Canada: Federal Government Overhauls Canadian Environmental Legislation

The federal government has, as promised, introduced two new pieces of legislation which together, overhaul the federal environmental assessment (now to be re-named impact assessment) regime in Canada; replace the National Energy Board (NEB) with a new Tribunal; and significantly amend fisheries and navigable waters legislation. Bill C-68 addresses the Fisheries Act modernization while Bill C-69 covers the other three topics. In doing so this government is effectively rolling back many of the changes enacted by the previous Conservative government. All of these new initiatives include the expansion of the role of Indigenous peoples in some of the processes under the acts, which are discussed in our February 2018 Blakes Bulletin: Implementing UNDRIP? Federal Government Releases Draft Environmental Legislation.

IMPACT ASSESSMENT REGIME ROLLED OUT

The changes in the new Impact Assessment Act (Act) include the creation of a new Impact Assessment Agency of Canada (Agency) that will conduct all reviews, a pre-filing consultation phase and new timelines for review and decision making. The scope of assessments will be broader and there are new factors to be taken into account when making decisions; but the ultimate decision as to whether projects can proceed will continue to be made by the minister or cabinet.

The Act and the Agency replace the Canadian Environmental Assessment Act, 2012 (CEAA) and the Canadian Environmental Assessment Agency, respectively. The Agency is an entirely new body and will be the single authority responsible for conducting all federal impact assessments, unless these are referred to a review panel. The NEB and the Canadian Nuclear Safety Commission (CNSC) will no longer have the authority to conduct reviews on their own.

The Act considerably broadens the scope of the assessment process and provides for enhanced consultation with groups that may be affected by proposed projects. Impact assessments will be conducted by the Agency or a review panel; however, the scope of effects that need to be taken into account under the proposed process is broader than the effects considered under CEAA. The effects to be considered are those within federal jurisdiction, which is consistent with the existing environmental assessment regime.

The factors that must be considered have been significantly expanded, and include: alternative means of carrying out the designated project that are technically and economically feasible, including through the use of best available technologies and the effect of those means; traditional knowledge of Indigenous peoples of Canada; the extent to which the designated project contributes to sustainability; 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; and any study or plan that is conducted or prepared by a jurisdiction, that is in respect of a region related to the designated project.

"Sustainability" is now included as a mandatory consideration and is defined as "the ability to protect the environment, contribute to the social, economic well-being of the people of Canada and preserve their health in a manner that benefits future and present generations". While this includes economic well-being, a notable omission from the extensive list of factors is direct economic considerations.

Key concepts from the proposed Act include:

  • Designated projects: The Act has retained the concept of "designated projects", which will include physical activities carried out on federal lands and that are designated by regulation. It is unclear if the regulations will mimic CEAA or will be substantially revised. We anticipate some broadening of the list.
  • Substitution: The Act has retained the concept of substitution, a process that requires only one assessment process where both federal and provincial assessments are required. Separate provincial and federal decisions will still be required, but one assessment attempts to limit overlapping regulatory requirements. Equivalency, another concept aimed at streamlining a dual provincial and federal assessment process under CEAA, would no longer be available.
  • Regional and strategic assessments: The Act provides for regional assessments to address cumulative effects of existing or future activities in a specific region and the assessment of federal policies, plans and programs, and issues relevant to impact assessments of designated projects through strategic assessments.
  • Projects carried out on federal lands, outside Canada or carried out, or financially supported, by a federal authority: The Act provides that these projects are to be considered so as to avoid significant adverse environmental effects as opposed to a consideration of adverse effects for other projects subject to an assessment.

The Act grants the Agency and minister considerable discretion compared to the existing environmental assessment process. Key provisions include:

  • Designating physical activities: The minister will continue to have the power to designate physical activities, which would then require them to undergo an impact assessment, if in the minister's opinion carrying out the activities would cause adverse effects, or if public concerns related to the effects warrant the designation.
  • A federal veto: The minister is also given the power, before the commencement of an assessment, to make an order directing the Agency not to conduct the assessment if the minister is of the opinion that it is clear the designated project would cause unacceptable effects. As the definitions of "effects within federal jurisdiction" and "direct or incidental effects" are broad, and the Act does not appear to further limit the minister's discretion in forming his opinion, this provision creates uncertainty for proponents.
  • Role of other federal agencies: The minister may also direct the Agency not to conduct an assessment, before commencement of an assessment, if a federal authority advises the minister that it will not be exercising power required of it under other federal acts that are required to carry out the project in whole or in part. This appears to detract from the benefits of a single authority as other federal agencies can block projects prior to an impact assessment being conducted.

The federal government will be releasing new regulations designating the physical activities (Project List) that will be subject to an impact assessment. It can be expected that the new regulations will expand the Project List as there have been concerns that the existing regulations under CEAA were not broad enough to sufficiently capture all projects that may require an assessment. The federal government has released a Consultation Paper On Approach to Revising The Project List to seek views on revising the Project List and is currently accepting submissions and public comments.

The Act includes a 180-day project planning phase that engages public consultation, other local jurisdictions and federal agencies and Indigenous people prior to the start of an assessment. The legislated timeline for the subsequent impact assessment process is 300 days, shorter than under CEAA; however, the additional time period for project planning is not included in the legislated impact assessment timeline. It is unclear how this will play out practically and if the impact assessment process will ultimately be longer or shorter than under CEAA.

There are numerous opportunities for the minister and cabinet to "stop the clock" during both the planning and assessment phases. The federal government has released a Consultation Paper On Information Requirement and Time Management Regulations to seek views on forthcoming regulations on information requirements for the early planning phase and the circumstances in which the minister can stop the clock for the legislated timelines during the assessment process. They are currently accepting submissions and public comments.

Not all projects already under the existing CEAA process have been grandfathered in by this new legislation and some assessments may be continued under the new impact assessment process, depending on the decisions already made under the current process. For example, environmental assessments that are currently being conducted by the NEB or the CNSC, in respect of which the Agency considers that the proponent has not collected the information or undertaken the studies required, would be continued under the new process once the Act comes into force. The transitional provisions create considerable uncertainty for ongoing projects.

NEB TO BE REPLACED BY NEW TRIBUNAL

As part of the modification of the approval process for major natural resources and energy projects, Bill C-69 also contemplates the implementation of the Canadian Energy Regulator Act (CERA). Under CERA, the NEB will be replaced with the Canadian Energy Regulator (CER) and the NEB Act will be repealed and replaced with the CER Act. The CER will continue to be based in Calgary, although there will no longer be a residency requirement imposed on full-time hearing commissioners as there is under the NEB Act. The administrative functions of the CER will be separate and distinct from the CER's adjudicative functions, with a separate board of directors and slate of hearing commissioners.

The CER will continue to oversee federal, interprovincial and international energy projects in a manner similar to the present regime under the NEB, albeit with a few significant changes, including: all decisions of the regulator must involve consideration of any adverse effects on the rights of Indigenous peoples of Canada; public participation in pipeline hearings will no longer be restricted to persons who are directly affected; cabinet's existing discretion to overturn a decision of the regulator involving pipeline project approvals will be removed — however, its right to request that the regulator reconsider any of its pipeline decisions will remain.

All energy projects that are subject to an impact assessment would undergo a joint integrated hearing overseen by members of both the Agency and the CER.

The factors to consider in determining if a pipeline project is in the public interest are more explicitly set out than under the present Act. Additional factors to consider specifically include, among other things: safety and security of persons and the protection of the environment; health, social and economic effects, including with respect to the intersection of sex and gender with identity factors; the interests and concerns of the Indigenous peoples of Canada; and environmental agreements entered into by the Canadian government, which would include agreements pertaining to climate change.

The proposed changes have supposedly been introduced to make the energy approval process more streamlined as well as more transparent and readily accessible to the public. It remains to be seen if those two goals are compatible and if they can be attained.

From a more granular perspective, the proposed changes will require additional guidance and regulatory direction. It remains to be seen what that guidance will look like and whether the revised energy approval process is indeed more streamlined.

FISHERIES ACT FURTHER MODERNIZED

The signature feature of the proposed Fisheries Act amendments is the reversion of the prohibitions in the Fisheries Act on causing serious harm to fish, back to two separate prohibitions: death to fish and the harmful alteration, disruption and destruction of fish habitat, commonly referred to as HADD. The first key difference between the two prohibitions is that serious harm to fish focuses on permanent harm to fish and fish habitat, while HADD also prohibits disruption of habitat, which has been interpreted to include more fleeting or temporary impacts. What difference the serious harm prohibition actually created for projects was a question of biology, and in many instances, especially with large projects, was a distinction in terminology more than in substance. The second difference between the two prohibitions is the geographic scope, which was limited in 2012 to fish and fish habitat that are part of aboriginal, commercial and recreational fisheries. Through policy statements, Fisheries and Oceans Canada took the position that the 2012 prohibitions had an expansive reach, primarily due to the inclusion of the aboriginal fishery. Nevertheless, the current government has chosen to remove this limiting language, reverting to applying the prohibition to all Canadian fisheries waters, as had been the case prior to 2012.

The amendments do not touch the section 36 prohibition on deposit of deleterious substances that has been in place since the 1970s, or the significant fines, extended limitation period and broader self-reporting requirements that were added to the Fisheries Act in 2012.

One of the features of the changes made in 2012 was the modernization of the processes under which projects that had the potential to cause serious harm to fish could move forward. Broader regulatory powers to create tools under which projects could proceed without authorizations, and the policies developed in furtherance of these powers, resulted in more efficient mechanisms for planning projects to avoid or mitigate the prohibited harm, or for obtaining authorizations where avoidance was impossible. Bill C-68 continues this trend by expanding the authority to make regulations authorizing works to include both individual and classes of works. It also provides power to the ministry to establish standards and codes of practice regarding the avoidance of death of fish or HADD, the conservation and protection of fish or fish habitat and the prevention of pollution.

The proposed amendments also introduce explicit references in the Fisheries Act to tools such as mitigation and the use of compensatory habitat previously only recognized by policy. For example, Bill C-68 includes a new prohibition on harm to ecologically significant areas, but provides the minister with the authority to issue authorizations to carry out work in them, if satisfied that avoidance and mitigation measures may be implemented to achieve objectives for the restoration and protection of fish and fish habitat. Another proposal is for fish habitat banks, which will allow a proponent to make an agreement with the government to carry out a conservation project within the same area where it is proposing to carry out work that will impact fish habitat.

Another prominent feature of the proposed amendments is a new category of projects (or classes of projects), referred to as designated projects, which will be prescribed by regulation and which will be required to have a permit issued under the Fisheries Act. This would appear to be a significant departure from the current requirements to have authorizations only when project will cause specific prohibited harms. The impact of these changes will become clearer when the regulations prescribing designated projects are released.

Bill C-68 directs what the minister must consider when making regulations or orders under the fish habitat and pollution prevention provisions in the Fisheries Act. Notable in these is a requirement to consider the contribution to the productivity of relevant fisheries by the fish or fish habitat that is likely to be affected by a project; whether there are measures and standards or to avoid mitigate or offset death to fish or HADD; and the cumulative effects of carrying on proposed works. The minister also has the discretion to consider, among other things, the application of a precautionary and ecosystem approach and sustainability of the fisheries.

In keeping with the trend towards greater transparency, the amendments require the establishment of a public registry on which regulatory instruments, guidelines and policies, as well as authorizations or permits issued under the Fisheries Act will be posted. Bill C-68 also introduces alternative measures agreements that allow for the diversion of charges under the Fisheries Act under conditions agreed upon with an accused and carried out under the supervision of the court.

NAVIGABLE WATERS PROTECTION REFORM

The government is also proposing significant new measures to regulate projects that could impact navigable waters in its amendments to the Navigation Protection Act (which will be re-named the Canadian Navigable Waters Act.)

The Canadian Navigable Waters Act would require proposed major works (such as large dams) to receive an approval before building begins. (What will be considered a "major work" has not yet been disclosed.) The Canadian Navigable Waters Act would also require an approval to construct or place works in, on, over, under, through or across a Scheduled navigable water in Canada that may interfere with navigation. For navigable waterways not on the Schedule, the Canadian Navigable Waters Act would require that proponents issue a public notice and provide information about proposed works (except for minor works) on all navigable waters to give people the opportunity to ask questions and voice concerns before construction begins. It would also introduce a resolution process that would allow the minister of transport to review navigation concerns for works on navigable waters not listed on the Schedule where the concerns are not resolved. The intent is that various waters would be added to the Schedule. "minor works" would not require assessment.

The Canadian Navigable Waters Act would enable the minister of transport to more fully address obstructions and potential obstructions on all navigable water in Canada, by increasing the ministry's order-making powers and to undertake work to remove obstructions to navigable waters and recover the costs from the persons responsible.

Bill C-69 provides for more transparency by enhanced public notice and consultation requirements as well as a public registry.

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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