Project Law Blog

Redwater SCC Leave Decision

Posted in Insolvency and Restructuring, Oil & Gas Law, Public Utility
Comment

Introduction

The Redwater Energy Corporation (Redwater) saga endures as the issues in the case continue to loom large in the Alberta oil and gas industry and the Federal bankruptcy regime. On Thursday, November 9, 2017, the Supreme Court of Canada granted leave to appeal the Alberta Court of Appeal’s decision on the matter on an expedited basis. The crux of this case, followed very closely by the Canadian oil and gas industry, is whether the provincial regulatory regime conflicts operationally with the federal Bankruptcy and Insolvency legislation. The Alberta Court of Appeal upheld the Alberta Court of Queen’s Bench decision that a receiver and a trustee in bankruptcy are permitted to renounce or disclaim an insolvent debtor’s interest in unproductive oil and gas assets, including those subject to abandonment and reclamation obligations and orders.

The Facts

Redwater was a public oil and gas corporation that became insolvent in the spring of 2015. It owed its principal secured lender, Alberta Treasury Branches (ATB), approximately $5 million.  Following an application by ATB, Grant Thornton Limited was appointed as the receiver and trustee. Redwater owned a number of oil wells, some of which were valuable and others that were at risk of becoming “orphans wells” due to the fact that the costs of remediating and abandoning the wells exceeded the value of the wells and Redwater was not financially able to pay for the remediation.

Redwater’s trustee in bankruptcy wished to renounce or disclaim Redwater’s interest in the wells at risk to become orphan wells. The Alberta Energy Regulator (AER) argued that the benefit of obtaining licences to produce should come with the burden of abandonment/reclamation and therefore a sufficient portion of the sale proceeds from the profitable wells should be set aside to meet the expected costs of remediating the orphan wells.

Overview of the Lower Court Decisions

On May 19, 2016, the Alberta Court of Queen’s Bench held that a trustee in bankruptcy has the right to disclaim unproductive oil and gas assets, including those subject to abandonment orders. As set out in our June 22, 2016 blog post, this creates an inherent risk that if the Orphan Well Association is unable to fund the increase in abandonment and reclamation liabilities from disclaimed assets, the obligation to do so will borne by Alberta taxpayers. In response to the decision, the AER issued two bulletins: Bulletins 2016-16 and 2016-21, summarized in our previous post from June 22, 2016 and our post from July 12, 2016, respectively.

On April 24, 2017, the Honourable Mr. Justice Slatter affirmed the Alberta Court of Queen’s Bench decision, writing for a 2-1 majority. The AER and the Orphan Well Association argued that the Alberta Court of Queen’s Bench erred in finding that the receiver should not have to carry out the abandonment, reclamation and remediation obligations of the insolvent company’s unproductive oil and gas assets or perform the abandonment orders as issued by the AER. The majority of the Alberta Court of Appeal dismissed the appeal and held, based on the doctrine of federal paramountcy, that the obligations of trustees and receivers pursuant to the Oil and Gas Conservation Act and the Pipeline Act frustrate the federal purpose of the Bankruptcy and Insolvency Act regarding the priority of creditors and that the obligations of the licensee (debtor) under the AER licensing regime are essentially unprotected monetary claims and therefore unenforceable against the trustee and receiver. The Court of Appeal clearly stated that the AER cannot insist that a trustee dedicate parts of the bankrupt estate to satisfy environmental claims in priority to those of the secured creditor – to the extent that provincial legislation leads to a different result, the paramountcy doctrine is engaged.

Pending SCC Decision and the Assignment of Environmental Responsibility

Thus the question that remains to be decided by the Supreme Court of Canada: who should ultimately bear the responsibility for abandoning, reclaiming and remediating sites and fulfill the environmental responsibilities associated with unproductive oil and gas assets?

As stated in the Leave to Appeal Application, the SCC is being asked to consider a number of questions, including whether the majority of the Alberta Court of Appeal erred in:

  • Its broad interpretation of the trustee’s powers to disclaim certain assets (wells) under s.14.06 of the BIA?
  • Whether the provincial licensing regime that obligates an oil and gas producer to abandon and reclaim its well sites creates an unauthorized priority in bankruptcy proceedings?
  • Whether the provincial oil and gas licensing regimes and obligations to abandon and reclaim well sites and the federal bankruptcy regimes can co-exist without conflict such that both can operate as they are presently drafted?

The matters to be argued have public importance and broad reaching impacts to the oil and gas industry, the federal insolvency industry, the banking industry and the public that will be looked upon as the funder of last resort in the event the environmental obligations to clean up unproductive well sites are left in limbo.

Spiritual Sites and Ski Hills: Ktunaxa Nation v. British Columbia (Forest, Lands and Natural Resources Operations), 2017 SCC 54

Posted in Aboriginal, Administrative Law, Constitutional Law, Consultation, Environmental, Project Development, Project Permitting, Regulatory, Regulatory Compliance
Comment

The Supreme Court of Canada (“SCC”) rendered its decision in Ktunaxa Nation v. British Columbia (Forest, Lands and Natural Resources Operations) on November 2, 2017. This decision has important implications for both project proponents and Aboriginal groups in Canada.

Background

The Ktunaxa National Council represents the four Ktunaxa communities in Canada: A·kisq̓nuknik̓ (Columbia Lake Indian Band), Yaqaón Nuñkiy (Lower Kootenay Indian Band), Aq’am (St. Mary’s Indian Band) and Akan’kunik (Tobacco Plains Indian Band). The Ktunaxa traditional territory is said to cover lands in British Columbia, Alberta, Washington, Idaho, and Montana.

The dispute stems from a proposal by Glacier Resorts Ltd. (“Glacier”) to build a year-round ski resort in the Jumbo Valley near Invermere, BC (the “Proposed Resort”). This led to decades of regulatory processes and negotiations between Glacier, the BC government and stakeholders (including the Ktunaxa and the Shuswap peoples who inhabit the Jumbo Valley). During this engagement, the Ktunaxa asserted that the Proposed Resort was located within an area of paramount spiritual significance known as Qat’muk. The Ktunaxa asserted that Qat’muk is home to an important population of grizzly bears and to Grizzly Bear Spirit, a principal spirit within Ktunaxa religious beliefs and cosmology.

Consultation followed and the original proposal was modified. While the Shuswap supported the modified proposal, the Ktunaxa were not satisfied and sought further consultation. Following further discussions, the Ktunaxa took the position that accommodation was impossible because allowing such development, and in particular permanent structures, would drive Grizzly Bear Spirit from Qat’muk and irrevocably impair their religious beliefs and render their related religious practices meaningless.

In 2012, the BC Minister of Forest, Lands, and Natural Resources (the “Minister”) approved the building of the Proposed Resort. The Ktunaxa applied for judicial review of the Minister’s decision, arguing that it violated their right to freedom of religion under s. 2(a) of the Charter of Rights and Freedoms, and breached the Crown’s duty consult and accommodate under s. 35 of the Constitution Act, 1982.

Lower Court Decisions

At trial, the chambers judge dismissed the petition.[i] He held that:

  1. s. 2(a) of the Charter did not confer a right to restrict the otherwise lawful use of land on the basis that such use would result in a loss of meaning to religious practices carried on elsewhere; and
  2. the process of consultation and accommodation with respect to the Ktunaxa’s asserted Aboriginal rights had been reasonable.

The BC Court of Appeal affirmed the trial decision,[ii] and the Ktunaxa appealed to the SCC.

Supreme Court of Canada

The SCC (9:0) dismissed the appeal, with two judges (Moldaver and Côté JJ.) writing partially concurring reasons.

(a) Freedom of Conscience and Religion

Where a claim is made that a law or governmental act violates freedom of religion, it must be determined whether the claim falls within the scope of s. 2(a) of the Charter. The scope of s. 2(a) has been defined as protecting “the right to entertain such religious beliefs as a person chooses, the right to declare religious beliefs openly and without fear of hindrance or reprisal, and the right to manifest religious beliefs by worship and practice or by teaching and dissemination.”[iii]

To establish an infringement of the right to freedom of religion, the claimant must demonstrate:

  1. that he or she sincerely believes in a practice or belief that has a nexus with religion; and
  2. that the impugned state conduct interferes, in a manner that is non-trivial or not insubstantial, with his or her ability to act in accordance with that practice or belief.[iv]

The first stage of the test was met in this case – none of the parties disputed that the Ktunaxa sincerely believe in the existence and importance of Grizzly Bear Spirit, or that they believe that permanent development in Qat’muk will drive Grizzly Bear Spirit out.

McLachlin C.J. and Rowe J., writing for the majority, ruled that the second stage of the test had not been met – the Minister’s decision did not interfere with the Ktunaxa’s freedom to believe in the Grizzly Bear Spirit or to manifest this belief. Rather, the majority held that the Ktunaxa’s claim was that s. 2(a) of the Charter protects the presence of Grizzly Bear Spirit in Qat’muk, which is a novel claim. The majority declined to extend s. 2(a) beyond the scope recognized in past jurisprudence, finding that the state’s duty under s. 2(a) is not to project the object of beliefs or a “spiritual focal point of worship,” but rather to protect the freedom to hold such beliefs and to manifest them in worship, practice, teaching, or dissemination.

Therefore, the majority held that the Ktunaxa’s claim, which sought to protect Grizzly Bear Spirit and the subjective spiritual meaning they derived from it, was beyond the scope of s. 2(a). The majority also noted that the proposed extension of s. 2(a) would put deeply held personal beliefs under judicial scrutiny, which would be inconsistent with the principles underlying freedom of religion.[v]

In partially concurring reasons, Moldaver J. (along with Côté J.) disagreed with the majority and found that the Minister’s decision interfered with the Ktunaxa’s ability to act in accordance with their religious beliefs and practices in a manner that is more than trivial or insubstantial, and that the Ktunaxa’s claim falls within the scope of s. 2(a).

In particular, Moldaver J. held that where state conduct renders a person’s sincerely held religious beliefs devoid of all religious significance, this infringes a person’s right to religious freedom because the person can no longer act in accordance with his or her religious beliefs. Applying this reasoning, Moldaver J. held that the Minister’s decision to approve the Proposed Resort will render all of the Ktunaxa’s religious beliefs related to Grizzly Bear Spirit devoid of any spiritual significance. Accordingly, the Ktunaxa will be unable to perform songs, rituals or ceremonies in recognition of Grizzly Bear Spirit in a manner that has any religious significance for them, which amounts to a breach of s. 2(a).

Moldaver J. also stated that this type of state interference is a “reality where individuals find spiritual fulfillment through their connection to the physical world,” a central feature of Indigenous religions. Moldaver J. held that, in the Indigenous context, land may itself be sacred and the spiritual realm is inextricably linked to the physical world, which means that state action that impacts land can sever the connection to the divine and render Indigenous religious beliefs and practice devoid of their spiritual significance. Moldaver J. argued that this feature of Indigenous religions should be taken into account in assessing whether s. 2(a) has been infringed, so as to ensure that all religions are afforded the same level of protection from state interference.

However, Moldaver J. ultimately concluded that the Minister’s decision was reasonable because it reflected a proportionate balancing between the Ktunaxa’s Charter rights and the relevant statutory objectives (i.e., to administer Crown land and dispose of it in the public interest).[vi]

(b) Duty to Consult and Accommodate

The Minister’s decision regarding whether there has been adequate consultation and accommodation is entitled to deference – this means that the reviewing court does not decide the issue for itself, but rather ensures that the Minister’s finding was reasonable.[vii]

The majority stated that the constitutional guarantee of s. 35 of the Constitution Act, 1982 applies to treaty rights, proven or settled Aboriginal rights and title claims, and potential rights in as-yet unproven Aboriginal claims. This obligation flows from the duty of the honour of the Crown and is constitutionalized by s.35. The content of this duty varies with the prima facie strength of the claim and the effect the proposed development or use will have on the claimed Aboriginal right.[viii] This obligation flows from the duty of the honour of the Crown and is constitutionalized by s. 35.

The Court held that the Ktunaxa’s petition was, in essence, asking the courts to pronounce on the validity of their claim to a sacred site and associated spiritual practices. The Court found that this declaration could not be made by a court sitting in judicial review of an administrative decision (i.e., the Minister’s decision to approve the development) – it could only be made after a trial of the issue and on the basis of proper and tested evidence.

All nine judges concluded that the Minister’s decision that consultation sufficient to satisfy s. 35 was not unreasonable. In reaching this conclusion, the majority (supported by the two concurring judges on these points) noted that the Ktunaxa’s spiritual claims had been acknowledged from the outset, negotiations spanning two decades and deep consultation had taken place, and many changes had been made to accommodate the Ktunaxa’s spiritual concerns.

Other Challenges for the Project

The Environmental Assessment Certificate (the “Certificate”) issued in respect of the Proposed Resort included a condition that Glacier must have substantially started the construction within five years of the date of issuance (August 3, 2004). The BC Environmental Assessment Office granted Glacier a one-time extension of this requirement in 2009, imposing a new deadline of October 12, 2014. In June 2015, the BC Minister of Environment determined that the project had not substantially started, so the original Certificate expired.

Conclusion

The Crown’s duty to consult Indigenous peoples in the context of the development of major projects has been the subject of a great deal of judicial scrutiny in the last fifteen years. This decision represents a relatively new development where Charter claims (in this case, freedom of religion) are combined with consultation issues. Given the length of time involved in the regulatory and judicial processes, it is doubtful that the outcome is satisfactory to any of the participants. This most recent decision will provide some guidance for all participants (Crown, Indigenous groups and project proponents) facing similar challenges in the future.

 


[i] Reasons indexed at 2014 BCSC 568.

[ii] Reasons indexed at 2015 BCCA 352.

[iii] R. v. Big M Drug Mart, [1985] 1 S.C.R. 295 at p. 336 (per Dickson J.).

[iv] Multani v. Commission scolaire Marguerite-Bourgeoys, 2006 SCC 6 at para. 34.

[v] Syndicat Northcrest v. Anselem, 2004 SCC 47 at paras. 49-50.

[vi] Doré v. Barreau du Québec, 2012 SCC 12; Loyola High School v. Quebec (Attorney General), 2015 SCC 12.

[vii] Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73 at para. 62.

[viii] Ibid at paras. 43-44.

Canada Releases Discussion Paper on Proposed Changes to Federal Environmental and Regulatory Reviews

Posted in Aboriginal, Administrative Law, Constitutional Law, Environmental, Project Permitting, Public Law, Regulatory
Comment

In 2016, the Government of Canada began reviews of federal environmental legislation and the National Energy Board (NEB).  At the same time, Parliamentary standing committees undertook reviews of changes to federal fisheries and navigable waters laws.  Reports from those four processes were released earlier in 2017.[1]

The Government of Canada has now released a discussion paper that outlines the legislative changes Canada is contemplating in response to the recommendations in those reports.  This post highlights some key changes in the four areas of potential significance for project proponents.

Guiding Principles

The discussion paper states that the changes under consideration will be guided by five principles:

  • fair, predictable and transparent environmental assessment and regulatory processes that build on what works;
  • enhanced participation of Indigenous peoples to advance Canada’s commitment to the United Nations Declaration on the Rights of Indigenous Peoples;
  • inclusive and meaningful public engagement;
  • timely and evidence-based decision-making; and
  • one project — one assessment, with the scale of assessment aligned with the scale of the project and its potential impacts.

Environmental Assessment

Key changes under consideration in this area include:

  • establishing a single agency for federal environmental assessments, but providing for single, integrated assessments for major energy projects subject to separate regulatory authority;
  • enhanced consideration of cumulative effects of development, through mechanisms like strategic and regional environmental assessments as well as development of national environmental frameworks;
  • maintaining the current project list approach, but providing for processes to review and amend the project list;
  • maintaining legislated assessment timelines, but with flexibility for exceptional circumstances;
  • requiring assessment of impacts on Indigenous peoples, and providing for greater Indigenous participation on assessment boards and review panels;
  • broadening the scope of environmental assessments to consider economic, social and health impacts in addition to environmental impacts;
  • implementing a new early engagement and planning stage that would be led by proponents under direction from Canada;
  • direct engagement between Canada and Indigenous peoples;
  • eliminating the standing test that the NEB has used for decades to determine who can participate in assessments;
  • improving participant funding; and
  • allowing for substitution arrangements with provinces, territories and Indigenous governments.

National Energy Board

The report on modernization of the National Energy Board proposed sweeping changes to the NEB.  The discussion paper indicates that Canada is considering adopting a structure for the NEB similar to the Alberta Energy Regulator, with a corporate-style board to direct the NEB, and separate hearing commissioners to review projects and make regulatory decisions.  The NEB’s legislation would provide for Indigenous representation on the board and among hearing commissioners, and provide for an expanded role for Indigenous peoples in monitoring of pipelines and other energy infrastructure.

The discussion paper proposes expanding the authority of the NEB to cover renewable energy projects and infrastructure in offshore areas under federal jurisdiction.

Unlike the modernization report, the discussion paper does not propose to move the NEB’s headquarters to Ottawa.  The discussion paper indicates that the NEB will continue to be based in Calgary.

Navigable Waters

The discussion paper does not propose to undo the 2012 changes implemented by the Navigation Protection Act, principally the introduction of a list of waterways subject to the Act’s requirements.  However, the discussion paper does indicate that a process will be added to provide for clear criteria and a transparent process for adding other navigable waters to the schedule.

Fisheries

The key fisheries-related change identified in the discussion paper is a return to prohibition of the harmful alteration, disruption or destruction (HADD) of fish habitat without approval.  The discussion paper also proposes clarification of when Fisheries Act authorizations are needed for projects and when they are not, identification of measures to avoid and mitigate harm to habitat through development and enforcement of standards and codes of practice.  The discussion paper also indicates that project proponents will be subject to increased reporting requirements in relation to activities affecting fish and fish habitat.

The Government of Canada is seeking comment on the proposed legislative changes prior to August 28, 2017.  The discussion paper indicates that Canada is working towards introduction of proposed legislative changes in the fall of 2017.

 


[1]  See our prior blog posts on these developments:

ESTMA Update: Reporting Requirements Apply to Payments to Aboriginal Governments Effective June 1, 2017

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

In previous posts, from April, 20 2015 and June 2, 2015, we reported on the federal Extractive Sectors Transparency Measures Act (“ESTMA”) and the requirements it imposes on companies to report certain types of payments made to governments. ESTMA requires reporting companies to report payments made to specified “payees” — governments in Canada and foreign states (along with certain other bodies established by those governments) — in any of seven categories:

  • taxes, other than consumption taxes and personal income taxes;
  • royalties;
  • fees, including rental fees, entry fees and regulatory charges as well as fees or other consideration for licences, permits or concessions;
  • production entitlements;
  • bonuses, including signature, discovery and production bonuses;
  • dividends other than dividends paid as ordinary shareholders; and
  • infrastructure improvement payments.

A company must report payments to a government that total $100,000 or more in any financial year in any category. Each company must, no later than 150 days after its financial year-end, provide the federal Minister of Natural Resources with a report disclosing reportable payments made during that financial year. The report must also be made public.

Section 29 of ESTMA states that it does not apply to payments made to “Aboriginal governments” during the two year period after ESTMA came into effect. This delayed implementation was intended to provide additional time for consultations with Aboriginal groups. As ESTMA came into force on June 1, 2015, reportable payments to Aboriginal governments made on or after June 1, 2017, will have to be included in ESTMA reports. This may present challenges for reporting companies.

First, ESTMA does not define “Aboriginal government,” and does not use the term in the definition of “payee.” ESTMA’s focus is on payments that are attributable to governments’ ownership of resources and to governments’ power to tax or regulate reporting companies.  Some Indigenous groups — such as Indigenous groups that own land and have law-making powers under modern treaties — would very likely be “Aboriginal governments” and therefore “payees” under ESTMA. This may be less clear in other cases, such as Metis groups that are organized as societies and that do not own land or have law-making powers. Reporting companies will therefore have to consider whether any given Indigenous group is a “payee” under ESTMA. If not, payments to that Indigenous group would not be reportable under ESTMA, even if they may otherwise fall within one of the seven reportable payment categories.

Second, the application of ESTMA to payments under impact benefit agreements (or similar agreements) with Indigenous groups is unclear. Not all payments outlined under impact benefit agreements will fall within reportable ESTMA payment categories. Companies will therefore have to review existing impact benefit agreements with Indigenous groups to assess whether payments required under those agreements fall into any of the seven reportable payment categories. Payments under impact benefit agreements that do not fall within the seven reportable payment categories do not have to be reported, even if the Indigenous group is a “payee” under ESTMA. It is the substance of a payment, not whether it was made pursuant to an impact benefit agreement or other arrangement, that governs whether it is reportable. As a result, companies will have to review payment obligations to determine whether they are in substance reportable payments.

Finally, having to report payments to Aboriginal governments will add to the compliance workload for companies, as they will have to assess whether payments are reportable, and if so will have to track and report on those payments.

The Seven Year Itch: The SCC Returns to Address an Unresolved Question regarding the Crown’s Duty to Consult Aboriginal People and the Legislative Process

Posted in Aboriginal, Administrative Law, Constitutional Law, Consultation, Environmental, Project Permitting, Public Law, Regulatory
Comment

On May 18, 2017, the Supreme Court of Canada agreed to hear an appeal in an important case that could further define the nature and extent of the Crown’s duty to consult Aboriginal people, including the previously unresolved question as to whether the Crown’s duty to consult Aboriginal people can be triggered by legislative action.

Background – When Does the Crown Duty to Consult Arise?

In 2010, the Supreme Court of Canada, in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, addressed the question “When Does the Duty to Consult Arise?”  The Court found that the test for triggering the Crown’s duty to consul can be broken down into three elements:

(1) the Crown’s knowledge, actual or constructive, of a potential Aboriginal claim or right;

(2) contemplated Crown conduct; and

(3) the potential that the contemplated conduct may adversely affect an Aboriginal claim or right. (para. 31)

In discussing the second element (contemplated Crown conduct), the Court went out of its way to clarify that it was not addressing the question of whether consultation obligations could arise from the government’s action in preparing or passing legislation.

“We leave for another day the question of whether government conduct includes legislative action.”  (para. 44)

That day may arrive soon.

Omnibus Legislation – Does the Crown Duty to Consult Arise from Legislative Action?

In 2012, the then-Minister of Finance introduced Bill C-38, enacted as the Jobs, Growth and Long-Term Prosperity Act, and Bill C-45, enacted as the Jobs and Growth Act 2012. These two omnibus bills resulted in the repeal of the Canadian Environmental Assessment Act; the enactment of the Canadian Environmental Assessment Act, 2012; as well as in amendments to the Fisheries Act, the Species at Risk Act, the Canadian Environmental Protection Act, 1999,  and the Navigable Waters Protection Act, renamed the Navigation Protection Act.[1]

The Mikisew Cree First Nation commenced court proceedings alleging that the two omnibus bills reduced the types of projects that were subject to federal environmental assessment, reduced the navigable waters that required federal approval to build obstructing works on them, diminished the protection of fish habitat, and reduced the requirements to approve effects on species at risk. Since environmental assessments and other federal approval mechanisms typically allow First Nations to voice their concerns about effects on its treaty rights to hunt, fish and trap, and have those rights accommodated, the Mikisew Cree argued that this reduction in oversight may affect their treaty rights and accordingly, the Crown should have consulted with it during the development of that legislation and upon its introduction in Parliament.

In the lower Courts, the results were mixed:

  1. the Federal Court (December 19, 2014) found that the relevant federal Ministers had breached their duty to consult the Mikisew Cree on the development and introduction in Parliament of the two omnibus bills.
  2. the Federal Court of Appeal (December 7, 2016) granted the appeal —finding that legislative action is not a proper subject for an application for judicial review in the Federal Court and that importing the duty to consult to the legislative process offends the separation of powers doctrine and the principle of parliamentary privilege.

The Mikisew Cree sought leave to appeal to the Supreme Court of Canada.

 The Question Returns to the Supreme Court

On May 18, 2017, the Supreme Court of Canada granted leave to appeal. Thus, approximately seven years after leaving the question open, the Court (which has a number of new justices on the bench) will return to the question of whether legislative action is or can be considered “Crown conduct” for the purpose of triggering the duty to consult Aboriginal peoples. Depending on the answer [2], the Court’s decision could have a profound impact on both the federal and provincial legislative process in Canada.

 


[1] In June 2016, the Trudeau government announced a review of environmental and regulatory processes. Two Expert Panels have now released their reports on (i) reviewing the federal environmental assessment processes; (ii) modernizing the National Energy Board.  In addition, two Standing Committees have now reported on restoring lost protections and introducing modern safeguards to the Fisheries Act and the Navigation Protection Act.  See our prior blog posts on these developments:

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

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

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

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

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

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

[2] Typically, it takes approximately six to eight months between the date leave to appeal is granted and a hearing of the appeal.  Further, it typically takes six months (or longer) between hearing of an appeal and judgment.

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.