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Understanding the new federal impact assessment process

Yesterday morning, after almost two years of consultation and development, the Honourable Catherine McKenna, Minister of Environment and Climate Change, introduced Bill C-69 “An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts” to Parliament.

The new legislation marks a major overhaul in the process by which the Government of Canada assesses and approves natural resources projects, such as mines, pipelines and damns. In a press conference, Minister McKenna summarized the legislation by saying it will provide clarity and certainty about how the process works, what companies need to do, and why and how decisions are made.

Central to this new Impact Assessment Process is the creation of the Impact Assessment Agency of Canada (IAAC). This agency will lead all impact assessments going forward. It will replace the Canadian Environmental Assessment Agency (CEAA), it will subsume the assessment mandate of the National Energy Board (NEB), and it will collaborate with the Canadian Nuclear Safety Commission (CNSC).

The IAAC’s first task will be to foster public confidence. Turning the page on the previously defined project list, the IAAC will consult with other government bodies, industry and the public to redraw the list of project types that should be subject to mandatory impact assessments. Ultimately, this will create three categories of projects that are subject to different modes of final approval following the impact assessment process: 1) Listed projects, which will require ministerial approval; 2) Joint-Panel projects, likely highly sensitive or controversial projects, which will require cabinet approval; 3) Non-listed, which will only require bureaucratic approval.

After this legislation passes, the regulatory landscape for project assessments will be fundamentally altered. The CNSC will be the only current regulator to remain and it will continue to conduct its own assessment processes, but it will no longer be the lead agency with the IAAC becoming the main decision maker. Meanwhile, the NEB, which has been the independent federal regulator for energy projects since 1959, will be replaced by the Canadian Energy Regulator (CER). The CER will carry out the same regulatory and statistical gathering roles of the NEB, but will not be involved in the assessment of listed projects, which will be under the authority of the new IAAC. The CER will only have assessment and recommendation power over non-listed projects.

As part of this regulatory overhaul, the IAAC will work with the provinces and territories to reduce duplication of assessments so that one project will only require one review.

In addition to altering the roles of regulatory bodies, the new legislation creates a two-step assessment process: 1) Early Engagement Process and 2) Impact Assessment Process. First, the Early Engagement Process requires project proponents to take 180 days working with local indigenous communities to understand them and adapt project plans to fit their needs, concerns and goals. The objective is to build strong working relationships before building projects. Second, the Impact Assessment Process will take a maximum of 300 days to evaluate the project from a variety of perspectives, including health, socio-economic, technological, environmental, and climate impacts. In addition, the IAAC has been tasked to incorporate traditional indigenous knowledge and a gendered perspective into its analysis.

Finally, the new legislation indicates different methods for final approval. Whereas non-listed projects will have final approval by either the CER, CNSC, or another regulatory body, listed projects must be referred to the Minister of Environment and Climate Change for final approval. However, Joint-Panel projects will require that Minister take the final decision to Cabinet.

The key takeaway for industry is that this new Impact Assessment Process is intended to create regulatory certainty while fostering public trust in major energy and natural resources projects. As Minister McKenna argued, it is about striking the right balance.