Nation-building legislation: the One Canadian Economy Act

Jun 6

Context

During the June 2nd First Ministers meeting, the premiers and Prime Minister Mark Carney focused on threats of tariffs being imposed by the United States and Carney’s proposal to combat tariffs with a major domestic building program. Carney said it would focus on “nation-building” projects that serve the “national interest.” The Prime Minister’s Office requested each premier nominate five such projects.

Subsequently, on June 6th, the government tabled Bill C-5, The One Canadian Economy Act, sponsored by Minister Dominic LeBlanc. According to the government’s backgrounder, the goal of the bill is to “send a clear early signal, to build investor confidence and get projects to investment and construction faster.”

In a press conference announcing and outlining the bill, Carney responded to a media question on timing by indicating it’s his priority to pass the bill before the House rises. He even mused that the House of Commons may sit throughout the summer to achieve that.

When passed, Bill C-5 will enact the Free Trade and Labour Mobility in Canada Act as well as the Building Canada Act.

C-5 Function

The One Canadian Economy Act sets out a process by which the Prime Minister and Cabinet can deem a project to be “in the national interest” via regulation.

There is no application process. Cabinet will select projects with no prescribed methodology for how projects are nominated for consideration; although a nod in the backgrounder is made to consultation on that matter with provinces, territories and Indigenous rights holders.

Once a project is included on the national interest list, it will be considered approved subject to conditions.

An Impact Assessment and Indigenous consultation will be required conditions for all designated projects. Instead of working with various agencies and ministries to satisfy conditions, a single minister will be designated to provide one list of conditions on behalf of all ministries and departments. That minister will render a single decision, called a “conditions document.”

The conditions document will be the only permit required under all applicable statutes.

All contact for proponents will be routed through the incoming Federal Major Projects Office.

Nation-Building Projects of National Interest

No list of proposed projects has been made public to date, despite the premiers arriving at the June 2nd First Ministers Meeting with their own lists.

Projects already widely discussed in Canada could be on the premiers’ priority lists, among them the Ring of Fire and access-enabling infrastructure in Northern Ontario; a James Bay Deep Sea Port; high-speed rail between Toronto, Ottawa and Montreal; new pipelines to move oil from Alberta to British Columbia’s tidewaters; the Pathways Alliance proposal for a carbon capture and storage project in Alberta’s oil sands; offshore wind capacity in the Atlantic; new nuclear power installations; and new electricity grids connecting the Yukon and British Columbia or an East-West grid moving Quebec hydroelectric power across provincial borders.

The government’s background documents indicate they will not cap the number of projects that could be included, noting it will be a “small number” of “executable” projects.

Projects of national interest are defined as those that make a “significant contribution to Canada’s prosperity, advance national security, economic security, defence security and national autonomy through the increased production of energy and goods, and the improved movement of goods, services and people throughout Canada. They would strengthen access to Canadian resources, food and services to a diverse group of reliable trade partners.”

Projects will be considered for their ability to:

Strengthen Canada’s autonomy, resilience and security;
Provide economic or other benefits to Canada;
Have a high likelihood of successful execution;
Advance the interests of Indigenous Peoples;
Contribute to clean growth and to Canada’s objectives with respect to climate change.

Indigenous Consultation, Consent and Equity

In an early misstep, Justice Minister Sean Fraser told media he doesn’t consider the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) free, prior and informed consent (FPIC) to be “a blanket veto power.” Within a day he apologized.

Bill C-5 will mandate consultation with provinces, territories and Indigenous Peoples – consultation the background documents contemplate could be conducted by the Major Projects office. The government and Carney himself have stated that Section 35 rights are constitutionally protected and will be upheld.

Carney stopped short of a commitment to “consent,” leaving an open question around consultations that return more opposition than support.

Importantly, regarding Indigenous consent, on June 6th Carney also said, “enabling long-term wealth and prosperity through equity ownership is critical.” He then reannounced the commitment to double the Indigenous Loan Guarantee Program to $10 billion, supporting more Indigenous-led bids on infrastructure projects.

Busting Interprovincial Trade Barriers

Breaking down interprovincial trade barriers has been a focus for Carney, it’s consistently been a part of his messaging, and was included in the seven priorities provided to cabinet ministers in place of traditional mandate letters. As the short title of the bill implies, the One Canadian Economy Act will also provide a framework for standardizing rules for businesses operating interprovincially via automatically determining that a product or service that meets a provincial standard also meets the comparable federal standard.

The legislation also provides a labour mobility framework; a cross-Canada trucking industry standard; and will recommit to removing additional federal exceptions in the Canadian Free Trade Agreement.

Texture's Analysis

Bill 5 vs. Bill C-5: Ontario Premier Doug Ford has passed Bill 5, which allows for the designation of Special Economic Zones, under strong opposition from some Indigenous leaders, people and allies, which received extensive media coverage. British Columbia Premier David Eby passed a similar project fast-tracking bill despite opposition from the B.C. Assembly of First Nations Regional Chief Terry Teegee, among others.

Prime Minister Mark Carney and his team are desperate to avoid similar backlash, so they’re treading carefully – talking repeatedly about meaningful Indigenous consultation and Section 35 rights.

Carney’s administration is alive to the need to go beyond consultation and recognizes the value of Indigenous equity partnerships, but the government appears to be struggling to navigate the complex space between consultation and consent.

Veto torpedo: Conservative Leader Pierre Poilievre is criticizing Carney’s insistence that projects will never be forced on a province that’s an unwilling host.

That’s following a campaign faux-pas in which Carney asserted he would use “emergency powers” to advance energy projects, including pipelines, even in the face of provincial opposition. Hotly criticized in Quebec, Carney then reversed his position, committing to a French-language Quebec journalist that he “would never impose” a pipeline on Quebec.

Committing to provincial veto power could be a torpedo straight to the hull of this policy. It’s not going to do much to raise investors’ confidence in Canadian projects if a premier from any party can hold any project hostage for any reason – from oil and LNG pipelines to mining exploration.

Adapt to Win

Economic reconciliation benefits everyone: Projects that are Indigenous-led or co-Indigenous-led and will generate substantial economic benefit for Indigenous communities will be at the top of the pile for conditional approval under Bill C-5. Partnerships will go farther under the Building Canada Act.

Be the talk of O-town: The criteria for making the conditional-approval list under C-5 is relatively subjective – specifics like dollar-amount thresholds are absent from the bill. Plus, Carney himself has committed to keeping the project list short. To make the cut, projects will need to come with some social and political capital. If your organization wants one of those coveted “national interest” designations, lock-in your narrative, shout it from the rooftops and repeat, repeat, repeat. OpEds, news coverage, thought leadership, journalist share-of-mind, and government relations work are all required to put your project name on the lips of Ottawa’s chattering class.

Keep all levels of government in mind: Any project given conditional approval under C-5 will still need federal, provincial, municipal and Indigenous governments on-side – especially with provinces holding something akin to a veto power. Bill C-5 isn’t giving you the power to ignore other levels of government.

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