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What Changes to Canada’s Federal Regulatory Process Mean For Energy and Utilities Organizations

2020-11-04


By: Adena Vanderjagt, Manager, Indigenous Services

In August 2019, the new Impact Assessment Act (IAA) came into force. This federal legislation replaced the Canadian Environmental Assessment Act, 2012 (CEAA, 2012) and, according to the Government of Canada, marked a shift in the regulatory process to align with the federal government's mandate to foster sustainability.1 This new Act outlined a process for assessing the impacts of major projects and the Impact Assessment Agency of Canada (the IAAC) is responsible for conducting impacts assessments under this Act.2

High tension power lines

The Act brings some key changes, including a change in the reporting structure, new components for consideration in the assessment phase, and a new phase within the regulatory process. These changes add complexity and financial considerations to proponents which were not previously part of the CEAA, 2012 process and your organization needs to understand what the impacts could mean.


Table of Contents

  1. Introduction
  2. About the Impact Assessment Agency of Canada and the Impact Assessment Act
  3. Reporting Structure
  4. Updated Considerations
  5. New Stage
  6. Conclusion

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About the Impact Assessment Agency of Canada and the Impact Assessment Act

The IAAC is a federal body that is accountable to the Minister of Environment and Climate Change. The IAAC is tasked with assessing the positive and negative environmental, economic, social, and health impacts of potential major projects as designated in the Physical Activities Regulations: SOR/2019-285. According to the Government of Canada, they are meant to provide uniformity of assessment practices, provide a single point of contact for Crown consultation and engagement, and ensure consistency with other regulators such as the Canada Energy Regulator and the Canadian Nuclear Safety Commission.3

The IAA and its subsequent regulations establish the legislative basis for the federal impact assessment process. Some examples of regulations include:

  • Definition of the type of projects that may require an impact assessment
  • Information that should be included in project descriptions
  • The deliverables that the IAAC provides to proponents
  • What circumstances may result in a timeline suspension
  • What costs can be recovered from proponents by the IAAC

This blog contemplates changes affecting the IAAC (e.g., reporting structure) and changes legislated by the IAA (e.g., addition of planning phase).

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Reporting Structure

One of the notable changes is which federal minister will have oversight responsibility for the IAAC.

Previously, the Canadian Environmental Assessment Agency reported to Natural Resources Canada (NRCan) and the Major Projects Management Office was responsible for the overarching project management and accountability for major resource projects in the federal review process. NRCan's mandate is to enhance the contribution of the natural resources sector to the economy, improve the quality of life for all Canadians, and conduct innovative science in facilities across Canada.4

Under the new legislation, the Impact Assessment Agency is accountable to the Minister of Environment and Climate Change Canada (ECCC). ECCC's mandate differs from NRCan's in that it is meant to protect and conserve Canada's natural heritage and ensure a clean, safe, and sustainable environment for present and future generations.5 In addition to the differing mandates of these ministries, there is uncertainty related to the role of the Major Projects Management Office (MPMO).Currently, no projects subject to the new legislation have been identified for coordination through the MPMO and the only projects slated for their involvement are being assessed under the former legislation (e.g., the National Energy Board) as they were filed prior to the IAA coming into force.

It is unclear how a shift in mandate of the overseeing ministry will affect natural resource development. However, we can look to projects currently within the regulatory process for some clues. Recently, the Minister used ministerial discretion to combine two projects submitted for designation by Coalspur Mines (Operations) Ltd. to warrant a designation under the IAA. The projects were meant to be considered as separate applications but were both expansions of the Vista Coal Mine Phase 1 Project.

Considered together, the projects were just under the 50 percent increase to area of mining threshold[SH1] [MC2] , but above the capacity threshold (at 18,683 tonnes per day) of 5,000 tonnes per day described in Item 19(a) of the Physical Activities Regulations. This decision speaks to an increased focus on cumulative adverse effects which were specifically referenced in the Ministers Decision. Explicitly, the Minister identified that the projects "…may cause adverse direct and cumulative effects to areas of federal jurisdiction", including fish and fish habitat, species at risk, and Indigenous peoples.6 The language in this designation decision was mirrored in the Teck Coal Limited Castle Project designation completed August 19, 2020, which also resulted in a provincial environmental assessment process being designated federally. These decisions set the tone for future decisions made under ECCC.

More Information

For more information on the Coalspur Mines (Operations) Ltd. Decision please see:

For more information on the Teck Coal Limited Decision please see:

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Updated Considerations

The Impact Assessment Act now requires two new components to be assessed as part of the overall analysis of the environment, social, health, and economic effects of projects; gender-based analysis plus (GBA+) and impacts that a physical activity may have on the rights of Indigenous peoples of Canada recognized and affirmed by section 35 of the Constitution Act, 1982. These requirements are now codified in legislation and are factors that must be considered.

Gender-Based Analysis Plus

GBA+ is meant to recognize existing and historical power structure imbalances (e.g., laws, policies) that have shaped society and created inequalities.7 Designated projects have the potential to layer positive and negative impacts on top of these existing inequalities.8 In many cases, practitioners already try to consider gender and diversity issues through social impact assessments, or through health impact assessment work.

However, now GBA+ is a formal requirement of the IAA and proponents will be specifically directed to explore aspects of this as part of their Tailored Impact Statement Guidelines. It is the intention of the IAAC that the GBA+ requirements will lead to better public participation by including diverse perspectives, improve the science behind the assessment work, and provide better evidence related to positive and adverse impacts.9

An example of what this specific direction can look like is illustrated within the Tailored Impact Statement Guidelines for the Gazoduq Project proposed by Gazoduq Inc. This document has many instances requiring disaggregated information related to GBA+; for example, within human health information must include a description of "…baseline health conditions and existing health inequalities using disaggregated data for diverse subgroups (e.g., women, youth, and elders) and their different access to resources, opportunities, and services within the community to support GBA+".10

Rights Held by Indigenous Peoples

The IAA also includes assessment of impacts that a physical activity may have on the rights held by Indigenous peoples of Canada recognized and affirmed by section 35 of the Constitution Act, 1982. This varies from the previous legislation, which only required consideration of changes to health and socio-economic conditions, physical, and cultural heritage, the current use of lands and resources for traditional purposes or any structure, site, or thing that is of historical, archaeological, paleontological, or architectural significance to Indigenous peoples.

This explicit requirement of assessment of impacts to rights has resulted in specific direction within the Practitioners Guide and led to a variety of Policy Contexts and Guidance being produced, including:

  • Policy Context: Indigenous Participation in Impact Assessment;
  • Guidance: Indigenous Participation in Impact Assessment;
  • Policy Context: Assessment of Potential Impacts on the Rights of Indigenous Peoples;
  • Guidance: Assessment of Potential Impacts on the Rights of Indigenous Peoples;
  • Guidance: Collaboration with Indigenous Peoples in Impact Assessment;
  • Guidance: Indigenous Knowledge under the Impact Assessment Act: Procedures for Working with Indigenous Communities; and
  • Guidance: Protecting Confidential Indigenous Knowledge under the Impact Assessment Act11

Did you know?

MNP Energy and Utilities has an Indigenous Services team, including experts on the requirements of the IAA in relation to Indigenous rights. These experts guide Indigenous nations and proponents through the IAAC process in relation to the rights of Indigenous peoples.

In order to see how these Guidance documents and Policy Contexts are operationalized, look to the Tailored Impact Statement Guidelines for the Gazoduq Project. In this document, it is recommended by the IAAC that proponents share Valued Component ("VC") "…studies with Indigenous peoples prior to assessing the impact on their rights or interests"12 as well as discuss with Indigenous peoples how to best reflect the assessment of impacts on rights. This could include "Indigenous-led studies".13

These requirements are a departure from the previous approach and can be viewed as a step towards Indigenous peoples being partners in environmental assessments rather than components of the broader socio-economic landscape to be studied. However, the timeline considerations of this increased involvement as well as capacity for that involvement of Indigenous peoples have yet to be defined.

As this direction comes within the Tailored Impact Statement Guidelines, which is within the Planning Phase (to be discussed below), it can be assumed that the implementation of this direction straddles both the Planning Phase (180 days) as well as the Impact Statement Phase (up to three years) where they proponent develops their Environmental Impact Statement. As these requirements are new, existing proponents will require internal discussion to ensure timelines are generous to allow for fulfillment of the conditions laid out in their specific Guidelines.

Did you know?

The Impact Statement Phase can be up to three years. This can be extended if the proponent requests it.

Capacity for both the GBA+ assessment requirements as well as Indigenous rights will also have to be considered by proponents and this may necessitate greater discussion and direction from the IAAC. Both these aspects will require more involvement by the public and Indigenous peoples and increased capacity requests will certainly arise. Who is responsible for this capacity (either the proponent or the IAAC) and what some standardized funding amounts (where possible) will look like remains to be seen.

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New Stage

Another new addition to the regulatory process is the Planning Phase. While a preliminary phase has always been around, this more regimented Planning Phase is meant to better position proponents and the IAAC for completion of the Environmental Impact Statement within regulated timelines. This process is also meant to enhance public and Indigenous peoples' contributions to the planning of the assessment.14

Step-by-Step

Prior to the Planning Phase being initiated, the proponent is responsible to determine if their project is listed on the Physical Activities Regulation. If it is, they are required to submit an Initial Project Description for review by the IAAC. The IAAC takes 10 days to review this document and if it conforms, it is formally accepted and posted to the registry with a Notice. Once this Notice and Initial Project Description is posted, the 180-day timeline begins.15

If, once designated, a lifecycle regulator requires involvement (like the Canadian Nuclear Safety Commission or the Canada Energy Regulator) this is also where the collaboration between those entities begins. If, after consulting with lifecycle regulators and other jurisdictions that require involvement, there is a request to extend the Planning Phase, the IAAC can extend it by up to 90 days.16 Once the 180-day process begins, activities include:

Planning Phase

Source: Impact Assessment Agency of Canada, Impact Assessment Process Overview

Phase 1

Consultation and engagement on the Initial Project Description completed with:

  • Indigenous peoples;
  • Public; and
  • Other relevant participants.

Phase 2

After consultation and engagement on the Initial Project Description, the IAAC prepares a Summary of Issues. This is provided to the proponent and posted to the registry and includes issues raised by:

  • Provincial, territorial, and Indigenous jurisdictions;
  • Indigenous groups;
  • The public;
  • Federal authorities; and
  • Other relevant participants.

Phase 3

The proponent prepares a Response to the Summary of Issues that explains how they will address the issues and updates their Initial Project Description to be a Detailed Project Description and submits them to the IAAC.

Phase 4

The IAAC spends up to 10 days reviewing and then posts the Response to the Summary of Issues and the Detailed Project Description to the registry.

Phase 5

The IAAC determines whether an impact assessment is required and posts the Decision and Reasons for Decision to the registry.

Phase 6

Assuming an impact assessment is required, the IAAC engages with the above noted entities to develop:

  • A Public Participation Plan;
  • The Indigenous Engagement and Partnership Plan;
  • The Impact Assessment Cooperation Plan;
  • The Permitting Plan; and
  • Tailored Impact Statement Guidelines.

In order to facilitate the development of the above noted plans (where required) and the Tailored Impact Statement Guidelines, drafts are posted on the registry for comment.

Phase 7

Once finalized, the IAAC posts the Tailored Impact Statement Guidelines and a Notice of Commencement to the registry before the end of the 180-day Planning Phase.

Phase 8

Within 45 days of the Notice of Commencement, the Minister can refer the impact assessment to a Review Panel. If this happens, the IAAC posts the Minister’s decision, and the reasons for referring the project on the registry. Some projects like uranium mines or interprovincial natural gas pipelines are automatically referred to a review panel.

Following these steps, the project moves from the Planning Phase to the Impact Statement Phase. This new Phase may create uncertainty for proponents newly navigating the process as capacity provision for involvement of the public and Indigenous groups has yet to be defined.

So far, the IAAC has provided small amounts of funding for involvement but it appears to be on an ad-hoc basis and can vary depending on the project and the Indigenous groups’ level of involvement. This Phase also requires additional effort by the proponent to pre-emptively consider how they will address issues arising in the Summary of Issues within the Environmental Impact Statement. While it is unclear at this point how stringently proponents will be held to the Response to the Summary of Issues, responses are required, and plans need to be identified.

Please refer to the Gazoduq Project as an example of a project that has navigated the Planning Phase under the IAA with the IAAC. This Process is one of the first to progress through the new IAA and IAAC process and has necessitated the proponent re-evaluating aspects of study and proposing additional work in their Response to the Summary of Issues. Ultimately, the Gazoduq process is still underway and the results are not yet known, but it can give a real time, practical view into operationalizing the new IAAC process.

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Conclusion

The IAA and IAAC mark a shift in the regulatory landscape for federally regulated projects; from the change in responsible Ministry, structure, new components for consideration, and new phases. These changes may add complexity and financial considerations for proponents. The best, and easiest, way to learn the process is by monitoring an existing project under this framework. The examples provided above can provide insight into what is being required, what is being funded, and what the newly required documents look like.

Our MNP Energy and Utilities team is assisting numerous clients in navigating this changing landscape in relation to the IAA and major project impacts including the rights held by Indigenous peoples and look forward to supporting our clients and their projects from planning to execution.

Adena Vanderjagt
Manager, Indigenous Services
[email protected]
403.648.4115


Notes

1. Government of Canada, Canadian Environmental Assessment Agency, Overview of the Impact Assessment Act, 2019 (Accessed 2020)
2. Ibid.
3. Government of Canada, Impact Assessment Agency of Canada, Mandate (Accessed 2020)
4. Government of Canada, Natural Resources Canada, Mandate (Accessed 2020)
5. Government of Canada, Environment and Climate Change Canada, Portfolio (Accessed 2020)
6. Government of Canada, Impact Assessment Agency of Canada, Coalspur Vista Coal Underground Mine and Expansion Activities Project, Minister's Response (Accessed 2020)
7. Government of Canada, Impact Assessment Agency of Canada, Policy and Guidance, Practitioner's Guide to the Impact Assessment Act, Gender-based Analysis Plus in Impact Assessment (Interim Guidance) (Accessed 2020)
8. Ibid.
9. Ibid.
10. Government of Canada, Impact Assessment Agency of Canada, Gazoduq Project, Tailored Impact Statement Guidelines, July 17, 2020 (Accessed 2020)
11. Government of Canada, Impact Assessment Agency of Canada, Practitioners Guide (Accessed 2020)
12. Government of Canada, Impact Assessment Agency of Canada, Gazoduq Project, Tailored Impact Statement Guidelines, July 17, 2020 (Accessed 2020)
13. Ibid.
14. Government of Canada, Impact Assessment Agency of Canada, Impact Assessment Process Overview (Accessed 2020)
15. Government of Canada, Impact Assessment Agency of Canada, Impact Assessment Process Overview (Accessed 2020)
16. Ibid.