Environmental and Regulatory Reviews: Discussion Paper

June 2017

Purpose

Our Government is committed to deliver environmental assessment and regulatory processes that regain public trust, protect the environment, introduce modern safeguards, advance reconciliation with Indigenous peoples, ensure good projects go ahead, and resources get to market.

We made this commitment because we share common concerns about the ability of Canada’s environmental assessment and regulatory processes to protect and sustain the natural environment while getting resources to market and creating good, middle class jobs for Canadians. In the current system:

• There is a need for greater transparency around the science, data and evidence supporting decisions and to ensure Indigenous knowledge is sufficiently taken into account;
• Protections to Canada’s fisheries and waterways are insufficient; and,
• Indigenous peoples and the public should have more opportunities to meaningfully participate.

This discussion paper outlines the changes our Government is considering for Canada’s environmental assessment and regulatory processes that will:

• Regain public trust;
• Protect the environment;
• Advance reconciliation with Indigenous peoples; and,
• Ensure good projects go ahead and resources get to market.

Progress to Date

Interim Approach

In January 2016, the Minister of Environment and Climate Change and the Minister of Natural Resources announced Interim Principles to strengthen government decisions on major projects until legislative, policy and program changes to the environmental assessment and regulatory review system are in force. There will be a transition phase outlined as these changes take effect, including maintaining the principle that no project will be asked to go back to the starting line.

The Reviews

In June 2016, the Government of Canada launched a comprehensive review of federal environmental and regulatory processes, including a review of federal environmental assessment processes, modernizing the National Energy Board and restoring lost protections and incorporating modern safeguards under the Fisheries Act and the Navigation Protection Act.

Consultation has been at the core of these reviews. The expert panels and parliamentary committees that undertook the reviews heard from provincial and territorial authorities, Indigenous peoples, industry representatives, scientists, academics and the public from coast to coast to coast. They heard views on what does and does not work in our current environmental assessment and regulatory processes.

Thanks to the advice and recommendations delivered by the expert panels and parliamentary committees and through additional inputs to government directly, we are ready to shape a path to deliver on our commitments.

Call to Action

In addition to input received through the reviews, our government has benefitted from feedback from Canadians provided to Government through on-line engagement, face-to-face meetings, views submitted directly to departments, comments from provinces, territories and Indigenous peoples, and practical lessons learned over the past 18 months.

In total, it is evident we need to make changes to our environmental assessment and regulatory processes because:

• Opportunities for Canadians to meaningfully participate are limited, particularly in project planning and monitoring of construction and operation
• Information is difficult to access for the public and Indigenous peoples, making meaningful participation a challenge
• Concern that not all expertise, science, evidence and Indigenous knowledge is fully considered, and that information presented by proponents is not adequately validated
• Individual projects are often reviewed without an understanding of the broader environmental and development context in an area
• Decisions are not sufficiently explained so that Canadians can understand why a choice was made
• Reconciliation must guide consultation and recognition of Indigenous peoples’ rights and interests and the role of government in those processes needs to be clear and consistent
• Proponents and investors need a predictable and fair process to support their decisions

Path Forward

This discussion paper outlines a series of system-wide changes our government is considering to strengthen Canada’s environmental assessment and regulatory processes. We are seeking feedback on the proposed approach so that we can bring forward a comprehensive suite of changes this fall.

Our objectives moving forward are to ensure we honour our commitment to regain public trust in environmental assessment and regulatory processes in a manner that advances reconciliation with Indigenous peoples, protects the environment and allows resources to get to market.

Guiding Principles

From the outset, the changes that we make will be guided by the following principles:

1. Fair, predictable and transparent environmental assessment and regulatory processes that build on what works
2. Participation of Indigenous peoples in all phases that advances the Government’s commitment to the United Nations Declaration on the Rights of Indigenous Peoples and reconciliation
3. Inclusive and meaningful public engagement
4. Timely, evidence-based decisions reflecting the best available science and Indigenous knowledge
5. One project – one assessment, with the scale of assessment aligned with the scale and potential impacts of the project

Rebuilding Trust in the Project Assessment System

This section outlines proposed changes to the project assessment system.

Our proposal recognizes constitutional jurisdiction and the strength of regimes that are in place among provincial, territorial and Indigenous partners, as well as existing co-management frameworks used in the North and Canada’s offshore regions.

Our proposal builds on the strengths of the existing system and includes seven crosscutting areas of change:

• Addressing Cumulative Effects
• Early Engagement and Planning
• Transparency and Public Participation
• Science, Evidence and Indigenous Knowledge
• Impact Assessment
• Partnering with Indigenous Peoples
• Cooperation with Jurisdictions

We are also considering focused changes to strengthen environmental assessment; energy regulation under the National Energy Board; the protection of fish and fish habitat; and safeguarding navigation on our waterways.

Impact Assessment and Regulatory Processes

The following diagram outlines proposed changes to Canada’s environmental assessment and regulatory processes, building on positive features of the current system.

• The early planning and engagement, impact assessment, and regulatory phases are closely linked.
• A project’s potential impacts are identified during early planning and impact assessment phases and additional conditions are applied to support regulatory compliance during the regulatory phase.
• To promote a seamless transition between these phases and inform and align regulatory decision making, regulatory agencies engage in the early planning and impact assessment phases.

Addressing Cumulative Effects

Indigenous peoples, stakeholders and the public more broadly were clear that we should not be trying to resolve complex policy issues within the time-bound framework of individual project reviews. Enabled by science, evidence, Indigenous knowledge and technology, as well as by collaborative processes with provinces and territories, Indigenous peoples and stakeholders, we need to understand the state of the environment regionally and nationally, including the cumulative effects of development. We need to start with an understanding of the “big-picture” so we can consider impacts of development in the early planning stages and make evidence-based choices to guide the path forward.

Cumulative Effects – Strategic Assessments
“A strategic IA should be conducted to generate guidance and direction for these types of initiatives to help implement their goals and objectives in project and regional IA.”

Building Common Ground, p.82

Early Engagement and Planning

Indigenous peoples, stakeholders and the public more broadly want to be aware of, and have the opportunity to be involved earlier in, project planning activities. We agree that assessments should begin with a planning phase that occurs before project design elements are finalized in order to develop effective engagement strategies and foster greater collaboration between proponents, Indigenous peoples, stakeholders, the public and the government. We must also work together so that early engagement provides clarity and certainty to support efficient review processes.

Transparency and Public Participation

We heard about the importance of transparency in all aspects of environmental assessment and regulatory processes, from making data and science accessible to clearly communicating the basis for decisions.

Our goal is to design a system where Canadians can influence decision making through open access to information, meaningful public participation, and transparent decision making. We believe that better processes, better information, and better-informed decisions will help to restore trust in the system.

Science, Evidence and Indigenous Knowledge

We heard that some of the biggest challenges could be overcome with better information, early awareness, and improved transparency. Science, evidence and Indigenous knowledge should inform project planning, assessment and decision making, and be open, accessible and transparent.

Science, Evidence - “In our view, decision making … must be transparent and guided by legislated principles based on science and Indigenous traditional knowledge.”

Enhancing the Protection of Fish and Fish Habitat and the Management of Canadian Fisheries, p.38

Impact Assessment

Canada’s new environmental assessment system must consider impacts on more than just the environment. The economic, social and health effects associated with a project must be considered. Assessments must also include a Gender-Based Analysis Plus (GBA+)^{Footnote 1}. To ensure greater consistency and maintain the integrity of impact assessment processes, we propose that a single government agency be responsible for guiding and conducting impact assessments and coordinating consultation with Indigenous peoples for all designated projects, as opposed to the current model of three separate responsible authorities conducting their own reviews.

For major energy transmission, nuclear and offshore oil and gas projects, assessments would be conducted jointly by the agency and life cycle regulators, ?using the regulators’ expert capacity and ensuring that safety and other key regulatory factors are considered as part of a single, integrated process. This approach will help to ensure that impact assessments are consistent and based on clear processes and legislated time lines that provide regulatory certainty and enable good projects to go ahead.

Partnering with Indigenous Peoples

Reconciliation must guide partnerships with Indigenous peoples, recognizing and respecting their rights and interests, their deep connection to their lands, territories and resources, and their desire to participate as partners in the economic development of their territories. We recognize that reconciliation requires sustained government-wide action and needs to be at the centre of our consultation and accommodation activities.

Cooperation with Jurisdictions

We heard a common view from industry, provinces, territories and Indigenous peoples: we need to be efficient and seek out every reasonable opportunity to collaborate on project assessments. We heard that federal environmental assessment and regulatory processes can be strengthened to support cooperation with provinces and territories, while respecting their jurisdiction.

Proposed Program and Legislative Changes

The government is considering changes to restore trust in Canada’s environmental assessment and regulatory review processes, namely: environmental assessment, energy regulation under the National Energy Board, protection of fish and fish habitat, and safeguarding navigation on our waterways.

i. Impact Assessment

As outlined in the previous section, changes to the Canadian Environmental Assessment Act, 2012 are being considered to strengthen environmental protections. Going forward, we are considering a new approach to environmental assessment for designated projects that includes:

Governance

• Establishing a single government agency responsible for guiding and conducting federal assessments and coordinating Crown consultations for those assessments
• For major energy transmission, nuclear, and offshore oil and gas projects, the agency and life- cycle regulators would jointly conduct impact assessments as part of a single, integrated review process
• Decision making retained by Minister(s) or Cabinet based on whether the project is in the public interest, to ensure accountable government
• Working with industry to define activities that should be cost-recovered
• Requiring a new early planning phase led by proponents with clear direction from the government
• Advisory committees for Indigenous peoples, stakeholders and experts to provide advice to the Minister on issues related to impact assessments

What is Assessed

• Reviewing the Project List Regulations and establishing criteria and a transparent process to periodically review and update the Project List to ensure those types of major projects that have the greatest potential impacts in areas of federal jurisdiction are assessed
• Maintaining authority to designate a non-listed project that could have adverse impacts on areas of federal jurisdiction where warranted, based on clear criteria and a more transparent proces
• Maintaining the flexibility to exclude designated projects from assessment under certain conditions based on clear criteria and a transparent process
• Enhancing transparency and requirements for the assessment of projects on federal lands
• Relying on the life-cycle regulators (i.e. National Energy Board, Canadian Nuclear Safety Commission, Offshore Petroleum Boards) for the assessment of non-designated projects (e.g. delineation wells in the offshore)

Parameters of Assessment

• Broadening the scope of assessment to include environmental, economic, social and health impacts to support holistic and integrated decision making
• Consistent use of Gender-Based Analysis Plus GBA+) in assessments to better understand the impacts on communities (e.g. the influx of people in a temporary work camp)
• Strengthening existing provisions that explicitly require assessment of impacts on Indigenous peoples
• Considering both positive and negative impacts of a project in the assessment process
• Reinforcing rigour through peer reviews of science and evidence in the assessment phase

Cooperation with Jurisdictions

• Developing cooperation agreements with interested jurisdictions (provinces, territories, Indigenous) to advance and support the objective of “one project – one assessment,” while respecting their jurisdiction
• Retaining legislative provisions to allow substitution with provinces and territories where there is alignment with federal standards
• Developing new provisions to enable substitution with Indigenous governments
• Ensuring that the process better recognizes Indigenous jurisdiction, laws and practices
• Increasing flexibility to allow the Government of Canada to defer to or harmonize with environmental assessment processes created pursuant to Indigenous governments

Compliance and Enforcement

• Maintain authority for enforceable assessment conditions and work with federal regulatory authorities to enhance compliance and enforcement activities
• Maintain authority for the National Energy Board, the Canadian Nuclear Safety Commission and the Offshore Petroleum Boards to integrate impact assessment conditions stemming from a joint assessment under their responsibility for regulatory compliance, monitoring and enforcement
• Explore a mechanism to amend project conditions to support the integration of adaptive management and technological advances
• Inclusive monitoring and compliance activities, so that life-cycle regulators and permitting departments work closely with Indigenous peoples, communities, and landowners

Timelines

• Maintain legislated timelines to provide clarity and predictability
• Provide flexibility by allowing ministerial approval of exceptions to legislated timelines (e.g. alignment of assessments with other jurisdictions)

One project – One assessment

Our approach remains committed to building on what is working well, while seeking to attract and grow investment. In support of this objective, we are considering:

• • Maintaining legislated project assessment timelines to provide clarity and predictability
• • Providing authority to approve exceptions to legislated timelines (e.g. for cooperative assessments with provinces)
• • A new early engagement and planning phase to identify issues early and provide clarity on requirements for the assessment and regulatory phase
• • Maintaining a Project List to retain clarity on when a federal assessment is required
• • A single government agency to deliver process integrity and consistency for major projects
• • Continued focus on single window for federal coordination (e.g. ensuring alignment of assessment and follow-on permitting)

ii. Modern Energy Regulation

The Government of Canada believes that any major project needs to go through an open, transparent, inclusive, and thorough environmental, social and economic assessment process. The changes described here aim to modernize the National Energy Board to reflect what Canadians expect from an independent regulator. Our government is modernizing and rebuilding trust in Canada’s lifecycle energy regulator so that safe and credible projects can proceed. We are considering changes to the National Energy Board Act, including:

Mandate

• Leveraging existing venues for policy dialogues outside of project hearings (e.g. Generation Energy, Pan-Canadian Framework on Climate Change)
• Developing a separate model to deliver timely and credible energy information to Canadians
• Changing the wording to determining public interest to explicitly include environment, safety, social and health considerations
• Adding provisions to provide authority to regulate renewable energy projects and associated power lines in offshore areas that are under federal jurisdictionv

Modern and effective governance

• Separating the roles of Chief Executive Officer and Chairperson of the Board, currently held by the same person
• Creating a corporate-style executive board to lead and provide strategic direction to the NEB organization
• Creating separate Hearing Commissioners to review projects and provide regulatory authorizations
• Enhancing the diversity of the Board and Hearing Commissioners
• Increasing Indigenous representation among the Board and Hearing Commissioners and requiring expertise in Indigenous knowledge
• Maintaining the National Energy Board in Calgary, while eliminating the residency requirement for the Board and Hearing Commissioners

Decision making

• Increasing public participation opportunities in technical hearings, including enhancing the support available to all participants to help them navigate regulatory processes
• Providing authority to make final decisions on certain functions such as import/export licenses, and variances or transfers to certificates and licenses
• Introducing an advocate to support landowners in regulatory processes
• Establishing alternatives to some formal adjudicative processes, such as appropriate dispute resolution

Indigenous

• Creating opportunities for dialogue with Indigenous peoples on energy policy
• Strengthening the approach for Indigenous peoples to build capacity for participation in processes and help coordinate Crown consultations
• Expanding the role of Indigenous peoples in the monitoring of pipeline and other energy infrastructure from construction to decommissioning

Operations

• Encourage the development of cooperation agreements with interested jurisdictions
• Making information available to the public online, including incident reports and follow-up data, in a way that is easily understood
• Enhancing safety and security measures to protect energy infrastructure and prevent tampering

“... we have developed a comprehensive vision for the future of energy transmission infrastructure regulation, which, we believe, will chart an ambitious and thoroughly modern course as Canada enters a new era in the development of its vital energy sector.”

Forward, Together, p. 3

Restoring Lost Protections to the Navigation Protection Act

In 2012, changes to the Navigation Protection Act (NPA) introduced a Schedule of Canada’s busiest waterways – oceans, lakes and rivers – and shifted its focus to the approval of works, such as bridges and dams, on these waterways. As part of our commitment to restore lost protections for navigation, provide a meaningful role for Indigenous peoples in the regime and meet a high standard of transparency throughout the regulatory process, we are considering changes that include:

Restore Lost Protections for the Public Right of Navigation

• Improving the process for adding navigable waters to the Schedule, including developing clear criteria and a more accessible and transparent process
• Regulating obstructions and certain classes of works (such as dams and ferry cables) on all navigable waters in Canada
• Developing a complaint mechanism for works on unscheduled navigable waters to provide a means to address concerns about the public right of navigation

Partner with Indigenous Peoples

• Working with Indigenous peoples to obtain and incorporate Indigenous knowledge in decision making, alongside other sources of evidence
• Facilitating early and regular engagement and participation in NPA processes, including a tailored process for adding waterways in their traditional territory to the Schedule
• Identifying ways in which Indigenous peoples could be involved in monitoring, enforcement and decision making activities on their traditional lands

Open, Accessible and Transparent Processes

• Providing easy, on-line access to information about projects
• Requiring proponents to provide notice and opportunities for appropriate consultation before constructing a work on any navigable water
• Clarifying the criteria used for the aqueous highway test in determining whether a water is navigable

In addition to these system changes, we are also considering whether there are priority navigable waters that should be added to the Schedule now, in advance of any new process coming into effect

“Although the goals of industry, government, Indigenous groups, conservation associations and other stakeholders may diverge as to how development surrounding Canada’s waterways takes place, representatives of these groups told the Committee of the need for clarity, transparency and expedience in processes that protect navigation and in dispute resolution.”

A Study of The Navigation Protection Act, p. 13

iv. Enhanced Protection for Canada’s Fish and Fish Habitat

Changes made to the Fisheries Act in 2012 shifted the focus away from broad fish habitat protection and toward managing threats to the productivity of Canada’s commercial, recreational and Aboriginal fisheries. As part of our commitment to restore lost protections and incorporate modern safeguards in the Fisheries Act, we are considering legislative, regulatory, policy and program changes that would:

Partnering with Indigenous peoples

• Being responsive to Indigenous rights and jurisdiction, with space created to enable increased Indigenous involvement, including Indigenous-led assessments and respecting Indigenous decision-making
• Ensure meaningful and ongoing engagement and participation in planning and integrated management
• Incorporate Indigenous knowledge into decision making

Planning and Integrated Management

• Support early and broad engagement in planning and management activities
• Enable proactive identification of important habitats and consider these areas in decision making
• Collaborate with partners to identify key restoration and rebuilding priorities
• Incorporate modern resource management and planning principles such as cumulative effects, the precautionary approach, and ecosystem-based management

Regulation and Enforcement

• Prohibit the harmful alteration, disruption or destruction (HADD) of fish habitat without approval
• Clarify when Fisheries Act authorizations are needed for projects and when they are not
• Identify measures to avoid and mitigate harm to habitat, including through the development and enforcement of standards and codes of practice
• Enhance enforcement powers
• Clarify the factors considered in decisions about approvals
• Build the capacity and develop expertise to protect fish and fish habitat

Partnering and Collaboration

• Foster partnering for activities that conserve and enhance fish habitat
• Develop scientific expertise on fish and fish habitat protection
• Establish a collaborative committee to advise on fish and fish habitat protection
• Strengthen federal leadership, cooperation and communication with all orders of government, in all regions

Reporting Back to Canadians

• Provide Canadians transparent access to information about projects and activities impacting fish and fish habitat through:
  • improved reporting from proponents
  • strengthened compliance monitoring
  • timely, relevant and accessible information

“In [the Committee’s] opinion, the proposed amendments included in this report reflect the values of ecosystem-based management, sustainable development, the precautionary principle and co-management in addressing fish habitat protection and fisheries management.”

Enhancing The Protection of Fish And Fish Habitat And The Management of Canadian Fisheries, p. 38

Your Views

Moving forward, we will continue to work closely with provinces and territories, Indigenous peoples, industry and civil society to ensure we get this right.

We are interested in your views on the new approach and directions we are considering. Please provide your comments on or before August 28, 2017.

They can be provided to: Canada.ca/environmentalreviews

Next Steps

The government will reflect on the input received and will continue to consult and engage with Canadians as we determine how to move forward. We will also continue to work with provinces and territories, Indigenous peoples and a variety of stakeholders to explore specific issues such as the proposed approach to early planning and engagement, and the criteria for reviewing the Project List Regulations. This work will inform proposed changes to Canada’s environmental assessment and regulatory processes in the fall of 2017.