On April 26, 2012, the federal government introduced the budget implementation bill, Bill C-38, in the House of Commons.  Consistent with the practice of the current government in past years, Bill C-38 amends several statues unrelated to financial appropriation matters.  The amendments include repealing the Canadian Environmental Assessment Act (CEA Act) and replacing it with the Canadian Environmental Assessment Act, 2012 (CEA Act 2012).

The government has elected a full tear down of the CEA Act and has started over with a new approach.  This breaks with the two decade long practice of tweaking the CEA Act with legislative amendments in response to adverse or contentious judicial decisions.  The new approach adopts the following tools that, at a high level, resemble those contained in the BC environmental assessment (EA) regime:  

  • More reliance on a centralized environmental assessment authority.  The Canadian Environmental Assessment Agency (CEA Agency) will act as "responsible authority" (RA) instead of the permit-issuing federal department, for types of projects specified by regulation. The CEA Agency's role will likely look more like the BC Environmental Assessment Office (BC EAO) after the CEA Act 2012 is passed, although the Agency budget was severely cut in the previous federal budget.  It appears that EAs will be centralized between the CEA Agency, the Canadian Nuclear Safety Commission and the National Energy Board (the latter two are quasi-judicial tribunals with specialized expertise).
  • Centralized monitoring of EA conditions and powers to impose administrative penalties for non-compliance.  The CEA Agency will have monitoring, inspection and fining powers similar to the BC EAO (the underuse of which were the subject of recent criticism by the BC Auditor General).
  • Only making project types specified in regulations subject to EA.  The CEA Act 2012 abandons the CEA Act's sometimes ambiguous "trigger" approach where any project requiring specified authorizations triggers an EA obligation by the permit-issuing federal department, unless an exclusion applies.  Instead, as in BC, a regulation will specify the types of projects requiring EA.
  • Only one level of environmental review, subject to the need for public hearings.  Under the BC regime the EAO has discretion to establish the appropriate scope of assessment, including convening public hearings if required.  Federal EAs will now either be "environmental assessments" or "review panels".  This change abandons the "screening" and more detailed "comprehensive study" levels of environmental review, as well as the "mediation" mechanism. 
  • Legislated timelines within which EAs must be completed.  Federal EAs must be completed within 365 days, or two years for a review panel.  This federal timeline standard compares with the B.C. standard of 180 days, although each timeline may be suspended in appropriate circumstances.

Other key changes are:

  • Restricting the scope of federal EA to areas of current federal legislative powers.  Although the Canadian Constitution allows both federal and provincial governments to pass legislation concerning the "environment", federal legislation in that area currently includes fisheries and aquatic life, migratory birds, national parks and wildlife areas, aboriginal peoples and federally owned lands.  Unlike the current approach, federal EA will be restricted by defining “environmental effects” in relation to current federal legislative authority, or effects directly related to federal actions necessary to carry out the project.
  • More reliance on provincial EA processes.  Provinces must first request the federal government to substitute a provincial EA process for a particular project or class of projects.  The federal government must make the substitution if asked, but only if the provincial EA will sufficiently overlap on areas of federal jurisdiction, and if the provincial EA meets or exceeds the content required by the CEA Act 2012.  The federal government may also attach conditions to any substitution decisions.  The provincial EA processes will not automatically displace federal EA.  While provincial coordination mechanisms exist under the CEA Act, their use has been challenging (for example, the federal-B.C. environmental assessment cooperation agreement has lapsed since 2009).
  • Restricting the scope of public participation to "interested parties" who are "directly affected" or have "relevant experience."  This language resembles legislative language used by Alberta energy regulators to exclude what may be viewed as frivolous participants, and has been narrowly interpreted by the Alberta Court of Appeal.  While the CEA Act 2012 language appears less strict, it will nonetheless create a federal EA gate-keeping tool to manage the participation of members of the public and environmental non-governmental organizations.

The government’s overall change in approach appears designed to deal with concerns that the "one project, one review" concept was not being met by the coordination provisions in the CEA Act, both between different federal departments and between federal and provincial authorities, resulting in undue delay.  How the CEA Act can be applied to coordinate with provincial processes to efficiently review major projects was a key issue in a number of recent cases before the Supreme Court of Canada and the Federal Court of Appeal, ultimately resulting in a 2010 legislative amendment.  The CEA Act 2012 revisits this issue in a much more substantial way.

Critical information on how the CEA Act 2012 will function will be contained in its regulations, which are not yet released.  For example, the regulations will explain the type of projects that are subject to environmental assessment and which of those projects are the responsibility of the CEA Agency as RA.

Bill C-38 has only received first reading to date, and may undergo substantial revisions before it becomes law