Authors: Martha Hall Findlay, Marla Orenstein, Colleen Collins and Naomi Christensen
Bill C-69, as proposed, would overhaul Canada’s energy project assessment process, creating a new Impact Assessment Agency (IAA) and replacing the National Energy Board (NEB) with the Canadian Energy Regulator (CER). The bill introduces some welcome changes, but also retains some of the same features that are causing problems in the current system. It fails to address fundamental issues of trust, economic activity and national competitiveness. Proponents and investors are not worried about tough, evidence-based regulation. But unless these issues are addressed, our regulatory system will remain vague, unreliable and subject to politically motivated decisions at the end of a long and expensive process – all of which discourage investment in the Canadian economy.
If our regulatory system is to become unstuck, we must get it right. Appropriate and sustainable reform benefits everyone – environmentalists, project proponents, the public and the federal government. It is critical that Ottawa takes the time and effort needed to address the systemic issues we describe to ensure it does not hamstring the new regulatory process.
An environment for success
The development of a regulatory system that encourages economic development, supports responsible development of our energy resources, and is clear, transparent and fair rests on four essential pillars:
Clear policy: The regulatory process is not the place to decide and debate government policy. Yet, in the absence of clear direction from the government on economic, environmental and Indigenous rights policy, the regulatory system has become the de facto forum for debating these concerns. It is not set up to deal with policy debates, nor should it be. Policy-makers must determine policy up front, based on the priorities of Canadians. This will provide clarity needed for the regulator to better do its job. It will also create a strong and clear signal to investors and the public about how Canada intends to achieve economic prosperity, environmental sustainability and competitiveness.
Clear legislation: A legislative framework should define clear mandates, roles and responsibilities of the regulator, minister(s) and cabinet, so that all stakeholders are confident that decisions are being made using due process by those with the mandate to do so.
An empowered & trusted regulator: The government needs to trust the regulator – otherwise how can Canadians be expected to trust it?
> Let the regulator decide. The regulator must be empowered to do its job – to make the final decision as to whether the project should be allowed to proceed, based on technical merit, local and regional effects, risk mitigation measures, potential benefits and alignment with policy.
> Make the political decision up front. Make the political decision about national interest at the end of the “early planning” phase, before embarking on the full assessment process. This will enhance the legitimacy of the entire process and give stakeholders and investors the greater certainty they need.
Appropriate, broad but efficient stakeholder input: We need appropriate, broad but efficient stakeholder input.
(i) Bring back into the bill the concept of “standing,” establishing the priority of those groups or entities more directly impacted and consolidating similar messages.
(ii) Ensure that the consultation and hearing processes are fair, transparent and inclusive.
(iii) Make it clear to participants that being heard does not necessarily mean that the decision will reflect their own preferences.
(iv) Create a Public Intervener Office with the responsibility to synthesize the interests and views of various parties who wish to comment on the application or the regulatory process itself, to manage stakeholder input in a way that is both fair and respectful.
The detail to make it work
In addition and to fulfill the four main pillars of improvement – clear policy, clear legislation, an empowered and trusted regulator and appropriate, broad but efficient stakeholder input – specific provisions of Bill C-69 need to be amended or to have additional clarity to be efficient, effective and fair.
Ensure transparency and clarity throughout: Ensure that the regulator is able to provide full documentation of the regulatory process and all decisions, and that this information is made available in a way that is easy to access and understand.
Focus on positive as well as negative effects to inform balanced discussion: Consideration of the positive benefits of a project is critical at the local and also regional and national levels. Section 6 of Bill C-69 sets out the purposes of the Act. One purpose is to ensure that the impact assessment considers both positive and adverse effects. However, Section 22, Factors To Be Considered, does not include specific reference to project benefits. Section 22 must include consideration of positive benefit factors. Positive effects locally, regionally and nationally will better inform a more balanced public discussion of how projects affect environmental, economic and societal goals.
Increase certainty on timeframes: Although the intention of the bill as proposed is to reduce the amount of time the regulatory process takes, the bill as is merely increases uncertainty. The bill must provide additional clarity on milestones to be met; how decisions to stop the clock will occur and why; overall timeframes; and how to ensure that delay is not unreasonable or politically motivated.
Use regional and strategic assessments to account for cumulative effects: Regional and strategic effects are useful tools to identify cumulative effects – if done well. Key issues remain to be worked out, including the triggers to initiate them; how to deal with jurisdictional overlap; and whether results will be informative or prescriptive. Bill C-69 should also clarify that project-level permitting should not be suspended awaiting regional or strategic assessments.
Move the energy information function to increase credibility: Keep the energy information function out of the regulator and house it within Statistics Canada or another autonomous and trusted organization – as is done in the United States and elsewhere – to avoid the perception of conflict of interest and build trust in energy information.
Depoliticize the Project Review Panel appointment process: Review panel members should be appointed from a list developed by an independent committee to avoid bias, or the appearance of bias, in their selection.
Include social impacts, but align with best practice: The bill broadens the impact assessment scope to include not only environmental, but also health, social and economic impacts. Past environmental assessments have often de facto addressed these issues; enshrining this in legislation reflects community priorities. However, the new IAA needs to align its approach with international best-practice.
Separate the process for information requests from a process for comments: The Information Request (IR) process is overwhelmed, with submitted questions often numbering in the tens of thousands. The new regulatory process should include a parallel mechanism by which comments and opinions can be submitted and heard, but do not need to be answered by proponents. A new Public Intervener Office would help with this.
Make reports comprehensible as well as comprehensive: The size of impact assessment reports has gotten out of hand, often comprising tens of thousands of pages. The new IAA should explore methods through which impact assessment results and the decisions that are made by the regulator, panel or minister can be communicated simply and clearly.
Use community monitoring to help build trust: Indigenous and community monitoring committees can build trust and foster positive relationships as well as provide data to increase understanding of local effects of development. Community monitoring under the new IAA should build on the example of good practice seen elsewhere in Canada, in particular Saskatchewan and British Columbia.
Share data to reduce burden and add transparency: The government should consider using the new open data registry as a clearinghouse to store data gathered by proponents’ consultants during the impact assessment process. This would increase transparency. It would also be easier to determine at an early stage what adverse impacts might occur, and would reduce the need for repeated stakeholder consultation.
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