Canada: Increased Clarity Or More Uncertainty? Federal Government Takes First Steps To Review Environmental Assessment Process And Introduces Interim Pipeline Assessment Rules

On January 27, 2016, the Federal Government announced five principles that will guide its discretionary decision making powers on major natural resource projects. These principles are intended as an interim measure while the Government undertakes a broader review of the environmental assessment process. As stated in the December 2015 Speech from the Throne, the Government plans to introduce new environmental assessment processes as part of its efforts to restore public trust.

The following five principles will guide the Government's discretionary decision making for projects subject to the federal environmental assessment process:

  1. No project proponent will be asked to return to the starting line — project reviews will continue within the current legislative framework and in accordance with treaty provisions, under the auspices of relevant responsible authorities and Northern regulatory boards;
  2. Decisions will be based on science, traditional knowledge of Indigenous peoples and other relevant evidence;
  3. The views of the public and affected communities will be sought and considered;
  4. Indigenous peoples will be meaningfully consulted, and where appropriate, impacts on their rights and interests will be accommodated; and
  5. Direct and upstream greenhouse gas emissions linked to the projects under review will be assessed.

These principles are consistent with the Liberal Party's 2015 campaign promises and in particular, to "make environmental assessments credible again", "modernize the National Energy Board", and "ensure that environmental assessments include an analysis of upstream impacts and greenhouse gas emissions resulting from projects under review".

For two projects currently under review by the National Energy Board (NEB), the Trans Mountain Expansion Project and the Energy East Pipeline, the Federal Government intends to take immediate steps to implement these five principles.

For the Trans Mountain Expansion, the Government has committed to:

  • Undertake deeper consultations with Indigenous peoples and provide funding to support participation in these consultations;
  • Assess the upstream greenhouse gas emissions associated with this project and make this information public; and
  • Appoint a Ministerial Representative to engage communities, including Indigenous communities potentially affected by the project, to seek their views and report back to the Minister of Natural Resources.

Similarly, for the Energy East Pipeline, the Government has committed to:

  • Undertake deeper consultations with Indigenous peoples potentially affected by the project and provide funding to support these consultations;
  • Help facilitate expanded public input into the National Energy Board review process, including public and community engagement activities. The Minister of Natural Resources intends to recommend the appointment of three temporary members to the National Energy Board; and
  • Assess the upstream greenhouse gas emissions associated with this project and make this information public.

In order to implement these steps for these projects, the Minister of Natural Resources intends to seek extensions of the prescribed time limits under the National Energy Board Act (NEB Act) for the NEB's project reviews and the Governor in Council's (GIC) decision to either approve or refuse to issue the project certificates. The NEB Act currently provides that the Minister may extend the legislated time limit for applications by a maximum of 3 months, and that the GIC may extend the time limit further on the recommendation of the Minister.

For the Trans Mountain Expansion, only the timeline for the GIC's decision will be extended by 4 months for a total of 7 months (from August 2016 to December 2016).

The Energy East Pipeline will be subject to extensions for both the NEB's assessment process and the subsequent GIC's approval. Specifically, the time for the NEB review will be extended by 6 months and the period for the GIC's consideration will be extended by 3 months. For the Energy East Project, such extensions would result in the regulatory approval process taking 27 months (2 years and 4 months).


Back in 2012, the Jobs, Growth and Long-Term Prosperity Act ushered in a number of legislated time limits for applications before the NEB, including a 15 month time limit for the NEB's review of a completed application and 3 months for the GIC to either approve or refuse to issue the certificate (total of 18 months). The Government's announcement appears to continue to adopt a time limit process, albeit with extensions. The real challenge will be fulfilling additional consultation responsibilities within the prescribed extension periods.

We also observe that the announced changes may be said to take into account recent judicial decisions regarding the NEB's jurisdiction and regulatory scheme. For example, in Forest Ethics Advocacy Association v. Canada (National Energy Board) the Federal Court of Appeal held that the NEB was not required by the NEB Act to consider larger, general issues such as climate change, and that the regulation of upstream and downstream activities was outside of the approval process outlined by the NEB Act as it is within the jurisdiction of other regulators.

Under the new announced principles, assessment of direct and upstream greenhouse gas emissions will be studied separately and not by the NEB. Responsibility for this new assessment appears to fall with the Ministry of Environment and Climate Change. This suggests that a new layer of regulatory oversight will apply to pipeline projects in the interim. Going forward, this approach may foreshadow the types of changes under consideration with respect to the NEB's regulatory process and the federal environmental assessment process. The "one project – one assessment" principle seems to be evolving. Will the environmental assessment of future pipeline projects remain the responsibility of the NEB? Will a more centralized approach led by ministerial departments or the Canadian Environmental Assessment Agency itself be in store? Stay tuned.

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