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Setting the record straight on legislation to strengthen project reviews

Bill C-69 is currently at second reading in the Senate.

The purpose of Bill C-69 is to improve the rules for the assessment of major resource projects.

This sweeping piece of legislation aims, at once, to protect the environment and waterways, to rebuild public trust in how decisions about resource projects are made, and to provide certainty, including predictable timelines, to industry and investors. It also ensures that Indigenous knowledge is formally integrated into review processes.

Senator Grant Mitchell, who is sponsoring the legislation in the Senate, is aware that most Canadians and Albertans, as well as a majority of businesses, believe deeply that a strong economy is dependent on an equally strong and protected environment. Businesses know that their own achievements are dependent on the successful interconnectedness of the two. Shareholders know this, as well.

Still, some business groups have argued that the legislation’s efforts to strengthen reviews is too onerous and that it could lead to delays in project approvals. In an effort to answer those concerns, Sen. Mitchell has issued the following document to address what he believes are some misunderstood measures in the legislation.

The Canadian Environmental Assessment Act 2012 (CEAA 2012) is the current regulatory regime for resource projects.

THE PROCESS IN CRAFTING THE BILL

Some have criticized the bill for being reviewed by a House of Commons committee focused on the environment rather than on energy, and that only a minimal number of witnesses from the energy department were heard. Critics also say the proposed law was introduced by the Minister of Environment and Climate Change – not by the Minister of Natural Resources.

The Ministers of Environment and Climate Change, Natural Resources, and Transport are all deeply engaged in this bill. The Ministers share responsibility for the different sections of the bill, with Part 1, the Impact Assessment Act falling under Environment and Climate Change, Part 2, the Canadian Energy Regulator Act coming under the Minister of Natural Resources, and Part 3, the Navigable Waters Act being under Transport.

Then-Natural Resources Minister James Carr and Environment and Climate Change Minister Catherine McKenna, as well as their respective deputies, together briefed the House of Commons Environment and Sustainable Development Committee on March 22. Minister of Transport Marc Garneau appeared before the committee on March 28.

The committee also heard from the following witnesses connected to the energy sector, as well as from government departments and agencies dealing with the energy sector:

  • Canadian Association of Petroleum Producers
  • Canadian Energy Pipeline Association
  • Teck Resources Limited
  • Suncor Energy Inc.
  • Canadian Electricity Association
  • Canadian Nuclear Association
  • Cameco Corporation
  • Mining Association of Canada
  • Canadian Hydropower Association
  • Prospectors and Developers Association of Canada
  • National Energy Board
  • Canada-Newfoundland and Labrador Offshore Petroleum Board
  • Canadian Nuclear Safety Commission
  • Christyne Tremblay, Deputy Minister, Natural Resources Canada
  • Jeff Labonté, Assistant Deputy Minister, Major Projects Management Office, Natural Resources Canada

The Senate will undertake a similar process of thoroughly studying the bill, including hearing from a broad range of witnesses at committee.

Bill C-69 is the product of a long and thorough review process with exhaustive engagement with stakeholders, including those in the energy sector:

  • The Expert Review Panel on environmental assessment processes held four months of hearings in 21 communities with 1,035 in-person participants, and received more than 520 written submissions from companies, industry associations, Indigenous organizations and communities, individuals, NGOs, provincial and federal departments and agencies, territories, municipalities, port authorities and land claims organizations.
  • The Expert Panel on the Modernization of the National Energy Board also held four months of hearings in 10 cities, with 1200 in-person participants, and 400 written and online comments.
  • The Government subsequently engaged stakeholders and the public through meetings, online comments, and formal submissions on both of these reports in the spring of 2017.
  • The Government published a discussion paper on its proposed approach to environmental assessments and regulatory reviews and invited input on this, before drafting C-69.

PROJECT REVIEW TIMELINES

Some have argued that timelines will increase significantly, from the current four years to an additional eight to 10 months.

This is false. Bill C-69 has shorter timelines than those that exist now under CEAA 2012.

The timelines proposed in Bill C-69 are, in each of four categories of reviews, as follows:

  • 300 days for impact assessments conducted by the IAA (down from the current 365 days);
  • 300-600 days for impact assessments conducted by a joint panel (down from the current 720 days);
  • 300-600 days for assessments conducted by an integrated panel (down from the current 720 days; and
  • 300 days for reviews done by life cycle regulators, such as the Canadian Energy Regulator or the Canadian Nuclear Safety Commission (down from 450 days).

The proposed legislation provides flexibility to set shorter timelines, depending on the scope and scale of a project, or to adjust timelines to facilitate cooperation with another jurisdiction. Timelines will be set at the end of the early planning phase to enhance clarity and certainty.

Adding in the new 180-day, formalized pre-planning phase to the C-69 timelines and comparing them to the current CEAA 2012, and assuming 120 days for the informal pre-planning that proponents do now, the C-69 timelines are still shorter:

  • 480 days for assessments done by the IAA (down from 485);
  • 480-780 days for joint panel assessments (down from 840);
  • 480-780 days for integrated panel assessments (down from 840);
  • 300 days for life cycle regulator approvals, which do not require a pre-planning phase (down from 450).

These are each either well under the 24 months or reasonably within range of the 24 months claimed to be the target that the United States is moving to.

  • IAA assessments of 480 days equal 16 months.
  • Joint Panel assessments of 480-780 days equal 16-26 months.
  • Integrated Panel assessments of 480-780 days equal 16-26 months.
  • Life cycle regulator reviews of 300 days equal 10 months.

Proponents are already doing unofficially, as best practice and without recognition, much of what is laid out in the bill’s early planning phase. The new 180-day pre-planning phase simply requires proponents to come to the IAA earlier in the whole process and places obligations on the federal government to provide direction with respect to indigenous consultation, regulatory coordination, targeted review guidelines and cooperation with other jurisdictions.

The bill also provides flexibility to set shorter timelines, depending on the scope and scale of a project, or to adjust timelines to facilitate cooperation with another jurisdiction. It also allows timelines to be shortened if the work is completed satisfactorily sooner.

Critics of the bill suggest that there are too many opportunities for timelines to be extended or suspended. However, the management of timelines under the proposed legislation will be more controlled than under CEAA 2012. Provisions in new Information Requirements and Time Management Regulations will set clear limits to manage rigorously when timelines can be suspended. There will not be unwarranted delays and the clock will not run indefinitely as it does under the CEAA 2012.

The new legislation introduces timelines to speed up decision-making. The Minister will be required to make a decision no later than 30 days after an impact assessment report is completed. Cabinet decisions will be required within 90 days. Similar provisions do not exist in CEAA 2012. Under Bill C-69, 90-day extensions are permitted, but the reasons for the extension have to be released publicly. No such provisions exist now.

DISCRETIONARY POWERS

Some have argued that the legislation gives the federal Minister of Environment and Climate Change added discretionary power on project approval.

This is false. The discretionary powers proposed under Bill C-69 for the Minister of the Environment and Climate Change are not expanded from what currently exists. In fact, there are some additional constraints.

Bill C-69 removes the Minister’s discretionary power to reject projects before an impact assessment is conducted. As amended, the Minister must issue a notice to the proponent if the Minister is of the opinion that the designated project is likely to cause unacceptable environmental effects within federal jurisdiction or if the Minister has been informed by a federal authority that it will not be issuing a permit or authorization. It would then be up to the proponent as to proceed or not with the impact assessment.

During consultation prior to the bill’s introduction, there was considerable public support for final project approval remaining with the Minister or Cabinet. There was a preference for decision-making by elected, publicly accountable officials rather than having decisions on complex projects being made by bureaucrats or independent tribunals. The Minister and Cabinet are better placed to consider public interest, and the Minister and the Cabinet are accountable to the public in ways that bureaucrats are not.

Bill C-69 increases transparency of decision-making. To ensure transparency and accountability every decision made by the Minister or Cabinet must be explained in an official and publicly issued Decision Statement, which would be posted to on the agency’s website. This enhances transparency and accountability as it is not currently required.

Finally, the bill requires that the Minister decide on projects within 30 days of receiving an impact assessment report. When the decision is required to be made by Cabinet, the deadline is 90 days. While these deadlines can be extended up 90 days, the Minister must explain any extension publicly.

Currently, there is no deadline at all for decisions and no requirement that delays be explained publicly.

PERMITS

Some are concerned permits will be harder to secure under the new regime. The Business Council of BC expressed concerns that changes in permitting could lead to “greater difficulty securing permits” as well as “heightened uncertainty among company managers, project developers and investors.” It was also concerned that the proposed law will “accelerate outflows of business investment to other jurisdictions.”

It’s worth noting that Bill C-69 was introduced in February 2018, has not yet been passed into law and, as such, is not yet in effect. Any outflows of capital have been happening under the current regime, and are, in any event, a result of a combination of complex issues, including energy self-sufficiency in the U.S., uncertainty in oil prices that makes longer term projects, like key ones in Canada, more risky, and general trade uncertainty.

The proposed permitting plan, which would be required to be developed in the planning stage, will clarify much earlier in the process what permits, licences or authorizations will be required and what regulators or jurisdictions will require them. This can avoid delays during the post approval permitting phase and may even allow construction of approved projects to start sooner. The IAA and regulators will work during planning with proponents to identify timelines, information, and other requirements needed to better prepare proponents for the permitting process.

PROVINCIAL AUTHORITY ON NATURAL RESOURCE DEVELOPMENT

Some are concerned that the bill removes provincial authority on natural resource development.

Bill C-69 clearly states that it applies only to projects under federal jurisdiction, and that assessments will look at impacts under federal jurisdiction.

The current process lacks the flexibility needed to harmonize review processes between the federal and provincial governments, resulting in duplication, red tape, and sometimes lengthy delays.

The proposed act provides the Minister of Environment and Climate Change with flexibility to better align the federal process with others, including provinces.

If a project requires an assessment by another jurisdiction, the new Agency will work cooperatively to plan a process that meets the requirements of all decision makers. To support this key objective, the Agency will seek to develop cooperation agreements with interested jurisdictions. These discussions are already underway and are expected to further clarify and enhance collaborative activities for individual projects.

The new legislation will continue the potential for substitution, which allows the process in an identified jurisdiction to replace the federal one as long as it meets the same standards.

UPSTREAM/DOWNSTREAM CRITERIA ON GREENHOUSE GAS EMISSION STANDARDS

Some have suggested that Bill C-69 will require assessment of the upstream and downstream emissions of individual projects.

Bill C-69 does not introduce any requirement that imposes upstream/downstream Greenhouse Gas emission review requirements. The specific requirement in the bill, through section 22 and section 63, is that impact assessments consider the extent to which the effects of the project being assessed will affect, “Canada’s ability to meet its environmental obligations and its commitments in respect of climate change.”  In its discussion paper on the Strategic Assessment on Climate Change, the government specifies that downstream emissions will not be assessed. GHG emissions linked directly to a project under review (referred to as upstream emissions) are currently being assessed under CEAA 2012, so there will be no change from current practice.

CLIMATE CHANGE

Some have argued that the bill contains a clause that turns Canada’s voluntary commitments on climate change into legal obligations.

C-69 simply requires that impact assessments consider how a project will affect, “Canada’s ability to meet its environmental obligations and its commitments in respect of climate change.” Some projects may in fact benefit from this consideration. For example, projects that use better technologies and emit fewer GHGs compared to other projects will actually help us meet our climate change commitments. Assessing these emissions can also identify opportunities to develop mitigating measures. Focusing on reducing emissions saves money, and enhances the credibility of a project.

SCIENTIFIC STANDARDS

Some believe the scientific standards are fuzzy and may not be the same for Indigenous and non-Indigenous bodies who do assessments.

Bill C-69 values and requires consideration of both science and Indigenous knowledge.

It requires that “the Government of Canada, the Minister, the Agency and federal authorities, in the administration of this Act, exercise their powers in a manner that adheres to the principles of scientific integrity, honesty, objectivity, thoroughness and accuracy.”

The bill requires that scientific information received and considered as part of an impact assessment will be posted and maintained on a public website (section 105(2) (d)), so the type and quality of scientific information being considered will be clear.

The bill also requires publication of an explanation of how Indigenous knowledge is taken into account in the assessment.

On assessments involving or led by an Indigenous jurisdiction, enhanced cooperation among the proponent, the Impact Assessment Agency and Indigenous jurisdictions will include project-specific plans about how to undertake the assessment, including what kind of scientific data will need to be collected. Any substitution agreement with another jurisdiction will have to meet federal standards.

PUBLIC INPUT STANDARDS

Some are concerned that public input standards favour opponents of resource projects.

It should be noted that the application of the “standing test” that is in place under CEAA 2012 was only applied only during hearings for projects regulated by the National Energy Board. Environmental assessments that currently fall under the Canadian Environmental Assessment Agency are open to public participation through a managed process, so here is a great deal of experience in managing public participation in impact assessments without the use of the standing test.

Under Bill C-69, the standing test will be removed, but the Agency and Review panels will continue to be empowered to use the full range of engagement tools – including in-person hearings, open houses, town halls, online platforms and mail – to manage public participation. Participation will have to fall within the regulated timelines.

As we have seen, unduly limiting public participation creates mistrust of the entire impact assessment process. Public participation is essential for building public trust and the conviction of the courts.

GENDER-BASED ANALYSIS

Some have objected to a clause requiring gender-based analysis within impact assessments.

Resource projects can have significant impacts on communities and the people who live in them – and these impacts can be both positive and negative. In fact, it is common practice for proponents to include Gender-Based Analysis. Gender-Based Analysis Plus (GBA+) is an analytical tool that helps us think through how projects might affect diverse groups of men, women and gender-diverse people differently. For example, the influx of people in a temporary work camp may put pressure on local social services, or have positive or negative effects on the local housing or job markets. These effects could be different for women and men and could have a greater impact on vulnerable populations.

That’s why the bill proposes that impact assessments include the consideration of “intersection of sex and gender with other identity factors.” This will mean consistent use of GBA+.

A key difference between Bill C-69 and the existing legislation, CEAA 2012, is that Bill C-69 will consider positive impacts, whereas CEAA 2012 deals only with adverse environmental impacts. This means that positive effects on communities are not currently considered in a formal way. Under C-69, positive impacts, for example, on employment for women, indigenous peoples, and other people with diverse identities, would be formally included in the impact assessment report, which is positive for proponents.

If there are negative impacts, then identifying them allows for all stakeholders to work out ways of mitigating them. This enhances the benefit to the community and raises the credibility and credit that will be afforded the company and the company’s project.

The inclusion of gender and identity factors has a considerable degree of industry support, including from the Mining Association of Canada. It’s worth noting that 60 per cent of all federal environmental assessments involve mining companies.

SUPPORT FOR PROPONENTS OF RESOURCE PROJECTS

Some are concerned that benefits of projects won’t be clearly articulated in the review process.

Bill C-69 requires that positive impacts, including social, economic, gender, specifically be assessed and then clearly outlined in the public impact assessment report prepared by the IAA, based upon the proponents’ project application information. Currently, only adverse environmental impacts are required to be reported. Under the proposed legislation, the reporting of positive impacts will elevate much broader public awareness of the contribution projects make to the general public good and why a project is in the public interest.

Setting the record straight on legislation to strengthen project reviews

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