CALGARY, May 24, 2018 – Canada has proposed some welcome improvements to the way energy decisions are made but the proposed new system overall remains flawed, will be mired in delay and vulnerable to eleventh hour changes based on political whim – leaving no one with more confidence in the system, according to a new report from the Canada West Foundation.
The new Bill C-69 legislation is intended to restore trust in Canada’s regulatory system decision-making. But the process fails to address fundamental issues of trust, economic activity and national competitiveness, according to Unstuck: Recommendations for reforming Canada’s regulatory process for energy projects. Further, it leaves the regulatory system subject to politically motivated decisions at the end of a long and expensive process. As a result, investment in the Canadian economy will continue to be discouraged, and our economic competitiveness will suffer, the report states.
According to the report, to create a clear, transparent and fair regulatory system, Canada must have:
• Clear policy: Policy-makers must determine economic, environmental and Indigenous rights policy up front. This will provide clarity needed for the regulator to better do its job.
• Clear legislation: We need a legislative framework that defines clear mandates, roles and responsibilities so that all stakeholders are confident that decisions are being made using due process by those with the mandate to do so.
• An empowered and trusted regulator: The government needs to trust the regulator – giving it the power to make the final decision. We must eliminate politically motivated decisions made at the end, after the process is complete.
• Appropriate, broad but efficient stakeholder input: Bring back “standing;” make it clear that being heard does not always mean the decision will reflect participant preferences; create a Public Intervener Office to help manage comments, questions and other input.
Making a national interest determination at an early stage would act as a “gate” – that is, a project deemed to be in the national interest by politicians at the beginning of the process would still be subject to a detailed examination and decision of the regulator. But an early “no” would at least save the time and expense of pursuing a lost cause, the report notes.
Introduced in February 2018, Bill C-69 is intended to overhaul Canada’s energy project assessment process, create a new Impact Assessment Agency (IAA) and replace the National Energy Board (NEB) with the Canadian Energy Regulator (CER). Unstuck urges changes to specific provisions of the bill, including consideration of the positive benefits of a project along with the negative effects, greater transparency with full documentation of the regulatory process, and more certainty on timeframes.
“If Canadians are to trust the way energy decisions are made, then we need to know that politicians do too. Neither proponents nor environmentalists want a system vulnerable to political whim. Elected leaders must make early decisions about public interest – then step back and empower the regulator to do its job. Only then will we have a regulatory environment that restores trust, enhances legitimacy and gives investors the greater certainty they need.”
– Martha Hall Findlay, Canada West Foundation President and CEO and co-author of the report.
“Proponents and investors are not worried about tough, evidence-based regulation, but as Canada overhauls impact assessment, it’s crucial to get it right and create an environment for economic prosperity and environmental sustainability.”
– Colleen Collins, Canada West Foundation Vice-President and co-author of the report.
“Bill C-69 introduces some welcome changes to impact assessment in Canada, such as moving to include not only environmental, but also health, social and economic impacts, but challenges remain. It is critical that Ottawa takes the time and effort needed to address systemic issues to ensure it does not hamstring the new regulatory process.”
– Marla Orenstein, Canada West Foundation Natural Resources Centre director and co-author of the report.