Project Law Blog

Federal Environmental Assessment – What’s Next – A Tiered Approach

Posted in Aboriginal, Consultation, Environmental, Mining, Oil & Gas Law, Project Development, Project Permitting, Public Utility, Regulatory, Regulatory Compliance
Comment

This is the most recent blog in a series of posts which discuss the proposed recommendations set out by the Expert Panel in its report entitled Building Common Ground – A New Vision for Impact Assessment in Canada, The Final Report of the Expert Panel for the Review of the Environmental Assessment Processes (the “Report”), released April 5, 2017. This entry will focus on the proposed tiered approach to federal Impact Assessment (IA) processes, namely, the use of strategic and regional IAs to inform project IAs as outlined in Section 3 of the Report.

A Tiered Approach to Impact Assessment

As discussed in our previous posts, the proposed focus of the new IA process is sustainability. The Report notes that many elements of sustainability cannot be properly assessed at the project level. Sustainability requires the consideration of federal government policies, plans, and initiatives (“Federal Initiatives”) and regional issues. Given this, the Report proposes a tiered approach to IA whereby strategic and regional IAs will be developed to provide guidance and context against which project IAs can proceed. Below we provide a high level review of strategic and regional IAs including their purposes, when they would apply, how they would apply, and their anticipated benefits.

Strategic Impact Assessments

Strategic IAs provide direction on how specific Federal Initiatives should be considered as part of a regional or project IA. The purpose of a strategic IA is to provide clear direction and guidance on how the goals of the specific plan, program, or policy can be implemented through regional and project IAs. Some of the topics for existing initiatives identified in the Report include federal government policies on wetlands, species at risk, climate change, fisheries, migratory birds, ocean protection, and sustainable development. Depending on the nature of the Federal Initiative, a strategic IA may set criteria and thresholds against which regional and project IAs should be measured.

The Report recommends that a strategic IA be required for any Federal Initiative that:

  1. is likely to affect many projects subject to federal IA; and
  2. lacks clear guidance on how it should be applied in a project or regional IA.

These triggers are designed to exclude Federal Initiatives that already have clear detailed guidance as to how they are to apply to environmental assessment processes.

The Report recommends that strategic IAs be developed in consultation with interested jurisdictions, parties with relevant expertise or experience, and Indigenous Groups. The ultimate goal of a strategic IA should be to provide guidance and direction on:

  1. all pillars of sustainability that are relevant to implementing the Federal Initiative for project and/or regional IAs;
  2. the information or studies within each applicable pillar that are needed to address the Federal Initiative in project and/or regional IAs; and
  3. the objectives, criteria, thresholds, methods, or protocols that must be addressed in project and/or regional IAs.

The anticipated benefits of strategic IAs include enhanced realization of Federal Initiatives, greater clarity for proponents regarding information requirements and the objectives or standards that proposed projects must meet, and a common standard against which all participants can measure a project vis-à-vis a specific Federal Initiative.

Regional Impact Assessments

Regional IAs focus on the current state of a particular geographical area. The purpose of a regional IA is to provide the regional context necessary to accurately assess the potential impacts of a project through the project IA process. It is anticipated that regional IAs will gather baseline information regarding the current state of the region’s environment (including Aboriginal traditional uses), establish valued components and associated criteria, identify regional stressors and trends, provide local context and background information for matters of interest to the community, identify areas of importance, and assess cumulative impacts.

Regional IAs will not be required in every instance. The Report proposes that a regional IA is necessary only where the project in question occurs:

  1. on federal lands or marine areas with the potential for cumulative impacts; or
  2. outside of federal lands and marine areas where there is a potential for, or existing, cumulative impacts on federal interests.

The first scenario applies where there is broad federal authority over the area in question. The Report recommends that the regional IA extend beyond the specified area if there is co-operation with other jurisdictions. Regional IAs commenced under this trigger are expected to focus on the five pillars of sustainability and assess cumulative impacts in the region in order to develop a robust, forward-looking alternative development scenario approach.

The second scenario applies where there are several federal interests in the area, but no exclusive federal authority. Given the lack of exclusive federal authority, regional IAs required for these scenarios will be limited in the following two ways: (1) they will not include any consideration of alternative development scenarios; and (2) they will focus exclusively on cumulative impacts to valued components related to matters of federal interest. The scope of regional IAs under this trigger may be expanded if there is co-operation from other jurisdictions.

It is expected that regional IAs will be developed gradually through a transition process whereby certain regions will be prioritized over others, based on need. Regional IAs are expected to be developed through the same three stage process as project IAs, as described in our earlier post.

The integration of regional IAs into the federal IA process is expected to give rise to several benefits. First and foremost, regional IAs are expected to result in more efficient, effective, and accurate project IAs. Almost all parties that participated in the review of the federal environmental assessment processes agreed that some form of sustainability at a regional level was necessary to accurately assess the impacts of a project. Other anticipated benefits include better informed decisions on future projects, improved trust and relationships with Indigenous Groups, and a clear strategy for achieving regional sustainability through the assessment of alternative development scenarios.

Implications

The Expert Panel’s recommended tiered approach proposes a new way to consider Federal Initiatives and regional issues as part of the project approval process. While the existing federal environmental assessment regime includes mechanisms for the consideration of Federal Initiatives and the undertaking of regional studies, many participants in the review process indicated that these mechanisms are rarely used and ineffective in achieving the desired result.

The recommendations made by the Expert Panel are significant in that, in certain instances, they would render strategic and regional IAs mandatory. While the Report provides some guidance on the process for completing strategic and regional IAs, the work proposed is not a simple task and would require cooperation among several parties. As such, there remains considerable uncertainty as to when strategic and regional IAs would be available to inform project IAs. It remains to be seen which of the Expert Panel’s recommendations will be accepted by the federal government. Members of the public have until May 5, 2017 to provide the federal government their feedback on the Report.

With special thanks to Rochelle Collette and Daphne Rodzinyak for their assistance in finalizing this post.

On Friday, April 21, Lawson Lundell will be hosting a seminar on the Report and potential implications. For more information about the seminar, or to register, please email shabibovic@lawsonlundell.com with your name and company name by Wednesday, April 19th. We will have video conferencing available for those participating outside of Vancouver. If you would like to join via video conference, please let us know in your RSVP response and we will send you the video and dial-in information. Please note: spaces are limited.

Federal Environmental Assessment – What’s Next – Stages of Project Impact Assessment

Posted in Aboriginal, Consultation, Environmental, Mining, Oil & Gas Law, Project Development, Project Permitting, Public Utility, Regulatory, Regulatory Compliance
Comment

This is the most recent in a series of posts which discuss the proposed recommendations set out by the Expert Panel in its report entitled Building Common Ground – A New Vision for Impact Assessment in Canada, The Final Report of the Expert Panel for the Review of Environmental Assessment Processes (the “Report”). This entry will focus on some of the particulars of the assessment process as outlined in the Report.

Three-Stage Approach to Project Impact Assessment

Planning Phase

The Report contemplates a three-stage assessment process for projects: a Planning Phase, a Study Phase, and a Decision Phase. At all phases of the assessment, the Impact Assessment Commission (“IAC”) would take the lead and opportunities would be given for public participation.

The goal of the planning phase is to identify valued components, alternatives to the project that require study, and the sustainability framework for the project. To achieve this, the Expert Panel proposes the establishment of two committees for each project: a “Project Committee” and a “Government Expert Committee.” The Project Committee would be composed of representatives from various levels of government, Indigenous Groups, community organizations, non-governmental organizations, the proponent, and members of the public. The Government Expert Committee would be composed of technical experts from the IAC as well as experts from government organizations and Indigenous Groups. Ultimately, the Planning Phase would result in a conduct of assessment agreement, which would identify the design of the project, the areas of study required (including alternatives to the project or alternative designs), the consultation requirements, and cost and timing factors.

The Planning Phase represents a major change from the early stages of the current environmental assessment process. According to the Report, one of the primary reasons for the suggested change is that the starting point for the current environmental assessment is perceived to be too late for communities, stakeholders and Indigenous Groups to provide input into project design or alternative means by which a project could be realized.

Study Phase

Once the Planning Phase is complete, the assessment moves to the Study Phase, which would be similar to the current environmental assessment process. The studies identified in the conduct of assessment agreement will be completed by various experts including indigenous and public, with input given by the Project Committee and the Government Expert Committee. These studies would form the basis for the Impact Statement (akin to the current Environmental Impact Statement) that would identify the impacts of the project on the valued components and the five pillars of sustainability: environment, economy, social, cultural and health. At the end of the Study Phase, the two committees would meet to discuss the Impact Statement. At this meeting, the proponent would be expected to confirm the final proposed project design and components.

Unlike the current EA process, which is largely proponent-driven, the development of the Impact Statement would be driven by the IAC and include all interested participants from the Planning Phase, including the Project Committee and Government Expert Committee. The Study Phase will also include accommodation of Aboriginal and treaty rights and interests.

Decision Phase

Once the Impact Statement is completed, the project moves to the Decision Phase, in which the IAC will determine whether the project should be allowed to proceed. Where there is consensus for the Project to proceed, the Commissioner will draft an order reflecting the consensus. If there are areas of non-consensus, a review panel will be appointed to hold a hearing on all issues of non-consensus and then make the decision. The test for determining whether a project is allowed to proceed will involve a project-specific “sustainability test” to assess the impacts on valued components identified across the pillars of sustainability against established criteria; taking into account proposed mitigation and accommodation measures. In addition, the adequacy of Indigenous consultation would be addressed in the Decision Phase. The Decision Phase will conclude with the issuance of a Decision Statement allowing or rejecting the project.

The Report recommends that the IAC would seek Indigenous consent and issue a public decision statement on whether the project provides an overall net benefit to Canada across the five pillars of sustainability for present and future generations.

Implications

The proposed three-stage approach represents a significant departure from the current environmental assessment process. The recommendations in the Report look to streamline the hearing process and focus on issues of non-consensus, incorporate an independent decision maker, and build in transparent, evidence-based decisions. Overall, the process outlined in the Report focuses outcomes for projects on sustainability using net benefits, rather than the current “significant adverse environmental effects” test.

Of course, time will tell which of the proposed changes to the stages of the assessment process are adopted into legislation. The federal government will be accepting public comments on the Report until May 5, 2017.

On Friday, April 21, Lawson Lundell will be hosting a seminar on the Expert Panel’s report, and potential implications.  For more information about the seminar, or to register please email shabibovic@lawsonlundell.com with your name and company name by Wednesday, April 19th. We will have video conferencing available for those participating outside of Vancouver. If you would like to join via video conference, please let us know in your RSVP response and we will send you the video and dial-in information. Please note: spaces are limited.

Federal Environmental Assessment – What’s Next – A Single Impact Assessment Authority

Posted in Aboriginal, Consultation, Environmental, Mining, Oil & Gas Law, Project Development, Project Permitting, Public Utility, Regulatory, Regulatory Compliance
Comment

Over the past week, the Project Law Blog has been discussing the recommendations set out by the Expert Panel in its report entitled Building Common Ground – A New Vision for Impact Assessment in Canada, The Final Report of the Expert Panel for the Review of Environmental Assessment Processes (the “Report”). We have provided an overview of the recommendations, discussed the Indigenous considerations outlined in the Report, and described the proposed new triggers for federal Impact Assessments. Today’s post provides an overview of the Report’s proposed new assessment authority.

Historical Approaches

Under the former Canadian Environmental Assessment Act, responsibility for environmental assessment was spread across all federal decision makers.  In 2012, responsibility for conducting assessments was centralized in three Responsible Authorities: the National Energy Board (“NEB”), the Canadian Nuclear Safety Commission (“CNSC”) and the Canadian Environmental Assessment Agency (“the Agency”).  The NEB and CNSC act as Responsible Authorities for projects requiring an assessment which they regulate, while all other assessments fall under the responsibility of the Agency.

Panel Recommendations

In response to concerns around the impartiality of the current process, the Panel has recommended that a single responsible Impact Assessment authority be created. The Impact Assessment authority should:

  • be established as a quasi-judicial tribunal empowered to undertake a full range of facilitation and dispute resolution processes;
  • have a strong regional presence;
  • have robust internal quality assurance processes;
  • provide reasons for its decisions; and
  • be subject to an appeal to the Governor in Council, who should also provide reasons for its decisions.

The following sets out further recommendations of the Panel for the proposed structure of the new Impact Assessment authority.

Single, Quasi-Judicial Authority

The single responsible authority would be a new independent, quasi-judicial authority known as the Impact Assessment Commission (the “Commission”). The Commission would be the sole authority empowered to conduct and decide upon Impact Assessments for projects under federal jurisdiction. The Report refers to the Canadian Radio-television and Telecommunications Commission as an example of Canada’s longstanding experience with independent, quasi-judicial tribunals making final decisions.

The Commission would be divided into the following functions:

  • Planning and Assessment;
  • Science and Knowledge;
  • Indigenous Relations;
  • Public Participation;
  • Proponent Liaison;
  • Information Management; and
  • Monitoring and Enforcement.

Members of the Commission would be appointed by the Governor in Council. The Commission would be headed by a Chairperson who would, along with other Commissioners, be the federal decision-makers.  The Commission would be independent with respect to its decision-making powers, though the government may be able provide direction on policy matters. The Commission would also include a Chief Science Officer with the authority and duty to verify the adequacy of studies used in Impact Assessments.

Members of Indigenous groups would play a central role in the Commission. The Commission would be empowered to work with Indigenous groups to integrate Indigenous assessment processes and to fulfil consultation and accommodation requirements.

Quality Assurance, Internal Audit & Ombudsperson

The Panel recommends that the Commission establish strong internal controls. A quality assurance program would assess the quality of Impact Assessments and ensure that continuous learning and improvement takes place; an internal audit function would ensure rigorous financial controls and disciplined money management; and an ombudsperson-type function would receive and investigate complaints regarding the Commission’s conduct and issue recommendations to the units concerned.

The reports of all of these programs and functions would be made publicly available.

Regional Presence

One of the Panel’s key recommendations is the Commission have a strong regional presence across Canada. Its operations should be conducted largely from regional offices with common services based in headquarters. Each office would be responsible for the conduct of Impact Assessments in its particular region and would be staffed to conduct the Impact Assessments, Indigenous relations, and public participation processes, as well as perform monitoring and enforcement duties.

Reasons for Decisions

The Commission will be required to provide reasons for its decisions based on the new sustainability model. In the Report, the Panel noted that the current environmental assessment process does not provide reasons or information on the justification for major projects, and viewed this as an important source of frustration and a key reason why people do not trust federal environmental assessment outcomes.

Appeal Process

The Commission’s decisions would be subject to an appeal to the Governor in Council. The appeal process would be available to any participant, though this right would be limited by some measure of standing in respect to a particular assessment. Appeal decisions should also be accompanied by full reasons based on the purposes of the legislation.

Conclusion

The recommendation for a new federal Impact Assessment authority is a significant one. Unlike changes to project triggers, which could be effected by way of amendments to current regulations, creating a new quasi-judicial authority would require substantial legislative and policy changes, the creation and staffing of regional offices, and the appointment of a diverse group of Commissioners. This recommendation will require careful consideration by the federal government and, if adopted, will likely take some period of time to implement.

As has been repeated in other posts, the extent to which the Report’s recommendations will be adopted by the federal government remains to be seen. The federal government will be accepting public comments on the Report until May 5, 2017.

With special thanks to Rochelle Collette for her assistance in researching and drafting this post. 

On Friday, April 21, Lawson Lundell will be hosting a seminar on the Expert Panel’s report, and potential implications.  For more information about the seminar, or to register please email shabibovic@lawsonlundell.com with your name and company name by Wednesday, April 19th. We will have video conferencing available for those participating outside of Vancouver. If you would like to join via video conference, please let us know in your RSVP response and we will send you the video and dial-in information. Please note: spaces are limited.

Federal Environmental Assessment – What’s Next? – Proposed New Triggers

Posted in Aboriginal, Consultation, Environmental, Mining, Oil & Gas Law, Project Development, Project Permitting, Public Utility, Regulatory, Regulatory Compliance
Comment

Last week we summarized the recommendations set out by the Expert Panel established by the Minister of Environment and Climate Change in its report entitled Building Common Ground – A New Vision for Impact Assessment in Canada, The Final Report of the Expert Panel for the Review of Environmental Assessment Processes (the “Report”). One of those recommendations was to change the way projects “trigger” the federal environmental assessment (“EA”) or impact assessment (“IA”) requirement. This post provides an overview of the former and present triggers for federal EA, and the proposed new approach in the Report.

The Previous Approach: CEAA 1992

Under the previous legislation, thousands of projects per year “triggered” the federal EA requirement because they needed a federal permit, licence, or other approval under one or more of the numerous legislative provisions listed in the old Law List Regulations. This broad net approach meant that many projects triggered a federal EA irrespective of the project’s anticipated impact on the environment.

The Current Approach: CEAA 2012

Under the current legislation, federal EAs may be required where a project:

  • is a “designated project” pursuant to the Regulations Designating Physical Activities;
  • meets the scale threshold prescribed by the Regulations; and
  • may cause adverse “environmental effects” (as defined for this purpose, which include environmental aspects within the federal legislative authority).

These requirements create a list of the type and scale (and sometimes location) of projects that generally require a federal EA by one of three federal authorities, the Canadian Environmental Assessment Agency (the “Agency”), the National Energy Board, or the Canadian Nuclear Safety Commission, depending on the type of project involved. Designated projects for which the Agency has responsibility trigger a “screening” phase in which the Agency determines whether a federal EA is required. The Minister of Environment also has the power to designate additional physical activities in an Order, in which case such projects would require a federal EA. Under the current scheme several dozen projects a year trigger a federal EA.

The Proposed Approach

The new approach described in the Report would focus on matters of federal interest and consequential impacts on present and future generations. The three proposed trigger mechanisms are as follows:

  1. a new Project List which includes “projects that are likely to adversely impact matters of federal interest in a way that is consequential for present and future generations.” These projects would automatically require a federal IA;
  2. for projects not on the Project List, a set of non-discretionary statutory criteria which require an IA of “projects that have the potential to impact present and future generations in a way that is consequential.” These projects would automatically require a federal IA; and
  3. a process to allow proponents or any person or group to request that a Project IA be carried out. In each case the decision whether to grant the request would be made by the new IA Authority envisioned in the Report.

The Expert Panel anticipates that hundreds of Project IAs would be triggered each year under this proposal. However, the Report presents the proposed triggers in conceptual form only. It suggests that the most important factor should be “effects on federal interests” (to be defined more broadly than under CEAA 2012). The Report also indicates that there should be a materiality test so that Projects with “a trivial impact” on federal interests do not trigger IA. The Report states that the threshold should be defined as a “consequential impact” and tied to the sustainability framework described elsewhere in the Report. It does not give concrete examples of a potential test for a “consequential” impact.

The extent to which the Report’s recommendations will be adopted by the federal government remains to be seen. The federal government will be accepting public comments on the Report until May 5, 2017.

With special thanks to Rochelle Collette for her assistance in researching and drafting this post. 

On Friday, April 21, Lawson Lundell will be hosting a seminar on the Expert Panel’s report, and potential implications.  For more information about the seminar, or to register please email shabibovic@lawsonlundell.com with your name and company name by Wednesday, April 19th. We will have video conferencing available for those participating outside of Vancouver. If you would like to join via video conference, please let us know in your RSVP response and we will send you the video and dial-in information. Please note: spaces are limited.

Indigenous Considerations in the Expert Panel Report on Federal Environmental Assessment Processes

Posted in Aboriginal, Consultation, Environmental, Mining, Oil & Gas Law, Project Development, Project Permitting, Public Law, Regulatory, Regulatory Compliance
Comment

Our April 7 post on the report of the Expert Panel reviewing federal environmental assessment processes noted that the report contains recommendations for greater inclusion of Indigenous peoples in federal environmental assessment processes. This post looks in more detail at the report’s key recommendations and commentary on that subject. Overall, the Expert Panel report envisions a much greater level of direct Indigenous participation in environmental assessment, including at the decision-making level, than is currently the case, as well as significantly enhanced consideration of impacts on Indigenous rights and interests in federal environmental assessments.

Consent

The Expert Panel report envisions Indigenous peoples as being on par with other levels of government in federal environmental assessments. The report refers to the “inherent jurisdiction” of Indigenous groups over their traditional territories, and, consistent with the federal government’s adoption of the United Nations Declaration of Rights of Indigenous Peoples (“UNDRIP”) and its “free, prior, informed consent” (“FPIC”) principle, recommends that Indigenous peoples who are impacted by a project should have the right to withhold consent to the project. The Expert Panel report expects the right to withhold consent to be exercised reasonably, with some form of dispute resolution process available to review the reasonableness of a decision to withhold consent. Where there is a disagreement between Indigenous groups about whether any given Indigenous group is affected by a project, and should therefore have a right to give or withhold consent over the project, the report suggests that the disagreement should be resolved by the Indigenous groups themselves in accordance with their own laws and traditions.

The Expert Panel report does not directly address the consequences of an Indigenous group withholding its consent, in particular whether a project could still proceed if it had otherwise received all necessary federal or provincial approvals. As a result, it is not clear if the Expert Panel is recommending that each Indigenous group should have a veto over projects that affect it.

Indigenous Environmental Assessment Processes

The Expert Panel report notes that some Indigenous groups have legal rights to participate in environmental assessment processes, pursuant to modern land claims agreements, self government agreements, and federal laws. The report suggests that Indigenous groups without modern treaties should, if they wish to do so, be able to establish their own environmental assessment processes, and that federal environmental assessment processes should support Indigenous jurisdiction in that regard.

The Expert Panel report does not address the legal or jurisdictional basis for Indigenous groups establishing their own environmental assessment processes (other than those created under modern land claims agreements). To the extent that this would be enabled by federal environmental assessment laws, the report does not address the federal government’s jurisdiction to provide for the application of Indigenous environmental assessment processes to provincial Crown lands or projects on provincial Crown lands.

Impact on Indigenous Peoples and Lands as Trigger for Federal IA

Under the current Canadian Environmental Assessment Act, 2012, (“CEAA 2012”) when a federal assessment is triggered for a project, the environmental effects that must be considered include the effects of changes in the environment on Indigenous culture and heritage and Indigenous use of lands and resources for traditional purposes. The Expert Panel report recommends that federal environmental assessments should be conducted on projects that have potential impacts on federal interests that are consequential to present and future generations. The report identifies Indigenous peoples and lands as one of those federal interests. Indigenous lands are not limited to federal lands, meaning that impacts on Indigenous peoples or their lands from projects within provinces or on provincial Crown lands could serve to trigger federal environmental assessments. This would greatly expand federal involvement in environmental assessments in provinces beyond current levels.

The Expert Panel report also suggests that, when assessing potential impacts of activities on Aboriginal and treaty rights, asserted rights should be assessed along with established rights. The report does not address how environmental assessment processes should address situations where disputes arise over whether there is a credible basis for the asserted right.

Formal Participation in Project Committees and Review Panels

The Expert Panel report recommends that, for each project subject to the federal environmental assessment process (estimated to be in the hundreds annually), a project committee would be established, along with a separate committee of government experts. The project committee would have representatives of Indigenous groups as well as community organizations, non-governmental organizations, the proponent and members of the public. The project committee, along with the government expert committee, would participate in environmental assessments overseen by the proposed new Impact Assessment Commission. The two committees would review the impact statement for the project to identify for the Impact Assessment Commission topics of consensus and disagreement.

The report also suggests that Indigenous peoples would be represented on any review panel established to make environmental assessment decisions on a project where there are important issues of non-consensus about the project’s impacts and mitigation measures.

Enhanced Participation Would Not Replace Crown’s Duty to Consult and Accommodate

While the Expert Panel report recommends direct participation by Indigenous representatives in environmental assessment structures and decision-making, the report states that this would not replace the need for direct Crown consultation and accommodation discussions with Indigenous groups. The report proposes that the Impact Assessment Commission would be charged with the responsibility of ensuring that the Crown’s consultation and accommodation obligations are met. In this regard, the Expert Panel report distinguishes between impact mitigation measures established through environmental assessment processes and accommodation measures arising from direct Crown consultations with Indigenous groups.

Capacity Funding

The Expert Panel report states that capacity constraints are a barrier to effective Indigenous participation in environmental assessments. The report recommends that a long-term funding program be put in place to allow development of environmental assessment capacity suited to the needs of specific Indigenous groups. This would allow Indigenous groups to use their time and resources efficiently during project environmental assessments, and is needed to create conditions where Indigenous groups are able to exercise the “free, prior, informed consent” contemplated under UNDRIP. The report states that Indigenous groups should be able to define for themselves their respective capacity needs and how to address those needs.

Environmental Assessments and Impact Benefit Agreements

The Expert Panel report notes that Impact Benefit Agreements (“IBAs”) are private contractual arrangements between project proponents and Indigenous groups. The report notes that IBAs have become an important way for Indigenous groups to address project concerns with proponents. However the report suggests that government has a role in ensuring that Indigenous groups have a full appreciation of potential project impacts prior to negotiating an IBA. The report also suggests that enhanced consideration of Indigenous interests in federal environmental assessments would reduce the need for Indigenous groups to rely on those private contractual arrangements to address concerns related to accommodation of their rights and interests. The report does not, however, make any recommendations to the federal government about IBAs or how they should be treated under federal environmental assessment laws.

Indigenous Knowledge

The Expert Panel report recommends that federal environmental assessment legislation require that Indigenous knowledge be integrated into all phases of environmental assessment.  Indigenous groups would determine for themselves how Indigenous knowledge studies should be conducted, and would enter into agreements on how those studies should be integrated into environmental assessments.

Clearly, the Expert Panel report envisions a role for Indigenous participation in planning, conduct and decision-making for, and consideration of Indigenous interests in, federal environmental assessments that far exceeds what occurs today under CEAA 2012.  The Expert Panel acknowledges that implementing recommendations for increased Indigenous participation, along with other recommendations in the report, may add to the costs of federal environmental assessments and may extend timelines. However, the report argues the model it proposes will “meet the test of financial prudence and will effectively balance the different perspectives regarding the time required” for environmental assessments.

As noted in our April 7 post, the federal government is seeking comment on the recommendations in the Expert Panel report prior to May 5, 2017. The federal government will then consider the report and responses to the recommendations this fall, with a view to introducing legislation in 2018.

 

Federal Environmental Assessment – What’s Next? – Expert Panel Releases Report

Posted in Aboriginal, Consultation, Environmental, Mining, Oil & Gas Law, Project Development, Project Permitting, Public Utility, Regulatory, Regulatory Compliance
Comment

On April 5, 2017, an Expert Panel established by the Minister of Environment and Climate Change (the “Panel”) released its report, Building Common Ground – A New Vision for Impact Assessment in Canada, The Final Report of the Expert Panel for the Review of Environmental Assessment Processes (the “Report”). Our post of June 26, 2016 discussed the Federal Government’s review of key environmental and regulatory legislation and processes. The Report is a step in this review and Canadians are invited to comment on the Report until May 5, 2017.

The executive summary of the Report sets out 48 recommendations regarding legislative and regulatory changes to the current environmental assessment (“EA”) processes associated with the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”).  The recommendations, if adopted, would represent significant changes from the current approach to federal EA processes. Some key themes covered in the Report are:

  • a shift in focus from EA (with an emphasis on the bio-physical environment) to a sustainability-based Impact Assessment (“IA”) process based on five pillars of sustainability: environmental, health, social, cultural and economic considerations;
  • the purpose of federal IA, and an approach that incorporates not only Project IAs, but also Strategic IAs and Regional IAs;
  • considerations regarding Indigenous Peoples, their inclusion in the processes and in decision-making, and IA processes reflecting the principles of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP);
  • the establishment of a single IA Authority as a quasi-judicial tribunal, responsible for leading the development of the Impact Statement, and with the power to compel expertise from federal scientists, retain external scientists, and verify the accuracy of studies across all five pillars of sustainability;
  • evidence-based IA, incorporating Indigenous knowledge, community knowledge, and the best available scientific information, and including provision for a federal database for baseline and monitoring data;
  • a proposed new process for Project IA that provides for open, meaningful public participation, involves multi-party in-person engagement, and has three phases: Planning, Study, and Decision;
  • a Decision Phase in which the IA Authority would seek Indigenous consent, and would issue a decision statement on whether the project contributes positively to the sustainability of Canada’s development;
  • new triggers for Project IA based in part on a new Project List, as well as other projects that are likely to have a consequential impact on matters of federal interest, the intention being to have hundreds of projects per year triggering federal IA, rather than the dozens per year that trigger EA under CEAA 2012, or the thousands per year that triggered federal EA under the pre-2012 CEAA legislation;
  • co-operation among jurisdictions, whether through co-operative IAs or substituted IAs (but without the equivalency option that is set out in CEAA 2012);
  • mandatory project monitoring and follow-up programs, which may include Indigenous Groups and local communities; and
  • provision of a broad set of enforcement tools, including the possibility of the IA Authority carrying out compliance and enforcement activities with other jurisdictions.

Underlying Focus – The Shift to Sustainability

Underlying the entire Report is the Panel’s recommendation that sustainability be central to any new IA legislation, meaning that assessments should move beyond the bio-physical environment to encompass a review of impacts on all five of the pillars of sustainability identified in the Report (environment, society, economy, health, and culture). Changing the nomenclature from Environmental Assessment to Impact Assessment underscores the substantive changes proposed in the Report.

The Panel further recommended a sustainability framework be defined at the outset of each assessment, addressing each of the five pillars. The panel recommended that the decision of whether to approve a project should no longer be based on the significant adverse environmental effects test, but rather should be based on the sustainability framework in the form of a sustainability test. This is a departure from CEAA 2012 and historic assessment processes, which concentrated on the significance of adverse environmental effects.

There are many points of interest covered in the Report. Stay tuned for additional posts from our practice group in the coming days, elaborating on some of the other key points.

Implications

The Report represents another step in understanding how the Federal Government may amend federal EA processes, but does not provide concrete examples of what the new legislation may look like. The recommendations, if adopted, imply a substantial re-write of the legislation. For project proponents – particularly industry – the message remains that assessments will continue to be required for new projects, but how new triggers and a new test will be legislated remains unclear. The changes may also involve the establishment of a new regulator and new assessment and decision-making processes.  Project proponents must pay close attention to the Federal Government’s response to the Panel’s recommendations, and may consider commenting on the Report to ensure their views are considered.

B.C. Court of Appeal review of the BC Environmental Assessment Process – Case Comment on Fort Nelson First Nation v. British Columbia

Posted in Aboriginal, Environmental
Comment

Introduction

In Fort Nelson First Nation v. British Columbia (Environmental Assessment Office), 2016 BCCA 500, the B.C. Court of Appeal recently considered three issues involving the Reviewable Projects Regulation under B.C.’s Environmental Assessment Act:

  1. whether a letter from the Environmental Assessment Office (“EAO”) confirming a proponent’s interpretation of the Regulation is a judicially reviewable “decision”;
  2. the interpretation of the threshold to trigger a provincial environmental assessment of  a proposed sand and gravel pit; and
  3. whether the EAO’s communication to the proponent could amount to “Crown conduct” that triggers a Crown duty to consult with potentially affected Aboriginal peoples.

Takeaways

  1. A confirmation by the EAO that a project does not meet the threshold for environmental assessment is not a decision subject to judicial review. Proponents remain responsible under the Act for knowing whether their project is reviewable.
  2. The EAO’s interpretation of the threshold in the Regulation was reasonable — the term “production capacity” does not include waste material. This provides certainty to mining proponents about the actual threshold for environmental assessment.
  3. The interpretation of a regulation, standing alone, does not attract the Crown’s duty to consult with Aboriginal peoples. This provides both the Crown and project proponents with certainty, and avoids the tension that would arise if legislation were interpreted and applied differently in different areas of the province as a result of Aboriginal consultation.

Background Facts

The case dealt with whether a proposed frac sand mine near Fort Nelson, B.C. was subject to provincial environmental assessment. The proponent wrote to the EAO providing a description of the project and the applicable environmental assessment trigger, and asked for the EAO’s confirmation that the project was below the trigger threshold. That request specified that the production capacity of the mine would not exceed 240,000 tonnes per year, based on the proponent’s assumption that this production capacity would not include any excavated material to be screened out as “waste.”

Under the Regulation, a sand and gravel pit is a reviewable project if it is:

A new pit facility that will have a production capacity of:

(a)        > 500 000 tonnes/year of excavated sand or gravel or both sand and gravel during at least one year of its operation, or

(b)        over a period of < 4 years of operation, > 1 000 000 tonnes of excavated sand or gravel or both sand and gravel.

The EAO confirmed in a letter (the “Letter”) the proponent’s understanding that the project would not exceed the trigger threshold.  It also confirmed that “[p]roduction capacity does not include that portion of the excavated material which would not be sold or used in the operation.” However, the EAO was clear that “[p]roject proponents are responsible for making their own determination as to whether or not their proposed project falls within the thresholds set out in the [Regulation].”

The Fort Nelson First Nation (the “First Nation”) disagreed – its position was that the project would exceed this threshold.  It brought a petition for judicial review on the grounds that the EAO’s interpretation was unreasonable arguing that all of the excavated material, including waste, should count towards the production capacity. The First Nation further argued that the EAO’s interpretation of the provision and consequent confirmation that the project did not exceed the trigger threshold was Crown conduct that attracted the duty to consult. The First Nation further argued that consultation on these points had been inadequate.

Decision on Judicial Review

On judicial review, the Chambers judge found the EAO’s interpretation unreasonable and set aside the Letter. He held that the threshold criteria are not limited to just the sand and gravel to be sold or used by the proponent. He sent the determination of whether the proposed mine met the threshold back to the EAO for reconsideration.  The judge also found that the Crown had a legal duty to meaningfully consult with the First Nation in good faith and to seek to accommodate the First Nation’s Aboriginal rights under Treaty 8 with respect to the subject matter of the Letter, and declared that the Crown had failed to fulfill this duty to consult.  The Executive Director of the EAO and the project proponent appealed the decision.

The Appeal

Issue 1 – Was there a reviewable decision at all?

The Court of Appeal disposed of the appeal on a key preliminary issue: Was there anything subject to judicial review? The basic premise underlying the Chambers judge’s decision was that the Letter was a decision capable of being reviewed by the courts.

On appeal, the Court held that “judicial review provides for relief…in relation to the exercise of a statutory power of decision conferred by an enactment to make a decision deciding or prescribing (a) the legal rights, powers, privileges, immunities, duties or liabilities of a person, or (b) the eligibility of a person to receive, or to continue to receive, a benefit or licence.” The Court then went on to consider the scheme of the Act to determine whether the Letter was an exercise of a statutory power of decision.

Under the environmental assessment scheme in BC, the onus is on the proponent to determine whether a project is reviewable based on the criteria set out in the Regulation. The legislation contains no mandated decision by the EAO regarding whether a project is reviewable under the Regulation.

The Court of Appeal therefore concluded that the Letter was not a decision by a statutory delegate about whether the project was a reviewable project under the Regulation. The Letter was clear that it was not a “legal opinion” and confirmed that the onus for determining the need for an environmental assessment under the Regulation is on the proponent.  The Court characterized the Letter as a “non-binding opinion” that was not subject to judicial review.

Issue 2 – What is the threshold for triggering environmental assessment?

Despite this preliminary conclusion, the Court went on to consider the merits of the appeal and interpreted the threshold necessary to trigger an environmental assessment for a sand and gravel mine.

The EAO’s interpretation and application of the Regulation was upheld as reasonable. The EAO favoured, as was done in Friends of Davie Bay v. Province of British Columbia, 2012 BCCA 293, an interpretation which creates a “bright-line rule” that can be applied without undue speculation.  Its view was that “production capacity” means the amount of “product” or “output” of something that has value added, and that it would be contrary to the ordinary meaning of production capacity to include “waste material” within its definition. The Court agreed that this interpretation is consistent with the scheme of the Act and the Regulation.  In each of the other project types listed within Table 6 (Mine Projects) of the Regulation, production capacity is defined with respect to the output of the mine.

Importantly, the Court also concluded that the EAO’s articulation of the threshold did not undermine the statutory scheme and objectives. Although the object of the Act is environmental protection, the overall scheme balances the need for environmental protection against encouraging economic development. The thresholds in the Regulation are designed to be easily applied by proponents, while other provisions in the Act function as safeguards, allowing projects to be designated as reviewable by the Minister or, in some circumstances, by the Executive Director.  The Court concluded that the EAO’s interpretation of the threshold criteria was reasonable.

Issue 3 – Was the Crown’s duty to consult engaged?

Finally, the Court considered whether the Crown’s duty to consult had been triggered. One of the key points of disagreement between the parties was whether the EAO’s interpretation and application of the reviewability threshold constituted “Crown contemplated conduct”. Both the proponent and the EAO argued that statutory interpretation is not “Crown conduct” capable of attracting a duty to consult. The First Nation argued that interpreting and applying the reviewability threshold was in fact “Crown contemplated conduct” and, in this case, the adverse impact was that the project would be subject to reduced environmental oversight, and would therefore expose the First Nation to greater potential impacts to its Aboriginal or Treaty rights.

The Court noted that the Supreme Court of Canada jurisprudence in this area is well-established. “A duty to consult arises when: (1) the Crown has knowledge (actual or constructive) of a potential Aboriginal claim or right; (2) the Crown contemplates conduct; and, (3) there is a potential that the contemplated conduct may adversely affect an Aboriginal claim or right.” Crown contemplated conduct which may adversely impact on an Aboriginal claim or right is not confined to government exercises of statutory power, but can also extend to “strategic, higher level decisions.”

The Court dismissed the First Nation’s claim that a duty to consult was triggered by the EAO’s interpretation. The Court grounded its finding in the tension that arises between the purpose of the duty to consult and the uniform nature of statutory interpretation.  The Court held that regulations are rules of general application intended to apply universally throughout the Province. The “general objective behind statutory interpretation…is to provide a uniform answer to the meaning of an enactment that applies universally to all subject to it.” (para. 124) Imposing a duty to consult over the interpretation of the Regulation may lead to different interpretations applying to different projects.

In so finding, the Court rejected the Chambers judge’s finding that the interpretation of the Regulation was a “strategic, high-level decision” that could have potential adverse effects on Aboriginal or Treaty rights. The Court went on to state that the “Crown conduct” that may trigger the duty to consult in such a case is the Crown’s contemplated issuance of the sought permit or other authorization.

In any event, the Court found that had the duty to consult been engaged, the EAO had fulfilled its duty.

With thanks to articling student Rochelle Collette for her assistance.

Lawson Lundell Contributes to Practical Law UK: A Q&A guide to electricity regulation in Canada

Posted in Project Development
Comment

Jeff Christian and Lana Shipley, Partners at Lawson Lundell LLP, have written a Q&A guide to electricity regulation in Canada. The Q&A gives a high level overview of the domestic electricity market, including domestic electricity companies, electricity generation and renewable energy, transmission, distribution, supply and tax issues. It covers the regulatory structure; foreign ownership; import of electricity; authorisation and operating requirements; trading between generators and suppliers; rates and conditions of sale and proposals for reform.

To read the full guide, click here.

Lawson Lundell Contributes to Practical Law UK: a Q&A guide to oil and gas regulation in Canada.

Posted in Oil & Gas Law
Comment

Lewis Manning and Bernadita Tamura-O’Connor, Partners at Lawson Lundell LLP, have written a Q&A guide to oil and gas regulation in Canada. The Q&A provides a high level overview of the domestic oil and gas sector, rights to oil and gas, health, safety, and the environment, sale and trade in oil and gas, tax and enforcement of regulation. It covers transfer of rights; transportation by pipeline; environmental impact assessments; decommissioning; waste regulations and proposals for reform.

To view the full guide, click here.

 

Lawson Lundell Contributes Canadian Chapter of 2017 International Comparative Legal Guide: Mining Law

Posted in Mining
Comment

Karen MacMillan and Khaled Abdel-Barr, Partners in Lawson Lundell’s Mining Group, have written the Canadian chapter of this year’s International Comparative Legal Guide: Mining Law. The chapter covers the following topics:

  • Relevant Authorities and Legislation
  • Mechanics of Acquisition of Rights
  • Foreign Ownership and Indigenous Ownership Requirements and Restrictions
  • Processing and Beneficiation
  • Transfer and Encumbrance
  • Dealing in Rights by Means of Transferring Subdivisions, Ceding Undivided Shares and Mining of Mixed Minerals
  • Rights to Use Surface of Land
  • Environmental
  • Native Title and Land Rights
  • Health and Safety
  • Administrative Aspects
  • Constitutional Law
  • Taxes and Royalties
  • Regional and Local Rules and Laws
  • Cancellation, Abandonment and Relinquishment

To view the full chapter, click here.