Canada: Federal Government Standing Committee Provides First Indications Of The Content Of Pending Regulatory Reform

On March 13, 2012, the federal Standing Committee on Environment and Sustainable Development released its Report in the statutory review of the Canadian Environmental Assessment Act (CEAA). This Report recommends a variety of meaningful changes to the CEAA that would have significant implications for resource developers in Canada. Given the federal government's express commitments to regulatory reform, it is likely that many of these recommendations will be implemented by the federal government before the next federal election.

Report of the Standing Committee on Environment and Sustainable Development

The Standing Committee on Environment and Sustainable Development (Standing Committee) was tasked in October 2011 with conducting a statutory review of the CEAA. On March 13, 2012, it released its Report setting out the Committee's observations and recommendations. The most significant findings of the Standing Committee are as follows:

• Improving Timeliness: The Standing Committee endorsed the concept of environmental assessments (EAs) being carried out by the "best-placed regulator", which at the federal level should be the Canadian Environmental Assessment Agency (CEA Agency). The Committee also recommended eliminating the consideration of "alternatives to" a project under the CEAA, as EAs should not include a review of the proposed project's business case. Finally, while the Committee noted the recent regulations under the CEAA that provide mandated timelines for comprehensive study-level assessments, the Committee recommended further amendments to the CEAA framework to provide for binding timelines for all EAs under the Act.
• Reducing Duplication: The Standing Committee recommended that the CEA Agency should be empowered to determine that another jurisdiction's EA process fulfills the requirements of the CEAA and is thus "equivalent". The Committee suggested that specific pieces of provincial legislation deemed "equivalent" should be identified in a Schedule to the CEAA and that the CEAA should be amended to exempt projects subject to EAs under those provincial laws from the requirements of the CEAA. In addition, the Standing Committee recommended moving the CEAA away from a trigger-based approach to EA (i.e., if there is a "trigger" under section 5 of the CEAA then an EA is required) to a project list approach whereby projects requiring federal EAs are clearly enumerated in advance, subject to the discretion of the Minister of Environment to require an EA for a non-listed project.
• Aboriginal Consultation: The Standing Committee recommended that Aboriginal consultation be more fully integrated into the EA process. The Committee recommended that the federal government work with the provinces, territories and Aboriginal groups to develop a single Aboriginal consultation process applicable to all EAs under the CEAA.
• Certainty of Outcomes: While the Standing Committee noted that improving the EA process was important, it also recognized that improvements were needed to yield positive, measurable outcomes in federal EAs. To that end, the Committee recommended that EAs be conducted early in the planning stages of a project, which will facilitate cooperation with other jurisdictions and enhance the ability of Aboriginal groups to participate in project planning. The Committee recommended that EAs under the CEAA consider positive environmental effects of proposed projects, not just adverse environmental effects. Greater reliance on follow-up programs was also recommended by the Committee.

The Standing Committee concluded by stating that while reforming the CEAA is a good start for environmental regulatory reform: "The Committee encourages the federal government to implement the aforementioned reforms, and to consider potential reforms to other environmental laws". Such laws could include the federal Fisheries Act and the Species at Risk Act.

Implications of the Standing Committee's Recommendations

Overall, the Standing Committee's proposed changes to the CEAA would significantly improve the efficiency and timeliness of the federal EA process. Reviews would be conducted more quickly as a result of mandatory timelines and oversight by a single "best placed" regulator. The designation of "equivalent" provincial laws would reduce much of the duplication between provincial and federal EAs that are common today. Further, determining the applicability of the CEAA on the basis of a project list as opposed to the current "trigger" approach would provide additional certainty to project proponents of the likely regulatory requirements for their projects.

Given the federal government's express commitments to regulatory reform, it is likely that many of the Standing Committee's recommendations will be implemented by the federal government before the next federal election. It is important to recognize, however, that the Standing Committee's Report contains very high-level recommendations and the ultimate success and effectiveness of those recommendations will depend on the specific legislative amendments that the federal government proposes. Therefore, industry should monitor regulatory reform developments closely and should engage with the federal government as much as possible to influence the outcome of these efforts. In addition, industry should use the current momentum for regulatory reform to advocate for changes to other federal laws such as the federal Fisheries Act and the Species at Risk Act that also create regulatory uncertainty and inefficiencies for project proponents.

Shawn Denstedt's practice is comprised of energy, mining, environmental, regulatory and aboriginal law matters. Sander Duncanson specializes in environmental, regulatory and aboriginal law issues for natural resource development projects.

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