Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 24 - Evidence - May 29, 2012
OTTAWA, Tuesday, May 29, 2012
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:03 p.m. to examine the subject matter of those elements contained in Part 3 of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012, and other measures.
Senator W. David Angus (Chair) in the chair.
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The Chair: Good afternoon, ladies and gentlemen and honourable guests. I am calling to order this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. I think we all know why we are here; it has something to do with this document, Bill C-38, the budget implementation bill. I wanted to simply say, for the benefit of our listeners on the CPAC network, on the World Wide Web and on our other social media that are following our proceedings, that this is a continuing session in our pre-study of Bill C-38, which is still in the House of Commons. By unanimous agreement by the parties in the Senate, we are doing five different sections of the bill, pre- studies, and this committee is dealing with Part 3.
Colleagues, our witnesses tonight require no introduction in detail. However, I think we are very privileged to have three ministers of the Crown with us. Because we are getting ready to come out with our report on the energy sector, we are starting to work on some graphics and some videos for our social media friendly report that will be coming out soon.
I need permission from the members present that we have a photographer present in the room during all or part of the proceeding.
Senator Baker: I so move.
The Chair: Moved by Senator Baker, seconded by Senator Peterson. All in favour?
Hon. Senators: Agreed.
The Chair: Carried. Thank you very much.
We have with us three ministers: the Honourable Keith Ashfield, P.C., M.P., Minister of Fisheries and Oceans; the Honourable Joe Oliver, P.C., M.P., Minister of Natural Resources, from Ontario; and also from Ontario, a minister we know well, the Honourable Peter Kent, P.C., M.P., Minister of the Environment.
Gentlemen, thank you for coming here this afternoon. We know you follow carefully the deliberations of this committee and you would agree we are very engaged in the sector. One of the things that our intensive three-year study on energy has indicated to us is a great need for some of the things that have been set forth in Part 3 of Bill C-38, namely, a streamlining, if you will, which is the way the government has characterized it, for resource development in this country and to establish a new regime for assessing and conducting the necessary assessments for the environment and other relevant factors before granting permission for proponents to go ahead with these big projects. That is what it is about.
This is our third session. We have had the officials from, I think, all three of your departments. Now we will be having the agencies come to talk to us as well, the nuclear agency, the National Energy Board, and so forth. You gentlemen are key to this and I know you made great efforts to be here as the first witnesses, but you cannot be in the House of Commons and in your ridings and everywhere at the same time so you are here tonight. I think that is great. Without further ado we will let each of you make a statement and then we will question you. I think you have a big vote in the house later tonight.
Just so you know who we are, I am Senator David Angus from Montreal, the chair. To my right, from Alberta, is Senator Grant Mitchell, the deputy chair. This gentleman here, Minister Ashfield, you will know is Senator Wallace from Saint John, New Brunswick; and Senator Lang from the Yukon Territory. To our left is our able clerk, Lynn Gordon. Next to Ms. Gordon, from Calgary, is Senator McCoy. To her left, from the great province of Newfoundland and Labrador, is Senator George Baker; to his left, from Saskatchewan, is Senator Robert Peterson. Finally, from the Northwest Territories, is Senator Nick Sibbeston. A couple of other senators may come in, but we will get on with it.
Minister Oliver, will you go first?
Hon. Joe Oliver, P.C., M.P., Minister of Natural Resources: Yes, I believe I will. Thank you very much.
Honourable senators, it is my pleasure to appear today before the Standing Senate Committee on Energy, the Environment and Natural Resources. Before answering your questions, I would like to speak briefly about the benefits of Bill C-38 that relate specifically to responsible resource development.
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Responsible resource development will strengthen Canada's already stringent environmental protection measures and provide Canadians with a more efficient and more predictable process for examining large projects. It will thus help create jobs and further economic growth across the country, in addition to generating new revenues, which will help fund government programs and services that will benefit all Canadians.
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We need to put in place a modern regulatory regime that will create a welcoming climate for investment and job creation in Canada and enhance the competitiveness of our resource industries.
Mr. Chair, Canada's regulatory regime has evolved over many years, often independently and with little thought given to how the processes interact, one that is cumbersome, unnecessarily complex and highly prone to duplication and overlap. In some cases, the same project must go through two virtually identical assessments at the federal, provincial or territorial level with, at different times, potentially different conclusions.
The practical problems of this approach are self-evident. Inefficient regulation leads to unnecessary and unpredictable project delays of a kind that can create additional costs for proponents and impede their ability to attract capital and stimulate economic activity. Both industry and government are in agreement: Canada has suffered from this regulatory malaise for too long.
Responsible resource development takes the action necessary to fix this problem through four key objectives: first, to make the project reviews more predictable and timely; second, to reduce duplication of project reviews; third, to strengthen environmental protection; and fourth, to enhance Aboriginal consultation.
The Chair: Can I interrupt you briefly, minister? You mentioned that both industry and government are in agreement that Canada has suffered from this regulatory malaise for too long. One of the things we think is very important in terms of getting the message out about these provisions is that we understand the word ``government'' includes the governments of the provinces. Is that true? Can you affirm that?
Mr. Oliver: Yes, it is. We have had extensive discussions with governments at all levels. I have met with many of the premiers, and I personally have spoken to them about our initiative. Prior to my arrival last May, there was a continuum of complaints that were received from the provinces. As you know, under the Constitution, provinces own the resources. They are deeply implicated, therefore, in natural resource policy. The resources development initiative has an enormous impact on each of the provinces where they are located, and of course even where they are not located there are spill-offs on the industrial side in respect to each and every one of the projects, which I am happy to address. The very short answer is yes.
The Chair: Thank you very much. Carry on.
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Mr. Oliver: Responsible resource development will offer a number of practical advantages. It will eliminate duplication by making it possible for environmental assessments conducted by provincial and territorial governments to take the place of those carried out by the federal government, instead of duplicating work already done.
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Our plan will also put in place enforceable, beginning-to-end time limits on assessments of no longer than two years, and it will do so without compromising the rigour of our review process. We will make these improvements while at the same time strengthening Canada's high environmental standards.
A further consideration, and an important one, is the rights of Aboriginal people in Canada and the legal duty of our government to consult on decisions that could affect them. We take this obligation very seriously. Our plan will better integrate consultation with Aboriginal peoples and communities into the review process and provide additional funding to support Aboriginal participation in project reviews.
To modernize our outdated regulatory system, we will take a whole-of-government approach. Our ultimate objective is simple: one project, one review, in a clearly defined time period.
The need for modernizing our regulatory system is widely recognized by all governments and widely supported. The provinces and territories all agree that regulatory renewal is a priority. I should add that that consensus was clearly affirmed at the federal-provincial-territorial meeting we had in Kananaskis last July when, unanimously, all the governments in question signed on to a communiqué, one of whose action plans identified the modernization of regulatory review. All our governments support efforts to reduce duplication and overlap among the various jurisdictions.
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Mr. Chair, I have crossed the country talking about our responsible resource development plan and I can assure you that Canadians understand that it is possible to develop our resources quickly and responsibly while protecting the environment.
In fact, according to a recent Ipsos-Reid survey, over two-thirds of Canadians think that we can develop our economy while respecting the environment.
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Under our plan, we will not only maintain Canada's world-class environmental protection programs, we will strengthen them. This will be achieved by focusing federal environmental assessment efforts on major projects that could have adverse effects on the environment.
In such cases, we will take steps to strengthen compliance and introduce stronger enforcement tools. For example, we will introduce new, enforceable environmental assessment decision statements that ensure project proponents comply with required environmental protection measures, and there will be new penalties for contraventions of the Canadian Environmental Assessment Act.
The government is also investing $165 million over two years through Budget 2012 to support responsible resource development. This includes new measures to strengthen marine and pipeline safety. Tankers will be double-hulled. Pilotage will be mandatory. Aerial surveillance and navigation tools will be improved. We will increase annual pipeline inspections from 100 to 150. We will double the number of comprehensive audits of pipeline operations. These and other safety measures will give us additional assurances that problems will be identified and corrected before incidents occur.
In this way, we will build on earlier successes in protecting Canada's environment. All projects, big and small, will continue to be subject to the environmental requirements of relevant federal and provincial laws, regulations and standards.
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We will draw on our earlier successes to protect Canada's environment. All projects, whether large-scale or not, remain subject to the applicable environmental requirements of the laws, regulations and standards of the federal government and the provinces.
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We are looking to the future as well as to immediate benefits. Over the next decade, in the energy and mining sectors alone there is potential for more than 500 new projects worth more than half a trillion dollars in investments, and these projects will create an estimated 700,000 jobs across Canada.
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Mr. Chair, our critics have tried to pit the various regions of Canada against one another, but the responsible resource development plan is totally impartial. Each region has everything to gain, since our objective is to strengthen primary industries across the country, create jobs and ensure the prosperity of all Canadians.
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Opponents have also warned about the so-called Dutch disease, saying that resource development pushes up the Canadian dollar, thereby hurting the manufacturing sector. This view is divisive, pitting one region against another. It is also not based on sound economic analysis and has been debunked by several economic studies. One such study was supervised by economist Jack Mintz at the University of Calgary, who found that Michigan and Ohio suffered the same or greater decline in manufacturing employment as Ontario, obviously not a result of the value of the Canadian dollar but because of growing competition from lower cost producers in less developed countries.
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To conclude, I wish to point out that our government's approach is based on the irrefutable evidence of the beneficial effect of resource development for all parts of the country. Furthermore, we will support only those resource development projects that do not pose a threat to Canadians or their environment.
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I am pleased to answer questions from the committee at the appropriate time.
The Chair: Thank you very much, Minister Oliver. I think we will go to the next minister and then we will have the three of you questioned, if you are agreeable to that. Is it Minister Kent next?
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Hon. Peter Kent, P.C., M.P., Minister of the Environment: Thank you, Mr. Chair. I am happy to be here as you conduct your preliminary study of Bill C-38. I am going to focus my remarks on the proposals of a new Canadian Environmental Assessment Act, as well as on significant amendments to the Species at Risk Act and the Canadian Environmental Protection Act of 1999.
As the honourable senators know, on account of major undertakings in this area, environmental assessment is a key component of my portfolio. This is a major element in the government's plans to strengthen environmental protection today and for future generations of Canadians.
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This is why we have protected funding for the Canadian Environmental Assessment Agency at a time of fiscal restraint. Despite opposition allegations, some media misreporting and wild accusations in the blogosphere, there are no cuts to the agency's funds. In fact, the agency's budget will increase by 5 per cent.
The changes made by Bill C-38 will make the process more predictable, more timely, reduce duplication, strengthen environmental protection and, as my colleague said, enable meaningful consultations with First Nations.
There are, as my colleague pointed out, the four pillars of responsible resource development.
There has been a great deal of debate about the impact of Bill C-38 on the federal environmental assessment process, but I believe the facts are clear. It will strengthen environmental assessment and, in doing so, our ability to protect the environment. The issue of enforcement of environmental laws came to the forefront in Budget 2008, which stated that environmental laws alone are not enough to guarantee a cleaner, better environment. These laws also need to be enforced.
My predecessor followed through with the Environmental Enforcement Act that was ably examined by this committee and passed by Parliament in 2009. However, the existing Canadian Environmental Assessment Act still does not have enforcement provisions.
Bill C-38 builds on the excellent work of my predecessor and closes the enforcement gap for environmental assessment. The new Canadian Environmental Assessment Act creates a decision statement that will include enforceable conditions. These conditions are backed up by inspection powers to confirm that mitigation measures are being implemented. There are penalties ranging from $100,000 to $400,000 for violations.
However, legislation is just part of the solution. The government has permanently increased resources to environmental enforcement by $21 million annually to ensure we have the officers, the equipment, the forensic science and the tools to do the job.
Today there are 50 per cent more enforcement officers than there were just five years ago. They are stationed in offices across the country. They are working in the field to detect and to take action against those who violate our environmental legislation.
These officers will now be able to inspect and take action on violations of the Canadian Environmental Assessment Act. These new enforcement provisions are complemented by a requirement for a follow-up program after each and every environmental assessment. These programs verify the accuracy of an environmental assessment's predictions and determine whether mitigation measures are working as intended.
The bill also includes new authority for the Minister of the Environment to launch regional environmental assessments in cooperation with another jurisdiction. Currently, the act is restricted to a single project focus, which is a challenge to assess cumulative effects of multiple projects and activities in a region experiencing significant development. The requirement to assess cumulative effects is nevertheless carried over from the current act. It is an essential part of the federal regime.
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You must recall the testimony recently given by Pierre Gratton of the Mining Association of Canada before this committee. He stated with respect to regional studies:
This was a specific recommendation we had made, and I think it has been overlooked by many as an important environmental improvement. I think environmental groups and industry have been calling for this type of measure for many years and it is in this legislation.
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The results of these studies can feed into the assessment of specific projects and the gains are twofold. First, we will have a deeper understanding of the ecosystem involved. This will translate into better environmental assessments and approaches to mitigation. Second, by doing much of the upfront scientific work, regional studies will streamline project specific reviews.
Again, the conclusion is clear: We are proposing changes that support environmental stewardship and the four pillars of responsible resource development.
Regional studies also provide an opportunity for Aboriginal peoples to make their concerns known, thus informing later consultations with respect to specific projects. The environmental assessment process is uniquely situated to assist the Government of Canada with its constitutional duty to consult and, where appropriate, accommodate Aboriginal groups when their rights might be adversely affected by a proposed project.
Environmental assessment starts early in the planning of a project, when it is still possible to make design changes to reduce impacts. There are also logical points in the process to directly obtain input from Aboriginal groups, to learn of their concerns and to develop means to avoid or to reduce negative effects. For these reasons, the government will continue to integrate, to the extent possible, Aboriginal consultations into the environmental assessment process.
Budget 2012 provides the Canadian Environmental Assessment Agency with $6.8 million per year to support consultations with Aboriginal peoples and $5.3 million is a renewal of funding first provided in 2007. It is now being topped up by a further $1.5 million in new money. Agency staff and review panels are engaging and will continue to directly engage Aboriginal peoples in their communities.
As part of the responsible resource development plan, the government is also proposing some changes to the Species at Risk Act and to the disposal-at-sea provisions of the Canadian Environmental Protection Act, 1999. These changes allow the government to issue regulations that set legally binding timelines for permitting decisions.
To improve efficiency, amendments to the disposal-at-sea permitting process will allow for permit renewals for routine, low-risk projects and change publication requirements to allow publication on the Canadian Environmental Protection Act registry website rather than in the Canada Gazette.
The Species at Risk Act amendments allow for longer-term permits and they make the conditions of permits enforceable. These changes will support effective protection of listed species while allowing the government to issue authorizations for a time period better suited to large projects.
In closing, I wish the committee well as you continue this important study. Thank you.
The Chair: Thank you very much, minister.
I mentioned that some other senators would be arriving. Down here to my left, and to your right, is Senator Paul Massicotte from Quebec. At the end of this row is Senator Bert Brown of Alberta, and two along from him is the Honourable Senator Asha Seth.
This is your first experience here, senator, so welcome to you. You are filling in today for Senator Frum. We are very pleased to have you here. I hope you will find it interesting.
Also Senator Seidman is next to Senator Lang; she is from Quebec. Finally, there is our fisheries expert on the committee, Senator Janis Johnson from Manitoba.
Watch out, Minister Ashfield. You now have the floor, sir.
Hon. Keith Ashfield, P.C., M.P., Minister of Fisheries and Oceans: Good evening senators. It is a pleasure to be here to have the opportunity to outline the changes to the Fisheries Act that are proposed in the jobs, growth and long-term prosperity bill.
With regard to the broader jobs, growth and long-term prosperity bill, I am proud of the work that has been done to focus the government on better and more effective ways to contribute to our economic growth and job creation in a sustainable, responsible way now and for future generations. In today's economy it is paramount to ensure that Canada's great natural resources, including the fisheries, be well managed. With respect to the fisheries it is our intention to do that.
The proposed changes to the Fisheries Act do three things related to the protection of fisheries in Canada: One, it is about focusing our protection efforts where they are needed; two, it is about regulatory clarity and efficiency; and three, it is about enabling partnerships with provinces, territories, Aboriginal groups, conservation organizations and others who care about fisheries protection.
I should note that the changes we have proposed do not change the scope of how section 36, the pollution provision, is applied by my colleagues at Environment Canada. Most of what I will speak to applies to the fisheries protection other than pollution.
First, the proposed changes enable us to focus our efforts on the protection of commercial, recreational and Aboriginal fisheries. This means moving away from the current system where all fish and all habitats are subject to the same treatment. Under the Fisheries Act today, an irrigation ditch containing fish that flows through a farmer's field is subject to the same level of protection as a sensitive salmon rearing area on the Fraser River. The law applies regardless of the magnitude of the impact, from a dock at a lake, to a clear span bridge, to a major industrial or resource development project. That is not a sustainable or a common sense approach.
Canadians expect us to focus our work on the protection of fisheries. The proposed changes will enable us to focus on the commercial, recreational and Aboriginal fisheries. These changes will ensure that these fisheries are protected from a range of threats, including impacts to fish habitats, the non-authorized killing of fish and protection from aquatic invasive species — an emerging threat not contemplated when the Fisheries Act was last amended.
The purpose section of the fisheries protection provisions of the Fisheries Act clarifies that these provisions are to be applied to support the sustainability and ongoing productivity of commercial, recreational and Aboriginal fishers. We are also providing enhanced tools for protection and compliance. The proposed changes include aligning the penalty provisions with the Environmental Enforcement Act. The changes would make the conditions of authorizations more easily enforceable. Failure to meet the conditions of authorizations would be considered an offence, so we can ensure that appropriate mitigation, offsetting and monitoring takes place. The changes enable the identification of ecologically significant areas. In these areas we can require enhanced protection so that important fisheries areas are clearly delineated and appropriate planning can occur to avoid impacts to such areas.
Another objective of our government is to provide a clear and transparent regulatory framework. We will provide clarity about how the new provisions will apply. We have included a regulatory authority to establish standards for fisheries protection, for example, for minimum water flows for fish or the passage of fish or the times of year that projects can or cannot be undertaken to protect fish spawning or migration.
Canadians expect us to be clear about the rules — where they apply and how they apply. We will also develop a regulation that clarifies to proponents what information we will require from them for a project and how long it will take us to do the review for the purposes of issuing permits.
The proposed changes will provide new mechanisms to better coordinate with provinces and territories to address overlap and duplication. Where a provincial or territorial government has standards that meet or beat the federal standards, we can stand down and allow the provincial process to apply. We can even delegate the authority to make decisions if the appropriate arrangements and accountability mechanisms are in place.
As serious as we are about our focus on protecting commercial, recreational and Aboriginal fisheries, we are also serious about transparency, about clarity and about efficiency. Canadians want to know what the rules are, how the rules are applied, what is expected of them as proponents and how long decisions will take. The proposed changes provide the tools to do this.
One of these changes I am most excited about is enabling partnerships. I have already spoken about building on existing partnerships with provinces and territories to address overlap and duplication, but I am also talking about enabling partnerships with conservation groups and others who are passionate about protecting fisheries. We have good partnerships now with groups that represent the thousands upon thousands of Canadians who work with us to protect Canada's fisheries, but we know we can be better partners. Therefore, the proposed changes enable us to enter into agreements with third parties to undertake projects and programs that support the conservation objectives of the act.
Conservation groups, angling groups, recreational fishing groups and many others have told us about the important work they are doing to protect Canada's fisheries and about their ideas to develop new, innovative approaches to achieve this. It is innovative and exciting to hear from groups with such passion and on-the-ground expertise. The networks in those groups are truly extraordinary. We need to work through them to reach the general public.
To summarize, the changes to the Fisheries Act represent three components: a focus on significant impacts to Canada's commercial, recreational and Aboriginal fisheries; tools to enable regulatory clarity and efficiency; and tools that enable partnerships with those who care about protecting fisheries. I am excited about the prospect of these proposed changes that will get us focused where we need to be focused. It will get us out of the ditches and fields and better connected with Canadians who are already engaged in this important work.
With these changes I am confident we will have the direction, the tools and the partnerships we will need to ensure that Canada's commercial, recreational and Aboriginal fisheries survive for future generations of Canadians to enjoy.
The Chair: Thank you to all three of you. Those were excellent summaries of each of your responsibility areas for the responsible resource development plan.
I think all senators here heard each of you in your own way say that the status quo is unacceptable and it makes no sense. How did we get to that point in the first place?
Mr. Oliver: As I mentioned in my brief remarks, it just evolved. It just happened. There are many people with different authority. We know that at the federal level there was a multiplicity of organizations that were created over time, different ministries became involved and perhaps no one was looking at the overall picture and the cumulative impact. Then, of course, there are federal-provincial issues and it just grew holus-bolus. One day people woke up and said that this is actually getting out of hand.
I have had experience with regulations of different kinds, such as securities regulations, but it is extraordinarily difficult to make improvements in regulation. Fundamental change will never ever come from the regulator so we felt it was time. There was so much at stake. We have immense natural resources. We are blessed as a country and we have the opportunity to provide security and prosperity for Canadians now and for generations to come. We cannot let an administrative process bog us down such that the hundreds of thousands of jobs that can be created in the next 2, 5, 10 years take 10 and 20 years or never. There is too much at stake for Canada.
Mr. Kent: Our government recognized in 2007 that there were challenges and began working with the provinces and with industry to discuss these.
You will recall that in my last appearance I reminded you that in June 2010 there were legislative improvements to CEAA to address some of these issues of duplication, redundancy and overlap. However, it was clear that more needed to be done on the NEB side of the process with regard to major projects like pipelines, and we have moved even further in consultation with our various provincial counterparts with regard to fixed timelines.
Timely assessment does not mean less rigorous assessment, and we have found widely, even among the many environmental NGOs, recognition that rigorous examination and assessment can still be timely.
The Chair: This was not a case of you could not see the forest for the fish.
Mr. Ashfield: Senator Baker is losing out here. He is usually very good at this.
The Chair: Chairman's prerogative.
Mr. Ashfield: As you know, I am currently dealing with an act which was written in 1868. It is layers upon layers of policy and regulation, and that has evolved over the years and made it difficult. The last substantive change in the act was in 1977.
Times have changed. We drifted away from, I believe, our core mandate, and that is the fishery, to support and maintain the fishery from now and into the future for future generations.
These changes will allow us to do that, and I am looking forward to working over the course of time here to ensure that this does happen.
Senator Mitchell: Thank you, gentlemen, for being here. As I listen, I get the sense as you very consistently — you are a team, there is no doubt about it, and on message — proclaim your absolute, fundamental commitment to the environment, all the while that you are cutting the northern round table. You have cut, it would seem, every single climate change research station and climate change program. You have attacked the environmental NGOs. You have exited Kyoto. I could go on.
As I listen, I am reminded of the Monty Python skit where the purchaser brings back the dead parrot and keeps saying, ``This parrot is dead,'' but the customer relations actor said, ``No, no, that parrot is not dead. That parrot is sleeping. That parrot is not dead.''
Well, I am sure that everyone internationally and many people in Canada are looking at you and saying, ``You know what? When it comes to environmental stewardship on the part of this government, that parrot is absolutely, fundamentally dead.''
How is that you will you ever build the social responsibility, the social licence and the credibility you need throughout the world and across the country to sell and build these projects and to sell our products when people are hearing you trying to argue that black is white, up is down, in is out, red is brown, and, by the way, that parrot is not dead? How will you do it? Why would anyone believe you are going to protect the environment?
The Chair: There is the question.
Mr. Kent: I would be delighted to respond and to walk through your list of misinformation and disinformation. It is true that for the national round table, after serving for a quarter century, its time has come, and there are any number of other academic and industry bodies that address the connection between the economy and the environment.
A year ago, we also ended the Canadian Environmental Network, again, a network that served us well in its time. However, with technology, the Internet and a variety of improvements in terms of community relationships and dialogue with government, it was simply no longer necessary.
We have closed no Arctic research facilities. We continue to host the Polar Environment Atmospheric Research Lab at Eureka, but at the moment there are no scientific bodies that have been successful in winning grants to continue that study. We will continue to spend a quarter of a million dollars a year to keep it ready for that research. As a matter of fact, we reopened it after the previous Liberal government mothballed it in 2002, so we stand ready. We believe there should be research. We fund through NSERC, at Environment Canada, but research across government, and basically, we believe that in the area of environmental assessment, we can be much more rigorous. We can be much more timely and more effective by contemporizing and strengthening laws. That is essentially what we are doing with CEAA, the NEB and the Canadian Nuclear Safety Commission and with the Fisheries Act.
Senator Mitchell: When you aggressively tax environmental NGOs, particularly international ones, and you have used some terms I expect you might like to withdraw, perhaps or perhaps not — ``money laundering'' — what message does that send to elements in the U.S. who will use every argument they can to prove that Canada has no credibility in protecting the environment? We do not demonstrate reductions in climate change emissions. They will use what you are saying as a classic argument to withdraw, impede and inhibit entirely the social licence needed to build a project like Keystone. How does that work?
Mr. Kent: First, there was no sweeping criticism of charitable groups or of environmental NGOs. I have been quite specific in saying there are definitely some bodies abroad that are aiming their fundraising and delivery through some Canadian agencies with Canadian charitable status to obstruct environmental assessment processes, not to constructively participate.
Our government recognizes that there are a good many, and, certainly, in Environment Canada we see millions of dollars a year coming in from organizations — NGOs — that constrictively contribute to conservation and environmental protection in Canada, for example, Ducks Unlimited. The list is long.
Senator Mitchell: Tides Canada.
Mr. Kent: I would not necessarily include that organization. However, there are some organizations in the United States and in Canada, which we have seen by the Senate examination alone, through other bodies and some elements of the media, that have changed their websites, behaviours and their operating protocols because of the sudden bright glare of examination over possible wrongdoing, not only with regard to Canadian organizations that have charitable status, but also with organizations in the United States, misguided philanthropists and other organizations, who in the past have stated brazenly that their objective, as the Prime Minister so aptly said, is to turn Canada, our resource rich country, into one vast national park, and our government resists that.
Mr. Oliver: With respect, senator, exaggeration and misinformation does not help Canada's reputation or our ability to sell our resources internationally. We have not, I have not and my colleagues have not attacked all environmental groups. However, there are some that are opposed to all resource development. They will never say they are, but the fact is they oppose every resource development, and you can see that quite interestingly as the resource developments keep coming to the public. There has been a lot, and it is not only Keystone, the Northern Gateway, the Kinder Morgan line, the reversal of line 9, the possibility of the main line going through, the Lower Churchill and so on. Each one of these — every single one — is opposed by various groups, and one has to conclude that they are opposed to resource development for this country, whatever their motivation, be it ideological, commercial or political.
We are engaged in a major dialogue with Canadians to make them understand what is at stake here, and why a responsible resource development is the way to go for our country.
Senator Lang: I would like to take a different point of view from my colleague Senator Mitchell. I maintain that red is red, black is black, and the good news is that the numbers of polar bears in the Arctic are increasing, not decreasing. There are some very good news stories out there in respect of the environment. I think we, as Canadians, should maybe look at our glass of water and talk about it being half full, perhaps not half empty.
This is a very important question that Canadians should put to the government: What are the consequences if we do nothing and we maintain the status quo? I would like Minister Oliver to comment on maintaining the status quo in view of the resources in the world and how things are changing.
Mr. Oliver: What we risk is to see our resources stranded and our legacy squandered. In the oil sands, as one example, we have 174 billion barrels, the third largest reserves in the world. With technological improvement that number could well go up — I think it will — and we could end up with the highest amount of proven oil reserves in the world, and that is one resource. There is forestry and mining — we are a mining giant.
If you look across the country, in British Columbia there is forestry and natural gas; obviously, oil and gas in Alberta. We have potash and uranium near the top of the world in Saskatchewan. We have the Ring of Fire in Ontario, the Plan Nord in Quebec; and hydroelectricity in Atlantic Canada. Every one of these individual projects is good not only for the region in which it is located but also for the entire country. We have at play here just in the oil sands over $3 trillion of economic activity. Overall, we are looking at well over $4 trillion, over 1 million jobs created, and hundreds of billions of dollars of revenue to governments from taxes and royalty payments, which support critical social programs like housing, health care, education and pensions.
This country has an opportunity to move forward, in spite of the turbulent international financial environment, in a prosperous and secure way, but we have to take advantage of the assets that we have rather than watch our competitors, the Australians, the Iranians, the Iraqis and the Saudis, take advantage and look at us in bemusement as they move forward. It would be a national tragedy if we turned our back on our resources.
Senator Lang: To follow up on that, add to your list the Yukon and Northwest Territories and Nunavut in mining.
Mr. Oliver: In fact, we are only beginning to understand the total immense potential in the North. We are going to be learning more about that. It has an opportunity to transform communities that have suffered from high unemployment forever into communities of wealth, prosperity and jobs throughout this vast country.
Senator Lang: I can speak from the Yukon's perspective. We are in a fortunate place now as opposed to 10 years ago when we had no mines operating. We have three in production and a number of others in the offing just in mining alone and there are other areas of the economy as well.
There is almost a consensus across the country between the provinces and the territories for the changes that are being recommended through the bill that we are presently studying. However, a concern has been raised and I am wondering if you can give me assurances. The concern is that in view of the fact that there will be a delineation, or the principle of equivalency or substitution between the provinces and the territories or the federal government in the case of the fisheries and even in the regulatory process, can you give us assurances that in the long term there will not be an offloading of responsibility from the federal government and then a further cost to the provinces and the territories?
Mr. Kent: I can offer the view from Environment Canada with regard to CEAA. There is provision in the new legislation for, as you said, both substitution and equivalency. Substitution will allow a province or a territory to conduct an environmental assessment, but the final decision would be made by the federal Minister of the Environment.
In the case of equivalency, again, that would transfer, hypothetically, but we have been talking with provinces and we are assured by past experience of both their competence and capacity, to assume, project by project, the authority to conduct both the environmental assessment and to render a decision in compliance with CEAA 2012 or with Bill C-38. The federal legislation still effectively prevails, but in some cases there is provision under law for the provinces, either at the substitution level or with regard to equivalency, to carry out the assessments.
Mr. Oliver: To further amplify the points, in respect of the NEB, because the projects are interprovincial and are regulated under federal jurisdiction by the NEB, substitution will not apply to those projects because the NEB is the natural lead.
The Chair: We will have to keep moving here, even though I know the ministers will stay for an extra bit of time.
Senator Baker: Ministers, I would like to direct my question or questions, depending on whether the chair permits me to ask many questions, on one subject alone, which I am sure the chair, the great jurist that he is, has also on his mind.
We heard from the Canadian Mining Association and the Prospectors and Developers Association of Canada, did not we, Mr. Chair? They had a big question on their mind. It had to do with the interpretation of the changes that are taking place in this bill to sections 35 and 36 of the Fisheries Act as they pertain to mining.
Now, am I all right so far, Mr. Chair? This is exactly what they were concerned about.
The Chair: Yes.
Senator Baker: Here we have a situation where you are changing section 35, where the gravity of the offence would be ``fish habitat,'' to ``fish.'' You are changing it to the words ``serious harm to fish'' and removing the word ``habitat.'' However, in section 36 you are keeping ``fish.'' In section 35 you are restricting it to ``commercial fishery,'' but in section 36 you keep it to ``fish.''
The mining association was saying was that this is all fine. You are being specific in section 35, which they appreciate because you need specificity in order to know what you are doing, but in section 36 you are now going to be prosecuted anyway for the same offence. They are asking us if the changes that were made in section 35 apply to section 36. That is about the simplest way I can put the question.
The Chair: That is how you will leave it, right?
Mr. Ashfield: ``Fish habitat'' is still in the act. It is there.
Senator Baker: Yes, but section 35(1) has changed.
Mr. Ashfield: It is defined in the act. It says that ```fish habitat' means spawning grounds and any other areas, including nursery, rearing, food supply and migration areas, on which fish depend directly or indirectly in order to carry out their life processes,'' so ``fish habitat'' has not been eliminated from the act at all.
Senator Baker: No, but section 35(1) has changed.
Mr. Ashfield: In terms of the concerns of major developers, ultimately, we still have to protect fish. That is the role of the Minister of Fisheries. We will do that a number of different ways.
You talked about equivalency and a lot of other things. We have the opportunity to make this work, in conjunction with my friends at Environment Canada and NRCan. We can address these issues.
Mr. Kent: I would add that under section 36 there are several provisions. Section 36 stands as is within the new legislation. However, the general prohibition that is outlined in section 36 prohibits the deposit of deleterious substances into fish-bearing water. Also, in a later chapter, it allows the permitting of the discharge of deleterious substances under some conditions, in some situations. Section 36 prevails as is under CEAA.
Senator Baker: I will conclude with this: Right now under the act, sections 35 and 36 are qualified by regulation. The minister makes regulations. You have been criticized on this bill by people saying, ``You are making regulations.'' You could always make regulations under sections 35 and 36. That does not change.
What the mining association is concerned about is what I pointed out. Could you provide the committee with a written response? Could you have a look at what the mining association said before this committee and provide the committee with an explanation as to whether or not they do have a point or they do have some concerns? No one is saying that you are relaxing the regulations here, because you are not. In fact, you are making them a little bit more complicated under section 36. You are.
Mr. Kent: We are making them more effective.
Senator Baker: Yes, effective; I know. Could you provide us with a written response? Could you do that, just to satisfy us? If you do not, we have to report back to Parliament that you were not cooperative.
Mr. Kent: Absolutely. Just to complete that thought, many years ago there was no consideration for non-metal mines. For example, there were no diamond mines in Canada. We have had requests from the Mining Association of Canada and from industry generally to address and to contemporize here, as elsewhere through the legislation, appropriately, new regulations that will apply to metal mining and to non-metal mining, as it applies to fish and fish habitats.
Senator Baker: The minister understands.
The Chair: Senator Baker, you always come around to agree with the chair. Those witnesses from the Mining Association of Canada also indicated that on the section 35 and 36 ambiguity issue they were working very cooperatively with officials from these ministers' departments, as we speak. They are very pleased with the cooperation.
Senator Sibbeston: I just want to thank the three ministers for giving recognition to the Aboriginal people and their importance in this whole process.
Historically, one of the benefits of environmental boards and national energy boards and things of that sort has been that it has been a forum for Aboriginal people to state their case with respect to the land, waters and so forth. We have come a long way as a country in terms of being able to accommodate them and to make it possible for them to partake.
I recognize that the process does go on in the Northwest Territories, where I live, and in my hometown, Fort Simpson. There is a little mine just 150 kilometres west of us that hopes to develop zinc. It has taken six or seven years, and they have not started operating yet; it has just taken that long.
During that time, from initially all the Aboriginal communities being against that development, now, because of the company's willingness to work with them and accommodate them, their environmental concerns have been allayed. They are now in a position where they are supporting that development.
These are big steps. It speaks well for our country that throughout our whole country, the rights of native people are not just overridden, pushed aside and overwhelmed, and that they have a chance.
I think the essence of Aboriginal people is for them to take part and benefit. That is the essence. When you look at some of the developments in the North, the diamond mines and the oil in Fort McMurray, that has happened to a certain extent.
I am conscious of the Northern Gateway project and the attempt to build a pipeline from Alberta to the B.C. coast. There are some native people that are for it; others along the seacoast, who are likely to be adversely affected if there is a spill, are against it.
How do we as a country get approval for a project like that, considering that there is at the moment a lot of opposition? I would be interested to hear your views.
Mr. Kent: I will start off, and I am sure my colleagues have thoughts. We have realized in recent years that the constitutional obligation to consult, the statutory obligation to consult, must be respected and consultation must begin much earlier, not only government to First Nations but industry to First Nations. In talks I have had recently and over the past few months with the Assembly of First Nations and Grand Chief Atleo, we have been discussing a concept that he first brought forward with regard to a virtual college that collects good and bad experiences that First Nations have had with regard to resource development projects, and to share that information with First Nations.
For example, as we move forward in Ontario with the Ring of Fire, there is great trepidation in some quarters about how this resource development will be carried out. I agree with the grand chief that consultation — but also shared experience, good and bad — will help the assessment process and deal with facts and realities, and not some of the misinformation or fear mongering that sometimes sets the process aside.
Senator Sibbeston: Can Minister Oliver say something? This is so important.
Mr. Oliver: Of course, we take our constitutional duties very seriously. The responsible resource development legislation is designed to enhance, deepen and make more meaningful the consultation specifically related to resource development.
I cannot comment on the Northern Gateway specifically because it is under regulatory review. You do know, however, that our government considers it a critical strategic objective to diversify our markets. Of course, in order to that, we have to build the infrastructure to get the resources from where they are to where they are wanted.
We are taking a whole-of-government approach, which would directly integrate Aboriginal consultations into the new process, get them involved earlier so it is more meaningful, and strengthen federal departmental coordination, establish a single central coordinator for projects under federal jurisdiction, and develop protocols with the provinces and territories and Aboriginal groups.
We have to approach this in an atmosphere and reality of mutual respect. We are hoping, at another level, that the enormous benefits of some of these projects for the communities will be persuasive and bring some communities onside.
I would just say that there is probably somewhat more support than is publicly known, and in some cases there are arrangements being worked out that will be, I gather, announced at a later stage.
Senator Peterson: Thank you, ministers, for your presentations. I have just a few questions. Mr. Oliver, this will be to you.
It is my understanding that most of the portions of the Canada Nuclear Safety Act will be transferred to the provinces. I was wondering if this would also include legal liabilities in the event of serious incidents.
Mr. Oliver: First, this piece of legislation does not apply to the Canadian Nuclear Safety Commission. We have spoken to the commission, and the chair of the commission will be making some voluntary steps of his own in terms of timing, but that is something that is within his control, within Dr. Binder's control, and is not something that is being mandated by the government. It is separate and apart.
Liability will not be affected.
Senator Peterson: Minister Kent, under the new assessment act, we are putting collars on the time that it can be done. It says it could be up to two years. I presume that is an outside number, but it could be less than that. Who determines the length of a study?
Mr. Kent: The establishment of timelines relates directly to the experience, I think it is fair to say, of a majority of assessments that have been carried out in the past. With regard to CEAA, you are quite right, in general, for a two-year timeline for federal panels. There is provision for ministerial discretion for a brief extension of three months should there be extenuating circumstances. There are any number of possibilities there. Again, in the event that there are extraordinary circumstances, the Governor-in-Council can provide for further extension.
By and large, we think that the two-year timeline, with a set pre-panel, panel and decision period, will be easily achievable. We do intend with this new legislation and by the establishment of timelines that panels will conduct themselves and will focus themselves on getting the job done. Some of the more unacceptable examples of delay have been caused in the past by panels that applied themselves less than full-time. There are also extenuating circumstances with regard to a proponent wanting a time out. There have been occasions in the past where a project proponent has undergone either a sale or a transfer of responsibilities, going in and out of partnerships. There are times when a provincial or territorial partner would need a timeout. We believe that the two-year, defined timeline is easily achievable in all but very few circumstances.
Senator Peterson: You would think you can accommodate all interested witnesses who would want to appear?
Mr. Kent: Absolutely.
Senator Peterson: Without adjusting the timelines to exclude them?
Mr. Kent: We have found in recent years, again since the June 2010 improvements to CEAA, that in fact those rough timelines have by and large been met. There are some exceptions. Going forward with the new legislation, we believe that that will encourage those panels to put noses to grindstone and get the job done.
Senator Peterson: Also, regardless of what the panels say, they are aware also that the cabinet makes the final decision, I take it?
Mr. Kent: That has always been the case in CEAA. What has happened now is the NEB process has been contemporized to CEAA. CEAA will operate going forward much as it already does now, with the addition of timelines and with the addition of some of the detail with regard to changes in the Fisheries Act. It will operate much as it does today.
Senator Peterson: I hope so. We will see.
The Chair: Ministers, I am getting the signal that you have to go. I have six people on the list. Do you all have to go? Is there any leeway at all?
Mr. Kent: I do have a federal-provincial commitment.
Mr. Ashfield: I have another commitment as well, Mr. Chair.
The Chair: Senator Johnson got caught in a rainstorm. She came to me this morning and said she had a very important question. I would like her to have the last word.
Senator Johnson: Thank you very much, Mr. Chair. Some of my colleagues have covered it. The key thing is the Fisheries Act, with regard to the minister, would no longer prohibit harmful alteration, disruption or destruction of fish habitat, but rather prevent serious harm to fish that are part of a commercial, recreational or Aboriginal fishery or to fish that support such a fishery. The question is, after recognizing that even temporary disruptions can have a serious impact on fish, I have to know how the changes would protect the fish throughout their life cycle. Can you give me an example of an effect that would harmfully alter fish habitat but not seriously harm the fish?
Mr. Ashfield: There are a number of examples that you could use. If you look at fish habitat along the shores of a stream, for example, there could be a temporary upheaval of the vegetation along the shore. That would be a temporary effect on fish, but it certainly would not impact overall or for any extended period of time. It would have a minimal impact on fish and fish habitat. There is that type of thing. There are other things that could destroy permanently fish habitat along a stream, and those are areas that we would certainly not allow and would be involved in making sure that fish were protected.
Senator Johnson: I have been on the Fisheries Committees for years in the Senate, and I come from a lake that is very challenged, Lake Winnipeg. The experimental lakes project was stopped. It has been a very busy weekend for us all. I know you are trying to upgrade and improve in all the work you are doing. I know no matter what you do in the way of change in this country, it takes time and understanding, but we have to get the message out that it is positive. What you are doing is positive, not negative. It is not going back in time; it is going forward in time. I am hoping you can do that as well as getting the fisheries and oceans to enforce habitat provision, especially. That is a very important thing. You talk about being upset about the past. That has not been done in the past, in my experience, in all my work in the Fisheries Committee, enforcing that habitat.
Mr. Ashfield: In actual fact, we are increasing our authorities through the changes that we are proposing. They would allow us to provide a more meaningful enforcement, new fines for the Environmental Assessment Act, in line with the Environmental Assessment Act, so we will have the tools that we need to actually enforce things. On the regulatory side, we actually could not enforce a lot of our regulations, and this will allow us to do that.
Mr. Kent: If I could speak briefly to the experimental lakes, that is an example of sometimes knee-jerk, negative reaction to change. The experimental lakes project, which was created back in the 1970s, was invaluable in helping to create the acid rain treaty. The data we have accumulated over the past four decades is broad and it is deep. The partnership with DFO has been a very good one. What we are doing now in Environment Canada is moving farther west to take a look at potential impact and acidification of lakes downwind from the oil sands, for example. That is part of our water, air, biodiversity monitoring, which we have strengthened in the Athabasca Basin and in the airsheds west and southwest of there. There is change but, as with every program in every department of government, there is a time to create programs, there is a time to assess programs, a time to renew them when they are still relevant and to end them when they are not. That is essentially what we have been doing in recent months across government.
The Chair: There are still six of you on the list. I will put you at the top of the list in that order. We have people from the agencies here, and we have time set aside. We can sit as late as we want.
I take it you do have to leave, gentlemen?
Mr. Kent: In the interests of strengthening our federal-provincial partnerships, I think we would have to go.
The Chair: Thank you all very much. It has been a good session.
We continue with our meeting as we study the provisions of Part 3 of Bill C-38, the current budget implementation legislation. We now have with us three very important agencies involved in the administration of the responsible resource development plan enshrined in the budget legislation. We have the Canadian Environmental Assessment Agency, the Canadian Nuclear Safety Commission and the National Energy Board of Canada.
I believe our witnesses were in the room during the earlier testimony, so you all know who we are, but I would like each of you to introduce yourselves, or I could help you. I know in the centre we have Ms. Helen Cutts, Vice-President, Policy Development Sector of CEAA. I think we have seen you before. I think we have seen a number of you before our committee, so we are looking forward to your input on this legislation. We also have Steve Mongrain, Senior Policy Advisor, Policy Development Sector of CEAA.
From the Canadian Nuclear Safety Commission we have Gord White, Vice-President, Regulatory Affairs; Patsy Thompson, Director General, Directorate of Environmental and Radiation Protection and Assessment; and Peter Elder, Director General, Directorate of Nuclear Cycle and Facilities Regulation.
From the NEB, all alone, is Robert Steedman, Chief Environment Officer.
Thank you all for coming and welcome. I believe Ms. Cutts is up first, so over to you.
Helen Cutts, Vice-President, Policy Development Sector, Canadian Environmental Assessment Agency: Thank you, Mr. Chair. I am glad to be here to give some further explanation about the Canadian Environmental Assessment Act, 2012. My remarks will build on what was presented to the committee on May 10 and some of the highlights that were just provided by the Minister of the Environment.
My intent today is to provide an overview of the sequence that would be followed for an environmental assessment. I will look at how the assessment is initiated, how it is conducted and, finally, what it takes to complete an assessment. This will be a beginning-to-end view of what the new process will look like.
We will begin with initiating the environmental assessment. The core element of the initiation is the project list. A list will set out project types in regulation. Project proponents would be required to submit a project description to the Canadian Environmental Assessment Agency.
As a safety net, the Minister of the Environment could require an environmental assessment of a project that is not on the list. When this project description comes in, the agency would have 45 days to determine whether an environmental assessment is required. This includes a 20-day public comment period. This step would not apply to projects regulated by the Canadian Nuclear Safety Commission or the National Energy Board. These projects, if identified in regulations, would automatically require an environmental assessment.
I will turn now to the actual conduct of an environmental assessment. Here we begin with looking at the environmental effects. The environmental effects that would be assessed are those within federal jurisdiction, such as effects on fish. These effects are covered in section 5(1). The effects that result from a federal decision about a proposed project must also be assessed. For example, an environmental assessment would look at the effects that result from a federal decision to fund a project. Those effects are covered in section 5(2). Assessments would be conducted by the agency, the Canadian Nuclear Safety Commission, for the projects that it regulates and the National Energy Board for the projects it regulates.
If it is a project that our agency is responsible for, the Minister of the Environment could decide to refer the project to a review panel. The minister would have 60 days from the start of the assessment to make this referral.
As you know, there are time limits proposed in this bill. The agency would have 365 days to do a standard assessment and 24 months to complete a review panel. The time limits for the National Energy Board and the Canadian Nuclear Safety Commission are covered under their respective acts, and my colleagues can touch on that.
Environmental assessment includes opportunities for public participation. For example, public comment is sought when the agency conducts the assessment. The public would also have an opportunity to comment on the draft report prepared at the end.
If the assessment is carried out by a review panel, then that review panel must hold public hearings. Interested parties that are directly affected by the project, or that have expertise or information relevant to the project, may submit oral submissions. The requirements in the current act for participant funding would continue, along with a public registry to provide convenient public access to documents.
In terms of cooperation with other jurisdictions, the current mechanisms have been retained. These include the ability to delegate an environmental assessment as well as establishing joint review panels. But in addition to those two, there are two new tools, substitution and equivalency. Substitution allows the process of another jurisdiction to substitute for the federal process but not decision making. Under equivalency, cabinet may recognize a provincial process as equivalent for a specific project. In these cases the act would not apply.
I will turn to the final stages of an environmental assessment. At the end of an environmental assessment, a decision is made as to whether a project is likely to cause significant adverse environmental affects. As is the case under the existing act, cabinet would determine if any significant effects are justified in the circumstances. This decision statement would set out mitigation measures as well as follow-up requirements. Follow-up programs would be mandatory after all environmental assessments. The act includes inspection powers and potential fines of $100,000 to $400,000 to deal with violations of the act.
I would like to mention two other points. Federal authorities would be required to ensure that their actions with respect to routine projects on federal lands and outside Canada do not cause significant adverse environmental effects, and there is also new authority to conduct assessments on a regional scale rather than just specific projects. This is done in cooperation with the provinces and was highlighted by Minister Kent in his presentation.
In conclusion, this is a run-through of what the process would look like. My colleagues will now provide an overview of how environmental assessment fits into their broader responsibilities.
Robert Steedman, Chief Environment Officer, National Energy Board of Canada: Thank you for the opportunity to appear before you today to support a review of Part 3 of Bill C-38. The National Energy Board's purpose is to regulate pipelines, energy development and trade in the Canadian public interest. The board is accountable to Parliament and reports to Parliament through the Minister of Natural Resources. The board regulates the construction and operation of interprovincial and international oil and gas and commodity pipelines, and international power lines. We also regulate oil and gas exploration and development on frontier lands and offshore areas not covered by provincial- federal co-management agreements.
The NEB's regulatory oversight extends over 71,000 kilometres of pipeline that crisscross most of our country, and approximately 1,400 kilometres of international power lines. The board does not regulate energy projects that are wholly contained within a province.
The NEB holds the companies it regulates accountable for the safety of their facilities and for the protection of the environment in which they operate. Our safety programs are designed to ensure companies are effective in managing safety and environmental protection throughout the entire lifecycle of a pipeline from design to construction, operation and through to abandonment.
As we audit and inspect for compliance. We look for evidence of management systems that provide a strong foundation for a pervasive culture of safety, forcefully affirmed by the organization's leadership, rigorously documented in writing, known to all employees and consistently implemented in the field.
The board has an advisory function under the NEB Act. In this role it reviews and analyzes matters within its jurisdiction and provides information and advice on aspects of energy supply, transmission and disposition in and outside of Canada.
The board holds a public hearing for any application to build a pipeline over 40 kilometres long and for a variety of other energy regulatory matters. In assessing a project, the NEB considers all factors relevant to the public interest, including the environmental effects of the project.
We have significant experience in considering potential environmental effects when making our regulatory decisions and have been conducting environmental assessments under the Canadian Environmental Assessment Act since it came into force in 1995. In recent years, the NEB has conducted about 30 screening level environmental assessments per year. Many of these screening level assessments were part of a public hearing under the NEB Act. The board has conducted comprehensive studies and review panels under the CEAA, all in association with a public hearing under the NEB Act.
The National Energy Board has the mandate, processes and capacity to conduct technically rigorous, publicly transparent and inclusive environmental assessments for any facility that we would regulate. The NEB has approximately 50 environment, socioeconomic lands and stakeholder engagement specialists and 40 safety and engineering specialists on staff.
As a lifecycle regulator, the NEB attaches environmental conditions to project approvals that we monitor and enforce beyond the environmental assessment phase for project approval through construction, operation and eventual abandonment. Throughout the entire lifespan of a project, we monitor to ensure that the company is managing its project so that it is operated in manner that is safe, secure and protects the environment.
Our compliance and verification program includes such activities as audits, construction and safety inspections, compliance meetings, emergency exercise assessments and investigations. If we find that a company is not complying with its regulatory obligations, we use a range of tools to enforce our decisions, uphold safety and protect the environment. These tools range from an oral request for immediate compliance to criminal prosecution. They also include orders to stop work or modify the operation of a facility.
Should proposed legislative changes be enacted, the NEB will operate within that updated framework. The NEB would continue to conduct an independent, fair and accessible environmental assessment and regulatory review process for major pipeline projects. We would recommend terms and conditions to make the project safe for people and the environment.
The legislative changes address the timelines for NEB regulatory assessment and provide GIC with the responsibility to make the go/no go decision for issuing a pipeline certificate. Proposed timelines are consistent with the NEB's historical performance and tools are provided to deal with contingencies.
Currently, the NEB makes the decision, but an order from the GIC is required before a certificate for a project can be issued. This would change so that the GIC makes the decision and is not simply approving the NEB decision. Further, in situations where the NEB does not recommend approval, the analysis and recommended terms and conditions would be provided to the GIC for their final decision.
Thank you for the opportunity to provide this overview of the National Energy Board's mandate and regulatory approach. I would be pleased to answer any questions you may have.
The Chair: Thank you very much, Mr. Steedman. GIC, is that Governor-in-Council?
Mr. Steedman: Yes, sir.
Gord White, Vice-President, Regulatory Affairs, Canadian Nuclear Safety Commission: Thank you, Mr. Chair and senators, for the invitation to appear before your committee today to discuss the elements of the government's Responsible Resource Development Initiative related to the mandate of the Canadian Nuclear Safety Commission.
As Canada's sole nuclear regulator, CNSC is responsible for maintaining the health, safety and security of Canadians and the environment as it relates to our nuclear industry. We regulate pursuant to the Nuclear Safety and Control Act and associated regulations. The government's Responsible Resource Development Initiative proposes certain changes to the Nuclear Safety and Control Act and associated regulations and will provide the CNSC with new authorities, which I will outline shortly.
To better understand the CNSC's regulatory regime, I would like to provide a snapshot of how we operate.
[Traduction]
The CNSC and the Atomic Energy Control Board, which preceded it, have regulated nuclear activity for over 65 years. Regulated activities include the entire nuclear cycle, including uranium mining and milling, fuel manufacture, nuclear facilities such as nuclear generating stations and ultimately waste management.
Regulatory oversight also involves nuclear substances and commercial, medical, university and research applications, as well as Canadian compliance with commitments pertaining to nuclear safety and non-proliferation.
[Français]
CNSC is constituted as a quasi-judicial tribunal made up of permanent full-time and part-time commissioners of various professional, scientific and environmental backgrounds, supported by CNSC staff. The commission's decisions relate primarily to the CNSC licensing regime and are appealable only to the Federal Court.
CNSC's licensing regime is both robust and progressive, from construction, through operation, to decommissioning. Environmental assessments have been, and will continue to be, tailored to the type of nuclear projects being considered, for example, uranium mines versus nuclear power plants. Since 2000, CNSC has participated in 66 environmental assessments that are either complete or ongoing.
Legislation before the house both clarifies and enhances the CNSC's ability to regulate Canada's nuclear industry.
[Traduction]
In phase with projects assessed and under the Canadian Environmental Assessment Act, the CNSC will amend the regulations so as to officially set a 24-month deadline for making decisions respecting a licence to prepare site for a Class 1 nuclear facility, and a licence to prepare a site and to construct a mine, or a uranium mill.
This period begins on receipt of a complete application. It includes the time required by the CNSC to conduct an environmental assessment and the time required by the Commission to hold hearings and give a decision respecting a licence to prepare a site.
[Français]
In addition, the proposed legislation provides the CNSC with the authority to establish and implement an administrative monetary penalty program to further promote compliance by licensees through enforcement of licensing conditions and, in particular, environmental compliance.
The bill also contains two provisions that can be characterized as administrative housekeeping. First, it is proposed that the NSCA be amended to allow the Governor-in-Council to extend the maximum term of temporary commission members from six months to three years, to provide more flexibility and facilitate earlier commission decisions.
Second, provisions in the NSCA are proposed to allow the CNSC to transfer licences to other qualified parties, provided that the conditions of the licence continue to be met. This will reduce regulatory burden and duplication for both proponents and the CNSC where nothing substantial has changed to warrant the need for an application for a new licence.
[Traduction]
Under the proposed act, the CNSC will be one of three agencies — with the National Energy Board and the Canadian Environmental Assessment Agency — responsible for environmental assessments.
The CNSC will continue to play its role as agent of the Crown and will comply with its obligation to consult Canada's Aboriginal Peoples. We are proud to have developed a productive and transparent policy for consulting Aboriginal Peoples.
In early 2011, the CNSC launched its Participant Funding Program to facilitate public participation — notably Aboriginal organizations — in its regulatory proceedings.
[Français]
In closing, the proposed legislation builds on changes to the CEAA Act, made in 2010, and recognizes the fact that the CNSC has ensured environmental protection through its environmental assessment screening decisions previously made under the CEAA Act and its robust licensing process under the NSCA. The proposed changes will clarify CNSC's role as it relates to nuclear projects in Canada, minimizing delays and further supporting the move to one project, one review, and moving us, in particular, along in our goal of one project, one review, one regulator.
Thank you for the opportunity to provide an overview of the CNSC's mandate and regulatory regime. We look forward to your questions.
[Traduction]
Senator Massicotte: My question was for the minister, but I am sure you can answer it. I understand that the current system does not work. The time taken is too long and inefficient. That is why I am in favour of the objectives sought by the amendments proposed to the acts concerned.
People are generally always concerned about redefinitions of the types of project to be reviewed and about lowered standards of quality where the environment is concerned.
Can you assure us that this is not the case, that words and new definitions are not being used to revise the environmental standards to be applied?
Ms. Cutts: With the new act, requirements are not being amended. For example, if substitution provisions are introduced, there are measures to ensure that the basic federal requirements will be fully met.
[Français]
Certainly, we have a number of environmental elements to the bill that assure us there is no reduction in the quality of the environmental assessments. What we are able to do, first, is have a consolidation of authority. Instead of 40 different agencies we have only three, and better governance is a key part of this legislation. Now these three agencies that are here today can focus their attention and they are the experts in the field, instead of having so many.
We also have new measures that will improve the environment. There is no risk that we are reducing our environmental standards. We will be able to strengthen environmental protection through the regional measures that the minister spoke of. When the federal government works with a province to establish a regional environmental study, this will allow us to get at a core issue — cumulative environmental effects — that are difficult to get at through a project.
[Traduction]
Senator Massicotte: Does this assurance also apply to the Fisheries Act, with the amendments being made to it, for threatened fish?
[Français]
Ms. Cutts: We are working very closely with our colleagues in the Department of Fisheries and are assured the two acts work well together. For example, fish is a matter of federal jurisdiction, so the Environmental Assessment Act allows us to look at the effects on fish and we use the same definition of fish as our colleagues at DFO.
[Traduction]
Senator Massicotte: This morning, in The Globe and Mail, I think, or in another daily newspaper, four former fishery ministers — Conservative and Liberal — expressed the opposite opinion. According to them, the minister is not fulfilling his constitutional responsibility to protect fisheries and therefore we have a major dilution of responsibility in the provisions proposed. Can you give us your reaction and comments? I think that these four former ministers are going to testify here in the near future but if you could give us your reaction now, it would be more interesting.
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Ms. Cutts: It would be difficult for me to give an opinion. When we heard the Minister of Fisheries, he was here to speak to the Fisheries Act. However, the three agencies we have here are not the Department of Fisheries, and it would not be appropriate for me to comment on that article.
Senator Wallace: Ms. Cutts, in your presentation you pointed out that under Bill C-38 the time limits for the environmental assessments would change from what exists today. An assessment conducted by the agency would have to be completed within one year and any conducted by the review panel within 24 months, or two years.
From your experience, could you comment on the appropriateness of those reduced timelines? Do they seem appropriate? There has been some criticism that it is too tight a period. We have heard from the ministers that it is not the case. Could you comment?
Ms. Cutts: We have considerable experience at the agency. We introduced some timelines by regulation last year. Even before we brought those regulations in we had determined that it was appropriate to aim for 365 days to do a comprehensive study, so we worked on a policy basis. Our experience has been that we are able to meet those timelines. We work very well with the other departments to gather the information we need and have no concern that the 365 days is doable.
That is something we have experience with. For the panel reviews, we have given ourselves two years. The panel review is a different process: There is a time for the public hearing and it takes longer. Based on our examination of the steps that are needed by the agency to carry out the work, two years is absolutely adequate time. We are comforted that if there were an unusually complicated project, we have built the extensions into the act. We may not need to use them, but it is good that they are there in case something unusual comes up.
Senator Wallace: With regard to the review panel, as you point out, the public is involved or would be involved in that process. The public is very interested to be involved in the process and it is good that is in there. I notice, though, that the review panel process would involve those that are interested parties that are directly affected by the project. How would who is or is not directly affected be determined? I am sure many will want to appear. How would it be determined as to who would be directly affected? What does that mean?
Ms. Cutts: The clause that is in the act is that interested persons are those who are directly affected or who have information and expertise that is relevant. It is up to the panel to determine who the interested parties are. In practice, this will mean that they are looking for people who have information that will allow them to make a meaningful decision. It is the nature of the information; not the nature of the person. In any hearing you want to have a panel that can say, ``I hear you, I find that is very relevant.'' If a person starts out with some relevant information and then goes off on a tangent, it is not good use of the panel's time so the panel would say, ``That information is not relevant. Turn back to your important points.''
We are giving a tool to the panel and interested parties are simply those who are directly affected or have that relevant information. That information could come from those who live in the area, from someone across the country who has experience with that kind of project, or it could be an expert. It could be a university professor who understands the engineering involved. As long as the panel is getting the right information from those affected — the Aboriginal groups, the scientists and those who have relevant information — that is what will make a good environmental assessment project.
Senator Wallace: I am sure there will be a number of people who would want to appear at any panel hearing. Is there a pre-screening to determine who the panel hears from? Do they predetermine who is an interested party? Do they predetermine who may or may not have relevant information or do they make that decision once they are before the panel and then decide whether to allow them to continue?
Ms. Cutts: The act is setting up the basic principles of interested parties, but it does not go into any level of detail on how the panel would make those decisions. In my experience with the Canadian Environmental Assessment Act, the hearing process has not needed to restrict in any way or do a pre-screening. We have been able to manage very complicated projects and let all the interested parties appear without any screening process.
It is my expectation that panels will be able to make a judgment call on a case-by-case basis of what is best and whether they need to do any type of screening.
Senator Brown: I am very much interested in one of the things that starts off with ``all of the above timelines apply to the government activities and not the periods required by the proponents.'' I think that is a very positive thing that they have done to straighten out the extent of some of those policies, which went on for years and years. I am also very glad to see that the three ministers are not only protecting the environment but also protecting the natural resources when they are mined or whatever resources they are.
I think we went through about a decade and a half of what was called ``global warming'' and it did not work out too well so they changed it to GSG gas emissions. I just want to know if you people that work with the ministers are as intent as they are to protect both the environment and the resources.
Ms. Cutts: You are asking if we are protecting both the environment and the natural resource heritage of Canada.
Senator Brown: Yes, the development of those resources, very much so.
Ms. Cutts: I put the words ``protection of the environment'' as paramount. The bill is designed to ensure that the environment is protected. The bill also has objectives that are related to an efficient process. There is no sense running a process that takes longer than necessary, and that is why we have timelines. The process is effective. One of the objectives is to ensure that this huge natural resource development can go forward in the next 10 years, some $500 billion in projects, and that the jobs and growth associated with those can be achieved.
This bill is incredibly good at balancing objectives. It will allow us to take advantage of that natural resource heritage and provide the jobs for those who need them, while ensuring that we have an excellent environmental assessment process that generates high quality reviews and protects the environment.
Senator Brown: Thank you very much. That is exactly what I want to hear.
The Chair: There is a happy senator.
Senator McCoy: Welcome back, everyone. Just to keep this clear in my head, there are processes called ``substitution'' on the one hand and ``equivalency'' on the other hand, which are newly legislated, I believe. To make it concrete in my mind, take the example of the Prosperity mine, for example, which was in British Columbia. The gold and copper mine proposed using an existing lake as a tailings pond. The British Columbia process finished before the federal process was finished. A decision was made by the British Columbia cabinet that allowed the proposal to go forward. The federal process ended somewhat later and the federal cabinet said, no, the environmental impacts, even with mitigation, were not justified in the circumstances.
Under equivalency, if B.C.'s laws had been declared equivalent, we would have had only the B.C. cabinet's decision to let that mine go forward. Is that correct?
Ms. Cutts: One thing I did not mention in my opening remarks was that substitution and equivalency are not available for panel reviews. We have made a conscious decision that there are two types of reviews: our standard reviews and panel reviews. Projects that are more complicated and have a higher risk to the environment go under panel reviews, and substitution and equivalency would not be available.
We cannot take the Prosperity mine case and say what would have happened. The federal government would not have been in a position, had this bill been in place, to pass that on to the province.
Senator McCoy: At some point someone must make a decision early in the process that a project will be more complex. Where does it say that in this bill?
Ms. Cutts: It says that the first step is 45 days for a screening, and then it says that if it is determined that an environmental assessment will be done, the minister has 60 days to determine whether there will be a panel.
That means that when we are talking to the provinces and trying to determine, are we going to take advantage of these excellent tools? Will we consider substitution and equivalency? We have to make sure we have determined whether it is a panel first.
Senator McCoy: The substitution is a blanket substitution.
Ms. Cutts: I do not know what you mean by ``blanket.''
Senator McCoy: It applies to projects of a certain type.
Ms. Cutts: Substitution applies in two cases: One is on a project-by-project basis and the other is for a class of projects.
Senator McCoy: Substitution in any event would still keep the decision at the federal level. I am interested in equivalency.
Ms. Cutts: The equivalency decision is taken differently. It is a big decision, and I understand everyone's interest in it. It is a big decision because if it is decided that the provincial process is equivalent for that particular project, then the project is no longer subject to the act, and the federal government is out of the picture. It is not coming in at the end to make a decision. The whole process shifts to the provinces. The provinces continue to do the work right up to the decision.
First, what we have done in the bill to distinguish between substitution and equivalency is we have said that we need a cabinet decision if we are going to make a decision on equivalency because it is the bigger of the two decisions. Second, we have said that it is only available on a case-by-case basis and not on a class basis. Third, we have said that there is this discretion, whereas substitution is automatic if the conditions are met.
Senator McCoy: I think that off-line I will get you to take me through the steps in the bill because I know time is passing today, and I have another question.
I have not heard cost recovery discussed yet. This is new, too, or at least I do not recall it from before in other acts; and I have been working with them for 20 years or so.
Steve Mongrain, Senior Policy Advisor, Policy Development Sector, Canadian Environmental Assessment Agency: The agency currently recovers costs for review panels. It is done through a service charge order under the Financial Administration Act. That was issued in 1998. The bill proposes to take that out of the Financial Administration Act because we have had some challenges with it. We have created provisions in the Canadian Environmental Assessment Act. The provisions in the act become operative when regulations are made by the Governor-in-Council to do so. The intent is to essentially carry over the cost recovery that exists today for review panels, if this law comes into force.
Senator McCoy: How much have you been recovering all these years, then? It has been from the proponent, I presume.
Mr. Mongrain: Costs recovered from the proponent vary from year to year. It is probably best if we get back to the committee with specific numbers, but it is in the order of $2 million, $3 million or $5 million a year, depending on the project volume.
Senator McCoy: The Mackenzie Valley pipeline, then, cost more than what you said.
Mr. Mongrain: That was the anomaly.
Senator McCoy: Did you recover all those costs? I guess not even the NEB would have because they have not been responsible that long.
Mr. Mongrain: We recovered those costs that are covered in the order, so it includes —
Senator McCoy: It is not full cost recovery, then?
Mr. Mongrain: It gets complex because the current order only applies once the panel is appointed. The current order that was in effect for Mackenzie deals with things like translation of review hearings, transcription of review panel hearings, rental of meeting rooms, et cetera.
We were also one amongst many partners, so it is probably best if we get back to you on some of the details on how much we have covered. Regardless, that was certainly an anomaly in terms of the amount. We can separate that out for the committee, though, Mr. Chair.
Senator Mitchell: We all know that many people are concerned that these changes will actually water down, reduce and diminish the environmental review process, so I would like to go at that a little bit, at quite a technical level, for clarification.
A decision is made that there will be a panel. The federal government is not obliged to do that panel by itself; it can do it by itself or it can do a joint panel. However, could it also just delegate that panel to the province and say, ``You do it''?
Ms. Cutts: No. There are no provisions to have panels delegated to the provinces.
Senator Mitchell: Let us say there is a project in province X and the provincial jurisdiction is here and there is a set of regulations. The federal jurisdiction is here, all within the province applies and there is a set of regulations.
Under this process, could the federal government say, ``Okay, province, you will do the assessment where your regulations apply. Would you do the assessment where our regulations apply, too?'' Could that happen?
Ms. Cutts: Under a standard environmental assessment, do you mean?
Senator Mitchell: Or whatever assessment. Will that change, or could the feds just say, ``We do not care; we will not have ours done. You do you yours''?
Ms. Cutts: You have to use the provisions in the act according to the way they are. You cannot just have a side agreement. You have to execute the provisions that say if we are to have the province figure out their stuff, then you would use substitution.
I think I am having a problem with this because there is a problem with the premise of your question, which implies that there is this world that is only provincial and another world that is only federal. There are overlapping elements of jurisdiction, and it is really hard to say, ``There is your part and this is our part.''
For example, if we are doing work and we have decided that we the federal government will fund a project, that means there is a federal decision to be made about funding. Then we look at the environmental effects of that project, and we are obligated to look at those effects whether they are under federal jurisdiction or not. We can look at species like the grizzly bear. We are not restricted to the standard federal elements.
Senator Mitchell: There is an assumption on the part of some people that equivalency would apply in a certain sense all the time — that the feds would not give up a process or delegate or ask another jurisdiction to do it if they did not think they would get at least as good a review as if they did it themselves. However, there is a different use of equivalency versus the designation of substitution, I think. How will equivalency be established if they do give it up? How can Canadians be assured that if someone else does it, it will at least be as good as the federal process would have been?
Ms. Cutts: We have set out a number of conditions that we expect to be met under equivalency. For example, section 19 of our act that these are the things you have to do in order to do an environmental assessment. You have to set out significant effects, you have to set out mitigation, and you have to do cumulative effects.
We also require a public process. We require that the other province carry out the enforcement, the mitigation and the follow-up.
We have to sit down with our provincial colleagues and we talk to them about the nature of their regime and how it dovetails with our regime. It is a federation. We have a federal government and 10 systems across the country that are all a little bit different. What we are doing and what we have already started doing is talking to each province and look at their system with them. They will tell us, ``We think that our legislation meets all the conditions that you are asking for,'' or they might say, ``We do not do one of the things in our legislation, but we will agree to do it on a policy basis.''
Then we would set out an agreement with them that says that they will carry out the work and will satisfy the federal condition, even though it is a little different than their normal process. It does require some bending on their part and we will ensure that they bend the right way.
Senator Mitchell: Are there any provinces that you do not have confidence that they would have sufficient expertise, depth or experience? For example, maybe a province is getting into a shale gas project that they have never had to do before. Would you just say, ``You cannot do it; I do not care how badly you want to do it, we will do it''? Would that be the case?
Ms. Cutts: With equivalency, the decision will be taken by the Governor-in-Council, so cabinet will get information about that province and about those particular circumstances. Before any documentation goes to cabinet, we, the agency, will have done our homework and talked with the province and given advice.
Mr. Mongrain: In terms of expertise, there is the delivery of the process and then there is the technical review of things provided by the proponent. One of the things that is possible under these arrangements is the continued participation of federal authorities that have that scientific and technical expertise. In fact, we put an obligation on them to provide it to provinces if requested to do so.
Senator Mitchell: That is an interesting point, and it gets to my next question. In the past, you have done environmental reviews — the agencies of people here or the organization you represent. It strikes me with 40 other organizations that there used to be, you have used resources from other places; you have used scientists that may have been laid off now. You have used research stations and monitoring stations that may have been shut down.
Therefore, while you say that the CEAA has 200 people more or whatever, are they enough to replace these other resources that you might have drawn on or did you never draw on them?
Ms. Cutts: This is a really big move. This whole responsible resource development is huge and the work done among departments to get this bill ready was incredible. I could not sit here confidently and tell that you this is a good act if I did not think we had done our homework and felt that the resources in the expert departments are there. I feel completely assured that when a CEAA official goes forward to Environment Canada, to Transport Canada or to DFO and says, ``For this project, we need your expertise,'' I know it will be there. The whole federal family has been working so hard and closely on this bill. We would not let it fail for the sake of not having the right expertise in place.
Senator Mitchell: Fisheries used to do environmental reviews, I think, but am I led to believe now that CEAA be covering off those environmental reviews, or did you always do the fisheries portion of environmental reviews?
Ms. Cutts: Fisheries and Oceans was one of the 40 departments and agencies that was responsible for doing environmental assessments in the past, so they were doing them at a screening level, or prior to 2010, they were doing them as a comprehensive study.
Senator Mitchell: Are staff from Fisheries who used to do that moving to CEAA now, or where will you get that expertise?
Ms. Cutts: They still have expertise.
Mr. Mongrain: As it relates to fish and fish habitat, but with respect to the broader environmental effects beyond fisheries, this removes a burden from them to look at other changes to the environment, through an environmental assessment, and that is something that we would do through the process. We rely on others like Environment Canada, Natural Resources Canada and some of our own internal expertise, but primarily on those scientific departments. We continue to rely on them related to those issues that are directly within their mandate.
Senator Mitchell: If you do choose substitution, so both the review and the decision go to the province, and they really screw it up — like, oh, my gosh, it's a mess — do you have any recourse?
Ms. Cutts: Of course, we thought about the risk that something could go wrong. In thinking about it, we decided we had better set up something so we do not end up in that situation. We do not want our minister put in a situation where he is faced with a report that is not good enough to make a decision.
We are proposing that we will work with the province and ask them at critical points during the process for information. These checkpoints are a mechanism to ensure that they are on the right track.
As Mr. Mongrain mentioned, the second element is the federal employees who are experts in a field that might not be a specialty of that province would still be engaged. There are two roles for the federal government to ensure that things do not go wrong. One is a coordinating role, and the other is an expert role.
Senator Mitchell: Until this change occurs, CEAA basically did environmental reviews, but now the CEAA will do some environmental reviews and will check that the provinces are properly doing whatever we have delegated to them. Is that right? Is that a fundamental change?
Ms. Cutts: Yes, I think that is a fundamental change. Right now, CEAA is doing them, or other agencies, and in the future there is a possibility that there will be two processes.
Senator Mitchell: In a sense, to make the logical point, whereas now we have two processes done by two groups, which has been a problem of duplication, we may end up with one process done by two groups, which would seem to be duplication, too, or am I just exaggerating for emphasis?
Ms. Cutts: If we are looking to ensure that we reduce duplication, it is incumbent on us to find a way to work differently with the provinces. Right now, we work through cooperation, and we try to make our two systems work together. If we move to substitution, we will not be there every step of the way. We will allow the province to do the work, but a certain amount of attention still needs to be paid by the federal government, but it is the degree that is important, so it is not as if there are two players working on it 24/7.
The Chair: Mr. White, I have a question. It may not be relevant, but I think it is.
This committee took quite an interest in the nuclear situation in Canada, and we visited Chalk River, Darlington and Bruce. We are very impressed with the facilities that we saw, the regulatory regime that is in place and the efforts that are being taken to go to another level of management of the waste, yet this huge article about Pickering appeared in national newspapers about a week or 10 days ago. It was saying that it is unsafe, even Darlington. We have been told that Darlington has various units. They will have a new build and one thing and another and, ultimately, mothball or shut down Pickering, yet it is operating. I do not know whether it was the result of a report, whether it was investigative reporting or what it was. Are you familiar with what I am referring to?
Mr. White: Personally, I am not familiar with that report, but perhaps Dr. Thompson is familiar with that specific report.
We are in the business of nuclear safety. We do not license facilities unless they are safe. The safety case has to be very well constructed, including the environmental assessment activity that leads up to a decision, and it is the licensing process that controls what happens or what does not.
In our case, OPG is getting ready to ultimately close down Pickering, but it still has to operate in a safe manner until it gets to a shutdown state, and then there is a decommissioning process that takes it beyond that.
The Chair: Just so you know, we understood that, and we thought it was vigorous and also that your own activities are overseen by the IAEA, the international agency, and we even saw teams of people from Vienna, and so on, in there.
Mr. White: We are not overseen by the IAEA. Canada's regulator is independent, but we work cooperatively.
The Chair: Why are they there at all?
Mr. White: They are a UN body. Actually, Mr. Elder was an employee of the UN.
Peter Elder, Director General, Directorate of Nuclear Cycle and Facilities Regulation, Canadian Nuclear Safety Commission: I will clarify one thing. I will go back to your original question, first.
The report came from the provincial energy regulator looking at the performance in terms of the economic performance of Pickering. It was not looking at the safety of the performance. It was actually looking at the performance, things like how many days in the year it was operating compared to industry average. In that respect, it was not very flattering to Ontario Power Generation, but it was nothing reflective on the safety performance that we independently assess.
The International Atomic Energy Agency does have oversight in Canada, and that is that we are fulfilling our commitments related to the peaceful uses of atomic energy. Again, they would go back in and make sure that we are not doing anything nefarious with the nuclear material. However, on the safety side, we work in collaboration and use them as peers to do peer reviews on the safety.
The Chair: I recall far down towards the end of the article, it said that notwithstanding any of the foregoing, they are still maintaining the safety standards. However, if you find that a thing is working at 30 per cent efficiency and it is causing increased costs per kilowatt hour, it gives you the sense that there must be a defect and that maybe it is unsafe. That is all. A public perception develops.
Mr. Elder: Within the nuclear regulators, and this is something that is discussed internationally, there is a lot of debate as to whether how often it is operating actually tells you anything about whether it is operating safely. There are mixed stories. You can have stories that have very good operating performance and suddenly it is because they are overlooking a whole bunch of little safety things that they should have shut down to fix. You cannot draw a direct relationship from it.
We do not really look at that. We look at events in terms of whether they are putting stress on their safety systems. It is not whether they had to shut down because they had a piece of equipment that had nothing to do with safety that was out of operation but did not let them produce energy.
The Chair: Thank you very much.
Senator Lang: I appreciate you coming this evening and staying later. Also, I appreciate all the hard work that the various members of your departments have done over the course of the past year. This obviously has not been easy to put together.
I would like to go back to a bit of history to see where we have been and where we are going. I asked for some notes in respect of previous projects and how long they took to go through the system the way the system is set up at present.
To give an example just so it is on the record, in respect of the Midwest Uranium Mining and Milling project in northern Saskatchewan, the review of the project began in March 2006 and is still ongoing. At the Darlington Nuclear Generating Station, the review of the project took almost five years. Once it was decided that a panel review was required, it took 12 months to prepare the necessary guidance documents.
Review of the Northern Gateway Pipeline Project began in 2005. In the beginning of the process it took eight months to confirm that this project would require a review panel. Then there is the Jackpine Oil Sands Mine expansion. The company submitted its application in 2008 and the review is still ongoing — this is 2012, remember — due to misalignment of the federal and provincial review processes. The federal review formally started more than two years after the application was submitted.
If we consider the Lower Churchill Hydroelectric Generation Project, the review of the project took more than five years. The company submitted its project description in 2006 — remember, this is 2012 — and an environmental assessment began in 2007. The responsible federal departments finally approved the project in March 2012.
Then we go to the Mackenzie Gas Pipeline, which has been my whole life. Actually, it is more like 30 years. You talked about recovering costs. My information is that the review of the project this time around has taken more than nine years.
Then we go to the Joslyn Oil Sands Mine. Because of the present situation, namely applications to the province of Alberta in 2006 — remember, this is 2012 — the federal environmental assessment began in 2008 and approval was finally given in 2011.
I am pointing this out because I want assurances. Can you assure us that in this bill, and in view of the timelines that have now been inserted and the responsibilities that have been put in with the amendments brought forward, other than for those situations where an extension has been granted by the Governor-in-Council, we will meet these timelines so that common sense will prevail and we can either get a no or a yes on these projects?
Mr. White: I will start with the first two projects because they are related to the Nuclear Safety Commission.
Dr. Thompson has some interesting information here.
Patsy Thompson, Director General, Directorate of Environmental and Radiation Protection and Assessment, Canadian Nuclear Safety Commission: Essentially I want to provide the information on the Midwest project and the Darlington project. To provide context, since 2000 the CNSC has conducted 66 environmental assessments and 47 of them have been completed. Many of them have been completed in less than two years, including proponent time.
To go to the Midwest project, the proponent came forward in 2006. At that time it was the current CEAA regime with, as mentioned earlier, a number of agencies being involved. In the case of Midwest project, we started with two responsible authorities, the CNSC and the Department of Fisheries and Oceans. For a period of time the Department of Fisheries and Oceans was in and was out, so there was a lot of negotiation to decide who was involved in doing the environmental assessment. Finally, over the course of time, we are now three responsible authorities. With the legislation that is being proposed, having the CNSC be the responsible authority for nuclear projects would have dealt with a situation like this.
In case of the Darlington project, a delay of 12 months was mentioned in getting the guidelines approved. Again, the CNSC was not operating within the regime that is being proposed and the guidelines had to be approved by a minister. Unfortunately an election was called and there was no minister available. That happens as well.
Ms. Cutts: I will give you further assurance that timelines will be met. First, sometimes in the past it was difficult to get the process going. The current act has a decision trigger, which means that you have to decide by working with departments about whether, for example, there is a Fisheries Act authorization. Sometimes it took a long time to determine that. We have different ways of triggering the act, so if there is an issue with fish we know that we can trigger without having to figure out if there is a Fisheries Act authorization.
Since the act is triggered differently, we start faster. We not only have the broad timeline of 365 days, but we have the internal timeline of 45 days to get that decision as to whether we need an assessment or not. That will be critical. Because we are the ones at CEAA making the decision, then we press to make that in a timely way.
The other thing we have done is introduced the possibility of terminating a panel. Because some of these panels became inefficient they were not working well and there was nothing that could be done, so extra measures were introduced.
Perhaps Mr. Steedman could speak to that.
Mr. Steedman: I can affirm that the more players required to coordinate a process, the greater the likelihood it will take longer. The simple principle in the proposed bill is that the responsibility for the environmental assessment would be consolidated with a single responsible authority. The National Energy Board is very comfortable, based on its historical experience, with the exception of the examples noted by Senator Lang, that the 15 months the National Energy Board would be expected to meet in terms of a timeline is quite doable and reliably doable.
In contingencies there are mechanisms to extend that, but the other key point is that there are now tools in both the NEB Act and the CEAA for others that should make it easier to deliver high quality assessments within those timelines.
Senator Lang: I appreciate the responses.
I would like to go to another area. Once again, I do not necessarily share Senator Mitchell's view of the world that the federal government will always save us. Having served at the territorial level for many years, I can say that sometimes they did not save us. That is why I am very much in favour of the concept of substitution and equivalency and viewing the provinces and their authorities from that point of view.
One other area has not been discussed here. The quality of the environmental assessments has come up time and again over the days of our hearings. The one area that has not been brought up is the question of legal challenges. Would you comment on this point? If these assessments are not done properly, the possibility of legal challenges to the process is there and could successfully negate a project going together if a thorough review is not done. Is that correct?
Mr. White: I will speak to the nuclear projects. Basically, the licensing decisions that are made by the commission are appealable to the Federal Court of Canada. Yes, we could have a legal challenge on our hands. In fact, we do. The Darlington review panel, the JRP, is subject to legal challenge. It is not necessarily in the nuclear world simply the EA that is being challenged, it is the licensing decision writ large.
Much of it in the case of Darlington was essentially the EA. Our process is an integrated process of an EA being done in a simultaneous fashion as a licence to prepare the site to construct. We run the two together.
Ms. Thompson: To provide additional context, since the CNSC has been involved in environmental assessments, when the CEAA came into force, we have had three legal challenges. Since 1995, more than 70 environmental assessments have been done. It is a very small number of challenges. From those three cases, two of the challenges were not successful. The process was shown to be robust. The third challenge is before the court now.
Senator Lang: I do not want to belabour the point, but this should give comfort for those who are somewhat cynical looking at the changes that it is incumbent upon various government authorities to ensure that the process is done properly and upon the proponent so that that possibility does not exist for a legal challenge to be successful. Is that not correct?
Ms. Cutts: That is absolutely correct. Here, we put in timelines. It would be ridiculous if we did a poor job, faced a legal challenge, basically had the issue in the courts and then the timelines would mean nothing. The timelines are twinned with quality work because otherwise they mean nothing.
Senator McCoy: I have a quick supplementary question. I do not want to mislead our listeners. The legal challenges to decisions are on a fairly narrow basis. The fact that one can challenge is not any guarantee and that was your premise, Senator Lang. I do not want to get into a debate but I think we should, for the sake of the record, recognize that there are some limitations on the appeal process.
Senator Lang: Nothing is ever guaranteed. I am only saying that there is a further comfort, a reason why it has to be done properly.
Senator McCoy: Perhaps.
Senator Peterson: Ms. Cutts, the proposed CEAA 2012, I understand, will not provide for a yearly statistical review of the act. Is that correct? If so, why?
Ms. Cutts: Did you say the statistical review?
Senator Peterson: Yes, of the act; a summary of environmental assessments.
Ms. Cutts: Once a year we would report to Parliament to indicate how many assessments we have done; we would also report on whether we met our timelines.
Senator Peterson: You provide a yearly review?
Ms. Cutts: Yes, a yearly report to Parliament.
Senator Peterson: Mr. White, prior to this new legislation, uranium mines were held to the same rigorous environmental review as a nuclear reactor. Do I understand that this is now going to change?
Mr. White: No, it is not, sir, not at all. Dr. Thompson could give you an update on that.
Ms. Thompson: This statement has been made on a number of occasions. The CNSC has always triggered the scope of the environmental assessment to be appropriate to the project. Environmental assessments for uranium mines look nothing at all like uranium environmental assessments for nuclear power plants. The issues are very different. The scope and complexity of the assessments are very different.
For most uranium mines, we have worked collaboratively with the provinces where one coordinated process has met the needs of both the CNSC and the provincial environmental assessment.
Senator Peterson: Licence renewals are now for three years or longer. How long does it take to do that?
Mr. Elder: The licence renewals vary, but you are interested in Saskatchewan. Certainly one mine in Saskatchewan has an eight-year licence; the other ones are currently five. When they come up for licence renewal next fall, we are talking to them already about what the application would look like, but the application is about a year in advance of a public hearing. We expect them to ask for five- to ten-year licences.
Senator Peterson: That is good news.
Mr. Steedman, on the gateway project, I understand the review is under way now. Does it fall under the new rules or the old rules?
Mr. Steedman: Both the NEB Act amendments and the CEAA 2012 deal with the case of a joint review panel that was started before the bill and carries on after. There is clear direction in the transition provisions such that the chair of the National Energy Board and the Minister of the Environment would, after enactment, if it is enacted, set a timeline for the completion of the assessment. That would be their job.
Senator Peterson: Are the witnesses who have been approved to date — and I presume quite a number have come forward — advised that there is a distinct possibility that they will not get to appear?
Mr. Steedman: I do not think I can comment on that. It will be up to the chair and the Minister of the Environment to set a timeline. I suppose it may or may not affect the schedule as it exists.
Senator Peterson: Thank you.
The Chair: We have two short supplementary questions.
Senator Johnson: Thank you, chair. I wanted a clarification from Mr. White.
With regard to your comments on page 3, you talked about being consistent with the projects assessed under the act. The CNSC will amend regulations to formally establish 24-month timelines to render a decision for a licence. Number one, what would they be for?
Mr. White: We would establish 24-month timelines for a project, either a new uranium mine or a mill, or a significant upgrade, a major project upgrade, or a new waste management facility like the DGR in southwestern Ontario, or possibly a new build. I like to think we will have a new build, but we will see.
Senator Johnson: You say here that you will amend this 24-month period.
Mr. White: No, we will not amend; we will establish the 24 months.
Senator Johnson: You will amend regulations.
Mr. White: We will do it through regulations.
Senator Johnson: What was the timeline before that?
Mr. White: The timeline before was not —
Senator Johnson: That is right, that was the problem. That is part of the reason for this.
Ms. Thompson: It is not now regulated, it is by project agreement.
Senator Johnson: That is what I wanted to have out there.
Second, when you are talking about preparing a site for a class 1 nuclear facility or a licence to prepare a site, how long do those preparations usually take and what is involved?
Mr. Elder: Under our regulations we can vary a lot because class 1 can be everything from a company that would do fabrication of fuel for a nuclear reactor to the actual nuclear reactor. The preparation of site for essentially a conventional manufacturing building is quick. In most cases, we would combine a licence to prepare a site with a licence to construct the facility. The separation comes more when you are dealing with something like a power reactor, where you have to look into a number of factors on that site, for example, does it have adequate water supply. There are a number of issues that you may have to deal with before you start to construct a reactor. In that case, depending on the complexity, it can take the company a few years to prepare the site.
Senator Johnson: Thank you.
Senator Mitchell: The subject of statistical review made me think about the subject of statutory review as well. There exists now in the act, I think, a statutory review every five years, but I think that has been removed with these changes; is that true?
Mr. Mongrain: The original act had a five-year review clause by the Minister of the Environment. The agency conducted the review in the years 2000 and 2001; amendments were passed in 2003. Those amendments included a seven-year review clause by a parliamentary committee. That was done by the house environment committee this past year. The bill as it stands has no statutory review clause.
Senator Mitchell: Thank you.
The Chair: Senators, are there any further questions for the witnesses?
There being none, thank you very much. You have been here for a good four hours and I think we have had a good session. We think this bill is good stuff. Thank you very much for coming here.
Colleagues, we are here Thursday morning with more witnesses and also an update on our report.
(The committee adjourned.)