Canada: Moving Towards Sustainability And Public Interest: Federal Government Introduces The Impact Assessment Act

Last Updated: February 12 2018
Article by Canadian ERA Perspectives, Peter Brady, Joanna Rosengarten and Stephanie Axmann

Most Read Contributor in Canada, September 2018

On February 8, 2018, the federal government introduced the Impact Assessment Act ("IAA" or "Act"), federal legislation to replace Canada's current environmental assessment legislation, the Canadian Environmental Assessment Act, 2012 ("CEAA 2012").

The proposed IAA is the result of the federal government's review of the scope and process of Canada's federal environmental assessment legislation, which began with the establishment of an external Expert Panel in August 2016. As we previously wrote, on April 5, 2017, the Expert Panel released a report that contained various recommendations to fundamentally change the federal approach to project assessment. Such recommendations included the consideration of a broader range of project impacts, the establishment of a single impact assessment agency, increased participation of Indigenous groups, and earlier participation of the public and Indigenous groups in the planning process for assessments. Many of these recommendations have been implemented in the proposed IAA.

A Quick Overview

The IAA differs significantly from the current environmental assessment process in place under CEAA 2012. The new legislation moves away from a consideration of the environmental effects of a designated project towards a broader assessment of project impacts ("impact assessment" or "IA"), including impacts on social and health aspects, on the economy, and on Indigenous peoples, in each case looking at such impacts on current and future generations. A determination of whether a designated project should go ahead would require a consideration of whether it is in the public interest, how it impacts on sustainability and whether it will encourage or deter the federal government's commitments on climate change. The new IAA would establish a single agency that is responsible for conducting IAs, would increase public participation in the conduct of IAs beginning with a new early planning phase, and would significantly increase the participation of Indigenous groups and consideration of the impacts a project may have on Indigenous groups and peoples.

A Closer Look

  • Designated Projects. Only "designated projects"—those that are prescribed in a 'Projects List' regulation or are specifically designated by the Minister—would be subject to the IAA. The ability for the Minister to designate a project that is not on the list is similar to that found under the current CEAA 2012 i.e. the Minister may designate a project if it may cause adverse effects or if public concerns related to those effects warrant designation. The trigger for an IA would be the carrying out of a designated project, which is prohibited until the IA is completed. Also, federal authorities are specifically prohibited from exercising any powers (such as issuing licenses or permits) with respect to a designated project, or providing any financial assistance enabling a designated project to be carried out, unless an IA has been completed.
  • Types of Impact Assessments. There are two types of IAs under the proposed legislation: IAs carried out by the new Impact Assessment Agency of Canada (the "Agency") and IAs carried out by review panels.

    1. Impact Assessment Agency of Canada. The proposed legislation establishes a single federal agency to lead all IAs for designated projects. The Agency would be responsible for coordinating consultations and ensuring opportunities for public participation. The Agency would have wide-ranging powers, including the ability to require that additional studies be conducted or additional information collected for an IA. The Agency would ensure that the IA is conducted and that an IA report is prepared. The final decision of whether a designated project should proceed would be made by the Minister (or the Minister could refer the decision to the Governor in Council). The Agency would, following receipt of an initial project description, determine if an IA is required for a project, taking into account potential impacts on matters within federal jurisdiction.
    2. Review Panels. Following the commencement of an IA, the Minister would have the power to refer the IA to a review panel if he or she is of the opinion that such referral is in the public interest. In making this decision, the Minister would be required to take into take into account the extent of potential adverse effects and the public concerns regarding the project. Where a project involves physical activities that are regulated under the Nuclear Safety and Control Act or the Canadian Energy Regulator Act, the Minister must refer the IA to a review panel which would include members with specific expertise in these areas. A review panel would establish terms of reference, conduct the IA, hold hearings to allow adequate public participation, and prepare an IA report. The final decision of whether a project should proceed would be made by the Governor in Council.
  • Early Planning Phase: The IA process would begin when the proponent of a designated project provides the Agency with a project description that is posted on the Agency's website. The public would be provided with opportunity to comment on the project description and the Agency would be required to offer to consult with Indigenous groups that may be affected by the project. The Agency would be required to provide the proponent with a summary of issues (including those raised by the public and Indigenous groups) and the proponent would be required to provide a notice of how it intends to address such issues. All notices would be publicly available on the Agency's website.
  • Impact Assessment. The IAA requires a consideration of a broad range of impacts aimed at understanding how a project may affect the environment, as well as health, social and economic issues over the long term. The proposed legislation sets-out a long list of factors that must be specifically considered in an IA including:

    • the effects of potential project accidents and malfunctions;
    • any cumulative effects that are likely to result from the designated project (in combination with other activities that have or will be carried out);
    • impacts on any Indigenous group and on the s. 35 rights of Indigenous peoples of Canada;
    • any traditional Indigenous knowledge provided with respect to the project;
    • community knowledge related to the project;
    • public input and commentary;
    • the purpose of and need for the project;
    • alternative means of carrying out the project;
    • alternatives to the project;
    • the extent to which the project contributes to sustainability. Sustainability is defined to mean "the ability to protect the environment, contribute to the social and economic well-being of the people of Canada and preserve their health in a manner that benefits present and future generations";
    • the extent to which the project hinders or contributes to Canada's obligations and commitments in respect of climate change;
    • the intersection of sex and gender with other identity factors. The federal government has stated that it will require a gender-based analysis (GBA+) for every review. Such an analysis would, for example, study how the influx of male workers in a remote work camp could affect women living in nearby communities; and,
    • any other factors that the Agency or Minister require to be taken into account.
  • Decision-Making & Public Interest. The decision framework has shifted to a determination of whether a project is in the "public interest" rather than whether it causes significant adverse environmental effects. Decisions on a project would be made by the Minister (in the case of IAs conducted by the Agency) or by the Governor in Council (in the case of IAs conducted by a review panel) and would be based on whether a project with adverse effects is in the public interest. This "public interest" determination must include a consideration of: (i) the extent to which the designated project contributes to sustainability; (ii) the extent of the adverse effects; (iii) the implementation of the mitigation measures; (iv) the impact that the designated project may have on any Indigenous group or peoples or their rights; and, (v) the extent to which the effects of the designated project hinder or contribute to the Government of Canada's ability to meet its environmental obligations and its commitments in respect of climate change.

The concept of sustainability—the ability to protect the environment, contribute to the social and economic well-being of the people of Canada and preserve their health in a manner that benefits present and future generationsis central in the proposed legislation. Fostering sustainability is listed as a purpose of the IAA, sustainability is specifically included in the factors to be considered in conducting the IA, and sustainability is one of the factors guiding the determination of whether a project is in the "public interest".

  • Regional and Strategic Assessments. The IAA provides the ability to conduct regional impact assessments to consider existing and future effects of projects carried out in a federal region, as well as strategic assessments of any federal policy, plan or program that is relevant to IAs. The federal government has indicated that the first strategic assessment will be conducted on climate change and will be aimed at providing guidance on how greenhouse gas emissions should be assessed in individual project reviews.
  • Indigenous Participation and Consultation. The IAA sets out to achieve the Government of Canada's commitments towards reconciliation with Indigenous peoples through a number of substantive measures. Broadly, these measures are focused on (i) increasing opportunities for Indigenous participation and cooperation with government in IA processes and decision-making; (ii) enhancing recognition and consideration of Indigenous rights and interests; and (iii) enhancing consultation and engagement opportunities for Indigenous groups. We will address Indigenous matters under the Act in more detail in a further blog post, but in brief:

    • Increased Indigenous participation and cooperation opportunities. The Minister is granted broad authority to enter into agreements or arrangements with Indigenous "jurisdictions" (defined in the IAA) on a range of subject matters, which includes the exercise of powers, duties and functions in relation to impact assessments. The Minister also has the power to substitute an Indigenous jurisdiction's process for assessing the effects of designated projects for the IA process. The Agency has authority to delegate to Indigenous jurisdictions the carrying out of any part of an IA and the preparation of the IA report. Although these types of arrangements are discretionary, they give rise to potential opportunities that would significantly shift assessment and decision-making authority from government to Indigenous groups.
    • Enhanced recognition of Indigenous rights, interests and knowledge. Factors that must be taken into account in an IA include not only the adverse impacts of the project on Indigenous peoples' s. 35 rights recognized and affirmed in the Constitution Act, 1982, but also more broadly the impact of a project on any Indigenous group. Other Indigenous-related factors that must be considered include: traditional knowledge, if provided; considerations related to Indigenous cultures; community knowledge; and any assessment of the effects of a project that is conducted by or on behalf of an Indigenous governing body. Further, in determining whether a project is in the public interest, the Minister or Governor in Council, as applicable, must also broadly consider the impact that the project may have on any Indigenous group in addition to any adverse impacts on s. 35 rights.
    • Enhancing consultation and engagement opportunities for Indigenous groups. Notably, at the early planning phase, the Agency is required to offer consultation with any applicable "jurisdiction" and with any Indigenous group that may be affected by a project. This signals a shift towards early and increased Crown-Indigenous consultation, whereas the current practice is heavily proponent-driven. The IAA does not expressly address the proponent's role in consultation. Other measures to increase consultation and input by Indigenous groups include the establishment of an Indigenous Advisory Committee to advise the Agency with respect to Indigenous interests and concerns in respect of assessments under the IAA, and the establishment of a participant funding program.
  • Transitional Provisions. The IAA sets out transitional language that charts the course for designated projects that were commenced under CEAA 2012 or, in rare circumstances CEAA 1992, where the environmental assessments are not yet concluded. Projects that were designated projects under CEAA 2012 where a screening decision has been made to have an assessment done are continued under the new IAA. Correspondingly, if an assessment has been started under CEAA 2012 but all the studies and information have not yet been gathered, these assessments will move to the new IAA process. Environmental assessments under CEAA 2012 that have started and where all studies and information have been gathered will continue under CEAA 2012. Conspicuously absent from the IAA is any clarity on the possible application of the IAA to projects that are not designated projects under CEAA 2012 but that may be designated projects under the IAA. This lack of clarity will undoubtedly create some unease for current project proponents or projects in the development and planning stages. The IAA grants jurisdiction for additional transitional matters to be dealt with through regulation. We can anticipate that the details of often tricky transitional provisions will be set out in the development of the Projects List regulation in the coming months.
  • Timing. The federal government has stated that the proposed IA process is aimed at providing greater efficiency and consistency for major project reviews. The proposed IAA includes timelines for all aspects of the process, however, such timelines can be increased and suspended in most cases. Rigorous management of the proposed timelines will be required in order to ensure that the IAA process does indeed provide greater efficiency. The federal government is currently seeking comments on time management regulations, including on factors to consider in suspending timelines. Notably, once a Decision Statement is issued for a designated project following the IA, section 70(1) requires that the Minister establish a period within which the proponent must substantially carry out the project. These serves to create a best-before date on the currency of an IA for a project.

The federal government is currently seeking comments on the approach for developing the Projects List regulation, which will determine the projects that may be required to undergo an IA under the proposed legislation. The government has stated that it is developing a criteria-based approach that will focus IAs on projects that have the most potential for adverse environmental effects in areas of federal jurisdiction. As noted above, the government is also seeking comments on time management regulations as well as on information requirements, such as the information that a proponent is required to provide to the new Agency in the early planning phase of the process. Comments can be submitted at https://www.impactassessmentregulations.ca/.

It is expected that regulatory proposals will be released for comment in Fall 2018 and draft regulations will be formally published in early 2019. Based on this timing, we would expect a new federal impact assessment regime to be in place in summer of 2019. We will continue to monitor the status of the proposed IAA and regulations, and we welcome any questions or comments.

Please see our post on the changes to federal navigable waters protection legislation, and changes to the Fisheries Act.

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