The Quagmire deepens… Canada’s new Impact Assessment Act

What Problem are We Trying to Solve?

In 2015 the Liberals campaigned on the idea that the existing NEB process was unfair to environmental and indigenous concerns. They also wanted a review process to reflect the climate change agenda. The Liberals claimed that the NEB had lost public confidence and that a modernized process will create greater certainty to industry and investors.

It isn’t so clear that the general public was all that mistrustful of the National Energy Board. But that narrative fit with the Liberal’s ‘anti Harper’ election campaign.

But for the record, a 2016 WorleyParsons study of environmental assessment practices worldwide, found that Canada’s system is among the most thorough and comprehensive. It is also among the most expensive and time-consuming processes in the world.

Parliament passed legislation in June 2018 for a new impact assessment and regulatory system for Canada, housed under a proposed Impact Assessment Act. The act is awaiting passage by the Senate. There is an active campaign to have the Senate send the bill back to the Parliament to be repealed or modified.

The key aspects of the act are:

  1. The act will be administered by the environment ministry not the natural resources ministry.
  2. The Act is much broader, considering social, economic, and environmental issues. It will be aimed at describing both the positive and negative impacts of the project.
  3. The process adds an inherently subjective criterion called “sustainability” and omits measuring direct economic benefits.
  4. The outcome of the assessment determines if the project is in the ‘public interest”. But the Environment Minister, not the regulatory agency makes that determination.
  5. Public participation, consultation and input have been expanded; ‘just about anybody’ can intervene compared to previous processes where intervenors had to be impacted in some way.
  6. Details are provided about expectations from companies for indigenous and public participation, and consultation.
  7. Timelines are set for the project planning phase at 180 days. The assessment phase timeline is 300 days to a maximum of 600 days for assessment.

This act has not been well received by investors and industry. The key sticking points are:

  • Politicians can now make “flavor of the day” decisions.
  • The Minister can order the agency not to bother with an assessment thus killing a project before it starts.
  • The “free for all – anybody can intervene” will be a gong show for anti-development activists. And there is no clear idea as to how increased participation will managed.
  • And there are 40 or so opportunities for the Minister to “stop the clock” in the middle of the assessment. So timelines are far from fixed.
  • Projects like pipelines that extend over multiple jurisdictions will face enormous complexities meeting the requirements for consultation, public participation, indigenous participation and accommodation.
  • There is the problem of setting up this new agency in the midst of the TransMountain fiasco adding to perhaps greater delays because the agency isn’t open for business.

Listening to the reaction of industry, it doesn’t sound like the new agency is a signal that Canada’s resource sector is open for development.

The Unspoken Issue – Trust

Legislation is usually written to preserve as much flexibility for government as possible.  Thus, to some extent we must suspend judgement until we see how the new agency deals with the ‘devils in the detail’. But overall there is little to make Severely Normal Albertans optimistic that the government supports resource development:

  • This legislation is clearly tilted away from the proponents of resource projects.
  • The current Environment Minister’s resume is without any background in resource development.
  • The Natural Resources Minister, the lead Minister for Alberta, is maintaining strict radio silence on the TransMountain.  Nothing is on his various websites except a single tweet and Facebook entry in early September.
  • The continued confusion and lack of federal action on a TransMountain go-forward plan probably means its priority is retaining seats in the BC lower mainland and not solving pipeline congestion.
  • There is still a lack of clarity about whether Indigenous rights means a de facto veto for resource projects.
  • Government’s inertia in testing the judicial over-reaches from the BC Court of Appeal in the Northern Gateway or TransMountain decisions means that government has accepted these questionable decisions.

Quarmire is defined as: A situation, often political/military, that’s difficult to get out of.