Market News

 April 20, 2012
Canada Federal Government to streamline process for environmental projects

 The Government of Canada has released details on a Plan for the overhaul of the environmental review process for major projects as was promised in the recent federal budget.

The Plan, announced by Joe Oliver, Minister of Natural Resources, at a press conference at an industrial plant in Toronto, is intended to streamline the review process and to focus federal involvement only on projects of major significance.

The Plan "will help prevent the long delays in reviewing major economic projects that kill potential jobs and stall economic growth by putting valuable investment at risk," said Minister Oliver.

Key elements of the proposed changes are:
•Moving toward a "one project, one review" system for reviews of major projects by recognizing provincial processes as substitutes or equivalents to federal ones as long as they meet the requirements under the Canadian Environmental Assessment Act;
•Ensuring decisions by the Canadian Environmental Assessment Agency on whether a federal environmental assessment is required are made earlier in the process (within 45 days);
•Setting timelines for hearings and assessments, namely, 24 months for panel reviews, 18 months for National Energy Board hearings and 12 months for standard environmental assessments;
•Setting legally binding timelines for key regulatory permitting processes, including the Fisheries Act, the Species at Risk Act, the Navigable Waters Protection Act, the Canadian Environmental Protection Act and the Nuclear Safety and Control Act;
•Consolidating the number of organizations responsible for reviews from more than 40 to three: The Canadian Environmental Assessment Agency, the National Energy Board and the Canadian Nuclear Safety Commission;
•Focusing federal assessment efforts on major projects that can have significant environmental effects;
•For the first time, the Plan will introduce enforceable environmental assessment decision statements under the Canadian Environmental Assessment Act. This means proponents of major projects will have to comply with conditions set out in the decision statements or may face tough financial penalties. The proposed penalties could range from $100,000 to $400,000;
•Requiring follow-up programs after all environmental assessments to verify the accuracy of the predictions regarding potential environmental effects and to determine if mitigation measures are working as intended;
•For the first time, providing federal inspectors with the authority to examine whether or not conditions of a decision statement are met;

For the first time the Plan will authorize the use of administrative monetary penalties for violations of the Canadian Environmental Assessment Act, the Nuclear Safety and Control Act and the National Energy Board Act. These penalties will be designed to address small contraventions quickly so that larger issues do not arise in the future. Further details on the penalties will be available once legislation is introduced.

The proposed penalties could range from $25,000 to a maximum of $100,000 for violations of the Nuclear Safety and Control Act, and the National Energy Board Act, while the range of penalties under the Canadian Environmental Assessment Act will be established through regulations.

Finally, the Plan will provide more than $35 million over two years for marine safety and $13.5 million over two years to strengthen pipeline safety, including regulations to strengthen the tanker safety regime and increasing the number of oil and gas pipeline inspections each year by 50 percent, from 100 to 150 inspections.

Robert Blakely, Director of Canadian Affairs for the Canadian Building Trades is also on record as supporting this major Government initiative, saying "the skilled trades people who go to work every day on large energy projects ought to benefit from the streamlining of the regulatory process."

Regulatory reform is "super important for Canada, in terms of competitiveness," notes Travis Davies, spokesman with the Canadian Association of Petroleum Producers, which supports a move to shift reviews to provinces.

Cited in a Globe and Mail article, he said "We've got provinces here in Canada that have been doing very good regulatory work for a very long time - in the case of Alberta, for almost a century. We know we have good regulators in the west, and there's no reason why that's not going to help us have a more efficient system."