Member Article

One way to change the law fast is to amend or repeal statutes in budget legislation.  That is what the federal government of Canada
did in 2009, 2010 and 2011. Federal programs, staff positions and budgets for environmental science, conservation and protection have been eliminated. That leaves a lot of responsibility with the provinces and territories, and many open questions for industry. This article describes what has happened and identifies what to look out for.

Environmental assessment is a process that should normally begin in the early planning stages  of a project. The idea is to force developers to identify project alternatives that would avoid environmental impacts and to list measures that will mitigate unavoidable impacts so that governments can decide whether the project should be authorized or not. In Canada, infrastructure and facilities related to natural resources development projects have been subject to environmental assessment (EA) rules at the federal level since the 1980’s.

Subject matter expects can do a rough EA off the top of their heads. Checking the boxes found in EA laws and regulations, on the other hand, can be a fairly cumbersome, long-winded process involving interjurisdictional squabbles, inter-agency referrals, political pressure, public hearings, court challenges and massive expenditures of money all around. Furthermore, EA does not discharge the duty of the Crown to consult with and accommodate people who have a prima facie claim to aboriginal or treaty rights protected under the Constitution. 

The Canadian Environmental Assessment Act (CEAA), which took effect in 1995, was drafted in such a way that projects were “in” unless they were on an exclusion list. CEAA has been amended so that now,  projects are “out” unless they’re on an inclusion list. This can make a big difference, at least at the level of legal certainty for project proponents. It should also be noted that the new act requires the EA to consider anticipated project effects upon aboriginal people, such effects being defined as “environmental effects.”

The federal government was also looking for clarity when it amended the 19^th century Navigable Waters Protection Act to change its name to Navigation Protection Act and specify that only watercourses listed in an appendix to the act are covered by the act.  No more canoe test for us. (The canoe test, a favourite of the courts: a watercourse is navigable if you can float a canoe on it). 

The Fisheries Act also got pared down, to cover protection and conservation of fish habitat supporting aboriginal, recreational or sport fisheries in Canada. No longer will the test for identifying fish habitat be whether it is a place frequented by fish.  It will now need to be a place frequented by fish frequented by fishermen.  These changes have been adopted but they are not yet in force.

In all three cases, the effect of the changes will be to reduce or eliminate federal involvement in project environmental reviews. It’s not yet clear whether all of this is good news for business. Some fear that industry may end up dealing with a patchwork of different rules across the country, or that provinces and territories might compete for investment by loosening environmental requirements.

The important thing to remember is that environmental law in Canada is a moving target. Quebec, for example, recently added administrative penalties to its toolbox and fines are being levied in record numbers. In Ontario, D&O experts are reeling after directors and officers of a bankrupt corporation were personally named to a clean-up order for a site with multi-million dollar environmental liabilities and execution of that order was upheld by the Environmental Review Tribunal pending appeal. None of this seems to bear out the “race-to-the-bottom” effect I mentioned above.

And not to be forgotten: the parallel but entirely different subject of aboriginal rights will continue to slow down project approval and this is not something that can be fixed in budget legislation.