One Canadian Economy Act Clears the House of Commons

The Carney government cleared a major legislative hurdle this week as Bill C-5, the One Canadian Economy Act, passed the House of Commons. The legislation is the centrepiece of the Liberals' agenda to dismantle internal trade barriers between provinces and to accelerate approvals for projects the government deems to be in the national interest, and its passage marks one of the most significant early wins for a government that won a majority only weeks ago.

What the bill does

At its core, the One Canadian Economy Act is designed to do two things at once. The first is to reduce the patchwork of provincial rules, certifications and standards that have long made it harder to move goods, services and workers across provincial borders than across some international ones. The second is to create a faster, more centralised pathway for approving large projects in sectors such as energy, transportation and critical minerals.

The government has argued that the two goals are linked. Officials contend that a more unified internal market and a quicker approvals process are both necessary to attract the scale of private investment the prime minister has been courting at home and abroad. Removing friction, the argument goes, lowers costs for businesses and signals to investors that Canada can move quickly when projects align with national priorities.

The legislation gives the federal government tools to designate certain projects for expedited review, a provision that has drawn both praise and concern. Supporters see it as a way to end the years-long delays that have plagued major infrastructure and resource projects. Critics worry it could concentrate too much discretion in federal hands and sideline environmental and Indigenous considerations.

The economic case

Estimates of the cost of internal trade barriers in Canada have long run into the tens of billions of dollars annually, a figure economists across the political spectrum have cited as evidence that the country has been needlessly hobbling its own economy. The government has seized on those numbers to frame the bill as low-hanging fruit: a way to boost growth without raising taxes or running larger deficits.

That framing has taken on added urgency given the state of the economy. With business investment weak and the country having posted back-to-back quarterly declines in output, the government has been searching for levers that can lift productivity. Tearing down internal barriers is one of the few measures economists broadly agree would help, even if estimates of the precise benefit vary.

The bill also fits into the government's broader response to the trade conflict with the United States. With American tariffs weighing on key sectors, ministers have argued that strengthening the domestic market and diversifying trade are two sides of the same strategy. A more integrated Canada, in this telling, is a more resilient one.

How the debate unfolded

The bill's passage through the House was not without friction. Opposition parties pressed the government on the scope of the powers it would grant to fast-track projects, and on whether the legislation adequately protects environmental standards and the duty to consult Indigenous communities. Some members raised concerns that the drive for speed could come at the expense of due process.

The government, for its part, argued that the bill preserves existing legal obligations while removing duplication and delay. Ministers said the goal is not to bypass safeguards but to ensure that projects which clear those safeguards are not held up by administrative bottlenecks and overlapping reviews. The Liberals' majority ultimately ensured the bill's passage through the chamber.

Provincial reaction has been mixed. Some premiers have welcomed measures that would make it easier to sell goods and services across borders, a long-standing grievance for businesses operating nationally. Others have watched warily, concerned about how the federal fast-track provisions might interact with their own jurisdiction over resources and the environment.

The provincial dimension

Internal trade is an area where Ottawa cannot act alone. Much of the friction that businesses face stems from provincial regulation, meaning the federal government can lead but ultimately needs provincial cooperation to deliver the full benefits of a unified market. The bill is in part an invitation to the provinces to align their rules, backed by federal coordination.

That dynamic is playing out against a tense federal-provincial backdrop. Relations with Alberta are strained over energy and a planned referendum question on separation, and several provinces guard their jurisdiction jealously. How the government manages those relationships will help determine whether the One Canadian Economy Act delivers in practice or stalls in implementation.

The Indigenous dimension is equally important. The duty to consult is a constitutional obligation, and any move to accelerate project approvals will be tested against it. Indigenous organisations have signalled they will be watching closely to ensure that speed does not translate into shortcuts on consultation and consent.

What it means for Canadians

For consumers and workers, the promise of the bill is tangible: lower prices on some goods, easier movement of skilled workers between provinces, and over time a more efficient economy. Trades workers, professionals and businesses that operate across provincial lines stand to benefit most directly if the recognition of credentials and standards becomes smoother.

For communities near major projects, the implications are more complex. Faster approvals could mean jobs and investment arrive sooner, but they also raise the stakes of getting environmental and consultation processes right. The government's challenge will be to demonstrate that speed and rigour are not mutually exclusive.

The broader payoff, if the government's projections hold, is a more productive and resilient economy better able to withstand external shocks. That is a long-term proposition, and one whose success will be measured over years rather than months.

A long-standing grievance

The barriers the bill targets have frustrated businesses and economists for generations. Despite operating within a single country, Canadian companies have long faced a thicket of differing provincial regulations, certification requirements and standards that can make it harder to sell goods or deploy workers across a provincial line than across an international border. Successive governments have pledged to address the problem, with limited success.

Examples of the friction are legion: trucking rules that differ from province to province, professional credentials that are not recognised across borders, and product standards that force companies to adjust packaging or formulations depending on where they sell. Each individual barrier may seem minor, but collectively they impose costs that economists have estimated run into the tens of billions of dollars annually.

That the problem has persisted for so long speaks to its difficulty. Internal trade barriers are largely a product of provincial jurisdiction, and provinces have historically been reluctant to cede regulatory authority or to harmonise rules they see as serving local interests. The One Canadian Economy Act represents the latest and among the most ambitious federal attempts to break that logjam.

The fast-track question

If the internal-trade provisions have drawn broad support, the project fast-tracking elements have proven more contentious. The bill gives the federal government tools to designate certain projects for expedited review, a power supporters see as essential to ending chronic delays but critics worry could be used to override legitimate scrutiny.

The concern is partly about process and partly about precedent. Granting the executive discretion to single out projects for accelerated treatment raises questions about transparency, accountability and the criteria that will guide such decisions. Environmental organisations and some Indigenous leaders have warned that speed could come at the expense of rigorous assessment and meaningful consultation.

The government has insisted that existing legal obligations, including environmental review and the duty to consult, remain intact, and that the bill is about eliminating duplication rather than removing safeguards. How that assurance holds up in practice, as the first projects are designated and the new powers are tested, will be a crucial measure of whether the legislation delivers on its promise without sacrificing accountability.

Indigenous and environmental scrutiny

Among the most consequential questions hanging over the legislation is how its project fast-tracking provisions will interact with the duty to consult Indigenous communities and with environmental assessment. Both are areas of significant legal and constitutional weight, and any perception that speed is being prioritised over those obligations could provoke opposition and legal challenges.

Indigenous organisations have signalled that they will watch the implementation of the bill closely, insisting that the duty to consult, a constitutional obligation affirmed repeatedly by the courts, cannot be diminished in the name of expediting projects. Meaningful consultation and, where appropriate, consent are increasingly understood as prerequisites for projects to proceed without protracted conflict.

Environmental groups have raised parallel concerns, warning that accelerating approvals must not come at the expense of rigorous assessment of the impacts of major projects. The government has maintained that existing safeguards remain in place and that the bill targets duplication rather than scrutiny, but the credibility of that assurance will be tested as the first projects are designated for expedited treatment and the new framework is put into practice.

What's next

With House passage secured, attention turns to the bill's progress through the rest of the legislative process and, ultimately, to implementation. The real test will come as the government begins designating projects for expedited review and as provinces decide how far to align their own rules with the federal framework.

The legislation gives the Carney government an early marker of its ability to deliver on its economic promises. Translating the bill into measurable gains in trade and investment, however, will require sustained cooperation with provinces and Indigenous partners, and a careful balancing of the competing demands for speed and scrutiny. For now, the government has the law it wanted. The harder work of making it matter begins next.