Vancouver Coastal Health is required to apply for an annual exemption to operate Insite.
"We know Insite works," says Coastal Health chief medical health officer Dr. Patricia Daly, in a written statement.
"Thousands of overdose deaths have been prevented, the spread of infectious diseases like HIV and hepatitis C have been reduced, and clients can more easily connect to health services like detox and primary health care," she says.
The Conservative government is opposed to the Insite operation and has taken its fight with the supervised injection site to the Supreme Court of Canada.
In a landmark 2011 ruling, the court found that not allowing the clinic to operate would violate the Charter of Rights and Freedoms.
This week the government passed Bill C-2, the Respect for Communities Act.
Daly said the new legislation will make the process of applying for an exemption more onerous, requiring volumes of information to meet 27 conditions.
"VCH is troubled by the numerous conditions set out in the new legislation," she said.
Donald MacPherson, spokesman for the Canadian Drug Policy Coalition, said he believes the government purposely created Bill C-2 to discourage new sites from opening
"Supervised consumption sites are a response to a very dire situation," he said.
According to Coastal Health, more than 1.8 million injections have happened at Insite under the supervision of nurses. There have been no overdose deaths, and as many as 800 people visit the facility daily.