Canada: Sweeping Changes Proposed To Canada's Environmental Assessment Legislation

Last Updated: February 14 2018
Article by Sarah R. Levine

The parliamentary review of Canada's federal environmental assessment and regulatory processes, initiated by the Trudeau government in 2016, has culminated in proposed sweeping changes to the Canadian Environmental Assessment Act, 2012 ("CEAA 2012"), the Fisheries Act, the Navigation Protection Act, and the National Energy Board ("NEB").

Bill C-69, which was tabled last week, proffers the notion of "One project. One assessment", which reflects Ottawa's goal of creating a more streamlined process for the review of designated projects.  This change seems aimed at pleasing project proponents. 

On the other hand, the Bill introduces the concept of a "planning phase" to the impact assessment process before an actual impact assessment is done, with attendant consultation obligations.  It also widens the type of impacts that will be assessed.  These changes seem aimed at pleasing stakeholders such as landowners, environmental groups and Indigenous peoples.  It will be interesting to see whether this new regime is successful in achieving these different aims, which if not inherently contradictory certainly can be in contentious cases.

So what exactly is in Bill C-69 and what will Canada's federal environmental assessment process look like, assuming these proposed changes become law?

Enacting the Impact Assessment Act and the Canadian Energy Regulator Act

The CEAA 2012 was introduced under the Harper Conservatives and, while touted as industry-friendly legislation, has been the subject of much criticism from both environmental groups and industry alike due to both the perceived scaling back of environmental protections as well as its review process which critics charge is inefficient. In response to this, the Trudeau government is proposing to repeal the CEAA 2012 and replace it with the Impact Assessment Act.

Currently, there are three separate agencies ("responsible authorities"), each with their own set of rules, responsible for conducting environmental assessments: the NEB, the Canadian Nuclear Safety Commission ("CNSC") and the Canadian Environmental Assessment Agency ("CEAA").  All designated projects, as defined in the Regulations Designating Physical Activities (or as designated by the Minister of Environment), undergo an environmental assessment by one of these responsible authorities. 

Bill C-69 seeks to streamline these multiple agencies by creating the Impact Assessment Agency of Canada ("IAA"), a single body designed to carry out the review of all major projects in Canada.  In addition, the NEB will be replaced by the "Canadian Energy Regulator".  The IAA will bring the impact assessment ("IA") process under the authority of a single agency, scrapping the NEB's and CNSC's assessment powers. The IAA would work with the Canadian Energy Regulator, the CNSC and Offshore Boards to ensure that safety and other important regulatory criteria are considered in the new IA review process.

Key features of the IA process

Arguably the most significant change in the proposed IA process is the shift away from decisions based solely on a determination of adverse environmental impacts to one that takes an integrated approach to considering whether a designated project's adverse effects are in the "public interest."  This public interest determination will not only take into consideration the potential environmental impacts of the project, but also incorporate considerations such as the effect of the project on the government's ability to meet its climate change commitments, the extent to which the designated project contributes to sustainability, the impacts on Indigenous groups and rights and "the intersection of sex and gender with other identity factors".  Impact assessments under the IAA must also consider "any alternatives to the designated project", a requirement that had been in the old Canadian Environmental Assessment Act but was excluded in the CEAA 2012.

The new IAA mandates an initial "Early Planning" phase of up to 180 days that will engage Indigenous communities and the public in meaningful discussion to determine whether or not they will be affected by the proposed project.  The Minister will have the power to decide that a project not even proceed to an impact assessment if the Minister is of the opinion that "it is clear that the designated project would cause unacceptable effects".  This appears to be intended to allow the government to reject a project on broad policy grounds before a proponent invests significant time and money.

The IAA will have set timelines for the review of projects: a maximum of 300 days for smaller projects with fewer assessment requirements (so that they can be carried out in a "timely manner"); and 600 days for bigger projects that are subject to a panel review, a tighter turnaround than the current 24 months (730 days) under CEAA 2012.  Following the Impact Assessment, there will be a maximum 30 day window for a decision to be rendered if the Minister determines a public interest component, or 90 days if Cabinet makes the public interest determination.

The existing "standing test," which acts as a threshold that is determinative of who can participate in the regulatory review process, is being eliminated in order to give members of the public a greater chance to provide input. The legislation emphasizes the critical need for the IAA to meaningfully consider impacts on Indigenous rights and culture early on in the review process, for which the federal government will be providing financial support.

Canadian Energy Regulator- the New NEB

The National Energy Board is slated to be replaced by the Canadian Energy Regulator ("CER"), whose job it will be to oversee the regulation of pipelines and the traffic, tolls and tariffs relating to the transmission of oil and gas through them.

The NEB's ability to satisfy the Crown's duty to consult with First Nations or to undertake environmental assessments in general was the subject of criticism for many years. Among other things, the creation of the CER is intended to bolster capacity in areas such as environmental science, community development and Indigenous traditional knowledge.

However, Minister McKenna has indicated that the federal cabinet will retain its right to approve projects that it feels are in the national interest, even if an assessment process determines a project could cause significant environmental, health, or socio-economic effects.  This veto power of the federal government to approve projects that have not passed a review will no doubt disappoint certain environmental and Indigenous groups, but Minister McKenna asserts the need for balancing all Canadians' interests, noting that "Canadians want a modern environmental regulatory system that protects the environment, supports reconciliation with Indigenous people and attracts investment."

Next Steps

The federal government is presently seeking input from Indigenous peoples and the broader public on regulations and policy changes required to accompany the legislation. In particular, the government is seeking public comment on two key proposed regulations under the IAA by April 15, 2018: a revised "Project List" to identify the major projects to be subject to the IAA and the Proposed Information and Time Management Regulations which will replace the current requirements for a designated project's description.

The tabling of Bill C-69 flows from the Trudeau government's commitment to engage in a critical review of Canada's federal environmental and regulatory processes to address concerns from various groups about meaningful engagement, inefficiencies, and balancing the country's environmental goals with its desire to remain competitive in getting Canadian resources to market.

With promises of "more predictable and consistent timelines", decisions based on "robust science, evidence and Indigenous traditional knowledge" and more coordination with the provinces "to support one project one assessment", we will be closely following the progress of this draft legislation, as its potential to usher in a new era of federal project impact assessment might have significant impacts on the future of Canada's industries and economy, but also on federal-provincial and Crown-Indigenous relations.

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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Sarah R. Levine
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