“No one should see how laws or sausages are made.”  Otto von Bismarck

Note to my readers:  This post is very long for a blog.  I did not want to make it even longer,  or to present additional posts on this subject.   That is why I have posted here an abbreviated version of my ideas for C-69 amendment, providing only the recommendations that are easier to understand.  Others, which may be more complex, have been omitted for the sake of brevity. However, if you find the table below too detailed, skip past it and just read the text. I’m happy to offer more detailed insight into my recommendations if you would like to contact me directly.

Introduction

C-69 has had no shortage of critics, myself included.  However, the government’s desire to modernize what had been criticized as antiquated and inadequate environmental assessment legislation is commendable. The government could have left things as they were, thereby avoiding criticism.

Several critics of C-69 have argued that the law is so seriously flawed that it should be repealed and the government should start again from scratch. I disagree. It has taken a long time, and thousands of person hours to create C-69. This law has been through Parliament and is currently before the Senate. The government should not throw all that work away now.   Nor is it so bad as to be unfixable.  It is not the function of the Senate – an unelected body – to repeal or refuse to pass laws legally enacted by the elected representatives in Parliament.

Unfortunately, what Parliament wanted the law to accomplish — greater transparency, greater inclusiveness, greater fairness and a shorter time for completion — is unlikely to be accomplished by this law because of the way it is written.  I would strongly recommend that it be amended, as outlined below.

I have neither sought nor received any remuneration for preparing these suggested amendments. Nor have I done this work at the request of or in support of anyone’s political or economic interests. The opinions expressed are entirely my own. After having worked in administrative law for more than 45 years, including participation in several environmental assessments and drafting parts of several statutes, I want to provide my knowledge and experience to make this law workable for both present and future Canadian governments, and for the people they serve.

The drafting flaws that I see in the legislation are summarized in my previous blog post here.  This is recommended reading for a better understanding of the reasoning behind my proposed amendments.

The potential for amendments at this late date are quite limited. Major amendments would take several months of work by a large group of lawyers, and then several more months for its review by interested parties and by a parliamentary committee. Indeed, any proposed amendment of a law of this length and complexity, however minor, would have to be carefully scrutinized to see what other parts of the law would be affected by that amendment, and whether this would cause new contradictions or new uncertainties. In the longer term, though, I would hope that some of the more fundamental flaws seen in the previous law and carried forward into this law will be fixed.

As I am just one person, whose only resource is me, I cannot draft extensive amendments, or examine all of the potential consequences of each amendment within any reasonable time frame, and certainly not while C-69 is before the Senate.  Accordingly, I have set out below a table of suggested amendments for immediate use.  Below the table are my more detailed explanations of the reasons for both these immediate amendments and suggestions for more fundamental amendments in the future.

Recommended Amendments to C-69

Why Was C-69 Created?

During the last election campaign Prime Minister Justin Trudeau accepted the criticism that the National Energy Board’s (NEB) assessment of pipelines like the TransMountain Pipeline Expansion Project (TMX) was severely flawed. He promised that if elected, his government would improve this process. I see nothing wrong with any elected official keeping a political promise to improve a process; such political integrity should be encouraged.  But even with the best of intentions, not every legislative change will be an improvement.

Federal environmental assessment in Canada began in the mid-70s, with legislation that has been amended by several successive governments, usually adding complexity, uncertainty, cost and delay.  The process has recently become less expert, less science-based, more political and more polarized between project supporters and opponents. As currently drafted, C-69 does not improve this situation.

The politicians in both major political parties appear to have forgotten why democracies like Canada and the USA originally created “independent” administrative tribunals: to hear and determine complex scientific or other technical issues for which politicians are ill-suited.  Good science and good politics are not always the same.  However, the pre-2012 law left the decision with the NEB, while preserving a political veto, intended to be exercised sparingly, upon appeal to the Cabinet on issues of policy alone. This created a valuable buffer between the politicians and the contesting parties.

This is how the CRTC works, and how the NEB used to work before the previous government changed the law. The pre-2012 de-politicization avoided the current political theatre of blockades, injunctions, defiance of injunctions, publicity-seeking arrests of politicians and other protesters, and numerous applications to the courts. Politicization of what should be arm’s-length, evidence-based decisions invites political theatre.

Well-publicized litigation is part of that political theatre. Although the vast majority of such court challenges fail, the publicity in announcing them is often sufficient reward. If one succeeds, as in TMX, the result is devastating for the project. Hence the mere threat of litigation poses a huge risk for the proponent’s investors.  Legislation that encourages litigation and makes it more likely to succeed is an effective deterrent to project proponents.

The previous government amended the Canadian Environmental Assessment Act (CEAA) in 2012 to remove a number of provisions it disliked. Environmental advocacy groups criticized these amendments as having removed essential environmental protections. They recommended restoring these provisions and adding more and better protections. C-69 is at least in part a response to these criticisms.  

The 2012 CEAA’s most important and most damaging change was to transfer the decision-making power from the NEB to the Cabinet. This demoted the NEB from an independent regulatory agency to merely the public hearing part of the government of the day.  C-69 retains this demotion for the NEB’s successor, the new Impact Assessment Agency (IAA). This calls into question the raison d’être of the IAA. Why do we need the IAA to hold lengthy hearings but decide nothing, while the Cabinet hears nothing and decides everything? The public hearing effectively becomes a costly and frustrating exercise in blowing off steam. Its only result is a non-binding report that the Cabinet can use or ignore as it wishes. That report disappears into the black box of secret Cabinet decision-making. It also makes the Cabinet the target for judicial review, potentially creating self-inflicted political damage through court criticism.This lack of transparency is both bad law and bad politics.

Other new provisions in C-69 reduce the independence of the new Assessment Agency even further, widening the gulf between those who hear and those who decide. The most important amendment to C-69 would be to restore decision-making power to the IAA (or to anyone else conducting impact assessment hearings under C-69). But it is highly unlikely that this will be done anytime soon — not until politicians realize that they, too, would be better off depoliticizing these assessment decisions.

The Federal Court of Appeal (FCA) decision in the TMX case will be particularly embarrassing now that the government has purchased the TransMountain pipeline and  taken on the role of the proponent.  This puts the government in the obvious conflict of interest position of reviewing and approving its own project. This is tantamount to the Minister saying “I am have persuaded myself that my own proposal is worthy of approval, so I hereby approve it.”

There are two ways to remove the split between who hears and who decides. The first, and the most efficient, is to eliminate the formal hearing process, close down the IAA and have the Cabinet make a purely political decision based on advice from various government departments and lobbyists representing various interests. The other way — less efficient but more transparent —  is to return to the pre-2012 law under which the IAA is treated as the body with the relevant expertise and trustworthiness both to hear and to decide the project assessment issues (subject to appeal). The system we have now is the worst of both possible worlds: neither efficient nor transparent.

Retaining the 2012 politicization and the opaque political decision-making process in C-69 was a political decision made by elected representatives. It is not the role of the Senate to change it. Accordingly, I will not make any detailed drafting recommendation to amend this aspect of C-69 until our governments are prepared to change this. Despite TMX, we are not there yet.

Clarifying the Duty of Consultation With First Nations (FNs)

Many FNs may enjoy benefits or suffer detriments from pipeline projects. The Supreme Court of Canada (SCC) has held in several cases that the Crown (in practice, the Canadian government) has a constitutional duty to engage in good faith consultations with FNs when permitting activities or projects which may affect FNs’ Aboriginal rights.  There is also a duty to accommodate their rights wherever possible. However, the SCC and other courts have said different things in different cases about what kind of consultation is adequate and how accommodation should work in practice. This area of constitutional law is therefore highly uncertain and unpredictable. Cases are decided on a case-by-case basis without consistency or useful guidance for future cases. This situation cries out for reform.

Critics of C-69 have advocated that C-69 should contain provisions for the scope and limits of FN consultation and accommodation. I disagree. A constitutional duty cannot simply be amended by Parliament. It would require some sort of unprecedented constitutional amendment, or some other process not yet known to Canadian law. I would recommend against any attempt to amend C-69 by including provisions seeking to define the scope of this constitutional duty.

If the government wishes to bring some measure of consistency and clarity to this area of law I can think of only one way to do so. That is to draft a law setting out the scope and limits of consultation and accommodation under various circumstances (such as the existence or absence of a treaty, or a conflict among FNs supporting and opposing a proposed project), and to present this draft law to the SCC in a reference case. The court would then give its legal opinion on the validity of various parts of this proposed law. This would encourage the SCC to review and direct the future of consultation and accommodation in a more predictable manner.  That would be of benefit to both FNs and the Crown.

Presenting Evidence of Indigenous Knowledge

Indigenous knowledge has been recognized and valued as adding an air of reality to, or even successfully contradicting, scientific evidence that is sometimes fragmentary, biased, or just plain wrong. C-69 section 22 (1) (g) makes it mandatory for the IAA to take Indigenous knowledge into account in preparing its report for Cabinet. I agree with this in principle, provided that the principle is implemented properly.  That has not been done in C-69 because its meaning has been left undefined and subject to debate and litigation.

What is Indigenous knowledge under C-69? Looking at both words separately, what makes it Indigenous and what makes it knowledge? The Act’s definition section, section 2, says only “Indigenous knowledge means the Indigenous knowledge of the Indigenous peoples of Canada.” That circularity is not helpful. I am not suggesting that every word used in C-69 needs to have an elaborate definition, but key terms that are likely to influence the outcome of a decision should not be left open-ended or be given circular definitions. To do so is effectively saying “I don’t know what I want the law to mean, so let’s just toss it out there and see what happens.”

As a general principle, if you can’t define a key term in a law you are writing, you don’t know what you mean.  And if you don’t know what you mean, how can you expect others to know what you mean? Writing into law vague expressions without meaningful definition is to enact the law of unintended consequences. 

 Not everything intended to be presented to the IAA by every Indigenous individual or group is necessarily “Indigenous knowledge”. Unfortunately, the section 2 definition does not tell us what distinguishes Indigenous knowledge from the knowledge of anyone who is not Indigenous. One would expect the definition to include such things as, for example, the history and culture of particular Indigenous communities materially impacted by the proposed project, their ancestral and current ties to the land and waters they use and occupy, the continued health of that land and water, and the flora and fauna and the people on it. On the other hand, knowledge of the design, construction and operation of pipelines is not specifically or uniquely Indigenous.

If an Indigenous group, through lawyers and expert witnesses, presents economic evidence opposing the financial case for the project, or environmental evidence of biologists’ studies of wildlife habitat, is that still Indigenous knowledge? It could be, if any evidence presented by any Indigenous group is treated as Indigenous knowledge, but it wouldn’t be if there must be some special characteristic of it that is uniquely Indigenous. Since C-69 provides no guidance on this (beyond the circular definition described above), it becomes yet another debatable issue that may have to be resolved by the court.

Then we come to the unlimited and undefined word “knowledge”. Not everything someone says is truly their “knowledge”, although they may present it as such to give it greater weight and credibility. Without going down the endless rabbit hole of the philosophical meanings of knowledge dating back to Socrates, some distinctions between what is and what is not knowledge may be useful. Simply put, one can have knowledge of anything that we would consider to be factual. For example, Indigenous evidence might be presented of knowledge of the current condition of certain plants or animals or rivers in the geographic area in which they live or regularly travel. That would be factual evidence. 

However, the law distinguishes between evidence and argument. Argument – usually presented by lawyers at the close of one’s case – may summarize some of the facts presented but may also go further to describe opinions, beliefs and predictions of the future. Arguments are not about knowledge but are statements of opinion intended to be persuasive.

Statements about the future may be called forecasts, predictions or speculation, depending on what these statements are based on. But, as there are no facts in the future, there can be no knowledge of the future, whether Indigenous or otherwise.

For these reasons, the definition of “Indigenous knowledge” should be about (a) what is genuinely and uniquely Indigenous, and (b) what is truly evidence of knowledge rather than anything presented by or on behalf of any Indigenous group participating in the hearing on any subject.

Secret Evidence of Indigenous Knowledge — A Litigation Trigger

Section 119 provides for what can only be described as the statutory permission to present secret evidence of the undefined “Indigenous knowledge”.

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.

No one else is given this procedural privilege.  In a hearing process where all parties are supposed to be treated equally, through secret evidence, FNs are treated more equally than others. This is likely to cause serious problems for both those presenting the secret evidence and those receiving it.

This is unnecessary, anomalous and an obvious litigation trigger. It should be removed from C-69 as quickly as possible.

“Confidential” used in this context is a synonym for “secret”. Anyone who decides to present secret evidence is most unlikely to consent to having it disclosed. If they wanted it disclosed they would not have presented it secretly.

Note that Indigenous knowledge can be given secretly both to the Agency and 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, as there is no reason why it should. And section 119 imposes no time limit on when this Indigenous knowledge may be provided to the Minister.  This lack of time limit raises, at a minimum, two serious concerns.

1. Before the hearing

Under section 17, discussed below, the Minister can prohibit a project 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, in writing, the decision could be based on Indigenous knowledge presented in secret that cannot be disclosed.  Providing the “basis” for the Minister’s opinion does not require disclosing all of the sources of information that the Minister used in forming that opinion.  The existence and content of the secret evidence can remain secret.

2. After the hearing

If a proposed pipeline goes through a multi-year hearing that results in the IAA recommending approval, Indigenous knowledge attacking the IAA’s report can be presented to the Minister secretly.  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 for one group only to present secret evidence to a public hearing agency is unbalanced. Allowing secret evidence to be presented to the politicians who actually make the decision may result in a political scandal if this is discovered, with accusations of a “cover up”.

There is no clear rationale for permitting 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 in the IAA’s proceedings there is a well-established and highly successful procedure for doing so: in camera proceedings.  Although this is done by excluding the public, 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. The in camera procedure renders the unfairness of section 119 unnecessary.

Ironically, presenting secret evidence may be detrimental to FNs too, unless they win their issue.  As it is in secret there will be no public record kept of what they presented to the IAA or to the Minister.  Hence, if they do not win their issue, they will have no recourse.  They will be unable to complain publicly or bring a court application alleging that their evidence was ignored or misused.  This may happen more often in future if a future government is unsympathetic to FN interests.  The potential detriment to FNs may well outweigh any advantages.

Section 22 (1)(n) and Gender Based Analysis+

Section 22 (1)(n) requires every assessment to take into consideration “the intersection of sex and gender with other identity factors”. This is one of the most controversial sections of the entire Act. Why this is relevant to a proposed pipeline is not self-evident.

There is a federal government policy to make increasing use of gender based analysis (usually abbreviated as GBA+), within the government itself. It is described on a government website here: GBA+ . This tells us that “the Government of Canada is committed to supporting the full implementation of GBA+ across federal departments and agencies.” The method of implementation is also described in the website:

“It is the responsibility of your department or agency to determine whether there is a potential gender issue within the proposed policy, program, initiative or service. Should such a potential exist, the government expects the organization to fulfill its commitment to undertake a thorough and complete GBA+ assessment.” [Underlining mine.]

This policy does not require the assumption that there is a gender issue, but rather, to conduct an analysis to determine whether there is such a potential issue within the proposed “program, initiative or service”. This is a government policy, not a law, and as such, it can only apply to a Government of Canada program, initiative or service, not to a private sector program, initiative or service. The subject of an impact assessment of a proposed private sector pipeline to private sector customers is not a Government of Canada program, initiative or service.

Going further, the GBA+ policy implementation suggests:

 “Considering gender in the development or design of a new policy, program, initiative or service can be as simple as asking the following questions:

What is the profile of the client base or target group of the proposed policy, program, initiative or service?

Does an aspect of the proposed policy, program, initiative or service have the potential to impact women and men differently? If so, how?”

Let us ask these two questions about a proposed private sector pipeline.

Q 1: What is the profile of the client base or target group of a proposed oil pipeline?

A 1: The client base or target group is purchasers of the oil transmitted by the pipeline — in recent years, usually for export to other countries, but domestically, to refiners.

Q 2: Does an aspect of this proposed pipeline service have the potential to impact women and men differently, and if so, how?

A 2:  As just mentioned, the target group would be commercial exporting businesses or refineries, not individual women and men within Canada. For this reason, the usual rationale for GBA+ analysis is irrelevant.

Of course, impact assessment covers more than oil pipelines. What if the project in question is an interprovincial high voltage transmission line or an oil or gas pipeline for domestic consumption? The client base/target group of transmission lines is electric utilities, not individual consumers of either sex; and for domestic use, the client base of oil or gas pipelines it is oil refineries or gas utilities like Enbridge, not individual consumers of either sex. In short, impact analysis of these large transmission corridors, whether of pipes or wires, does not raise GBA+ issues as described in the policy.  

As the policy itself directs:

“If no GBA+ issues have been identified, please indicate “not applicable”.

Therefore, the GBA+ analysis is not applicable.  The problem with the language of clause (n) is that its mandatory wording legally requires the GBA+ analysis to be completed even though it is “not applicable”. Every mandatory consideration requires evidence to be collected on it and requires the Agency’s analysis of that evidence to be included in its final report. Unless this is done, the report would not be compliant with the Act.

A drafting problem with clause (n) is its inconsistent use of the words “sex” and “gender” in this context. The word “sex” can mean either the sex act itself or one’s biological sex: male or female. In the present context it is obviously the biology. Likewise, the word “gender” can be used differently in different contexts. It can either be used as a synonym for one’s biological sex or as meaning one’s identifying with masculine or feminine characteristics that are psychosocial. In the present context it appears to be used in the latter sense.

These distinctions are important in certain legal contexts because some Canadians have a gender identity that is to varying degrees and at various times in their lives different from their biological sex. There has been a history of discrimination against such persons. Today, however, there are federal and provincial human rights laws that prohibit such discrimination. As well, of course, Canada has had legislation for many years prohibiting sexual assault, sexual harassment and discrimination in employment, accommodation, etc., on the basis of sex and now, on the basis of gender identity.

These laws are applicable to everyone, including pipeline companies, their employees, their contractors and their employees. In the past, there have been well documented cases in the construction and operation of projects, particularly in remote and underpopulated areas, in which these laws have been infringed. It is obviously important for Canada to avoid or minimize such misconduct in future projects. If that is one of the purposes of clause (n), as some commentators have suggested, the purposes is good, but the vague and confused language of “the intersection of sex and gender with other identity factors” does not serve this purpose.

As sex is not an identity factor in the same sense as gender is, there is no intersection of sex with “other” identity factors. Gender is an identity factor in this context, as it is not used as synonymous with “sex”. It is easy to understand how sex and gender may or may not intersect in the case of particular individuals, but difficult to understand how both sex and gender might intersect with unspecified other identity factors, and how any of these intersections might be related to the construction or operation of a pipeline. Who, exactly, is the law trying to protect, and from what? C-69 is unclear. It appears as if it has just taken a Treasury Board directive on GBA+ or something similar, and shoved it into a statute as a mandatory requirement.

A more general issue raised by this clause is one of the timing. There are some things that can be known with reasonable certainty prior to the issuance of a pipeline construction licence. How the construction crews will actually behave once they are hired is not something that can be determined through a hearing at the project assessment stage. It should not be added to the list of things that should be heard and determined prior to licensing for construction.

There is no dispute about the applicability of the above-mentioned antidiscrimination laws to construction crews in Canada. The only question is the effectiveness of their enforcement by the pipeline after it is licensed to construct. It is therefore unnecessary to spend time and money to hear evidence and conduct analysis of non-issues. Clause (n), an obvious an unnecessary litigation trigger, should be deleted.

If, from an abundance of caution, the Senate wishes to ensure that the construction and operation of approved projects are not discriminatory on the basis of sex or gender identity it can do this by adding a requirement in C-69 that every certificate of public convenience and necessity for construction shall contain a condition that the proponent must at all times take reasonable steps to ensure compliance with the human rights laws of Canada and of such provinces as may be applicable. This would cover not only discrimination on the basis of sex and gender identity, but also religion, race and other prohibited grounds of discrimination.

The Minister’s Extraordinary Powers under C-69

The Act requires a proponent to submit to the Agency a complete application for a proposed pipeline. The Act also gives the Minister two extraordinary powers. The first of these is the procedural power to grant any number of extensions of time for the assessment. This procedural power is normally given to the agency conducting the assessment, not to a political actor who is not conducting it. It is a lot easier for an independent agency to say “no” to repeated requests for extensions of time than it is for the Minister to say “no”.  Politicizing this procedural power is likely to make hearings longer.

The second power is even more extraordinary. It permits the Minister to prohibit any project that has submitted an application to the Agency from proceeding to an assessment, without any hearing or other specified procedural safeguard, 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 of the actual evidence the Minister may have considered to support that basis. The Minister is not required to provide a detailed analysis of how he or she estimated the environmental, social, health and economic effects, or the standard according to which such estimated effects were deemed unacceptable. Indeed, there is no legal or scientific test for what constitutes acceptable or unacceptable environmental effects. “Unacceptable” means whatever the Minister considers to be unacceptable. 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 the Minister, and the greater the risk of a successful judicial review of the Minister’s decision. The incentive, therefore, is for the Minister to provide as little of substance as possible in explaining the decision.

The power of the Minister to kill a pipeline by preventing a hearing will obviously invite lobbying —  by pipeline opponents to kill it and pipeline supporters to let the application go to a hearing. It is quite possible that the lobbying by pipeline opponents, including the Indigenous knowledge provided to the Minister in secret, could be the reason for the Minister prohibiting the assessment. Once the Minister has made a decision it is effectively final (unless overturned by the FCA). Therefore, before a prospective proponent will risk potentially hundreds of millions of dollars in preparing a complete application to the IAA, it will want to consider the risk that the Minister will cause all of this investment to be lost if the Minister considers it politically expedient to prohibit the assessment. Giving such power to the Minister will do nothing to encourage the Board of Directors of a potential pipeline proponent to risk the massive investment required to prepare a proposal.  This power also negates the legislation’s professed goal of greater transparency.

Canada’s assessment process has survived perfectly well since the mid-1970’s without Ministers exercising such a draconian power. This power should be removed from the Act if the goal of transparency is to be taken seriously. If it is truly clear that a pipeline proposal would provide unacceptable environmental effects at the outset, a better way of dispensing with a fatally flawed proposal would be for the IAA to conduct a hearing on that preliminary issue, with all of the evidence and arguments in the open. Such a preliminary application to strike out a proceeding before it gets underway is well known in administrative law as well as in court procedure.   This would be a fair, transparent, evidence-based process rather than a secretive political process.

It may be argued, in support of politicizing the preliminary termination of the pipeline application, that if the Cabinet is dead set against approval it is better to know that sooner rather than later. Against that argument, however, is that the Cabinet probably doesn’t know whether the proposal is a good one or a bad one until the evidence is in at the IAA. The politics of public acceptance may well change during the course of the hearing and upon receipt of the final report. The losers will always complain that the process was flawed, but the winners – which may include numerous FNs supporting the proposal – maybe more influential.

At bottom, the CEAA and C-69 processes allow the Cabinet to hide behind the assessment body’s report if they want to approve it. As the Prime Minister said after approving TMX, “we have listened to the science” in the NEB report. Alternatively, if the Cabinet does not want to approve it, as with the Northern Gateway pipeline, they can reject it on whatever grounds they wish. In effect, the role of the IAA is to go out and play in the political traffic to see if it survives. If it does, the Cabinet has the freedom to approve its report; if it does not, the Cabinet can avoid political loss by rejecting the report. Giving the Cabinet the opportunity to choose approval or rejection based on the report is more valuable to all parties than allowing the Minister to abort the application without having “the science” or anything else that might come from a hearing.

A long term consideration that governments in power seldom consider is that they will not always be in power. Governments come and go, sometimes in four years or even less.  Currently, looking at the success of populist, authoritarian presidents and legislatures in several countries in Europe and the Americas, such a government may come to power in Canada in future.  If you give your Minister extensive power to make subjective decisions, without the transparency that leads to accountability, you are also giving this power to your political successors, whoever they might be.

Of course, every government believes that they will only use their power for the public good, so giving their Ministers more power will make things better, and faster.  But what about the next government, and the one after that?  Can you trust them as much as you trust yourself? Once you put essentially unchecked power into law, it stays there.  In the 1797 Goethe poem “The Sorcerer’s Apprentice, and the Disney film on the same theme, the inexperienced apprentice uses his limited knowledge of magic to create chaos and growing danger, until the sorcerer returns and saves the day.  Unlike the happy ending in that story, once this government loses power to another, the sorcerer cannot come back to save the day by fixing the law. What will be the legacy of C-69?

The Problems Revealed by the Federal Court of Appeal (FCA) Decision in TMX

I have provided my detailed analysis of this FCA decision in two previous blog posts, here and here. The FCA decision clearly revealed drafting weaknesses in the CEAA. It is important to learn from these drafting mistakes rather than to preserve them or make them worse. For the purposes of this blog post it is unnecessary to discuss the court’s reasons related to the duty of consultation of FNs. As for the court’s criticism of the NEB’s hearing process, it is necessary to mention that:

1. if CEAA has proved to be so complex and uncertain as to prevent completing the TMX assessment within a reasonable time and with finality, C-69 should reduce rather than exacerbate these problems
2. the TMX approval was quashed because it was based on an NEB report the court held was fatally flawed; a flaw in an assessment agency’s report should not invalidate the Cabinet’s political decision
3. the fatal flaw, the court held, was in scoping the assessment; as scoping is necessary in every project assessment it should not be so easily set aside
4. tanker traffic, although outside the proponent’s control, could be considered “incidental” to the operation of the pipeline, and therefore, could be a mandatory assessment factor; legislation that requires consideration of unlimited incidental or indirect upstream or downstream effects requires an assessment of almost infinite scope and duration, and facilitates post-decision litigation
5. the CEAA contained a list of 12 mandatory factors to be considered by the NEB in every assessment; by expanding this list to 20 mandatory factors C-69 will greatly increase necessary hearing time, cost and risk of judicial quashing for alleged failure to consider any of these factors adequately.

Avoiding Problems in Pipeline Project Assessment

1.   Micro-management by Legislation

Appoint the best people to conduct the impact assessment and let them do their jobs. Historically, the NEB had considered all relevant and material factors related to a proposed project, seeking evidence from all parties on potential impacts on FNs, the economy, etc. It did this without a statute listing all the things the law required it to consider. Governments should only appoint to assessment agencies people they consider qualified, socially conscious and trustworthy. If they make such appointments, is it really necessary to attempt through law to program them like robots? Environmental assessment laws that attempt to impose micro-control over the mental processes of qualified decision-makers merely waste time and resources, while discouraging the best people from accepting such minimal-discretion appointments.

2.   Remember What is Being Assessed

Be realistic about what it is that is being assessed. What we are assessing is just a narrow transportation corridor, a pipe that is typically 36-48 inches wide, with most of it buried underground. (36 inches is about the same diameter as my waistline.) How large an environmental footprint can such a small underground transmission corridor create?  Similarly, gas pipelines and electricity transmission lines are by no means massive threats to the local environment.

Public fear of pipelines has created grassroots political pressure to prohibit all of them. The degree of public alarm over pipelines is out of all proportion to the environmental and social risks they actually pose. In operation, an oil pipeline itself emits very little CO2, certainly a lot less than railway transportation of the same volume of oil.

There are at least two reasons for the obsessive opposition to pipelines. The first is not to the pipeline itself, but rather, a transference to the pipeline of the opposition to the continued use of fossil fuels. The theory is that if one can prevent the transportation of fossil fuels through pipeline vilification one can prevent fossil fuel use. Hence the demonstrators’ placards saying “Keep it in the ground!”.

The second is the incentive to be an actor in the increasingly emotional political theater of pipeline opposition. There are strong incentives for such opposition. Benefits can accrue to FN leadership and federal, provincial and municipal politicians, particularly if facing election, if they can rally support behind a common enemy, the pipeline. Also benefiting are some of the more militant environmental NGOs whose websites imply that stopping the pipeline will, for example, save the orcas, right next to a big button saying “Donate”. The Canadian protest organization industry is well financed, skillfully using social media to quickly organize petitions, demonstrations and blockades to enhance its power. The other side of the argument is rarely presented effectively, if it is presented at all.

3.  Recognize the Practical Limits of Assessment Processes

Assessment legislation cannot be used to implement every one of a government’s desirable public policies. For example, reconciliation with FNs is a desirable government policy. But is an adversarial hearing process in which some FNs will be winners and some will be losers the way to create reconciliation with the losers? Similarly, transparency in decision-making is a desirable public policy. However, Canadian Cabinet meetings are conducted in secret; they are not transparent. While the hearing process before the assessment agency may be transparent that is of limited relevance when those who hear do not decide and those who decide do so in secret. Virtuous but unrealistic policy goals in C-69 will create unrealistic expectations of the process. When such expectations are not met, it results in understandable complaints that the process was flawed. Don’t use the preamble and purpose sections of the Act to raise expectations that cannot be met.

Pipeline opponents usually attack any pipeline decision-making process as being “flawed”. This is easy to do because every project assessment process requires procedural trade-offs between hearing endless evidence on every imaginable issue and completing the assessment in a reasonable time. Therefore, the list of potential subjects that were not examined in sufficient detail will always be a long one. For this reason, every public hearing process can be attacked as being flawed.

There will never be a flawless assessment process. That is true regardless of which political party is in power or how the assessment legislation is worded. Why would unsuccessful opponents to a pipeline ever agree that the process that led to its approval was fair?

C-69 greatly expands the hearing issues while shortening the legislated time limit. If impact assessment is going to be of any use in future, the government must legislate a workable compromise between the list of issues that must be heard and assessed and a reasonable and realistic time period within which to do so. Legislating a time limit (such as 300 days) is likely to prove unrealistic if the complexity of the mandatory considerations and mandatory inclusiveness of unlimited public participation makes such a timetable virtually impossible to meet. 

4.   Resolve the Disconnect Between Assessment and Licensing

Both the CEAA, and now C-69, blend together two quite different and essentially disconnected processes. 

One process – the one the project proponent is interested in – is reviewing the proposed project to make the decision to approve or deny a “certificate of public convenience and necessity”. This certificate is what gives the project the green light to begin construction.  It is normally subject to a number of important, legally binding conditions. Obviously, neither the IAA nor the Cabinet can impose conditions with which the proponent cannot possibly comply because these conditions are outside of the proponent’s control. If such conditions were imposed a proponent would most likely succeed in setting these conditions aside through an application to the FCA.

The second process is to assess not only the proponents project itself, but also the direct and indirect upstream and downstream environmental, social, economic and political effects that may (or may not) result from the proposed project – not just in Canada but anywhere on the planet. Because these potential effects are outside the control of the proponent, attempts to mitigate or even prevent them cannot be included in the conditions of licence. Although the proponent has initiated the assessment process and is participating in it at a cost of typically $1 billion to obtain a licence, a large part of the process is then used for assessing project-external issues such as tanker traffic or contribution to sustainability or the effect on the government’s ability to meet its Paris Agreement CO2 reduction commitments. These project-external issues are not being considered for the purpose of imposing conditions of licence but for the purpose of deciding whether these external issues provide sufficient grounds for denying the licence. 

5.   Limit the Project-External Effects to be Assessed

I am not suggesting that the project assessment process should consider only the factors within the proponent’s control. But going to the other extreme — assessing every hypothetically possible effect, and the effect of those effects, and the interaction of those effects — is process without adequate limits.  If the hearings are going to be completed within a reasonable time and with foreseeable finality, the project-external issues cannot be allowed to become so protracted and dominant as to render the project itself only peripheral to the project-external assessment process. The project proposal should not be the reason for a massive, multi-year Royal Commission into the long-term future of the oil industry and the impact of fossil fuels on the planet. 

To the extent that C-69 moves us even further than the CEAA in that direction, it becomes an even more effective deterrent against private sector project proposals. After the TMX events it is difficult to imagine the Board of Directors of a business corporation submitting a pipeline proposal under C-69 without the kind of government guarantee or backstop sought by TMX. It may be an unintended effect, but C-69 is likely to socialize pipeline projects so that only governments – in reality taxpayers – will take on the cost and risk of proposing any kind of pipeline in Canada. And then, as now with TMX, the government will be seeking approval for its own pipeline project from itself. If that is the main accomplishment of C-69 we can do better.

As discussed under the proposed amendments in the table above, section 63 gives the Cabinet 5 “must consider” factors, while section 22 gives the Assessment Agency 20 such “must consider” factors. There is no obvious reason why those who decide must consider only 5 factors while those who hear must consider and report on 20 of them. This is especially puzzling given that the legislation requires the Cabinet to base its decision on both its 5 factors and on the IAA’s report which must take into account 20 factors. Does this difference between 5 and 20 mean that those who must decide based on 5 factors are obligated or permitted to ignore 15 of the 20 factors in the Agency’s report? Or does this mean that the Cabinet is required to go beyond the 5 factors mandated in section 63 and consider the entire 20 factors in the Agency’s report? If it is the latter, what is the need for section 63 to impose any mandatory factors on the Cabinet when considering the Agency’s report gives the Cabinet 20 factors to consider. There is nothing in C-69 that explains or resolves this inconsistency.

Logic would suggest that if only 5 considerations are essential to actual decision-making by the Cabinet then that should be the same 5 considerations that are essential for the Agency’s hearing. Consistency between hearing and deciding, even if done by different people in different ways, should require the same set of necessary considerations. The easiest way to do this is simply to repeat in section 22 the same considerations as in section 63.

However, in my view, some of the section 63 “must consider” factors are unnecessary, and should be deleted. Then, the section 22 “must consider” factors should be revised to be the same as the remaining factors in section 63. This would create the necessary consistency between what is to be considered by those who hear and what is to be considered by those who decide. 

If this is not done, so that some differences between sections 63 and 22 are to be preserved, the next best amendment would be to remove a large number of the troublesome subclauses under 22 (1). These detailed changes are set out in the table above.

There are other sections of C-69 that repeat some of the same “must consider” language as sections 63 and 22, such as section 84. I have not proposed amendments to all of these repetitive sections because that would make this blog post much longer than necessary. Readers should therefore assume that my not repeating these recommendations throughout all of C-69 is to reduce length rather than to indicate agreement with all these other sections containing the same problematic language.

6.   Fix the Negative Bias in The Mandatory Considerations

As shown in the table above, some of the items in section 63 require the Cabinet to consider adverse or negative effects only.  They say nothing about considering the positive or beneficial effects, or balancing the negative against the positive effects to arrive at a balanced conclusion. This gives the appearance of a negative predisposition towards proposed projects, a bias against them. If one looks for negatives, one is likely to find them.  If the law only requires looking for adverse effects that is likely that these are the only effects that will be found. My recommended amendments are intended to create a more balanced requirement.

Make These Amendments Now

1. Remove some of the obvious and unnecessary litigation triggers
2. Remove obvious barriers to transparency
3. Remove anti-project bias in requirements to consider negative effects only, rather than balancing negative and positive effects
4. Don’t compel the IAA to hear speculative evidence or to consider abstract, essentially unanswerable questions
5. Consider adding a new requirement that all licensed projects will comply with all applicable federal and provincial laws as a condition of licence
6. Don’t try to use the adversarial pipeline project assessment process to correct Canada’s and the planet’s environmental, social and political problems.