Canada: The Canadian Environmental Assessment Act, 2012 — Second Challenge Facing Project Proponents

Last Updated: September 15 2015
Article by Rodney V. Northey

This is the second of three articles on challenges facing project proponents under federal environmental assessment law.  It addresses key issues raised by the current Canadian Environmental Assessment Act, 2012 (CEAA/12)1 in the absence of any court judgments interpreting its provisions.

At a high level, the present regime appears similar to the predecessor regime set out in 1992 legislation ("CEAA/92").  Both regimes focus on assessing significant adverse environmental effects.  However, in other key respects, CEAA/12 departs from the approach of CEAA/92 and introduces new principles to federal EA practice. As set out in the initial article, many of these new principles arise within three core attributes of CEAA/12:

(1)        Few projects trigger CEAA automatically.

(2)        Where triggered, the project subject to EA is broad, if not comprehensive.

(3)        The scope of each assessment or determination of effects is project-specific and often narrow.

The present article deals with the second core attribute2.  Further details on all of these points may be found in the recently published 2015 Guide to the Canadian Environmental Assessment Act (LexisNexis Canada 2015), hereafter referred to as the "Guide."

The second core attribute is new.  It creates serious new challenges for proponents dealing with CEAA/12.  Though fewer projects now trigger CEAA, once federal EA is triggered, it is difficult for proponents to ensure the assessment includes all required project components. 

Where triggered, the project subject to EA is broad if not comprehensive

It is useful to review the approach of CEAA/92 to triggering EA before addressing how CEAA/12 deals with this topic.

CEAA/92 set out a scoping process for projects. In general terms, a project was a "physical work" and related "undertakings" such as constructing or operating the physical work. Section 15 set out a three-part approach to this topic. Extensive litigation determined how section 15 should be interpreted, including the sole CEAA/92 case to reach the Supreme Court of Canada. Many principles resulted from this litigation. One principle was that a project EA was required to consider all undertakings related to a triggered physical work. A second principle was that considerable federal discretion existed around what physical works were "in relation to" the triggered physical work and thus part of the EA. A third principle applied to projects on the now-repealed comprehensive study list and advised that scoping discretion did not authorize reducing the scope of a project subject to comprehensive to remove it from such study3.

By contrast, CEAA/12 sets out no scoping process. It contains no section to replace section 15 of CEAA/92. Instead, CEAA/12 sets out a novel definition of "designated project": 

designated project" means one or more physical activities that

(a) are carried out in Canada or on federal lands;

(b) are designated by regulations made under paragraph 84(a) or designated in an order made by the Minister under subsection 14(2); and

(c) are linked to the same federal authority as specified in those regulations or that order.

It includes any physical activity that is incidental to those physical activities.

Building on this definition, CEAA/12 gives rise to three principles for determining the project subject to EA:

  1. the EA project includes all designated physical activities linked to the same federal authority;
  2. the EA project may, but is not required to, include all related designated physical activities if the designated activities are linked to different federal authorities; and
  3. the EA project includes all physical activities that are incidental to the designated physical activities.

The first principle results from the definition of "designated project." The designated project expressly includes "one or more" physical activities that are linked to the same federal authority4. Table A provides twp examples of how to apply this principle.

Table 1A

1st Project Definition Principle

Two designated physical activities linked to the same federal authority: Examples 

Example A.1: the construction and operation of:

  1. a new metal mine with production greater than 3,000 tonnes/day and a new railway line, and 
  2. right of way greater than 32 km. (Both linked to the CEA Agency)

Example A.2: the construction and operation of:

  1. a new pipeline longer than 40 km, and 
  2. a new petroleum storage facility with a capacity greater than 500,000 m3. (Both linked to the NEB)

The second principle results from section 16 of CEAA/12. It deals with two designated projects that are "closely related" but linked to different federal authorities. Section 16 requires cooperation between the two federal authorities. It appears to permit, but does not demand, a single EA5. Table B provides two examples of how to apply this principle.

Table 1B

2nd Project Definition Principle

Two designated physical activities linked to different federal authorities: Examples

Example B.1: the construction and operation of:

  1. a new metal mine with production greater than 3,000 tonnes/day, and 
  2. a new railway line and right of way greater than 32 km. (Both linked to the CEA Agency)

Example B.2: the construction and operation of:

  1. a new pipeline longer than 40 km, and
  2. a new petroleum storage facility with a capacity greater than 500,000 m3. (Both linked to the NEB)

The third principle is the most important. CEAA/12 demands that an EA of a designated project include all "incidental" physical activities. It provides no discretion to scope out any such activities. The term "incidental" is new and can mean different things. On the one hand, using the CEAA/92 litigation, it can mean "secondary" in relation to the "primary" activity that is designated. CEAA/92 litigation involved a host of terms to convey a primary/secondary approach to project scoping.6 On the other hand, incidental can mean something "liable to happen" if something else happens. This does not involve a "primary/secondary" approach and resembles the situation addressed by the Supreme Court of Canada in a 1994 EA case involving the NEB and Hydro-Quebec7. In that case, the Court upheld the jurisdiction of the NEB to consider the effects of upstream dam construction in the course of considering a licence to export electricity. According to the Court, the appropriate test was whether the construction of the new dam facilities was required to serve, among other needs, the demands of the export contract. In CEAA/12 terms, one might now frame this 1994 issue around whether the new dam facilities are incidental to the demands of the export contract8.

Table 1C

3rd Project Definition Principle

Incidental Physical Activities: Examples

Example C.1: the construction and operation of:

  1. a new metal mine with production less than 3,000 tonnes/day, and 
  2. a new railway line and right of way greater than 32 km. (Both linked to the CEA Agency)

Example C.2: the construction and operation of:

  1. a new pipeline less than 40 km, and
  2. a new petroleum storage facility with a capacity greater than 500,000 m3. (Both linked to the NEB)

Given that this second meaning for "incidental" may tied in to earlier federal EA jurisprudence, it is difficult to rule out its application today under CEAA/12.  Yet this second meaning has a breadth that poses far greater challenges for proponents than the first narrower meaning.

Table C provides two examples of challenging situations for applying the 3rd project principle. Both examples deal with situations where it is arguable whether the "designed" physical activity is incidental to the physical activity or vice-versa. According to the terms of CEAA/12, there will be different legal implications resulting from what "physical activity" is "incidental" to the other. 

Conclusions

CEAA/12 provides a novel approach to setting the scope of the project subject to federal EA. Compared to CEAA/92, CEAA/12 requires a broad approach to scoping the project.  It also introduces new language for whether the EA of a designated physical activity requires EA of other related physical activities: the new test is whether the latter activities are "incidental" to the designated activity. If they are incidental, then they are part of the EA. CEAA/12 provides no provision to narrow the scope of the project. 

Since this definition of "designated project" has a central role within CEAA/12, this new test is relevant to all federal EAs triggered by this Act.  Similarly, this new test presents challenges to all proponents of designated projects.

Based on the experience with CEAA/92, it is likely that litigation is required to clarify the scope of these novel CEAA/12 provisions and departures from earlier EA principles and practices.

Footnotes

1. Enacted by S.C. 2012, c.19, and in force, July 6, 2012.

2. Gowlings' August 24th EnviroBulletin addressed the first core attribute. A future article will deal with the third core attribute. 

3. See Guide, pp.91-2.

4. See Guide, pp. 72, 75-9.

5. See Guide, p.103

6. See Guide, pp.80-88.

7. See Quebec (Attorney General) v. Canada (National Energy Board)[1994] 1 S.C.R. 159, cited in Guide at p.83.

8. See Guide, pp.86-8

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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