Regulations Amending the Physical Activities Regulations: SOR/2026-185

Canada Gazette, Part II, Volume 160, Number 18

Registration
SOR/2026-185 September 3, 2026

IMPACT ASSESSMENT ACT

P.C. 2026-784 September 3, 2026

Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, makes the annexed Regulations Amending the Physical Activities Regulations under paragraph 109(b)footnote a of the Impact Assessment Act footnote b.

Regulations Amending the Physical Activities Regulations

Amendments

1 (1) The definition international electrical transmission line in subsection 1(1) of the Physical Activities Regulations footnote 1 is repealed.

(2) The definition new right of way in subsection 1(1) of the Regulations is replaced by the following:

new right of way
means land that is to be developed for a railway line or an all-season public highway and that is not alongside and contiguous to an area of land that was developed for an electrical transmission line, oil and gas pipeline, railway line or all-season public highway. (nouvelle emprise)

2 Subsection 2(1) of the Regulations is replaced by the following:

Physical activities — designated projects

2 (1) The physical activities that are set out in the schedule — other than the construction, operation, decommissioning and abandonment of a regulated facility as defined in section 2 of the Canadian Energy Regulator Act, if those activities are regulated under that Act — are designated for the purpose of the definition designated project in section 2 of the Impact Assessment Act.

3 Sections 30 to 33 of the schedule to the Regulations are repealed.

4 Section 39 of the schedule to the Regulations and the heading before it are replaced by the following:

Pipelines

5 Section 41 of the schedule to the Regulations is repealed.

Coming into Force

6 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Government of Canada has proposed to make changes to laws, regulations, and policies to simplify and improve the efficiency of the review processes for major projects. As part of these changes, responsibility for the assessment of certain projects is being assigned to the federal life cycle regulator responsible for regulating those projects.

Therefore, amendments to the Physical Activities Regulations (Project List) are required to remove project types that are currently subject to both the Impact Assessment Act (IAA) and the Canadian Energy Regulator Act (CERA). These projects would be subject to assessment and ongoing regulation by a single regulator under the CERA or would be assessed under the Building Canada Act if designated as a project of national interest.

Separate, targeted amendments to the Physical Activities Regulations (the Regulations) to remove certain entries will better ensure that the Project List is aligned with the IAA, as amended in 2024. Further amendments to the Project List to respond to the 2024 Project List Review and consultation will be proposed at a later date.

Background

The IAA came into force in 2019 and sets out processes to anticipate, identify, assess and address significant adverse effects within federal jurisdiction that may be caused by carrying out designated projects. The Regulations set out the classes of physical activities (i.e. types and sizes of projects) with the greatest potential to cause adverse effects within federal jurisdiction as designated for the purposes of the IAA.

The Canada Energy Regulator (CER) regulates international and interprovincial pipelines, international and designated interprovincial electrical transmission lines and some offshore renewable projects. This arm’s-length regulator is responsible for the life cycle of a project from early planning through construction, operation, and, ultimately, closure or abandonment. In 2019, the IAA introduced a requirement that the impact assessment of designated interprovincial or international pipelines or electrical transmission lines (i.e. those that require 75 km or more of new right of way) and certain offshore renewables under the CERA be conducted by an integrated review panel, where the requirements of both the IAA and the licensing process would be met. Since then, no assessment by an integrated review panel has ever been conducted for these projects. The CERA also came into effect in 2019. Changes introduced through that legislation included a new requirement for licensing decisions (that apply to all interprovincial or international pipelines and electrical transmission lines, and offshore renewables regulated under the CERA) to consider substantially the same factors as those assessed under the IAA. Under the CERA, the final public interest decision on pipelines or international electrical transmission lines that require 75 km or more of new right of way is also made by the Governor in Council, as it is under the IAA. For CER-regulated offshore renewables, the CER is the final decision-maker.

In the document entitled Getting Major Projects Built in Canada – Discussion Paper on Proposed Legislative, Regulatory, and Policy Reforms, the Government of Canada proposed to assign responsibility for the assessment of all projects regulated under the CERA to the CER, rather than an integrated review panel as required under the IAA, in order to ensure a simpler process by a single regulator. This would be accomplished through the amendments to remove these projects from the Project List, so they are no longer subject to the IAA. Other changes proposed in the Discussion Paper would require legislative changes which may be introduced following consultations.

The IAA was amended in 2024 to respond to the decision made by the Supreme Court of Canada on October 13, 2023, which found that parts of the IAA went beyond federal jurisdiction under the Constitution. The IAA amendments narrowed the definition of adverse effects within federal jurisdiction, focussed decision-making provisions squarely on adverse effects within federal jurisdiction, and increased reliance on provincial processes and co-operation in federal assessment. The Project List was reviewed in 2024, including to ensure that it aligns with these features of the amended Act.

Objective

The purpose of the Regulations Amending the Physical Activities Regulations (the amended Regulations) is to

Description

The following project types are being removed from the Regulations. As a result, these projects will no longer be subject to the IAA:

Regulatory development

Projects regulated under the CERA

In the 2025 Speech from the Throne, the Government of Canada committed to making decisions on major projects within two years. On May 8, 2026, the Government of Canada published the document entitled Getting Major Projects Built in Canada – Discussion Paper on Proposed Legislative, Regulatory, and Policy Reforms, seeking feedback from the public, stakeholders, provinces, territories and Indigenous groups. The paper included a proposal to assign responsibility for certain projects to the federal organization with the most expertise, making CER responsible for the review of international and interprovincial pipelines and certain other projects regulated under the CERA.

Communication was sent to all premiers, to over 100 national associations, investors, and environmental organizations with links to the discussion paper and seeking feedback. Hundreds of submissions were received related to pipeline reviews and the CER. Industry stakeholders expressed strong support for the proposal to have all pipeline projects reviewed exclusively by the CER. Industry actors view this as a key step toward improving regulatory certainty, reducing duplication, and streamlining approvals. There is broad agreement that the CER being solely responsible for assessments and limiting the use of integrated assessments would enhance efficiency and investor confidence. However, there are concerns across stakeholders regarding implementation details, particularly how CER-led timelines will align with Indigenous consultation requirements and whether existing processes can realistically meet proposed time frames. Energy stakeholders emphasized the need for clarity on legislative changes, the transition from the Impact Assessment Agency of Canada (IAAC) to the CER, and the thresholds that determine project classification (e.g. pipeline length). Overall, while CER-related reforms are supported by industry, stakeholders stress that their success will depend on clear rules, practical timelines, and careful integration with consultation and intergovernmental frameworks.

Members of the public raised concerns about the proposed changes, particularly regarding the potential weakening of independent environmental assessments and public-interest reviews. Concerns were also expressed about compressed timelines and reduced opportunities for public participation, as well as the risk that projects could be approved without a full understanding of environmental impacts, potentially leading to long-term ecological damage and higher remediation costs.

It is important to note that the CERA requires that substantially the same factors for assessment as are required to be considered by an integrated review panel under the IAA be considered by the CER in its reviews. Subsection 183(2) of the CERA sets out the impact assessment factors that the CER must consider during pipeline reviews, and includes the consideration of environmental effects, including cumulative effects; health, social and economic effects; and effects on the rights of Indigenous Peoples, including the interests and concerns of Indigenous Peoples (full list of factors listed in subsection 183(2) of the CERA). The CER has conducted over 100 reviews of pipelines using these factors since the CERA came into effect in 2019, and they will continue to conduct these reviews in a credible and rigorous manner and to uphold the Crown’s duty to consult.

As it relates to public participation, opportunities for public participation remain in the CERA. The CER is required to hold public hearings and comment periods for certain applications, and meaningful participation (public and Indigenous) occurs through the adjudication process and supplemental Crown consultation (for larger infrastructure projects). The CER hearings are designed to allow for meaningful engagement, consultation and accommodation, providing flexibility through different hearing process steps, such as information requests, written evidence and submissions, and oral Indigenous knowledge sessions.

In situ oil sands extraction facilities and fossil fuel-fired power generating facilities

In mid-2023, the IAAC engaged with expert federal departments, key stakeholders and Indigenous partners on a review of the Project List. Public consultation on proposed options for amendments, including the removal of in situ oil sands facilities and fossil fuel-fired power generating facilities from the Regulations, was held in summer 2024. Among the issues raised was that the in situ oil sands facility entry specifies that these projects are designated only in situations where provinces do not have legal frameworks to limit the amount of greenhouse gas emissions from these projects. Under the amended definition of the IAA, greenhouse gas emissions would not be considered an adverse effect within federal jurisdiction for purposes of the IAA for certain projects. Similarly, all fossil fuel-fired power generating facility projects that have entered the IAA process have either been screened out because of limited potential to cause adverse effects within federal jurisdiction, as defined in the amended IAA, or because other federal or provincial regimes are able to assess these projects.

In the Project List review consultation, provinces and territories and industry groups highlighted the importance of reducing duplication with provincial assessment processes and focussing federal assessments on those projects most likely to cause significant adverse effects in federal jurisdiction, as defined in the amended IAA.

Indigenous groups emphasized that any major projects must be adequately assessed, including for their impacts on Indigenous Peoples and their rights. In situ oil sands facilities and fossil fuel-fired power generating facilities would continue to be assessed under provincial processes and subject to federal regulatory regimes, which include the duty to consult, and must ensure that Indigenous rights are respected.

In light of the consultations that have been undertaken on the amendments to the Regulations, an exemption from prepublication in the Canada Gazette, Part I, is sought to ensure that the CERA-regulated projects are subject to review by a single regulator under the CER and to better ensure that the Regulations align with the IAA as amended in 2024.

Indigenous engagement, consultation and modern treaty obligations

As part of the Indigenous engagement on proposed legislative, regulatory and policy reforms, letters were sent to Indigenous groups (First Nations, Metis and Inuit rights-holders, modern treaty and self-governing partners, regional and national Indigenous organizations), along with an electronic copy of the Getting Major Projects Built in Canada discussion paper, and a link to the paper online. An invitation to participate in engagement, with registration information for virtual engagement sessions, and a capacity funding application were included. Two additional follow-up emails were sent to all groups with discussion papers, information regarding capacity funding, letters, and reminders of meetings. The Major Projects Office hosted engagement sessions, including with Modern Treaty and Self-Government partners; as well as bilateral meetings with representatives of the Métis National Council and provincial Métis organizations; representatives of Inuit Tapiriit Kanatami, Inuit regional organizations, Indigenous organizations; and Indigenous nations and governments. Capacity funding was provided.

Indigenous Peoples highlighted concerns related to reduced transparency, fairness, and meaningful participation in decision-making processes. They emphasized that the removal of independent review panels under the IAA could limit their ability to engage in processes that are fair, impartial, and consistent with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) principles. There is concern that projects may be advanced without sufficient Indigenous input, including Indigenous knowledge and independent studies, potentially overlooking key environmental, cultural, and economic considerations. This could increase the risk of projects encroaching on traditional territories and sensitive ecosystems without proper assessment. Lastly, there is concern that the proposed changes could overlook or extinguish existing co-management regimes that operate concurrently with federal sectoral regulations for electrical transmission lines or pipelines (e.g. within Mackenzie Valley) and cross-existing treaty settlement areas without authority or coordination.

The hearing processes conducted by the CER allow the Crown to fulfill its constitutional obligations to Indigenous Peoples, including a duty to consult obligations and obligations pursuant to the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDRIPA). Assessments being led under the CERA rather than pursuant to the IAA will not extinguish existing co-management regimes nor cross existing treaty settlement areas without authority or coordination.

Treaties, historical and modern, are constitutionally protected under section 35 of the Constitution Act, 1982, carry the force of law, and are fundamental elements of Canada’s constitutional fabric. There are 30 modern treaties and self-government agreements across the country, although more than half are in parts of northern Canada where the IAA does not apply in most circumstances. While developing the Regulations, an assessment of modern treaty implications, undertaken in accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, identified implications related to modern treaty obligations.

Modern treaties, as well as stand-alone self-government agreements, may contain specific provisions or chapters related to environmental assessment, and may include the power for the treaty government to enact laws with respect to environmental assessment. The amended Regulations do not impact how assessments are conducted under treaty-based processes and neither abrogate nor derogate from a treaty, as the treaty (a constitutionally entrenched commitment) would prevail.

Based on the amended Regulations, international and interprovincial pipelines, electrical transmission lines and other CERA-regulated activities, in situ oil sands facilities, and fossil fuel-fired power generating facilities, are no longer subject to the IAA. For those modern treaty partners with treaties that do not contain self-government agreements containing specific provisions or chapters related to environmental assessment, this could have implications with respect to the right to be engaged in federal decision-making relating to lands and resources in modern treaty areas.

Modern treaty partners will still be able to participate in decision making through participation in provincial and other federal regulatory processes, including under the CERA. The CER and other federal regulators already have and will retain responsibility for Indigenous consultation.

Instrument choice

Amendments to the Regulations are required to remove the requirement for interprovincial pipelines, and certain other projects, to undergo an assessment by an integrated review panel under the IAA and to ensure better alignment of the Project List with the IAA as amended in 2024.

Regulatory analysis

Benefits and costs

The cost-benefit analysis assesses the difference between the baseline and regulatory scenarios.

Methodology and key assumptions

Historical and anticipated project data is used to estimate the number of projects in the baseline and regulatory scenarios. Historical data is based on the average annual number of projects historically captured under the Regulations, since the IAA came into force. Anticipated projects data includes known projects that have a reasonable likelihood of entering the IAA process in the foreseeable future.

Both the baseline and regulatory scenarios assume the average annual number of projects historically captured will continue into the foreseeable future, while incorporating information on anticipated projects to refine the forecast and assess the expected impact of the proposed amendments on any known upcoming projects.

However, the numbers are difficult to estimate accurately because there are multiple factors that influence the demand for major projects in Canada, including macroeconomic conditions, sector-specific investment cycles, and federal, provincial and territorial policy. While it is not possible to accurately project the number of future project proposals, the methodology used provides the most reliable prediction using available data. Recent federal commitments to accelerate major project development through assessment and regulatory efficiency measures, such as improving interjurisdictional co-operation through co-operation agreements to ensure “one project, one review,” and enhancing regulatory predictability are not factors specifically incorporated into the methodology, though may increase the overall number of projects that could be proposed over the analytical period.

Baseline scenario

In the baseline scenario, the Regulations continue to remain in force without the proposed amendments. Under this scenario it is estimated that an average of 10 projects per year will be designated and enter the IAA process, though not all of those will require a comprehensive impact assessment. This estimate is based on the assumption that the average annual number of projects historically captured under the Regulations since the IAA came into force would continue into the future. Anticipated project estimates are incorporated, including one interprovincial pipeline regulated under the CERA. However, anticipated project estimates do not change the overall estimate in the baseline scenario.

There would continue to be costs for both businesses and the Government that do not provide added benefits to Canadians. Fossil fuel-fired power generating facility projects would continue to be subject to the IAA. These projects made up 20% of the initial project descriptions received under the IAA, while they have consistently received decisions following the planning phase that a comprehensive impact assessment is not required. Similarly, in situ oil sands facilities, which have not been proposed historically under the IAA, would likely also receive decisions that a comprehensive impact assessment is not required should any be proposed. This will result in an inefficient allocation of government resources that could be better directed to those projects that add value beyond other federal and provincial processes.

Without changes to the Regulations, projects regulated under the CERA would be assessed by integrated review panels under the IAA. However, no assessment by an integrated review panel has ever been conducted for a pipeline or electrical transmission line project under the IAA.

Regulatory scenario

In the regulatory scenario, the Regulations are amended to bring the proposed changes into force. Under this scenario, based on the historic average annual total described above, it is estimated that between seven and eight designated projects per year would enter the IAA process. This is an incremental reduction of between two and three projects from the baseline scenario, based on the number of fossil fuel-fired power generating facilities, international and interprovincial pipelines and electrical transmission lines, in situ oil sands projects, and offshore renewable energy projects regulated under the CERA in the historical and anticipated project data. This will result in cost savings for both businesses and the Government. The costs and benefits associated with the amended Regulations are as follows:

The amended Regulations will improve the efficiency of review processes for major projects, while generating net cost savings for project proponents and the federal government. The amendments remove entries for project types that have limited impacts within federal jurisdiction based on implementation experience and/or are adequately managed by other federal regimes.

For projects that will no longer be designated, project proponents will avoid preparing project descriptions and related materials required during the planning and impact assessment phases under the IAA and the Information and Management of Time Limits Regulations.

For the IAAC, cost-neutrality results from the removal of projects regulated under the CERA, including one anticipated pipeline, while overall net cost savings arise from not initiating or administering impact assessments for fossil fuel-fired power generating facility projects that historically have limited potential for adverse effects within federal jurisdiction.

Project-specific effects
Projects regulated under the CERA

The removal of the following project types regulated under the CERA will result in a cost-neutral outcome for businesses and the Government:

While these projects would no longer be subject to an assessment by an integrated review panel under the IAA, they will undergo a CER-led review under the CERA. Businesses therefore continue to face similar costs related to project reviews. This includes any continued cost recovery by the Government for assessment-related work, which will be recovered solely by the CER rather than shared cost recovery by the IAAC and the CER under the baseline scenario. Government costs would transfer from the shared cost model under the baseline to the CER only, leading to cost neutrality to the Government overall.

Very few of these project types have met the threshold for designation since the introduction of the IAA. However, it is anticipated that a minimum of one pipeline, one electrical transmission line, and one offshore wind project regulated by the CERA that meet the threshold for designation would be proposed in the next 10 years.

The project types removed from the Regulations will continue to be subject to regulation and environmental protection under the CER, and therefore, incremental environmental impacts from the removal of these project types are not anticipated.

In situ oil sands facilities

The removal of in situ oil sands facilities from the Regulations will result in no new costs or benefits compared to the baseline scenario. No in situ oil sands projects that would be captured by the Project List are anticipated to be proposed in the next 10 years.

Fossil fuel-fired power generating facilities

The removal of fossil fuel-fired power generating facilities from the Regulations will result in no new costs, while there will be cost savings to businesses and the Government compared to the baseline scenario.

Based on implementation experience, fossil fuel-fired power generating facilities have consistently not required a comprehensive impact assessment following the planning phase, due to the limited potential to cause adverse effects within federal jurisdiction as defined in the IAA or because potential adverse environmental effects are sufficiently mitigated through existing frameworks, including provincial environmental assessments, and federal regulations.

Small business lens

Analysis under the small business lens concluded that the amended Regulations will not impact Canadian small businesses. The projects identified in the amended Regulations are large in scale and small businesses would not propose a project that meets any of the described criteria.

One-for-one rule

The one-for-one rule applies, since there is an incremental decrease in administrative burden on businesses. The proposal is considered burden OUT under the rule, and no regulatory titles are repealed or introduced. The amendments would result in an annualized administrative total cost saving of $14,867. As per the Red Tape Reduction Regulations, the assessment of administrative impacts was conducted for a period of 10 years commencing from registration. All values listed in this section are presented in 2012 dollars, discounted to 2012 at a rate of 7%.

The amendments removing project types from the Physical Activities Regulations result in an annualized administrative total cost saving of $14,867. Three project proponents per year would save 846 hours by no longer being required to prepare assessment-related documents. The average wage (including overhead) of the individual responsible is estimated to be $42.83. As stated in the “Benefits and costs” section, the proponent is expected to still incur costs to prepare documentation for the CER; however, for the purposes of the one-for-one rule, the administrative burden is no longer attributable to these Regulations.

Regulatory cooperation and alignment

The amendments to remove in situ oil sands facilities and fossil fuel-fired power generating facilities reflect the emphasis in the amended IAA, and in federal-provincial co-operation agreements to provide for “one project, one review,” to rely on provincial processes and to focus federal assessments on those projects most likely to cause significant adverse effects in federal jurisdiction.

International obligations

Canada has international obligations to assess the types of physical activities that may cause transboundary impacts and monitor activities that may cause harmful changes to the marine environment.

As a Party to the United Nations Economic Commission for Europe’s Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention), Canada is committed to preventing, reducing, and controlling significant adverse transboundary environmental impacts of proposed activities. Under the Convention, which Canada has ratified, Canada has obligations to assess the potential transboundary impacts of certain activities at the early planning stage and allow the public and the authorities in affected party countries to participate in the impact assessment process.

Of Canada’s closest neighbours, only Denmark (Greenland) and France (Saint-Pierre-et-Miquelon) have also ratified the Convention. The United States of America signed the Convention but has not ratified it nor signalled an intention to do so; and thus, Canada has no obligations related to the United States of America under the Espoo Convention.

Canada is also a party to the United Nations Convention on the Law of the Sea (UNCLOS), which includes obligations related to environmental assessment and monitoring of activities that may cause harmful changes to the marine environment. The IAAC works closely with Global Affairs Canada to provide advice and participate in the negotiation of implementing agreements under UNCLOS, including the International Seabed Authority’s Mining Code for commercial exploitation of deep-sea minerals and the recently adopted Agreement on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction (BBNJ Agreement).

The amended Regulations do not affect Canada’s obligation or ability to assess physical activities that may cause transboundary impacts, nor monitor activities that may cause harmful changes to the marine environment.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary screening concluded that a strategic environmental and economic assessment is not required for the proposed changes to the Regulations.

The results of the screening showed that the proposed changes are not expected to have impacts on the environment. For the classes of projects removed, other robust federal and provincial regulatory processes will ensure that nature and biodiversity are considered, assessed and addressed throughout project life cycles, resulting in net neutral impacts on the environment.

Gender-based analysis plus

The amended Regulations do not have direct impacts based on gender and other identity factors.

Projects that require an impact assessment under the IAA take into consideration the wide range of positive and adverse social, health, environmental and economic effects, and include gender-based analysis plus (GBA+). This analysis can highlight benefits and provides an opportunity to mitigate negative impacts for diverse groups, including women, Indigenous Peoples, and other vulnerable groups. It ensures that projects are considered in a holistic manner that recognizes the multiple pillars of sustainability and promotes sustainable development.

Projects no longer subject to the IAA because of the amended Regulations are subject to other robust federal and provincial regulatory processes. For example, under paragraph 182(2)(c) of the CERA, the health, social and economic effects, including with respect to the intersection of sex and gender with other identity factors, are factors that must be considered. In situ oil sands extraction facilities and fossil fuel-fired power generating facilities will continue to be subject to applicable federal regulatory regimes that consider GBA+ and provincial regulatory oversight, which may also include GBA+.

Implementation, compliance and enforcement, and service standards

Implementation

The amended Regulations come into force on the day on which they are registered.

Contact

Celine Guidone
Director
Legislative and Regulatory Affairs Division
Impact Assessment Agency of Canada
Government of Canada
Email: regulations-reglements@iaac-aeic.gc.ca