Canada’s New Impact Assessment Act Is Only as Good as the Extent to Which It Will Apply

In June, the federal government passed Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts. Along with its companion Bill C-68, C-69 seeks to make good on a number of federal government commitments to restore lost protections and introduce modern safeguards under the Fisheries Act and Navigation Protection Act, modernize the National Energy Board, and restore credibility and public trust in federal environmental assessments.

However, regulations proposed under the new Impact Assessment Act (IAA) threaten to derail the federal government’s attempts to achieve those commitments. Specifically, the proposed Regulations Designating Physical Activities (Project List) would not only fail to restore impact assessment oversight to the vast majority of projects within federal jurisdiction, it arguably lessens it.

What the IAA does better

In many ways, the new IAA – which will come into force upon order-in-council – represents an improvement over the much-criticized Canadian Environmental Assessment Act, 2012 (CEAA 2012). Whereas CEAA 2012, along with its predecessor Canadian Environmental Assessment Act (CEAA), seeks to simply mitigate, avoid or justify significant adverse environmental effects, the IAA seeks to foster sustainability by requiring decision-makers to determine whether a project is in the public interest having regard to five enumerated factors, including whether the project will foster sustainability. These factors constrain Ministerial and Cabinet discretion to approve clearly unsustainable projects, which, along with a requirement for detailed reasons for decision, promise to heighten transparency and accountability.

Similarly, the IAA requires assessments to look at both positive and negative effects, rather than focus simply on avoiding or mitigating harm. It considerably expands upon the factors that must be considered in an assessment, to include all relevant social, environmental, health and economic factors, along with such other matters as gendered-impacts, impacts on Indigenous rights, and climate.

Granted, the IAA falls far short of the recommendations of the Expert Panel appointed in 2016 to review federal assessment processes. It maintains, and even shortens, mandatory timelines for assessments, fails to establish a mandatory test requiring proponents to prove that their projects are the most sustainable path forward, allows lifecycle regulators to chair review panels, and omits legislated triggers for bigger-picture regional and strategic assessments.

Still, other notable improvements include the removal of the standing test introduced by CEAA 2012, which required the public to show that they were directly affected by or had relevant expertise respecting pipeline projects, and greater recognition of Indigenous rights and jurisdiction.

Why those improvements may not matter

A Discussion Paper on the Proposed Project List published in May of this year has not only proposed not expanding the list of projects that will be subject to the IAA, but in fact reducing it. The Discussion Paper proposed increasing the production thresholds for mines, meaning that mines will have to be even larger before they trigger an assessment. For example, the proposed threshold for new metal mines will go up from 3,000 tonnes of ore production capacity per day to 5,000 tonnes, new uranium mines with less than 2,500 tonnes per day production capacity will no longer be subject to the IAA, while triggers for apatite mines (a group of phosphate minerals) have been removed entirely.

The Discussion Paper proposes increasing thresholds for highways – from 50 km to 75 km – as well as pipelines – from 50 km to 75 kms on a new right of way. It, and the IAA, have together also introduced a means of exempting certain projects that otherwise would have been subject to the Act were there has been a regional assessment, such as offshore exploratory drilling. While there are some new additions to the Project List, such as a wind energy projects that occur in water and have more than 10 turbines, the list will likely represent an overall reduction in the number of federal assessments per year.

One of the reasons for the diminishment of the Project List is because the government has taken the approach that only projects “with the greatest potential for adverse environmental effects within federal responsibility” should be placed on the regulations. “Greatest potential” has been defined as requiring impacts on “multiple areas” within federal responsibility. In other words, significant adverse effects on fish would not qualify; a project would have to result in significant adverse effects on fish and aquatic species at risk, or perhaps fish, aquatic species at risk and migratory birds. Notably, navigation is not on the proposed list of areas within federal jurisdiction that may give rise to a listing, despite the fact that navigation is squarely within federal jurisdiction and amendments to the Navigation Protection Act fail to require that environmental factors be considered when deciding whether to permit projects under that Act. As a result, there is no longer any link between navigation and the environment in impact assessment or the navigation protection legislation.

It is worth noting that in addition to the IAA, amendments to the Fisheries Act and Navigation Protection Act (which will be called the Canadian Navigable Waters Act after amendments in C-69 comes into force) both recognize classes of “major projects.” Section 35.1(1) of the Fisheries Act now allows the Fisheries Minister to designate major projects that require permits (as opposed to merely authorizations) for harm to fish or fish habitat. Similarly, the Canadian Navigable Waters Act authorizes the Transport Minister to designate “major projects” by order-in-council, which will require additional permits under that Act.

Given the fact that the amendments to the Fisheries Act and Canadian Navigable Waters Act occur in tandem with the enactment of the IAA, and that all three sets of changes recognize “major projects,” one would think that the definition of “major project” would be consistent between all three sets of legislation. Instead, the Discussion Paper appears to place a higher standard on major projects for the purposes of the IAA, requiring multiple heads of power to be involved, and “greatest potential” for impacts.

Accordingly despite the improvements noted above, the IAA cannot be considered an improvement over the status quo if this approach is taken.

Why the Project List matters

A major downside of the IAA is that it fails to restore the “triggers” in CEAA that automatically required environmental assessments of projects requiring federal permits, authorizations or funding, and projects that occur on federal lands or have a federal proponent.

Designed to ensure decision makers look before they leap, impact assessment is a planning tool that serves a unique function in environmental decision-making. From 1973 to 2012, it was a crucial step in federal environmental decision-making, and in ensuring protections of such matters as fisheries and navigation. As opposed to regulatory processes, which tend to have narrower focuses and limited or no public comment, impact assessment (done right) involves early and ongoing meaningful public and Indigenous engagement, consideration of alternatives to the project and alternative means of carrying it out, and iterative project design that responds to environmental and social concerns in order to enhance benefits and avoid or mitigate harms.

In 2012, that changed. Among other things, the replacement of CEAA with CEAA 2012 removed the requirement to assess the impacts of over 90% of projects that involve a federal decision, proponent, funding or lands. Since 2012, multitudes of projects that affect fish, climate, navigation and other areas of federal jurisdiction have been approved – or have bypassed federal oversight entirely – without public engagement, Indigenous consultation, or transparent regard to options best foster sustainability. This lack of assessments is as much a loss of protection of fish and navigation as the 2012 gutting of the Fisheries Act and the Navigable Waters Protection Act.

It is critical to recognize that the dramatic reduction in the application of CEAA 2012 was central to the public outcry over Bills C-38 and C-45 that resonated from 2012-2015, and which led the current government to commit to restoring lost protections, introducing modern safeguards, and restoring credibility and public trust in federal environmental laws and decision-making.

It is also important to understand that impact assessment is not a stand-alone process; it interacts with federal decisions to better ensure robust oversight, secure social license, respect Indigenous authority and uphold the United Nations Declaration on the Rights of Indigenous Peoples. Thus, impact assessment is central to efforts to restore lost protections, introduce modern safeguards and restore credibility to environmental laws and decision-making. As the Expert Panel appointed to review federal assessment processes recommended, the Project List should apply to all projects that are “likely to adversely impact matters of federal interest in a way that is consequential for present and future generations.”

As a result, in order for the federal government to fulfil its promises to restore lost protections and public trust, the Project List must be dramatically expanded to apply to projects involving a government decision, lands, proponent or funding with implications on sustainability so that it can, like CEAA, help federal officials look before they leap. At best, a Project List that fails to do so means that important commitments will remain unfulfilled. More significantly, a Project List that reduces the number of projects subject to federal assessment – as the federal Discussion Paper proposes – will actually lessen protections, rather than enhance them.

How the federal government can improve the Project List – and thereby strengthen the IAA

To reiterate, the Impact Assessment Act is only as good as its application to projects that affect areas of federal jurisdiction. As mentioned above, regulatory approval processes (such as Fisheries Act permits) are not a substitute for impact assessment. While the Impact Assessment Act will ensure more meaningful assessments of projects when it applies, if it only applies to a handful of “major” projects (which appear to be randomly selected according to political, rather than evidence-based, criteria) then it fails to restore the protections and credibility lost in 2012.

With a federal election looming in October 2019, Ministers’ offices are winding down and bureaucracies are preparing to enter into caretaking mode during the writ period. In advance of the election, the IAA is expected to come into force by the end of August, and along with it, the Project List regulations. As a result, there is limited opportunity for a sizeable shift away from the government’s current intentions regarding the Project List and towards what is actually needed in order to ensure that the IAA is indeed an improvement over our current assessment and regulatory framework.

Luckily, developing the Project List need not be an all-or-nothing process. It will be critical for whoever forms government after October to take advantage of opportunities early in the mandate to significantly build upon the proposed entries to the list, including by requiring assessments of all GHG-intensive projects as was proposed in the 2018 discussion paper.

Meanwhile, between now and the end of August when the Project List is published in the Canada Gazette II, there is opportunity to make some critical but achievable adjustments that will act as a safety net until after the election. In particular, instead of increasing the production thresholds for projects like mines and pipelines, the thresholds set out in the current Regulations Designating Physical Activities should be maintained. Additionally, the list should include triggers in order to ensure that for all projects that require a permit under section 35.‍1(3) of the Fisheries Act, and all works designated as “major works” under the Canadian Navigable Waters Act that require a permit under section 7 of that Act.

Process matters

In addition to lessening the number of projects that will be subject to the IAA, the proposed Project List has been developed without any transparency regarding the criteria or evidence used to determine what projects will be on the list. Despite the fact that the government received over 100 submissions from industry, environmental organizations, Indigenous groups and individuals on the approach to building the Project List, the “what we heard” section of the Project List Discussion Paper is less than two pages long. And despite the fact that a 2018 discussion paper proposed using a transparent, evidence based process for determining what would be on the list, applying clear criteria such as frequency and duration of potential project effects, no such evidence or criteria have been provided to justify the proposed entries to the list – or the decisions to exempt certain projects.

In order to restore credibility to impact assessment, the processes used to determine what is subject to assessment must also be credible. To be credible, entries to the Project List should be clearly justified through the use of science and knowledge and criteria designed to ensure that impact assessment applies to projects with implications on sustainability. Political considerations, industry pressure and provincial backlash are irrelevant; instead, potential for direct or cumulative impacts on areas within federal jurisdiction, including recognition of Indigenous title and rights, should be central to the determination. Public engagement and Indigenous consultation should be meaningful, and all relevant information should be made publicly available online.

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