The Proposed Impact Assessment Act: A Sea Change for Proponents Navigating Canada’s Project Approval Regime

Torys Quarterly: The Future of Business in Canada

If the federal government’s proposed Impact Assessment Act (IAA)is enacted substantially in its current form (which is expected), proponents of large energy, infrastructure and mining projects caught by the IAA will face new challenges and opportunities in obtaining regulatory approvals in a timely manner.

To illustrate some of the new courses that proponents may chart, this article maps out both challenges posed by the IAA’s planning phase, and opportunities provided by the IAA’s decision-making based on the “public interest.”

Background

After much anticipation, on February 8, 2018, the Government of Canada announced and introduced for first reading Bill C-69, which contains the IAA and other important regulatory changes. Bill C-69 is the product of a multi-year federal Review of Environmental and Regulatory Processes. Bill C-69 has passed second reading and is currently subject to a review by a House of Parliament committee.

If enacted, the IAA would, among other things, repeal and replace the current Canadian Environmental Assessment Act, 2012 (CEAA 2012) and expand the focus from primarily environmental effects to a broader consideration of impacts. In other words, this would result in a major overhaul of the existing federal environmental assessment (EA) process—including through a new planning phase that effectively expands proponents’ obligations. The IAA would also change the focus of decision-making. Whereas the CEAA 2012 asked whether a project would likely cause prohibited significant adverse effects and, if so, whether such effects justified in the circumstances,2 the IAA would ask whether a designated project would be in the public interest (including as defined).3

The IAA is expected to come into force in 2019. Although the government continues to consult regarding the application of the IAA, its application is expected to be at least as broad as the CEAA 2012 (for more on the IAA, see our analysis here).

Planning Phase

Under the IAA, existing screening work under the CEAA 2012 to determine whether an EA is required will be expanded to include a planning mechanism. While some details are still to come, we do know that under the IAA, proponents would be required to provide the Impact Assessment Agency of Canada (the Agency) with a notice that, among other things, sets out how the proponent intends to address the issues identified by the Agency with respect to the project, including issues raised by the public or by any jurisdiction or Indigenous group that is consulted by the Agency.4 Under the IAA, the proponent is then required to provide the Agency with the identified information and studies within three years (unless the Agency provides an extension). Otherwise, the IA is terminated.5

As a result, the scoping of information collection and studies in the planning phase would be critical to whether an IA is–or even can be–satisfactorily completed and if so, by when. While some of these risks existed under the CEAA 2012, they were typically mitigated by such studies being conducted prior to the formal EA process commencing, without being subject to a time limit. Under the IAA, it will be very important for proponents (and their advisers) to develop approaches that sufficiently address the issues identified by the Agency and that are implemented in the timeframe permitted by the Agency.

Basis for Decision Making

Another significant change the IAA would bring is the basis in decision making moving from the potential for “significant adverse environmental effects” to the “public interest” decision-making basis. This change will mean that much more information will be relevant to assessing designated projects. For example, the public interest determination must consider, among other things, the extent to which the designated project contributes to sustainability, which the IAA defines 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.”6 Proponents will want to ensure that the information provided in connection with the IAA includes a project’s positive aspects–rather than focusing solely on adverse environmental effects. As a result, the scope of a proponent’s information collection and studies may not be limited to the issues identified by the Agency, since they may not cover all of a project’s positive attributes.

Conclusion

Proponents of large, potentially controversial energy, infrastructure and mining projects that are subject to the IAA may benefit greatly from considering how to obtain an approval under the IAA. Certainly, using some of the approaches that worked under the CEAA 2012 will not be optimal–and may not even be sufficient–under the IAA, including due to the planning phase and the public interest test.

If you have any questions regarding the IAA or would like to discuss it, please contact any of the authors.

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1 See http://www.parl.ca/DocumentViewer/en/42-1/bill/C-69/first-reading

2 See section 54.

3 See sections 60, 62 and 64.

4 See subsection 15(1) of the IAA.

5 See subsections 19(1) and (2) and subsection 20(1) of the IAA.

6 See sections 2 and 63.

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