The Canadian Liberal government has introduced Bill C-69, which, among other things, will repeal the Canadian Environmental Assessment Act, 2012 (the “CEAA”) and enact the Impact Assessment Act (the “IAA”). After being introduced in February 2018, Bill C-69 was passed by the House of Commons in June 2018 with little attention from the general business community. The Bill is now being considered in the Senate, with second reading underway. Judging by the relatively fast timeline thus far, the IAA is expected to come into force in 2019.

The government has stated the IAA will create greater certainty and predictability within the environmental review process. However, at this stage there is a cloud of uncertainty hanging over the ultimate impact of the IAA until further information regarding execution of the new review process is released. Based on what information is contained in Bill C-69, what we do currently know is that the IAA is a bulked-up version of the CEAA, and that businesses need to be aware of the proposed changes and how they will affect their operations.

Overview

The IAA creates the Impact Assessment Agency of Canada, which will be the new regulatory body under the IAA (the “Agency”). The government’s intent is to create a single agency by which all impact assessments are conducted, unless referred to a review panel by the federal Minister of Environment (the “Minister”), leading to greater consistency, certainty and transparency in impact assessments. However, there is concern that the Agency, or a review panel, will be composed of people that may not have adequate knowledge or expertise in the area or industry of a proposed project.

CEAA and IAA are similar in that they are both centered on a designated project list. Designated projects included under the IAA are ones that have one or more physical activities carried out in Canada or on federal lands and are designated by regulations or by an order made by the Minister. A brief public consultation was concluded in 2018 in regards to a list of designated projects that will be included under the IAA. This project list, once established, is proposed to provide clarity and predictability according to the government, notwithstanding the Minister’s discretion to add any project as a designated project in the future. Additionally, the IAA suggests that strategic and regional assessments are left to the Minister’s discretion, which also creates an additional degree of uncertainty for planned projects as to whether the IAA assessment process will apply.

CEAA focused on the assessment of environmental effects of designated projects. The new IAA replaces and extends the existing process by expanding the range of factors to be assessed to include non-environmental effects or impacts. An “impact assessment” under the IAA means an assessment of the effects of a designated project, and notably such impact assessment includes many factors that have not traditionally been considered in an environmental review process. Impact assessments will be completed by the Agency, or a review panel established under the IAA, and submitted to the Minister. The Minister, or Governor in Council, then decides if the adverse direct or incidental effects of a designated project are in the public interest.

Impact Assessment – Planning Phase

There are a few phases outlined in the IAA. The first is the planning phase, which requires a project proponent to prepare and submit an initial project description that the Agency must review in deciding whether an impact assessment is required. The project description information submitted in the planning phase will be prescribed by regulations. However, these regulations have not yet been released so it is unknown at this time what types of information will need to be included in such project descriptions.

While the planning phase is primarily concerned with determining whether an impact assessment is actually required for a proposed project, the IAA still requires the Agency to consult with and to provide public, Indigenous groups and other relevant jurisdictions with an opportunity to particulate meaningfully in this phase.

New Assessment Factors

If an impact assessment is required, there are many factors identified in the IAA that must be considered. The IAA enumerates 20 factors (increasing from the 10 currently used in the CEAA) that must be taken into account by the Agency or review panel. A few noteworthy additions include:

  • the impact that the designated project may have on any Indigenous group and any adverse impact that the designated project may have on the rights of Indigenous peoples recognized and affirmed by section 35 of the Constitution Act, 1982;
  • Indigenous and community knowledge provided with respect to the designated project;
  • the extent to which the designated project contributes to sustainability;
  • 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;
  • considerations related to Indigenous cultures raised with respect to the designated project; and
  • the intersection of sex and gender with other identity factors.

However, Bill C-69 is silent on how these new factors will be considered and weighed in a final impact assessment decision.

The existing CEAA environmental assessment process is considered time and resource intensive. Many have expressed concern that with the IAA’s additional factors, more time and resources will be required from project proponents, and the current lack of clarity regarding the application of these new factors may lead to a chill on project investment in Canada.

Decision-Making

Under the IAA, following an impact assessment, the Minister may determine alone whether the adverse direct or incidental effects of a proposed project are in the public interest or may refer the decision to the Governor in Council. Additionally, the Minister has discretion to reject a proposed project at the completion of the planning phase without proceeding to an impact assessment. In either instance, there is risk that a decision under the IAA may become political rather than evidence based.

Conclusion

The process under the current CEAA and the proposed IAA contain many similarities. However, currently there is a lack of clarity on how the impact assessment factors will be applied and a concern that the IAA may significantly add to the length, complexity and uncertainty of the project assessment process.

Many are anxiously awaiting disclosure of further information from the government that will help frame the IAA by identifying the projects that will be subject to the assessment process as well as prescribe the information a project proponent must submit in its project description during the planning phase. The federal government has stated they are planning to share a proposed project list prior to a second round of consultation. As of the date of this article, such list has not yet been released.

Clarification on these issues may help to dispel the fog currently surrounding the IAA and assist businesses in developing and advancing their project plans. Time will tell if the new IAA will further the federal government’s pledge to increase environmental sustainability, while still taking into consideration the interests and needs of businesses that support Canada through project investment and development.