Major Federal Changes

On April 26, 2012, a new budget bill (“Bill C-38”) was tabled in the federal House of Commons. As suggested in press releases issued by the Federal Government last month, Bill C-38 contains several significant changes to federal environmental legislation, including: the Canadian Environmental Assessment Act, the National Energy Board Act, the Canadian Oil and Gas Operations Act, the Nuclear Safety and Control Act, the Fisheries Act, the Canadian Environmental Protection Act and the Species at Risk Act. The most drastic change will be to repeal the Canadian Environmental Assessment Act in its entirety and replace it with the new Canadian Environmental Assessment Act, 2012 (“CEAA, 2012”).

These changes are intended to streamline and speed up the regulatory process for projects subject to federal review. They provide time limits for certain review processes, greater coordination between different government agencies and reduced duplication of application materials. Overall, the accelerated regulatory process and enhanced ministerial control is balanced with increased enforcement and penalty provisions. The changes are intended to increase efficiency, but are accompanied by stiffer consequences if proponents do not play by the rules.

The proposed CEAA, 2012 differs fundamentally from the current version. In the current version, federal environmental assessment (“EA”) is required if one of the “triggers” in the Act is met. In the new Act, only “designated projects” (designated by regulation or Ministerial order) are subject to EA. Also, “comprehensive study” EAs are eliminated. Projects may still be referred to a review panel. The Minister of the Environment (“Minister”) may authorize “equivalent assessments” to be conducted by a responsible federal authority, provincial government agency, foreign government, or other approved authority.

In accordance with the intention to speed up the regulatory process, CEAA, 2012 sets the following time limits within which the Minister must render a decision pertaining to the EA:

  • 365 days for EAs conducted by the Canadian Environmental Assessment Agency;
  • 18 months for EAs conducted by the National Energy Board (the National Energy Board Act will also be amended to give the Federal Cabinet the final say on whether major pipeline projects are approved); and
  • 24 months if the EA is handled by a review panel or currently subject to a comprehensive review.

However, all time limits are subject to extensions provided by the Minister or Federal Cabinet, depending on the circumstances. The time limits also apply only to “complete applications” and the clock is halted if further studies or information are required by the Minister.

One of the purposes of the current Act is to provide for and encourage public participation in EAs. This remains a purpose in the new Act, but limits are imposed on participation in major pipeline reviews under the NEB Act and review panel EAs. Only an “interested party” (defined as a person who is “directly affected” by a project or who has relevant information or expertise) may participate in these EAs.

Finally, under the new Act, EAs will be restricted to areas within federal jurisdiction: fish (Fisheries Act), acquatic species (Species at Risk Act), migratory birds, projects on federal lands and projects which affect Aboriginal peoples. The proposed changes to CEAA will have minimal effect on projects in Canada's three territories which are subject to different federal environmental assessment regimes resulting from land claims. Changes to the legislative regimes in the NWT and Nunavut are currently being considered and it remains to be seen how the federal efficiency agenda will play out there.

Bill C-38 also proposes the following noteworthy changes to the legislative scheme under the Fisheries Act:

  • authorizing the Governor in Council to enact regulations excluding certain waters from the prohibition on causing serious harm to fish and damaging or destroying fish habitat (section 35);
  • the amended Act will prohibit destruction or damage to newly created categories of commercial, recreational and aboriginal fisheries; and
  • imposing minimum penalties for several offences.

Also in-line with the theme of streamlining the regulatory process, proposed amendments to the Canadian Environmental Protection Act and the Species at Risk Act would allow the responsible Minister to set time limits for issuing or denying permits to dispose of wastes and engage in activities affecting listed species, respectively.

The proposed changes contained in Bill C-38 are designed to provide certainty and speed up the regulatory process that project proponents are subject to. This overhaul of the federal environmental regulatory system can be seen as a positive move for many project proponents. The new environmental legislation could be in force as early as July 1, 2012.