On Thursday April 26, 2012, the Conservative Government tabled Bill C-38 that proposes to repeal the existing Canadian Environmental Assessment Act (“CEAA, 1992”)1 and to replace it with the Canadian Environmental Assessment Act, 2012 (“CEAA, 2012”).2

The new legislation is designed to change the environmental assessment process in a number of ways. The proposed changes have already galvanized environmental groups who criticize the move as favouring economic interests over environmental interests. However, the changes appear to be consistent with government’s long-standing recognition that the process must become more timely and efficient.  

To provide a brief overview, environmental assessments under the CEAA, 1992 are intended to predict environmental effects of proposed projects before they are carried out to minimize or avoid or reduce adverse effects. Generally speaking, the process is triggered whenever a federal authority proposes, finances, enables a project to be carried out on federal lands, or provides certain licences, permits or approvals to enable the project to be carried out. Depending on the potential for adverse environmental effects, the process may be done as a “screening” to identify adverse environmental impacts and determine the need to eliminate or mitigate them, or if the impacts are expected to be significant, a “comprehensive study”, mediation, or a review panel process is followed. Apart from the list of licences, permits and approvals that trigger the CEAA, 1992, there is another list that excludes projects, and a further list that says when comprehensive studies are required.

The initial enactment of, and continued amendment of the CEAA, 1992 appears to respond to court challenges regarding environmental protection. For example, the CEAA, 1992 was at least partly born of such litigation.3 The CEAA, 1992 was passed to replace the Environmental Assessment and Review Guidelines Order (the EARP Guidelines), a move spurred by the January 1992 Supreme Court of Canada (“SCC”) decision in Friends of the Oldman River Society v. Canada.4 The CEAA, 1992 was amended again in 2010, after the decision by the SCC in MiningWatch Canada v. Canada (Fisheries and Oceans)5 released in January of that year which held that while the Minister could enlarge the “scope” of a project, he did not have authority to reduce the scope by excluding certain parts of the proposed project from consideration to fit it within the screening report rather than the comprehensive study process. If projects were being “scoped” into screening reports to speed the assessment process, this decision clearly stepped on the brakes.

Historically, the federal government has demonstrated a commitment to reducing any identified inefficiencies in the environmental assessment process. The government had attempted to improve efficiency in 2003 by amending the CEAA, 1992 to create a federal environmental assessment coordinator,6 and by creating the Major Projects Management Office to help large resource projects navigate the federal regulatory process. Notably, a few months after the SCC’s decision in MiningWatch, the government passed Bill C-9 which amended the CEAA, 1992 by giving the Minister of the Environment the power to establish the scope of any project in relation to which an environmental assessment is to be conducted.7 Other 2010 amendments were intended to “streamline” certain process requirements for comprehensive studies, and to give the Canadian Environmental Assessment Agency (“CEA Agency”) authority to conduct most comprehensive studies.8

In mid-March 2012, the Standing Committee on Environment and Sustainable Development tabled a report which said that significant inefficiencies still remain, and which proposed 20 recommendations to streamline the process.9 For example, it was identified that the federal government generally takes 200 days longer to approve the same project than the Provincial environmental assessment does.10 Following the Standing Committee’s report, the Federal 2012 Budget released at the end of March proposed to implement several of these recommendations, and on April 26, 2012, the specific legislative changes were tabled in Bill C-38. It appears that many of the Standing Committee’s recommendations are to be implemented in the CEAA, 2012.

On April 17, 2012, the Government announced that its Responsible Resource Development plan, which is Part 3 of Bill C-38, focuses on making the review process for major projects more predictable and timely, reducing duplication in the review process, strengthening environmental protection, and enhancing consultations with Aboriginal peoples.11 Notably, the CEAA, 2012 will only require environmental assessments for “designated projects” defined as being projects carried out in Canada or on federal lands, that are designated by regulation or in an order made by the Minister, and are linked to the same federal authority specified in the regulation or order.12 This is intended to simplify the initial determination of whether a project will be subject to an environmental assessment.

One of the most significant changes is to the types of reviews used to conduct environmental assessments. To improve timeliness, CEAA, 2012 will replace the current structure of four types of reviews with two: standard environmental assessments and review panels.

Under CEAA, 1992, all reviews including the screening report considered the environmental effects including of potential malfunctions and cumulative effects that were likely to result and the significance of those effects, in addition to other factors.13

Under CEAA 2012, a screening involves the submission of information from the proponent and a consideration by the CEA Agency of whether the project requires an environmental assessment based on factors such as the possibility that carrying out the project may cause adverse environmental effects, comments by the public, and the results of any regional studies.14 Environmental assessments of designated projects are conducted by the responsible authority as determined by section 15 of the CEAA, 2012, and involves a consideration of ten factors including the “environmental effects” of the project15 and any cumulative effects likely to result, the significance of those effects, mitigation measures, and alternative means of carrying out the designated project, as well as community knowledge and Aboriginal traditional knowledge.16 A designated project may be referred to a review panel if the Minister is of the opinion it is in the public interest to do so, unless the project falls under the jurisdiction of the CNSC or NEB as the prescribed RAs.17

Other major proposed changes include:

  • Recognizing provincial environmental assessment processes as substitutes or equivalents to federal ones as long as they meet the requirements under the CEAA,18 and the designated project does not fall under the jurisdiction of the CNSC or NEB, and has not been referred to a review panel;19
  • Ensuring the CEA Agency decides whether a federal environmental assessment is required within 45 days of posting notice that a designated project is subject to a screening report on the CEA Agency’s internet site;20
  • The following timelines for hearings and assessments, subject to time extensions: 24 months for panel reviews,21 15 months for National Energy Board hearings plus three months for the Governor in Council to make an order,22 and 12 months for standard environmental assessments;23
  • Consolidating the number of organizations responsible for reviews from more than 40 to the CEA Agency, the NEB, the CNSC, or the federal authority performing regulatory functions prescribed by regulations;24 and
  • Focusing federal assessment efforts on “designated projects” that can have “significant adverse environmental effects”, and deciding whether, taking into account the appropriate mitigation measures, the significant adverse effects are or are not justified in the circumstances .25

It is very important to note the CEAA, 2012 also includes a number of additions to the compliance and enforcement powers provided in the CEAA, 1992, the Nuclear Safety and Control Act (“NSCA”), and the National Energy Board Act (“NEBA”). Some specific changes include:

  • Enforceable environmental assessment decision statements under the CEAA,26 meaning proponents of major projects will have to comply with conditions set out in the decision statements or may face financial penalties potentially ranging from $100,000 to $400,000;27
  • Requiring follow-up programs after all environmental assessments to verify the accuracy of the predictions regarding potential environmental effects and to determine if mitigation measures are working as intended;28
  • Providing federal inspectors with the authority to examine whether or not conditions of a decision statement are met;29
  • Authorizing the use of administrative monetary penalties for violations of the CEAA, 2012 under the Environmental Violations Administrative Monetary Penalties Act (Canada) to address small contraventions,30 which allows for potential penalties of up to $5,000 in the case of an individuals, and $25,000, in the case of any other person or a ship or a vessel.31

Penalties can be highly effective deterrents, as they generally don’t require the Crown to prove a corporation or individual intended to do a prohibited act, only that the act was done. This makes it easier on the Crown to impose penalties. In the case of strict liability offences, the accused may raise a defence of due diligence to prove that all reasonable precautions to avoid committing the prohibited act were undertaken.32

The proposed procedural efficiencies in the CEAA, 2012 will affect how quickly the assessment runs and what steps need to be followed by proponents, First Nations, the public, and governments. It will remain to be seen, taking as a given that the legislative changes are passed by the Conservative majority government proposing them, whether a faster process and new compliance and enforcement provisions will be procedural changes only, that merely affect how the process unfolds, or whether the new procedures could amount to substantive changes that will alter outcomes for interested parties and the environment.

It does appear that the CEAA, 2012 is intended to narrow in some respects who is entitled to participate in environmental assessments for orders made under section 54 of the NEBA. For example, CEAA, 1992 defined “interested party” expansively to mean, “in respect of an environmental assessment, any person or body having an interest in the outcome of the environmental assessment for a purpose that is neither frivolous nor vexatious.”33 CEAA, 2012 specifies that an “interested party” is “the person is directly affected by the carrying out of the designated project or if, in its opinion, the person has relevant information or expertise”.34 The public is still ensured an opportunity attend hearings,35 and public comments are one of the factors that must be considered by the RA.36 However, the public’s right to participate in standard environmental assessments in section 24 of the CEAA, 2012 is subject to section 28 which only says that an “interested party” is to be provided with an opportunity to participate in environmental assessments pursuant to NEBA section 54.37 Review panels are also required to permit any “interested party” to participate in the environmental assessment, but need only provide a summary of public comments in the report.38

Furthermore, unlike the CEAA, 1992 which allowed the Minister or “any interested person” to apply for an injunction to prevent the contravention of a ministerial order prohibiting the proponent from carrying out the proposed project, the CEAA, 2012 only contemplates applications by the Minister to enjoin the commission of offences listed in section 99.39 That section makes it an offence for a proponent to carry out the proposed project except where no assessment is required or the proponent complies with the conditions set out in a decision statement issued by the responsible authority.40 The issue of standing could become a contentious one.

Many groups have already expressed concern that the proposed streamlining will be accomplished at the sacrifice of environmental protection, First Nations consultation, and public participation. On the other hand the delays and financial costs for assessments can dissuade proponents from proceeding at all, and there is no guarantee that these delays result in improved outcomes for the environment or affected groups.  

CEAA, 2012 is an effort to streamline federal environmental assessments without compromising the integrity of the process. It combines measures to ensure decisions are made in a timely fashion, that duplication of processes are avoided, that review panels hear from those directly affected by the project or who have relevant information or expertise and are not unduly prolonged by others, and that conditions to approvals are enforceable. Whether it is an improvement over the CEAA, 1992 will certainly be a matter of debate.