Presentation to House Finance Subcommittee on Environmental Assessment Law

June 4, 2012

On May 30, 2012, Stephen Hazell testified before a subcommittee of the House of Commons Finance Committee discussing the repeal of the Canadian Environmental Assessment Act and its replacement by a weaker, less comprehensive law included in the omnibus bill to implement the 2012 federal budget.   Stephen's written brief to the Committee follows:

 

LESS HASTE, MORE SPEED:

ENVIRONMENTAL ASSESSMENT LAW REFORM REQUIRES CONSIDERED PUBLIC DISCUSSION AND PARLIAMENTARY DEBATE   

 

BRIEF TO THE HOUSE OF COMMONS SUBCOMMITTEE ON BILL C-38 (PART III) OF THE STANDING COMMITTEE ON FINANCE

 

STEPHEN HAZELL

 

MAY 30, 2012

 

Introduction

 

The Canadian Environmental Assessment Act(CEAA) is the key federal law supporting informed federal decision-making with respect to development projects, setting out a process requiring that information about the environmental effects of such projects be gathered and assessed, and that the public be afforded meaningful opportunities to participate.  

 

First enacted in 1992, CEAA requires reform in order to better achieve sustainability objectives as well as greater process efficiency.  Unfortunately, the Canadian Environmental Assessment Act 2012included in  Part III of Bill C-38 the proposed Jobs, Growth and Long-term Prosperity Actwould largely dismantle the federal environmental assessment system and thereby dramatically diminish the capacity of the federal government to make informed decisions about development projects. Further, the high degree of discretion afforded to the Minister of the Environment and other federal agencies in CEAA 2012 will politicize environmental assessment.  As well, CEAA 2012 includes numerous unfortunately worded provisions that will invite litigation and thus delay environmental assessments of projects and implementation of decisions relating to these projects. 

 

Recent statements by federal ministers have focused on the perceived need to streamline environmental assessment, such as by authorizing the substitution of federal reviews by provincial reviews, and to ensure that panel reviews are completed within reasonable timeframes.  While Bill C-38 proposes makes important and mainly unwise amendments to achieve streamlining and certainty in panel review timeframes, these are far from the most important changes to environmental assessment proposed in Bill C-38. 

 

The comprehensive and far-reaching changes to federal environmental assessment proposed by Bill C-38 argue for a more considered, deliberative approach to examining the legislation so that CEAA 2012 can stand the test of time. 

 

This brief focuses on the implications of several fundamental changes to federal environmental assessment, as follows:

 

  • Elimination of legal requirement to carry out project environmental assessments will mean far fewer and narrower assessments
  • Abundance of discretion will politicize federal environmental assessment and create uncertainty for projects  
  • Litigation risks will increase as result of hasty drafting of Bill C-38 and lack of consultation with stakeholders and public
  • Centralization of environmental assessment at Canadian Environmental Assessment Agency will result in greater process efficiency
  • Substitution by provincial processes will mainly serve to fragment the integrity of  federal environmental assessment
  • Imposition of timeframes for environmental assessments and panel reviews will have little practical effect.

 

 

Elimination of legal requirement to carry out project environmental assessments will mean far fewer and narrower assessments

 

Under CEAA 2012, only designated projects are subject to environmental assessment (s. 13, 14.(1)). Designated projects are designated either by regulation or by order of the Minister of Environment (s.2.(1)).  No draft regulation listing proposed designated projects has yet been publicly released, but the project categories listed in the Comprehensive Study List Regulations have been suggested as a starting point for identifying designated projects.  As of May 29, 2012, the CEAA registry lists 39 comprehensive studies of projects currently being undertaken, as well as 11 current panel reviews.  The roughly 4,000 to 6,000 screening environmental assessments undertaken annually under CEAA would be eliminated under CEAA 2012.      

 

In the CEAA 2012 screening process, the proponent of certain designated projects must provide the Canadian Environmental Assessment Agency with a detailed description of the project (s.8). If the Agency deems the description adequate, the description is posted online allowing the public to provide comments regarding the project (s.9). The Agency is then required to decide within 45 days whether an environmental assessment of the project is required (s.10). Thus even some designated projects may be exempted from environmental assessment.  

 

Given that the Minister of Environment has not yet released a draft regulation listing categories of projects to be identified as designated projects, CEAA 2012 could well be an empty vessel with very few environmental assessments actually being carried out.  Scott Vaughn, the Parliamentary Commissioner for Environment and Sustainable Development, has estimated that 20 to 30 environmental assessments would be conducted annually under CEAA 2012.

 

If CEAA 2012 is applied to a handful of projects annually, it matters little what the rest of the legislation says about timelines, substitution, equivalency or public participation. The federal government will have, in effect if not in law, largely abandoned environmental assessment for projects other than for large pipelines and major nuclear facilities.     

 

Abundance of discretion will politicize federal environmental assessment and create uncertainty for projects 

 

CEAA 2012 is not so much a law imposing requirements for the conduct of environmental assessments as a statute enabling the exercise of discretion by Ministers and responsible authorities.  As indicated, CEAA 2012 provides broad discretion for the Agency (and Environment Minister) to determine that the environmental assessment of a project is not required, to scope the factors to be considered in the environmental assessment (s. 19.(2)) and to determine whether or not a provincial process is an “appropriate substitute” for the federal process.  This will inevitably result in the politicization of environmental assessment. 

 

For example, assume that aggregate quarries on the scale of the proposed Melancthon quarry are listed as a designated project by regulation.  A first step of the proponent of such a quarry could well be to retain an Ottawa lobbyist to pressurize the Agency and the Minister of Environment to exercise s. 10.(b) discretion to decide that no environmental assessment is required, or failing that, to exercise s.19.(2) discretion to scope the assessment of the quarry down to a stream crossing.   

 

Is it the intention of Parliament and the government that the application of federal environmental assessment law to major development projects should be reduced to proponent lobby fests? 

 

Litigation risks will increase as result of hasty drafting of CEAA 2012 and lack of consultation with stakeholders and public

 

CEAA 2012 is complicated legislation with many new concepts to be incorporated into federal law.  These new concepts include the definition and application of terms such as “designated project”, “environmental effects”, “interested party” and “appropriate substitute”.  The legislation has been developed within the federal government in confidence and in haste without the benefit of the views of environmental assessment experts and professionals in industry and civil society or members of the public knowledgeable about environmental assessment.   

 

This “cone of silence” approach is strikingly different from that relating to development of the current environmental assessment laws.  The Canadian Environmental Assessment Actenacted in 1992 was preceded by several years of public discussion and three different bills tabled in Parliament.  The major amendments to CEAA in 2003 were also preceded by a public consultation process led by the Agency as well as House of Commons Environment and Sustainable Development Committee hearings.  From the early 1990s until 2008, CEAA regulations were developed by consensus of the multistakeholder Regulatory Advisory Committee (RAC), which was composed of representatives of federal and provincial governments as well as environmental, industry and Aboriginal groups, and chaired by the Agency. 

 

Clearly, CEAA 2012 has not had the benefit of such a rigorous review from stakeholders and independent commentators; this is clear from numerous examples of awkward and inconsistent drafting in Bill C-38. As well, the extent of Agency and Ministerial discretion with respect to decisions (such as s. 10.(b) may require clarification from the courts. Thus, during the first few years after declaration in force, the application (or non-application) of CEAA 2012 to development projects is likely to be tested frequently in the courts.  This cannot but create uncertainty and delays for project proponents that would not be the case under CEAA currently.    

 

Centralization of environmental assessment at Canadian Environmental Assessment Agency will result in greater process efficiency

 

The Canadian Environmental Assessment Actis based on the self-assessment approach by responsible authorities for screenings, with the Agency managing comprehensive studies and panel reviews.  CEAA 2012 would result in the abandonment of the self-assessment approach other than with respect to the National Energy Board and the Canadian Nuclear Safety Commission.   Self-assessment certainly makes no sense if there are to be only 20 to 30 federal environmental assessments annually.

 

The more centralized approach in CEAA 2012 would address one of the key irritants for provinces and proponents about CEAA, and that is that there are often multiple federal authorities involved in the environmental assessment of bigger projects, and they often disagree about who should have lead responsibility for the environmental assessment as well on other process issues.   The more centralized approach in CEAA 2012 should promote consistency, timeliness, and efficiency in federal interactions with provinces on environmental assessment.   CEAA 2012 should have gone further and maintained Agency authority with respect to environmental assessment of pipeline and nuclear projects, especially in relation to panel reviews. 

 

Substitution by provincial processes will mainly serve to fragment the integrity of federal environmental assessment

 

CEAA has had a beneficial effect in establishing basic standards for environmental assessments across Canada that could not be ignored by other jurisdictions.   Substituting provincial for federal assessment responsibilities under sections 32-37 of CEAA 2012 would further reduce the scope of, as well as fragment, federal environmental assessment.  Current provincial and Aboriginal-claims based processes differ significantly in their purposes, rules, processes, scope, and provisions for public engagement.  Increasing divergence and diminishment of these processes can be expected without the elevating effect of CEAA.  

 

The vaguely stated “appropriate substitute” requirements to be met by substituted provincial processes (s.32, 34) would not likely ensure credible equivalency. Proponents would still face an unhelpful diversity of assessment requirements from one province to the next, which would further appear to be contrary to the public interest.

 

Imposition of timeframes for environmental assessments and panel reviews will have little practical effect

 

CEAA 2012 proposes one-year limits for environmental assessments (s.27) and two-year limits for panel reviews (s.38.(3)).  In practice these timeframes will have little practical effect.  The primary reasons why a small number of CEAA environmental assessments have taken more time than expected relate to: delays in process decisions within the federal government itself; incomplete environmental assessment information provided by project proponents; business decisions by proponents on account of shifting external factors (e.g., price of oil, natural gas, minerals), and legal actions by community, environmental and Aboriginal organizations (which are upheld by courts, as often as not) .

 

With rare exceptions, CEAA independent panels have conducted their reviews with dispatch.  Delays in those rare examples of panel reviews that have taken more time than expected (e.g., Mackenzie Gas Project) relate to the complexity of the issues and regulatory environment, and inadequate resources provided by the Government of Canada to conduct hearings and write the panel report.

 

Conclusions and Recommendations

 

This brief has addressed only a few of the many grave concerns that have been identified with respect to CEAA 2012. What is abundantly clear is that CEAA 2012 is not about “ensuring a robust environmental review of major projects” as Natural Resources Minister Joe Oliver stated on May 2, 2012 in the House of Commons.   The truth is that CEAA 2012 represents a singular abandonment of the key federal process for understanding and mitigating the adverse environmental effects of development projects.    

 

The Subcommittee faces the challenge of understanding this complicated legislation, as well as the comments of witnesses and others, and proposing amendments that could mitigate the devastating impacts that this legislation will have on Canada’s natural environment. This is a Herculean task. I intend no slight to the energy and sagacity of Subcommittee members in saying that the current legislative process is not likely to result in a law that will serve Canada’s public interest, the interests of communities affected by projects, or even the financial interests of proponents and investors.    

 

Less haste will yield more speed and a better law. In conclusion, I recommend that the House of Commons Subcommittee on Bill C-38 (Part III) remove the proposed CEAA 2012 from Bill C-38, the Jobs, Growth and Long-term Prosperity Act, and propose to the House of Commons Finance Committee that CEAA 2012 be referred to the House of Commons Environment and Sustainable Development Committee for its review in collaboration with a multistakeholder advisory group to be determined.   

 

In the alternative, I recommend that the Subcommittee on Bill C-38 (Part III) request that the Minister of Environment table the draft Designated Projects Regulation with the Subcommittee immediately and prior to conclusion of the Subcommittee’s hearings.  Without knowing what projects CEAA 2012 would apply to, the Subcommittee has no grounds for claiming that CEAA 2012 will serve any useful environmental assessment purpose whatsoever.

 

Stephen Hazell M.Sc. LL.B. is senior counsel with Ecovision Law, and a part-time professor in the Faculty of Law at University of Ottawa.  He is former director of regulatory and legislative affairs at the Canadian Environmental Assessment Agency.