Canada: Ottawa Pitches A New Way To Assess Major Projects

Last Updated: February 21 2018
Article by Rodney V. Northey

On Feb. 8, 2018, through Bill C-69, the federal government unveiled long-awaited legislation to reform federal environmental assessments, the National Energy Board, and the Navigation Protection Act. These announcements complete the week of attention to federal environmental legislation that began with the Feb. 6 announcement of changes to the Fisheries Act to restore "lost protections" by expanding the scope of the current Act to apply to all fish habitat in Canada.

Bill C-69 proposes a new federal framework as follows:

  1. A new Impact Assessment Act will replace the Canadian Environmental Assessment Act, 2012.
  2. A new Canadian Energy Regulator Act will replace the National Energy Board Act.
  3. Amendments to the Navigation Protection Act will expand the scope of the current Act to include all navigable waterways in Canada.

To support this legislative reform, the main Government of Canada website provides access to a new "handbook" to address "Better Rules for Major Project Reviews," and to two "consultation papers" for public input dealing with the "Revising the Project List" and "Information Requirements and Time Management Regulations." The website also provides a schedule for future consultation. It provides that proposed regulations will be issued for comment this fall and draft regulations will be published in the Canada Gazette in early 2019.

Together, this legislative package implements a key election promise of the federal Liberals in 2015. Nevertheless, it's worth considering the extent to which this federal reform matches the government's ambition to both restore trust and get resources to market — objectives that many people consider contradictory. Considering the proposed legislation as a whole, this article examines three reforms that should improve the practice of federal assessment, as well as three areas in which the legislation fails to match government's stated ambitions.

Three important assessment reforms

1) Moving from EA to IA

The first and most obvious reform is that the government is moving from "environmental assessment" to "impact assessment." This change reflects a key recommendation in the report issued by the federal expert panel, titled Building Common Ground: A New Vision for Impact Assessment in Canada:

A matter that was heard resoundingly from Canadians was the need for an EA process to move beyond the bio-physical environment to encompass all impacts, both positive and negative, likely to result from a project. The many presenters who raised this suggested that social issues, economic opportunities, health impacts and cultural concerns should be considered.

The change from EA to IA involves two important reforms:

The first reform is that the IAA will expand federal assessment beyond its current and traditional focus on the "environment" – the biophysical environment of water, land, air, fish and wildlife – to fully address the human world (e.g., economics, society, culture, and health).

The second reform is that federal assessment will expand beyond its current and traditional focus on "adverse" effects – particularly "significant adverse environmental effects" – to assess, compare and weight benefits as well as impacts. The proposed IAA makes these two points in its proposed legislative purposes (s.6(b) & (c)), factors of assessment (s.22), and factors for decision making (s.63).

Furthermore, going beyond the recommendations in Building Common Ground, the proposed IAA requires a gender-based analysis (see, in particular, the factors of assessment: s.22(1)(s)) 1 in addition to assessments of environmental, social, health and economic impacts.

2) Triggers for IA

The second key reform is the trigger for impact assessment. The IAA proposes to continue reliance on a list of "designated projects" to provide the main trigger for IA. However, it proposes to develop this list based on new criteria. According to the discussion paper released for comment last week:

"The basic principle guiding the review of the Project List is the potential for adverse effects in an area of federal jurisdiction related to the environment." (p.3)

This principle appears very similar to a key recommendation from Building Common Ground:

"Federal IAs should only be conducted on a project, plan or policy that has clear links to matters of federal interest.

"The careful consideration and incorporation of federal jurisdiction is the starting point from which to answer the question of when federal IA should apply."

The proposed IAA sets out its own starting point for federal jurisdiction in section 7. This section looks very similar to section 5(1) of the current Canadian Environmental Assessment Act, 2012 (CEAA). However, this is not a broad list. Nor is it supplemented by the additional sources of federal jurisdiction that fit under s.5(2) of the CEAA. At this point, it is not clear how the new legislation will implement a broad approach to federal jurisdiction to guide the projects that require assessment. As presently worded, the proposed Schedule 3 to the Act does not appear to have sufficient scope to address this need.

3) Test for IA approval

The third reform is the test for IA approval. For the entirety of the more than 40-year history of federal assessment, the test has focused on the potential to cause adverse environmental effects – significant effects or unacceptable effects. The panel recommended reform of this test to provide a sustainability focus for federal IA. As stated by the panel:

"Sustainability should be central to federal IA. To meet the needs of current and future generations, federal IA should provide assurance that approved projects, plans and policies contribute a net benefit to environmental, social, economic, health and cultural well-being."

The proposed IAA references "sustainability" in its preamble, defined terms (s.2), purposes (s.6), factors of assessment (s.22), and its test for approval (s.63); however, the IAA does not make sustainability the test for approval. Instead, it proposes to use a "public interest" test, and to identify factors that must be considered to address the public interest. Sustainability is one of five mandatory factors that include the extent of adverse effects within federal jurisdiction, the implementation of appropriate mitigation, potential impact on Indigenous rights or an Indigenous group, and the extent to which the effects hinder or contribute to meeting Canada`s climate obligations.

Overall, this reform is an improvement on the current approach; however, as now drafted, this improvement is at the expense of providing decision-making certainty for proponents or other participants in the assessment process. It is thus important to move beyond simply a list of considerations that make up the "public interest" to a true "test" for approval.

Three ways in which the legislation falls short of the government's ambitions

As mentioned above, the government tasked the panel with providing reforms to restore trust, introduce new fair processes, and get resources to market. It also sought to have the panel address how to integrate into EA the government's May 2017 recognition of the United Declaration on the Rights of Indigenous Peoples (UNDRIP).

In response to these challenges, the panel recommended a new vision of assessment that included three major reforms:

  1. Starting the assessment with a new planning phase that would emphasize face-to-face meetings over technical documents;
  2. Requiring that all key assessment documents be prepared by an authority that would be independent of the proponent and any party to the assessment; and
  3. Establishing a quasi-judicial tribunal to provide alternative dispute resolution but also, as needed, expert decisions on all issues arising in the assessment process, including decisions on the scope of the assessment, and the affected rights of indigenous peoples.

Insufficient attention to early planning

Currently, under CEAA 2012, federal EA begins with the proponent filing a project description report with the CEA Agency or a similar document with the National Energy Board or the Canadian Nuclear Safety Commission. One concern with the present process was that it requires proponents to finalize details on the project before mandatory consultation begins. This creates an adversarial process because proponents are reluctant to change project details after they have invested time and resources in the details they present.

In response to this concern, the panel recommended that federal IA start with a "planning phase". As set out by the panel:

The Planning Phase represents a major change from current practice and is intended to bring parties to face-to-face meetings and open up discussion on proposed activities early, before critical elements are decided.

The IAA does include a new planning phase (it references this reform in its preamble, and provides some details in sections 10 to 15); unfortunately, however, these legislative details suggest that the planning phase is simply a new name for the existing screening process under CEAA 2012. Instead of face-to-face meetings of participants, the IAA proposes only written comments. It is also troubling that the IAA proposes a detailed project description report as part of planning, since this kind of detail can constrain planning discussions. Notably, the IAA makes provision for regulations by the Minister to set out the required considerations for this planning phase (s.112(a)); however, as yet, the legislation does not set out how the planning phase will improve planning or improve trust in the way the panel believed would occur through early, informal face-to-face meetings.

Not requiring that all key assessment documents be independent of the proponent

The current assessment process relies on proponents to prepare the majority of key assessment documents. The process begins with a proponent's project description report (PDR) and generally focuses on a proponent's environmental impact statement (EIS). Under this process, proponents produce increasingly voluminous documents and then everyone else reviews these voluminous documents, usually engaging experts. This review process includes governments (federal, provincial, municipal, Indigenous), the public (residents, NGOs, scientists) – all of whom provide comments in some sequence, and concludes with a proponent's response.

The panel found this process extremely inefficient and adversarial. It was inefficient not only because tens of thousands of pages come from a proponent, but because every proponent document must be reviewed and critiqued by everyone else. To restore trust and improve assessment timelines, the panel believed that everyone would benefit from following the practice of other jurisdictions to require independent assessment documents. The most notable example is under the United States National Policy Act where an EIS must be independent of the proponent and is subject to legislated page limits. As such, the panel recommended independent assessment documents as follows:

  • IA legislation require that all phases of IA use and integrate the best available scientific information and methods.
  • IA legislation provide any IA authority with power to compel expertise from federal scientists and to retain external scientists to provide technical expertise as required.
  • IA legislation require that any IA authority lead the development of the Impact Statement.

The proposed IAA proposes some important reforms regarding the use of existing data and creating a major federal database to providing access to existing studies. However, it contains no major reforms regarding the preparation of assessment documents. It is difficult to see how this acceptance of the status quo will deliver the sought-for results of improving trust and timelines.

No tribunal to provide timely expert decisions on all assessment issues

The proposed IAA creates the new "Impact Assessment Agency of Canada" (IAAC) to succeed and replace the current Canadian Environmental Assessment Agency.

It is also notable that the IAAC will be clearly and unequivocally the lead federal authority on IA. Though future IAs will involve other federal regulators, such as the newly-named Canadian Energy Regulator (to replace the National Energy Board), the IAA provides that IAs involving other federal regulators will be "joint" IAs. There will no longer be assessments led by and involving only the federal regulators.

However, the new IAAC will not make assessment decisions. Instead, the IAA proposes to keep the present system of ministerial and cabinet decisions on assessments.

Considering this response to the stated objectives that the government set for the panel, it is again difficult to see how acceptance of the status quo will improve timelines or restore trust. At present, the concluding decision making phase of assessments is extremely lengthy as well as ad hoc and behind closed doors.

Instead of the current options of ministers or the courts, the panel believed that a modern independent tribunal was a proven path to independent, expeditious and expert decisions:

The power to make IA decisions is aligned with the independence of the authority. Canada has longstanding experience of independent, quasi-judicial tribunals making final decisions, with perhaps the best-known example being the Canadian Radio-television and Telecommunications Commission (CRTC).

Although UNDRIP must be read as a whole, the panel found that several articles of UNDRIP related directly to the field of IA. These included:

  • Right to self-determination
  • Right to participate in decision-making and maintain institutions
  • Right to set own priorities and strategies
  • Right to make decisions over traditional territory
  • Right to free, prior and informed consent

The panel also believed that this tribunal could be aligned with UNDRIP. A new tribunal could include Indigenous tribunal members as are found across northern Canada through the many new comprehensive land claims. The panel also believed that this tribunal could address one of the most challenging aspects of UNDRIP regarding consent:

"Collaboration with all parties, especially Indigenous Groups, is key to the success of IA processes in general. Consent should therefore be provided under a collaborative framework which would include dispute resolution processes at decision points. Parties would have various options available to them to review the reasonableness of all decisions, including the reasonableness of Indigenous Groups withholding their consent."

Making an expert tribunal the primary decision maker was considered by the panel to be vastly more efficient than going to court or engaging ministers or cabinet. The panel also believed an independent and expert assessment tribunal offered many important opportunities to improve trust.

By contrast, it is difficult to see how the acceptance of the status quo on decision making will deliver the ambitious objectives of improving trust and timelines.

Conclusions

Though the new IAA is likely to improve the practice of assessment, it does not meet the government's stated objectives of restoring trust and getting resources to market. A key shortcoming is the lack of reform to improving access to independent expertise through assessment documents and decisions. The current system has proven to be inefficient despite legislated timelines. The lack of trust has resulted in court challenges to most of the recent government decisions on projects under the Canadian Environmental Assessment Act, 2012 (CEAA). It is not clear how the IAA as now proposed will do better on these major issues and we will monitor the further consultation efforts to see if these concerns are addressed.

Footnote

1 As explained in the IA Handbook released on February 8th, a gender-based analysis "would study how the influx of male workers in a remote work camp could affect women living in nearby communities." This kind of analysis has been part of international development work for decades. It has also featured in previous federal environmental assessments in the late 1970s and early 1980s.

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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