In June 2025, Canada introduced transformative legislation that promises to reshape how major infrastructure projects navigate regulatory approval processes. The Building Canada Act, enacted through Bill C-5 on 26th June 2025, aims to reduce federal decision timelines on major projects from five years to two years, fundamentally altering the investment landscape for institutional capital seeking reliable, risk-adjusted returns.
Quick Introduction to the Building Canada Act
The Building Canada Act provides streamlined regulatory processes through a one decision-maker model and advance certainty of approval for projects designated as being in the national interest. The federal government will establish a Major Projects Office to coordinate approvals and allocate capacity funding to strengthen Indigenous Peoples' participation in this process.
The Purpose of the Building Canada Act
The proposed legislation will accelerate the realisation of major, nation-building projects that will help Canada become the strongest economy in the G7, deepen trade relationships with reliable partners, and create good Canadian jobs. The Act fundamentally transforms how projects achieve regulatory certainty by addressing three critical challenges:
Enhanced Regulatory Certainty: Once the environmental and other review processes and consultations with potentially impacted Indigenous rights-holders are completed, the Minister responsible for the Act will issue a single set of binding conditions for the project.
Indigenous Partnership Integration: The Government of Canada has doubled the Indigenous Loan Guarantee Programme from $5 billion to $10 billion – enabling more Indigenous groups and organisations to become owners of major projects.
Streamlined Federal Coordination: The Building Canada Act provides for streamlined regulatory processes through a one decision-maker model and advance certainty of approval, though not of approval conditions, for national interest projects.
How This Changes the Traditional Process
The traditional regulatory approval process has historically created significant uncertainty for project developers and investors. From a practical perspective, unless a proponent had already completed baseline environmental studies and secured Indigenous support for a proposed national interest project prior to the BCA's designation stage, the two-year timeline may prove challenging for a project's permitting phase.
The Act transforms this dynamic by requiring upfront determination of national interest status, which then triggers streamlined approval mechanisms. The criteria that will be weighed in those discussions and decisions include the extent to which the project will strengthen Canada's autonomy, resilience and security.
However, implementation faces significant challenges. Nine First Nations in Ontario have already filed a legal challenge against the Building Canada Act, with Indigenous leaders expressing concerns that projects will "end up in court" due to inadequate consultation.
Project Timeline Comparisons
Traditional Approval Process (Pre-Building Canada Act)
- Average Timeline: 5-7 years for major infrastructure projects
- Key Challenges: Multiple federal agencies, sequential approvals, uncertain outcomes
- Risk Profile: High regulatory uncertainty, frequent court challenges
Building Canada Act Process (2025 Forward)
- Target Timeline: 2 years for designated national interest projects
- Streamlined Elements: Single authorisation document, unified federal office
- Requirements: Meaningful consultation on which projects are deemed in the national interest and on the conditions that projects will have to meet
Indigenous Partnership Model
- Enhanced Certainty: Projects with Indigenous majority ownership demonstrate reduced regulatory risk
- Support Mechanisms: $40 million in funding for Indigenous participation to strengthen Indigenous groups and organisations capacity to participate in implementing the Building Canada Act
Cedar LNG: The Indigenous Partnership Success Model
Cedar LNG represents a breakthrough in Indigenous-led project development, with the Haisla Nation and Pembina Pipeline Corporation announcing a positive Final Investment Decision on 25th June 2024. The project demonstrates how Indigenous majority ownership can accelerate development timelines and reduce regulatory risk.
Project Structure and Ownership: Cedar LNG is the world's first Indigenous majority-owned LNG project, with the Haisla Nation holding majority ownership. The nation is a majority owner in the project with a 50.1 per cent stake, ensuring genuine Indigenous control over project development and operations.
Timeline Achievement: The Cedar LNG project achieved its final investment decision through an accelerated process that demonstrates the potential for Indigenous partnership models. Cedar LNG will be one of the largest First Nations majority-owned infrastructure projects in Canada, employing up to 500 people during construction and providing 100 good, secure jobs once operational.
Risk Mitigation Success: "With Cedar LNG, we have proven that Indigenous communities can successfully forge a path to economic independence and generational prosperity," said Haisla Chief Councillor Crystal Smith. The project demonstrates how authentic Indigenous partnership creates stakeholder alignment that reduces both regulatory and operational risks.
Beyond Speed: Risk Mitigation
The Building Canada Act's value proposition extends beyond timeline reduction to encompass comprehensive risk mitigation strategies. Projects without Indigenous partnerships historically face significant challenges, including court challenges, construction delays, and cost overruns.
Regulatory Risk Reduction: The Government of Canada will consult with provinces, territories, and Indigenous Peoples to determine the initial list of national interest projects, ensuring that designated projects have broad stakeholder support before entering the streamlined approval process.
Constitutional Compliance: Canada will uphold its constitutional obligations to consult Indigenous groups to ensure projects proceed in ways that respect and protect Indigenous rights. The Act specifically commits to working in a way that respects commitments to the implementation of the United Nations Declaration on the Rights of Indigenous Peoples Act.
The Regulatory Architecture
The Building Canada Act creates a comprehensive regulatory framework that embeds Indigenous participation throughout the approval process:
Federal Level Implementation: An Indigenous Advisory Council that will closely work with the new Federal Major Projects Office, comprised of First Nations, Inuit, Métis, as well as Modern Treaty and Self-Government representatives.
Capacity Building Support: Dedicating $40 million in funding for Indigenous participation from early discussions on which projects to prioritise to ongoing capacity-building.
Financial Partnership Mechanisms: Canada's new government has doubled the Indigenous Loan Guarantee Programme to $10 billion, enabling more Indigenous communities to acquire full equity ownership of major projects.
Investment Strategy Implications
For institutional investors, the Building Canada Act creates several strategic advantages that improve project economics and risk profiles:
Enhanced Predictability: The two-year timeline commitment provides greater certainty for capital deployment and return calculations.
Government Partnership: The federal government's recent commitment to double the federal Indigenous Loan Guarantee Programme to C$10 billion may help to derisk the proposed streamlined regulatory process.
ESG Alignment: Indigenous majority ownership models like Cedar LNG provide authentic reconciliation partnerships that meet institutional ESG requirements.
Implementation Challenges and Opportunities
Despite the Act's ambitious timeline commitments, implementation faces significant challenges. Indigenous leaders express concerns about consultation adequacy, with some stating they were not consulted during the drafting of the new legislation.
However, successful implementation examples provide optimism. Joe Dion, former grand chief in Alberta and CEO of the Western Indigenous Pipeline Group, believes the Carney government will respect Section 35 and honour the principle of free, prior, and informed consent.
Success Factors for Project Developers:
- Early Indigenous engagement before project designation
- Genuine partnership structures with meaningful ownership stakes
- Capacity building investments in Indigenous communities
- Alignment with Indigenous economic development priorities
The Competitive Advantage
Projects developed under the Building Canada Act framework with authentic Indigenous partnerships create sustainable competitive advantages. These projects benefit from reduced social licence risks, enhanced access to government funding programmes, and preferential treatment in procurement processes.
Cedar LNG demonstrates this model as "a powerful example of how industry, Indigenous nations and governments can work together to deliver much-needed Canadian energy to the world".
The Building Canada Act represents Canada's most significant regulatory reform in decades, with Indigenous partnership at its core. For investors seeking reliable, risk-adjusted returns in Canadian infrastructure, understanding and embracing this new paradigm is no longer optional, it's essential for project success.
Looking Forward
The trend toward Indigenous participation requirements is expected to accelerate. Future regulatory frameworks will likely strengthen FPIC implementation and expand fast-track eligibility criteria. Early adopters are establishing preferred partner relationships while the competitive landscape remains favourable.
