Note: The original post was slightly edited on January 26 and 28, 2019, to add a few additional points that occurred to me upon re-reading it.
Is it possible under the current law for a private sector oil pipeline to be approved in Canada within a reasonable time and with finality? The short answer is “No!”. And the new assessment law, C-69 (now before the Senate) will make private sector pipeline approvals even less likely. The process of assessment cannot be infinitely long and complicated, with no reasonable likelihood of finality in the decision to approve or deny construction. Now, only the government can accept the cost and risk of attempting to build a pipeline to an ocean port. If that had been the government’s intention in enacting C-69, it would have succeeded; as that is not what was intended, the law must be amended.
Today, having purchased the TMX pipeline, the federal government is seeking approval of its pipeline, from itself. How credible will either decision be? If the Cabinet says “yes, we approve our own project” that self-approval looks like a decision biased by self-interest. If the Cabinet says “No, we don’t approve our own project” that just looks silly.
The assessment process to be used for pipelines will also be used for interprovincial and international (north-south) electricity transmission lines. Under the plans for the greatly increased use of renewable energy from solar and wind power, new, additional electricity-transmission lines will be needed to carry solar- and wind-generated electricity from rural areas to larger cities. If pipelines cannot be assessed properly, neither can electricity transmission corridors. This is not good for replacing fossil fuels with more renewable energy.
As two recent Federal Court of Appeal cases (Northern Gateway and Trans Mountain) have shown (NG, TMX), the years of debate at the National Energy Board (NEB) and the Cabinet have become just the slow road to the courthouse. Whatever the government does, the court still gets the last word. The current score is: proponents = 0, opponents = 2. Not very encouraging.
Why does any of this matter to you and me? If Canada’s impact assessment law is a barrier to project development, investment, both domestic and foreign, will leave Canada. Bankers and other private sector business leaders tell us this is already happening (Globe & Mail, November 17, page B1). With investment go jobs, new university graduates, entrepreneurs and other talent, to countries with a better business climate. The likely long term result is a lower Canadian dollar, causing higher consumer prices for fresh vegetables, manufactured goods, computer software and other imports from the US and elsewhere, higher unemployment and less government revenue for social programs like health care.
It can easily cost a pipeline proponent $1 billion to develop and present a pipeline proposal through the years of the assessment process, with an uncertain outcome. A pipeline proponent has no control over the efforts of either the federal impact assessment agency or the Crown’s consultations with the First Nations (FNs). However, if either of these government efforts fail to meet judicial approval, the proponent takes the hit.
Bill C-69 replaced the Canadian Environmental Assessment Act (CEAA) with the new Impact Assessment Act (IAA), the stated goal being to improve the project assessment process. But reading the new Act itself (the Act), rather than how it is presented (Government’s description), shows that it is unlikely to achieve its stated purposes. The IAA will greatly increase complexity and delay in project assessment, and also provide several new and improved litigation opportunities for pipeline opponents. The underlying message to prospective investors, whose advisors will read the law behind the political salesmanship, is that Canada is now indifferent to, and perhaps actually opposed to any new non-government pipeline projects. Again, if that is not the desired message, fix the law.
For private sector proponents using private capital, the risk of losing a multi-billion-dollar pipeline proposal after years of assessment was already too great under the old law. That is why the Kinder Morgan investors in the Trans Mountain Pipeline Extension (TMX) stopped construction and, without waiting for the FCA’s decision, happily sold their project to the Canadian government. Only the government can afford to take as long as it wants to succeed or fail at obtaining judicial approval. One can only hope that the Senate – the “chamber of sober second thought” – will speak truth to power about amending C-69.
The Intended Results of the IAA Conflict with its Content
The IAA explains its intended results in the Preamble to the Act, which lists certain government commitments:
Whereas the Government of Canada is committed to…..
- achieving reconciliation with First Nations …. based on recognition of rights, respect, co-operation and partnership;
- using transparent processes that are built on early engagement and inclusive participation and under which the best available scientific information and data and the Indigenous knowledge of the Indigenous peoples of Canada are taken into account in decision-making
- assessing how groups of women, men and gender-diverse people may experience policies, programs and projects and to taking actions that contribute to an inclusive and democratic society and allow all Canadians to participate fully in all spheres of their lives;
However, the government is unlikely to achieve:
- reconciliation with FNs via an adversarial hearing process in which some FNs support and others oppose the pipeline, as the only the winners will be reconciled to the result;
- transparency via a process in which those who decide the assessment do not hear the parties, while those who hear cannot decide
- transparency when some parties are permitted by the Act to provide their evidence and opinions in confidence, as secret evidence is not transparent
- an inclusive and democratic society by assessing and taking unspecified “actions” against the impact of a pipeline on unspecified “groups of women, men and gender-diverse people”.
If the key intended results conflict with the Act itself, and thus, will not be achieved, honesty requires that either the description of the intended results be amended or the Act be amended to correct the conflict.
There Is No Win/Win Solution in Litigation
Natural Resources Minister Amarjeet Sohi recently told reporters (November 15, 2018, Globe & Mail) that the key to building pipelines is building trust in regulatory processes and engaging affected parties early on so that approvals aren’t overturned (as happened with TMX). Unfortunately, that is not enough. An adversarial process inevitably creates winners and losers; and impact assessment is an adversarial process. For parties unalterably opposed to the pipeline, the only win is to prevent it from being licensed. These opponents couldn’t care less whether the process itself is trustworthy so long as it achieves their desired outcome.
Similarly, whether one engages such parties early on or later will not change their determined opposition, or their court challenges if the Cabinet approves the project.
No hearing process is immune to court challenges, but some are more likely to be challenged successfully than others. An impact assessment process should not effectively hang a target on its back with a sign saying “sue me”. An important goal of the IAA should be to minimize the likelihood of successful court challenges, thereby improving the likelihood that the Cabinet’s decision will be final. Unfortunately, the IAA increases the likelihood of successful court challenges by introducing several new litigation triggers.
Three Basic Problems With The Old Law Not Addressed by C-69
- The CEAA and the NEB Act give the NEB potentially conflicting duties. Is this supposed to be an assessment process or a licensing process? The two are not the same. The numerous upstream and downstream impacts the CEAA required the NEB to assess (e.g. of tanker traffic in the ocean) are much broader than the conditions of licence that the NEB and the Cabinet can legally impose under the NEB Act. Downstream tanker traffic cannot be part of a pipeline proponent’s project because what happens in the ocean is not within the proponent’s control. Therefore, conditions of license cannot include anything about tanker traffic because the pipeline would have no way to comply with such conditions. While assessment of tanker traffic may be mandatory for CEAA purposes it is irrelevant for NEB Act pipeline licensing purposes. This conflicting mixture of two different laws in one proceeding before one agency create uncertainty and litigation, as happened in TMX. This needs to be resolved by amending C-69 to clarify the hearing duties and licensing duties in one place.
- The CEAA already made it mandatory to hear and determine too many potential future effects (12 of them) to be considered. Several are of marginal relevance, and several use vague language that encourages litigation. C-69 lengthens to 20, rather than shortens, the list of mandatory considerations. This makes the hearing agency’s power of scoping much more difficult to apply than that which has already proved fatal in TMX. The long list of mandatory considerations implies a lack of trust in the ability of those the government appoints to conduct the hearings to do so intelligently. It removes their discretion to discern what is relevant and material to the proposal and to focus its hearings on those issues. It effectively treats the hearing people as if they were robots who needed to be programmed to make the right decisions. This may deter some of the best people from accepting such appointments.
- The persons who conduct the public hearings (the NEB or the new Impact Assessment Agency) have no authority to decide anything. On the other hand, the persons who decide everything (the Cabinet) do so in secret, with no public participation. C-69 gives the Minister even greater political control over the hearing process, increasing politicization while reducing transparency. I am not saying that political control in making the necessary tradeoffs is bad, or that transparency is bad, but they are conflicting. C-69 shifts the previous balance even further towards political control and away from transparency.
These three fundamental flaws could to be fixed by amending C-69.
Three Basic Problems With Consultation of First Nations
- The positions of FNs on a pipeline are often divided. While many support pipelines that provide many FNs with jobs and income, a few FNs are unalterably opposed. The purpose of opposed FNs in participating in the Crown’s consultation process is not to arrive at an agreement to accept the pipeline but to collect evidence for a successful court challenge. They have every right to do this, but the government has no duty to enact legislation that makes successful court challenges easier.
- Under our system of government the public service employees doing the consulting can have no authority to decide anything or make any commitments to FNs on behalf of the Cabinet.
- The Cabinet cannot meet to consult repeatedly with 100+ FNs potentially affected by a pipeline. Thus, the people doing the consulting are necessarily just the conduits of FNs’ concerns to the Cabinet. However the FCA in TMX held that performing this role was inadequate. That decision should have been appealed, but was not. The vagueness in the duty to consult and accommodate can be resolved, but not by the Senate.
These three basic consultation problems cannot be entirely fixed now because the duty of consultation is constitutional. Parliament can’t amend the constitution by legislation. It can, however, remove some of the unnecessary litigation triggers in C-69 and attend to clarifying the duty to accommodate later.
The initial Supreme Court of Canada (SCC) case law on consultation was developed in the context of a local project (such as logging) affecting one or two First Nations directly. There has been far less SCC consideration given to cases of a lengthy pipeline route potentially affecting a large number of FNs with differing or opposed interests. The government could draft a law and then present a reference case to the Supreme Court of Canada seeking clarity of its constitutional duty of consultation under these new and more complex conditions.
Some of the Litigation Triggers in the IAA
- Secret Evidence of “Indigenous Knowledge”
A pipeline company going through the IAA process will be concerned that some FN witnesses may present their “Indigenous knowledge” in confidence, attacking the proponent’s evidence during the hearing, or even after the hearing has ended.
The IAA has no definition of “Indigenous knowledge”, making that a potential area of litigation. If we know what that means it should defined; if we don’t know what it means it should be deleted. The hearing is about possible impacts of the pipeline many years into the future. There are no facts in the future. There can be no “knowledge” of the future, only predictions. However, Indigenous knowledge could be defined as knowledge of the environment and socio-economic conditions in their traditional areas. It should not include opinions of non-Aboriginal issues such as the economic need for the project.
This undefined, unlimited secret “knowledge” may cause project approval to be denied. As the law is written, the proponent will be denied an opportunity to know the content or even the existence of the secret evidence, and therefore, may be denied a fair opportunity to challenge it.
The IAA does permit someone who somehow discovers that secret evidence was presented to apply for disclosure of the secret evidence subject to certain conditions. However, no disclosure may be granted unless it is necessary for “procedural fairness”. When a proponent and an FN are disputing disclosure of secret evidence at the hearing stage, the hearing will probably be suspended while the procedural fairness issue goes to the FCA, and perhaps also to the SCC. In any event, the resolution of this issue may not be simple or quick. Fixing this aspect of C-69 will remove the litigation trigger.
2. Unrealistic Statutory Time Limits
The TMX hearing had some 1,600 participants. The IAA emphasizes even greater public participation. To hear from an unlimited number of public participants presenting an unlimited volume of evidence would require unlimited time. Pipeline opponents will sometimes organize numerous individuals to make repetitive, scripted presentations, to maximize delay. The Agency will have to impose time limits, at least on oral submissions, thereby potentially triggering court challenges. To reduce the risk of successful court challenges, the Minister will probably have to grant one or more extensions of time beyond the statutory 300 day time limit for completing the hearing. For this reason as well, C-69’s purported reduction in the statutory hearing days from the time limit in the CEAA is unrealistic.
3. Problem Language
Vague, over-inclusive language in the IAA – of which there are numerous examples – will also be potential litigation triggers for one side or the other. Such language will not be helpful to anyone. I have seen an environmental group seeking support for C-69 on social media, encouraging Senators to approve C-69 quickly despite industry objections. However, if environmental advocates understood that the vague language and undefined action words in C-69 can be interpreted in ways that harm rather than help the environment, they, too, would want the legislation made more effective through better drafting.
The Mandatory Consideration of Abstract Issues in the IAA
The list of ‘must consider’ factors in the IAA tries to compel something it cannot compel. “Considering” anything is a mental activity. Mental activities are invisible. There is no practical way any legislation can compel anyone to think about anything. There is no way the government or the courts can detect whether that mandatory consideration has or has not been given. Such mandatory requirements can only create a written document that has headings for each of the mandatory factors, and some verbiage to demonstrate that each factor was considered. This is checking the check boxes.
What weight is actually given to any one of these factors may range from 0 to 100%. (The legislation cannot require specific weights to be assigned to particular factors.) Despite its good intentions, the main effect of such mandatory considerations is symbolic reassurance that anything and everything has been taken into account. In the real world of decision-making, however, the written reasons for decision may be quite different from the actual reasons for decision. Accordingly, to attempt to create a higher level of coincidence between written reasons and real reasons, legislators should minimize the number of mandatory considerations and eliminate any that are vague, speculative or simply a waste of time.
Under C-69, the Agency must consider – and therefore, receive hugely time-consuming evidence from numerous parties on – factors of an overly broad and highly speculative nature. Consider section 22 (1) (a):
22 (1) The impact assessment of a designated project ….. must take into account the following factors:
(a) the changes to the environment or to health, social or economic conditions and the positive and negative consequences of these changes that are likely to be caused by the carrying out of the designated project, including …..
The word “environment” is defined in section 2 of the IAA as:
environment means the components of the Earth, and includes
(a) land, water and air, including all layers of the atmosphere;
(b) all organic and inorganic matter and living organisms; and
(c) the interacting natural systems that include components referred to in paragraphs (a) and (b)
What the Agency must in future consider is not limited to the environment that may be directly affected by the project, or even to the environment of Canada. It must consider all layers of the atmosphere everywhere on the entire planet, and also, every living plant and animal, every rock, and the interaction of these on the Earth.
Obviously, there is no practical way that the parties can present evidence on, or the Agency can hear and determine, all of these issues, covering the entire planet. What the hearing agency must do, therefore, is to impose a practical limit on the physical, temporal and subject matter boundaries of the hearing. This is referred to in environmental assessment as “scoping”. That is what the NEB did in the TMX case. Although the NEB heard and reported on its findings on the impact of the marine traffic on the endangered orcas, it decided to limit the scope of its recommendation to items that could be imposed on the proponent’s terms of licence. That was why it decided to exclude from its definition of the proponent’s project the issue of marine traffic and its potential impact on the orcas. That scoping was also why the FCA held that the NEB’s decision was so defective that it could not be relied upon by the Cabinet as the basis for its decision, and therefore, the FCA quashed the Cabinet’s TMX decision. Scoping in the face of 20 mandatory considerations will be a hazardous process, a veritable invitation for opponents to litigate.
For reasons I have discussed elsewhere (NEB Right), in my respectful opinion the NEB was right and the FCA was wrong on this issue in TMX, but the NEB could have explained its reasoning a lot better. As the government decided not to appeal the court decision it remains as a precedent that encourages litigation on scoping decisions.
The impacts that must be considered under section 22 have been broadened from the environment alone to include health, social or economic conditions – again, without limits as to geography and time. The Act provides no definition of health, social or economic conditions, hence the necessary scoping of these mandatory considerations may ultimately be determined by a court. Taken literally, in the context of the global definition of “environment”, they could be interpreted as covering health, social or economic conditions anywhere on the planet.
The TMX assessment process is now in its 6th year, with no end in sight. And that was when the impacts to be considered were environmental only. Now, with C-69, we have added three additional, indefinitely broad areas of mandatory consideration: health, social and economic considerations. All of this added complexity is to be presented and determined within a shorter statutory time limit.
Following the precedent set by the TMX decision, an Agency or a Cabinet decision that fails to demonstrate full consideration of all of these mandatory factors in sufficient depth can be overturned by a reviewing court. Where statutory language is so completely open-ended, any future attempt to scope the hearing, or any lack of clarity in the written reasons for decision, is likely to produce the same negative litigation outcome as in TMX. Potential pipeline proponents and their advisors will surely understand this.
(d) the purpose of and need for the designated project;
This requirement is not new, but it needlessly increases hearing costs and the risk of litigation. Why require evidence to assess the purpose of a pipeline? Does anyone not know that the purpose of a proposed oil pipeline running from point A to point B is to carry oil from point A to point B?
In considering the need for the project, whose need is relevant? The proponent obviously needs the project or it would not be proposing it. The customers of the project, who will pay to transport, purchase and use the oil also need the project or they would not have entered into long-term purchase agreements with the proponent. Who else’s need should be considered? Alberta’s? Canada’s? FNs’ who will receive payment and employment from the project? FNs’ who oppose the project because they don’t need it? The legislation doesn’t say whose needs must be considered, creating another opportunity for litigation.
Whether a project is needed by anyone is irrelevant to whether the project’s likely effects are acceptable. Why not dispense with the question of the need and just get on with considering the pros and cons of the project itself?
(g) Indigenous knowledge provided with respect to the designated project;
I have already mentioned this issue above, but wanted to provide the actual wording of the Act demonstrating that this is also a mandatory consideration.
This clause (g) should be considered together with section 119, which reads, in part:
119 (1) Any Indigenous knowledge that is provided to the Minister, the Agency, a committee referred to in section 92,93 or 95 or a review panel under this Act in confidence is confidential and must not knowingly be, or be permitted to be, disclosed without written consent.
The other requirements governing confidential evidence follow this subsection.
Note that Indigenous knowledge can be provided to the Minister. Unlike the Agency, the Minister does not conduct public hearings with a transcript of evidence. Indigenous knowledge presented to the Minister in the privacy of the Minister’s office will be undetected, a total secret, unless the FN gives the Minister written consent to disclose it. That seems unlikely. And section 119 imposes no time limit on when this Indigenous knowledge may be provided to the Minister. This raises, at a minimum, two serious concerns.
- Under section 17, discussed below, the Minister can prevent a proposal from ever getting to a hearing, based on nothing more than the Minister’s opinion. Although the Minister has to provide some basis for doing so, it could be based on undisclosed Indigenous knowledge presented in secret. Providing the basis for the Minister’s opinion does not require disclosing all of the sources of information that led to the Minister forming that opinion.
- At the other end of the assessment process, if a proposed pipeline goes through a multi-year hearing that results in an Agency recommendation for approval, Indigenous knowledge criticizing the Agency’s recommendation can be presented to the Minister in confidence. The Minister can then recommend that Cabinet reject the pipeline proposal despite the Agency’s recommendation. The proponent may never know what happened.
Statutory permission to present secret evidence to a public hearing agency is never a good idea. Allowing secret evidence to be presented to the politicians who actually make the assessment decisions is worse.
There would be no reason to present Indigenous knowledge about a pipeline proposal to a Minister in secret except to lobby for a political decision against the pipeline. The federal Lobbying Act and Regulations are based on the principles that:
- Lobbying public office holders is a legitimate activity,
- It is desirable that public office holders and the general public be able to know who is engaged in lobbying activities.
The provision for what is in essence secret Indigenous lobbying of a Minister, even before or after an assessment hearing, is effectively an exemption from the Lobbying Act that is inconsistent with the second of these principles.
There is no clear rationale for permitting the undefined and unlimited “Indigenous knowledge” to be presented to anyone in secret. If there is a need to protect genuinely confidential information from public disclosure there is a well established and highly successful procedure for doing so: in camera proceedings. This is done behind closed doors, but the lawyers for the parties adverse in interest are sworn to secrecy and are permitted to represent the interests of their clients at the in camera hearing. An in camera transcript is also prepared and retained for use of the parties in final argument, which may also have an in camera component. Whether to go in camera is in the discretion of the hearing agency, not the party who would like to avoid having its submissions known and contested.
(i) the extent to which the effects of the designated project hinder or contribute to the Government of Canada’s ability to meet its environmental obligations and its commitments in respect of climate change;
This is one of the most difficult mandatory considerations in the entire Act.
The obligations and the commitments are not the same. Government commitments under the Paris Agreement are in writing and have been made public on line. But what are the government’s environmental obligations? What is written, and where, about what the present and future governments will consider themselves obligated to do for the environment?
The effects of the proposed project will be seen over many decades, requiring numerous assumptions about the future of Canadian government obligations and commitments in respect of climate change, and how these might be achieved.
I cannot say anything more about the undefined and fluid concept of obligations, so will turn to climate change commitments.
I begin with a semantic quibble. The expression “climate change” has become a politically polarized expression between “alarmists” and “deniers”. It is also inaccurate in this context.
Weather is local; the climate is planetary. Some sort of climate change on the Earth is ongoing, inevitable and affected by many non-human factors as well as by anthropogenic (human caused) factors. Canada cannot, literally, have made any commitments about climate change as such. The government cannot change the climate. It can only have made commitments about reducing Canada’s carbon dioxide emissions. The purpose of these commitments may be to help to reduce the rate of anthropogenic global warming, but the purpose of the commitment should not to be confused with the commitment itself. If this entire clause is not deleted, the expression “climate change” should be replaced by “carbon dioxide emissions reduction”, as that is what has actually been committed.
Like the commitments of all Paris Accord signatories, our government’s CO2 emission reduction commitments are not legally enforceable by other countries. These commitments are nothing more than the political promises of a current government to use its best efforts to reduce CO2 emissions to specified levels by a certain time. Politics being the art of the possible, what is politically possible in Canada over time will determine what government efforts can accomplish.
Impact assessment of domestic projects such as pipelines or electricity transmission lines should be based on empirically verifiable evidence of a project’s effects within the reasonable scope of its domestic impacts in the reasonably foreseeable future. With the inclusion of such factors, impact assessment becomes unfocused, indeterminate and even more politically polarized.
Clause (i) mentions the government’s “ability” to meet its commitments. That raises an unanswerable question for impact assessment. The government’s ability to meet its commitments depends upon the means that present and future governments will choose to meet whatever commitments will then exist.
The current federal government’s chosen means is a carbon tax. This tax is now strongly opposed by five provincial governments of different political parties, with constitutional litigation under way. As a political issue it is highly divisive among Canadians in different regions of the country. Feeling these pressures, our government is modifying it tax level after hearing concerns from Canadian industry about how the tax would affect their ability to compete (Carbon Tax).
How is any impact assessment hearing to know whether, over the typical 50+ year lifetime of a pipeline, the carbon tax will be increased, decreased or abandoned entirely? If the change in the US president from Democrat to Republican can result in termination of the US’ Paris commitments why could future elections not cause this to happen in Canada? Is the new Impact Assessment Agency required to assume that the current political party will remain in power and will follow the same political policies continuously for the 50 or more years that the pipeline would operate?
The ability of the Government of Canada to meet its CO2 reduction commitments will depend upon the means the government choses to do so, and the extent to which it applies those means, e.g., a carbon tax, the level of that tax, and who is exempted from paying some or all of it. These are essentially political questions for the future, not amenable to meaningful hearings and scientific evidence.
One of the arguments against TMX was that its approval would cause an increase in domestic CO2 emissions that would be so great as to make it impossible to meet its CO2 reduction commitments. Let’s assume that this argument is correct, and that our government cannot take any other steps to offset the increase in emissions “upstream” of the pipeline. Then the Agency, under C-69, would have to consider what might happen downstream, as it must assess impacts across the entire planet. If the oil in the pipeline is shipped to China and used there to replace coal, the net result of planetary CO2 might well be a reduction, despite the increase in Canada. However, if China used our oil to make gasoline for more trucks and SUVs rather than displacing coal there would be an increase in CO2 emissions globally.
In practice, Canada has no way of knowing who would buy what percentage of the oil transported by the pipeline, let alone what they would do with the oil over the next 50+ years. Evidence on this issue to meet this mandatory consideration requirement would have to be endlessly speculative and of no real value.
In summary, this clause (i) requires an abstract debate with no useful result. It should be deleted.
(n) comments received from the public;
How can the Agency demonstrate that it took into account several thousand different comments from several thousand individual members of the public? It can only say in its reasons for decisions that “we have considered all of the evidence”. But if the project is approved, such generic statements would not satisfy any opponent.
(s) the intersection of sex and gender with other identity factors;
See my comments above. This clause is unnecessary because it makes mandatory a debate that has already taken place and been resolved.
I understand the concerns to be that in work camps constructing the pipeline through remote areas the construction crew may mistreat local women, and engage in sexual harassment; that the construction companies may discriminate against women in employment opportunities or pay levels, or fail to provide a safe and comfortable working environment for women. There is also the possibility that transgender persons may be subject to various forms of discrimination or abuse. But these issues are no longer legitimately debatable.
There are strong and effective federal and provincial laws in place prohibiting discrimination on the basis of sex, sexual orientation and gender identity. These laws also provide effective procedures for making complaints about both individual and systemic discrimination on these bases. There is no reason to take up more hearing time to hear again what has already been well decided.
It would be a simple matter for the new Agency to make it a standard condition, in every licence of every project it approves, that the proponent will take effective steps to ensure that it is in full compliance at all times with all applicable federal and provincial laws governing discrimination by its contractors and employees on any prohibited ground.
If the government wants to ensure that this is done it could do this by a simple addition to C-69. It could require that any licence (sometimes called a certificate of public convenience and necessity) issued under federal jurisdiction shall contain the condition that the licensed entity shall take effective steps to ensure that it is in full compliance at all times with all applicable federal and provincial laws governing discrimination by its contractors and employees on any prohibited ground. (“Prohibited ground” would also cover discrimination on the basis of religion, race, etc.)
(t) any other matter relevant to the impact assessment that the Agency or — if the impact assessment is referred to a review panel — the Minister requires to be taken into account.
Every “must take into account” item added by the Minister is another box to be checked. Every item requires detailed discussion in the Agency’s written reasons, to prove to a reviewing court that it was taken into account. Every such mandatory consideration provides another club for an opponent to use in court. Why make court challenges so easy?
It is an implied legal requirement of anyone who hears anything that they must consider all of the relevant evidence before them. Accordingly, providing long, detailed lists of what evidence must be considered creates more checkboxes for the Agency’s reasons for decision, lengthier and costlier hearings and increased opportunity for court challenges, while adding little clarity to the applicable law.
Changing the word “must” to “may” in section 22 would make the mandatory discretionary, thereby solving many of these problems.
The Minister’s Extraordinary Powers
The IAA requires a proponent to submit to the Agency a complete application for a proposed pipeline. However, the Act also gives the Minister two extraordinary powers. The first of these is the power to grant any number of extensions of time for the assessment. The second is even more extraordinary: it permits the Minister to prevent any project that has submitted an application from proceeding to an assessment, without any hearing, simply on the basis of the Minister’s opinion. All that is required is for the Minister to form an opinion that the proposed project would cause “unacceptable” environmental effects:
17 (1) If ….. the Minister is of the opinion that it is clear that the designated project would cause unacceptable environmental effects within federal jurisdiction, the Minister must provide the proponent with a written notice that he or she … is of that opinion. The written notice must set out …. the basis for the Minister’s opinion.
The mandatory notice to the proponent merely requires the Minister to provide the “basis” for his or her opinion. This is not a requirement to provide any or all of the evidence the Minister may have considered to support that basis. The Minister is not required to provide a detailed analysis of how the environmental effects were estimated or the standard according to which such estimated effects were unacceptable. There is no specific legal or scientific test for what constitutes acceptable or unacceptable environmental effects. It is entirely discretionary. The more a Minister says about why he or she decided to kill a pipeline the more the political opponents have to attack, and the greater the risk of a successful judicial review of the Minister’s decision.
(Note: Several years ago I succeeded in having the Federal Court quash the Federal Minister of the Environment’s decision to require a project to go through an environmental assessment. The trial judge’s decision was upheld by the Federal Court of Appeal. If the court can quash a Minister’s decision to require an assessment I see no legal reason why it cannot also quash a decision to prevent an assessment.)
The power of the Minister to kill a pipeline proposal by preventing a hearing will obviously invite lobbying pressure on the government — by pipeline opponents to kill it and pipeline supporters to let the application go to a hearing. It is quite possible that such lobbying by pipeline opponents, as well as Indigenous knowledge provided to the Minister in secret, could be the reason for the Minister prohibiting the project’s assessment. Once the Minister has made a decision it is effectively final (unless overturned by a new government or the Federal Court). Therefore, before a prospective proponent will spend potentially hundreds of millions of dollars in preparing a complete application to the Agency, it will want to consider the risk that the Minister will cause all this investment to be written off if the Minister considers it politically expedient. Such power in the Minister will do nothing to encourage the Board of Directors of a potential pipeline proponent to approve the heavy investment in preparing a proposal. It also negates the legislation’s professed goal of greater transparency.
Canada’s assessment process has survived perfectly well since the mid-1970s without Ministers exercising such a draconian power. This power should be removed from the Act if the goal of transparency is to be achieved.
The Impact of the Impact Assessment Act
One of the most important impacts of the IAA will be invisible: the potential proposals not presented for assessment because they are deterred by the new law. The negative outcomes of both NG and TMX in the courts will be remembered when potential investors’ lawyers review the IAA. These lawyers will realize that any new project is unlikely to be approved within a reasonable time, and with finality. Therefore, the main impact of the IAA will probably be to discourage private sector investment in Canadian energy resources. Even government owned pipelines will have trouble under this new law.
This law will have to be fixed sooner or later. Why not now?