Proposed resource projects in Canada require a range of regulatory and environmental approvals from the federal and/or provincial/territorial governments, depending on the scope of the proposed project and where it is located. Consultation with Canada’s aboriginal peoples oftentimes plays a significant role in the approvals process.
Since the federal and provincial governments share jurisdiction over the environment, federal legislation may apply to energy projects that have inter-provincial or international characteristics, or that are wholly situated within a province or territory.
National Energy Board
The National Energy Board (NEB) is the primary federal energy regulatory agency. The NEB regulates inter-provincial and international pipelines, international power lines, and the importation and exportation of energy to and from Canada. It also regulates onshore and offshore development in the Northwest Territories, Yukon and Nunavut, as well as offshore areas not within provincial jurisdiction, under the Canadian Oil and Gas Operations Act.
The purpose of the NEB is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian “public interest” (a balance of economic, environmental and social interests that changes as society’s values and preferences evolve over time). In deciding whether to approve an energy application before it, the NEB must consider the overall public good that a project may create as well as its potential negative impacts.
Federal Environment Legislation
Federal environmental legislation may also apply to energy projects. For example, the Fisheries Act applies where a proposed project would negatively affect fish and fish habitat managed by the federal Department of Fisheries and Oceans. Energy project proposals must also comply with provisions of the federal Migratory Birds Convention Act and the Species at Risk Act. Additionally, where equipment is to be erected or placed in navigable waters, approval under the Navigable Waters Protection Act may be required.
Canadian Environmental Assessment Act
Projects that require certain federal government approvals may also trigger a federal environmental assessment under the Canadian Environmental Assessment Act (CEAA). This assessment may range from a comprehensive study for prescribed projects that have the potential for significant environmental effects to less detailed screenings of less significant projects. In certain cases, a review panel may be appointed and public hearings held.
Each province and territory maintains its own regulatory regime for approving energy-related projects. Energy projects situated wholly within one province are subject to the legislation and authority of that province. The majority of oil and gas-related activities under provincial jurisdiction are located in the provinces of Alberta and British Columbia, although there are also significant oil and gas activities in Saskatchewan, Newfoundland and Labrador, Nova Scotia and in Canada’s northern territories.
The Energy Resources Conservation Board (ERCB) and Alberta Utilities Commission (AUC) are Alberta’s primary energy regulators. These tribunals regulate upstream energy projects, intra-Alberta electricity transmission and pipeline projects, and local distribution utility matters. The ERCB and AUC’s mandates are to ensure the safe, responsible and efficient development of Alberta’s energy resources, and to regulate the pipelines and transmission lines required to move these resources to market.
All significant steps in proposed energy projects require ERCB and/or AUC approval. Where a project is approved, a licence, order or permit is issued. Energy development applications are processed as either routine (generally with a turnaround time of 1 to 2 days) or non-routine (which applications may take months to process and may involve public hearings). In a routine application, there are no landowner obligations and all technical, safety, public consultation and environmental requirements have been met. Landowner objections, community or environmental concerns, or objections from competing companies give rise to a non-routine process.
Larger energy projects require an environmental assessment process and review under the Alberta Environmental Protection and Enhancement Act (the EPEA). The ERCB and AUC consider the results of the assessment process in assessing the public interest.
The Oil and Gas Commission (OGC), a Crown corporation, is primarily responsible for the regulation of oil and gas activities and pipelines in British Columbia. The OGC also provides for the effective and efficient review of applications; ensures that approved applications are in the public interest, having regard to environmental, economic and social effects; encourages the participation of First Nations; participates in planning; and educates and communicates with the public. The Oil and Gas Commission Act and the Petroleum and Natural Gas Act, along with their respective regulations, are the key statutes governing upstream oil and gas development.
The British Columbia Environmental Assessment Act (EAA) requires an environmental assessment review process for project proposals that exceed thresholds established by the Reviewable Projects Regulation (RPR). All such proposals must receive a certificate before they may proceed. The Environmental Assessment Office may review the process and co-ordinates with all other governmental agencies, including the OGC. If a project proposal does not exceed the thresholds set out in the RPR, the OGC has jurisdiction over any environmental review, subject to a variety of statutes. The Environmental Management Act, for example, guides the OGC in discharging its responsibilities. Other applicable legislation includes the Forest Act; the Forest and Range Practices Act; the Forest Practices Code; the Water Act; and the Heritage Conservation Act.
Federal-Provincial Cooperation Agreements
Both Alberta and British Columbia have entered into environmental cooperation agreements with the federal government that provide for a single, cooperative environmental assessment process where an environmental assessment of a proposed project is required under both the Canadian Environmental Assessment Act and Alberta’s EPEA or British Columbia’s EAA. These agreements minimize the duplication of efforts and ensure that an environmental assessment is conducted as efficiently and effectively as possible.
Given that aboriginal and treaty rights are protected by the Constitution Act, aboriginal issues can play a significant role in pursuing energy projects in Canada. Both the federal and provincial governments have a duty to consult with and, if appropriate, accommodate aboriginal communities (First Nation, Inuit, and Métis) when they have knowledge of the potential existence of aboriginal or treaty rights and are contemplating conduct that may adversely affect those rights. The scope of the duty depends on the circumstances under consideration; however, at all times, consultation must be conducted in good faith and with the intention of substantially addressing the concerns of the aboriginal community whose lands are at issue.
The duty to consult and accommodate arises when a government is asked to approve a regulatory or environmental application for a proposed resource project that would be developed on or near the traditional lands of aboriginal communities and that may adversely affect aboriginal or treaty rights. Governments are expected to inquire into and determine whether there is a potential infringement of those rights prior to making its decision and, if so, to accommodate those rights appropriately. Any infringement must be justifiable, failing which the resource developer risks a court order quashing the regulatory permit or licence issued by the government for violating the Constitution Act.
In practice, governments frequently delegate some (or all) consultative responsibilities to resource developers. They may also require resource developers to consult as part of the regulatory process, and the regulatory process itself can work to satisfy the Crown’s duty. Consultation requirements usually include: providing information to the aboriginal community; identifying their interests and concerns; and taking action to avoid or mitigate negative impacts from the project (i.e., accommodation). Often, information is exchanged in the context of the environmental impact assessment through discussion with elders and the preparation of Traditional Land Use and Traditional Ecological Knowledge studies. In many cases, the project proponent will need to provide funds to enable the aboriginal community to review the project and environmental assessment documents, and to participate in the regulatory process.
In the context of a large resource project, developers may need (or choose) to negotiate agreements with the aboriginal community. Such agreements may be used to build positive, long-term relationships with affected aboriginal communities. The agreement can provide for environmental mitigation measures, training and education opportunities, business opportunities, and cultural and traditional land use commitments. Sometimes, the aboriginal community may seek equity participation in the project.