Newly proposed legislation Bill C-39 could consolidate environmental assessments and permits, introduce new rules for fish habitat offsetting and allow some developments to be pre-approved within designated regions of national interest.
The federal government has introduced legislation that would significantly overhaul how major infrastructure, energy and resource projects are assessed and approved in Canada, establishing a one-year timeline for federal decisions while consolidating environmental assessments, permits and Indigenous consultations.
Introduced on September 21, Bill C-39, the Building Canada Strong Act, proposes amendments to the Impact Assessment Act, Fisheries Act, Species at Risk Act and several other federal statutes. The changes are intended to reduce overlapping regulatory requirements and accelerate construction while, according to the government, maintaining environmental protections and the Crown’s duty to consult Indigenous Peoples.
Under the proposed framework, federal departments would conduct environmental assessments and permitting reviews concurrently, rather than through separate processes that can take five years or longer to complete.
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For projects subject to the Impact Assessment Act, the federal environment minister would issue a single decision document incorporating all required federal approvals, enforceable conditions and mitigation measures. Individual departments would remain responsible for enforcing permits under their respective legislation.
The government has also issued a Cabinet Directive on Getting Projects Built in Canada, which took effect September 21 and establishes a coordinated federal review process while the legislation is considered by Parliament.
One-year timeline begins after application is complete
Although the legislation establishes a maximum one-year federal review and decision period, the timeline would not begin until a project proponent has submitted a comprehensive application containing all required studies and information.
According to insights from Canadian law firm McMillan LLP, the preparatory phase — including baseline studies, technical assessments and the determination of whether an application is complete — would not be subject to a legislated time limit.
As a result, the total time between a project’s inception and federal approval could remain considerably longer than one year, depending on the complexity of the required studies and preparatory work.
The firm also notes that important implementation details remain unresolved, including the information required to trigger the one-year timeline, how quickly regulators must determine whether an application is complete, and the circumstances under which review periods can be suspended or extended.
The proposed legislation would allow additional time to fulfill Indigenous consultation obligations. For projects regulated by the Canada Energy Regulator, extensions required to complete Crown consultations would be limited to 90 days per extension.
Changes to environmental oversight and permitting
Bill C-39 would assign responsibility for certain projects to a single federal assessor. The Canada Energy Regulator would become the sole assessor for pipelines, transmission lines and certain offshore renewable energy projects under its jurisdiction, while the Canadian Nuclear Safety Commission would conduct impact assessments for nuclear and uranium projects subject to the Impact Assessment Act.
These changes would replace the existing integrated review panel arrangements involving the Impact Assessment Agency of Canada.
The legislation would also allow the environment minister to authorize certain preparatory construction activities before a final impact assessment decision, where doing so is considered in the public interest. Such authorization would not guarantee eventual project approval.
Other proposed amendments would require federal decision-makers to consider the technical, economic and practical feasibility of conditions imposed on projects under environmental legislation.
The environment minister would also receive broader authority to add, remove or amend impact assessment conditions where the changes are determined to be in the public interest.
Currently, the minister’s ability to amend conditions is restricted where doing so would increase the extent of adverse effects.
Proposed amendments to the Fisheries Act would also introduce new options for compensating for damage to fish and fish habitat associated with development projects. Currently, proponents generally must undertake their own habitat offsetting projects or use credits from habitat banks established through previous restoration work.
Regions of National Interest
Another significant provision would allow the federal government to designate Regions of National Interest under the Building Canada Act.
These could include transportation and energy corridors, telecommunications networks, energy production and transmission systems, and industrial regions.
Before a region could be designated, a regional impact assessment would identify its geographic boundaries, proposed activities, cumulative environmental effects and standard mitigation requirements.
Following designation, certain developments identified through the regional assessment could be considered pre-approved, subject to specified conditions and mitigation measures.
Projects not covered by the original regional assessment that could have additional environmental or other effects would require supplementary assessment and consultation.
McMillan LLP notes that regional designations would not eliminate the Crown’s constitutional consultation obligations where subsequent projects could adversely affect asserted or established Indigenous rights. However, consultation undertaken during the regional assessment could help fulfill some project-specific consultation requirements.
The legislation would also remove the existing five-year sunset clause from the Building Canada Act, allowing the legislation to remain in force beyond its original expiry date.
Indigenous consultation and environmental concerns
The government proposes establishing a Crown Consultation Hub within the Impact Assessment Agency of Canada to coordinate federal engagement with Indigenous communities.
The objective would be to establish one coordinated consultation process per project, per Indigenous community, rather than requiring communities to participate in multiple overlapping federal processes.
The hub would not oversee consultations led by the Canada Energy Regulator, Canadian Nuclear Safety Commission or certain other federal project offices.
The government maintains that the proposed changes would not remove existing requirements for environmental assessment, permitting or Indigenous consultation.
However, McMillan’s analysis notes that Indigenous groups and members of the public raised concerns during consultations about environmental oversight, meaningful participation and the capacity of federal regulators to conduct assessments that adequately consider Indigenous rights.
The law firm also identifies unresolved questions about how the new consultation framework would operate and how the proposed one-year timeline would accommodate consultation requirements.
More than 26,000 submissions were received during the federal government’s engagement process, which ran from May 8 to July 22, 2026.
Beyond environmental approvals, Bill C-39 includes proposed changes to transportation infrastructure, national trade corridors, port governance and federally regulated labour relations.
The legislation remains subject to parliamentary consideration, with further regulations and implementation guidance expected to determine how the proposed approval framework would operate in practice.
Related Professional Development Event
Learn about Canada’s environmental regulations, enforcement trends and compliance strategies from the McMillan LLP team at the CANECT West Environmental Compliance and Due Diligence Training Event taking place in Calgary, Alberta, from November 25 – 26, 2026.
For over 30 years, CANECT has been Canada’s leading training and networking event for environmental compliance and due diligence.
Explore the course topics and see who is speaking at: www.canect net
