The 20 projects currently undergoing a federal impact assessment have been in it for an average of 2.8 years

Federal impact assessments should be fair, transparent, and swift for all projects, not just the few favoured by Ottawa under Bill C-5, states the MEI in a new publication released this morning.

“Bill C-5 is a clear admission that the current project approval process is broken,” says Krystle Wittevrongel, director of research at the MEI and author of the report. “Plagued by a lack of predictability, investors have found the process unreliable, and creating a bypass for a few projects favoured by politicians does not fix that.”

In late June, Ottawa passed Bill C-5, an omnibus bill that included the Building Canada Act. The law gives the government the ability to bypass existing legislation in order to fast-track the approval process for projects it deems to be in the national interest.

Under the current assessment process, project approvals have been scarce. Since the Impact Assessment Act was passed in 2019, only a single project—Cedar LNG—has been successful in navigating the process from start to finish.

There are currently 20 projects undergoing this assessment review, 12 of which are in the second phase, five are in the first phase, and three are being assessed under BC’s substitution agreement. Not a single project is in the final stages of assessment.

Over this period, investment in key sectors like energy has declined.

In 2015, the value of projects in Natural Resources Canada’s major projects inventory stood at $711 billion. By 2023, it had dropped to $572 billion.

Adjusted for inflation, Canada should have had $886 billion in planned investments—a $314-billion gap, according to the researcher.

Upstream oil and gas investment was expected to increase by seven per cent in 2024 worldwide.

Since 2022, heads of state from Japan, South Korea, Germany, Poland, and Greece have indicated their interest in Canadian energy.

“If this government wants to get things built, it should overhaul the process to benefit all projects and sectors, rather than having everything hinge on its discretion,” notes Ms. Wittevrongel.

The MEI proposes the following policy recommendations to institute a federal assessment process that is swift by default:

• Set firm deadlines: All projects, not just those deemed in the national interest, should be reviewed within a hard 18-month cap. Politicians should not be able to extend these timelines or suspend the process.
• Respect constitutional limits: Federal assessments should focus strictly on areas of federal jurisdiction in order to reduce scope creep and legal uncertainty.
• Limit the scope of considerations: Avoid overly subjective criteria like impacts based on sex and gender intersections, which risk further complicating and delaying approvals.
• Eliminate duplication: If a province has already completed a rigorous assessment, the federal government should automatically accept its findings.

“Ministerial meddling is no fix for Canada’s protracted and opaque approval process,” concludes Ms. Wittevrongel. “Only a system that is swift by default will draw the investment Canada desperately needs to unlock its full potential.”

The MEI Viewpoint is available here.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.