Continued Regulatory Reform: Canada’s first project of national interest and Bill C 39

On October 1, 2026, the Government of Canada designated the new West Coast Oil Pipeline, known as the Pacific Link Pipeline, as a project of national interest. The designation coincides with a broader suite of proposed amendments to federal environmental assessment and project approval legislation intended to accelerate and better coordinate approvals for new projects. As part of these reforms, on September 21, 2026, the Government introduced Bill C-39, the Building Canada Strong Act (the Bill). The Government has presented the Bill as a measure designed to facilitate investment in projects that support employment and economic growth, improve the safe and efficient movement of goods across Canada, maintain environmental protections, and uphold the rights of Indigenous Peoples.

This post provides an overview of the Pacific Link Pipeline designation and the government’s proposed reforms to federal project assessment and approvals regulations.

Pacific Link Pipeline – a project of national interest

In June 2025, Canada enacted the Building Canada Act (BCA) through Bill C-5, establishing an accelerated approvals process for major projects deemed to be in the national interest. Just over a year later, Canada designated its first project of national interest under Schedule 1 of the BCA – the Pacific Link Pipeline, which is expected to ship one million barrels of crude oil per day from Alberta to the West-coast.

The designation kicks off a one-year process for the Major Projects Office and Canada Energy Regulator (CER) to carry out the federal review process and consultations with all stakeholders to establish the conditions for the project. The government intends to finalize the conditions by September 1, 2027, with concept development – including everything from community consultations to route mapping, ecological surveys, cost estimates, procurement, and workforce planning – to be completed within one year. The conditions document will serve as the CER certificate for the pipeline and will include various other federal permits, such as Fisheries Act authorizations and Species at Risk Act permits.

As discussed in further detail below, the government is expanding its focus on approval streamlining beyond projects of national interest.

Bill C-39: Key Changes to Federal Project Assessment and Approval Framework

The government has presented the Bill as a broad economic reform initiative with a stated objective to eliminate duplicative reviews, simplify the permitting process, and provide investors with greater certainty. It consists of three parts:

• Part 1 targets project evaluations through reforms intended to better coordinate impact assessments, federal authorizations, and Crown consultations with Indigenous groups.
• Part 2 introduces measures relating to supply chains, including amendments to trade corridors, port oversight, marine regulations, and the enactment of a new digital trade framework.
• Part 3 introduces measures relating to the workforce, by updating federal labour relations and wage protection legislation.

The Bill would amend 19 federal statutes, enact the new Enabling Digital Trade Act, and repeal the Shipping Conferences Exemption Act, 1987. The Bill forms part of the continuing evolution of the federal project approvals regime in Canada and builds on the “one project, one review” framework introduced in earlier regulatory reforms. Many of the themes reflected in the Bill, including the one-year decision timeline, enhanced coordination of federal approvals, and reduction of duplication across regulatory processes, appeared in the federal consultation launched in the spring of 2026 through the discussion papers Getting Major Projects Built in Canada and Strengthening One Canadian Economy through trade and transportation. The consultation is discussed in further detail in our previous post, Federal Government Launches Consultation on Accelerated Major Project Approvals and “One Canadian Economy” Reforms.

The federal government also issued the Cabinet Directive on Getting Projects Built in Canada, which establishes a framework for coordinating federal impact assessments, permitting processes and Indigenous consultation, with the objective of issuing federal regulatory decisions within one year after a proponent submits a comprehensive application and all required information and studies. The Directive is also intended to streamline and align federal review processes in support of economic growth, reconciliation and environmental protection.

In the following subsections, we have provided an overview of the proposed amendments to three statues that are central to the federal project approvals regime and are contained within Part 1 of the Bill: the Impact Assessment Act, the Building Canada Act, and the Fisheries Act.

Amendments to the Impact Assessment Act

The Impact Assessment Act (IAA) establishes the federal impact assessment process for designated projects. The Bill would make several changes to the manner in which those assessments are carried out and how they are coordinated with other federal approval processes. These amendments are framed as a response to overlapping assessment and permitting regimes that have, in practice, led to multi-year delays for project proponents.

The Bill introduces a 365-day decision target timeline for project assessments led by the Impact Assessment Agency of Canada (IAAC). The one-year period begins once the IAAC determines that the proponent has submitted all the information and studies required for the assessment. If a decision is not rendered within the one-year period, the Minister of the Environment would be required to publish the reasons for delay and a proposed timeline for the decision. The time for proponents to provide the required information and studies would also drop from three years to one year. However, the Bill would allow proponents to notify the IAAC to opt-out of the one-year process for specific permits.

The decision-making process is further amended by the Bill to permit secondary federal permit reviews, such as Fisheries Act authorizations and Canadian Navigable Waters Act permits, to run concurrently with the main impact assessment, rather than sequentially. Where the applicable statutory requirements have been met, the Minister of the Environment could issue a consolidated decision statement containing the decision and federal authorizations.

Additionally, the Bill would remove the existing integrated review panel model and assign project authority to specialized regulators. For designated nuclear and uranium proposals under the IAA, the Canadian Nuclear Safety Commission (CNSC) would conduct the impact assessment. Major pipelines, transmission lines, and certain offshore renewable energy projects within the Canada Energy Regulator’s (CER) jurisdiction would be assessed by the CER under the Canadian Energy Regulator Act.

Following an impact assessment, the Minister of the Environment determines whether a project is likely to cause significant adverse effects within federal jurisdictions and sets out conditions to mitigate them. Where the minister determines that any of the effects are likely to be significant, the minister and the designated minister further decide whether the effects are justified in the public interest, or refer the matter to the Governor in Council. The Bill would also expand the Minister of the Environment’s authority to amend project conditions. The Minister could add, remove, or modify a condition as long as doing so does not increase significant adverse effects. However, where a project’s significant effects have already been found to be justified in the public interest, or where the Governor in Council determines that a change is in the public interest, the Minister could amend conditions regardless of the significance of the effects.

Notably, the Bill proposes to grant the Minister of the Environment and the CNSC a broad new power to authorize early works before the project has been approved, subject to conditions in instances where it is in the public interest to do so.

Also, the Cabinet Directive provides that, where no impact assessment is required, the President of the IAAC may implement a coordinated permit plan to facilitate the issuance of all federal decisions within one year of the proponent submitting a complete application and supporting studies. However, the Directive does not clearly indicate whether such a permit plan will be implemented automatically or at the discretion of the President of the IAAC.

Finally, the Bill would formalize coordinated Crown consultations as a part of the federal approvals process. The federal government would establish a centralized Crown Consultation Hub (CCH) to create a consolidated Crown consultation process for each project, rather than conducting multiple, overlapping consultations for the same project. The CCH would act as the centralized lead for Indigenous consultation for IAAC-led projects, helping align engagement across departments, identify potential impacts on Indigenous rights earlier in the process, and coordinate federal consultation with provincial processes, where appropriate.

Amendments to the Building Canada Act

As previously mentioned, the Building Canada Act (BCA) allows the Governor in Council to designate individual infrastructure proposals as “national interest projects”, for which the BCA establishes an accelerated approval regime where certain statutory findings, determinations, and opinions required for federal authorizations are deemed to be made in favour of permitting the project. For national interest projects, such as the Pacific Link Pipeline, the BCA requires the designated minister to issue a document that, once the statutory requirements are satisfied, serves as the federal authorizations identified in the document. The Bill proposes to remove the current five-year sunset period on the BCA powers (executive designation, amendment, and regulation-making), allowing the regime to continue on an ongoing basis.

The Bill would expand this mechanism beyond individually-designated national interest projects by introducing “regions of national interest”. This would permit the Governor in Council, on the recommendation of Minister Dominic LeBlanc (as President of the King's Privy Council), to designate a geographic region by adding it to a new Schedule 3 of the BCA. Schedule 3 would identify the region’s geographic description, eligible projects within it, the qualification criteria, and the information to be provided by proponents to demonstrate that those criteria are met.

Before a region may be designated, a relevant regional assessment examining the cumulative environment and socio-economic impacts must be conducted under the IAA or any applicable territorial law. The Governor in Council must be satisfied that the designated region is in the national interest. In making this determination, the Governor in Council evaluates factors such as national autonomy, economic benefits, climate goals, and Indigenous interests – the same factors that it considers when designating a national interest project. The Minister must also be satisfied that adequate consultations were conducted with relevant provincial or territorial governments and with affected Indigenous communities whose constitutional rights could be engaged by the regional designation. Accordingly, projects of an eligible type located within these designated regions, that meet specified criteria, will qualify for consolidated federal authorization documents.

In addition to regional designations, the Bill proposes several changes to the BCA, including the following:

• The designated minister’s existing authority to amend conditions in a national interest project’s consolidated authorization document would be expanded to allow the addition or removal of conditions and would extend to authorizations granted before the project's designation as a national interest project.
• The Minister’s requirement to publish the specified project information no later than 30 days before issuing the consolidated authorization document would be removed. Instead, the disclosure would be required to be made no later than 30 days after the authorization document is issued.
• Applications for judicial review of Governor in Council orders under the BCA will go directly to the Federal Court of Appeal to reduce litigation delay and provide timely decisions.

Amendments to the Fisheries Act

The Fisheries Act (FA) protects fish and fish habitat by requiring federal authorizations for undertakings or activities that result in the harmful alteration, disruption, or destruction of fish habitat or result in the death of fish. The FA already includes a fish habitat banking regime that allows proponents to undertake conservation projects related to fish habitat to receive certified habitat credits that may be used to offset impacts from authorized projects. However, proponents can currently only use habitat credits generated through their own conservation projects. The Bill proposes to amend the FA to create the legal foundation for third parties, such as specialized conservation entities, to build certified habitat banks and sell habitat credits to proponents. These credits may subsequently be used by proponents within a designated service area to offset adverse aquatic impacts.

Additionally, the Bill introduces a fee-in-lieu offsetting framework for projects determined by the Department of Fisheries and Oceans to have minor impacts. The circumstances governing eligibility for this would be prescribed by future regulations. Under this framework, a proponent authorized to carry on a work, undertaking, or activity may pay a fee instead of carrying out offsetting measures directly. Fees paid would be deposited to the federal Environmental Damages Fund and used for conservation, restoration, or habitat protection purposes.

The Bill would add a new feasibility notion to the FA which changes how conditions are set on certain FA authorizations. Specifically, the Minister of Fisheries and Oceans would be required to take into account whether the conditions are technically, economically, and practically feasible before establishing, adding, or amending any terms on federal fish and fish habitat authorizations. The Bill proposes to add a similar requirement for permitting considerations under the Canadian Environmental Protection Act, 1999, Species at Risk Act, and the Canadian Navigable Waters Act.

Finally, the Bill would transfer certain regulatory authority relating to the Authorizations Concerning Fish and Fish Habitat Protection Regulations, which previously sat with the Governor in Council, to the Minister of Fisheries and Oceans.

Looking ahead

Pacific Link’s designation takes Canada’s national interest project approvals regime from concept to reality. It remains to be seen how this process will unfold and whether other projects the government has referred to the Major Projects Office will be designated as projects of national interest.

At the same time, Bill C-39 proposes broader changes to coordinate federal reviews, streamline authorizations, and expand flexibility for project proponents. The Bill is at an early stage in the legislative process and may be amended further as it proceeds through the Parliament. For proponents, tracking these next steps will be important, particularly for understanding how the proposed changes will affect project planning, filing requirements, and approval timelines.

Our team at McCarthy Tétrault will continue to monitor developments related to major projects and Bill C-39, along with other legislative and regulatory developments, and provide updates. For further information or assistance, please contact a member of our team.