Canada: The New Federal Impact Assessment Act

Environmental Bulletin
Last Updated: September 2 2019
Article by Kai Alderson, Bridget Gilbride, Emilie Bundock and Stephanie Sanger

On August 28 and 29, 2019, the Impact Assessment Act ("IAA") will come into force, along with a new set of Regulations. After a lengthy review, this legislation received Royal Assent on June 21, 2019, the last day the Senate sat before breaking for the summer and before the fall federal election. Now that the Regulations are ready, the Government is issuing Orders in Council bringing the legislation into force (except for a limited number of provisions).

The IAA replaces the Canadian Environmental Assessment Act, 2012 ("CEAA 2012"), and is significantly different in a number of ways. We previously drafted Something Old, Something New: Canada's Proposed Impact Assessment Act highlighting the primary changes to the environmental assessment process. While the Senate made changes to the legislation, the description of the new impact assessment process in that bulletin remains relevant.

In this bulletin, we provide an overview of the IAA, the underlying Regulations, and the new impact assessment process.

One Assessment Body - The Impact Assessment Agency

Under the IAA, the Canadian Environmental Assessment Agency will be continued as the Impact Assessment Agency of Canada (the "Agency") and will now be the single agency responsible for the management and coordination of impact assessments (in contrast to CEAA 2012, under which three different agencies had responsibility for conducting environmental assessments). The Agency will have the power to delegate any part of an impact assessment to a provincial government or an Indigenous governing body.

As a result of Senate amendments to the IAA, the IAA increases the independence of the Agency from the Ministry of Environment and Climate Change. For example, the Agency, rather than the Minister will have the primary power to manage time limits throughout the assessment process.

Triggering the Impact Assessment Process

Under the IAA, an assessment is required for "designated projects", which are determined in two ways:

Projects designated by regulation (the "Project List")

The IAA continues the approach taken under CEAA 2012 to designate projects by type and thresholds prescribed by regulation. For the most part, project types that were reviewable under CEAA 2012 remain reviewable under the IAA, and most of the associated quantitative thresholds either remain the same or have increased. However, some new project types have been added and the scope of others has expanded. For example, projects with components that cause changes within national parks or marine protected areas are more likely to trigger a federal impact assessment than before, as will new project types such as offshore wind energy projects. Some public-policy driven exemptions have disappeared, (e.g., those surrounding the construction of new marine berths on existing port lands), and others have been added (e.g., oil sands projects located in provinces that have achieved provincial greenhouse gas emissions targets).

Ministerial discretion

As with CEAA 2012, the IAA gives the Minister discretion to designate projects not included in the regulations, where the Minister is of the opinion that the physical activity "may cause adverse effects within federal jurisdiction or adverse direct or incidental effects, or public concerns related to those effects warrant the designation." The IAA also expressly notes the Minister may consider adverse effects to Indigenous peoples, including Indigenous women.

In addition, as in CEAA 2012, a project that is carried out on federal lands, although not "designated", cannot be carried out unless the applicable authority has determined that doing so is not likely to cause significant adverse environmental effects; or if it is likely to, then the Governor in Council must decide that those effects are justified in the circumstances.

Introduction of a New Planning Phase

The IAA introduces a new Planning Phase intended to assist the Agency in deciding whether to carry out an assessment, whether to coordinate with other jurisdictions or agencies (such as a provincial government, federal authority or Indigenous governing body) and what the scope of the assessment will be. This Planning Phase also gives the minister an opportunity to put an end to the project before an assessment is commenced if it is clear that the project would cause unacceptable environmental effects within federal jurisdiction or that it will not be awarded key permits by other federal regulators.

This Phase begins with the proponent providing a project description containing the required information. The Information and Management of Time Limits Regulations, which also come into force on August 28, set out detailed information requirements for the initial project description, requiring proponents to undertake extensive planning and investigations well in advance of initiating the IAA Planning Phase. The description will be posted online and the Agency must provide the public with the opportunity to comment.

The IAA no longer has a "standing test" for public participation as was the case under CEAA 2012 where the definition of "interested party" was limited to a person who is "directly affected by the project or has relevant information or expertise." Under the IAA, the Agency is given discretion to consider the manner in which members of the public may participate.

Also during the Planning Phase, the Agency must offer to consult with any jurisdiction that has powers or duties in relation to an assessment of the environmental effects of the designated project and any Indigenous group that may be affected by the carrying out of the designated project.

At the end of this Planning Phase, the Agency must provide the proponent with a summary of issues that it considers relevant, including those raised by the public or any other jurisdiction or Indigenous group. The proponent must then provide the Agency with a notice setting out how it intends to address the issues.

The Impact Assessment

The Agency must decide within 180 days of posting the project description online whether to commence an impact assessment (the Agency can in certain circumstances suspend or extend this period).  The IAA lists the factors that the Agency must take into account in making this decision, which includes the possibility of adverse effects, any adverse impact on the rights of Indigenous peoples and comments from the public. The Agency also has discretion to consider "any other factor that the Agency considers relevant."

Scoping

The Agency's notice to commence an impact assessment will also set out the scope of factors to be assessed and the information and studies the proponent must provide.  The IAA adds a number of factors, compared to CEAA 2012, with the scope expanded from environmental effects of proposed projects, including:

  • the need for the project;
  • alternatives to the project;
  • traditional knowledge of Indigenous peoples and community knowledge;
  • the project's contribution to sustainability;
  • the intersection of sex and gender with other identity factors;
  • the extent to which the effects of the project hinders or contributes to the federal government's ability to meet its environmental obligations and climate change commitments (the federal government is still in the process of developing a "strategic assessment of climate change" which will guide impact assessments under the IAA);
  • impacts on Indigenous rights, communities and cultures.

The first two of these factors (need for, and alternatives to, the project) are not new to environmental assessment. Although they are not included in CEAA 2012, they are found in the previous version of the Canadian Environmental Assessment Act that was replaced by CEAA 2012. The remaining factors, while not expressly set out as statutory criteria in CEAA 2012, were often incorporated into the scope of assessments in practice.

Agency Process

The standard process for an impact assessment under the IAA is similar to the process under CEAA 2012, but differs in a few notable ways, including:

  • Introduction of the Planning Phase, discussed above.
  • Draft Report: The Agency must post a copy of its draft report for public comment prior to finalizing the impact assessment report.
  • Timeline for Report: The Agency must finalize its impact assessment report and submit it to the Minister no later than 300 days after it determined that the proponent provided all required information.
  • Extensions: If the Agency determines that a longer time period is needed to allow for coordination with a jurisdiction or to take into account "circumstances that are specific to that project," the Agency must decide this prior to commencing the assessment. The Minister may extend the time limit by 90 days only, but the Governor in Council may extend the time limit any number of times. (The Agency does have the ability to suspend the time limits in certain circumstances pursuant to the Information and Management of Time Limits Regulations)

Panel Review Process

The IAA requires the Minister to refer the impact assessment of a designated project to a Review Panel if the project is regulated under:

  • the Nuclear Safety and Control Act, or
  • the Canadian Energy Regulator Act (this Act is also coming into force on August 28 and the National Energy Board will become the Canada Energy Regulator).

These assessments should not exceed 300 days, but may be up to 600 days if required.

The Minister may also refer the impact assessment to a review panel if in the Minister's opinion doing so is in the public interest. If an assessment is referred to a review panel in these circumstances, the Agency sets the timelines for the review panel to submit its report and recommendations. This can be up to a maximum of 600 days (shortened from 2 years under CEAA 2012) unless the Agency believes more time is required to allow for cooperation with a jurisdiction or to take into account circumstances that are specific to that project. As with an Agency review, the Minister can only extend the process at this point by up to 90 days, however, it may be extended any number of times by the Governor in Council. As with Agency assessments, the Information and Management of Time Limits Regulations set circumstances where the Agency can suspend the time limit.

Joint Review Panel

As is the case in CEAA 2012, the Minister may establish a joint review panel with other jurisdictions that is given the power and duties to conduct the assessment.

Substitution

In certain circumstances, as is the case under CEAA 2012, the Minister may approve substitution of another jurisdiction's assessment process for the process under the IAA.

Impact Assessment Decision Making

The decision making process under the IAA involves a determination of whether the adverse effects that are indicated in the assessment report are in the "public interest". The Minister must either make this determination or refer it to the Governor in Council. This is in contrast to CEAA 2012, in which the Minister (or other responsible authority) decided whether a project was likely to result in significant adverse environmental effects, and if so, the Governor in Council decided whether those effects were justified in the circumstances.

The factors that must be considered in making a "public interest" determination are:

  • the extent to which the project contributes to sustainability;
  • the extent to which adverse effects are significant;
  • the implementation of mitigation measures (defined as including "restitution for any damage caused by those effects through replacement, restoration, compensation or any other means");
  • the impacts on Indigenous communities and Section 35 rights; and
  • the extent to which the effects hinder or contribute to Canada's environmental obligations and climate commitments.

The decision statement issued to the proponent may include conditions related to the adverse effects including mitigation measures and a follow-up program.

The decision statement must also set out the period within which the proponent must "substantially begin" to carry out the designated project. "Substantially begin" is not defined, although the IAA states that the views of the proponent will be considered in establishing this period. It is unclear what options are available to proponents should unexpected and unavoidable events occur that lead to delay (for example, a sudden drop in commodity prices, or an environmental event such as a wildfire).

Transitional Provisions

The IAA outlines the process for projects that had been submitted or initiated under CEAA 2012 prior to the IAA coming into force:

Screenings under CEAA 2012

If the proponent provided the former agency with a description of the designated project and the former agency has not posted a notice of its decision, the screening will be terminated. The description of the designated project provided, however, will be deemed to be the initial description of the project provided under the IAA.

Environmental assessments under CEAA 2012

If the former agency has posted the notice of commencement under CEAA 2012, the environmental assessment will be continued under CEAA 2012. The proponent must provide the Agency with any information or studies required by the Agency or a former agency under CEAA 2012 within the required time limits or the environmental assessment will be terminated. In addition, within 60 days of when the IAA comes into force, a proponent may request the Agency to continue the environmental assessment as an impact assessment under the IAA.

Panel reviews under CEAA 2012

An assessment referred to a review panel under CEAA 2012 will continue under CEAA 2012. A proponent may request the Minister to continue such assessment as an impact assessment under the IAA.

Substitution

An environmental assessment commenced under CEAA 2012 for which the Minister approved a substitution process is continued under CEAA 2012.

Projects on federal lands

The IAA does not apply to projects where a federal authority has already made a determination regarding the significance of the adverse effects of projects on federal lands under section 67 of CEAA 2012.

Focus on Indigenous Peoples

An overarching theme running throughout the IAA is a focus on Indigenous peoples to ensure their rights, culture, and traditional knowledge are considered at the various stages of an impact assessment. This is clear from the purposes of the IAA, which include:

  • promoting cooperation and coordinated action with Indigenous governing bodies that are jurisdictions;
  • promoting communication and cooperation with Indigenous peoples;
  • ensuring respect for the rights of Indigenous peoples; and
  • ensuring Indigenous knowledge and community knowledge are taken into account.

For more information on changes to the legislation specifically related to Indigenous groups, see our earlier bulletin Bill C-68 and Bill C-69 Propose Bigger Role for Indigenous Groups in Environmental Review  on this issue.

Conclusion

The current government is promoting the IAA as a transformational change to project review, and the conservative opposition says it will prohibit projects from proceeding. It remains to be seen in practice how different the process will be. Regardless, successfully navigating through the process will require careful and strategic planning from the outset.

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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