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Posted in: Facilities | Practice & Procedure | Energy Policy | Canada (Federal)

Feb 14, 2018

Legislation Introduced to Replace the NEB and Project Review Process

By David Stevens

On February 8, 2018, the federal government released Bill C-69 titled “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.” The new legislation is the culmination of the promised process to modernize the National Energy Board (NEB) and update the environmental and regulatory processes for federally regulated energy projects such as pipelines. The approach set out in the new legislation is consistent with, but not identical to, what had been suggested in the May 2017 NEB Modernization Expert Panel Report (see our earlier post) and in the federal government’s June 2017 Discussion Paper on Environmental and Regulatory Reviews (see our earlier post).

Two main aspects of Bill C-69 are the creation of a new “Canadian Energy Regulator” (CER) to replace the NEB and the creation of a new “Impact Assessment Agency of Canada” to undertake environmental and regulatory impact assessments for major new energy projects.

Under the proposed Canadian Energy Regulator Act (included within Bill C-69), the CER will take on some, but not all, of the roles currently played by the NEB. The CER will continue to determine tolls and tariffs and oversee federally regulated pipelines. Notably, the task of reviewing new major energy projects will now fall with the IAAC, instead of the NEB. A chart (reproduced below) from the website describing the CER summarizes the government’s view of key differences between the NEB and the CER that will replace the NEB.

Current Energy Regulator Proposed Modern Energy Regulator 
Potential conflict related to those setting strategic and those responsible for adjudicating regulatory matters A Chief Executive Officer would be established that is separate from the Chair.  A Board of Directors would be established to provide strategic direction, and a separate group of Commissioners (i.e., adjudicators) would be created. Remove the requirement for adjudicators to reside in Calgary.
Perception that the Board is closely linked to industry At least one member of the Board of Directors and one Commissioner would need to be First Nations, Métis, or Inuit.
The timeline for non-designated projects is 450 days The legislated timeline for non-designated projects would be shortened to 300 days.
Authority of inspection officers is limited Inspection officers would have the authority to act quickly and order work stopped on a project that is operating unsafely or not meeting conditions.
No legislative authority for regulating offshore renewable energy (ORE) resources in the federal offshore The regulator would have legislative authority to regulate ORE projects and ORE power lines in the federal offshore. 
A strict test is used to determine who can participate during a project hearing The standing test would be eliminated to ensure that any member of the public can express their views.
Project reviews are used for debate on broad climate and energy policy issues Generation Energy, an ongoing dialogue with Canadians on energy issues, will provide a venue for policy debates on climate and energy issues outside of the formal regulatory process.
Concerns have been raised regarding the way in which regulator collects, uses, and protects Indigenous knowledge The regulator would be required to consider Indigenous knowledge provided during project reviews, and protections would be set out in legislation and regulations. 

 

Further details about the CER are set out in the Canadian Energy Regulator Handbook published at the same time that Bill C-69 was introduced.

The Impact Assessment Act (also part of Bill C-69) creates the new IAAC (which replaces the Canadian Environmental Assessment Agency). The proposed legislation establishes a one-stop comprehensive review of new major projects, where the IAAC will work with other bodies including the CEA, Canadian Nuclear Safety Commission, Offshore Boards and provinces, territories and Indigenous jurisdictions. The IAAC review process will apply to major projects, as designated by regulation or by the Minister of the Environment. According to the government’s press release, the scope of IAAC reviews will be broader than was the case under the previous regime by “expanding the types of impacts studied to understand how a proposed project could affect not just our environment, but also health, social and economic impacts, as well as impacts on Indigenous Peoples, over the long-term.”

The IAAC process commences with an “early planning phase” where a description of the project will be published. After that step, the public will have an opportunity to comment and then the IAAC will provide a list of issues raised that the applicant will have to address. The process may then proceed to an “impact assessment,” which involves assessment by a review panel on a variety of listed factors. The review panel will produce a report and the Minister/Cabinet will then make a determination about whether the project is in the public interest. The expectation is that the IAAC process will take two years or less, which is said to be faster than current processes.

It is not presently known when Bill C-69 will be passed and brought into force; nor is it known whether all aspects of the new legislation will come into effect at the same time. In any event, it can reasonably be expected that the approval and implementation process (which may also include new regulations) will take many months to be completed. 


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