Operational Framework for Use of Conservation Allowances: chapter 6

Allowance Design Elements

The following allowance design elements reflect international best practices for conservation allowances and are to be used as the starting point in the development of a conservation allowance. The design elements should be applied case-by-case based on the legislative framework under which the allowance is being applied, potential environmental impacts of the proposed land- or resource-use activity and desired socio-ecological outcomes as well as consideration of Canada’s unique conservation goals and needs.

The allowance design elements are:

Equivalency: Conservation allowance projects should compensate for adverse impacts by protecting, enhancing or restoring equivalent ecological function at another site.

Ecological functions are processes (such as nutrient cycling or seed dispersal) that are carried out or enabled by an ecosystem and that are necessary for the self-maintenance of that ecosystem. Analysis of equivalency should consider both quality (provision of similar or dissimilar ecological function) and quantity of ecological functions in the context of conservation priorities. Provision of similar habitat types or ecosystem functions provide a starting point for the design of a conservation allowance.

In some cases, a conservation allowance may be designed to provide greater than equivalent ecological functions in order to account for identified risks, such as that the allowance will not be fully successful. Whatever the unit of measurement, the ratio of the conservation allowance habitat area to impacted habitat should be greater than 1:1 in all cases, and normally at least 2:1. There will be instances where much higher ratios are appropriate; for example, experience in other jurisdictions in North America shows use of ratios ranging from 3:1 to 40:1. The choice of ratio for each allowance will be case-specific, based on an assessment of a number of factors (e.g. impact type, severity and duration, site characteristics, existing regional mitigation ratios, uncertainties).

Additionality: Conservation allowances should provide ecological protection beyond what would be provided under a business-as-usual scenario."Additionality" ensures that the new ecological feature(s) provided by the conservation allowance replace what has been lost through land or resource development, providing an overall balance between what is lost and what is gained. The following criteria should be assessed in order to establish whether an allowance is additional:

  • Does the allowance result in incremental conservation benefits? (E.g. actions to create, enhance, restore or rehabilitate habitat, or measures to preserve existing habitat that is under threat.)
  • For allowances that propose to preserve existing habitat, is that existing habitat under identified threat and does the proposed allowance extend effective legal protection that responds to that threat? This may be achieved, for example, through land trust ownership and management.
  • Can proponents demonstrate that the proposed allowance is additional to existing legislation, regulations, programs, land-use plans and funding? If the allowance action has already received funding, been incentivized or is required, does it build upon the existing actions in a clearly identified way? 
    • If no legislative or funding commitment has been put in place to implement an existing conservation program or land-use plan, an allowance designed to implement some aspect of that plan may still be considered additional if it meets federal conservation allowance criteria.
    • Where there is overlap in the allowance requirements of two jurisdictions, a single allowance may suffice in some cases. However, the measures put in place by another level of government or federal department would need to be reviewed carefully.
    • In addition, a single allowance may be proposed to meet the conservation allowance requirements related to more than one federal act or policy. For example, an environmental assessment may consider a proposed impact to a migratory bird sanctuary on federal lands, and the allowance design could account for both CEAA objectives and MBCA objectives.

    Location: The location of a conservation allowance should have comparable ecosystem values, such as species composition and habitat structure, and should be determined based on an assessment of the relevant species and habitat/ecosystem context. Where information to make the above assessments is unavailable, the default location of a conservation allowance should be as close to the original site of impact as possible. However, in some cases it may be most ecologically appropriate to undertake an allowance at a site that is distant from the site of impact. For example, a more distant allowance site may be appropriate if it is able to provide greater ecological benefit to the affected species.

    Timing: The preference is for conservation allowances that can be implemented before the adverse impacts of proposed development occur. In cases where implementing compensatory measures prior to impact is not feasible, the next best solution would be to implement the compensatory measures at the same time as the land- or resource-use activity. Establishing the conservation allowance agreement after the land- and resource-use activity has commenced is not considered appropriate.

    Duration: The positive effects of the conservation allowance should last an appropriate amount of time to compensate for the duration of the ecological loss resulting from the project. A conservation allowance should be actively maintained until it is self-sustaining or it has met predetermined performance standards. While conservation outcomes should ideally be guaranteed until the adverse impacts of a land- or resource-use activity cease to exist, the duration of allowance activities may be limited by the legislative authority, including the ability to enforce the provisions of a supporting agreement. Conservation allowances that are maintained only as long as the land- or resource-use activity’s adverse impacts endure are appropriate where the impacts of the activity are short-term and reversible.

    Accountability: Conservation allowances should be formalized through written documentation, such as an agreement between Environment Canada and the allowance proponent (and, where appropriate, other partners, such as provincial or Aboriginal governments), or, where possible, formalized through permitting or other conditions. The form of the documentation (referred to in this document generically as an "agreement") could take many forms.

    It could be in the form of a letter of agreement, a memorandum of understanding, or other formal agreement such as an agreement under the DOE Act (described in more detail in Section 3).

    Alternatively, it could also be a condition within a Decision Statement issued under CEAA 2012. Likewise, in certain circumstances, it may be possible to include elements of an allowance agreement in the terms and conditions of a permit or agreement under section 73 or through a section 11 conservation agreement under SARA. Each proposal would need to be examined on a case-by-case basis to see whether it respects the purposes of SARA. If the full details of the conservation allowance are not covered by the permit or conservation agreement, there may still be a need for an allowance agreement.

    There may also be cases where it is appropriate to undertake a conservation allowance through an approach such as the transfer of title or by applying land-use restrictions to relevant land. The terms of the allowance could also be included in provincial permits or authorizations where those permits or authorizations are able to account for off-site measures.

    An allowance agreement should include key elements such as the amount and nature of the allowance, timing, duration, monitoring procedures, milestones and consequences for non-performance. The content and detail of an allowance plan will be greater for land- or resource-use projects of greater scale or complexity, such as those identified as designated projects under CEAA 2012.

    The enforceability of allowance agreements depends on the nature of the instrument through which they are implemented. For example, if a conservation agreement was included as a condition in a Decision Statement issued under CEAA 2012, that condition would become subject to enforcement provisions contained within the Act. Allowance requirements contained in the terms and conditions of a section 73 SARA permit could also be subject to enforcement conditions, including permit withdrawal.

    Where allowances are provided under an agreement, then the agreement should include clauses that set out the consequences if there is failure by the proponent to complete the conservation allowance appropriately. These clauses could include:

    • Payment of damages equivalent to the harm caused by the failure to complete the conservation allowance;
    • Payout of a letter of credit;
    • Provisions, including written agreement by a third-party landowner where necessary, to allow the Minister or a third party access to the site to complete the conservation allowance, if it is not satisfactorily completed by the proponent; and/or
    • The commitment of a province to undertake regulatory action, for example environmental protection orders.

    Other Design Considerations: Some jurisdictions have established conservation areas called "banks" from which developers can purchase "credits" representing a particular species or ecosystem type. In Canada, a proactive, proponent-led approach might be possible where one or more proponents or a third party would acquire and set aside an area of land that they would be able to draw upon to mitigate future impacts. The conserved area would be established prior to approval of any land- or resource-use activities. The conserved area would have to be administered in a transparent manner that would ensure that no portion of the conserved area would be used more than once for a conservation allowance. It would be determined on a case-by-case basis whether the conserved area (or some portion of it) would qualify as an allowance for a specific impact, and whether the provision of the allowance could constitute compliance with particular legislative or other obligations.

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