Pursuant to the Canadian Environmental Assessment Act1 ("CEAA"), an environmental assessment must be conducted for any project where a federal authority is the proponent, funds the project, grants an interest in land with respect to the project, or issues an authorization identified by regulations. An environmental assessment consists of assessing the potential adverse environmental effects of a project and identifying the mitigation measures required to eliminate or reduce the impact. Some federal impact assessment takes up to 5 years before the process is completed.
In the past, promoters have expressed concerns that federal environmental assessment requirements sometimes result in unnecessary hurdles and delays which complicate funding, particularly for infrastructure projects that have been shown to have low environmental impact. The necessity of conducting federal environmental assessments for projects already subject to a thorough provincial assessment was also questioned.
In the context of the current economic downturn, the federal government temporarily answered some of those concerns by adopting on March 12, 2009 the Regulations Amending the Exclusion List Regulations (2007)2 and the Infrastructure Projects Environmental Assessment Adaptation Regulations3 (collectively, the "Regulatory Package") which aim at reducing the number of assessments and avoiding duplication with provincial processes for projects funded under the Building Canada Plan, a $33-billion plan providing funding for various categories of infrastructure projects. The modifications entered into force on March 12, 2009 and will be in effect until March 31, 2011.
Regulations Amending the Exclusion List Regulations (2007)
The exclusion list was adopted under CEAA 15 years ago and was occasionally modified to exclude additional categories of projects from a federal environmental assessment. The Regulations Amending the Exclusion List Regulations (2007) exempt, until March 31, 2011, certain projects funded under the Building Canada Plan, such as railways, airports, water supply systems, bridge rehabilitation, buildings, bus and rapid transit systems and wastewater systems if they are not carried out in national parks, park reserves, national historic sites or historic canals and if they meet certain environmental criteria (ex. minimum distance from an environmentally sensitive area). The Canadian Environmental Assessment Agency suspects that, as many as 2 000 infrastructure projects could be exempted from federal environmental assessment over the next 2 years. These projects will however continue to be subject to applicable municipal, provincial and federal environmental statutes and other permit requirements, including any provincial environmental assessment procedure.
Infrastructure Projects Environmental Assessment Adaptation Regulations
With respect to projects funded under the Building Canada Plan that are not excluded from federal environmental assessment, the Infrastructure Projects Environmental Assessment Adaptation Regulations provide that the Minister of the Environment can allow the substitution of a federal assessment by a provincial one where he is satisfied that (i) the provincial process includes consideration of the factors set out in CEAA (e.g. determination of any significant adverse environmental effects), (ii) the public has access to documents and can participate in the process and (iii) a sufficient report will be submitted to the federal decision making authority. The federal Minister of the Environment retains the power to refer a project to a review panel under CEAA. In cases of substitution for a provincial assessment, the government has indicated that the timeframe to complete an environmental assessment could be reduced by as much as 12 months.
No consultations were undertaken with respect to the Regulatory Package. It was published directly in Canada Gazette, Part II on the basis that it needed to be urgently implemented to allow "shovel ready" projects to proceed. Fast-track adoption resulted in criticism for lack of transparency of the federal government. Several environmentalists voiced concerns that the government might be using the current economic crisis as an excuse to reduce the scope and number of federal environmental impact assessments for projects not otherwise subject to provincial impact assessment. Others mentioned that the Regulatory Package was not necessary since harmonization agreements signed between the federal government and several provinces have already simplified and expedited the processes. In contrast, some applauded the Regulatory Package for allowing the reduction of unnecessary costs and delays for projects that are known to have insignificant environmental impact or that are already subject to a thorough provincial environmental assessment.
The Regulatory Package will effectively be repealed on March 31, 2011. In the meantime, the federal government has indicated that a more comprehensive reform of CEAA applicable to all industry sectors is currently being considered and could eventually lead to new and permanent modifications to the federal impact assessment process. The Regulatory Package will no doubt serve as an interesting pilot test for steps to come.