Government of Canada makes significant changes to energy project approvals process

On September 3, the Government of Canada published amendments removing seven types of energy projects from the Physical Activities Regulations (the Project List) under the Impact Assessment Act (IAA). As a result, these types of projects will no longer be subject to the IAA but will continue to be regulated by the Canada Energy Regulator Act (CER Act) or applicable provincial environmental assessment regimes.

These changes were proposed in the spring as part of a suite of major reforms to the project approvals regime with the release of a discussion paper entitled Getting Major Projects Built in Canada¹. A public consultation took place from May 8 to July 22, 2026, and a “what we heard” report was published on September 9². The Government has indicated it intends to introduce legislation further consolidating federal project permitting processes this fall, and that it will propose more amendments to the Project List at a later date.

What you need to know

• Prior to these amendments, certain types of energy projects were subject to both the IAA and the CER Act. Now, these projects will be subject to assessment and ongoing regulation by a single federal regulator under the CER Act and/or the applicable provincial environmental assessment regime.
• Interprovincial and international pipelines, international and designated interprovincial power lines, and offshore renewable energy projects (unless regulated by the Atlantic offshore energy regulators) will now be reviewed by the Canada Energy Regulator under CER Act rather than through an integrated assessment under the CER Act and IAA.
• In situ oil sands extraction facilities and fossil fuel-fired power generating facilities will no longer be reviewed under the IAA, and may still be subject to provincial environmental assessment regimes, to ensure federal assessments remain focused on major projects within federal jurisdiction with the greatest potential to cause adverse effects.

Project List amendments

The following project types have been removed from the Project List and, as a result, will no longer be subject to the IAA:

• international and interprovincial pipelines;
• international and interprovincial electrical transmission lines;
• offshore renewable energy projects that are regulated under the CER Act;
• oil and gas pipelines and facilities in national parks and protected areas that are regulated under the CER Act;
• oil and gas facilities that are functionally integrated into a federal work or undertaking that is regulated under the CER Act;
• in situ oil sands extraction facilities with a bitumen production capacity of 2,000 m3/day or more, in a province without provincial legislation to limit greenhouse gas emissions from oil sands; and
• fossil fuel-fired power generating facilities.

Going forward, the Canada Energy Regulator alone will review interprovincial and international pipelines, international and designated interprovincial power lines, and offshore renewable energy projects (unless regulated by the Atlantic offshore energy regulators). This review will include an assessment of the proposed project’s effects on the environment and socio-economic impacts, known as Environmental and Socio-Economic Assessments (ESAs). For example, environmental considerations in an ESA typically include effects, including cumulative effects, on fish and fish habitats, GHG emissions and climate change, species at risk, water quality, and Canada’s ability to meet its environmental obligations. Socio-economic considerations in an ESA typically include effects on employment and economy, human health, infrastructure and services, and the rights of Indigenous Peoples³.

Factors considered in an ESA under the CER Act generally overlap with those assessed under the IAA. However, the IAA contains more prescriptive factors: for example, including statutory factors rather than guidelines to consider alternative means of carrying out the project and alternatives to the project. In contrast, the CER Act generally affords greater flexibility in how assessment factors are considered. The decision-making process for pipeline certificate applications under the CER Act also includes technical, engineering, operational, and economic considerations in addition to environmental and socio-economic effects. The IAA remains more prescriptive and process-oriented, while the CER Act retains a broader public interest and economic regulation focus.

For in situ oil sands extraction facilities and fossil fuel-fired power generating facilities, no federal review is required although these projects may still be subject to provincial environmental assessment regimes. The removal of these two types of energy projects was in response to the Supreme Court of Canada’s 2023 reference decision regarding the IAA, which found that federal assessments must remain focused on major projects with the greatest potential to cause adverse effects within federal jurisdiction⁴.