Canada: Environmental And Social Risk: Contractual And Project Financing Issues

What Is Environmental Risk?

• Environmental Laws And Regulations Impose Liabilities And Constraints On A Project
• Pre-Existing Contamination And Contamination During The Construction And Operation Of A Project
• Environmental Permitting Requirements Of Governmental Authorities Which Will Be Involved With The Project

What is Social Risk?

• Adverse local interest groups can delay project implementation, increase the cost of implementation and undermine project viability (NIMBY)
• Impact on local communities (e.g. noise, pollution, quality of life)
• Protesters

Navigating Permitting Issues

Concurrent Jurisdiction

• Environmental law is an area of jurisdiction shared between the federal government, the various provincial and territorial governments, and municipalities.
• Federal: jurisdiction over federally owned land and undertakings, fisheries waters, shipping, aviation (including airports), railroads, manufacturing, import and export of toxic substances, interprovincial and international transportation, as well as certain areas designated as being of national importance, such as ports, security and nuclear power.
• Provinces regulate everything else.
• Municipalities: delegated power to pass bylaws with respect to storm and sanitary sewer discharges, pesticide use, noxious weeds, noise and certain other nuisances.

Proponents failing to consider the jurisdiction of all levels of government

• As an area of concurrent jurisdiction, both orders of government have valid environmental powers
• Having met one order of government's rules, does not excuse the need to meet the other order's rules
• Several examples:
  • Energy East – the need to have both a Federal environmental assessment as well as an assessment under Quebec law
  • Trans Mountain Expansion – BC is required to conduct its own assessment as well as a Federal one

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