Canada, like many other countries, has established a comprehensive system for the purpose of regulating the effects of energy development projects on the health and safety of people and the environment.

This system includes numerous federal, provincial and territorial laws and policies that define requirements for environmental assessment, regulatory review and permitting and Aboriginal consultation processes.  These laws and policies have most often been built one atop the other over several decades without consideration of how they fit together within a comprehensive framework, resulting in a complex and often duplicative system.  For users of that system this complexity has created uncertainty and time-delays.  Moreover, the environment has not necessarily benefitted- cumbersome processes tend to stifle creativity around how to address environmental issues.  And perhaps of most significance in difficult economic times, the complexity and duplication has added costs.  This assessment is not just a complaint by Canadians:  according to the World Economic Forum’s 2011-2012 Global Competitiveness Report, system inefficiency is cited as the single largest barrier to doing business in Canada.

While efforts have been made in recent years to address some of these long-standing systemic issues, these have been limited in scope to some one-off tinkering that ignores the inter-connectedness of the overall framework. What is required is a “whole of government” or governments (federal, provincial and territorial) approach to reform the laws and policies that govern the environmental assessment, regulatory review and permitting, and Aboriginal consultation processes. The urgency of such reform is becoming even more critical given the reduced resources most governments have available.

While there is agreement on the need for reforming these processes, there are some who argue that such reform will diminish the level of environmental protection afforded under current laws and policies. This begs the question: will such reform result in an end to the standards of environmental protection provided in current laws and policies, or will such reform lead to the beginning of a system of regulating the environmental effects of development projects in more cost-efficient and smarter ways while achieving better environmental outcomes?

The federal government took an important step towards reforming its regulatory system in 2007 when it established the Major Projects Management Office (MPMO). With the creation of the MPMO, it set out to devise and support a new approach aimed at establishing a more effective, accountable, transparent and timely regulatory system applied to the review, assessment and approval of major development projects while achieving better environmental outcomes. The MPMO was assigned a dual mandate. One focused on providing for overarching project coordination, management and accountability for major resource development projects within the context of the existing federal regulatory review processes. Much of the work of MPMO on this mandate has been directed at establishing a more transparent, predictable, timely and effective approach to the review of major resource development projects.

The other mandate was to undertake research and identify options aimed at driving further performance improvements to the federal review processes applied to resource development projects. This led to collaborative policy research and analysis aimed at driving system-wide legislative, regulatory and policy changes to the federal regulatory system and improving alignment of federal and provincial environmental assessment, regulatory reviews and permitting and Aboriginal consultation processes. The results of this work formed the basis for first step initiatives in the federal government’s efforts to reform the processes that made up its regulatory system. This began with the introduction in Budget 2007 of a target of cutting in half the regulatory review period from four to two years. The government followed with the introduction of targeted legislative amendments to the Canadian Environmental Assessment Act and a new participant funding program to strengthen and enhance the National Energy Board (NEB) and the Canadian Nuclear Safety Commission (CNSC) review processes in Budget 2010.

While these first step initiatives were important, it was recognized that more fundamental changes were still required to the existing legislation and policies in order to fully address the systemic issues. A different culture of management was envisioned for legislation and policies from:

  • Where the “rules of the game” and timelines are unclear and open to interpretation, to defining in law clear results-based rules and reasonable timelines
  • Duplicative processes shared across jurisdictions to a “one project one review” approach implemented by a  “single best placed regulator”
  • Broad application to projects with insignificant risks to the environment, to a focus on projects that pose higher risks to the environment
  • Command and control to more flexible and innovative voluntary tools and instruments
  • A site specific approach to a place-based approach using boundaries that reflect an ecosystem and cumulative effects point of view
  • A government-driven approach to regulating, to one that embraces a collaborative approach based on shared responsibility and accountability with the regulated community, non-government organizations, Aboriginal groups, academia and the public
  • A focus on process to a focus on achieving better environmental outcomes for Canadians
  • Non-enforceable conditions of authorizations, to enforceable conditions

The announcement in Budget 2012 of a responsible resource development plan would appear to be the beginning of the current government’s legislated expression of this different approach.

The Honourable Joe Oliver, Minister of Natural Resources, in a recent announcement, identified several specific changes.  Key amongst these is the decision to consolidate responsibilities previously held by more than 40 organizations in 3 agencies:  the Canadian Environmental Assessment Agency, the National Energy Board and the Canadian Nuclear Safety Commission (CNSC) and the decision to reduce duplication by establishing equivalency with provincial environmental assessment processes. The announcement stated that legally binding timelines will also be a feature of the new regulatory system, for both environmental assessments and key regulatory review and permitting processes (including the Fisheries Act, Species at Risk Act (SARA), Navigable Waters Protection Act (NWPA), the Canadian Environmental Protection Act (CEPA), and the Nuclear Safety and Control Act (NSCA)).

Other changes include improving compliance and environmental protection for major projects by allowing for longer term authorizations with enforceable conditions under SARA; designation of a lead department or agency as a single Crown consultation coordinator for specific project reviews; the authorization of administrative monetary penalties for violations; and changes to the Fisheries Act that would enable the Minister to enter into agreements with interested groups to allow them to undertake measures to enhance fisheries protection.

The amendments (and the cultural shift behind them) speak to a very fundamental change in the “how” of dealing with regulatory process. The real question is whether they also reflect a difference in the “what”.

While the federal government has set out its agenda for putting in place a more efficient regulatory system for Canada, the connection of that agenda to its explicitly identified conservation interests has yet to be made clear. The opportunity exists, but this will require a better definition of that conservation agenda.  Within it, there will be a need to consider adopting modern concepts of ecosystem-based management, adaptive management, results-based regulations, biodiversity offsets, conservation banking, integrated resource planning and management. It will also need to address the requirements of ensuring the availability and convenient access to the scientific data, information and knowledge required to support sound decisions about regulating environmental effects.

The responsibility is not all on government however: a paradigm shift in corporate culture will also be required that will encourage more strategic and integrative thinking, planning and actions; greater collaboration and partnership; and new modes of policy framing and forms of environmental governance. Such new forms of governance should be able to allow for better engagement between those who set law and policy and those who respond to it. An important element of this will be to create strong linkages backed up by negotiated agreements with clear accountabilities between and among existing government organizations and agencies and networks of non-government actors—other levels of government, Aboriginal groups and other interested stakeholders. Finally, performance measures against which to determine if action taken in managing environmental effects is moving towards achieving the desired outcome of sustainability are critical to such a shift; otherwise it will be difficult to determine if we are moving along the continuum from where we currently are to where we need to go [to attain sustainability].

While the federal government has taken some important steps to reform the processes it applies to regulate the environmental effects of development projects, there is much more required if this is to be the beginning of a new system that will be more cost-efficient while achieving better environmental outcomes.

Canada’s energy sector, in particular, can make a significant contribution to shaping the reform of these processes. It can take a leadership role in engaging others in a discussion as to what is required and how best to deliver a regulatory system that allows for cost efficient and smarter ways of implementation, while achieving better environmental outcome for all.

By Patrice LeBlanc

Patrice LeBlanc joined SENES in 2010 as an Environmental and Habitat Management Specialist after some 40 years of experience in developing and implementing environmental and fisheries resource assessment and management legislation, programs, policies and guidelines with governments, industry and consultants. Since joining SENES he has been involved in developing positions for industry on reform of the Fisheries Act and guidelines on habitat banking, fisheries offsets, and fish screens for water intakes as well as the preparation of an EIA for a Nickel mine in Tanzania.

Patrice has some 30 years of experience in senior positions with Fisheries and Oceans Canada and the Canadian Environmental Assessment Agency. While at the Agency, he played a leading role in the development of the Canadian Environmental Assessment Act (CEAA) and its regulations and practitioners’ guides; the Cabinet Directive on the Strategic Environmental Assessment of Policies and Programs; the United Nations Economic Commission for Europe (UNECE) Convention on EIA in a Trans-boundary Context the development and delivery of training on the application of CEAA both in Canada and other countries. He led the 3-year International Study in the Effectiveness of Environmental Assessment.

With DFO, Patrice held senior level positions with the Habitat Management Program in the region and at headquarters. He was instrumental in the development of the Policy for the Management of Fish Habitat and related operational policies, guidelines and practices to guide the application of provisions of the Fisheries Act and the requirements to apply CEAA and other EA processes in the North, Aboriginal consultations and Species at Risk Act prior to issuance of authorizations. He also led a number of national initiatives to improve the efficiency and effectiveness of the regulatory review and approval process under the Fisheries Act. Patrice continued to play a key role in the development and application of CEAA through his responsibilities for leading the conduct and review of environmental assessments of a wide range of projects under CEAA; preparation of the department’s position on the five-year review of CEAA; development of policies, guidelines and practices and delivery of training courses on the application of CEAA.

Patrice has also held senior positions with Ontario Hydro, Nova Scotia Power Corporation, two consulting firms and the Governments of Trinidad and Tobago and The Bahamas where he led the preparation and review of environmental assessments for a wide range of projects in Canada, Trinidad and Tobago and The Bahamas.

Patrice has published and presented over 100 technical, scientific and policy papers on environmental and fisheries resource planning, assessment and management and advised other governments on the development of environmental assessment and management laws, policies and guidelines, including Japan, China, Denmark, the Republic of Trinidad and Tobago and the Commonwealth of The Bahamas.