Canada: Expert Report On Environmental Assessment Gives Rise To More Uncertainty

In this Update

On April 5, 2017, the Expert Panel for the Review of Environmental Assessment Processes in Canada released its Final Report entitled Building Common Ground: A New Vision for Impact Assessment in Canada. This Update outlines the Expert Panel's recommendations and their potential impact on environmental assessments and the regulatory process. It also examines the implications of the recommendations on the competitiveness of Canada's resource industries.

Background

On August 15, 2016, the Minister of Environment and Climate Change established an Expert Panel (Panel) to review federal environmental assessment processes in Canada. This review was predicated on the Liberal government's belief that the Canadian public had lost confidence in the environmental assessment process under the Canadian Environmental Assessment Act, 2012 (CEAA 2012). Among other things, the Panel was tasked with considering how public confidence in environmental assessments could be restored.

The Panel consisted of four individuals: Johanne Gélinas, an environmental consultant and the former Canadian Commissioner of the Environment and Sustainable Development; Doug Horswill, a former executive at Teck Resources Ltd.; Rod Northey, an environmental lawyer at Gowling WLG; and Renée Pelletier, the managing partner at Olthius Kleer Townshend LLP, a firm well known for its representation of Aboriginal groups in Canada.

Between August 2016 and April 2017, the Panel visited 21 cities across Canada, received 520 written submissions, held workshops and dialogue sessions with 1,035 individual participants and heard 397 in-person presentations. It released its report Building Common Ground: A New Vision for Impact Assessment in Canada [PDF] on April 5, 2017. The public has been invited to submit comments on the Panel's report until May 5, 2017.

Panel's recommendations

Despite the Panel's belief that it is "not proposing the creation of something entirely new," the Panel has proposed fundamental changes to the way that environmental assessments are conducted in Canada. Among other things, the Panel has recommended changes to the following:

  • the purpose and scope of environmental assessment (which the Panel believes should be changed to "impact assessment" to reflect a broader consideration of all positive and negative impacts of a proposed development on the well-being of Canadians);
  • the process for assessments (which the Panel believes should commence very early in a project's development before most important decisions have been made, and should involve collaborative multi-stakeholder committees that seek to achieve consensus on all procedural and substantive issues that arise during the assessment);
  • who is allowed to participate in the assessment (essentially, anyone who expresses an interest in the project);
  • who conducts the assessment (a new Impact Assessment Commission or "IAC");
  • who makes the ultimate decision on the project (the new IAC, with a right of appeal to the Governor in Council); and
  • the test for a project to proceed (instead of the current "significance" test, the Panel proposes that a project should be assessed against "sustainability criteria" to ensure that the project will result in a "net benefit" to sustainability).

In our view, many of the Panel's specific recommendations are sound and would improve environmental assessments. These include the following:

  • increasing the capacity of federal agencies to ensure that they participate effectively in environmental assessments;
  • expanding the informal options for the public to participate in environmental assessments, such as through open houses and workshops;
  • requiring all information generated during environmental assessments to be accessible to the public through an online registry, and also posting information about post-construction monitoring and enforcement to the registry;
  • allowing the regulator to compel expertise from federal scientists and retain external scientists to provide technical expertise;
  • requiring all environmental assessment decisions to include clear reasons that allow members of the public to understand the rationale for the decisions;
  • encouraging more collaboration between the proponent, governments and interested parties early in the regulatory process through collaborative multi-stakeholder committees;
  • revising the legislation to allow conditions in Decision Statements to be amended; and
  • encouraging greater use of regional and strategic environmental assessments, which could help focus project-specific assessments on the specific impacts of the project being considered.

Some of the Panel's other recommendations, however, are unworkable in our view and would introduce considerable uncertainty into the regulatory process. These recommendations include the following:

  • Changing the ultimate approval test from "significance" to "sustainability," combined with a transfer of decision-making responsibility from government to independent Commissioners, would introduce considerable uncertainty into the outcome of the environmental assessment process. As the Panel itself notes, "sustainability" is a term that means different things to different people. For example, the Joint Review Panel for the Lower Churchill Falls project interpreted sustainability to mean that a project should result in net environmental, social and economic benefits.[1] For most projects, that is an impossible standard as there are trade-offs between environmental impacts and social and economic benefits. In fact, the entire concept of sustainability, as first enunciated in Our Common Future,[2] understood sustainability to be a balancing of social, economic and environmental interests. The Panel recommends that "objective" sustainability criteria be developed for each project, considering matters such as "Are the benefits and costs of the project fairly distributed?" In our view, these types of questions are inherently subjective. Especially given that project proponents will not know who will make the ultimate decision on their projects, or what specific criteria will be considered, adopting a "sustainability" test for project approval would create considerable uncertainty regarding the outcome of any environmental assessment.  
  • The Panel supports the current objective of "one project, one assessment," but recommends determining the specific approach to federal-provincial co-operation on a case-by-case basis as part of the planning process for each project. In addition, while the Panel recommends keeping "substitution" of a provincial review process as an option for co-operation, it suggests that the requirements for substitution should be strengthened to ensure that the federal government's principles are upheld (and federal regulators and experts are involved), and that Indigenous groups should be actively involved in any substitution decision. This approach would make it more difficult to predict the nature and extent of the environmental assessment process in advance of developing a project.
  • While the Panel recognizes the importance of time limits in imposing discipline in the environmental assessment process and providing certainty to proponents, it recommends that project-specific timelines be developed for each stage of the project review process based on the individual circumstances of each project. This approach would reduce the ability to predict the timing of the environmental assessment in advance of developing a project. 
  • The Panel makes extensive reference to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), and recommends that in order to reflect UNDRIP, all Indigenous peoples who are affected by a project should have the right to provide or withhold their consent. If consent is withheld, a review panel will then determine whether that decision was "reasonable." If an Aboriginal group withholds consent and a review panel finds that decision to be reasonable, the project will not be allowed to proceed.

This recommendation is inconsistent with Canadian law, which is that Aboriginal groups do not have a veto over project development.[3] While proponents and governments should consult with Aboriginal groups with the objective of obtaining the group's consent, Aboriginal groups should not have the power to veto projects that are in the overall public interest of Canada. Adopting this recommendation would introduce considerable uncertainty into any resource development in Canada, particularly for linear projects that have the potential to affect hundreds of Aboriginal groups (like some major pipelines and transmission lines). In addition, the practical result of this recommendation would be to significantly and disproportionately increase the leverage of Aboriginal groups in negotiating Impact Benefit Agreements.

While 100% consensus is a goal that parties should strive towards, failure to reach consensus should not mean that a project cannot proceed if it is otherwise in the Canadian public interest.

  • The other issue with the Panel's recommendations from an Aboriginal law perspective is the Panel's recommendation that the IAC should be an agent of the Crown responsible for substantive Crown consultation and accommodation with Aboriginal groups. At the same time, the Panel recommends that the IAC should be a quasi-judicial tribunal. These two functions are likely incompatible. As a quasi-judicial tribunal, the IAC would be required to treat all parties impartially and fairly, and it would need to ensure that it complies with all requirements of procedural fairness. Consistent with Taku River,[4] the regulatory process may be sufficient in some cases to satisfy the duty to consult. To the extent that the IAC is also responsible for conducting direct consultation with Aboriginal groups, however, the IAC may owe Aboriginal groups a fiduciary duty and would need to treat them differently than other stakeholders. In our view, it would likely be impossible for the IAC to adequately fulfill these two different roles.
  • The Panel recommends transferring responsibility for preparing the Environmental Impact Statement from the project proponent to the IAC. While the Panel notes that this would reduce the perception of bias in environmental assessments, it would introduce further uncertainty into the environmental assessment process from the perspective of project proponents. Today, the proponent has control over the timing of environmental studies and can ensure that the consultant it selects has sufficient capacity, resources and qualifications to conduct the work. It would lose this control under the Panel's proposal. In addition, the Panel's approach would only work if the IAC was sufficiently resourced, which would require significant funding from the federal government. If that funding were to be cut in the future, or if the IAC's actual costs were to exceed its funding, the IAC would be unable to perform its functions and all projects subject to environmental assessment would be jeopardized.
  • The Panel recommends eliminating the "standing test" in CEAA 2012 because it believes that excluding individuals or groups from the assessment process erodes any sense of justice and fairness. This is one of the common criticisms of CEAA 2012, and arguably one of the main reasons that members of the public have lost confidence in the environmental assessment process. In our view, however, allowing expanded opportunities for participation in environmental assessments does not require eliminating the standing test. For example, the Panel suggests including new processes into the early phases of environmental assessments such as open houses. These should be open to anyone who wishes to attend. However, if a hearing is required at the end of the process (as the Panel contemplates for any issues that cannot be decided by consensus of the parties), some form of standing test is needed to make the hearing workable. For example, if all 15,000 individuals who submitted letters of comment in the Shell Jackpine Mine Expansion hearing (some from as far away as Belgium) had been allowed to cross-examine Shell's witnesses and present witness panels, the hearing would still be in progress. That outcome is not feasible, nor is it in the public interest of Canadians. In addition, parties with genuine interests in a project should not be drowned out in a hearing by allowing too many parties to participate that do not have a genuine interest in the project. In our view, there needs to be some form of standing test in hearings to make the process work as it is intended. 

The Panel's recommendations misconstrue the purpose of environmental assessment

Canada's regulatory process, including environmental assessments, must reflect the objective of regulation, as opposed to prohibition, of resource development. Resource development is perfectly legal in this country, and is a significant part of Canada's economy. Before any project proposal can be developed, most resource projects require mineral rights which the developer must acquire from the government (often at a significant expense). It is a well-established common law principle that a right to mines and minerals includes the right to do all things necessary to work and recover the minerals.[5] As a result, once mineral rights have been acquired, the developer has a legitimate expectation that it will be allowed to develop the resource. All Canadians should similarly have an expectation that once mineral rights have been issued, the resource will be developed for their benefit. This does not mean that the mineral rights can be developed no matter the consequences, but absent extraordinary circumstances the focus of the regulatory process should be on how the resource is developed, not whether it is developed. Similarly, environmental assessments should be about informed decision-making in furtherance of good regulation.

The Panel's approach to consensus-based decision-making and evaluating projects against sustainability criteria does not give meaningful consideration to the legitimate expectations of mineral rights' holders (and those of the Canadian public) and the purpose of environmental assessment.

Implications of the Panel's recommendations on Canadian competitiveness

In our experience, many of the companies that propose resource developments in Canada also have investment opportunities in foreign countries and must evaluate their Canadian projects against other investment options. To do so, they need to understand the "rules of the game" in each jurisdiction to understand what is required and how long it will take to obtain regulatory approvals, and the ultimate risk that approvals will be denied at the end of that process. Canada needs to ensure that its environmental assessment process is robust and can be relied upon by the Canadian public. But any reforms should also consider the impacts to the competitiveness of Canada's resource industries, which are a significant part of the Canadian economy. Ignoring the economic leg of the sustainability stool is not helpful to informed decision-making.

In our view, many of the Panel's recommendations are sound and would improve the current environmental assessment process. Others, however, create unacceptable risk because of the level of uncertainty they inject into a process that is already thought to be broken in international markets.

 Footnotes

[1] Lower Churchill Hydroelectric Generation Project Joint Review Panel, Report of the Joint Review Panel, Lower Churchill Hydroelectric Generation Project (August, 2011) at 354.

[2] Brundtland et al., Our Common Future, the Report of The World Commission on Environment and Development, (Oxford University Press: Oxford, 1987).

[3] Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, at 48.

[4] Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), [2004] 3 SCR 550.

[5] Borys v. Canadian Pacific Railway, [1953] A.C. 217 (P.C.).

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Canada LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Canada LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions