The New “Interim” Pipeline and Energy Project Approval Process: Bill C-38 Redux?

January 29, 2016

On Wednesday of this week Environment and Climate Change Minister Catherine McKenna and Natural Resources Minister Gary Carr announced a new “interim” approval process for certain pipeline and energy resource development projects that were already in or approaching the National Energy Board (NEB) approval process. These are reported to include the Alberta to BC Trans Mountain Kinder-Morgan Pipeline Project, the Alberta to New Brunswick Energy East Pipeline, Prince Rupert Liquid Natural Gas Terminal and crude-to-rail terminals.

The new process is based on five principles:
? No project proponent will be asked to return to the starting line — project reviews will continue within the current legislative framework and in accordance with treaty provisions, under the auspices of relevant responsible authorities and Northern regulatory boards;
? Decisions will be based on science, traditional knowledge of Indigenous peoples and other relevant evidence;
? The views of the public and affected communities will be sought and considered;
? Indigenous peoples will be meaningfully consulted, and where appropriate, impacts on their rights and interests will be accommodated; and
? Direct and upstream greenhouse gas emissions linked to the projects under review will be assessed.

The announcement brought immediate negative responses from First Nations and leaders of communities in British Columbia affected by the proposed energy projects to be covered by the “interim” process. Their response was not surprising given that the implication of Wednesday’s announcement is that the reviews of the pipelines and other projects will effectively continue under the Canadian Environmental Assessment Act and NEB rules established by the Conservative Government in 2012 though its notorious Bill C-38. Bill C-38 drastically narrowed the scope of federal environmental assessment and NEB reviews, and established a series of barriers to public participation in the review processes.

The only apparent legislative foundations for the “interim” process are the provisions of Bill C-38 assigning final decision-making authority under CEAA and the NEB Act to the cabinet. The new process appears to add a separate consultation and climate change impact assessment process to the existing approval process. The consultation and climate change process would apparently function as inputs into the cabinet's final decision-making process. There is no clarity about how these processes will work in practice, and the only indication of the basis on which the cabinet would make final decisions, is that its choices will be in the “national interest.” Legal basis for an answer of “no” to a project under the “interim” process could be very thin, particularly if it relies on evidence gathered outside of the formal review process. Those with concerns about the projects covered by the “interim” process may realize this and see it as adding some steps on the road to a yes, not a process for the real review of how these projects affect sustainability, climate change or the future direction of Canada’s economy and environment.

The Liberal platform, Mandate Letters to the Ministers of Environment and Climate Change, Natural Resources, Fisheries and Oceans and others, and December 4, Speech from the Throne all seemed to recognized that Bill C-38 had streamlined the CEAA and NEB processes to the point that they had lost their capacity to establish the legitimacy of decisions. The platform, mandate letters and Throne Speech all promised substantial reform to the CEAA and NEB processes to restore their status and meaningful processes for consultation, the gathering and assessment of evidence and decision-making. Those promises are now postponed, potentially for years.

Beyond the disappointment of voters concerned about the environment and climate change flowing from the deferral of one of the central features of the Liberal’s environmental platform, the government’s approach carries with it other, very high political risks. The “interim” process means that the cabinet will be taking full and direct ownership of any decisions regarding the pipelines and other energy projects. There will be no political cover in the form of NEB or environmental assessment decisions that the cabinet might later intervene to "modify" to address regional or public concerns. This is a dangerous situation given that the regions where opposition to new pipelines and energy projects is strongest – BC, Quebec and Ontario, were key factors in the Liberal government’s electoral success on October 19, 2015.

Environmental assessment processes have the potential to function as mechanisms for the evidence-based examination and resolution of significant societal disputes over the distribution of costs, benefits and risks associated with major projects. It was precisely that potential which Prime Minister Trudeau’s father recognized forty years ago when he established what was effectively Canada’s first major environmental assessment process - the Mackenzie Valley Pipeline Inquiry (a.k.a. the Berger Commission) - in 1974. The current situation of intensifying regional divisions over the future direction of energy resource and infrastructure development, and its implications for the environment, climate change and Canada’s economy, requires as substantive a response as was the case then. “Interim” measures will not do.