A Time of Crisis and Opportunity: Understanding Amendments to the Impact Assessment Act (Part 2 of 4)

1. Introduction

On September 21, 2026, the Government of Canada introduced Bill C-39, the Building Canada Strong Act.^[1] Bill C-39 proposes changes to several federal laws to shorten major project approval timelines, coordinate regulatory processes and help major projects move forward more quickly. As Canada has explained in its public materials, the goal is to encourage investment and get projects built faster.^[2]

Over this series of four blog posts, themed “Crisis and Opportunity”, OKT will explain what Indigenous Governments should know about Bill C-39.

Our overarching message is simple: while Bill C-39 raises serious initial concerns, it provides only the blueprint for what is still to come. Much will be shaped by how Canada implements the bill and the additional changes contemplated in the Cabinet Directive on Getting Projects Built in Canada (the “Cabinet Directive”), which accompanied Bill C-39. This creates an opportunity for Indigenous Governments to shape the new regulatory processes and clearly establish their expectations for how major projects should be developed within their territories.

This second blog post provides an overview to the changes to the *Impact Assessment Act. *If you wish to read more of this series, you can do so by clicking the relevant hyperlinks below – which will be updated as more posts are published.

1. A Time of Crisis and Opportunity: An Introduction to C-39 and the Cabinet Directive
2. Understanding Amendments to the Impact Assessment Act
3. Bill C-39’s proposed changes to the Building Canada Act, the Canadian Energy Regulator Act, and environmental legislation
4. How Indigenous Nations Can Position Themselves for Canada’s Major Projects Push

2. Understanding Amendments to the Impact Assessment Act

A. What is the Impact Assessment Actand Why is It Changing?

The Impact Assessment Act(“IAA”)^[3] is a federal law that governs how major infrastructure projects are approved. It does this by creating a process for assessing how the proposed project’s potential adverse effects within federal jurisdiction.

Projects which are subject to the IAA’s rules are either identified in the Physical Activities Regulations(the “Project List”) or designated by an order of the Minister of Environment and Climate Change. They are referred to as “designated projects”^[4] under the IAA and are reviewed by Canada because they fall under federal jurisdiction. Generally, federal jurisdiction applies when a project affects matters the federal government is responsible for regulating,  such as impacts on the rights of Indigenous peoples, migratory birds, fish habitats, or federal lands, or when a project may cross provincial or international borders (such as a bridge or road).^[5]

Until recently, most major projects requiring a federal impact assessment went through a comprehensive review under the IAA by the Impact Assessment Agency of Canada (“IAAC”). Where a major project was also regulated by a specialized body, called a “lifecycle regulator,” such as the Canadian Nuclear Safety Commission (“CNSC”) or the Canada Energy Regulator (“CER”), this included an assessment through an integrated review panel involving the IAAC and the relevant regulator.^[6]

However, even before Bill C-39 was introduced, Canada had already been working to simplify this process and narrow the scope of when the IAA applies. These earlier changes were largely a response to the Supreme Court of Canada’s 2023 decision, which found parts of the IAA’s legislative scheme to be unconstitutional.^[7] In September 2026, Canada also changed the Project List to remove certain pipelines, power lines and offshore renewable energy projects from integrated review under the IAA, so that their assessments would instead be carried out by the CER.^[8] Canada’s rationale for making these changes was to make the process “faster and more predictable”.^[9]

Canada has also been reaching co-operation agreements with provinces to coordinate project reviews which allows for it to rely on a provincial-level review, instead of conducting a separate federal assessment.^[10] For example, in November 2025, the IAAC released a draft co-operation agreement with Ontario that followed the “one project, one review” approach.^[11] The agreement provides that, for projects that are primarily provincially-regulated, Canada will rely on Ontario’s environmental assessment or regulatory process to address potential adverse effects within federal jurisdiction.^[12] Indigenous Governments may have reason to be concerned about this practice, as the environmental assessment regimes in most provinces and territories are significant weaker than the federal regime, and so relying on the provincial or territorial assessment may result in projects which are not as comprehensively assessed, with impacts which are not fully mitigated.

Bill C-39 proposes additional changes to shorten and streamline reviews for projects that remain subject to the IAA. Overall, the effect of these changes – in tandem with the changes already brought in before Bill C-39 – is to narrow the applicability and powers of the IAAand the IAAC. This marks another step away from the original, ambitious vision of an agency conducting comprehensive, best-in-class assessments of major projects, toward a more conventional regulatory body with a narrow mandate.

B. What Are Some Key Amendments To The Impact Assessment ActUnder Bill C-39?

While Bill C-39 proposes many changes to the overall structure of the IAA, we have provided a brief summary of the key changes Indigenous Governments should know about:

1. Allowing Early Construction: Currently, a proponent generally cannot begin work on a project until the assessment is finished and the project is approved.^[13] Bill C-39 would allow the Minister to approve construction before the assessment is complete if the Minister believes it is in the public interest.

There are a few clear limits on this power. The Minister cannot approve construction of the whole project and may impose conditions on any work that is allowed to begin.^[14] Further, where early work is authorized, the Minister (or, for projects assessed by the CNSC, the CNSC) must establish conditions requiring the proponent to remedy any adverse effects within federal jurisdiction caused by that work.

This change could mean, for example, that work on the foundations of a bridge connecting two provinces could begin before the full impact assessment is completed. That assessment may take a closer look at how the bridge could affect fish and fish habitat, and what protections are needed. Work could therefore begin before those issues have been fully assessed and the appropriate protections established, therefore causing irreparable damage to fish and fish habitat.

2. **Removal of Integrated Panels and Expansion of the CNSC’s Powers: **The IAA currently requires certain projects to be assessed by an integrated review panel which brings together the IAAC and the relevant lifecycle regulator to help make sure the review benefits from their combined expertise.^[15] Bill C-39 would replace this process with a review by a single body that is responsible for carrying out that assessment.

As CER-regulated projects have already been removed from the IAA process, the practical effect of this change is to remove integrated review panels for nuclear projects. Under the proposed changes, non-nuclear projects that remain subject to the IAA would be reviewed by IAAC, while the CNSC would be responsible for conducting assessments of projects within its jurisdiction.^[16]

To give effect to this new structure, Bill C-39 would significantly expand the CNSC’s role under the IAA and create a more complete review process for CNSC-led projects. This includes establishing new timelines, duties and responsibilities for the CNSC that often parallel those applicable to the IAAC.^[17]

3. **Shortened Timelines: **Canada’s fanfare around Bill C-39 emphasized the accelerated “one-year” decision-making timeline for project approvals under both the IAA and more generally, as discussed in our post on the Cabinet Directive.^[18] However, this does not mean that the entire impact assessment process will be completed within one year.

A review under the IAA includes several steps, each with its own deadline. Generally, Canada’s proposed changes would accelerate many of those steps, including reducing the time proponents have to provide the required information and studies from three years to one year. However, the advertised one-year period begins only after the relevant reviewer, whether the IAAC or the CNSC, posts a notice confirming that the required information and studies have been provided.^[19]  This period is further divided into assessment and decision-making stages, with different timelines depending on who makes the final decision.

In essence, the one-year timeline covers only the formal assessment and decision-making stages, not the earlier planning and studies. It is also subject to multiple exceptions and extension powers. Given these additional steps and the complexity of the process, we expect that the overall review will still likely take several years. As we will explain below, this is reasonable and expected. Major projects are complicated, and there is good reason to do them carefully.

4. **Coordinated Consultation and Permitting: **Right now, projects subject to the IAAprocess may still require additional permits from other departments. Bill C-39 proposes to change this process by giving the IAAC a formal role in coordinating Crown consultation and allowing for the minister responsible for IAAC to provide permits related to other legislative regimes as a part of the same process.^[20]  However, this only applies to specific permits and projects reviewed by IAAC and some consultation and approvals may still be handled separately.

5. **Ability to Remove Conditions: **When a project is approved under the IAA, its decision statement will generally include conditions that the proponent must follow. Under the current IAA, the Minister of Environment and Climate Change may amend or remove a condition only if doing so will not increase the adverse effects identified in the assessment report.^[21]

Bill C-39 would create an important exception. Depending on who approved the project, Cabinet, or the Minister of Environment and Climate Change together with the “designated Minister,” could amend or remove a condition if they consider it to be in the public interest.^[22] The designated Minister is another federal minister selected for the particular project, either through regulations or a Cabinet order.

This is a significant change. Conditions imposed through the impact assessment process can provide important protections for the environment and Indigenous rights, and may reflect concerns raised during consultation. This creates a risk that conditions considered necessary at the end of an assessment could later be weakened or removed because they are viewed as barriers to the project – and we currently do not know what level of consultation will be associated with such a change.

3. What Are Some Key Takeaways Related to Amendments to the Impact Assessment Act

General Takeaways

When Bill C-39 was introduced, much of the initial attention focused on the proposed changes to the IAA. In our view, that focus is somewhat misplaced. Although these amendments are important, their overall impact is less significant than the Government of Canada’s political spin may suggest. The IAA applies to a relatively narrow category of major projects, and the role of the IAAC had already been weakened by earlier changes. Many of the broader changes to federal project reviews are instead found elsewhere, including in the Cabinet Directive discussed in our previous post.

That does not mean the IAA amendments should be ignored. For projects that remain subject to the IAA, Bill C-39 represents a significant shift toward a more proponent-friendly review process. The proposed changes may reduce the time and opportunities available to complete the studies, assessments and consultation needed to understand and address impacts on First Nations and their rights.

In practical terms, this will make early engagement increasingly important. First Nations should establish clear expectations for proponents before the formal IAA process begins, including expectations regarding early consultation, information sharing and the studies needed to understand potential impacts. Once the formal process begins, there may be less time and fewer opportunities to identify and address concerns that were not raised earlier.

Takeaways for Indigenous Governments with Nuclear Projects In Their Territories

Before the IAA was introduced, the CNSC was responsible for conducting environmental assessments of nuclear projects.^[23] Bill C-39 would largely return to that model. While the CNSC has significant expertise in nuclear safety, the change would remove the IAAC’s role in these assessments, along with its broader expertise in assessing environmental, health, social and economic impacts, including impacts on Indigenous peoples. It is currently unclear how this change will affect projects already under review. For example, the proposed Bruce C Nuclear Project is currently going through an integrated impact assessment led by the IAAC and the CNSC.^[24]

We are also concerned that the CNSC would be able to authorize construction before an assessment is complete. Early works can have significant impacts of their own, and the earthworks required for these types of projects can be extensive and hard to undo. Allowing impacts on the land before Indigenous concerns have been fully considered is particularly concerning given the negative history of nuclear development for many affected communities, and is unlikely to be well received.

Ultimately, however, these are only initial takeaways. The actual implications of Bill C-39’s changes to the IAA will only become clear once they get put into practice. Until then, it will be important for Indigenous Governments to continue ensuring that their voices are heard with respect to their consultation rights and the impacts of projects on their territories.

What this means for your Indigenous Government

• Raise your concerns about the proposed changes with Canada, including by taking part in the legislative process for Bill C-39 and contacting your local Member of Parliament.

• Be vigilant about major projects being proposed in your traditional territory. Set clear expectations with proponents about the need for early engagement. You may also wish to develop or update your consultation protocols to reflect those expectations.

• Act quickly once a project enters the IAA With shorter timelines, there will be less time to respond once an assessment begins. Engage with the IAAC or the CNSC, as applicable, from the outset, and be ready to identify the information, studies and protections you need, including before any early construction is approved.

• If federal review processes become less comprehensive, be prepared to exercise your own governance authority and develop your own processes to fill the gap. Make it clear to proponents that they will be expected to respond to, and participate in, those processes.

• Contact OKT if you would like help commenting on Bill C-39 as it moves through the federal legislative process, taking part in an impact assessment, or raising concerns with proponents, the IAAC or the CNSC.

References

1. Bill C-39, “An Act respecting certain measures to strengthen the economy”, *1st Sess, 45th Parl, 2026.
2. Government of Canada, “Government of Canada introduces legislation to transform how Canada builds” (September 21, 2026).
3. Impact Assessment Act, S.C. 2019, c. 28, s. 1 [“IAA”].
4. IAA, s. 2 (definition of “designated project”).
5. IAA, s. 2 (definition of “adverse effects within federal jurisdiction”).
6. IAA, s. 43.
7. Reference re Impact Assessment Act, 2023 SCC 23.
8. See: Government of Canada, “Government of Canada Streamlines Project Assessments to strengthen one Canadian economy” (September 9, 2026).
9. Government of Canada, “Government of Canada Streamlines Project Assessments to strengthen one Canadian economy” (September 9, 2026).
10. Government of Canada, ““One Project, One Review”: Co-operation Agreements for the Assessment of Major Projects” (September 19, 2025).
11. Government of Canada, “Draft Co-operation Agreement between Ontario and Canada on Environmental and Impact Assessment” (November 24, 2025).
12. Draft Co-operation Agreement between Ontario and Canada on Environmental and Impact Assessment, s. 1(1).
13. IAA, s. 7.
14. Building Canada Strong Act, s. 5.
15. IAA, s. 36(1).
16. Building Canada Strong Act, ss. 7 and 8(1).
17. See: Building Canada Strong Act generally.
18. Government of Canada, “Cabinet Directive on getting projects built in Canada” (September 21, 2026).
19. Building Canada Strong Act, s. 16.
20. Building Canada Strong Act, s. 89.
21. IAA, s. 68(2).
22. Building Canada Strong Act, s. 53(1).
23. Government of Canada, “Impact Assessment Act – Presentation” (September 16, 2020); Andrew Dusevic.
24. Bruce Power, “Impact Assessment Process”.