On June 20, 2016, the Federal Government launched a comprehensive review of four key environmental and regulatory processes, namely:

  1. The federal environmental assessment processes under the Canadian Environmental Assessment Act, 2012 (CEAA 2012);
  2. The National Energy Board (NEB);
  3. The Fisheries Act; and
  4. The Navigation Protection Act.

While the reviews of CEAA 2012 and the NEB will commence immediately, those concerning the Fisheries Act and the Navigation Protection Act are not anticipated to begin until September 2016, and as such, the following discussion focusses on CEAA 2012 and the NEB. The stated objective of the Fisheries Act and the Navigation Protection Act reviews is to "restore any lost protections and to incorporate modern safeguards".

In January, the Federal Government announced five principles guiding its discretionary decision-making powers on major natural resource projects. A full discussion of the principles can be found in a previous post. These principles were intended as an interim measure while the Federal Government conducted its comprehensive review, and were referenced in this announcement detailing the modernization process. Of note, is the Federal Government's promise that "[c]onsultation will be at the core of this review" in a coordinated, open and transparent process. Additionally, it was stated that proponents currently engaged in a CEAA 2012 process would not be required to return to the starting line.

Review of the Environmental Assessment Process

The Federal Government's stated goal for reviewing CEAA 2012 is to develop new, fair processes that are robust, incorporate scientific evidence, protect our environment, respect the rights of Indigenous peoples, and support economic growth. The review will include environmental assessment processes conducted by the Canadian Environmental Assessment Agency, the Canadian Nuclear Safety Commission, and the NEB.

The Minister of Environment and Climate Change will be leading the charge on reviewing CEAA 2012, and will establish an expert panel to review the processes. Public input has already been requested with respect to the expert panel's Draft Terms of Reference, which were released with the review announcement.

According to the Draft Terms of Reference, the CEAA 2012 panel's mandate is to conduct the review and prepare a report to the Minister setting out its recommendations as well as a summary of the input received from the public, Indigenous peoples and any other interested group or organization. The panel will be asked by the Federal Government to respond to various questions, including:

  • How to restore robust oversight and thorough environmental assessments of areas under federal jurisdiction, while working with the provinces and territories to avoid duplication?
  • How to ensure decisions are based on science, facts and evidence and serve the public's interest?
  • How to provide ways for Canadians to express their views and opportunities for experts to meaningfully participate?
  • How to require project advocates to choose the best technologies available to reduce environmental impacts?
  • How to ensure that environmental assessment legislation is amended to enhance the consultation, engagement and participatory capacity of Indigenous groups in reviewing and monitoring major resource development projects?

The estimated timeline for the CEAA 2012 expert panel review is:

Jul 20, 2016 Indigenous and public input on the Draft Terms of Reference
Aug 2016 Terms of Reference to be finalized & Expert Panel Appointment
Sep – Nov 2016 Consultation hearings across Canada
Jan 31, 2017 Panel Recommendation Report

Review of the National Energy Board

The Minister of Natural Resources has been charged with modernizing the NEB and ensuring that its composition reflects regional views and has sufficient expertise in such fields as environmental science, community development, and Indigenous traditional knowledge. While the NEB is included within the scope of the environmental assessment review insofar as it is a responsible agency under CEAA 2012, the Federal Government notes that modernization of the NEB "goes beyond" this responsibility.

The NEB modernization expert panel Draft Terms of Reference are also available for public input on the same timeline as the environmental assessment panel, which is by July 20, 2016. The mandate of the NEB expert panel includes: (i) to enable public participation and input on key themes; (ii) to provide opportunities for engagement, including meetings with key stakeholders and the general public; (iii) to engage national and regional Indigenous organizations, groups, and communities to enable their participation at regional and local levels; (iv) to work with regional Indigenous organizations in the planning and hosting of Indigenous in-person engagement events; and (v) to prepare a report that includes the panel's findings and recommendations to modernize the NEB.

The stated scope of the review is to look at issues specific to the NEB which fall outside the environmental assessment review process, including an examination of:

  • Governance – including the composition and expertise of Board members, the division of operational and adjudicative functions, the NEB's role in policy implementation, and delegation of authority to Board members and staff.
  • Mandate – including defining and measuring public interest, potentially clarifying the NEB mandate respecting data collection and analysis, and expand the NEB's mandate.
  • Decision-making Roles – including considering the current approach to appropriate decision-making roles for the NEB, Minister, and Governor-in-Council.
  • Legislative Tools for Lifecycle Regulation – including recommendations respecting lifecycle oversight and public engagement tools, safety and emergency preparedness tools, and land acquisition matters and related negotiation proceedings.
  • Indigenous Engagement – including recommendations respecting enhancement of the role of Indigenous communities in monitoring pipeline development and operations and in developing emergency response plans, and respecting how the interests of Indigenous peoples are balanced against many and varied societal interests in decision-making.
  • Public Participation – including identification of legislative changes to support greater stakeholder and public participation in various NEB activities.

The timeline for the NEB expert panel review is:

Jul 20, 2016 Indigenous and public input on the Draft Terms of Reference
Aug 2016 Terms of Reference to be finalized & Expert Panel Appointment
Sep – Dec 2016 Consultation hearings across Canada
Jan 31, 2017 Panel Recommendation Report

Comments on the Draft Terms of Reference can be submitted to Natural Resources Canada at: NRCan.NEBModernization-ModernisationONE.RNCan@Canada.ca.

Sharing Your Views

Public stakeholders can submit their views in the following ways:

Commentary

While improving the environmental and regulatory processes for new energy infrastructure developments is a positive development, the stated goals of the review process, such as "restoring public trust" and "modernizing" the NEB, are politically-charged terms, in keeping with the Liberal Party's 2015 campaign promises. This review process will likely spark debate about the purpose and objectives behind NEB hearings, particularly when they involve new infrastructure projects.

Historically, new major projects, such as the Alliance Pipeline, Sable Island and the Maritimes North-east and crude oil pipelines (such as the Express Pipeline) proceeded using regulatory processes that were focused on science. Social aspects of these major new projects were not "hot button" political quagmires.

Yet times have certainly changed. The more recent Mackenzie Gas Pipeline Project, Northern Gateway and the Trans Mountain Expansion Projects are all a testament to the fact that energy infrastructure projects seem to be "media watch" items, and ones which can serve multiple purposes well beyond simply the science of good pipeline engineering design, construction and operation practices. Social media has permitted everyone to express views (whether informed or not) on these topics. Prior attempts to focus the NEB's process on the science and not social acceptance have created politically charged outcomes; ones which the current Federal Government claims have given rise to concerns of public trust.

Those objectives were seemingly behind the Jobs, Growth and Long-Term Prosperity Act in 2012 and the implementation of CEAA 2012. However, the approaches taken in this legislation have been widely criticized and are seemingly the root cause for this review. What is not yet clear is whether this criticism means simply reverting to the way things were prior to 2012, or whether something more is at hand.

We believe there is a strong argument for the latter. The language of "modernization" suggests something more than a "back to the future" result. What is less clear, however, is whether "modernization" is intended to mean something other than an independent, quasi-judicial role for the NEB. For example, is contemplation going to be given to potentially duplicating the regulatory oversight regime by the creation of additional processes? We note this concern is not just speculation. As demonstrated in the recent announcements made by Minister Carr, an "advisory panel" separate and distinct from the NEB has been formed to advise the Minister on matters heard and considered by the NEB in its hearing process into the Trans Mountain Expansion case. While this approach hardly seems consistent with the intended objective of regulatory certainty embedded in the objective of process improvement; it perhaps provides a signal as to what "modernization" means for the NEB.

The bottom line is that these review processes will address what the public policy role will be for the NEB going forward. Doing away or weakening the NEB's long-standing role as an expert independent, quasi-judicial body would damage Canada's reputation and have far reaching adverse results. Expanding the role of the NEB so it becomes the arbiter of "social license" potentially introduces unnecessary regulatory uncertainty and delay. The best achieved outcome is clarity in defining the roles and responsibilities of the NEB and government. As a quasi-judicial independent expert body, the NEB's role ought to remain one of making decisions based on the objective hearing and testing of evidence. Whether new or "modern" approaches designed to perhaps fulfill government's constitutional responsibilities or to receive public commentary on other aspects of a project should fall in or outside of the NEB's process will no doubt be the key focus of this review process.

The Environmental, Regulatory and Aboriginal Group of McCarthy Tétrault will continue to closely monitor and play an active role in this review process.

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