Mark Carney’s major projects have yet to face their ultimate challenge: the courts

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By Prime Minister Mark Carney’s scorecard, everything about his new Major Projects Office is going swimmingly.

Since its formation eight months ago, the office now has 100 staff, it has received 275 projects for consideration, and a new majority government has made it easier for the Liberals to launch a $25-billion sovereign wealth fund that can be used to plug any financing holes. Ottawa is ready to build again.

But there is a truth no one seems to be talking about, and it has significant consequences for Canada’s future. No matter how hard Ottawa pushes, and no matter how much money the federal government throws at the problem, major projects are likely to crash into a formidable obstacle: years-long litigation in the courts.

The government hasn’t said much about this, but seems to know it, which is why it has suggested that these projects are akin to national emergencies – and the hope is that this framing will provide some legal leeway.

“But it can only do so much,” said Max Faille, a managing partner at Cochrane Sinclair LLP in Vancouver who practises Indigenous law and constitutional litigation.

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“At the end of the day, Indigenous rights are constitutionally protected, so whatever the government does is subject to court scrutiny. Changes to legislation don’t displace the Constitution.”

The federal government has been here before, when the Trans Mountain pipeline expansion was initially shot down by the Federal Court of Appeal. (It was eventually approved after additional consultations.) Yet during that battle, the world looked a lot different. In 2018, investors, governments and corporations routinely preached environmental, social and governance principles, and even resource companies were worried about their ESG scorecards.

In 2026, Donald Trump is back in the White House, and this time around, he is targeting the movement. Canada is under assault from his global trade war, and he seems intent on ripping up his own free-trade agreement between Canada, the United States and Mexico.

At the same time, there is a separatist movement making more noise than usual in Alberta, and its anger dovetails with growing angst about Alberta’s ability to develop natural-resource projects. Canada’s economic standing also has, by some important metrics, fallen farther behind the U.S., and weak investment in resource projects has been a culprit.

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On top of all that, there is confusion in British Columbia after a landmark ruling in August, 2025, declared the Cowichan Tribes “have established Aboriginal title” to roughly 800 acres in the City of Richmond, as well as an Aboriginal right to fish for food. The ruling adds to a concern among governments and businesses that courts are shifting in favour of Indigenous challenges.

In other words, it’s a pivotal moment for the country, and rejecting a major project could damage national unity.

Already, there are signs that the courts are about to become the battle arena. Late Tuesday, the House of Commons held a committee meeting on the Building Canada Act, the legislation guiding the Major Projects Office, to receive an update from cabinet minister Dominic LeBlanc and MPO head Dawn Farrell. In the lead-up, the Chiefs of Ontario, which represent 133 First Nations across the province, filed a brief in the House, and they came out swinging.

In their filing, the Chiefs said they want to partner with the Crown “so Canada can build projects that are not only faster – but stronger, more sustainable, and just.” But so far, they aren’t enthused.

Their first issue is with the act itself, which they argue “was developed and advanced without meaningful consultation with First Nations rights holders. Despite its far-reaching implications, First Nations were not provided with the time, information, or opportunity required to assess the legislation and its impacts.”

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The Ontario Chiefs also called out allegedly unprecedented ministerial powers. “The legislation suggests that, once a project is designated, the focus of the process shifts toward how it will proceed, rather than whether it should proceed at all. This model raises concerns for First Nations, as it risks predetermining outcomes before meaningful consultation has occurred."

Meaningful consultation is crucial to any court battle, after two 2004 Supreme Court of Canada rulings confirmed a duty to consult with Indigenous communities.

Even when some Indigenous groups do support – or even co-own – major projects, other Indigenous communities and environmental groups may challenge the endeavours.

This week, lawyers for Ecojustice, an environmental law charity, appeared in B.C. Supreme Court to challenge the construction of the proposed 750-kilometre Prince Rupert Gas Transmission (PRGT) project in B.C. The $12-billion pipeline is co-owned equally by the Nisga’a Nation and Houston-based Western LNG, and it is meant to feed the $10-billion Ksi Lisims LNG project, which would produce liquefied natural gas for export to Asia.

Ecojustice is representing the Skeena Watershed Conservation Coalition, the Kispiox Valley Community Centre Association and local resident Kathleen Larson, who argue that the project did not substantially start construction by the time its environmental assessment certificate expired, which could quash its approval.

These fights are something Michael Sabia drew attention to in June, 2025, just days before he joined Mr. Carney’s government as Clerk of the Privy Council. Speaking at The Globe and Mail’s annual Intersect conference, he said his most recent work as chief executive officer of Hydro‑Québec had, on one hand, made him realize just how much trust was lacking between Indigenous communities and project proponents.

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But he also said that some groups had learned to use the courts to grind things to a halt when they felt disrespected. “First Nations, understandably, have become very good at taking projects and governments to court,” he said. “What happens in court? You lose decades.”

The Building Canada Act, which became law last summer, is designed to circumvent some knee-jerk challenges, lawyers believe. If a project meets five criteria, which include strengthening Canada’s autonomy and advancing the interests of Indigenous peoples, the government, under guidance from the MPO, can permit the project to bypass normal legal requirements and be put on a regulatory fast track.

The key to all this is an order-in-council that is ultimately issued by cabinet to approve the project. Courts tend to defer to orders-in-council, some lawyers argue, unless there has been a gross overreach.

Yet the Building Canada Act hasn’t been tested, and even if extensive consultations are conducted, all it takes is one or two groups to challenge a project.

“Unlike politics, majority rule doesn’t apply with the courts. Every First Nation or Indigenous group has the right to proper consultation,” said Sander Duncanson, co-chair of the national Regulatory, Indigenous and Environmental practice at Osler, Hoskin & Harcourt LLP.

“And in court,” he added, “challenges to national-resource and energy projects often take years to play out.”

Technically, a project can continue to be built while a court challenge is heard (unless a judge has granted an injunction), but the mere threat of a challenge adds extra risk for project proponents.

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In February, Enbridge CEO Greg Ebel said the company was still unwilling to take on the financial risk of developing a new oil pipeline from Alberta to Canada’s West Coast. (Enbridge lost hundreds of millions of dollars after the Northern Gateway pipeline died a decade ago.)

For those who want major projects built, there is hope. Commentary from Ontario First Nations, for instance, suggests that they aren’t necessarily opposed to projects.

But they are very clear about the need for consultations. And on this front, what constitutes adequate consultation and informed consent is grey, putting even more emphasis on the courts.

There are also concerns about just how much power cabinet has.

“It is not so much that some major economic development projects cannot occur – they can and likely should," said Kate Kempton, senior counsel at Woodward & Company LLP, who is representing some Ontario chiefs.

“But it is how such decisions are made and carried out and by whom."