As highlighted in our other bulletins in this series, Bill C-69, announced on February 8, 2018, proposes sweeping changes to the energy and environmental regulatory regimes relevant to project proponents in Canada. As part of these changes, the Canadian Energy Regulator Act will replace the National Energy Board (the “NEB”) with the Canadian Energy Regulator (the “CER”). The stated goal of the Federal Government is to create a “truly modern, world-class energy regulator”. In this bulletin, we highlight the main changes proposed by the Canadian Energy Regulator Act.
Jurisdiction to Include Authorization of Offshore Renewable Energy Projects
In addition to the NEB’s current mandate, the CER will be responsible for authorizing offshore renewable energy projects and offshore power lines. An “offshore renewable energy project” is defined as any exploitation of a renewable resource to produce energy and any storage or transmission of energy produced from a renewable resource (other than the transmission of electricity to a province or place outside of Canada) carried on in the offshore area. Presently, these offshore projects are regulated by a patchwork of provincial, territorial and federal agencies.
Removal of Federal Cabinet’s Ability to Overturn a Negative Decision
Under the Canadian Energy Regulator Act, the Governor in Council will no longer have the power to overturn decisions of the regulator not to certify a pipeline project. The Governor in Council may still, however, require the CER to reconsider decisions, and may overturn positive decisions to certify a project.
Increase in Participation by the Public and Indigenous Peoples
The Canadian Energy Regulator Act removes the NEB’s standing test that limits participants in proceeding to those that are either directly affected by the project or have relevant information or expertise. Instead, the Canadian Energy Regulator Act states: “Any member of the public may, in a manner specified by the Commission, make representations with respect to an application for a certificate”. Other provisions of the new act permit the CER to establish processes related to engagement with the public and Indigenous peoples, and collaborative processes with government or Indigenous organizations. While it remains to be seen how these powers will be used, the intention of the Federal Government is that participation by the public and Indigenous peoples will increase.
Revised Governance Structure
Bill C-69 contemplates a shift in the internal organization of the regulator, by separating the administrative and adjudicative functions. The administrative function will be led by a CEO, and the adjudicative function will be carried out by a new Commission. The Commission will be made up of Commissioners limited to serving no more than 10 years, with at least one of the seven full-time commissioners required to be an Indigenous person. The new federal regulator will have a Board of Directors to provide oversight, strategic direction and advice on operations, with one of the seven directors required to be an Indigenous person.
Other Changes of Interest
- Joint Impact Assessment. New energy projects requiring an impact assessment would undergo an integrated process that would be carried out jointly by the newly created Impact Assessment Agency of Canada (the “IAAC”) and the CER. The IAAC would be responsible for conducting its impact assessment and coordinating consultations with Indigenous peoples in collaboration with the CER. The CER would be responsible for making public interest determinations under the Canadian Energy Regulator Act.
- Codification of Factors Relevant to the Public Interest. The Canadian Energy Regulator Act codifies the public interest factors to be considered by the CER when determining whether to certify a project. The inclusion of “the intersection of sex and gender with other identity factors” is notable as a factor that has not, to our knowledge, been previously considered by the NEB.
- Codification of Duty to Consult. Various provisions of the Canadian Energy Regulator Act generally reflect an attempt to codify the Supreme Court of Canada’sdetermination that the regulator has a mandate to engage in Haida consultation. Section 56 sets out a general duty to consider adverse effects on the rights of Indigenous people recognized and affirmed by section 35 of the Constitution Act, 1982. The list of public interest factors to be considered by the CER also explicitly includes the interests, concerns, and effects on the rights of Indigenous peoples of Canada. The Canadian Energy Regulator Act is also clear that the public interest must be considered in light of traditional knowledge of Indigenous people.
- Potential Role of Indigenous Governing Bodies. The Canadian Energy Regulator Act states that the Minister may pass regulations authorizing Indigenous governing bodies to exercise the powers or perform the duties and functions under the Act.
- Timelines for Decisions. Decisions on applications not subject to an impact assessment under the new Impact Assessment Act will be subject to timelines of a maximum of 450 days for certification of a pipeline, 300 days for an international power line, 300 days for an offshore renewable energy project or power line, and 180 days for licences for the exploration of oil and gas. For major projects that would be subject to the new impact assessment process, a maximum deadline of two years would be imposed.
The changes replacing the NEB with the CER must still be passed by Parliament. It is apparent that the extent of change experienced by project proponents and the public will be determined to a large degree by how the CER will choose to exercise its powers.