On May 15, 2017, the National Energy Board Expert Panel released its report (the “Expert Report”) containing recommendations and advice in response to the request made of it by the Government of Canada. The Expert Panel was convened with the following mandate:

“Efforts to modernize the [National Energy Board (“NEB”)] will deal with a focused set of issues related to the [NEB’s] structure, role, and mandate pursuant to the [National Energy Board Act (Canada)]. Specifically, these efforts will aim to position the NEB as a modern, efficient, and effective energy regulator and regain public trust.”

During consultations with a number of industry groups and stakeholders, the Expert Panel heard concerns regarding matters such as:

  • jurisdictional silos in the energy sector, resulting in a risk that national goals cannot be met;
  • the NEB’s board of directors’ degree of separation from the energy industry that it regulates;
  • the perceived lack of transparency in the decision making process of the NEB, resulting in a lack of energy investment in Canada;
  • improving the lines of communication with Indigenous people and stakeholders.

The Panel has made a number of recommendations of which the most significant are:

  1. Replace the NEB with two agencies, being the Canadian Energy Transmission Commission (the “CETC”), whose function would be similar to that of the current NEB, and a new, independent Canadian Energy Information Agency (the “CEIA”), whose function would be to provide decision-makers and the public with energy data, information, and analysis;
  2. Implement a regulatory system that aligns with a clearly defined and coherent national strategy;
  3. Cultivate real and substantive participation from Indigenous people “on their own terms and in full accord” with Indigenous rights, Aboriginal and Treaty rights and title, and including the creation of a new Indigenous Major Projects Office;
  4. Increase the scale and scope of stakeholder engagement, and build better relationships with landowners;
  5. Implement a one-year process for all major projects for the Federal Cabinet to ensure alignment with national interest prior to a detailed project review or licencing decision, and informed by substantive Indigenous consultation and stakeholder engagement;
  6. Provide for a two-year licencing and full environmental assessment process through a Joint CETC/Canadian Environmental Assessment Agency hearing panel process for all major projects; and
  7. Move the CEIA, the CETC board of directors, CETC governmental coordination staff and (future) staff related to electricity transmission to Ottawa.

The relocation recommendation, which suggests that relocation is necessary to ensure separation between the CEIA, CETC, and the energy industry, has been criticized by political figures in Alberta. The Premier of Alberta, Rachel Notley, and Calgary’s Mayor, Naheed Nenshi, have both publically criticized the recommendation, which would have the effect of moving more than 300 full-time jobs from Calgary.

The Government of Canada is accepting comments on the Expert Report for the 30-day period ending June 14, 2017. Upon review of the Expert Report, comments and further consultations with Indigenous people and stakeholders will inform the development of next steps to be taken by the Government of Canada.

The Panel’s Report is far reaching. If the recommendations were to be adopted, they would significantly alter the NEB’s current mandate, including the way NEB regulated projects are permitted. Given the breadth of issues the Expert Report raises, and their significance, the implementation of the recommendations is not likely in the very near term. Nonetheless, given the Government of Canada’s stated desire to reform the NEB, industry observers and participants should view the Expert Report as reflecting the themes and types of change that are most likely to be implemented.