How pipeline decisions are made

Major energy projects that cross provincial and territorial borders in Canada have to go through a rigorous, multi-stage process before a final decision is made. This includes a National Energy Board (NEB) environmental assessment and regulatory review that assesses environmental impacts, takes into account scientific evidence, safety and security of operations, and sets conditions for approval as well as consultation with Indigenous groups potentially impacted by the project.

1. Proponent Application

The first step for any proposed major pipeline construction is for the proponent to file an application with the NEB. The application includes, among other things, information on how the pipeline would be built and operated, the measures in place to protect the safety of workers and public, consultation with Indigenous Peoples, and the company’s plan to minimize environment impacts.

2. NEB Project Review

Once the NEB deems the application complete, it launches a project review under the Canadian Environmental Assessment Act, 2012 (CEAA 2012) and the National Energy Board Act (NEB Act). The NEB must launch a public hearing and make a recommendation as to whether the pipeline is in the Canadian public interest, and the necessary conditions should it be constructed.

A hearing process provides an opportunity to participants to put evidence on the record, express their point of view, and possibly ask or answer questions about a proposed project or application. This provides the NEB with the information it needs to make a recommendation on whether or not a project should be allowed to proceed. The evidence and comments will be focused around a list of issues assessed during the NEB review. The list of issues can include:

• public interest
• scientific and technical information, including the design and safety of the project, or environmental matters
• socio-economic and land matters
• impact of the project on Indigenous groups
• financial responsibility of the applicant and economic feasibility of the project
• traditional and local knowledge

3. NEB Recommendation Report

The information gathered during the NEB Review leads to the NEB Recommendation Report, where the NEB recommends whether the pipeline is in the Canadian public interest and, if approved, under what conditions.

Conditions are applied to a pipeline to ensure they are planned, built, operated, and abandoned safely, protecting the environment and respecting the rights of those affected by the project. In making its recommendation, the NEB must ensure requirements under both the NEB Act and CEAA 2012 are upheld.

The Recommendation Report is provided to the Minister of Natural Resources, outlining the assessment results, project conditions, and recommendation as to whether the project should be provided a Certificate of Public Convenience and Necessity.

4. Government Decision

Once the Minister of Natural Resources receives the recommendation report from the NEB, the Minister brings forward a recommendation on the pipeline for Cabinet to review and for decision by the Governor in Council.

The Government has three months to make a decision (unless an extension is granted), and can do one of three things:

1. Order the NEB to issue a certificate to the pipeline company;
2. Dismiss the application for a certificate; or
3. Refer the recommendation back to the NEB for reconsideration.

If the application is approved under CEAA 2012 and the NEB Act, the Governor-in-Council orders the NEB to issue the Certificate of Public Convenience and Necessity, which is when a pipeline has federal approval to proceed, subject to any further regulatory permits and authorizations that may be required, as described below.

5. Federal and Provincial Permits and Authorizations

In order to begin construction and to commence operation, Governor-in-Council approved pipelines must still obtain any further federal and provincial permits and authorizations.

The NEB continues to monitor, assess and review the pipeline’s operations through its full lifecycle.

Indigenous Consultations

The Crown has a duty to consult and, where appropriate, accommodate Indigenous Peoples when it contemplates action(s) that may adversely impact potential or established Aboriginal or Treaty rights. These rights are recognized and affirmed in Section 35 of the Constitution Act, 1982.

Consultation with potentially impacted Indigenous groups occurs throughout the pipeline review and approval process. The federal Crown will often rely on the existing regulatory processes, to the extent possible, to fulfill the duty to consult, however the ultimate responsibility to ensure that the duty is adequately fulfilled remains with the Crown. Pipeline companies are encouraged to engage with Indigenous groups when preparing their application and Indigenous Peoples are encouraged to participate in the NEB’s review process. Following a recommendation by the NEB on the project, the federal Crown conducts additional Phase III consultations with Indigenous groups.

Even after Government approval, major energy projects must still obtain any further federal and provincial permits and authorizations; these permits and authorizations may require additional consultation with Indigenous Peoples.