By Nicholas Martin
In the Hill Times

May 3, 2017

You can’t live without water, but drink too much and you’ll get water poisoning. It’s the same with the regulatory decision-making process, where efficiency and inclusiveness must be balanced. Both are vital, but too much of either at the expense of the other, and the whole thing falls apart.

In recent years Canada has focused too much on efficiency and too little on inclusiveness in how energy decisions are made. Reforms passed by the former government of Stephen Harper prioritized getting projects approved, but the results have not worked out that way. Enbridge’s Northern Gateway is a prime example. The controversial pipeline received regulatory approval, but after extreme political backlash it was ultimately rejected by the federal government.

By trying to approve projects quickly and cheaply, the government has lost a great deal of the public’s trust in the ability to make energy decisions in the public interest. Unresolved political questions have boiled over into drawn-out regulatory debates upending approval processes after millions of dollars have already been spent.

Now, Ottawa is looking at regulatory processes all over again. This time, government needs to get it right. But when it comes to how big projects such as pipelines and transmission lines are approved, it is crucial not to overcorrect from past mistakes and make the process so inefficient that companies think twice before investing in Canada.

Unfortunately, we may already be heading down this path.

While the recent report from the expert panel tasked with reviewing federal environmental assessment processes contains many useful recommendations, some appear counterproductive.

To try to include different types of project impacts, the panel proposes to expand environmental assessment to address the five pillars of sustainability: environment, economy, social, cultural, and health. The panel also proposes that the final decision may be appealed to the federal cabinet, essentially providing a political veto at the end of the regulatory process.

While made with good intentions, these recommendations will not address existing problems with the regulatory system.

Each pillar of sustainability is important and should not be ignored in the approval of major projects. Without careful implementation, however, there is a risk of creating a system defined by inefficient decision-making. Every project will involve trade-offs of one kind or another; the important thing is to find the right way to address them.

Broad social and cultural trade-offs, especially, are best addressed by direct representatives of the public, not arm’s-length regulators. While the panel recommends that all decisions be reviewable by the federal cabinet, this type of input should happen at the beginning of the regulatory process, before substantial time and money have been invested into the project. Keeping it at the end will only cause more Northern Gateway fiascos, not less.

The panel’s report does contain useful recommendations to improve environmental assessments without sacrificing efficiency. These include requiring that all information created in the process to be made publicly available, improved public participation, and an emphasis on clear communication of how decisions are made.

With another expert panel report on reforming the National Energy Board due in May, the government will soon be set to make significant decisions about approving major projects. Just as the most recent reforms moved too far towards the efficiency side at the expense of the public’s trust, it is essential now not to overcorrect and move too far away from efficiency in search of inclusiveness.

The federal government must take care not to make a poison out of these necessary reforms to the assessment process. Doing so will only make energy decision-making toxic for everyone involved in the process.

Nicholas Martin is a policy analyst at the Canada West Foundation.