Federal government removes energy projects from dual environmental review, preserves species protections

The federal government announced Wednesday it will delist specific energy projects from the Impact Assessment Agency of Canada's environmental review process, moving them to review solely by the Canada Energy Regulator instead.

Projects affected include pipelines and transmission lines crossing international or provincial borders, offshore renewable energy projects, certain oilsands extraction projects, and fossil fuel-fired power generating projects. The government proposed these regulatory changes in May as part of a suite of measures to streamline project approvals.

The government initially proposed exempting certain projects from the "jeopardy test" required under the Species at Risk Act—a protections framework covering more than 600 species—if deemed in national interest. That proposal drew an open letter in August from five former chairs of the federal endangered wildlife advisory panel warning the changes could lead to the "wilful extinction" of endangered species.

A senior federal government source said that upcoming legislation will preserve Species at Risk Act powers, including jeopardy tests. The source spoke confidentially because not authorized to speak publicly. The Toronto Star first reported the government's decision to back down.

New regulations were published in the Canada Gazette on Wednesday. The government stated that the Canada Energy Regulator "has expertise conducting impact assessments that review a project's effects on a range of environmental factors, including air, water, soil, climate change, wildlife, species at risk and Canada's environmental obligations." It added that "these projects and facilities will continue to be subject to equally robust applicable provincial and federal assessment processes."

Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, said the delisting will "concretely help attract investment in this country" by reducing costs. "Regulatory costs are a big burden," Exner-Pirot said. "You're paying a lot of up front legal due diligence costs before you make a single cent."

Prime Minister Mark Carney promised during last year's election to streamline regulatory approvals for major projects. Shortly after the 2025 election, Liberals with Conservative help passed Bill C-5, which allows the government to fast-track major projects deemed in national interest.