Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue No. 50 - Evidence - October 18, 2018
OTTAWA, Thursday, October 18, 2018
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8 a.m. to study on emerging issues related to its mandate (topic: social licence and consultation).
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Good morning and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Senator Rosa Galvez, and I am a senator from Quebec, and I’m the chair of this committee.
Before starting, I would like to offer a welcome to two new members in this committee, colleagues, Senator Mary Jane McCallum and Senator Yuen Pau Woo from the Independent Senators Group. Thank you very much for being here.
I will now ask senators around the table to introduce themselves, please.
Senator Seidman: Judith Seidman, Montreal, Quebec.
Senator Neufeld: Richard Neufeld, British Columbia.
Senator Mockler: Percy Mockler, New Brunswick.
Senator Patterson: Dennis Glen Patterson, Nunavut.
[Translation]
Senator Massicotte: Paul Massicotte from Quebec.
[English]
Senator McCallum: Mary Jane McCallum, Manitoba.
Senator Woo: Yuen Pau Woo, British Columbia.
Senator Cordy: Jane Cordy, Nova Scotia.
Senator MacDonald: Michael MacDonald, Nova Scotia.
The Chair: I also want to introduce our clerk, Maxime Fortin, and our analysts Jesse Good and Sam Banks.
We are meeting today for a particular topic because we expressed a need to familiarize ourselves with a duty to consult and the concept of social licence to operate in the context of environmental assessment and major project proposals.
[Translation]
Today, we welcome Ross McKitrick, Professor of Economics at the University of Guelph; Thierry Rodon, Professor at Laval University and Northern Sustainable Development Research Chair; and Karine Péloffy, Legal Counsel for the Quebec Environmental Law Centre.
Thank you all for joining us. I invite Mr. Rodon, Ms. Péloffy and Mr. McKitrick to each proceed with their opening statement, after which we will go to a question and answer session.
Mr. Rodon, the floor is yours.
Thierry Rodon, Professor and Northern Sustainable Development Research Chair, Laval University, as an individual: Thank you for the invitation, Madam Chair. I am sorry that I cannot be with you in person. I am in France, where I am attending a mining development conference on social acceptability and the right of consultation.
I am a political science professor but I have a particular interest in Indigenous issues, specifically the relationships between Indigenous people and the state. For two years, with my colleague Martin Papillon, I have been doing a lot of work on the implementation of prior, free and informed consent in the context of large development projects. This issue comes up regularly just like the issue on consultation with the latest ruling in the Trans Mountain project.
First of all, what struck me is that the English and French titles of the subject do not describe the same thing. As you perhaps know, the concept of social licence — the term used in the English title of the conference — comes from the point of view of the companies. It refers to the efforts made by a company to obtain that social licence. It is related to social acceptability — the French title uses the term acceptabilité sociale — but the subject is not the same. Social acceptability comes from the point of view of citizen groups and communities. The citizens and the communities depend in turn on the efforts of the mining industry, but not only... I will come back to that, because social acceptability is quite a complex subject. We have to be careful, I feel. Social acceptability, a term which is becoming increasingly common, and social licence are two different things.
My interest is going to be more in the issue of social acceptability and its relationship with the duty to consult. Clearly, as I work on Indigenous issues, I will be giving examples of social acceptability from that setting. It has to be seen in relation to the free, prior and informed consent in the United Nations declaration. The Prime Minister committed to put it into operation.
The other point that I wanted to make is that social acceptability has become a criterion in project assessment and decision-making for major projects. Shale gas is an example.
A few years ago, the BAPE held consultations at the request of the Government of Quebec — which was actually a de facto information session — to try and obtain acceptance for shale gas operations in Quebec. As you may remember, it met with quite a resounding set-back. First, the government and the BAPE started with the idea that people lacked information and they just had to be better informed in order to get on board. That is not at all what happened. People gathered information elsewhere from groups of activists in the United States who were opposed to shale gas. Then they got their own information and stood up to the government with it. There was also the behaviour of the companies, which, as they explored for shale gas — the wells were exploratory — did not ask the public for permission.
We see two aspects of the social acceptability issue. We can see that businesses play a major role in this. Values are also at stake because social acceptability is connected to values and beliefs in the sense of the social sciences, that is, the ideas that guide us. In the public, some people are quite opposed to development and others are more in favour. This factor plays a major role in the acceptability of some projects.
The other, less well-known example is the Matoush project, which is a uranium project set up as part of Plan Nord near the community of Mistissini, a Cree community. This is another project that had been assessed by a developer who tried to convince the Cree that the project was good. The project was authorized by all regulatory agencies. The federal government was one of them, but ultimately, the project was not authorized by the Government of Quebec. The reason for this decision has to do with a moratorium on uranium. In fact, the developer’s inability to obtain the social acceptability of his project prompted the Grand Council of the Crees to pressure the Government of Quebec not to authorize it. The other point I wanted to raise is the decision of the Superior Court of Quebec in this case. Strateco sued the Government of Quebec because, although the project was approved, the government did not grant the licence. Strateco lost in the Superior Court. The Government of Quebec’s defence was based on the fact that the project had not obtained social acceptability. The court accepted the argument and agreed with the Government of Quebec on the issue. Clearly, social acceptability is at the heart of projects.
What is social acceptability? There are two definitions. Quebec’s Ministry of Natural Resources and Wildlife, the MERN, worked on it as a result of the problems related to shale gas and the Matoush project. The ministry finally went back to the same ideas as before, that is, according to MERN, social acceptability is, in fact, a lack of information. So the idea is that, if you inform the public, you will eventually convince them of the merits of the project. In fact, the shale gas project has shown that the information is not at all sufficient. The other aspect is to ensure that there are benefits for local communities. Clearly, this is an important aspect, but it is also not sufficient to achieve social acceptability.
The most interesting definitions of social acceptability are dynamic definitions, which call for the crystallization of opinions about an initiative, thereby making a project acceptable or not. Social acceptability is defined as the collection of individual opinions on whether or not a practice or condition is accepted, opinions that individuals use to compare it with possible solutions in order to determine its desirability. It is expressed by politically significant groups in society.
The advantage of this definition is that it is more dynamic in the sense that social acceptability is a relationship. It has to be built and it takes time. So it is a factor that must be taken into account and we cannot assume that a project is accepted at the outset. We hear a lot about the trust that must be established between a developer and a community. However, some aspects are key, particularly in certain types of development. We often see this with uranium, particularly in Quebec. Uranium projects face strong opposition, for good or bad reasons. However, that is not the point. If we think that the issue of acceptability is strictly linked to a lack of information, I think we have some problems, it is actually all about values. Either people’s values must be changed, which is extremely complicated, or people must be shown that the project is acceptable, in terms of their values.
That is why the UQAT Chair in Mining Entrepreneurship has created a social risk index, which is a way of assessing whether a project poses a social risk and how it can be managed.
Actually, the first of the three factors of social risk is community. Communities have their own perceptions and visions; for example, the Cree community of Mistissini initially strongly opposed uranium. The developer provided all kinds of information. He took the Cree to Saskatchewan specifically, to see how Cree communities in Saskatchewan accept uranium development. In the end, he didn’t succeed in convincing them.
The second aspect is businesses, which are a key factor. Some companies are making a significant effort.
The third factor is the impact of the type of project on the community. Some projects and their effects have a much greater impact on communities than others. Clearly, you can never predict them. We can do an analysis of the factors, but social acceptability is something that is built. It doesn’t always come from the outset.
Oil pipeline projects are hugely divisive when it comes to values. Should we continue to develop petroleum resources? Do we have to completely change the kind of energy we use? The public has those sorts of debates, which will reflect on the acceptability of certain projects.
It is also important to consider whether consultation is sufficient for social acceptability. I personally don’t think social acceptability is built through consultation. We need a much stronger commitment with the communities if we want to achieve social acceptability. I won’t lecture you. I’ll let the lawyers do that. You have seen the last Trans Mountain ruling. The issue of meaningful consultation with Indigenous communities is extremely important in projects. Consultation as the Supreme Court has defined it is not just about listening — because, very clearly, in most environmental assessment processes, the focus is on listening and providing information — it is about listening and then taking action or addressing the concerns expressed during those consultations. The Trans Mountain ruling was very clear: the National Energy Board listened carefully, but that was it. Clearly, that is not enough.
In my experience, there is an even more constructive way of achieving social acceptability for certain projects: community ownership of the projects. This would move us forward. I am talking about Indigenous communities because that is sort of my expertise. There are two extremely interesting cases of ownership and participation. The first is a hydroelectric dam project in the community of Inukjuak, an Inuit community in Nunavik. That kind of project may pose many problems in Northern communities, particularly in the James Bay region where there have been many dams. A group in the community actually decided to develop a hydroelectric project. The group organized the debate in the community, unlike in the case of projects that come from outside and are imposed on the communities. As you know, in Canada’s North, a lot of projects come from outside, often with negative impacts.
One thing I forgot to mention is the idea of cumulative social impacts, which is very present in Indigenous communities. Developers always feel that their projects are unique and will be considered in isolation. In fact, when we talk about a project in a Cree or Inuit community — as you know if you have attended consultations — we hear about the slaughter of dogs, residential schools, sedentation and major dams in Quebec. All those factors are seen as additional impacts. People will see the projects in that light. It is also something that must be considered in terms of social acceptability. It is important to understand that communities live with a prolonged sense of time. Their experience of development and government intervention may colour their reaction to other projects.
To go back to the example of Inukjuak, finally, after long discussions and deliberations within the community, the community accepted the project and funding was proposed. As a result, when a community takes ownership of a project, it is much easier to carry it out, especially if it is a small project. It’s a different story when it comes to pipeline projects.
The other interesting example is the Squamish community’s Woodfiber LNG project to construct a liquefied natural gas terminal. That type of project often raises questions because a number of hazards are associated with it. However, the community has taken an interesting initiative. It went to see the developer to agree to the assessment of the project, but according to its own assessment process. An agreement was reached between the Squamish Nation and the Woodfiber LNG developer, which funded a study of the project’s impacts on the community. The idea was not to redo the impact study done at the provincial and federal levels, since we were in the gas sector. The idea was to ensure that the community had a credible process and that it could participate in the decisions in which it was interested.
This project has resulted in costs for the developer. You can probably see the link between “social licence” and “social acceptability.” Clearly, the developer had to make this decision, because, if they could not get community support for where the terminal would be built, the project would not move forward. The developer therefore understood that it was in their interest to reach an agreement, even if they initially had no guarantees that the project would be accepted by the community.
The advantage is that the information and social acceptability process has been set up by the community, not by the proponent. The proponent did not intervene in the internal process. It funded it, but the community put it in place and made recommendations on a number of changes to the project and mitigation measures. These recommendations were accepted by the proponent, which allowed the project to be launched.
You can see that we can build, but we must increase the number of consultations. This is a good example of participation.
These are interesting examples. These projects ensure that communities support the projects and have a voice in the deliberations. This kind of project is a way to build relationships.
This clearly shows the link with free, prior and informed consent. This is something that Martin Papillon and I defended in our IRPP article. Consent can be built by holding a debate in the communities. So there is a need for a deliberative process that allows communities to decide their position on a project. The proponent may also intervene in the debates. This space for discussion, which is often lacking in major projects because we want to move very quickly, creates many problems of social acceptance. Obviously, social acceptability, as in the case of the Matoush project, was not there and could not have been created.
Some projects will not be launched. It is therefore in the interest of the Canadian government to make greater efforts, particularly in the case of Indigenous communities. The government must ensure that these communities have a place in the deliberations on major projects. They must be able to participate in the decisions that interest them and decide whether or not to accept projects. This is the choice of all communities.
I’ll end there. Thank you very much.
The Chair: Thank you very much. I would ask you to please stay for the question period at the end.
Karine Péloffy, Legal Counsel, Quebec Environmental Law Centre: Honourable senators, thank you very much for this invitation to appear before your committee this morning.
I represent the Quebec Environmental Law Centre, or CQDE. Since 1989, the CQDE has been providing information to citizens on the state of environmental law, participating in public consultations on law reform projects and initiating public interest litigation before all courts, where appropriate.
[English]
The CQDE has many court cases around the Energy East pipeline project, and its lawyers helped five citizens and landowner groups along the route in Quebec to intervene in a National Energy Board hearing on the project.
I am also a member of the Multi-Interest Advisory Committee that has advised the expert panel on EA processes and a minister on environment and climate change for the last two years. I will focus my presentation on these experiences.
My presentation will describe three key ingredients to make up the recipe for social licence. The first is a good process. The second is an assessment body that is independent. The third is a system that ensures that the most important issues are covered in the assessment. Last, I can answer questions on how social licence works in southern Quebec, as well as the sustainability basic legal framework and how it fits within Bill C-69.
Social licence should be considered as a public norm. In effect, it is a condition of project approval now. It is not a universally applicable legal definition; like sustainability, to which it is closely tied, the recipe for it will vary according to specific contexts. It is a result. It is not just a process, but a good process is necessary to get social licence.
The first ingredient is a good process, which means the confidence that the outcome is not baked in from the start. You may not agree with the outcome, but if you’ve been included meaningfully in the process and if you’ve seen how your views have been considered, you will be more likely to accept the outcome, even if you don’t agree with it.
There are two levels to this. At the macro level, the Canadian Environmental Assessment Act of 2012 was part of a massive omnibus budget bill. There were no consultation and no amendments, and many of its features had been requested by a particular industry sector to fast-track its expansion while dismantling environmental protection and public participation. For many, CEAA 2012 poisoned the well from the very beginning.
Bill C-69 is quite the opposite. It is the result of almost three years of engagement with many stakeholders, including industry.
At the project level, going back to the Energy East project, only directly affected people and some experts could participate. The assessment was limited to 15 months after the application was deemed complete. The first application was 30,000 pages of technical documents. I made the calculations, and according to average reading speed, it is not humanly possible to read that much in 15 months, let alone analyze it and determine whether carrying out the project is in the public interest.
Bill C-69 envisions a more open and meaningful process. Participants will be involved in co-designing the assessment from the start, including by identifying issues that matter to them. The early planning phase proposed in the bill is intended to focus the assessment on the most relevant issues and on the issues that are most important to the participating communities. It may actually result in more targeted, simpler assessments and fewer conflicts later down the line.
In Quebec, the BAPE, Le Bureau d’audiences publiques sur l’environnement, process is a good model for obtaining social licence. For 40 years, it has let anyone who wants to have a say have a say, and it is totally manageable. It leads to better and more trusted results. The BAPE has always done it, and public hearings are actually completed within four months, much shorter timelines than what’s contemplated here.
The second ingredient is independence. A prerequisite of social licence is to gain public trust. To gain public trust, assessment bodies must be independent and appear to be independent, both from industry and from government influence. Many articles, notably in the National Observer, allege that the NEB is a regulator captured by the industry it is meant to regulate. Before 2012, the NEB was performing only regulatory functions, and assessments were done by the Canadian Environmental Assessment Agency. The NEB had no expertise in assessment, and so it had little public trust on that basis from the outset.
In the Energy East context, this came to a crux with the Charest affair, which was a closed-door meeting between review panel members and Jean Charest, the former premier, who at the time was consulting for the proponent. The meeting took place against NEB internal rules and led to a big controversy, and the panel had to recuse itself.
Bill C-69 goes a good way toward attempting to ensure independence from industry by placing all assessments in the hands of a single agency and process, and by limiting the participation of regulators on review panels, while still ensuring their expertise will be considered.
The appointment of a review panel to consider major or more controversial projects is a first step in increasing independence from government, but it is undermined if appointments of members are made by the minister, as the current bill proposes, because the public often assumes that the government supports major projects, which can tarnish the credibility of panel reviews from the outset.
The appointment process is a crucial element to ensuring independence and public trust. This issue has flown under the radar up to now. It will likely be the subject of the only substantive amendment that CQDE will ask the Senate to consider in order to offer a process that is at least a functional equivalent of what is in place in Quebec for BAPE commissions. CQDE feels that this amendment is crucial to credibility without undermining the balance that already is achieved in the bill.
The third ingredient is a regime that ensures that the most relevant issues are part of the assessment in order to be credible. An obvious example is the exclusion of consideration of important climate impacts in pipeline reviews, likely the most important environmental, social and economic impact of such a project.
In 2014, the NEB said it would only look at the greenhouse gases associated with the construction of the Energy East pipeline, which is minimal considering the emissions that happened before and after the pipeline. People wanting to speak to the full climate impacts of the project were not allowed to participate. Canadians delivered 100,000 messages to the NEB in 2015, urging it to assess the climate impacts of the pipeline.
Following the board’s recusal after the Charest affair, the newly nominated hearing panel decided to restart the assessment process from scratch. After another round of public comments, this new hearing panel released its own list of issues in late August 2017, including a more fulsome assessment of climate impacts.
Bill C-69, for the first time in Canadian environmental assessment history, clarified that all projects will be reviewed to assess whether they hinder or contribute to our climate commitments.
In conclusion, Madam Chair and honourable senators, three ingredients: a good process, independence, and consideration of the issues that matter to the public affected by projects. These are three essential ingredients in achieving social licence. I would be very happy to respond to your questions.
Ross McKitrick, Professor of Economics, University of Guelph, as an individual: Good morning, everyone. I’m a professor of economics at the University of Guelph, where for more than 20 years I have researched and taught in the areas of environmental economics and policy analysis.
I would like to make three points on the subject of today’s hearing as it bears on your consideration of Bill C-69.
First, one of the government’s aims with Bill C-69 is to promote transparency and timeliness, but by expanding the scope of assessments to cover future compliance with vaguely defined criteria, the effect will very likely be the opposite.
Canadian law governs resource and economic development in two ways: through the prior, upfront approvals stage, and through ongoing regulatory compliance. The project approval decision should be made on the assumption that, during the project’s operating lifetime, the project manager will be subject to the laws and regulations then in force. It is neither feasible nor just to ask people to prove, years in advance, that they will not be out of compliance with a law.
For instance, we don’t expect a firm applying for an operating permit to prove, decades in advance, that it will never fail a Canada Revenue Agency audit. We assume that tax law enforcement will be handled by the relevant agencies in the future as the occasions arise.
Even worse would be if such a requirement were stated in vague terms that imply burdens over and above those found in existing law.
Bill C-69, section 22, requires a project assessment to take into account its impact on “sustainability” and “the intersection of sex and gender with other identity factors.”
These criteria are not defined and, in particular, there is no explanation of how they might differ from the requirement to comply with current laws or with new laws as they might arise in the future. They imply the existence of a secret set of requirements over and above what is written in Canadian law. Asking applicants to divine the nature of these hidden rules and prove their future compliance with them conflicts with the goals of timeliness and transparency, not to mention fairness.
Regarding gender analysis, for instance, the government gives the example of the potential effect on women in a community of an influx of male workers nearby. But there are already laws that govern people’s conduct in communities. Assuming that these laws will be enforced, we are left to guess about what else this provision requires or how an applicant could address it.
I am concerned that advocates of expanded impact assessment will use Bill C-69 to impose an ever-growing list of novel and secretive criteria for approvals, over and above what the existing law requires. The effect will be to create a process that is lengthy, arbitrary, unfair and at odds with procedural transparency. For this reason, I recommend that the approvals process return to its focus on environmental aspects that need to be addressed at the a priori stage, on the explicit assumption that ordinary law enforcement issues will be left for the operational stage.
Second, the proposed revisions to the approvals process are supposed to increase public confidence in the outcome, but they lack an essential ingredient for ensuring this.
The government has asserted that projects failed to proceed in the past because the public was not confident in the review process. I don’t believe this diagnosis to be accurate. Project approvals were based on credible and valid assessment procedures that had been relied upon many times over the years. The problem is that not everyone is committed to playing by the same set of rules.
The government needs to signal confidence in its own procedures by requiring those parties who oppose approval decisions to nevertheless respect the process and let construction proceed.
The revised rules seek to give standing to more people during the consultation stage. But in the current environment, this simply invites increased participation by more and more organizations who are known to be ideologically opposed to Canadian resource development and whose willingness to act outside the law has been demonstrated.
What is missing is a credible signal that the government will uphold the law and ensure that when applicants receive approval, construction can proceed unobstructed, and that unlawful tactics by protesters will be defeated through appropriate law enforcement actions. In other words, the government needs to commit to ensuring that the rules apply to everybody equally.
In the absence of such resolve, we will have given an effective veto on future resource development to those most willing to shout the loudest and flout the rules. Far from increasing public confidence in the process, this will discredit it and penalize those who try to follow it in good faith.
Third, the legislation creates ambiguity about what sort of information may be considered dispositive in review panel decisions. Specifically, the government draws a distinction between Indigenous knowledge and scientific knowledge, and it requires both to be used and taken into account, but it leaves unanswered the question of what happens if the two contradict each other.
Numerous provisions require reviewers to take Indigenous knowledge into account. For instance, section 97(2) says:
When conducting an assessment referred to in section 92, 93 or 95, the Agency or committee, as the case may be, must take into account any scientific information and Indigenous knowledge provided with respect to the assessment.
As written, this appears to oblige a review panel to give equal weight to both types of knowledge. By contrast, section 6(3) of the proposed act says:
The Government of Canada . . . must, in the administration of this Act, exercise their powers in a manner that adheres to the principles of scientific integrity, honesty, objectivity, thoroughness and accuracy.
To resolve the potential discrepancy, I suggest the provisions that require the taking into account of Indigenous knowledge be made subordinate to section 6(3).
Finally, with respect to the title of this hearing, let me remind the committee that there is no such thing as “social licence.” There are laws, regulations, review processes, approvals, operating licences and so forth. There is also public opinion, which ricochets between supporters and opponents on any issue, and the government needs to be proactive in defence of its regulatory process and of the industries that work within them to advance Canadian prosperity.
Waiting for the same activists who have declared their intractable opposition to Canadian resource development to issue a mythical social licence will condemn Canada to further decades of lost opportunities. What we need is for the Government of Canada to establish efficient, valid review processes and then ensure that those who play by the rules are not put at a tactical disadvantage by those who do not.
The Chair: Before we go to questions, I would like to mention to members of the committee that the invitation was sent to the potential speakers requesting them to talk about social licence and the consultation process. There was no mention of discussing Bill C-69, because the committee hasn’t received it officially.
You were invited, and we are happy you are here. Professor McKitrick, you decided to talk about C-69.
Senator Patterson: He wasn’t the only witness.
The Chair: I’m just putting that on the table for information and clarification.
We are here to familiarize ourselves with the process of social licence, acceptability of the project and the consultation process.
[Translation]
Senator Massicotte: Thank you for being here this morning. We won’t mention Bill C-69 because it is a very complicated debate, but we greatly appreciate your comments. I would like to discuss the social acceptability comment or the social licence. I try to ensure that there is a logical, consistent and effective process that is accepted by all, for those who are responsible for governing and approving projects.
The difficulty we have had over the past 10 or 15 years is that social acceptability, as defined by Mr. Rodon, is the local acceptability of the community. I have no difficulty saying that we must seek approval, but it must be consistent with our legal society, a predefined settlement society and not just composed of a wave of last-minute opinions.
Mr. Rodon, how do you see this? I have no difficulty with a process, as Ms. Péloffy said, that is open and that invokes opinion. However, we must still respect our right as a society. Once a project has received the approval of elected officials or a publicly approved system, the result must be respected. How do you perceive this vague aspect of social acceptability, which is not defined in the by-law of any municipality?
Mr. Rodon: That is a very good question. I will answer you as a political scientist. I note that in some projects such as Strateco’s, the case of shale gas, even if the BAPE has conducted consultations, we can have an open process and good quality information. However, this does not guarantee the social acceptability of projects.
Finally, a project’s lack of social acceptability can derail it. That’s what I observed with shale gas. The problem is that the Ministry of Energy and Natural Resources, or MERN, has tried to put in place a social acceptability policy for Strateco. It hired a consulting company, but stuck to the procedures.
I think that as long as we keep consulting — Even if people feel listened to, this does not guarantee that they will accept the decision. It is more complicated than that. There are power relations in society, it depends on the strength of the interest groups that will be present. On the one hand, there is the right, but on the other hand, there is the influence of interest groups that exist for a project or against a project.
I think there is something to think about. Perhaps there should be better participation rather than consultation, in my opinion. Legally, participation can be defined. In English, it is called “public engagement,” unlike “consultations.” This participation provides an open space for project deliberations. The problem is that we only discuss projects, and not a model of society. We saw this with the pipeline project, where the terminal was not considered in the environmental assessment. All this is problematic and there is a need to reflect on it in order to achieve greater credibility.
Senator Massicotte: Ms. Péloffy, I would like to know what you think. It is important to know what to expect, because social acceptability is the approval of the community. Is this more important than the legislation and compliance with our existing rules? Is it possible that private landowners could see their private property rights disappear because social and community acceptability is not there?
Ms. Péloffy: We are operating in a fuzzy area that depends on each context. It isn’t a legal and universal definition, but it is part of the legal framework. In Quebec, we have the Sustainable Development Act, which governs all decisions made by the government, including project approvals. This is how it was analyzed in the Strateco case. The concept of social acceptability is in line with the two social principles of sustainable development in Quebec, namely access to knowledge and citizen participation.
When we say that good consultation can lead to social acceptability, I am thinking of the BAPE model. I encourage you to read the books by Louis-Gilles Francœur and invite him to come and testify, because he has first-hand experience with the processes.
In the first part of the BAPE consultation, the public actively participates by asking questions and participating in the creation of the report. It is not at all a process where people come in just to complain and express their opinions. Nor is it a process where people’s opinions are sidelined because they aren’t based on facts. Citizens have the right to express their opinions when they participate in such a process.
Mr. Francœur saw several people change their minds during the evaluation by participating in the wording of questions, because of the information they were seeking and by seeing the whole cause develop before them. People’s opinions evolve through this. When a door is closed, people certainly want to break it down, but when it is open, people behave in a very different way.
[English]
Senator Massicotte: Mr. McKitrick, I’m not sure whether you’re an expert on the matter, but we talk about consultation. And as you notice there is a bill coming up, actually a declaration, from the United Nations, relative to the rights of a free and open commitment with the Aboriginal community relative to pre-approvals. The declaration used the word effectively “consentement.” Meanwhile, when defining Aboriginal rights, the Supreme Court often uses the word “consultation,” which is part of our debate. We know real consultation is not only taking notes but trying to seek mutual agreement.
The UN declaration for the Aboriginals, which we will be asked to talk about later on, uses the word “consentement.” If you consult a dictionary, it merely means “approval,” which means you’re giving somebody a veto right.
Do you see conflict between what we consider consultation — consent — as contained in the UN declaration for the Aboriginal community? Is that a difficulty? Must we seek their approval or simply try to do something that is fair in consideration of all interests?
Mr. McKitrick: I agree with you about the distinction that consultation doesn’t imply a veto unless you’re using different words that carry that connotation, and you have to be very careful if you’re going to go that route.
There are lots of situations already. For instance, if a municipality wants to expropriate land to build new subdivisions, there are requirements that they go through a local approvals process, and you take in information from all the people that will be affected. But the rules always seem to give the decision to someone presumably within the democratic process who is accountable to voters.
So if you broaden out an approvals process, the two questions are these: What information is actually dispositive? What information can drive a decision? If you’re taking an opinion from people who are going to be affected, but it’s known in advance that you’ll take this into consideration but you aren’t required to base your decision on that information, of course, that can be an extremely broad invitation. But if you’re saying you’re going to take in information and the people providing the information can effectively overrule or control the decision, that has implications about governance in society and democratic control of large-scale decisions. People get uncomfortable when those kinds of issues are put on the table.
I would ask you to reflect on two recent examples that are very instructive: wind turbines in Ontario versus pipelines in the West. In both cases, some communities were extremely opposed to what was happening. The wind turbines were being installed with very little of what we would consider impact assessment. The legislation pretty much guaranteed the cabinet full authority to put them where they wanted, when they wanted.
In rural areas in Ontario, the feelings ran very high, and people were extremely opposed to them. But they worked within the law, and in the end, when they had no legal recourse, they went through the electoral process to change the government. Nobody took the law into their own hands. You didn’t see road blockades. You didn’t see people tearing the towers down. You didn’t see people acting outside the law.
In the case of pipelines, what I’m concerned about in the discussion of social licence is that it’s moving away from an expectation that we’re going to have a process, it’s going to have discretion, it will be imperfect, it will make good decisions sometimes and not-so-good ones at other times, but everybody has to play by the rules, including when you don’t like the outcome. That is the challenge as you consider these issues of social licence and the duty to consult. Add to that the question of how you send the signal that, at the end of the day, everybody has to play by the rules.
Senator McCallum: I have one request and then my question. Since I’ve been involved in committees, sometimes there is just not enough time to ask a question or to make comments on what has been presented. I would like your permission to respond to Mr. McKitrick’s testimony in writing and give it to the committee. It’s critical for me to respond to what is in here.
Senator Patterson: Sure.
Senator Massicotte: Sounds good.
The Chair: Does everybody agree? Excellent. Perfect.
Senator McCallum: The question I have is around the roles of consultation, social acceptability and social licence. When I look at the three, they all have the same concepts. There is the interpretation of what those words mean, there is participation, there is consent, there are relationship issues. There is the potential to abuse, and opinions of parties can be disregarded by whoever is involved in the projects. All of those have those concepts.
I’m concerned that, because Indigenous people have the right to consultation, different concepts are coming that can bypass that consultation. I really feel there is no solid ground to these words. People have abused consultation for their own ends, and that’s why we end up with so much conflict. There is no spirit and intent that comes with these words.
Beyond those, there are also ethical and moral responsibilities that go with these processes that are not taken into consideration by law. They are outside a law.
I wanted to ask your comments on this: What are the differences between these three, and who termed these words and concepts?
The Chair: Ms. Péloffy, would you want to start with an answer?
Ms. Péloffy: I will try. I am not the expert on social licence. That would be Louis Simard, but he was not available to come this morning, so I did not suggest him. But maybe he would be a good follow-up.
From speaking to him, however, the way it arose in Quebec, social acceptability has been discussed and around since the 1980s. It meant different things to different people, and both proponents and opponents were using it for their own purposes.
In 2011, there was an assessment and the BAPE specifically asked the government to provide guidance and clarify what social acceptability means. I don’t know; I’m not a stickler for words normally, but I think social licence and social acceptability are quite closely related. Social licence is what the proponent gets once social acceptability has been achieved. There was a vast consultation and parliamentary commissions to come up with definitions and all of that stuff. Maybe it’s something that can be done at the level of Canada to have that reflection about what it means.
We shouldn’t confuse public consultation with consultation of Indigenous peoples, which is a constitutional right. And there is a grey area in the Tsilhqot’in decision. The Supreme Court said the proponents should seek the consent of communities. It didn’t say what would happen if they didn’t get consent. That is the open question in Canada.
I’m a lawyer, and I tend to always want to have legal rules that are very clear, but we’re humans. The humanity of us will always come through, and when there is a controversial project around which there are different opinions — very opposed opinions — you need a forum where these can be arbitrated. That’s what the assessment process should be. It should be the place where you can have this informed debate in a respectful way. If you don’t design the participation consultation in that way, then all of that will happen outside of it, and maybe outside the rule of law.
People going outside the rule of law is a direct consequence of the changes that happened in 2012, where the rules were made so restrictive that the people didn’t feel they had a space to be listened to and where the real issue would be discussed. It felt like it was baked-in from the start. That’s when you have these unfortunate situations.
Mr. McKitrick: I would ask that, as you sort through these things, you really reflect on the question of what exactly you are asking of project proponents. You should ask them for a lot of detail about the project — all the parameters of it, all the technical details — but there is a limit to what you can ask them about far future considerations, especially if you have trouble defining the concept that you’re asking. How can you expect the proponents to provide you detailed responses when the questions aren’t even well posed?
They need clear criteria. They need to be held to the burden of responding to it.
Local support is always an issue. It’s always been an issue, and not just for big resource development. For instance, down the road from where I live, there is a recycling operation run by the City of Guelph. It went through several phases. The problem is that they never got the local neighbourhood on board. They weren’t clear about the burden of odours, smell and things like that, so they have had to rebuild it several times to deal with those things.
That’s life. That happens all the time. In any municipality, anywhere people live together, you have the need for neighbours to deal with each other. I don’t think we should take the view that the resource development project question somehow involves looking at that for the first time. That’s always been an issue.
As we tackle that, though, I would recommend that you don’t try to compress everything into the approval stage. That’s another point that I made. Some things we leave for down the road, for compliance with the laws. Again, contrast it with the tax system. We don’t ask people to prove that, 10 or 20 years down the road, they won’t fail a CRA audit. We leave the tax compliance to down the road.
Also, not everybody likes the tax laws, but you have to obey them. We have very imperfect audit processes, but if you’re audited and you fail the audit, you have to deal with the outcome.
These controversies don’t arise in the case of tax law. We know that the processes are imperfect, but at the end of the day, we have to do the best we can, and you have to live within the rules.
I think, in this case, we should take the same view, that project assessment is always going to be discretionary and imperfect. Make it as good as you can, but make sure everybody realizes that we all have to play by the rules.
The Chair: Professor Rodon, do you want to add something?
Mr. Rodon: More complement on the big issue. I think you have to be careful with the term “consent.” Many people equate consent and veto, and I think it’s a way to disqualify the right of Indigenous people to actually participate in the decision making. That’s what it is.
I think a point we’ve made over and over, consent doesn’t mean that you are authorizing a project. So far it’s still the Crown that does it. But still, there has to be a meaningful participation and effort to arrive at consent.
Actually, the wording in Tsilhqot’in is “seeking consent.” The wording in the United Nations Declaration on the Rights of Indigenous Peoples is a stronger wording.
I think if you keep it only at only consultation, you are going to run into problems with Aboriginal people. You need to have better engagement with that. The example I gave you with the Squamish shows that you can have a process where the proponent knows what he has to do, can do it and can put resources on it, but in the end, it can be this project.
For me, it’s more important. The rule of law can change. It has changed over time. Decisions in Canada are clear on that. You need to engage Aboriginal people more than we’ve been doing so far.
I think there’s room for that. It’s not at all impossible, and it won’t prevent all the projects; that is not the experience, if you look at the Murray River mine project in the North, which has been approved.
Senator Seidman: Thank you all for your presentations on what is, obviously, not a simple issue. Part of the reason is because it feels so vague and undefined.
We’ve heard that the meaning of social licence or social acceptability has evolved over time, from a sort of basic support sought for natural resources projects in a community to a different kind of use now where people who disagree with a project claim there is no support for the project, and it puts into place what feels like an additional layer of undefined regulation.
We’ve heard, I believe from Ms. Péloffy and perhaps from the other two witnesses as well, that the requirements for social licence vary depending on the community and the different types of project. That adds another layer of this kind of vagueness.
Who defines the terms of social licence? In English, social licence sounds like you have to get a licence, so it goes beyond social acceptability. Who defines the terms and the process that then has to be followed for any given project?
I would start with you, Ms. Péloffy.
Ms. Péloffy: First, if I can just go back, I’ve heard the theme “it’s vaguely defined criteria” a couple of times. To give a bit of background context, before 2012, for close to 20 years, the former assessment law actually looked at changes to socio-economic conditions. In Quebec, we have been doing sustainability-based assessments for 40 years, based on the 16 development principles for the last 10 years. That’s all vague, but it’s been functioning. The economy hasn’t stopped, and not all projects have been stopped either. So it still can work, and it maybe gives the necessary flexibility to adapt to the context of every single project.
There is a definition of social acceptability that’s been adopted by the Superior Court. I could read it for you. Would you like me to? It’s an English translation:
Social acceptability may be defined as “the result of a process by which the parties concerned together developed the minimal conditions to be put in place so that the project, program or policy be harmoniously integrated at a given time into its natural and human milieu” or as being “the result of a process of construction and interaction between the members of a community.”
That’s where the active participation and the interaction within the assessment process are so important.
If I can veer off to Bill C-69, I think a lot of things have been put in this bill to ensure that these interactions and co-construction happen.
As to how it will be defined in the end, it is one of the factors — the social factor of sustainability — which the political decision maker will consider along with a lot of other things in making its decision.
It’s also been described, in its evolution, as sort of the intersection of participatory democracy, which would be the assessment, and representative democracy, which is that it is the government, in the end, that makes the final decision.
Senator Seidman: I don’t know whether Mr. McKitrick has something to say about that particular last point you made. I think that’s where the argument comes forward about minorities interfering in majority, democratic processes.
We have regulatory bodies and legislation, and then you get this process of social acceptability or social licence that begins. Some would say that that interferes in the democratic process, where the majority asks for oversight by the regulatory bodies and the legislation that already is in place. But I think you’re talking about some kind of in-between democratic process or participation.
Ms. Péloffy: If I look at Bill C-69, I would say that the planning phase, especially, and the fact that you can have collaborative assessments with Indigenous bodies and that the public input will be more — you will know how your input has been considered in all of this — this is the participatory democracy part of it. Then, when you get to the decision-making phase, which is the elected representative makes a decision, you respect the representative democracy.
Senator Seidman: Could you please say something about that, Mr. McKitrick, because I think that two-part process that we’re talking about is really the point.
Mr. McKitrick: Two things jumped out at me from the definition that was read, which I wasn’t previously familiar with. It refers to the “parties concerned” and the “members of a community” in terms of the people who need to, in a majority sense, consent with the project.
That makes sense to me because that’s always been the way. Instead of thinking about an LNG terminal or a pipeline, just think about somebody wanting to open a meat-packing plant in Etobicoke. There will be a municipal approvals process that takes into account the parties concerned, the landowners in the area and the members of the community, but those are also people who will feel, to some extent, that they voted for the people who are going to make the decision.
What I would be concerned about is if the approvals process then broadened out to say that anybody who feels that they might have an opinion on this is now going to be given standing. There might be people on the other end of the country who don’t like the thought of meat-packing plants and who start writing hundreds of letters. How do you deal with that? The mistake there is that they’re not actually parties concerned. People have an opinion on this — we have opinions on lots of things — but they’re not directly concerned with this. They’re not affected by it, so their standing shouldn’t exist in a process like that.
The questions of who are the parties concerned and who are the members of the community have to be tied closely to who had a vote for the people ultimately responsible for the decision and who is affected by the project.
Finally, on the issue of social licence, when you think about any licence, from a fishing licence to anything, you know who issues it. If it’s a well-defined licence, you know where to go to get one. I have no idea who issues social licence. I understand public opinion, and I understand the processes that go into influencing public opinion, but if we’re going to talk about social licence with a capital “L,” then tell me where to go to apply and what the approval process looks like.
Senator Seidman: Okay, thank you.
Senator Cordy: Thank you very much to all of you for your presentations this morning.
As Senator Seidman said, it’s not a simple issue. Sometimes, when you combine that with emotion, it’s very difficult to come to a consensus about making decisions.
Mr. McKitrick, you said that there’s no such thing as social licence; I think you called it public opinion. But you did also say that we should ensure that those who play by the rules on all sides are not at a tactical disadvantage, that all sides play by the rules.
Ms. Péloffy, you said that a good process is necessary where we know that the outcome has not been predetermined. I think the courts also ruled on that. You can’t just listen or pretend you’re listening when, in fact, there’s no result to the process or to the supposed listening.
Mr. Rodon, you did remind us that the court has actually defined what meaningful consultation is and that you can’t just listen, but it has to be meaningful dialogue.
All of these things are great until we come to what I think Mr. Rodon referred to as the wedge issues that become very emotional. You can consult for 10 years and nobody’s mind is going to be changed. Mr. Rodon, you gave some great examples of where there was meaningful consultation, consensus was reached and projects moved ahead taking into consideration what people heard during the consultation process. That doesn’t always happen, unfortunately.
How do we ensure that consultation is not just checking off boxes, that consultation has taken place? And then, once a fair consultation approach has taken place and a decision has been made, taking into account all of what has been said, that we can move ahead with the decision and build something, not build something or whatever it happens to be? What happens then? How do we move ahead with that after all the meaningful consultations have taken place?
Mr. Rodon: I was cut off for a couple of minutes, so I didn’t hear the end. But I think I caught enough to be able to answer.
You ensure there is a meaningful consultation. It applies to Indigenous communities, obviously, but it’s also required in any other communities. I’m always a bit worried about outside interests coming into a debate, but in development, you always get outside interest via industry or outside people. That’s part of the democratic process, and we have to live with that.
To pick up on what Ms. Péloffy said, clearly we are moving to a more participatory democracy and a more and more participatory process in governance. They are part of a way of decision making. It’s a way to ensure the legitimacy of a decision. That’s a very important thing in public policy. Because something like the — in Quebec is not helping politicians. Actually, Premier Charest lost an election on that one.
So you have to — and it’s a fact. You could maybe wish you were back in time where elites would decide, but the thing is people are more involved, and they want to be involved. They want a discussion.
The idea of deliberation is — and I keep bringing it up — a debate. A debate is something where you change ideas. If you only go through opinions, then issues are always coming. Deliberation is a space for people to exchange. It’s not that everybody changes their mind. The point is to come to an agreement for most people as to whether a project is good or not.
On the question of social licence that we are talking about, I don’t like “social licence” either. “Social acceptability” is a better term.
There are actually many ways to measure it, but the deliberation process is a way to measure the support. At the end, when you are doing — and BAPE is doing a better job of involving people. That provides a way to move ahead.
Anyway, you can decide, but it’s better for the government to decide we are consulting people, but the thing is people are not — so I think you need to live with that.
It is moving toward that. Quebec has done some work, as well, and there’s always work to be done. It’s a process. At a point, you say that we fight the law or don’t fight the law. In Quebec, social acceptability can be a reason for a government to override the decision of two regulatory bodies. That’s a decision of law. We are in the law.
Mr. McKitrick: A few years ago, I participated in an Ontario Energy Board hearing, and it was for an appeal brought by a family in a rural area about a large wind turbine project going up near them. I was brought in as an expert witness. The lawyer who was acting on their behalf explained to me that there was pretty much no hope. The way the rules are set up, the hearing panel could only override the government’s decision on extremely narrow grounds that are almost impossible for any person to meet. I thought the family had a very good case, not only for the damage it would do to their own area, but the project didn’t even meet the government’s objectives of what they were trying to accomplish with the Green Energy Act.
So despite the futility of the process, I and others went. We put a lot of effort into our presentations and went through the long, unpleasant process of being cross-examined. Then, in the end, as we expected, the decision was a foregone conclusion. It was all overturned.
That would be an example of a process that was extremely unfair and is everything that people are concerned about: foregone conclusions; we’re not listening; decisions that are made at the political level, regardless of what it’s doing to people in the area.
I go back to the point that the family didn’t then take the law into their own hands. They accepted the outcome, and they lived within the law.
Whatever process you have, there are always going to be deficiencies. There will be people who might say at the end, even with perfect justification, “I didn’t feel listened to” or “I felt that, in this case, the decision was a foregone conclusion.” That is always going to be a possibility, but if you have put in place a reasonable consultation process, you can’t then let people’s views on the deficiency of that process be an excuse to indulge chaotic behaviour down the road that throws the whole process into disrepute. Somehow you have to build an expectation into it, as we do in every other area of law, that everyone has to follow the rules even when you don’t like the outcome.
Ms. Péloffy: It all comes back to the view that the institution that will do the assessment takes of people. If we think public participation is only checking boxes, I have heard your complaints, next, then we won’t go forward with this bill.
If it’s a bit like the BAPE does, it’s a public hearing bureau. Its mission is to help the public understand the process, and it’s based on the collective intelligence of people, on believing that Canadians are smart, and when we put our brains together we make better things. If you start from that process, you learn and build together, and that is a completely different vibe and outcome.
If, at the end of all of this, there are still people who complain, some may protest in the street — I don’t think that’s outside of the law — but some may go to court and invalidate those decisions. That’s what we’ve seen with the Trans Mountain decision: a bad process, people not heard, not consulted, issues scoped out, and the courts, actually, very much within the law, decided that was not okay.
I’ve also heard the idea of social licence or social acceptability only being used by opponents, but it’s used by proponents too.
I’ll speak of the very specific experience of a farmer who was along the proposed Energy East pipeline route. She already had a pipeline on her land, so she knew exactly what sort of process was coming for her. She said these companies, I don’t know how they know this, but if they come into a community, they will know who is most vulnerable, who is older, who is poorer. They will go knock on those doors first, get them to agree, give them a bit of money to survey the land and sign a confidentiality agreement. They will pick those people out. When they’ve got enough, then they go to the rest of the community and say, “Hey, we have all these people who agree,” and now it puts an incredible amount of pressure on the community to say that they agree.
It can also be abused if you have some sort of open houses where you inform people about just one side of the issue, which I would call propaganda, and then you have a very superficial survey, and you say that the majority of people agree and we have social licence. It can be abused in both senses.
That’s why it’s not a legal definition that applies everywhere. It is one thing that gets considered as part of the social pillar of sustainability and gets considered at the decision-making stage.
Senator Woo: I have a specific question for Professor McKitrick and then a more conceptional, general question for all of the witnesses.
It picks up from Ms. Péloffy’s comment about breaking the law. You make a very big point, Professor McKitrick, about the importance of playing by the rules. I think all of us can agree with that. But you made this distinction between hydro projects and wind farm projects in Ontario that went ahead despite unhappiness by the community, and pipeline projects in the West — I’m from British Columbia — that have not gone ahead because people are breaking the law.
I’d like you to clarify if that’s, in fact, the case. It seems to me it is the courts that have stopped the pipeline project. I happen to live across from Burnaby Mountain, and as far as I know the camps have been dismantled. The police may be a bit indulgent, but they have certainly broken up the lawbreakers. Could you clarify, for the benefit of the record, that you feel that the Trans Mountain pipeline, in particular, has not gone ahead because laws have been broken by protesters as opposed to courts stopping the project?
Mr. McKitrick: I don’t dispute the court decision involved in that case. As I understand it, the courts set out fairly specific criteria that need to be met for approval to proceed.
I do refer, though, to things like the protesters hanging off the bridge and the encampments that you referred to and road blockades stopping construction. It’s not that protesters, on their own, stopped a construction project that was otherwise going to go ahead, because, as you say, there was a court ruling there. But the protests were going on before that court ruling took place, and the question is were those protesters prepared, at the end of the day, to just accept the outcome? They didn’t agree with it, but did they view the decision nevertheless as being reflective of the law of the land?
I come from a campus where we repeatedly have divestment motions put before the board of governors, and there’s a campaign beginning again. There are large groups that don’t want any hydrocarbon use, and they want universities to sell all their holdings in Canadian energy companies in the belief that it is illegitimate for us to be in that business altogether.
We can’t ignore that for some of the project opponents, it’s not that they specifically object to either that specific pipeline or that particular route for that pipeline; they object to the use of the resource at all.
Senator Woo: I understand that, and likely they will never change their minds.
Your point is more specific. It was on the need for determination on the part of the state, the authorities, to execute the implementation of the law and to make sure that it’s upheld. My reading of the situation of the pipeline, particularly Trans Mountain, is that they have done that. The protest camp does not exist anymore in the refinery in Burnaby; and to the extent that the pipeline is now in limbo, it is because of a court decision, not because protesters are somehow blocking the construction.
Let me get to the more general question on how we think about project assessment. The first step in any project assessment, clearly, is creating the parameters of what the project is and what the criteria are for study.
I’m an economist, and I remember back when an environmental impact assessment was a new thing. There was a period not so long ago when we did not do environmental impact assessments because the only criteria for major projects were financial viability and job creation and so on. Over time the scope of environmental assessment has expanded precisely, I think, because of social licence even though that word had not been created at the time.
I want to suggest the idea that even if we didn’t have such a term as “social licence,” it still would be there. The way to think about it, in my mind — you’re an economist, Professor McKitrick — is that it is the residual in the regression. You don’t know exactly what’s in the residual, but it’s there; you can’t wish the residual away. Sometimes we pretend that there isn’t this extraneous factor, but it exists.
My question to the three panellists is as follows: To the extent that we accept that there is a residual, that there is something else out there that needs to be considered in the valuation of all projects, is it not better for a regulatory process to try and identify what might be in the residual rather than to leave it as a vague, amorphous thing which can then create even more confusion than albeit the somewhat vagueness of items that we might have identified as belonging to the residual?
Do you know what I’m trying to get at here? It’s my sense that Bill C-69 is trying to do that. Even though it’s unsatisfactory in terms of how we precisely define many of the terms, it’s an attempt to get at something that is real rather than something that is imagined.
Ms. Péloffy: I’ll try to answer the question by still focusing on pipelines as well. For pipelines, under the CEAA 2012 regime, the big residual — and to me it’s not a residual; it’s the main question — is the climate. The UNEP person said we have two years to act on climate change. We are a country where at least some regions base a lot of their economy currently on fossil fuel exploration, and there’s definitely an incompatibility at the broader stage.
Some projects might be acceptable and fine, but a broad expansion of the tar sands may not be compatible. That has been the residual that has not been in the process for these pipeline reviews and has resulted in all that controversy.
One way to resolve that — and Bill C-69 does it a bit — is forcing consideration of climate change. We won’t be having these debates on the streets anymore; we’ll have them in the assessment process. To me, that is a positive step forward.
It is a difficult question to resolve in Canada. On the Multi-Interest Advisory Committee, the one consensus recommendation we could make on the climate front — and by consensus, I mean the Indigenous representatives, the environmental organization representatives and the industry representatives — was to conduct a strategic assessment of Canada’s climate commitments to know what the implications are for a specific project that will be governed by Bill C-69.
In April 2017, the expert panel said this was urgent three times. Later on, the government said it would do it. They issued a decision paper in the summer that said they would do it. We’re still waiting for it. This will be the forum where we get to determine these very difficult questions and that residual for that issue.
Otherwise, yes, it’s a broadening of the scope of assessment if you compare it to CEAA 2012. It’s not a broadening if you compare it to what was done before or what is being done in many provinces and territories. But having all those scopes be broad is to make sure we don’t lose anything that is very important to people who want to participate, which then results in that problematic residual that happens outside of the assessment context.
The Chair: Thank you.
We are running short with time. I would appreciate shorter questions and shorter answers, if possible. Professor Rodon or Professor McKitrick, do you want to add something to the answer?
Mr. McKitrick: You’re right that social licence might just be a name that’s being put on something that has always been there, which is the need for people to have a say in their own community and on the things that affect their lives. To that extent, it’s a good idea to try to codify it, to decide who has standing and what is the scope.
On the question of what should be decided up front, the climate change one is a good example because we know that there will be regulations and policies. Where should those decisions be made? Climate policy is one that does need to be made more at a macro level. If you’re trying to make the climate policy on the basis of whether a particular terminal should be approved, it will be an inefficient entry point for those kinds of policy decisions.
What would make sense, though, is if the operators of that project were to say, “Well, given our expectations of the policy regime, this may no longer be an economic project.” But that is based on operational considerations down the road rather than trying to say that, as a matter of national climate policy, we’re going to reject this particular project. That would typically be, from an economic point of view, an inefficient place to do your regulating.
Senator Neufeld: Thank you to all three of you for being here and making your presentations. I know it’s an issue that has lots of viewpoints, regardless of where you go. I have had my share of experience of that in British Columbia.
I would like to ask each of you a quick question, if I could. UNDRIP mentions “free, prior and informed consent” a number of times. Does that mean a veto? Is that what you think? Yes or no? Really quick here.
Ms. Péloffy: Where is Professor Rodon when you need him? Please go first, Mr. McKitrick.
Mr. McKitrick: If the language is “consent,” then yes, it’s a veto. Whether it should be a veto is what we’re discussing. But if I need your consent for something, you have a veto.
Senator Neufeld: Okay.
Ms. Péloffy: If we start from UNDRIP and the new preamble of Bill C-69 —
Senator Neufeld: I’m not talking about Bill C-69; I’m talking about UNDRIP.
Ms. Péloffy: Bill C-69 now contains a reference to UNDRIP. UNDRIP says “free, prior and informed consent.” That implies you can withhold consent. How that would be applied in Canada is something that has not been legally defined. The Tsilhqot’in decision says that it’s better to get consent. It doesn’t say what happens if you don’t get it. That’s an open question in Canada. If this bill goes forward and is implemented well, we might not even have to answer that question because maybe we will do everything well.
Senator Neufeld: Okay.
Second, when it comes to building projects — and I’ll speak about a clean energy project in northeastern British Columbia, where the community was much in favour and where the people living around it were not — someone has to finally make a decision on those issues. But, Ms. Péloffy, you seem to imply that everyone has to kind of be in favour of something before it goes ahead. Or have I misunderstood what you said? At the end of the day, someone has to make the decision.
Ms. Péloffy: Yes. That’s why I say it’s not a referendum or a survey. It’s a sociological nebulous concept that will be taken into account by the political decision maker at the end of the day. I don’t think it’s possible to ever get everyone to agree, but maybe you get to a point where people can live with the outcome, even if they don’t agree with it.
I know it sounds weird, but there is research that says that if you feel like you were heard — and actually, I myself had that experience with the expert panel on environmental assessment. You really felt heard by them. They were sitting very close to you. They were looking you in the eyes. You felt heard. At the end of the consultation, they showed how they took everyone’s comments into account. So although I didn’t agree with everything that came out in the report, I didn’t disagree enough with it to go and protest in the streets.
Senator Neufeld: With Trans Mountain, by polls — and polls can’t always be relied upon — over 50 per cent of the people in British Columbia approved Trans Mountain, so it should have gone ahead.
Ms. Péloffy: No, I specifically said it’s not a question of polls and surveys. It’s a question of creating participatory processes where we can collectively construct these things together.
Senator Neufeld: There’s one last thing. I know we’re running short of time.
It’s always interesting for me to hear about — not in favour of things — but for instance, Vancouver, the Lower Mainland, is quite happy getting their fuel from Edmonton, from the oil sands — the crude — shipped by pipeline from Edmonton and burning it, paving their streets and using it for all the things you use fossil fuel for. But, “I don’t want to be part of it. Not in my backyard.” That is what happens in many cases. Quebec is the same. They turned down fracking and mining, but they still have a nuclear plant. But guess where Quebec gets its natural gas from? It’s from the Marcellus in the U.S., which is there because of fracking. In a way, I guess they agree with it and accept it, but “don’t you dare do it in my backyard, because my backyard is special; that other person’s is not.”
To me, that doesn’t make sense, but it is, when you come right down to it, not in my backyard. I want a wind farm and I want solar panels, but I don’t want them around me. You put them over there on Fred’s property, because that will be okay. Then I’ll use it. That’s what happens in most cases. I might be a little blunt, but that’s exactly what I have experienced in my life in British Columbia for a long time. “We’ll accept it. We’ll use it. We’ll fill our car up with gasoline that comes from Edmonton” — by the way, that’s where it comes from. Most of Western Canada’s gasoline comes out of Edmonton and some just south of the border, that crude oil that is moved down the coast of British Columbia from Alaska.
I find that a little hard to take sometimes. That’s just a statement. You don’t have to answer.
Ms. Péloffy: Very briefly, yes, now there is a mining ban in Quebec, but we’re not the only jurisdiction with it. We closed our one nuclear power plant.
Senator Neufeld: You closed the plant but you had used it for decades.
Ms. Péloffy: We are at a specific point in time, given the very real challenges of climate change, where we don’t live anymore in the world we thought we knew. Maybe up until now it was a great idea to exploit our own resources and make the most of it. Maybe going forward, that may no longer be a good idea, and we need to think of different ways of doing things. It’s a difficult moment in time to be in, but either we decide to change or the climate will change for us, and that will actually be way more destructive.
Senator Neufeld: One thing I forgot is that you bring ships in from Venezuela, from Saudi Arabia and from other places right into the Gulf of St. Lawrence and into the refineries.
Ms. Péloffy: That oil is less greenhouse gas intensive.
Senator Neufeld: You don’t want to use the oil from Canada.
Ms. Péloffy: From an environmental perspective, the oil we bring into Quebec is less greenhouse gas intensive than the oil produced in Alberta.
Senator Neufeld: You are wrong.
Ms. Péloffy: I have actually looked at the numbers.
The Chair: Please, okay. We can find that. Actually one of our own reports talks about that. Before I give the floor to Senator Patterson, I would like to ask a question.
I’m an engineer, and I like my projects being built. I remember when I did one of my first projects, the only aspect that was considered in the acceptance and approval of the project was the economy. The only one. Then later, we added the technical aspect. We have to use the state of the art because we worry about the safety of the people. We also had to work in terms of the utility, the life of the bridge or the pipeline. The lifetime was very important, so we had to use the best technology available.
Then later, 30 years ago, we started thinking that the environment also needed to be taken into consideration. We keep calling it an environmental impact assessment, but in reality it is becoming an integrated assessment. You use the environment, but it’s integrated. It is considering the economy, technical, environmental and social.
My impression is that the inclusion of all these aspects has improved the quality of projects. I do not see going backwards and going back to just considering the economic part.
So wouldn’t it be intelligent from our side to move forward and get, as you said, the three things: clarity on the process, independence and neutrality, and talking about the important issues? Do I have an erroneous reading of what history is telling us, or do I have the right opinion of what history has shown us?
Mr. McKitrick: I think you’re using the term economics to mean a very narrow cost-benefit analysis based on the easily measured revenue and costs, whereas the economics of cost-benefit analysis would normally include things like risk premiums, for instance, for breakdowns and quality issues, and also pollution externalities. From a social point of view, those should be priced in. They get more difficult to measure as you move out. You still have to be responsible about measuring them and also weighing them against the other things.
I don’t want to get into trying to litigate the pipeline issue here because, as we saw, we will spin out of control. We are paying a very steep price in terms of the discount on crude. The question isn’t do we consider environmental issues or not, but if we put them in there with a reasonable price weighting, would it change our decision that it makes economic sense to have a pipeline to the coast?
My impression is that if the climate and the environmental issues were priced in, we would still say we’re paying too much of a price not having access to the export market here.
The Chair: I understand the concept of externality. I don’t think projects always consider externalities. They are mostly based on the cost-benefit analysis.
Mr. McKitrick: One quick point. Projects always have to comply with environmental regulations. We now talk about emission pricing more often, but the fact that we have air quality regulations, even though it doesn’t involve making a payment to the government, means they are still having to internalize the cost of compliance with those regulations. Those costs are taken into account, even though they are not priced in the decision.
Ms. Péloffy: I would agree with your description of the evolution, but I will say that in Quebec since 1978 the environment has always been an ecological, social and economic dimension. Of course, there is learning over time, and I think we’re getting better at grasping the whole of the reality that surrounds projects and having a better chance of doing better projects that will fit within their communities.
I agree that many externalities are not included in assessments and not included in a cost-benefit analysis. A tool has been developed, at least in Canada and in the U.S., which is the social cost of carbon, which assesses the damage that one tonne of greenhouse gases will create in the future when it is emitted. If we included that measure and said these are the economic benefits of the project and these are the damages it will cause to the climate, we would at least have a better picture, but that has not been the case in assessment so far.
As for the discount on crude, my understanding is that there are fewer refineries in the world that can actually take it. That’s one reason the price of oil fluctuates. The world is committed to saving ourselves from climate change, and that includes a fossil fuel phase-out, so there may not be markets for our resources going forward. That’s a clear risk we must take into account.
Senator Patterson: This is a study the committee has decided to make on social licence. I would like to ask about social licence. My impression from Professor Rodon and Ms. Péloffy is that the better term is “social acceptability.” Professor Rodon described this as a relationship. He said he didn’t like the term “social licence.” Ms. Péloffy talked about collective intelligence. I think you also mentioned a nebulous social concept.
Now we have Professor McKitrick, who has taught in this area for more than 20 years, basically saying there is no such thing as social licence.
Is this term being used by decision makers and governments? How extensively is it being used? The question is related to whether we are studying something important and current in examining this issue, or are we studying something vague, nebulous and mythical? I think, Professor McKitrick, you used the term.
The Chair: I want to say that what Professor Rodon said is that the term “social licence” was incorporated in practice by the corporations. That’s what he said.
Senator Patterson: I was asking about governments and regulators.
Mr. McKitrick: I think you have seen the difficulty this morning in defining the term. Social licence has migrated to social acceptability.
I think what it comes back to is public opinion and the interest of people who have a stake in a project, and to that extent, it has always been with us. It’s with us whether you are building a meat packing plant in Etobicoke or an LNG terminal on the West Coast. All the same questions have to be asked: Who should have standing? Who ultimately makes a decision? How is that decision accountable in the democratic process?
When I say there is no such thing as social licence, I would say I’ll believe in it when you tell me where I can go to apply for one and who issues it. And if you can’t answer a basic question like that or tell me what is involved in qualifying for one, if there are no answers to that question, then I say this is not a valid concept and we shouldn’t waste our time on it.
Senator Mockler: Absolutely.
Ms. Péloffy: For once I agree with Mr. McKitrick. It should not be understood as a permit that you get from somewhere. That’s not what it is. I equated social acceptability and social licence to simplify the debate this morning. But in Quebec, the term that is used is social acceptability. It has been used. It has mostly been used to refuse projects where it’s not present; at least three projects were recommended to be rejected by the BAPE based on the fact that there was no social acceptability at the local level.
As Professor Rodon explained, in the Strateco decision the judge said not only that the Minister of Environment was allowed to consider the project’s lack of social acceptability in the local Cree nation but had to. It was an obligation according to the Sustainable Development Act and the social principles that are enshrined in it. You have to consider it. So it is part of the regulatory system in Quebec.
Its formal place is a guidance document within the Ministry of Energy and Natural Resources, so I guess one of the downsides of this whole reflection that happened in Quebec is that it was described as a lion of a consultative process that gave birth to a mouse.
As to whether it’s relevant or not, I think figuring out what will make people buy into projects, feel like they have been heard and want to live with them is definitely very important. I think Bill C-69 goes a long way towards doing that. Trying to find a clear definition for it may not be such a worthwhile exercise, I would say.
Senator Patterson: Could you give us the court reference where you gave the definition? You read a definition; was that Strateco?
Ms. Péloffy: Yes, the definition was in the Strateco case, and it is at paragraph 442.
Senator Patterson: Thank you.
[Translation]
Senator Mockler: Madam Chair, given the time, I will ask two quick questions, and our witnesses can respond in writing.
The Chair: Senator Mockler, you have seven minutes.
[English]
Senator Mockler: Thank you for being here and sharing your ideas. I don’t agree with all the ideas that have been put on the table. But the reality is that I believe eventually we have to go there.
[Translation]
At some point, we have to go there to protect our communities. Canada’s population is approximately 37 million, which represents less than 1 per cent of the world’s population. That being said, we must not believe that Canada is the solution to everything that is happening on the planet.
However, since I am a student of politics, economics and social work, I feel concerned. I would like to share with you where I come from. I am the son of a single mother who lived on social assistance. I believe that being here in the Senate of Canada is something rewarding. Today, I am here to continue the work I have been doing in my community for 35 years: knocking on doors, hearing people’s opinions and then making decisions.
[English]
Professor McKitrick, you touched on a subject matter. And this morning when I look at the fact sheets in front of me, we are losing $100 million per day with our oil going just to the United States. That’s Canadian. It’s also Canadian where I live in New Brunswick. It’s also Canadian in Quebec. It’s also Canadian elsewhere across Canada. What does that mean? It means that we leave on the table, on an annual basis, $36.5 billion that can help us find solutions to what we’re talking about this morning. Some people think that right now Canada can push on a button and boom, we have the solution. No, no.
Ms. Péloffy, the question I have for you is as follows:
[Translation]
I would like you to provide us with a list of your clients. You could do that through our clerk. Since the committee is public, we would like to know who you are and who your clients are. Of course, you are entitled to your opinions, and I respect them.
[English]
But my other question is this: How is public trust defined? Because at the end of the day, we’re talking about Canadians. When I look at New Brunswick, we leave $740 million of revenues on the table annually. Nova Scotia, we leave $955 million annually on the table. Let’s talk about Quebec: $8.2 billion annually that we leave on the table that we could use to find solutions to the challenges we have.
I’m going to finish with a word — and I will quote a prime minister — mugwump. Mugwump is from the Massachusetts language of the Algonquin language family, earliest documented in 1828. I agree we must always bring to the table stakeholders. First Nations are our first stakeholders. They must be there.
What is “mugwump?” It is a word that was used in 1884 to describe the attitudes of people. Then mugwump was used by a prime minister, and I will quote it, from Pierre Elliot Trudeau, the fifteenth Prime Minister of Canada:
The past is to be respected and acknowledged, but not to be worshipped. It is our future in which we will find our greatness.
I would like to know, how do we define public trust on the challenges that we must go forward to continue to maintain Canada as the best country in the world? That’s what I want. They can bring it in writing. As a student of politics, I know that it can take time to define.
The Chair: We have two minutes left, so if you cannot finish it in one minute, then you can write us and we will be happy to receive your written statement.
Mr. McKitrick: Every fall, I teach a course called economic growth and environmental quality. I have economic students, science students, ecology students. They come with very different opinions on things. I find that I spend the first part of the course going over the data, showing them numbers, showing them historical data, current data. And that tends to bring everyone together because they see what the facts are.
I sense a lot of consensus about your intentions, what kind of process you would like to have. I disagree with the particular mechanism. I think it would get you farther away from what you intend to achieve.
[Translation]
Ms. Péloffy: Very briefly, we are not a law firm, because non-profit organizations, or NPOs, are not allowed to practise law. We don’t have any clients. We provide information to people who are interested in environmental issues.
In the case of the Energy East pipeline project, we referred people to a law firm that represented them. They were landowners along the road of the Energy East project.
[English]
As to how to define public trust, I think I’d paraphrase a Supreme Court justice who was trying to define pornography: It’s hard to define, but you know it when you see it.
I’d say public trust, you know it when you feel it.
The Chair: Thank you. I want to ask if you agree that I send the question of Senator Neufeld to Professor Rodon on the veto and the prior consent.
Senator Massicotte: Professor Rodon made a comment that it should not be consent if we seek to consent. But for the record, one should note that “seek to consent” was refused by the United Nations. After many months of delay, they refused the words “seek to consent.” The “consent” was maintained as is, not “seek to consent,” which means it’s pretty close to a veto.
The Chair: We can ask him to comment on that.
Thank you very much. I think everybody would agree that this was a very interesting talk.
[Translation]
Thank you very much for your presentations and your answers to the questions from the senators.
(The committee adjourned.)