdiction: Importantly, while the Building Canada Act provisions purport to centralize federal approval requirements for listed projects, proponents will still appear to need to engage provincial departments and agencies in order to advance national interest projects, although several provinces have recently moved to enact legislation to streamline their own processes in this regard.
Environmental Oversight: To gain public confidence, any condensed approvals process to – and be seen to – uphold "rigorous standards with respect to environmental protection". Regulators may find it challenging to develop in a timely manner the necessary conditions relevant to meet the objectives of each enactment pursuant to which an authorization will be required for projects that have not undertaken the required environmental studies and collated other pertinent baseline information.
Section 35, UNDRIP & Reconciliation: Whilst much of the legislation requires implementation through additional action by cabinet, Indigenous groups across Canada have raised concerns with the Building Canada Act, not just with its contents but the manner in which it was introduced in the House. Those operationalizing the legislation ought to ensure they keep at the forefront lessons learned from certain high-profile litigation relating to major projects.

Analysis and Conclusion

Bill C-5 reflects the federal government's ambition – as outlined in the recent Speech from the Throne – to remove all federal barriers to internal trade and labour mobility by Canada Day. It further reflects the government's desire for nation-building infrastructure "that will connect Canada, that will deepen Canada's ties with the world, and that will create high-paying jobs for generations."

For infrastructure developers and contractors, Bill C-5 offers operational benefits. The attempt to streamline labour mobility through expedited recognition of occupational certifications may reduce some cross-border onboarding delays, though hiring on infrastructure projects remains largely within provincial jurisdiction. Meaningfully addressing barriers to sourcing skilled labour at a project's outset and hiring mid-stream to address delays or productivity concerns will require the removal of barriers at the provincial level. Certain provinces, including Quebec, have signalled a desire to remove some labour mobility constraints for projects falling under their jurisdiction, though it is likely that provinces proposing to reduce their own barriers will expect reciprocity.

While Bill C-5 does not currently designate specific projects, the recent First Ministers' statement on building a strong Canadian economy and advancing major projects highlighted Canada's need for "nation-building infrastructure and corridors" including highways, railways, ports, airports, pipelines, nuclear projects, energy projects (in both clean and conventional energy), electricity transmission systems, and dual-use infrastructure in Northern and Arctic communities.

As we have previously highlighted, redundancy and inefficiency in government regulatory processes will lead to greater costs and longer timelines for all participants in the permitting and approval processes for major infrastructure . A lack of long-term certainty with respect to obtaining approvals and permitting is particularly challenging for proponents of major projects with high capital investment requirements and a long operational life. While in Bill C-5, the federal government aims to address these challenges through greater regulatory certainty with respect to a defined list of projects, to attract the capital investment needed to build and sustain major infrastructure projects beyond this defined set we expect that project developers will continue to seek reductions in redundancy and inefficiency in regulatory processes more broadly.

As we noted above, while this legislation concerns federal regulation, several provinces have announced similar efforts to align provincial regulations and accelerate infrastructure development. Ontario's recent passage of Bill 2: Protect Ontario Through Free Trade Within Canada Act, 2025 ("Bill 2") and Bill 5: Protect Ontario by Unleashing our Economy Act, 2025 ("Bill 5") which received royal assent on June 5, 2025, exemplifies the recent coordinated approach to eliminating interprovincial barriers (see our summary of Bill 2 here and our summary of Bill 5 here). British Columbia has passed the Infrastructure Projects Act ("Bill 15") which aims to advance certain public and private infrastructure projects (see our summary of the Act here). McMillan's construction, infrastructure and energy and indigenous and environment groups will continue to monitor the major energy and infrastructure regulatory landscape. For further information on how the new legislation may affect your business, or provide potential new avenues, please contact Catherine Doyle, Kyle Lambert, Sharon G.K Singh, Melissa Stoesser Young.

Footnotes

1. Bill C-5, Part 1, Section 8.

2. Bill C-5, Part 1, Section 9.

3. Bill C-5, Part 1, Section 10(a).

4. Bill C-5, Part 1, Section 10(b).

5. Bill C-5, Part 1, Section 11.

6. Money on the table: why removing Canada's internal trade barriers can improve our competitiveness, Business Council of Alberta, (November 2021)

7. Bill C-5, Part 2, Section 4

8. Bill C-5, Part 2, Section 5

9. Bill C-5, Part 2, Section 7.

10. Bill C-5, Part 2, Section 19

11. Bill C-5, Part 2, Section 7.

12. Bill C-5, Part 2, Sections 7 and 8.

13. Bill C-5, Part 2, Sections 9-17.

14. Bill C-5, Part 2, Sections 22 and 23.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.