Opportunities in Newfoundland and Labrador to streamline regulatory processes for National Interest Projects

Morgan Chafe
morgan.chafe@mcinnescooper.com
McInnes Cooper
St. John’s

This article outlines opportunities for Newfoundland and Labrador to streamline approval processes for National Interest Projects designated under the Building Canada Act. While the Act accelerates federal permitting, proponents must still navigate provincial environmental assessment, benefits plan negotiation, and municipal zoning and development permitting without a corresponding streamlined provincial framework. This article recommends adopting a “one project, one review” approach by relying on federal assessment materials under the provincial assessment process, providing clear minimum requirements for benefits plans, and using ministerial authority to standardize and prioritize municipal decisions to better align with the Act’s two-year timeline.

The intent of the Building Canada Act, SC 2025, c. 2 (“Act”) is to streamline regulatory approval processes for infrastructure projects deemed to be a project of national importance under Schedule 1 of the Act (“National Interest Project”). More importantly, National Interest Projects are deemed to have every favourable determination, opinion, and finding required to be granted any applicable permit, licence, or approval required by certain prescribed acts and regulations set out in Schedule 2 of Act that are needed to carry out the project.¹ The prescribed acts and regulations under Schedule 2 are federal acts and regulations.² Therefore a National Interest Project still must go through the necessary provincial and local government application processes for various permits, licences, and approvals it requires, with no guarantee of a favourable outcome.

Newfoundland and Labrador’s legislature has yet to introduce a companion Bill that would streamline the various provincial regulatory processes a National Interest Project must engage in. In Newfoundland and Labrador there are three (3) regulatory processes any National Interest Project must successfully traverse to get off the ground that, considering the Act and the absence of a companion Bill, present opportunities for streamlining to reduce the administrative burden associated with projects of such a scale:

1. The environmental assessment process (“EA Process”) under the Environmental Protection Act, SNL 2002 c. E-14.2 (“EPA”);
2. Negotiating a Benefits Agreement as a condition of a Release from the EA Process under the EPA; and
3. Local government development permit and re-zoning processes.

Provincial Environmental Assessment Process

The purpose of Newfoundland and Labrador’s EA process is to protect the environment and quality of life of the province’s population and facilitate the wise management of the province’s natural resources. The EPA requires anyone who plans a project that could have a significant effect on the natural, social or economic environment to present the project for examination.³

While the Act may allow a proponent to streamline the approval process for those National Interest Projects falling under the purview of the Impact Assessment Act, SC 2019, c. 28 (“IAA”) to date, the provincial legislature has not developed a process streamlining the approval of National Interest Projects under the EPA.

Under the Act, proponents are no longer expected to meet specific indigenous consultation and detailed project description requirements and may proceed without the planning phase, they are not bound by the timelines for an impact assessment, and the decision of the minister and Cabinet is deemed to be in support of the National Interest Project.⁴ However, at the provincial level proponents must still engage in indigenous consultation and detailed project description requirements and complete the planning phase, within the timelines established by the EPA with no certainty on the outcome of the EA Process. The result is that designated projects under the IAA are exempt from legislative requirements for the planning phase of the project,⁵ while the comparable provincial EA Process requirements remain.⁶

This presents an opportunity for the province to adopt a “one project, one review” approach by considering the materials a proponent submits to the Major Projects Office and/or Impact Assessment Agency as sufficient to satisfy the requirements of the EA Process, including any materials respecting indigenous and general public consultation. There is also an opportunity for the province to require its Department of Environment and Climate Change’s Environmental Assessment Division to prioritize the EA process for National Interest Projects in effort to adhere to the goal of a two-year approval timeline under the Act.

Negotiation of Benefits Plans

Projects completing the EA Process may be released from environment assessment subject to terms and conditions imposed by the minister.⁷ One such condition is that the proponent prepare a benefits plan that meets ministerial approval prior to commencing project activities.

Benefits plans are important tools to achieve the purposes of the EA Process. Specifically, to improve the quality of life of the people of the province by providing training, employment, and procurement opportunities. Yet, there is little guidance from the province as to the scope, form, or content of benefits plans. The only industry for which legislative guidance exists, is for projects in the province’s offshore energy industry. The Accord Acts require a benefits plan to be submitted to the regulator for approval and both the legislation,⁸ and the regulator provide guidance for creating such plans.⁹

National Interest Project proponents may be required to prepare and abide by benefits policies and procedures developed in consultation with the province. However, without meaningful guidance from the province as to the minimum requirements for benefits plans, proponents may be stalled from commencing project activities. This presents an opportunity for the province to provide clarity for the minimum requirements for benefits plans to streamline the release and approval of projects under the EA Process.

Municipal Zoning and Development Permitting Processes

One of the most arduous process a proponent must face when initiating a National Interest Project in the province is obtaining development permits and re-zoning applications from the local government where the National Interest Project intends to be located.

Under the province’s Urban and Rural Planning Act, 2000, SNL 2000, c. U-8 (“URPA”) each local government has the authority to make its own development regulations¹⁰ which dictate the scope of its discretion in whether to approve an application for a development permit or re-zoning. That said, the majority of municipalities have adopted some variation of the following scheme: a permit shall be issued where the development conforms with the development regulations, applicable building codes and municipal polices, subject to (a) council’s discretion to reject an application for being premature; and (b) council’s obligation to, in considering an application, take into account the municipal plan, the general appearance of the development of the area, the amenity of the surroundings, availability of utilities, public safety and convenience, and any other considerations which are, in its opinion, material. Notwithstanding the conformity of the application, council has discretion to reject an application as a result of the foregoing considerations. This scheme grants local governments broad discretion to create significant roadblocks for National Interest Projects.

Despite this broad discretion to create significant roadblocks for National Interest Projects, there is a mechanism under URPA whereby the minister may impose changes to local government’s development regulations in a variety of circumstances, including, inter alia, to permit the non-conforming development and use of land, to control or direct development in the province or an area of the province, and for the purpose of regulating, controlling, directing, or licensing development and controlling and directing the design, appearance, maintenance, use and occupancy of buildings, land and development in the province.¹¹ This ministerial authority presents an opportunity to streamline municipal zoning and development permitting processes. A potential solution is for the minister to impose an amendment to each local government’s development regulations whereby all projects considered a National Interest Project shall obtain approval for their development and re-zoning applications so long as it conforms with the development regulations, applicable building codes and municipal policies, and to require council to prioritize determinations on applications made by the proponents of National Interest Projects.

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