Uncategorized

Pipelines, the Environment and the Economy: Canada’s New Impact Assessment Law, C-69

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.

Introduction:

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

  1. 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.
  2. 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.
  3. 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

  1. 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.
  2. 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.  
  3. 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

  1. 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:

environmentmeans 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:

Confidentiality

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.

  1. 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.
  2. 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 orif the impact assessment is referred to a review panelthe 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?

Categories: Uncategorized

28 replies »

  1. Hello Andrew,

    Thank you for your insights! It’s becoming clear that the incumbent federal Liberals have no intention of approving any new pipeline in Canada, ever. Unfortunately–and sadly– a change of government is no guarantee of any progress toward actually getting the KM pipeline built.

    Meanwhile, millions of tons of B.C. coal are loaded annually from the Westshore terminal with nary a peep from the opponents of the KM pipeline; their hypocrisy is sickening.

    Liked by 1 person

  2. Andrew…I am sitting here, trying to compose a response to your excellent essay. For now, just a big thank-you for your thoughts on this subject. Keep up the good work.
    As an engineer, I worked for over 34 years in the oil and gas industry. It is appalling the path that the political class have taken over the years here in Canada to create such a mess. Your essay addresses some of the created laws and complications related to pipelines. This entire process was purposely intended to stop pipeline construction in Canada.
    The question is “why”?
    The answer is…follow the money via local corruption plus foreign interference.
    Martin Bender’s comment also has it right.
    Eldric Vero

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    • Thank you for the articulate and intelligent unbiased assessment of C69

      No coincidence in the obscenity of the numerical sequence, given the consequence of this governments intentional destruction of the moral and ethical compass of a Once world leading energy industry! Once the world leader in clean ethical O&G research,production and development, we are reduced to a “No Go Zone” for investment and innovation like to soon to be seen neighborhoods across Canada! And to what end?? A globaliat assassination of an industry a nation and her soverienty! May God save the Queen…. and Country!

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      • I don’t assume intentionally destructive motives in any legislation. Rather, I accept at face value that the legislation was written with the best of intentions. However, good intentions are not enough to write a good law.

        How can a well-intentioned assessment law be badly written? Ironically, by trying to list in the law every possible social virtue and make each of these a mandatory consideration. There was no line drawn between what one might like to assess if time and money had no limits and what a hearing can realistically expect to assess within reasonable limits. It is also a failure to trust the intelligence and judgment of the people appointed to conduct the assessment and their expert staff. These assessors should not be treated as robots to be programmed by statute.

        I don’t see bad intentions in writing this law. I see uninformed judgment. That is enough to be costly to all Canadians until the law is fixed.

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  3. Andrew I found you via the article by David Staples. For those who want to read an informative article/summary I am happy to share it with friends and others. We seriously need more journalists with David’s caliber to report to Canadians. The notion of making a 15 second video or 100 character article to explain the topic is absurd.

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  4. Billions of investment is after leaving Canada on Trudeau’s watch. Oil and gas companies leaving Canada and I don’t blame them one bit. Its time for Alberta to leave Canada. Canada just not working anymore, The Trudeau divide just sinking the entire Country

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  5. I’m no engineer, just an ordinary 80 year old Canadian. I read your article with great interest and for the life of me I cannot see anyone ignoring or trying to refute your arguments. I feel that going ahead with IAA or Bill C-69 would spell the downfall of our economy while destroying our energy resource management. “Ottawa take note and take care!”

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  6. This is a great read with interesting analysis from a legal and economic point of view. However, this blog badly misrepresents both climate change and indigenous issues, with the following passage as the most flagrant example:
    “Climate change is planetary, ongoing, inevitable and affected by many non-human factors such as El Nino, volcanic eruptions, the level of solar radiation, etc.. ”
    This sentence betrays a laughable ignorance of climate science. Talk about popular misconceptions. The only accurate statements are that climate change is “planetary” and “ongoing”. Everything else is wrong.

    Similar misrepresentations are found in passages discussing FN issues and indigenous knowledge, which may reflect either earnest misunderstanding or deliberate straw-man tactics. On multifaceted issues such as this, the blog would benefit from a more fair representation of groups and opinions the author likely disagrees with.

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    • I am a retired lawyer, not a climate scientist. My post is a legal analysis of Bill C-69. Except for the one sentence you criticized, it is not about climate science. However, I have read extensively about climate change, anthropogenic global warming (AGW) and the global temperature predictions of various models, including those of the IPCC and its critics. I understand “climate science” not to be a single science, but several: Astrophysics, Earth Sciences, Geology, Geophysics, Meteorology, Physics, etc. Each of these has something to contribute, albeit from differing scientific perspectives, to the serious — and regrettably politicized — debate about their differing conclusions. Hence the unfortunate, unscientific and polarized name calling between AGW “alarmists” and “deniers”, of which I am neither.

      I stand by my comment that climate change is planetary, ongoing, inevitable and affected by many non-human factors. I don’t believe “climate science” shows that all climate change is anthropogenic, or that all climate change can be stopped by changing human activity. Even if I am wrong on this issue, it is peripheral to my legal analysis.

      I don’t know what groups and opinions you expect me to disagree with. I have, over many years, represented and advised both environmental groups and First Nations, including in opposition to major projects such as pipelines or BC Hydro’s Site C project. Today, as always, I disagree with ill-conceived and badly drafted laws. In C-69, provisions that imply that First Nations and their experienced lawyers are unable to present and defend their evidence at an assessment hearing without special statutory protections are insulting.

      I am not sure what misrepresentations or straw man tactics you saw in my discussion of indigenous knowledge. I am not denying the existence or potential value of indigenous knowledge, or anyone else’s knowledge. I just say that terms such as “indigenous knowledge” in a statute about assessing potential future effects should be either be defined, amended or deleted, because there can be no real “knowledge” of the future by anyone. “Indigenous knowledge” is not clairvoyance of future events. It is really indigenous opinion about future events. Even if the law calls it “knowledge”, it should be treated procedurally as opinion evidence, just like anyone else’s opinions about future events.

      As well, a statute that requires secret evidence to be received invites litigation. Litigation is the enemy of finality. Yet secret evidence is unnecessary because evidence can be presented “in camera” (https://en.wikipedia.org/wiki/In_camera) if necessary. In camera is a well-known type of hearing that provides the necessary procedural safeguards, but requires no statutory provision to enable it. If there is case law or other statutory precedents to show that the evidence of an opponent in an adversary hearing can legally be kept secret from other affected parties under similar circumstances I would change my posting. Anyone can be wrong, including me. For now, I see the the secret evidence provisions in C-69 as redundant, paternalistic and procedurally unfair.

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  7. This is an excellent summary of the reasons that Bill C-69 will make new pipeline construction prohibitively difficult, and the only quibble I might make regards Mr. Roman’s careful avoidance of accusing the bill’s authors of deliberately setting out to landlock Alberta’s oil. This is certainly a reasonable as well as prudent avoidance, as who can know for certain the motives of the bill’s authors?

    Of course, to believe that those authors have no malicious intent to rig the process against new pipeline construction, you would also have to believe that they are unable to see what Mr. Roman sees. I find that very difficult to believe.

    The overarching notion environmental extremists are now selling is that peak demand for fossil fuels is at hand. Of course, if Canada builds a pipeline meant to transport fossil fuels for many decades into the future, that refutes the theory of imminent peak demand. Environmentalists are going to fight new pipeline construction with everything they have, and Bill C-69 presents them with new weapons in the fight.

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  8. One of the more startling whimsies of Bill C-69 is that it codifies into law the concept that there is such a thing as Indigenous knowledge. Now there is a dangerous term, because it immediately suggests its obverse, which is that there is also non-Indigenous knowledge. In the years of the European conquest, this would have included such things as written language, sophisticated Mathematics including Calculus and Analytic Geometry, Newtonian Physics, and the fabrications of metals and textiles. And considering these facts, thoughts might then bubble up in the brains of ungenerous men to the effect that non-Indigenous knowledge is quite a bit more advanced than Indigenous knowledge. If you know what I mean.

    But enough of that mischief. Building pipelines is not a subset of the process of reconciliation with Canada’s Natives. Shall we destroy Alberta’s economy as some sort of necessary penance for colonialism? And how is the loss of the livelihoods of at least a hundred thousand Canadians counterbalanced by the need to protect Orcas? The Pacific Ocean is said to be quite large, and Orcas can swim, so if they’re threated by oil tankers (but not other kinds of ships, apparently), they can move.

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  9. Indigenous knowledge has previously been approved by the Supreme Court of Canada as having evidentiary value. It has been accepted as evidence in several cases since then, generally in the context of land claims. That is why there was no need to include it in this legislation. However, once legislation adds a new term not found previously it is usually good practice to define what it means so that those interpreting the law can better understand what purpose the new term serves. This was not done in C-69.

    As to the orcas, the Federal Court of Appeal was wrong on that issue, in my view, and incorrectly criticised the NEB. I explain this here: https://andrewromanviews.blog/2018/09/21/appealing-the-trans-mountain-pipeline-decision/.

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  10. I remember reading about the Delgamuukw (and how is that pronounced?) case, which was a stark illustration of the difficulties inherent in the assimilation of Native peoples, in that exemptions in the admissibility of evidence that could never be made for European Canadians were necessary when dealing with Native land claims. Essentially, hearsay became admissible evidence on the basis of race. I thought then and think now that this was a reasonable and fundamentally just attempt to adapt the law to the needs of people, instead of people to the needs of the law.

    On the other hand, allowing small groups of Canadian Natives to sabotage pipelines to the detriment of the prosperity of tens of thousands of Canadians is to assert one variety of justice against another in an obviously harmful way, and in fact my understanding of existing rulings by the Supreme Court is that projects in the national interest do take precedence over the right of Natives to consultation. So I ask, is it possible that Bill C-69, or at any rate the clause in it that allows Indigenous knowledge to be invoked in confidence, unconstitutional in that in conflicts with existing law?

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    • You wrote: “On the other hand, allowing small groups of Canadian Natives to sabotage pipelines to the detriment of the prosperity of tens of thousands of Canadians…… ”

      In law there was no First Nations sabotage. The First Nations exercised their right to complain to the Federal Court of Appeal about how the Crown conducted its consultation, and the court upheld the complaint. The Crown did not appeal that decision, presumably because it accepted the court’s criticism. Thus, if anyone sabotaged the pipeline it was the Crown, by failing to fulfil its constitutional duty of consultation.

      You also wrote: “…my understanding of existing rulings by the Supreme Court is that projects in the national interest do take precedence over the right of Natives to consultation.”

      Not quite. Projects in the national interest may take precedence over aboriginal title, provided that the projects infringes aboriginal rights only minimally, and that infringement is justified. But that does not affect the right to be consulted. Prior to any infringement of aboriginal rights there must be adequate consultation and good faith efforts to accommodate any First Nations concerns.

      You also wrote: “So I ask, is it possible that Bill C-69, or at any rate the clause in it that allows Indigenous knowledge to be invoked in confidence, unconstitutional in that in conflicts with existing law?”

      This would not be unconstitutional, and it does not conflict with any statutory law. It does potentially conflict with the common law principle of procedural fairness, but only if the confidential evidence is never disclosed to other parties adverse in interest.

      In practice, if evidence is presented in confidence to the exclusion of parties adverse in interest that is likely to be set aside by a court. But that requires going to court, which can create 1-2 years of delay and uncertainty about the final result. The lawyers for a potential pipeline proponent will probably recommend avoiding this high level of risk, deterring new applications.

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  11. And now I shall drift over into the realm of speculation, being ignorant of the actual facts. This is a hobby of mine, and may take a modicum of patient indulgence from you.

    Anyway, I thought that the point was not that the Crown had failed to consult so much as the that the consultation was alleged to be perfunctory and prejudicial. Something about the Crown being mere note-takers of the concerns of the consultants. But think about that: If the substance of the consultation is that the consultants will not allow the pipeline to be built unless the pipelines poses no risk to the environment at all, that is not a consultation. It is a veto. A perfunctory and prejudicial veto.

    As to who should bear the blame for the sabotage, my non-lawyer’s tendency is to blame the beneficiary of it, which in this case was the Native complainants. What do these people actually gain from wrecking the pipeline anyway? Pipelines (and there are thousands of miles of them in Alberta) don’t wreck environments. I spent much of the eighties surveying pipelines, so I know something about the nature of laying pipe. Digging the trench is a short term disruption of the environment, but once you lay the pipe and fill in the trench, you don’t even know it’s there. These people can’t wait a few months until the trench is filled in? Or are allowed to insist that there be zero chance of leakage, ever in the history of the planet Earth? This is not reasonable.

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  12. After this response I will close this post for comments, to leave me more time to write my next post.

    No one said or thought the risk of a pipeline had to be zero. The consultation was criticized because the Crown’s consulting staff made little or no response to the First Nations’ stated concerns. In a previous post here I have criticized the court’s conclusion on this issue because under our system of government the front line consulting staff cannot offer personal opinions or bind the decision maker (the Cabinet) in any way. All they can be is note-takers.

    The First Nations complainants did not benefit in any way from halting the pipeline. Rather, these complainants avoided an annoying detriment. For example, the lead plaintiffs, who live in Burnaby, avoided having more tankers anchoring and loading in front of their homes.

    I agree with your central point that pipelines have been unreasonably vilified, to the extent that many Canadians now have pipeline phobia. A buried 36-48″ pipe is hardly the huge environmental disaster many critics make it out to be.

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  13. You consistently display a generosity to your opponents in debate that I cannot. My own policy is, when there are benefits of doubt regarding motive they accrue to me, and not to the persons with whom I disagree.

    The quality of the debate on this site is high, and is informed by scrupulous adherence to known fact. They say that lawyers tend to be profoundly cynical people, but you seem to be proceeding from the premise that everyone involved is telling the strict truth as he sees it, and is above malice. This is not how I approach discussions of the provenance of Bill C-69.

    In short, I believe (although I obviously cannot prove) that Justin Trudeau is deliberately landlocking Alberta’s oil, because he believes that he has a moral obligation to force Canadians away from the consumption of fossil fuels. He takes his obligations under the Paris Agreements seriously. He is pulling that sneaky little trick that elites use when they cannot enact legislation by democratic means, which is that he gets the Courts to do the dirty work. (Think of the establishment of same-sex marriage in Canada, which was a top-down imposition all the way. The Court even used hate speech laws to make it illegal to argue against the legalization of same-sex marriage.)

    Anyway, if you haven’t read it already, you should read the text of Tzeporah Berman’s speech to the Alberta’ Teachers Association on the necessity of destroying the oil sands. There you have an articulate display of the moral certainty that motivates anti-pipeline activists. And I think Justin Trudeau and Catherine McKenna would agree with every word Berman spoke. And I think that they are not inept legislators who cannot see the Bill C-69 must always deny approval to new pipeline construction. I think that they have crafted C-69 for exactly that purpose.

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    • I think the government’s motives in enacting legislation are irrelevant to the merit of the legislation. If I think a law is badly written I will provide a critical analysis of it, regardless of whether the government was well or badly motivated. Likewise, if it is a good law, I will praise it, regardless of whether I agree or disagree with the government’s political agenda. And anywhere in between good and bad I will provide a balanced view.

      I am a legal commentator, not a political commentator. I intend to stick to what I know and understand. Mind reading is not something I know or understand. Law is.

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  14. Laws are written by people with motives for writing them, and the motives are moulds that shape the laws. If the motive for writing Bill C-69 really was to make new pipeline construction impossible, then it is a well-written law, isn’t it? Your position that Bill C-69 is a badly written law is based on your assumption that the writers of it really were attempting to regulate new pipeline construction, rather than abolish it. So you may have been making an attempt at mind reading there, even if you don’t realize it.

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