Government of Canada Unveils its Proposed Impact Assessment Act

After much anticipation, on February 8, the Government of Canada announced and introduced for first reading Bill C-69.1 It is a legislative proposal resulting from the multi-year federal Review of Environmental and Regulatory Processes. If enacted into law, the Bill would, among other things, repeal and replace the Canadian Environmental Assessment Act, 2012 (CEAA 2012) with the proposed Impact Assessment Act (IAA). This would result in a major overhaul of the existing federal environmental assessment (EA) process.2

What You Need To Know

The new IAA is intended to enable more comprehensive impact assessments (IA), greater Indigenous and public consultation and more streamlined processes (e.g., “one project, one review”). It would, among other things:

  • shift to a broader assessment of project impacts, including the environmental, health, social and economic effects of designated projects;
  • rename the Canadian Environmental Assessment Agency as the Impact Assessment Agency of Canada (Agency), which would lead all federal IAs, including in coordination with other regulatory bodies in the case of joint panel reviews;
  • specify the factors that must be considered in each IA. This includes cumulative effects, impact on Indigenous peoples, project need and alternatives, traditional Indigenous knowledge, contribution to sustainability, regional and strategic assessments, climate change, and the intersection of sex and gender;
  • establish an early planning and engagement phase for potential IAs, which would require proponents to seek  Indigenous and public input on the project description; and
  • with some exceptions, shorten the time limit from 730 days to 600 days for the review panel’s assessment and report phase for IAs that the Minister refers for panel review, and reduce the assessment and report phase for assessments conducted by the Agency from 365 days to 300 days.

A prescribed list of designated projects would continue to be the primary trigger for the assessment process. This list would ultimately be set out in a new Projects List regulation, which is expected to cover more projects than the current Regulations Designating Physical Activities. The federal government is seeking public comments on the development the Projects List regulation and other key regulations under the IAA (e.g., relating to time management and information requirements) until April 15.3

Highlights of the Proposed IAA

As we wrote in April 2017,4 as part of the federal government’s Review of Environmental and Regulatory Processes, its appointed Expert Panel recommended significant reforms of the existing EA regime. These reforms included the implementation of a broader IA framework, enhanced Indigenous and public consultation, and a new IA decision-making body. As discussed below, the proposed IAA reflects many of the Expert Panel’s recommendations.

Broadened and Proactive Assessment of Impacts

Similar to the CEAA 2012, an IA under the IAA would be triggered by a proposal to undertake a project designated either by regulation or the Minister of Environment and Climate Change (i.e., a designated project). The IAA would involve a broader assessment than that under the CEAA 2012 by requiring proponents to consider a wider range of effects, including the environmental, health, social and economic effects of designated projects and impacts on Indigenous peoples.

In addition, the IAA specifies a range of factors that must be considered in each IA, including the effects of potential project accidents and malfunctions, likely cumulative effects, mitigation measures, impact on Indigenous peoples, project need and alternatives, community and traditional Indigenous knowledge, contribution to sustainability, regional and strategic assessments, contribution to climate change-related objectives, and the intersection of sex and gender.5 Some of these factors are specifically included under the CEAA 2012, while others are not.

In deciding whether a designated project may proceed, the Minister (for IAs conducted by the Agency) or the Governor in Council (effectively the federal government’s cabinet, for IAs conducted by review panels) must determine whether the project is in the public interest. This is in contrast to the approach under the CEAA 2012, where the decision-making authority must determine whether any significant adverse environmental effects of the project are justified in the circumstances. The public interest consideration would include a project’s contribution to sustainability, adverse effects within federal jurisdiction, implementation of mitigation measures, impacts on Indigenous rights, and contribution or hindrance with respect to federal climate change commitments. A key concept in the IAA, sustainability is defined as “the ability to protect the environment, contribute to the social and economic well-being of the people of Canada and preserve their health in a manner that benefits present and future generations.”

Notably, the IAA empowers the Minister to trigger a regional assessment of the effects of existing or future physical activities carried out in a region that is on federal land, and a strategic assessment of any federal policy, plan or program relevant to conducting IAs. In this regard, the federal government plans to commence a strategic assessment of how climate change considerations would be integrated in IAs and in determining whether a project is in the public interest.6

Prior to the Agency providing the proponent with a notice of commencement of the IA for a project, the IAA empowers the Minister to order the Agency to not conduct an IA in certain circumstances, including if a federal authority advises that it will not exercise a power required for the project to be carried out or if the project would cause “unacceptable effects” in the opinion of the Minister.

Impact Assessment Agency of Canada

Under the IAA, the Canadian Environmental Assessment Agency would be renamed as the Impact Assessment Agency of Canada, which would be tasked with conducting or coordinating all federal IAs, promoting harmonization in relation to IAs at all levels of government, promoting the development of IA techniques and practices, monitoring compliance with the IAA, and engaging in consultation with Indigenous peoples.

While the final decision-making power resides with the Minister or Governor in Council, as applicable, the Agency would be given wide-ranging powers to meet its statutory objects, including the powers to undertake IA-related studies and research, issue guidelines and codes of practices, negotiate agreements with other levels of governments and Indigenous governing bodies, and establish research and advisory bodies.

For each designated project, the Agency would either administer the IA process or, where the Minister refers the IA to a review panel, lead the IA in coordination with the relevant regulatory bodies (e.g., the new Canadian Energy Regulator being proposed as part of Bill C-69, the Canada Nuclear Safety Commission, and the Nova Scotia and Newfoundland Offshore Petroleum Boards).

Consultation and Engagement

The IAA would establish a new early planning phase for designated projects. At this stage, a description of the proponent’s project would be published for comment and the Agency would ensure that potentially impacted Indigenous groups are given an opportunity to be consulted. The proponent would be required to indicate its plans for addressing the issues raised during this phase.

With respect to Indigenous consultation and cooperation in particular, the IAA would introduce a number of enhancements, including: (i) allowing the Minister to enter into agreements with Indigenous jurisdictions on IA-related matters, and to substitute the IA with an Indigenous jurisdiction’s process for assessing the effects of designated projects; (ii) authorizing the Agency to delegate the carrying out of any part of an IA to Indigenous jurisdictions; and (iii) requiring each IA to account for impacts on any Indigenous group generally or on Indigenous rights, as well as traditional Indigenous knowledge provided to the Minister.

Other measures to facilitate Indigenous and public participation include a participant funding program and an Indigenous Advisory Committee to be established by the Agency.

Timelines

The IAA is intended to streamline and shorten the regulatory processes. For example, it would shorten the overall time limits for completing the review panel’s assessment and report phase from two years to 600 days for panel reviews, and from one year to 300 days for the assessment and report phase for Agency reviews, subject to certain powers of the Minister and Cabinet to adjust the applicable timelines.

The exercise of such powers may allow IAs to take significantly longer than the default timelines. For example, prior to the commencement of an IA, the Minister may suspend the time limit within which the Agency must provide the notice of commencement, and may establish a longer time limit than the default. After an IA commences, the Minister may extend the time limit by a period up to a maximum of 90 days, and may suspend the time limit altogether while certain activities prescribed by regulation are being completed. It is not clear what these activities may be until a regulatory proposal for a new time management regulation becomes available. On the other hand, the Cabinet has broad powers to, on the Minister’s recommendation, further extend the time limit any number of times during the course of an IA.

While some of the other phases of the IA process also have timelines, they are subject to modification as well.

Transitioning

Whether an existing EA will be transitioned to the IAA depends on several factors, including the type of EA and its status. In general, any projects for which a decision has been made to proceed with an EA under CEAA 2012 would:

(i)   proceed under the new IAA if the required studies and information gathering for the prior agency’s assessment (not the Minister’s assessment) has not yet been completed, when the IAA comes into force; or

(ii)   remain under CEAA 2012 if all studies and information gathering have been completed, when the IAA comes into force.

The IAA also makes provisions for circumstances where certain EAs under the 1992 Canadian Environmental Assessment Act have not yet been completed.

Next Steps

The federal government is accepting public comments on the approach for developing the Projects List Regulation to determine the projects that may be subject to an IA, as well as the approach for developing other regulations under the IAA relating to time management and information requirements. Comments may be submitted online until April 15.7

The full text of Bill C-69 (First Reading version) is available on the Parliament of Canada website.8





2 In addition, Bill C-69 also proposes to: (i) repeal and replace the National Energy Board Act with the proposed Canadian Energy Regulator Act, establishing the Canadian Energy Regulator to exercise oversight over the exploitation, development and transportation of energy within Parliament’s jurisdiction; (ii) amend the Navigation Protection Act (renaming it the Canadian Navigable Waters Act); and (iii) make consequential amendments to other federal statutes and regulations.

5 The federal government has indicated a gender-based analysis will be required for every review, which would examine, for instance, how the influx of male workers in a remote work camp could affect women living in nearby communities. See https://www.canada.ca/en/services/environment/conservation/assessments/environmental-reviews/environmental-assessment-processes/ia-handbook.html.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

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