Canada: Federal Government Further Refines Federal Environmental Laws

The federal government has proposed amendments to its new environmental assessment regime, and new regulations under the revamped Fisheries Act, indicating that the impetus to change the federal approach to projects impacting the environment is very much alive and well.

Parliament passed significant amendments to key environmental and energy regulatory statutes in 2012, in furtherance of the government's policy to streamline environmental assessments, project reviews and regulatory approvals. Under Bill C-38, the Jobs, Growth and Long-term Prosperity Act, the Canadian Environmental Assessment Act, 2012 (CEAA 2012) was introduced, and significant changes were made to the Fisheries Act. These initiatives were the subject of several Blakes Bulletins in May and July 2012: Canadian Government Introduces Legislation to Streamline Environmental Approvals, and New Federal Environmental Assessment Regime Now in Force. These latest regulatory initiatives are part and parcel of the refinement of law taking place as a result of Bill C-38.

Proposed Amendments to Regulations Under CEAA 2012

On Friday, April 12, 2013, the Canadian Environmental Assessment Agency posted proposed amendments to the Regulations Designating Physical Activities (Physical Activities Regulations) on its website. They were then formally registered for public comment in Part 1 of the Canada Gazette on Saturday, April 20, 2013. The proposed amendments can be viewed here.

As set out in our July 2012 bulletin, projects which may be subject to federal environmental assessment under CEAA 2012 are those which propose physical activities which exceed thresholds (such as production capacity) listed in the Physical Activities Regulations. According to the Regulatory Impact Analysis Statement (RIAS) which accompanies the Canada Gazette registration, the rationale for the proposed amendments are that the current version of the Physical Activities Regulations does not appropriately reflect the major projects that have the greatest potential to cause significant adverse environmental effects in areas of federal jurisdiction and, in addition, some types of major projects that are considered to have a high potential for such effects are not included. Accordingly, the proposed amendments are aimed at ensuring the Regulations capture the major projects that the federal government believes will have the greatest potential for significant adverse environmental effects.

The proposed amendments to the Physical Activities Regulations will bring about further changes in the type of projects which will be subject to federal environmental assessment. According to the government, this will not result in a great reduction in the number of projects subject to CEAA 2012, as the additions to the list of projects will offset the deletions. However, in our view, the proposed amendments are far more likely to result in a further reduction in the number of projects being assessed at the federal level rather than an increase, although the point is validly made that to some extent that is reliant on the health of the Canadian economy. Of particular note, many large industrial facilities such as those which process heavy oil and oil sands, or manufacture pulp and paper, steel and chemicals, as well as potash and other industrial mineral mines, will no longer automatically be caught by CEAA 2012.

The most significant amendments to the Physical Activities Regulations include the following:

  • additions of projects such as diamond and apatite mines, railway yards, international and interprovincial bridges and tunnels, bridges that cross the St. Lawrence Seaway, the first offshore exploratory wells and expansions to oil sands mines;
  • deletions to exclude projects such as groundwater extraction facilities, heavy oil and oil sands processing facilities, pipelines and electrical transmission lines not regulated by the National Energy Board (NEB), potash and other mineral mines (salt, graphite, gypsum, magnetite, limestone, clay and asbestos), pulp and paper mills, steel mills, metal smelters, leather tanneries, textile mills and facilities for the manufacture of chemicals, pharmaceuticals, pressure-treated wood, particle board and plywood, chemical explosives, lead acid batteries and reparable mineral fibres;
  • liquefied natural gas storage facilities will be modified to increase the threshold size by approximately 10%;
  • mine expansions will be modified to relate the size of the expansion to an increase in the area of disturbance rather than referring only to production capacity;
  • the thresholds for expansions are increased to 50% or more in the size of a facility (rather than the 35% most are currently set at); and
  • the NEB-regulated activities related to pipelines are modified to align with the process requirements under the NEB's legislation.

The proposed changes also include transitional clauses which provide that if a proposed project becomes a designated project under the proposed amendments, the Physical Activities Regulations will apply and thus a screening and possibly an environmental assessment under CEAA 2012 will be required before the activity can be carried out, unless the carrying out of the activity (or activities incidental to that activity) has already begun and alteration of the environment has occurred; a federal authority has exercised a power which would permit an activity to be carried out; or an assessment by another jurisdiction has commenced.

Questions arise as to what occurs if a project description has already been submitted or if an environmental assessment has commenced under CEAA 2012 at the time the proposed amendments come into force and the project is consequently no longer defined as a "designated project" under the Physical Activities Regulations. The government's view stated in the RIAS is that the screening process or environmental assessment would terminate because the project is no longer a designated project. This is likely accurate, as the various requirements in CEAA 2012 in relation to such projects would no longer apply. An example of this would be the prohibition on proponents taking actions to carry out a designated project unless there has been a decision under CEAA 2012. If a project is no longer defined as a designated project, the prohibition would no longer apply and it should be able to go ahead without the CEAA 2012 assessment.

The public comment period on the proposed amendments to the Physical Activities Regulations will remain open until May 20, 2013. The amended Regulations will come into force when the final version is posted in Part II of the Canada Gazette, sometime after the public comment period is closed.

First Proposed Regulations Under the Revamped Fisheries Act

Bill C-38 introduced changes which combine the prohibitions under the Fisheries Act against killing fish and carrying on any work, undertaking or activity that results in the harmful alteration, disruption or destruction of fish habitat, into a single prohibition against causing serious harm to fish that are part of a commercial, recreational or aboriginal fishery, or to fish that support such a fishery. These changes, which were discussed in detail in our May bulletin and another July 2012 bulletin: Federal Government Increases Oversight of Activities Impacting Fisheries, are not yet in force. We understand the current plan is to bring them into force once a revised Fish Habitat Policy has been developed and new regulations have been introduced.

On April 13, 2013, the government proposed the Application for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations (Application Regulations). These Regulations are the first to be introduced to implement the second round of changes to the Fisheries Act and consequently they are not scheduled to come into force until the federal cabinet issues an order implementing these changes to the Act itself. However, it is our understanding that these are not the only regulations being developed before the new prohibitions become effective. Indeed, some sources indicate that the government will be releasing a draft policy and other proposed regulations for consultation very soon. The proposed Application Regulations can be viewed here.

The purpose of the Application Regulations is to set out what documents and information are required for authorization applications under s. 35 of the Fisheries Act and to establish procedural requirements and time limits for application processing. The proposed Application Regulations also repeal the provisions of the Fishery (General) Regulations which currently set out the application requirements. According to the RIAS, the Application Regulations do not pose any additional procedural or substantive requirements over and above those currently in place for persons seeking an authorization under the Fisheries Act. However, it is notable that the proposed Regulations have far more detail on the requirements for applications than the current provisions in the Fishery (General) Regulations. So while the government claims the requirements are the same, many of these are currently established only by policy, which is discretionary and which has not been consistently applied across the country. Key examples are new mandatory requirements to provide an irrevocable letter of credit to cover the costs of implementing an offsetting plan proposed in support of an application, and to provide written evidence of authorization for accessing the lands or waters needed to implement the offsets. If nothing else, such requirements may result in difficult timing issues for applications which may have to wait for provincial tenures or licences to be issued before being submitted for approval.

One notable addition is the implementation of time limits for the government's consideration of the applications for authorizations. Applications for authorizations under s. 35 of the Fisheries Act are not currently subject to specific timelines, and can and often do, take years to be approved. While the Application Regulations do allow for "off ramps" from the timelines for the purposes of submission of additional or amended information, for consultation, for compliance with other acts of Parliament or land claims agreements, or if requested by the applicant, it is nonetheless a positive step that specific time limits will be enshrined in law. There are two main timelines imposed: 60 days for the government to determine if the information in the application is complete, and 90 days to make a decision once it has confirmed it is complete.

The Application Regulations do not provide any real guidance as to what the government considers the key terms in the new s. 35(1) of the Fisheries Act mean. An example of this would be what constitutes "permanent alteration of fish habitat". It appears we will have to wait for the revised policies for that level of guidance.

The comment period for the Application Regulations lasts until May 13, 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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