The 2025 Free Trade and Labour Mobility Act and Building Canada Act, also known as Bill C-5, One Canadian Economy Act is the federal government’s economic response to the US Trump Administration’s trade war by “breaking inter-provincial trade barriers, accelerating infrastructure, and unlocking 200 billion dollars in growth.” In these uncertain times, the government’s attractive pitch to voters is an orientation towards economic efficiency now, prosperity later.
Bill C-5 does target real and persistent economic barriers. Restrictions on labour mobility have prevented qualified workers from moving freely across provinces for work, while overlapping federal and provincial environmental reviews extend project approvals up to five years.
However, underneath this economic relief bill lies a troubling trade-off which can lead to long-term institutional consequences. The bill fundamentally restructures power within the Canadian regulatory system by giving Cabinet unprecedented power to designate certain projects as being in the “national interest.” Once the projects are so designated, independent regulators such as the Canadian Energy Regulator (CER) are no longer empowered to make decisions. While these regulators may continue to assess each project, the outcome of the approval process is already considered approved with this designation. These changes risk sacrificing regulatory independence and meaningful participation for the uncertain promise of accelerated timelines, efficiency, and cost management. The parliamentary process to pass Bill C-5 was rushed and included limited committee testimony by witnesses and reduced parliamentary and public input, furthering doubt on the level of scrutiny and democratic accountability.
Once the projects are so designated, independent regulators such as the Canadian Energy Regulator (CER) are no longer empowered to make decisions. While these regulators may continue to assess each project, the outcome of the approval process is already considered approved with this designation.
The Cabinet’s authority to designate projects and override recommendations by regulatory bodies creates a new form of political uncertainty. For example, the cancellation of the Northern Gateway pipeline by the Trudeau government in 2016 after its regulatory approval shows how executive decisions can abruptly derail projects even in their advanced stages. Rather than eliminating delays, Bill C-5 trades predictable regulatory processes for unpredictable political vetoes and the litigation that could follow as decisions are deemed unjust or lacking due diligence.
Bill C-5 also raises significant concerns for the Indigenous communities across Canada. While the legislation reiterates a mandate for the federal government to consult Indigenous Peoples before project designations, and doubles the funding available to the Canada Indigenous Loan Guarantee Program to $10 billion, major considerations have been flagged.
Grand Chief Trevor Mercredi of Treaty 8 First Nations testified at the Standing Committee on Transport, Infrastructure and Communities on review of C-5 that, “The bill effectively seeks First Nations consent before any impact assessment is conducted and before we understand how our treaty rights will be affected. This violates the principle of free, prior and informed consent as outlined in article 32.2 of UNDRIP.” He argued further on the legislation that, “Instead of a nation-to-nation approach, Canada opted for speed and secrecy…”
Indigenous Member of Parliament Leah Gazan has also stated that the Assembly of First Nations and other national Indigenous organizations argue that Bill C-5 is an, “ungracious invitation to the Supreme Court, meaning that the goal of this bill with regard to nation-building projects will actually be an economy-killing, job-killing bill because it’s becoming very clear from constitutional experts that any projects going forward are going to end up in court.” Formal consultation requirements with Indigenous communities cannot ensure that their contributions and consent may be considered, as Cabinet holds the final decisional authority.
Bill C-5 has the potential to create deeper institutional fragility. It consolidates power away from expert bodies and independent regulators and empowers political decisions from Cabinet. Such political decisions could impact investment, prolong litigation over Section 35 rights, and fracture Reconciliation efforts.
Canada faces severe economic and infrastructure problems which demand decisive public solutions. There are alternatives that preserve the integrity and independence of institutions without sacrificing efficiency. Some proven models include British Columbia’s recent streamlining legislation on housing that delegates authority to municipalities, allowing more public input in community development and enables city-wide development planning. Ensuring that the binding free, prior, and informed consent protocols are a requirement for compliance with international law such as the UN Declaration on the Rights of Indigenous Peoples. Canada’s already established regulatory regime, incomplete as it may be, should not be further dismantled if we are to prevent Supreme Court challenges. True nation-building requires protocols and procedures that have the trust of the public and input from all affected parties and elected representatives. By centralizing final authority in Cabinet, Bill C-5 does not strengthen state capacity — it creates institutional fragility.
