Next week's budget will propose a streamlined environmental assessment process, something that will delight the oil patch and give provinces a larger say over resource development.

But one part under consideration for the package — reforms to the Fisheries Act that would end federal oversight over much of the country's fresh water — is proving difficult for some provinces to swallow, sources say.

The environmental changes will be pitched as part of a major theme of the budget: get government out of the way and let corporations flourish.

They will reflect commitments made increasingly frequently by Prime Minister Stephen Harper and his environment and natural resource ministers, to remove barriers to investment and development.

Specific legislative amendments and regulatory fixes will likely be introduced later, with the budget merely outlining the new direction.

The package will eventually see Ottawa pay far less attention to small projects, impose time limits on major environmental hearings and pull out of the process altogether if a province is ready to step in with similar standards.

Economic impact

"Clearly, we need to focus our attention and reviews where they really matter — on big projects with the potential for the greatest economic and environmental impact," Natural Resource Minister Joe Oliver said Tuesday in Saskatchewan.

Plus, the Canadian Environmental Assessment Agency will likely cede ground in some areas to the National Energy Board and the Canadian Nuclear Safety Commission, to eliminate overlap.

At stake, says Oliver, is $500 billion in new energy and mining investment over the next 10 years.

Ottawa has shopped these ideas around to the provinces and there has been general, widespread agreement that the environmental assessment process is arcane, archaic and needs reform.

"I'm happy to say that my provincial and territorial counterparts… agree that our goal should be one project, one review, completed in a clearly defined time period," Oliver said Tuesday.

The oilpatch will stand to benefit, in particular, since changes made in the past to expedite hearings mainly benefited the mining industry, but did not directly tackle the panels often faced by oilsands projects.

'Reset the clock'

"I'm encouraged by the current thrust toward regulatory reform," said Don Thompson, an executive adviser at Canadian Oil Sands Ltd. "It's time to clean it up and reset the clock for the current decade."

At the same time, funding for the major projects management office — a group of federal deputy ministers whose task is to push assessments through the system efficiently — is expected to be renewed in the budget. It was set to expire this year.

It's trickier, however, to tinker with the Fisheries Act.

A leaked draft of one proposal last week showed Ottawa wants to remove habitat provisions from the act, essentially diluting the federal government's oversight of fresh water in the face of industrial development.

Fisheries Minister Keith Ashfield insists no final decision has been made, but says current policies overreach and are under review to better reflect "the priorities of Canadians."

His office will give no details about what policies are under review, when the review will be completed, or whether it plans to consult provincial governments and other stakeholders.

Pick up slack

Environmentalists and a large network of environmental scientists are furious about the idea and say Ottawa is ready to abdicate its national and international obligations to protect waterways.

Provinces would likely be expected to pick up the slack, but they are in the dark about how that would work and don't appreciate being handed extra cost and responsibility, some insiders said.

"If this approach is taken, groups such as ours will press the province to address the protection of aquatic habitat in legislation such as the proposed provincial water act," the B.C. Wildlife Federation said in a recent letter to Harper.

The federation said a mosaic of habitat regulations is a bad idea.

The Fisheries Act's habitat provisions are a frequent trigger for government intervention in the development of natural resources, partly because Canada has so many waterways that it's rare to find a mine or project that does not encompass a stream.

Pressure over Fisheries Act

Mining companies complain that government officials have cracked down in recent years for no apparent reason, hindering their work. Industry groups in British Columbia have pressured Ottawa for years to change the Fisheries Act so that it doesn't micro-manage minor developments.

"I think the focus needs to be on preservation of key fisheries stock," said Thompson of Canadian Oil Sands.

The federal measures come as a bitter war of words between environmentalists and the government takes full flight.

Natural Resources Minister Joe Oliver has condemned "radical" environmentalists, accusing them of taking foreign money to undermine Canada's economic health by opposing the Northern Gateway pipeline proposal.

Environmentalists, for their part, accuse Ottawa of giving up stewardship of the environment to promote energy and mining projects at all costs.