Canada: Challenges Facing Project Developers Who Trigger The 2012 Canadian Environmental Assessment Act

Pipelines, mines, ports, railways, reactors and power dams make federal environmental assessments prominent in current public affairs.

Yet most of these examples of federal EA deal with legislation that was repealed in 2012 and replaced by the current Canadian Environmental Assessment Act, 2012 (CEAA/12).¹ Today, as we pass the third anniversary of the new regime, we still lack any court judgments interpreting its provisions. Recent important decisions continue to be about the earlier 1992 statute.

Is it a mistake to treat the 2012 EA law as similar to the 1992 Act that shares its name?   

Yes. At a high level, both regimes appear similar: both focus on assessing significant adverse environmental effects. However, in other key respects, CEAA/12 departs from the approach of CEAA/92 and introduces new principles to federal EA practice.

Many of these new principles arise within three core attributes of CEAA/12:

1. Few projects trigger CEAA automatically
2. Where triggered, the project subject to EA is broad, if not comprehensive
3. The scope of each assessment or determination of effects is project-specific and often narrow

The present article deals with the first core attribute. Future articles will deal with the second and third core attributes. Further details on all of these points may be found in the recently published 2016 Guide to the Canadian Environmental Assessment Act (LexisNexis Canada 2015), hereafter referred to as the "Guide." 

Advantage to proponents: few projects trigger CEAA automatically

It is useful to review the approach of CEAA/92 to triggering EA before addressing how CEAA/12 deals with this topic.

CEAA/92 applied broadly to federal government decisions on projects. It applied to several thousand government decisions annually.

Across this wide array of federal decisions, CEAA/92 employed a complex approach to triggering EA. Most generally, some federal decisions for some projects triggered a screening EA automatically. This rule applied to federal government decisions on physical works that involved federal proponency, funding, or land. On the other hand, many federal decisions on many projects did not trigger EA unless the decision, the project, or both were listed in CEAA regulations.² A further complexity was that CEAA/92 contained both statutory and regulatory exemptions.³ The final complexity involved a fourth core regulation to CEAA/92 - the Comprehensive Study List Regulations listed major projects. This regulation did not alter what projects or decisions triggered EA, but it did alter the administration of the EA immediately once CEAA was triggered.

By contrast, CEAA/12 applies to a narrow band of projects. Its processes apply to a few hundred projects annually. Inside Canada,⁴ CEAA/12 applies to two categories of "projects": (1) projects on federal land, and (2) designated projects.

CEAA/12 applies automatically to Category (1) projects. Such projects require a federal "determination" before they may proceed (s.67). A determination is not an environmental assessment.

Environmental assessment is now limited to Category (2) projects - designated projects. CEAA/12 has no statutory EA triggers for environmental assessment. It provides two routes to project designation: the project is (a) listed on ministerial regulations, or (b) subject to a ministerial designation order. To date, the Minister has issued both types of project designation.⁵

To have a designated project, CEAA/12 regulations or orders must do two things: (1) designate a "physical activity" or class of physical activities, and (2) designate "linkage" between the activity and a federal authority. An example of a "physical activity" is construction of a gas pipeline.⁶  Linkage is a novel trigger requirement.

CEAA/12 requires that all designated projects be linked to a specific federal authority. Presently, CEAA/12 identifies several federal authorities. Three are found in the terms of CEAA/12: the Canadian Nuclear Safety Commission (CNSC), the National Energy Board (NEB), and the Canadian Environmental Assessment Agency (CEA Agency).

Three additional federal authorities are listed on Schedule 1 to CEAA/12: port authorities, a board as defined in the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act, and board as defined in the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The current designating regulations list and link physical activities to the CNSC, NEB, and CEA Agency only; the former three authorities are not responsible authorities under CEAA/12 because, to date, no regulations designate specific physical activities which are linked to any of these authorities.

On the basis of current regulations, many physical activities are both designated and linked to either the CNSC or the NEB. For such activities, EA is triggered automatically. This result is not new: the CEAA/12 triggers for projects involving the CNSC and NEB resemble what occurred under CEAA/92 under the combination of regulations described above.

On the other hand, CEAA/12 has a novel approach for all other currently designated physical activities. Regulations link all such projects to the CEA Agency. CEAA/12 requires screening for any designated physical activity that is linked by regulation to the CEA Agency. Though a screening was the predominant type of EA under CEAA/92, a CEAA/12 screening is not an EA. It is a time-limited statutory process to determine if an EA is required.

In key respects, the CEAA/12 screening process resembles the pre-EA process under CEAA/92 to determine if an EA was required. CEAA/92 created this pre-EA process through its 1996 Federal Authorities Regulations. These regulations demanded that project proponents prepare a project description report (PDR) and circulate it to applicable federal authorities. CEAA/12 has passed regulations to also demand that proponents provide a PDR to the CEA Agency to guide the screening process.⁷ On receipt of a PDR, the CEA Agency reviews it for completeness; if complete, the Agency has 45 days to invite and receive public comments, conduct the screening, and decide if an EA is required.

A further novelty to CEAA/12 is that it provides four statutory criteria to be applied by the CEA Agency to decide whether an EA is required: (i) the description of the designated project provided by the proponent; (ii) the possibility that carrying out the designated project may cause adverse environmental effects; (iii) any comments received from the public within the period of public comment; and (iv) the results of any regional study established by the Minister under sections 73 or 74 of CEAA/12.

Challenges for proponents

These novel aspects to CEAA/12 present at least two major challenges to proponents who trigger the screening process.

One challenge is how the screening process relates to assessing the significance of adverse environmental effects. CEAA/12 expressly seeks to prevent significant adverse environmental effects from designated projects. CEAA/12 makes a project's potential to cause adverse effects an essential consideration for the CEA Agency conclusion on whether an environmental assessment is required. However, the legislation does not expressly address the significance of adverse effects. Nor do current regulations on the contents of the PDR to be submitted by the project proponent.  

A second challenge is that CEAA/12 places great importance on linking the scope of effects to the scope of federal regulatory approvals. This linkage is central to the requirements of section 5 of CEAA/12 regarding "environmental effects.". Yet the screening process – PDR requirements and statutory criteria – does not expressly address section 5 or this linkage.  Current regulations require the proponent to identify potential federal approvals: they impose no requirement to explain what environmental information is associated with each such approval.

What is thus common to both challenges for proponents is that, despite the relevance of information on significance and required federal approvals to specific requirements of CEAA/12 environmental assessments, such information appears to be at odds with the specific requirements of the screening process. Legally, this raises the question whether such information is (a) irrelevant, (b) relevant if provided, or (c) beyond jurisdiction.

Conclusions

CEAA/12 provides a novel approach to triggering federal EA. This novel approach appears to change little for those designated projects that require CNSC or NEB approval; however, this novel approach does present challenges for the majority of designated projects that are linked to the CEA Agency. These projects now require a novel screening process administered by the CEA Agency.

Based on the experience with CEAA/92, it is likely that litigation is required to clarify the scope of these novel CEAA/12 provisions and departures from earlier EA principles and practices.

Footnotes

^{1 Enacted by S.C. 2012, c.19, and in force, July 6, 2012.}

^{2 In particular, regulatory approvals did not trigger any EA under CEAA/92 unless the regulatory decision was set out in the Law List Regulations. Similarly, projects involving physical activities not related to a physical work triggered EA only if the activity was listed on the Inclusion List Regulations.}

^{3 See, for example, section 7 from CEAA/92 and the Exclusion List Regulations.}

^{4 Outside Canada, CEAA/12 has automatic application to projects receiving federal financial assistance. For such projects, CEAA requires a determination that the project is not likely to cause significant adverse environmental effects: see Guide, pp.143-6.}

^{5 Thus, these regulations applied when CEAA/12 came into legal force. Initially, these regulations replicated the Comprehensive Study List Regulations from CEAA/92; however, in 2013, the Minister approved major amendments – additions and subtractions - to this list. In general, the current list appears to better reflect the CEAA/12 preoccupation with assessing only those matters clearly within federal jurisdiction. The Guide reviews these Regulations at pp.100-104.}

^{6 CEAA/12 has a subtle similarity to CEAA/92 in its use of trigger terms. Like CEAA/92, CEAA/12 applies automatically to projects involving a "physical work" if the work is on federal land (see section 67). Similarly, like CEAA/92, CEAA/12 requires regulations to apply to "physical activities." However, CEAA/12 departs from CEAA/92 in a fundamental way: a CEAA/12 designated "physical activity" can include one or more physical works, whereas the CEAA/92 list of designated physical activities was limited by CEAA/92 to activities not related to a physical work (e.g., certain dredging activities): see Guide, pp.75-9.}

^{7 See SOR/2012-148 Prescribed Information for the Description of a Designated Project Regulations. These Regulations seek a broad array of information under five headings: general information, project information, project location information, federal involvement, and environmental effects. The Regulations also require a summary of all required information. The Guide reviews these Regulations at pages 115-120.}

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