Too soon to determine if Trudeau government’s regulatory overhaul creates clarity – and unity

The Government of Canada announced today its long-awaited regulatory overhaul of the assessment and approvals process for major natural resources projects in Canada.

Spreading out across the country, key federal ministers, led by Minister of Environment and Climate Change, Catherine McKenna, Minister of Natural Resources, Jim Carr, and Minister of Fisheries and Oceans, Dominic LeBlanc, championed the new legislation as essential to ensuring a clean environment and a strong economy.

The Trudeau government has characterized its overhaul of the regulatory process as both restoring environmental protections lost under the Harper government and as providing clarity for project proponents, citing the need to prevent lengthy legal battles over project approvals and the need to protect the public interest.

By announcing the changes simultaneously nationwide, the Trudeau government is seeking to combat any perception that the overhaul is one of just regional (e.g. Western Canadian) concern.

What This Means

The changes address central mandate commitments for Ministers McKenna and Carr to, “review Canada’s environmental assessment processes to regain public trust and introduce new, fair processes.” In his announcement, Minister Carr made specific reference to the need to prepare for more than $500 billion in potential resource projects over the next decade.

However, opponents on both sides of the spectrum were quick to question the changes. Federally, the Conservative Party has criticized the new process, stating that the legislation still lacks assurances that projects will proceed on time. Alberta’s Opposition Leader, Jason Kenney, attacked the process as “increasing bureaucracy” and discouraging of future investment, while federal Green Party leader Elizabeth May has questioned whether the new process could place federal regulators in a conflict of interest.

It still remains to be seen whether this new process will provide added clarity. Regulations defining key parameters have yet to be determined; specifically what constitutes a “smaller project” or how to measure key criteria such as long-term health, gender, or Indigenous impacts.

Should federal regulations fail to provide adequate clarity around these new considerations, it is quite possible that a new generation of legal challenges will ensue – this time from proponents as well as intervenors, since all might seek clarity. Public or Indigenous groups could also challenge federal timelines and supports as inadequate to accommodate participation.

While previous federal assessments for major projects such as the Trans Mountain Expansion and Keystone XL are unaffected by the proposed legislation, it is ultimately too soon to determine whether proponents will take comfort in these changes and pursue new development.

Overview of Proposed Changes

Expanded Process

The Canadian Environmental Assessment Agency will be dissolved and the Canadian Environmental Assessment Act, 2012, will be repealed in favour of a new Impact Assessment Agency of Canada (and a new Impact Assessment Act). This Agency will be responsible for leading all federal reviews of major projects in collaboration relevant regulators.

Critically, the new review process will be expanded in scope to encompass:

• Long-term health and socio-economic impacts for local populations;
• Implications for Indigenous peoples, rights, and culture;
• Public participation in the review process;
• Protection for water, fish, and navigable waters;
• Increased participation of regulators in the assessment process; and
• Gender-based analysis assessments.

The Government will also expand the list of projects required to undergo the assessment process, but is seeking public input on specifics.

Timelines for reviews will also be set by the new Agency, although the federal government has already mandated that “smaller projects” will be restricted to an assessment timeline of 300 days. The specifics of what constitutes a ‘smaller project’ have not yet been determined.

Of note, the federal Cabinet will retain ultimate authority to approve a project it feels is in the national interest, despite the findings of the Impact Assessment Agency process.

Dissolution of the National Energy Board

The new process also establishes a new ‘Canadian Energy Regulator’ to replace the National Energy Board. Much like the National Energy Board, this new regulator will oversee regulations governing pipelines and related oil and gas transmission. However, it will not be mandated to lead the approvals of pipeline-related projects – a mandate that will fall to the new Impact Assessment Agency.

Implementation

The Government will support the implementation of the new framework with $1.01 billion over the five years. Funding will be specifically allocated to support the participation of Indigenous groups in consultations and to increase scientific involvement in the decision-making process.

Until the new framework and regulations are in place, the existing interim approach for project reviews, introduced in January 2017, will remain in effect.