Introduction
In early July, the Government of Canada released a Cabinet Directive on regulatory and permitting efficiencies for "clean growth projects". The Cabinet Directive establishes a framework aimed at getting projects built faster by improving the efficiency of Canada's approval processes including providing targets for completion of impact assessments and federal permitting processes.
Who This Directive Applies To
The Cabinet Directive applies to federal entities with a role in issuing key federal permits, licenses or authorizations for clean growth projects. This includes the Department of Fisheries and Oceans, Environment and Climate Change Canada, and the Impact Assessment Agency of Canada, among others.
Operational and decision-making autonomy of federal entities with independent or arms-length function, such as the Canadian Energy Regulator, are not affected by this Cabinet Directive.
While "clean growth project" is not defined, the Cabinet Directive identifies several "key sectors" that it states will be fundamental to the domestic and global transition towards net-zero, including:
- Greening manufacturing, industry, and hard-to-abate sector
- Critical minerals
- Power/Electricity
- Nuclear
- Enabling infrastructure
- Clean fuels
Objectives and Guiding Principles
The Cabinet Directive is designed to streamline and accelerate Canada's decision-making by defining timelines and federal roles and responsibilities.
Key objectives of the Cabinet Directive include:
- Accelerating Canada's decision making around clean growth projects;
- Enhancing public confidence in regulatory integrity and efficiency;
- Increasing predictability to promote investment in clean growth projects in Canada; and
- Coordinating processes for Crown consultation with Indigenous groups, emphasizing early engagement to build strong partnerships.
The guiding principles emphasize certainty and predictability, interjurisdiction cooperation, meaningful Indigenous partnerships, urgency in addressing climate risks, and comprehensive decision-making grounded in science and respect for Indigenous knowledge considering the benefits of clean growth projects for advancing Canada's net-zero economic transformation.
The Regulatory and Permitting Targets
The Cabinet Directive provides specific timelines for completion of regulatory processes including:
- Five years for designated projects under the Impact Assessment Act
- Two years for projects not requiring impact assessment but multiple federal permits
- Three years for nuclear projects reviewed by the Impact Assessment Agency and the Canadian Nuclear Safety Commission
The Cabinet Directive does not provide much guidance on how these timelines are to be achieved but it does emphasize that meeting these timelines requires early engagement with federal entities, good faith interactions with affected communities and timely data and information provision for decision making. The Cabinet Directives also emphasize coordination, and to the extent possible integration, with Indigenous, provincial and territorial partners to streamline review and consultation processes and reduce duplication.
Governance - Regulatory Efficiency Action Council
The Cabinet Directive outlines an internal governance structure designed to implement the Cabinet Directive. This includes the establishment of the Deputy Ministers' Regulatory Efficiency Action Council which will oversee and track the implementation of the Cabinet Directive.
In addition, the Deputy Secretary of Clean Growth will act as Federal Permitting Coordinator with a reporting function to the Regulatory Efficiency Action Council. The Clean Growth Office within the Privy Council Office will also play a role in providing strategic advice related to the Cabinet Directive and in working with the Impact Assessment Agency of Canada to formalize a collaboration arrangement for clean growth projects.
Implications
While the Cabinet Directive is a welcome update to the 2007 Cabinet Directive on Improving the Performance of the Regulatory System for Major Projects, it is too early to tell whether the Cabinet Directive will effectively accelerate federal assessment and permitting processes and how long it may take for any such acceleration to take effect.
The targets set out in the Cabinet Directive are ambitious, but generally aligned with the current timelines in the Impact Assessment Act, which contemplate the assessment process being completed in between 4.5 and 5.5 years, assuming no extensions are granted. It is not yet clear whether the Cabinet Directive will have the practical effect of getting projects being contemplated today built any faster.
What remains clear is that relationships with Indigenous peoples will continue to factor prominently into federal regulatory processes and project approval decisions. Reference in the Cabinet Directive to UNDRIP – including FPIC – will continue to drive expectations of Indigenous governments for consensus and consent-seeking. At the same time, reference in the Cabinet Directive to the elements of meaningful Indigenous partnerships – including equity ownership, participation and involvement in decision-making – pulls focus for proponents on Indigenous aspects of project development that will likely carry weight with Crown decision-makers and may be essential to the success of clean growth projects.
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