Much has been written about Canada’s recent push to accelerate permitting and approvals for major projects. For proponents fortunate enough to be designated as nationally significant or priority projects, the benefits are obvious: greater regulatory coordination, more government attention and a potentially shorter path to construction.
But there is another side to this conversation. Project review is not unlimited. Governments have finite regulatory resources, finite technical expertise and finite decision-making capacity. If some projects are moving to the front of the line, what does that mean for everyone else?
For companies whose projects are not selected for fast-tracking, there are four issues that deserve close attention:
1. The risk of a two-tier permitting system
Fast-tracking inevitably creates a distinction between priority projects and non-priority projects. While governments emphasize that all proponents will continue to receive fair treatment, the practical reality is that resources tend to follow political priorities.
For proponents outside the priority category, the concern is not necessarily that their approvals become more difficult. Rather, it is that timelines become less predictable as regulators focus attention on projects designated as nationally important. Of course, the reality is that government, and capital markets generally, have always had this issue – more projects to consider than the resources to evaluate them.
In capital-intensive sectors such as mining, uncertainty can be more damaging than delay itself. But perhaps a lack of political endorsement is a plus if you are an international investor? In the current heated political environment, projects off the fast-track may attract foreign dollars because they are not designated or high profile. These projects may also benefit from ”non-nationally significant” treatment by foreign investment and competition regulators – if you’re not nationally significant, then of course there should not be an issue (or less of one) with foreign investment.
2. Competition for scarce regulatory capacity
Environmental assessment specialists, Indigenous consultation teams, technical reviewers, permitting officers and decision-makers are not unlimited resources.
When governments commit to accelerating certain projects, those same teams often become responsible for delivering on ambitious timelines. The result may be fewer resources available for reviewing other proposals. In effect, fast-tracking may not eliminate delay across the system. It may simply redistribute it. But from a glass half full perspective, if government teams are also improving and streamlining their processes as a result of this focus, then there is a net benefit to the ecosystem and everyone benefits. Perhaps the use of artificial intelligence (AI), drones and government streamlining really can come together to mean more projects in total go ahead.
Companies whose projects fall outside the fast-track process should be asking whether review capacity is being expanded or merely reallocated. But just as they should have done in the past, they should also be asking what else they can do to be competitive.
Most of the companies we work with now realize they can’t sit back and wait for the government and the market to discover them. They need to engage not only with government, but with other stakeholders much more proactively than in the past. This is sometimes a difficult conversation to have, as in many cases, the project developers see their project as the best thing to ever happen, if only people will realize that. And of course responsible developers have to consider budgets and not spend capital unnecessarily. The example of balance some of us used to use was asking the CEO of a mining company to show us a recent flight’s boarding pass. If they weren’t out there telling the world about the project, that’s bad. But if they were not flying economy and wasting capital, that’s bad too.
3. Mining’s got talent – But not enough of it
Adjacent to the regulatory capacity discussion, Canada is still open for immigration of skilled talent, an influx of which has been declining in the mining sector for years. Not all jurisdictions are on the lookout for talent, which creates a surplus in some markets. If a project is not on the fast-track, looking to global talent pools for the necessary internal workstreams as a Canadian project may be an attractive proposition.
4. Investor perception and competitive positioning
Perhaps the most significant implication is psychological.
When governments publicly identify certain projects as priorities, investors, lenders and strategic partners may interpret that designation as a signal of lower execution risk. Conversely, projects that are not selected may face questions about timing, certainty and strategic importance.
The concern is not that non-selected projects are inferior. Many may be highly economic, environmentally responsible and strategically important. In Canada we have to keep in mind that it is not an accident that prioritized projects just happen to be evenly distributed across this vast country. Similarly, in other markets, selections are made not solely on pure merit of the project. But in competitive capital markets, perception often matters almost as much as reality.
Being outside the fast-track lane could increasingly become a financing and valuation issue, not merely a permitting issue. But of course the smart companies will position themselves as being fast-track lane adjacent, the next project to make it to the fast-track lane. Can these projects position themselves as either: (i) an acquisition target, or, an asset that is not under the pressure of government scrutiny (a mining free spirit) – because it is not fast tracked, therefore not beholden to anyone, and even if politics change, its path is self-supported and stable.
Once your project is identified for fast-tracking, what does that do for your acquisition swagger in the market? Does this mean that any new acquisition targets you engage with might value you differently as you are already on the inside of the project approval tent? Perhaps.
The bottom line
Canada’s desire to build major projects faster is a welcome development. The country needs new mines, infrastructure, energy projects and critical minerals investments.
But as policymakers focus on the winners, companies should not lose sight of the other side of the equation. When regulatory attention is concentrated, the key question becomes: if some projects are moving faster, who is waiting longer?
The answer may have important consequences for project developers, investors and Indigenous partners alike. But as in all situations, once you know your project is not on the fast-track, what are you going to do about it?
If you have questions about Canada’s fast-track projects strategy or how these developments may affect your project, please contact the authors, Greg McNab, David Hunter, Kimberly Burns and Robin Longe.
