Impact Assessment Agency of Canada: Appearance before the Standing Committee – March 19, 2024

Clean growth and regulatory efficiency

Q1. What role does the Impact Assessment Agency of Canada have in clean growth and the transition to net-zero?

• The Impact Assessment Act (IAA) is an important part of the regulatory framework for major clean growth projects, including critical minerals mines, nuclear and others.
• Impact assessment is a project planning tool designed to identify and mitigate potential negative effects of projects to support sustainable growth.
• The Impact Assessment Agency of Canada (Agency) leads these assessments serving as the lead and coordinator for Crown-Indigenous consultations, supporting the participation of other federal authorities or lifecycle regulators as appropriate, and enabling a ‘one window’ point of contact for proponents and Indigenous groups throughout the impact assessment process.

Q2. What progress has been made in improving the regulatory process for clean growth projects?

• In Budget 2023, the Government committed to outline a concrete plan to improve the efficiency of the impact assessment and permitting processes for major projects, including clarifying and reducing timelines, mitigating inefficiencies, and improving engagement and partnerships. The Fall Economic Statement 2023 reiterated this commitment indicating that a report will be released in the coming months.
• The Ministerial Working Group on Regulatory Efficiency for Clean Growth Projects (MWG) was established in September 2023 by the Prime Minister and has been working to develop whole-of-government solutions aimed at improving the efficiency and predictability of Canada’s regulatory system to support clean growth projects.
• The MWG Chair released a Public Statement on February 1, 2024, on the group’s efforts and highlighting some high-level commitments, including but not limited to, the following key commitments:
  • Drive coordination across federal regulatory departments: ensure predictable timelines are met through early coordination, information-sharing and effective communication across more than 10 federal departments and agencies responsible for regulation of major projects;
  • Amend the Impact Assessment Act: bring it in line with the October 2023 decision by the Supreme Court of Canada regarding federal jurisdiction in impact assessments through legislation this spring;
  • Launch a public permitting dashboard: increase transparency and accountability on the progress of major projects beginning with major projects subject to a federal impact assessment and building on the existing Canadian Impact Assessment Registry;
  • Collaborate with provinces and territories to maximize efficiencies: apply more flexible approaches and leveraging existing partnerships, such as the Regional Energy and Resource Tables to maximize efficiencies and reduce duplication across federal and provincial and territorial regulating and permitting processes, while respecting roles and jurisdictions;
  • Improve engagement with Indigenous partners: work with Indigenous partners to determine the best ways to enhance federal coordination of Crown consultation activities and ensure opportunities for meaningful and equitable engagement and participation of Indigenous Peoples in regulatory processes from the outset and in a manner that adheres to our commitments under the UN Declaration on the Rights of Indigenous Peoples;
  • Catalyze Indigenous ownership: in collaboration with Indigenous leaders and experts, develop an Indigenous Loan Guarantee Program to facilitate Indigenous equity ownership in major projects in the energy and natural resource sector, with more details to be announced in Budget 2024;
  • Address issues unique to the North: advance major projects in the three territories through the Northern Regulatory Initiative through regional studies, improved participation of community members and regulatory dialogues in the North.
• This work is ongoing.
• Outside of forthcoming amendments to the IAA mentioned in the statement, the Agency will continue to work actively to make assessments more efficient, including:
  • Tailoring and scoping assessments more effectively to focus on key federal issues and information requirements;
  • Integrating permitting information requirements into impact assessments and coordination post assessment permitting, including to provide transparency on, and reduce, overall timelines;
  • Providing more guidance to proponents to support their consultations and engagement with Indigenous groups;
  • Conducting regional assessments;
  • Updating the Project List as part of the IAA’s five-year regulatory review commitment, which will follow the amendments to the IAA;
  • Advancing the Government’s commitment towards truth and reconciliation and implementation of the UN Declaration on the Rights of Indigenous Peoples by, for example, developing Indigenous impact assessment co-administration agreement regulations;
  • Establishing agreements with provinces and Indigenous jurisdictions to better harmonize processes.

Q3. How do federal-provincial relations impact progress on clean growth?

• The Government is committed to working collaboratively with provinces and territories to ensure that impact assessments are done as efficiently as possible towards the goal of “one project, one assessment”, and to ensure that good projects continue to move forward in a timely and environmentally responsible way.
• With clarity from the Supreme Court as to the changes that are needed to ensure the constitutionality of the Impact Assessment Act, and the Court’s affirmation that the environment – and impact assessment in particular – are areas of shared jurisdiction between the federal and provincial legislatures under the Constitution, we have a renewed basis on which to engage with provinces to maximize cooperation.
• That said, many clean growth projects will not require a federal impact assessment and will only be assessed provincially, though with federal permitting requirements. There is a need to ensure collaborative approaches where federal and provincial assessments and/or permitting are required to ensure efficiency and certainty.

Q4. How does Canada’s regulatory process for clean growth projects compare to that in other jurisdictions?

• First, it is helpful to clarify that the approach to assessments differs from jurisdiction to jurisdiction. For example, the IAA is focused only on major projects with the potential for adverse effects within federal jurisdiction. By way of comparison, the USA’s National Environmental Policy Act (NEPA) subjects a much wider range of development projects to environmental impact assessments than those covered by the IAA.
• The impact assessment process under the IAA includes requirements for robust consultation and engagement with Indigenous peoples throughout each phase of the process; other jurisdictions do not have the same requirements regarding Indigenous rights, consultations, and accommodations.
• While stated timelines may seem shorter, not all jurisdictions have the same starting point for legislated timelines. For example, significant amounts of work may occur before the legislated timelines officially start – not giving the full picture of how long projects take to work through assessments.
• As part of their work, the Ministerial Working Group on Regulatory Efficiency for Clean Growth Projects is looking at how other jurisdictions, including the U.S., are working to better coordinate their regulatory processes and that will inform our recommendations.

Q5. How does the Agency engage with Indigenous Peoples in the context of clean growth?

• Advancing the full participation of Indigenous Peoples in Canada’s clean growth agenda is essential, and there are key priorities that we need to address collectively to ensure that this is done effectively.
• The Agency has been collaborating with CIRNAC on the whole-of-government approach to consultation and accommodation. The Agency has also had success in leveraging key federal programs, like the Strategic Partnerships Initiative, to fund accommodation measures in the past.
• Project-specific Indigenous engagement during impact assessments contributes to increased clarity on the scope of issues to be addressed can help with timelines and manages expectations without precluding the discussion on important issues.
• In addition to project-specific Indigenous engagement, the Agency can also leverage regional assessments to address some of the issues raised through project-specific Indigenous engagement. Early experiences with regional assessments have demonstrated that discussions at a regional level can create efficiencies across multiple projects.
• The Agency’s funding programs continue to be important tools for supporting Indigenous participation in major projects, specifically impact assessment processes. The Agency provides funding to support Indigenous consultation at key stages of the assessment process of designated projects, which includes the planning phase and the implementation of follow-up programs.
• The Agency’s Indigenous Capacity Support Program also provides funding to support the development of capacity so that Indigenous Peoples are prepared to meaningfully participate and increasingly take on leadership roles in impact assessment.

Impact Assessment Act pending legislative amendments

Q1. What is the current status of the impact assessment process? What about proponents that are already in the system?

• Environmental assessments have been evolving for over 50 years. The Supreme Court of Canada (SCC) provided direction in the recent Reference Case on the Impact Assessment Act (IAA) that is another example of this evolution, and we will bring forward amendments to address the SCC’s decision.
• Until then, we’ve published guidance on the interim administration of the IAA to provide certainty and continuity for proponents, Indigenous communities and the public involved in the process. Proponents have chosen to continue with their assessments, and new proponents have chosen to begin the process, so they don’t lose time.
• The interim measures include:
  • Providing an opinion on whether there is a clear federal jurisdiction for projects currently in the system;
  • Collaborating with proponents on gathering the information required to support assessments;
  • Engaging and consulting with Indigenous peoples through the assessment process; and
  • Exploring opportunities to maximize collaboration with provinces to take full advantage of provincial assessment of factors that they are examining and focus federal assessments on potential adverse effects in areas of federal jurisdiction.
• Regional assessments already underway are continuing in cooperation with Indigenous groups, provinces and stakeholders. Regional assessments are an opportunity to better understand impacts of specific activities in particular areas, and do not involve decision-making on specific projects.

Q2. Can you provide details on the plan for the amendments, when will they happen?

• The Government of Canada is working on targeted and meaningful legislative amendments required to provide regulatory certainty for major project proponents, Indigenous partners, industry, and environmental stakeholders, as well as for Canada’s investment climate.

Q3. Will there be consultation on the proposed amendments with Indigenous Peoples and will the Government of Canada continue to work with provincial governments?

• The Government of Canada has undertaken extensive engagement with Indigenous Peoples, stakeholders and provinces on the legislative amendments required to address the Supreme Court of Canada (SCC)’s decision. There is strong support for moving quickly to respond to the SCC to ensure certainty in impact assessments.
• Through consultations, we have assured groups that the amended IAA will remain consistent with the United Nations Declaration on the Rights of Indigenous Peoples and will maintain the opportunities for meaningful engagement and participation of Indigenous Peoples in the assessment process with the aim of securing their free, prior, and informed consent.
• The Government of Canada has also signaled that the amended Impact Assessment Act will enhance and provide more flexibility in cooperation tools for working with provinces in a way that more clearly reflects the respective federal and provincial areas of jurisdiction.

Q4. Does this decision limit the Government of Canada’s ability to fight climate change? Does the decision affect carbon pricing?

• The Government of Canada remains committed to advancing its clean growth agenda. The Government of Canada has many policies and programs in place to achieve its climate change and GHG goals.
• In 2021, the SCC gave its opinion that the Greenhouse Gas Pollution Pricing Act (GGPPA) was constitutional. The IAA Reference involved constitutional arguments that were distinct from those in the GGPPA Reference.

Regional assessment of offshore wind development in Newfoundland and Labrador and in Nova Scotia

Q1. When are the OSW regional assessment committees expected to report on their findings, and what do you expect them to say?

• Each Regional Assessment Committee will submit an interim report to the Ministers (ECCC, NRCan and provincial ministers) on March 23, 2024. The main objective of these interim reports is to identify and provide preliminary information and analysis on areas that may be suitable for development. We expect that the interim reports will also identify knowledge and data gaps and the results of engagement activities to date.
• Each Regional Assessment Committee will submit their final report to Ministers (ECCC, NRCan and provincial ministers) in late January 2025 after a 60-day consultation period on their draft reports beginning in September 2024. Final reports will include an update on proposed offshore wind licencing areas, knowledge and data gaps, assessment of important components such as environmental and cumulative effects, and proposed recommendations for mitigation and follow-up.

Q2. Will recent requests from the NL and NS OSW regional assessment committees to modify the terms of their agreements negatively impact the Government’s plans to move forward with offshore wind development in Nova Scotia and Newfoundland and Labrador?

• The Committees’ recommendations, information and analysis will support the sustainable development of this promising sector and Canada’s energy transition and climate change objectives. As such, the timely completion of the Regional Assessments remains a high priority for the Government of Canada.
• The timeline extension will not delay the establishment of the regulatory regime for offshore wind development, which is proceeding independently from both regional assessments. The Agency is working closely with officials from Natural Resources Canada and the provinces.

Q3. When will the NL Offshore Wind Development Regional Assessment Committee receive a response from ministers regarding its proposed modifications to its agreement?

• In January 2024, officials from the Agency, NRCan and the NL Government met with the Committee to discuss the content of the Committee’s request. I have worked closely with the other co-signatories to the Agreement to respond to the Committee’s proposed approach.
• This response recognizes the importance of effective engagement to the regional assessment process and the complexity of the Committee’s mandate and will be received by the Committee shortly.