Building for Tomorrow
Issue #5 | January 2026

Canada has entered a new era of nation-building. As Ottawa promises to “build, baby, build,” the provinces line up behind new trade corridors and the private sector awaits new business opportunities – the stakes for Canada’s economic future are high.

Rail lines, airports, ports, roads and pipelines are essential contributors to national prosperity. However, not all infrastructure is created equal, and the “how” of project approvals deserves just as much attention as the “what.”

Building for Tomorrow tracks, analyzes, explains and critiques the policies, projects and politics shaping Canada’s trade-enabling infrastructure.

Streamlining impact assessments for major projects

Canada has ambitious plans to build housing, energy and trade-enabling infrastructure that are intended to enhance economic prosperity and national security.

However, the ability to advance major projects continues to be constrained by lengthy and duplicative review processes that introduce delay and uncertainty into investment decisions. Reforms to impact assessment processes have been a focal point of our attention and federal commitments, but there are many dimensions to getting projects built faster, nation-building or otherwise.

One important federal commitment is to “strike co-operation agreements with every interested province and territory within six months” to realize the goal of “one project, one review.”

Prior to this announcement, the federal government only had a co-operation agreement with British Columbia. Since then, two more have been signed with Ontario and New Brunswick, and at least three more are in the works with Manitoba, P.E.I. and Alberta.

What are co-operation agreements?

In the context of impact assessments, co-operation agreements are deals between the federal government and a province to facilitate a more streamlined and co-ordinated review process for impact assessments. They help achieve this via three primary mechanisms:

1. Early assessment decision

If the Impact Assessment Agency of Canada (IAAC) decides in its initial project review that a project will have minimal impact on areas of federal jurisdiction, or that impacts are fairly standard or well-understood, it can issue an early assessment decision that further federal involvement is unnecessary.

2. Substitution

A province that has signed a co-operation agreement can apply to replace the federal impact assessment process with its own process, enabling a single assessment that meets both federal and provincial requirements.

3. Substitution of a harmonized process

The federal government and a province that has signed a co-operation agreement can agree to jointly develop an assessment process that meets the requirements of the Impact Assessment Act. The province and the federal government would jointly agree who is responsible for the different components of a review.

Other mechanisms

Co-operation agreements also enable several other less-prominent mechanisms, including joint review panels, condition development and permitting co-ordination.

Will co-operation agreements make approvals faster?

There is some evidence that co-operation agreements are more effective than current federal review processes.

As the Canada West Foundation has previously noted, only two projects submitted to the Impact Assessment Agency since the implementation of the 2019 Impact Assessment Act have actually been approved by the IAAC – Cedar LNG and Ksi Lisims LNG – and both of those were approved via the substitution of B.C. processes (note that this excludes “regional assessments,” projects where impact assessments were deemed unnecessary or unapplicable, or projects where there was an “early decision”).

There are some important qualifications.

First, evidence for the effectiveness of co-operation agreements is limited to the two examples noted above, and those reviews took about 3.5 and 2.5 years, respectively – still notably shy of the federal government’s new two-year target.

Second, substituting provincial processes for federal processes can only be as effective as the provincial process, even if we accept that B.C.’s processes are more effective, this does not necessarily hold true for other provinces.

Third, substitutions still currently require ministerial approval at both ends, meaning that decisions are political by default.

How will cross-provincial projects be handled?

Bilateral co-operation agreements do not provide an immediate solution to projects that require the co-operation of two or more provinces (e.g., the two pipeline proposals). Given current provincial and national ambitions to build major projects, developing a framework for reviewing multi-province projects seems worthy of consideration.

Note: although interprovincial energy projects are the jurisdiction of the Canada Energy Regulator, they are still subject to an integrated impact assessment led by the IAAC.

What happens when the federal government and a provincial government disagree?

When the federal government approves a substitution, they don’t yield decision-making authority regarding areas of federal jurisdiction (e.g., migratory birds).

This sets up the possibility of an impasse between a province and the federal government if a project goes through the provincial review process but can’t get approval related to a mitigation approach for a federal effect, particularly if final federal ministerial authority can still be exercised at the end of the project.

To what degree is the federal government prepared to surrender authority?

Even though the federal government does not yield final authority when it approves a substitution, in practice, it’s unlikely the federal government will want to deal with the political fallout of undermining a province’s review process.

The greater question is how willing the federal government will be to approve substitution reviews in the first place, particularly with provinces that may be “offside” when it comes to federal-provincial relations.

What comes next

Co-operation agreements have the potential to reduce duplication in project reviews by clarifying roles and improving co-ordination between federal and provincial governments.

They address one of the most persistent bottlenecks in the current system: parallel reviews of the same project by two orders of government. However, they do not resolve broader concerns about the efficiency, consistency or predictability of either federal or provincial assessment processes.

The effectiveness of co-operation agreements will ultimately depend on how they are applied in practice. Outstanding issues, including the treatment of multi-province projects, the handling of disagreements between governments and the degree of certainty provided once substitution is approved, will shape whether these agreements materially improve approval timelines.

Canada will need to restore confidence in the project approval system if the “build, baby, build” vision is going to become reality. Co-operation agreements will need to be accompanied by further efforts to streamline assessment processes and provide greater clarity to proponents, while maintaining confidence in environmental and regulatory outcomes.

Each month, Building for Tomorrow explores new developments in trade-enabling infrastructure in Canada, such as the rationale behind national projects, negotiations and agreements between different Canadian jurisdictions and developments in approval processes and policy.

Building for Tomorrow is written by Ryan Workman. If you have any developments you’d like to see featured or topics that you think should be covered, please send them to .

Further reading