Canada: Environmental Assessments And Greenhouse Gas Emissions

Copyright 2008, Blake, Cassels & Graydon LLP


In what can only be interpreted as a wake-up call to companies involved in projects that may emit significant greenhouse gas emissions, on March 5, 2008, the Federal Court released its judgment involving the Kearl Oil Sands (Kearl Project). The decision involved the judicial review of an environmental assessment conducted by a Joint Review Panel established by the Alberta Energy and Utilities Board and the Government of Canada (Panel). The judicial review was initiated by various non-profit organizations and encompassed several issues, including the assertion that the final report prepared by the Panel did not comply with the mandatory steps as set out in the Canadian Environmental Assessment Act (CEAA). The concern of the applicants was that the Panel did not provide any rationale in its report for its recommendations regarding greenhouse gas emissions. In agreeing with the applicants, the Federal Court held that a Panel must provide informed and reasoned bases for its conclusions "nourished by a robust understanding of Project effects". Given the heightened awareness surrounding greenhouse gas emissions and well-funded environmental lobby groups, the decision is a stark message to the industry that major project applications will be reviewed with increasing scrutiny.


Imperial Oil proposes to construct and operate the Kearl Project, an oil sands mine, to be located north of Fort McMurray. The Kearl Project includes the design, construction, operation and reclamation of four open pit truck and shovel mines, three trains of ore preparation and bitumen extraction facilities together with tailings management facilities and other infrastructure.

The environmental impact assessment filed in support of the Kearl Project confirms that it will result in average annual greenhouse gas emissions equivalent to 800,000 passenger vehicles and will contribute 1.7% of Alberta's annual greenhouse gas emissions (based on 2002 data).

Panel Hearings And Report

The Panel held 16 days of public hearings in November 2006 and heard submissions from approximately 20 parties.

On February 27, 2007, the Panel issued its report, which included a review of various stakeholder groups and summarized issues relating to social and economic effects, mine plan and resource conservation, tailings management, reclamation, air emissions, surface water, aquatic resources, traditional land use and traditional ecological knowledge, the need for follow-up and human health. The Panel report constituted the decision for the Alberta authorities and set out recommendations to the Department of Fisheries and Oceans (DFO) regarding project approval. Provided that the proposed mitigation measures and recommendations were implemented, the Panel was of the view that the Kearl Project was not likely to cause significant adverse environmental effects. It therefore recommended that DFO approve the Kearl Project. The decision of the Panel was challenged in the Federal Court by means of a judicial review application.

Legislative Context

The Court reviewed the legislative context involving environmental assessments, including the applicable provisions of the CEAA. It held that the CEAA establishes a two-step decision-making process. The first step requires an environmental assessment where potentially adverse environmental effects of a project are analysed. The second step involves decision-making and follow-up to determine if a particular project should be authorized and what follow-up measures, if any, are required to verify the accuracy of the assessment.

Step One: Environmental Assessment

Regarding the first step, the Court confirmed that there are three levels of environmental assessment under the CEAA: screenings; comprehensive reviews; and mediation and panel reviews. If a panel is constituted, section 34 of CEAA requires that the panel fulfill four general duties. First, the information required for an assessment must be obtained and made available to the public. Second, the panel must hold hearings in a manner that offers the public an opportunity to participate in the assessment. Third, a report must be prepared that sets out the rationale, conclusions and recommendations of the panel including any mitigation measures and follow-up program and a summary of any comments received from the public. Finally, the report must be submitted to the Minister and the responsible authority. In considering these general duties, the Court acknowledged that an assessment of the significance of environmental effects is not a wholly objective exercise but one that encompasses a significant measure of opinion and judgment. It further acknowledged that reasonable people can and do disagree about the adequacy and completeness of evidence which forecasts future results and the significance of such results. Moreover, the Court noted that the adequacy and completeness of the evidence must be evaluated in the context of the preliminary nature of an assessment. In that regard, it recognized that an assessment of environmental significance "does not extend to the elimination of uncertainty surrounding project effects".

Step Two: Decision And Follow-Up

Once the Panel report is completed, subsection 37(1.1) of the CEAA requires that the federal authority responsible for the decision consider the report and, with the approval of the governor-in-council, respond to the report. If the federal authority decides to authorize a project following a Panel report, it must undertake a follow-up program for the project to ensure its implementation and those results may be used to implement adaptive management measures or to improve the quality of future environmental assessments.

Based upon the general mandate of the CEAA, the powers of a panel must be exercised "in a manner that protects the environment and human health and applies the precautionary principle". The CEAA represents complex legislation for addressing the uncertainty surrounding environmental effects. Consequently, it requires early assessment of adverse environmental consequences, as well as mitigation measures, together with follow-up processes capable of adapting to new information and changed circumstances. It was in the context of this background that the Court addressed the concerns of the applicants.

Issue: Greenhouse Gas Emissions

The applicants alleged, among other things, that the Panel erred in law by failing to comply with the requirement "to provide a rationale for its recommendations [regarding greenhouse gas emissions] pursuant to section 34(c)(i) of the CEAA".

The Court noted the distinction between intensity-based emissions targets versus absolute greenhouse gas emissions. It referred to the evidence before the Panel concerning intensity-based mitigation and confirmed that the absolute amount of greenhouse gas pollution from oil sands development would continue to rise under intensity-based targets given the planned increase in bitumen production. The Court reviewed the Panel decision and held that the Panel erred by dismissing as insignificant the greenhouse gas emissions associated with the Kearl Project without "clear and cogent articulation" as to why intensity-based mitigation would be effective in reducing absolute emissions (accounting for 1.75% of Alberta's annual emissions) to a level of insignificance. By failing to provide a sufficient explanation in its report, the Court held that the Panel failed to provide a reasonable basis for its conclusions and violated section 34(c)(i) of the CEAA.

The Court held that the Panel, while not mandated to engage in policy recommendations, was mandated to conduct a science and fact-based assessment of the potential adverse environmental effects of a proposed project. The Court further stated that while the Panel was not required to provide an in-depth explanation of the scientific data for all of its conclusions and recommendations, it was required to explain, at least in a general way, why the potential environmental effects, either with or without the implementation of mitigation measures, would be insignificant. The Court recognized that, in the normal course, deference should be given to expertise possessed by the Panel. However, such deference was only triggered when the conclusions and rationale for the findings provided were articulated.

While the Court held that the Panel erred in law, because the error was confined to one specific issue, it considered it inappropriate and ineffective for the Panel to conduct an entirely new review. As a result, it remitted the matter back to the same Panel with a direction that it provide a rationale for its conclusion that the proposed mitigation measures will reduce the potentially adverse effects of the Project's greenhouse gas emissions to a level of insignificance.


A simple explanation of the decision is that a panel must adequately justify its conclusions in its final report. Failure to do so may result in a successful legal challenge. However, the decision warrants greater consideration than this simple explanation. As mentioned in the introduction, it is clearly a wake-up call to proponents involved in major projects that may emit greenhouse gases. No longer will proponents be able to rely upon the process followed for past approvals for other similar projects, where greenhouse gas emissions were not a prominent factor. Furthermore, it will be insufficient for proponents to assert that they will minimize emissions through the use of the most energy efficient, commercially proven and economic technology.

Once greenhouse gas emissions are known or estimated, project proponents must now provide evidence of mitigating those emissions and reducing them to insignificant levels on an absolute emissions basis. Such an approach can only be problematic in a province such as Alberta, which has adopted emissions intensity targets as opposed to absolute emissions targets for large greenhouse gas emitters.

Finally, although the decision refers to mitigation, it provides no assistance or guidance as to what constitutes such measures. For example, it does not address the thorny issue of whether or not mitigation efforts will be satisfactory if they occur elsewhere in Canada or the world. Alternatively, it does not confirm whether or not mitigation efforts will be restricted to the province in which the project is situate (as is the case in Alberta when considering emissions intensity reductions pursuant to the Specified Gas Emitters Regulation). It remains to be seen whether or not future decisions will provide clarification in that regard.

If the decision does nothing else, it confirms that greenhouse gas emissions and accounting for those emissions have now permeated all aspects of the business cycle.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.