Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue No. 58 - Evidence - April 4, 2019
OTTAWA, Thursday, April 4, 2019
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, met this day at 7:57 a.m., in public and in camera, to study the bill.
Senator Rosa Galvez (Chair) in the chair.
[Translation]
The Chair: Good morning and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Rosa Galvez. I’m an independent senator from Quebec and I’m the chair of this committee.
I’ll now ask my colleagues to introduce themselves, starting on my left.
[English]
Senator Richards: David Richards, New Brunswick.
[Translation]
Senator Massicotte: Paul Massicotte from Quebec.
[English]
Senator LaBoucane-Benson: Patti LaBoucane-Benson, Alberta.
Senator Mitchell: Grant Mitchell, Alberta.
Senator Neufeld: Richard Neufeld, British Columbia.
[Translation]
Senator Pratte: André Pratte from Quebec.
Senator Mockler: Percy Mockler from New Brunswick.
[English]
Senator McCallum: Mary Jane McCallum, Manitoba.
Senator McCoy: Elaine McCoy, Alberta.
[Translation]
The Chair: I also want to introduce Sam Banks and Jesse Good, our researchers, and Maxime Fortin, the clerk of our committee.
[English]
Colleagues, today we are continuing our study on Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts. Today we welcome Francyne Joe, President, Native Women’s Association of Canada and Adam Bond, Legal Counsel, Environment, Corporate, Citizenship, Native Women’s Association of Canada. By video conference, Kluane Adamek, Regional Chief, Yukon, Assembly of First Nations and Graeme Reed, Senior Advisor, Environment, Assembly of First Nations.
Thank you for joining us. I invite each of you to proceed with your opening statement and we will follow that with a question and answers period.
Kluane Adamek, Regional Chief, Yukon, Assembly of First Nations: Thank you. I appreciate the opportunity to join you this morning. It is 5 a.m. in Whitehorse and quite an early start for me, but nonetheless an important topic that we will be discussing this morning. As mentioned, I’m the Yukon regional chief from a small First Nation in the Yukon, the Kluane First Nation, which is a modern treaty First Nation.
One reflection I was thinking about yesterday was how important it is that we ensure that through this process that First Nations are included. What we have seen across the country over the last two years has been active participation from First Nations across this country. Coming from a northern First Nation, a proud Northerner, we do have an assessment process that reflects our needs in the Yukon. There are processes that exist in this country that have already proven that these mechanisms are not only viable, but have supported further advancing certainty and ensuring a balanced perspective to development by those who will be directly impacted by it.
As an opening, I wanted to share that Canada has so much to learn from the North, specific to development and processes that can be developed together in efforts to ensure sustainable development in the years to come.
Members of the committee, friends and relatives thank you for inviting me to share perspectives of the Assembly of First Nations and Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts. I want to also acknowledge my friend and colleague, President of the Native Women’s Association of Canada Francyne Joe, who is there with you in person there and to acknowledge Graeme and Sara, who are here with me on behalf of the Assembly of First Nations.
In the time for opening remarks I will focus on two things. First, how we got here. First Nations participation in the environmental and regulatory reviews, the mandate from our 634-plus chiefs and assembly, the role of the assembly of First Nations in this regard and why this bill is not to be feared. Indigenous considerations within the acts are necessary for the acts to be compliant with Canada’s constitutional obligations.
As mentioned, this process began over two years ago with active participation from First Nations across this country. The gutting of environmental laws by the 2012 omnibus legislation brought in by the previous government left First Nations on the outside of planning and decision making related to their lands, waters and territories. This has been, and continues to be, a flash point for resource conflict, litigation and protests. As I mentioned, coming from the North, in Bill S-6 — and many of you will be familiar with this bill — the National Energy Board sought to remove processes which I earlier mentioned this existed in the North, for example the Yukon and Northwest Territories. There were litigation’s taking place right here in my home territory that are now linked directly with this new bill that we are seeing that make amendments to the National Energy Board.
With cautious optimism, in June 2016, First Nations overwhelmingly participated in the legislative reviews that laid the foundation for the bill you have in front of you today. Hundreds of written submissions and oral presentations by First Nations were made to the expert panel in response to the discussion paper and to the House of Commons committee studying the bill. The collective work illustrates the complete overhaul of key environmental legislation regulations as envisioned by First Nations. Concepts such as jurisdiction, inherent and constitutionally protected rights, nation-to-nation relationships and reconciliation are consistently raised.
First Nations have welcomed many of the proposed changes that Bill C-69 would make. These include the mandatory consideration of Indigenous knowledge, necessary assessment of impacts on rights and decision making and regulatory opportunities for First Nation governments to lead impact assessments themselves. Unfortunately, First Nations concerns are not addressed in the current legislation. Items such as retaining ministerial or cabinet decision making and the uncertainty of the not yet released project list. These remain red flags for First Nations and put at risk the proposed nation-to-nation relationship.
In response, the AFN and chiefs and assembly have passed numerous resolutions calling on the Assembly of First Nations to work with Canada to ensure that the legislation respects First Nations treaties, rights, title and jurisdiction and recognize the responsibilities to their traditional territories.
First Nations leadership has also made it clear that the Senate committee must ensure that:
. . . rights holders participate in the hearing process in a timely manner that is respectful of their unique protocols, and processes, in order to complete the process before the next federal election.
I wanted to reiterate how very clear the chiefs and assembly were about that.
The AFN is not a rights holder, as we know. It plays an important role in communication, coordination, facilitation and advocacy for First Nations across the country. We urge you to engage directly with rights and title holders. We hope and urge that in your journey across the country you prioritize direct, meaningful engagement with First Nations and, as part of your work travelling as a committee and by the May 9 deadline, avoiding the tokenization of First Nations that often occurs in one-stop consultation.
Again, we are reminded of the North and how important it may be for the committee to consider making a Northern visit to better understand the Yukon Environmental and Socio-economic Assessment Act, in the Northwest Territories the Mackenzie Valley Resource Management Act, and the Nunavut Planning and Project Assessment Act. We also urge you to ensure that any new legislation is consistent with minimum standards outlined in the United Nations Declaration on the Rights of Indigenous Peoples.
If Bill C-69 passes, it will be the first piece of legislation in Canada recognizing the UN declaration. It does not go as far as adopting without qualification, but it is a positive first step for Canada in legislative development. As you are likely aware, the UN declaration does not create any new rights, as these rights are inherent and pre-existing. The declaration simply affirms Indigenous people’s human rights. Across government, including in Bill C-262, we are talking about realizing those rights and finding a better way to work together so we don not have to spend millions of dollars and waste years fighting in courts.
Inevitably, the conversation grows to be one of the standards of free, prior and informed consent. To be very clear, free, prior and informed consent was not created by the UN declaration, it was not created in Bill C-69 nor in Bill C-262, it comes from international law. It exists in our modern treaties and it existed in the earlier treaties in Canada. Bill C-69 does not create any new obligations in this regard. It’s very important we all be clear about that.
While there has been some misinformation circulated pertaining to the Indigenous-related provisions of Bill C-69, our submission, which is provided to you today, aims to clarify the First Nations position. Some industry associations, grassroots campaigns and political representatives have suggested that the sky will fall as a result of this bill, but that is not the case. We need to ensure that any of those pieces of information, or information which is misguiding decision-making processes is rectified and that facts are shared. On the contrary, we assert that the Indigenous-focused changes in Bill C-69 represent a renewed articulation of existing jurisprudence on the Canadian Constitution section 35 rights on the duty to consult and accommodate.
First Nations expect more than just compliance with case law in colonial court. However, the approach in Bill C-69 is not a radical departure from the status quo. For example, we know the bill is not perfect, but we recognize that it addresses some of the problems faced under the current existing regimes. That is important to note.
Under these regimes, they have caused delays and other uncertainties. Taken together with the government’s commitments contained in this bill, the minimum standards of the UN declaration and existing jurisprudence on section 35 we, collectively, have an opportunity to move forward together towards a future where First Nations rights holders are considered equal partners in all major resource decisions. This becomes about our future together. This is about thinking about Canada and a legacy that we will leave behind for our children.
Senators, for a moment I would ask you to reflect on how different the landscape of our country may be if this piece of legislation may have been introduced in your early careers.
As we are prepared to answer to our children and grandchildren about how we are unprepared to push ourselves to move beyond what currently exists, to challenge industry together, to do better and to ensure the rights of Indigenous peoples across this country are being honoured, it becomes about how we don’t have time to waste.
The time is now and we need to ensure that political partisanship, for example, not be put in the face of this very important piece of legislation.
Senators, I respectfully ask you to strongly consider the First Nations perspective, to ensure that this committee fully understands the rights and the processes through section 35 and the UN declaration, and that this committee fully support First Nations across the country to participate and share their realities with you in your coming weeks of travel.
On behalf of the Assembly of First Nations, we are pleased to share this submission and we look forward to participating in questions with you after we hear President Joe speak. Thank you.
The Chair: Thank you very much.
Francyne Joe, President, Native Women’s Association of Canada: Good morning. My name is Francyne Joe. I’m President of the Native Women’s Association of Canada. I am a proud member of the Shackan Nation, which is located just south of Merritt, British Columbia. I would like to acknowledge that we are gathered here today on Algonquin and Anishinaabe territory. I’m pleased to be here in front of you, Madam Chair and senators. I would like to know that I use “she” and “her” pronouns.
Since 1974, the Native Women’s Association of Canada has been the chosen national representative of grassroots Indigenous women, girls and now gender-diverse people. We represent First Nations status, on and off reserve, status, non-status disenfranchised Metis and Inuit. We defend their rights and advocate for their voices to be heard.
Today I’m here to defend the importance of Bill C-69. NWAC supports Bill C-69 and it must be passed before June 2019. The government must take measures to ensure Bill C-69 meets the distinct needs and priorities of Indigenous women. Our recommendations on impact assessment processes are vital to its success.
First, it needs the intersection of gender and sex with other identity factors to be included in impact assessment processes and decision making. This can be done through a culturally relevant, gender-based analysis. Bill C-69 is balanced legislation taking steps to include an intersectional, gender-based impact assessment for the first time ever. Women face systemic discrimination in all phases of an industrial project. For example, in extractive industries, jobs and other economic benefits tend to go to men as opposed to women. Unintended social impacts, such as increased cost of living and a rise in sexual violence, disproportionately harm women living in poverty. For Indigenous women these issues are often magnified due to intersecting barriers such as race, gender, class, sexual orientation, cultural identity, impact of colonization, ability, location and more.
A culturally relevant, gender-based analysis would reveal the distinct and unique impacts proposed projects would have on Indigenous women. This is essential to meet their needs and implement effective legislation.
Second, we recommend that Bill C-69 requires impact assessments to consult specifically with Indigenous women when consulting on Indigenous jurisdiction. To understand the environment, health, social and economic effects of a proposed project on Indigenous women, we must be consulted. As Indigenous women, we have nation- and territory-specific teachings about our relationship to the land and our responsibilities to mother earth. Industrial projects impact these relationships. Because of our relationship to the land, Indigenous women also experience unique health impacts of industrial projects. To ensure our needs and priorities are represented, Bill C-69 must ensure Indigenous women are consulted throughout all phases of an impact-assessment process.
Third, we recommend that Bill C-69 expand impact assessment factors to include a project’s contribution to transitioning the workforce to low-carbon industries and providing opportunities for Indigenous women to participate in low-carbon economic activities. Many of our community are already feeling the effects of climate change and we know the actions we take now are going to have direct impact on future generations. To truly assess and mitigate the risks of a proposed project, we feel it is vital that there is an incentive to transition the workforce to low-carbon-industries and that Indigenous women are given the opportunity to participate in these industries.
I’ll end by emphasizing that impact assessment is more than an evaluation of the economic benefits and environmental effects of proposed projects. It must be about improving and strengthening the relationship between Canada and Indigenous people.
Bill C-69 is an opportunity for Indigenous women to have our voices heard in that relationship. I thank you for your time and consideration.
The Chair: Thank you very much for your testimony. We are going to go now into a period of question and answers. I remind senators you have three minutes for each question and answer. If you can keep your question and preamble to one minute, then we have the rest of the time for the witness to answer.
Senator MacDonald: Thank you for the witnesses this morning.
My question is for the Assembly of First Nations of the Yukon. In 2018 the Alberta Assembly of Treaty Chiefs passed a resolution expressing support for Bill C-69. But on April 1 of this year they rescinded that resolution. I’m curious. How many members does the AFN have in common with the Alberta Assembly of Treaty Chiefs? Do you know the answer to that?
Ms. Adamek: Thank you, senator.
In response to your question, I am the chair of the AFN environment and climate change committee, and as such responsible for this particular piece of legislation along with my other AFN colleagues. There is no question that in a region such as Alberta there will be differing opinions, as I’m sure you’ve also heard from industry and from other key players. No question this committee has the very important role to play in ensuring that all First Nations voices from across the country are heard through not only this committee process but through others, to ensure that the committee does have a full understanding of varying perspective that may exist on this piece of legislation that exists across the country and wanting to further clarify in terms of membership.
The Assembly of First Nations, as a national advocacy organization, advocates for all First Nations across the country. That includes status, non-status, reserve, off reserve, for example, as mentioned. I come from a modern treaty nation of which our citizens are both status and non-status. We define our own citizenship through processes. Those citizens receive support and advocacy at their direction from the Assembly of First Nations.
As you mention, there are a number of resolutions guiding the work. It becomes our role as the AFN to ensure that rights are protected and honoured throughout these legislative processes and that important work as has been guided by chiefs and assembly is the work that we will continue to do.
Senator MacDonald: Well, I asked you how many members you have in common with the Alberta assembly, but we’ll go with another question.
Ms. Adamek: Sorry, senator, could you clarify? I want to make sure I understand.
Senator MacDonald: I’m just curious how many members does the AFN have in common with the Alberta Assembly of Treaty Chiefs.
Ms. Adamek: Maybe to further explain, the membership that exists in terms of the AFN is in relation to the nations that purely exist across the country. It’s not so much about: Are you a member of AFN? All First Nations across the country are essentially members by way of their individual First Nations. I would suggest, senator, and would hope that in your travel to Alberta that you meet directly and hear directly from Regional Chief Poitras, who would be best positioned to talk about those very intricate relationships that the Treaty 6, 7 and 8 chiefs have through the Assembly of First Nations.
Senator MacDonald: Yes, we will be meeting with people in Alberta.
Ms. Adamek: That’s great.
Senator MacDonald: Are any members of the AFN unhappy with the lack of pipeline capacity in Canada which greatly contributes to the Canadian oil discount? For example, according to the Indian oil and gas Canada figures, annual royalty income for 39 oil-producing First Nations has fallen by $200 million since 2012. Is the AFN concerned that pipeline proponents have said they won’t be able to get projects built under Bill C-69?
Ms. Adamek: Thank you for the question. Through our chiefs and assembly, the mandates we have been provided have always been that the conversations about development taking place need to happen with rights holders. For example, if we were talking about the Wellgreen mine in my traditional territory, those conversations about development would need to happen with Kluane First Nation. In this particular case, we have heard very different opinions again across what development looks like and how development proceeds.
This piece of legislation provides something new and different. It provides for a process that has engaged First Nations across the country for, as I mentioned, longer than two years to ensure that full participation has been not only included but that the work which First Nations have put into this process — the submissions, hearing from a number of nations and rights holders — that work has been involved and could actually translate into further certainty, for example, with respect to those industry sectors you mention.
I would look to Graeme in this case to add anything that I missed but I feel we definitely have received a lot of dialogue and feedback with respect to development and are being gently reminded that rights holders need to be the ones to have those very important conversations.
Senator Cordy: Thank you very much for your presentations this morning. They have been very detailed and bring to light changes made from the previous bill to this bill. Thank you very much for the work you have done in coming before the committee.
Ms. Joe, you spoke about how pleasant it is to see gender-based analysis in the bill for the first time ever in legislation. Could you explain what a difference that will make for Native women across the country to actually have gender-based analysis within the legislation? How will it make a difference in comparison to other legislation or in comparison to the legislation that was developed in 2012 that was in the omnibus bill?
Ms. Joe: Thank you very much for the question. Women, especially Indigenous women, have such a tie to their lands and territories. It’s not just a matter of collecting of food or where you live; there is history tied to our land. There is history tied to our ancestors who lived on this land. We bring that knowledge to the table with us as water carriers and knowledge keepers. When we have a committee that is gender-balanced, you are bringing the best information that’s going to come to the best decisions.
In the case of this bill, when you have a gender-balanced committee, including Indigenous women, you will have information about an upcoming project that goes beyond just the mineral extraction; it goes upon the impacts of the land and the impacts on the social communities. We need to remember that some of our people have been able to retain the knowledge of their ancestral territories for thousands of years. We shouldn’t overlook that.
Adam Bond, Legal Counsel, Environment, Corporate, Citizenship, Native Women’s Association of Canada: I could speak to the comparison to CEAA 2012. It doesn’t mandate that these considerations be taken into account. That exposes assessments and decision makers to be deprived of this information about the important effects of projects on Indigenous women. As a result, we have found there is a tendency or a risk for industrial projects to have greater deleterious effects on Indigenous women, in particular because of their exposure to vulnerabilities and poverty while at the same time not receiving the same economic benefits in jobs and economic opportunities.
Senator Cordy: Thank you for your presentation. Ms. Adamek, I agree with your comment that it’s better to be working together than to be litigating. It is better for everybody when that is the process. You spoke about the project list. We have heard that from a number of witnesses. Could you tell us the importance? Would it have to be the specific project list or could it be a generalization of the types of projects that would be on the project list?
Ms. Adamek: Thank you. Seeing the project list would best position all of us to start to look at, for example, free, prior and informed consent and the mechanisms and the many tools that we have through the implementing of our rights processes to identify next steps. Of course, conversations about types of projects — that would be something we would also equally like to better understand.
Graeme is the expert on this file from this perspective. If there is anything he would like to add with respect to the project list, I would like to turn it to him at this time.
Graeme Reed, Senior Advisor, Environment, Assembly of First Nations: Thank you. The only thing I would add is that the project list discussion is essential to the item that I think Senator MacDonald picked up about pipelines. If we look at the existing project list, we know that somewhere between 90 and 95 per cent of all projects under the scope of the NEB do not require a rigorous kind of largescale review project that is outlined right now, for example, in Bill C-69. Those non-designated projects, which make up the vast majority of projects regulated through what we now refer to as the NEB, would be important in addressing some of the concerns identified by Senator MacDonald and by other First Nations from across the country as well.
Senator Massicotte: Maybe I will address this to Ms. Adamek.
I consider myself of pro-Indigenous orientation. I think the country has a wrong to correct there, but I’m quite concerned. I’ve read a lot. I’m struggling with this issue. We refer to the UN declaration. You mentioned the issue of free, prior and informed consent. Everybody puts it under the rug, as you are doing by saying it’s not significant; it’s equal to what the Supreme Court has already decided. Yet I have read about the rulings by the Supreme Court; in my understanding of their rulings over a couple of decades now, they say it depends upon the degree of certainty. In some cases, you have the right to consent; in some cases, you do not. It depends upon how certain you are to be infringing upon the rights of Indigenous people.
I’m worried that making reference to the UN declaration will change the perspective and the future decisions by the Supreme Court which I think has done a very good job of protecting Indigenous rights. Help me there. I have met a lot of people including many chiefs and I’m struggling with the issue of why it will not complicate the future processes and the understanding of everybody around this proposed bill?
Ms. Adamek: Thank you, senator. I think that’s a really important question. The first thing I wanted to highlight, just at a high level, is that free, prior and informed concept is not a new concept. It is a concept that we are now seeing and it has been articulated through some of these international legal mechanisms which Canada is now fully acknowledging. We really need to look at the facts of law in every situation. I understand and hear the concerns you raise with respect to how the merging of that proposed language in this bill should be considered.
It is also important that we think about Bill C-262 and understand that it is also going through the federal legislative process. Should that bill become federal legislation, there are concerns identified with respect to the UN declaration and how that integrates within this bill; those are also very important questions that we should be asking about the importance of how we start to shift to include the UN declaration into all federal pieces of legislation because that is the international minimum standard which many countries have supported.
Sara Mainville, who provides legal counsel to the Assembly of First Nations: Would you be able to provide additional comments if there is anything I missed with respect to the senator’s question?
Sara Mainville, Partner, Olthuis Kleer Townshend LLP, Assembly of First Nations: Thank you, regional chief.
What we are trying to advocate with Bill C-69 is increased certainty. Consultation and engagement is a triangle of governance, community impacts and benefits, and the company or industry capacity. All three points of engagement need to have the capacity in order to achieve what would be in the project’s best interest of dealing with the impacts and ensuring there’s appropriate sharing of the benefits in each and every project.
That happens through a process of engagement. We are really supportive of the early engagement process in Bill C-69; that doesn’t exist in CEAA 2012. We are looking forward to having more discussions with industry — engagements through PDAC and other industry associations, including oil and gas, that they’re increasing the industry standard so that they are reaching negotiated agreements with First Nations that indeed is an illustration of consent on a very practical basis.
Senator Massicotte: Frankly, your answers don’t help very much. The other issue I have, the bill refers to nation-to-nation, government-to-government. As a Quebecer, we use the word “nation,” and the previous government accepted the word “nation-to-nation” as a sociological aspect of defining the people. When you say nation-to-nation, government-to-government, what does that mean? It seems to be broader and goes into uncharted territory. Can someone help me with those four words?
Ms. Mainville: Nation-to-nation is —
Senator Massicotte: What does government-to-government mean?
Ms. Mainville: Government-to-government is the fact that governments need to have a process to get to the approval of projects. Government-to-government means there is a discussion about the procedural aspects of how to engage on a project decision-making basis towards approval. That’s the government-to-government process.
The nation-to-nation process is at a higher level. For example, in my communities, there are 28 First Nations, and they are part of the Indigenous nation that I’m part of — the Nishnawbe Aski. We meet as a grand council, we have discussions on these projects, and we decide who the impacted communities are, who is going to take the lead. That’s governance. We also have engagements with various ministers to make sure they’re aware of our ultimate national concerns as a nation about some of these projects and the way that they’re engaging and consulting. It’s almost a policy basis; it’s not a project basis.
The nation-to-nation discussions are key and crucial to making sure that your processes, such as Bill C-69, meets the end goals of our own processes. That’s the nation-to-nation dialogue.
Senator Woo: My question is for the regional chief to pick up on Senator Massicotte’s question, but to be more specific about the reference to Indigenous jurisdiction in the bill.
The definition that’s used in Bill C-69 is that it covers First Nations with co-management regimes, that have land claims or self-government agreements. I wonder if that’s satisfactory to you. Obviously, it excludes other self-identified Indigenous governing authorities and some First Nations have pointed out that possible deficiency. Could you comment on that?
Ms. Adamek: Senators, leaving this room today, if there are additional questions, we will be happy to respond. If the feeling is that more information is needed, please let us know and we will be happy to share that.
This question is important and connects with the earlier question about nationhood. As you mentioned, for example, the land claims or self-government agreements, I come from a nation that has defined what our nation-to-nation relationship looks like. It becomes very career in terms of what the path forward is from a development perspective, from how we see our lands being taken care of, from an economic development perspective to language, culture and education, for example. We’ve done that work in our community.
Communities across the country are also doing this important work. As you mentioned, there are very important considerations to be made so this piece of legislation doesn’t exclude nations that are undergoing this work and that will identify what those processes look like.
What we have seen through this legislation is that it is an enabling piece of legislation. We know that through the regulatory regime process, for example, and the additional policies that will be derived through this piece of legislation should things move forward positively, that would be a time where we would see more First Nation engagement. Those nations that may not have formalized what that relationship or what those processes look like have the opportunity, as you mentioned, to not only be fully considered but, again, back to the conversation about rights, this is about rights being honoured and acknowledged through not only a process but for iterations to come through the various project lists, for example, and the other mechanisms that this piece of legislation affords.
From our perspective, yes, this needs to be inclusive, and there are many ways to ensure that takes place. Those who have formalized agreements shouldn’t take precedence over anyone else. We fully understand and respect that.
Graeme, if there’s something that I’ve missed, would you please chime in?
Senator Woo: Could you be specific about whether you are satisfied with the current definition of “Indigenous jurisdiction”?
Mr. Reed: In addition to the definition including modern land claims and those with self-government agreements, there is section 114(e) that enables the minister to enter into these relationships that allow First Nations to assume powers, duties and functions under the act. Is that a step in the right direction? Absolutely. Is that a recognition of the inherent jurisdiction that First Nations hold? I’ll let you guys decide on that.
It is a step in the direction that I think First Nations have identified through the expert panel and discussion processes, the discussion paper process and also through the response to the bill being examined by the House of Commons.
Senator Mitchell: Thanks to each of you. My first question is for Ms. Joe, who has given a very eloquent and impassioned defence of the GBA, gender-based analysis, in this process. I appreciate that very much, and I think many people do.
The inclusion of that element in the process has been criticized or raises concerns amongst some because it might delay or broaden the scope of the process too much. I’m startled when I read your presentation where you mention that projects can often have deleterious effects particularly for women and on food and security.
Could you address how the food and security element can be exacerbated and how you believe, with respect to women in particular, the GBA elements of a review would address mitigation of that problem and strengthen the review process, not weaken or unnecessarily delay it?
Ms. Joe: Thank you for the question. When it comes to food security and the issues surrounding industrial camps and the impacts on Indigenous women, we have to be careful. For one, when you have an industrial camp, a natural resources camp, in an environment where women have traditionally collected medicines, food and hunted, there is an impact on those areas. Usually it’s a toxic impact.
Quite often we have found that the quality of these items deteriorates, which affects the health of our women, children and communities.
On a commercial side of things, when you increase a large group of employees who come to work for that camp, it’s a supply-and-demand issue. Unfortunately, Indigenous women don’t make as much money as a lot of the camp workers.
Unfortunately, we’re seeing women not able to purchase food, health and even personal products for themselves. If a company can make more money by raising the cost of a jug of milk or fruits and vegetables, they’re going to do that. It makes sense as a business.
I hope that answers that portion of your question.
In GBA, when we look at GBA as consulting, I think we see that when a project is coming into a community — I was discussing this with colleagues yesterday — we want women to have good jobs in these projects. We obviously, in more cases than none, need to have other supports like daycare and elder care. These mines are quite often are 24-7 mines. Daycares are usually not 24-7. There are issues that Indigenous women — women — need to bring to the table that aren’t always addressed.
That’s my experiential side of things. I’m sure Adam might have more to add more on the scientific side.
Mr. Bond: Just to say how this legislation might address that, requirements under section 22, that those factors be taken into consideration, will require that those issues be spoken about in the first place. It’s essential. It’s giving a voice to these concerns. Without this requirement, there’s no guarantee those concerns will be brought to light.
Senator LaBoucane-Benson: First, regional chief, I want to thank you so much for being here at 5:00 in the morning. I know you’re not feeling well. I’m very grateful that you are participating.
One of the things that everybody on this committee is interested in is increasing certainty and decreasing litigation risk. I think you spoke to that quite well. Part of this is to ensure impact assessments reflect section 35 of our Constitution. It also means that we need to make sure that this bill reflects the finding of the Federal Court of Appeal and Supreme Court decisions on duty to consult. I thought that you offered three very important pieces that maybe you can repeat and flesh out. There were three points you made regarding Indigenous knowledge and participation. Can you speak about those? I think these need to be — to make sure we don’t lose those in this piece of legislation, because they address certainty and litigation risk.
Ms. Adamek: Thank you. I’ll start at a high level. I’m gently reminding everybody that we’re looking at CEAA 2012 and the NEB on no engagement with First Nations and really no concrete understanding of Indigenous knowledge, nor were any processes engaged upon in terms of including Indigenous knowledge in a way that it must be, in the same way that we balance science, for example.
While we know this piece of legislation isn’t perfect — I think we all know that; elephant in the room here, for a moment. There is no question. It’s so important that we are thinking about if we are willing to work from a place that is entirely dysfunctional that has led us to a number of different court cases. Are we willing to look at investment in being court cases as opposed to investment in process that’s going to work and create more certainty for everyone? Those are the types of questions that I feel are very important through this process, and that you have heard from a number of nations from across the country.
With respect to Indigenous knowledge, this is where the important work has been done by our people. Grateful probably wouldn’t be the best way to describe it, but I will use that word for now, because we’re grateful that there is finally this understanding and respect to Indigenous knowledge through energy or other development projects across the country. It is so important that those considerations not only be taken into consideration, but there be a clear process for that. That’s where the response has been very positive in terms of how that engagement has taken place and where we are now.
When we talk about litigation, the Mikisew Cree is a good example. I know that the senator from Alberta and speaking to a number of the nations from Alberta, of course, we are going to see different opinions and we welcome that. The over 40 nations that make up the First Nations that are part of the Treaty 6, 7 and 8 of the Alberta part of our AFN, for example. It’s important that everyone understand what those concerns are and that we are able to then move on from that place. If we don’t have a good starting point, where are we going to be? That’s exactly where we’re left right now with CEAA 2012 and the NEB. I share, from a regional perspective in the Yukon, some of those specific legal challenges. I often hear others joke “visit grandma Google,” but I really encourage this committee — and that has been a dimension of this entire process that I don’t think we’ve really looked at. In the North, for example, these processes exist. They were created together in parallel to this process.
When things like CEAA 2012, and specifically the NEB, came into play, you saw a response from the North through litigation that you may not have seen. That was specific to how that piece of federal legislation, the NEB, Bill S-6, infringed upon rights that had been already agreed to through our modern treaty agreements.
It is so important that we all take a moment to reflect on — perfection isn’t necessarily achievable in this process. The time, we know, is short. This is a great opportunity to start from a different starting point and to then look at making amendments so that we’re able to take a piece like Bill C-69 and work from there. We have to get beyond the status quo. We know the processes in place don’t work and this process has been positive in terms of engagement. This is a great opportunity for us as a country to really step behind the commitments we’ve made to reconciliation, to moving beyond and looking at sustainable ways of development across this country. Those are reflections I wanted to share.
Graeme, my colleague, from a technical perspective, if there was anything you want to add I will turn it to you at this time.
Mr. Reed: Thank you, senator, for the question. We addressed some issues in our submission. For us, the starting point is jurisprudence. Making it in alignment with that is probably a good starting point.
Senator Neufeld: I thank all of you for being here today. I can understand the 5:00 a.m. because I live in Fort St. John. I’m on the same time as you. I’m encouraged to hear that what you talked about, the project list, cabinet, final authority, at least what I understood, and participation of those most affected are on your minds also as the Assembly of First Nations. We’ve heard that consistently from almost all the other groups who have appeared here.
I get the feeling you’re saying the problem with the litigation happening is because of CEAA 2012. I’d like to get your viewpoint, if you look at Trans Mountain or Northern Gateway, that’s where things started to be talked about more as far as pipelines go. Trans Mountain has signed lots of agreements with First Nations along the full length of it, they’ve consulted for years with First Nations and there’s litigation.
Are you inferring that, if we had Bill C-69, we wouldn’t have that same litigation using Trans Mountain because that’s real, that’s happening, we know what’s happening? We hear from the sponsor of the bill, Senator Mitchell, that this bill will speed up the process, we’ll get to build things a lot faster. Does that bother you a little bit?
I’d really like to hear how we actually connect those dots when it comes to litigation.
I don’t believe for a minute that the litigation will quit. On Trans Mountain they negotiated for a number of years. Some people are going to be opposed and rightfully so. I’m not saying that shouldn’t happen. Some people should be for it. To think that Bill C-69 is magically going to change that process is hard for me to believe. Maybe you have a different viewpoint.
Ms. Adamek: Thank you, senator. As you mentioned, is it magically going to change? Of course not. I think we all know that.
What we do know, however, is that the process that exists now has led us to a place where we do have all of these court cases. We know, for example, that Kinder Morgan and that process, and the approval through the current NEB process, is problematic. We know that.
I think what becomes the important questions and considerations —
Senator Neufeld: Would you say the same thing about this bill if there was litigation, under Bill C-69 —
Ms. Adamek: I will finish. I’m going to finish and then I’m going to get to the next part of your question.
We can’t compare, first of all, CEAA 2012. We can’t compare the NEB because those are two fundamentally different pieces of legislation that were created with principles that don’t honour and acknowledge Indigenous rights.
If we’re coming at this from the perspective of wanting to look at furthering development across this country, then we need to think about how we are doing that. That is the fundamental difference between these two bills.
Can I sit here, analyze and assess whether we would be in the same legal situation? I think that would be pretty unfair. I know what we can say is that this process has been one that has been inclusive. This process has been one that considers Indigenous knowledge, that looks at Indigenous rights, that acknowledges that through this process. That is very different than what we have right now.
While some of the questions you have are very good questions, and likely a lot of people across this country are having those same questions, I think we need to take it back for a moment and ask why we are in that situation. It’s because we haven’t had a process in this country which has provided for the certainty we need as First Nations people, but also that industry needs.
I think that’s where we need to take a step back. We need to start from a more common place that has processes which respect the interests of sustainability and development across this country, while balancing that and ensuring that Indigenous rights are honoured and protected. Most importantly, that these projects and the people that they’re going to be impacting are not a bystander in any of the processes or developments, but that they’re engaged early and often from the very beginning.
For the second part of your question, I would like to invite my colleague Graeme to provide additional comments because I think these questions are very important. There’s no question that there is this friction across the country in understanding, legally, what will be in the future. But here is the thing: This is far better than what we have now, so are we willing to accept what isn’t working? Or are we willing to challenge ourselves and look at doing something new that was created with Indigenous peoples across this country?
Graeme, I’d like to turn it over to you.
Mr. Reed: Thank you, senator, and thank you, regional chief. I have two quick points. Our interest in the early engagement phase is that a lot of these questions would start early on in the process and that we would have these multi-jurisdictional conversations between recognized jurisdictions in a way that we haven’t had in the existing process.
We often hear this notion that First Nations are somehow a homogeneous group and they have to agree, except we never put that same sort of standard on provinces, which we see are clearly not agreeing in this circumstance. I think there’s a double standard expected of First Nations in this context.
The other thing is in that case that Tsleil-Waututh brought to the Federal Court of Appeal against Trans Mountain was about the implementation of consultation. One of my particularly favourable lines in that is that:
The law requires Canada to do more than receive and record concerns and complaints.
Clearly, we see that the existing consultation approach is not adequate to not only hear those concerns, but then incorporate those concerns into a process that is meaningful to include their rights.
Our hope is, through the design of an early and better process, these concerns and conversations can occur before they have to be referred to judicial review and creating this sort of negative environment between First Nations, proponents and governments.
Senator McCallum: Thank you to all the presenters.
My question is for President Joe. Women have had very little to no voice in the various forms of resource extraction activities, and women have traditionally been an important source of decision making that went beyond economics and into the resilience and social capital of our communities.
Has the exclusion of women, including the right to free, prior and informed consent, the right to say no, the right to say yes, and the right to say yes with conditions attached to it, in relation to their bodies, their lives and their role as protectors, impacted negatively on the relationship with Canada and bills like Bill C-69? Would this inclusion of gender-based analysis bring resolutions towards support for extractive resources?
Ms. Joe: Thank you, senator. I believe whenever we bring a new project into a community, be it an Indigenous community or otherwise — but most of these projects seem to be more remote and located near Indigenous communities. I think whenever you bring a large group of mostly male employees to an area, there are some dangers bringing strangers into your home and into your home area.
We need to have these concerns addressed in some way. I think some industries are understanding that by having a gender-based group that includes Indigenous women, they can be proactive to ensure that the safety of our Indigenous women, girls and communities is being addressed proactively. That’s a necessary process so that we can move away from violence against our people.
By having these gender-balanced committees and including the Indigenous voices, we’re also being very respectful of the territories we’re moving through. I think that’s going to become a two-way between the Indigenous community and the non-Indigenous community, although I guess it’s a three-way because you’re bringing in industry also.
I feel very strongly that by inclusion that we’re going to have better project, better outcomes and better support from all parties. Thank you.
The Chair: Thank you very much. That concludes this panel.
Colleagues, we have to have 20 minutes at the end of this session because we need to discuss the progress of our study.
Senators, we now welcome from the Canadian Energy Pipeline Association Chris Bloomer, President and Chief Executive Officer, and Ben Coleman, Manager, Government and Stakeholder Relations. From Wim M. Veldman Consulting Inc., Wim Veldman, President.
Thank you for joining us.
Wim M. Veldman, President, Wim M. Veldman Consulting Inc.: Thank you very much, Madam Chair. It is very nice to talk to a fellow engineer, especially a fellow water resources engineer. I have spent a lot of time in Peru, as well as on the Camisea pipeline project.
Thank you for your time. In the brief time I have, what I would like to focus on is real world experience in building pipelines. I have been fortunate to be involved in building pipelines for 45 years starting with the Trans Alaska pipeline full-time during its construction and design. I have also been involved in hearings in Canada for the NEB, FERC hearings in the U.S., State of Washington hearings, hearings equivalent to FERC in Argentina, which was an interesting experience, and also hearings for the state of Washington and pipeline projects.
I stress that it’s really important when we think about safe pipelines that are safe to operate, what we’re talking about in the hearings and the regulatory process is only the very first step. It’s the design, approval, construction and the operation. This is an international book whose second edition will come out in two weeks, but it is specifically on pipeline hazards and published by the American Society of Mechanical Engineers out of New York. I was fortunate to be asked to be one of the authors of the book. It is the full life cycle which we have to think about. Our objective is common: Safe pipelines.
I have talked about my number of years of experience, and I want to get something out of the way. I have seen references that say the NEB is 60 years old and we need to change it. I’m 75 years old, I just signed a two-year contract with the Trans Alaska pipeline, I hope that when they kick me to the curb it’s not because they say I’m too old, but they say I’m not good enough anymore. I have it in this book, in terms of chapter highlights, that I’m a firm believer in local knowledge from whatever source. My best local knowledge on a very difficult river crossing in Ecuador was a 90-year-old lady who lived on the river all of her life. I started in Manitoba on flood projects where we would talk to farmers. Local knowledge is extremely important. “Old” is not a good enough reason to change.
The basic NEB process is not broken. The overlying policies, statements, approaches and processes are the ones that are broken. Bill C-69, in my opinion as a simple engineer, has fatal flaws that will not remedy the problems we have. Amendments, in my opinion, will not fix it. We’ve talked about building pipelines and the challenges we’ve had. I think we should do a reality check. The Trans Mountain looping project that I was involved in through Jasper National Park and Mount Robson Provincial Park was challenging because of the tight right of way. A couple of years ago I saw a letter written by a lady in Vancouver who asked, “How would you like it if we built a pipeline through your parks?” In fact, we have one in Jasper that is barely visible. Trans Mountain won an award for excellent environmental studies. Trans Alaska pipeline — and I’ll refer to it as “we” because I have that sense of ownership. I’m still involved in it. Every year I do a line-wide inspection. This is the key — not only up front — but this is the key: Line-wide inspections, continuous evaluation that determines if we achieve what we all want, which is a safe pipeline.
OCP Ecuador, Mindo Ridge east of Quito is very challenging, but we found a way to do it by digging a pipeline by hand for eight miles. Camisea, Peru, twin lines, one to Pisco and one to Lima, and the eastern end in the jungle and the Amazon rainforest. Initially there was a plan for temporary access roads that was not permitted after a lot of consultation. All the construction was done by helicopter with access only along the pipeline right of way. Camps every 20 kilometres and helicopter support. It was incredible.
A little bit of history on the Trans Alaska pipeline system. We talk about opposition to pipelines. Opposition to pipelines is not new. In 1969, when Trans Alaska was first applied for, it was rejected for environmental reasons. They kept on studying. The good and strong thing they did was in 1971. There was a land agreement signed with all First Nations in Alaska. It was land and payments. That was in 1971. They continued to do environmental studies. There was still a lot of opposition in 1973, but the U.S. Senate at that time and the government said they had done four years of intensive studies after the first rejection, lets have a vote. The key vote in the U.S. Senate was a tie vote with Spiro Agnew, vice-president to President Nixon, breaking the tie. It was a lot of opposition, for good or not so good reasons. I stress that because opposition to pipelines is not new.
I should have said it at the beginning, I will focus totally on pipelines and the NEB. I have worked on mining projects and I can understand why they are viewed differently, but I will focus on pipelines.
When I think about the opposition to Trans Alaska — and I moved down to Texas to work on it full-time, sight unseen, not even having the project fully approved. I would challenge anybody now that was opposed to the Trans Alaska pipeline, including former Vice-President Joe Biden, to go up to Alaska now and ask anybody, especially the First Nations: Would you like to go back to pre-1973? Right now, the First Nations, in terms of Alaska-based companies, they comprise 75 per cent of the total revenue of the businesses based in Alaska, with their largest First Nation billing two and half billion dollars a year.
I would like to talk about the existing NEB. The mandate given to Minister Carr was to modernize the NEB. The expert panel spent time looking at it and one of the comments that they had is that the NEB is “respected internationally” as the “most stringent of regulatory regimes.” I think that should be the starting point. They recognized it is continually evolving and expanding its role. I worked on the Mackenzie gas project extensively. I was surprised by a previous comment on a previous hearing that before 2012 NEB did not do engagement with locals. I find that extremely surprising having spent a lot of time in the North on the Mackenzie gas project doing that very same thing.
If you look at the evolution of the design, the conditions, the degree of detail of the conditions from Mackenzie to Northern Gateway to Trans Mountain, you definitely see an evolution. The expert panel agrees there was an evolution. There was an audit done of NEB in 2015. One of the things that was recommended was that NEB improve tracking, and the expert panel agreed and recognized that improved tracking was happening. What more could have been done, whether it be TMX or any of those?
In some cases I’m not sure because some stakeholders stated publicly many times that regardless of what you propose, we will oppose. It’s hard to negotiate and consult on that basis.
Comments have been made that the new process will be science-based. I would challenge anyone to look at the NEB TMX decision report, especially look at the conditions and the requirements to meet the conditions all the way through, and I would like someone to point out what could be more science-based.
This is only the beginning. A lot of my work is involved. This NEB decision report doesn’t allow me to move one shovel of dirt. In my field, which is river crossings, before I can do anything, I need federal government, Transport Canada and provincial approvals. A lot of that is based on scientific analysis and studies.
Every step is detailed and public input. I showed this TMX report and its 68 pages of conditions. This very small book was my bible on the Trans Alaska pipeline. This was the starting point — the policies, criteria and multiple detailed studies; so volumes of words are not required to construct and operate a pipeline safely.
I find it interesting that we don’t believe in the robustness of the NEB process. We, being the taxpayers of Canada, spent $4.5 billion buying not the old pipeline. We bought the right-of-way and the approvals; so we must believe, having spent $4.5 billion, that we have a good chance of building the new one.
What should have been done? Where are the problems? As I stated, our problems are that we need stronger up front stated overall policies and procedures. As I said earlier, I’m a simple engineer, and I’m getting into some high-level policies. Let me give it a go.
Number one — make a statement that Canada should be energy independent. I know that was up for discussion at a Liberal annual meeting about a year ago. I don’t know if it made it to the top 25. Something that has been said many times by the Prime Minister as well as other ministers — fundamental responsibility to get our resources to international market. That should be a stated dictum and policy. Establish how to do nation-to-nation consultation. In 2017 the expert panel reported that a working group of ministers was working on that. I don’t know if that has been completed. Establish what is consultation. Consultation does not necessarily mean a veto. Establish that 100 per cent approval is not required. This is very apparent if you look at, as an example, all the discussions in the background of Bill C-48. I testified on Bill C-48 last night. Because Minister Garneau says that Bill C-48 was not 100 per cent approval.
What could have been the options arising from modernization management? One, do very little. Because we are “respected internationally”; we are “more stringent.” This is not a diagnosis for major surgery. I have been through the Panama Canal more than a dozen times. When it was taken over by the country of Panama, the engineers had a dictum to modernize the locks. These are more than 100 years old. They came back after a year and said that the locks are excellent. Other than upgrading some of the controls, the locks work.
Option No. 1 — do very little.
Option No. 2 — version 2.0 of the NEB. I have a table on that.
Option No. 3 — Bill C-69, which I regard as major surgery.
Option No. 1, you do very little. We are already doing that. We are already evolving.
Option No. 2, which I call NEB version 2.0, there is a detailed table attached to mine — I won’t go into it. The largest recommendation I make on that is to add on an independent review board. I can get into that because I think that’s an overlying review and assessment.
Bill C-69, what are some of the major flaws that I see? Rebuild public trust. Inclusive consultation.
If I went to Montreal as an expert witness, or as an expert in my field — bridges and rivers — and testified on a bridge, I would expect the panel in Montreal to say, “Mr. Veldman, sorry you wasted your time and our time. Your comments are irrelevant.” A direct “standing test” on testimony is accepted.
If you let anybody speak to it, half the people will be told you are not directly impacted, and all those people will be frustrated because their comments were not taken into account.
Greater transparency and more government decisions equals less transparency. The expert panel said the NEB decisions are transparent; it’s the government decisions that are not because they don’t have to be.
Conclusions — the Government of Canada, in their document, says that we want a modern, new and world-class federal energy regulator. I say we are already an internationally respected regulator among the most stringent; thus meeting our mandates, let’s modernize through the recommendations I have made. Thank you very much.
Chris Bloomer, President and Chief Executive Officer, Canadian Energy Pipeline Association: Thank you for the opportunity to come here and speak to you about Bill C-69 on behalf of the Canada Energy Pipeline Association.
I have a short statement. I look forward to your questions and having a conversation. Canada’s energy industry is undergoing a worsening crisis. That is understood by everyone.
The recent decision by a long-term investor in Canada’s energy sector, Devon Energy, to divest their Canadian assets is a stark example of this. Our oil and natural gas resources are landlocked because we are not building additional pipelines. The Canadian economy is missing out in billions on long-term revenue. We are foreclosing on opportunities to develop our vast resources.
One of the largest impediments is the regulatory environment in Canada. In addition to the lack of clarity and uncertainty in Bill C-69, the layering of new regulations at the federal and provincial levels is overwhelming. It contributes to our declining competitiveness.
CEPA-commissioned Ernst & Young — and I have a document we will be providing to you — to study the effect of increasing regulation on the pipeline industry as it is today. The study highlights the declining competitiveness of Canada for our industry. The Ernst & Young report was released yesterday, and we provided the committee with copies.
This report, along with our package of proposed amendments we have submitted, can help inform your important task of studying and amending Bill C-69.
CEPA provided a candid assessment of Bill C-69 to the parliamentary committee last spring. That committee did not address our concerns and returned a bill that was more troubling than the original, in our mind. It is that more troubling version that is before you today.
Bill C-69 does not address the pipeline sectors’ most fundamental concern — that of the unacceptably high financial risk associated with lengthy, costly project reviews that have triggered polarized discussions in the process and what are viewed as political decisions at the end.
Bill C-69 subordinates the role of the NEB, setting aside 60 years of administrative and technical expertise that has evolved over time, as we have heard.
It moves technically sound project reviews from the NEB to the Impact Assessment Agency. It is not tested and really lacks the independence and expertise to conduct major pipeline review projects. We view just the physical transition to that and the timing to be problematic for getting things done.
CEPA is proposing a suite of amendments to Bill C-69 that, if accepted, would offer a more balanced approach, decreasing the risks and increasing clarity and certainty for project proponents and investors. Our proposed suite of amendments is, however, provided without knowing the designated project list. That’s a fundamental and key component to our thinking around that. We would also like to understand how the regulations are going to be structured.
Our proposed amendments, which will you find in our written submission, are meant to address five fundamental flaws in the bill. The first is that Bill C-69, in our opinion, further politicizes the project review process by including broader public policy issues like climate change and sustainability in both the review process and the political decision at the end of a very lengthy and expensive process. It is the worst case scenario for our industry because it is uncertain.
Two, Bill C-69 sidelines the expertise of the NEB. Some of the changes in the Canada energy regulator act, such as the governance structure, are sound and we support those changes. That’s an evolution of the body and how it is governed. We strongly believe that project review should continue to be conducted by a modernized NEB as the best-placed independent regulator.
Three, Bill C-69 provides overarching discretion to the minister of environment and climate change. There are numerous areas in the bill that allow the minister’s intervention, including the power to add projects to the project list, the ability to determine the scope of factors to assess the final decision on whether the project is in the public interest, the ability to set project decisions and extend timelines.
CEPA remains concerned with the increase uncertainty this creates. We have consistently highlighted the importance of having an independent, quasi-judicial process that is grounded in fairness and transparency and based on principles of administrative law, natural justice and procedural fairness.
Four, Bill C-69 lacks necessary certainty and clarity. We have focused our amendments on two areas: timelines and public participation. We are proposing a maximum cumulative timeline and allowing the agency or commission to determine the public participation rights based on the degree to which a participant is directly impacted or has relevant information or expertise.
Five is the potential for increased litigation and judicial review. CEPA proposes a prohibitive clause to limit judicial challenges to decisions or orders on questions of law or jurisdiction, removing opportunities to reassess matters of fact.
In conclusion, Bill C-69, as currently proposed, is irreconcilable with the vision and objectives we have consistently articulated. It is also, in its current form, irreconcilable with the objectives that the government itself outlined at the beginning of the consultation process almost three years ago, though it seems like yesterday.
Finally, CEPA remains concerned that the government has not articulated a vision of how Bill C-69 fits into Canada’s longer-term energy objectives. It does not reflect the importance that energy will continue to play for many decades to come. It does not, in its current form, help Canada achieve the full value of its resources in world markets.
We applaud the work of this Senate committee to review the bill. It’s challenging, but it is of fundamental importance to Canada. This is a very big deal. We hope we can achieve an amended bill that we can all support and move on with together to get Canada moving forward to be able to develop our resources and build the necessary infrastructure to access markets and grow this industry.
Thank you very much. I look forward to your questions.
Senator MacDonald: Thank you to the witnesses for being here today.
It is illuminating to hear both of you speak up for the NEB. I’m one of those people who think that the hatchet job done on the NEB is unjustified and unfair. Mr. Bloomer, I’ll start with you. CEPA put a press release out on October 5, 2017, and it reads:
CEPA is extremely disappointed that the Energy East Pipeline and Eastern Mainline Project will not be moving forward. . . . TransCanada’s announcement follows the NEB Energy East Panel’s decision to consider upstream and downstream greenhouse gas (GHG) emissions for the projects.
Can you explain how upstream and downstream emission tests affect the pipeline project and how the imposition of this test specifically affected Energy East and once again puts upstream and downstream emissions as considerations under Bill C-69?
Mr. Bloomer: That particular issue of including upstream and downstream emissions in the evaluation and assessment of a pipeline project is very problematic. Our view is that from a review perspective, the pipelines serve to move energy products that are approved, have gone through rigorous environmental review and development, have met regulations and are serving a market that is, unto itself, governed by rules and regulations.
Those two jurisdictions are not under the control or under the impact of pipelines. The upstream piece is the purview of the provinces. It’s their resource. The downstream part is the purview of the markets, which will be subject to all kinds of different regulations such as carbon and consumption taxes. If there is no market, then we don’t supply it. Building those things into a project review and analysis is not the correct place to do that.
On Energy East, again, that was a compounding of an example of the process starting, the process stopping and the goal posts moving. When that last panel was put forward, we need to bear in mind that those panels are absolutely independent. They determine their own terms of reference. It was that panel that determined it would be a good idea to have upstream and downstream emissions.
That did two things. It meant you could bring into a review process, through the panels, whatever they wanted to do and that became a very big impact. It was basically something layered on. It was kind of the last drip in a drip-drip-drip of changes in that process. Based on that, it became untenable.
We strongly believe that the inclusion of upstream and downstream emissions for pipeline projects is absolutely inappropriate.
Senator MacDonald: Either one of you can speak to this. The U.S. is buying our bitumen at WTI or Western Canada Select discounted prices. In the meantime, they are producing their tight oil and selling it to Canada at world price. Can you speak to the investment of pipelines in Canada compared to investment in the U.S. and what your members tell you about Canada’s competitiveness, particularly with the U.S. when it comes to the investment climate?
Mr. Bloomer: I’ll answer and turn it over to Mr. Veldman. The EY report that we provided addresses that particular question quite clearly. If you look at section 52 applications equivalence in the U.S. since 2014, there have been 14 pipelines moving ahead and one in Canada. The dearth of project applications of a section 52 nature is stark. There is very little activity.
We know that investment is moving south. We know that there is not the kind of perception that Canada is a place to invest at the present time. That’s partly caused by the regulatory structure. Within that report, it will provide a very clear outline of how that impacts and what is occurring today and it’s a pretty stark difference.
Mr. Veldman: The only thing I could add is that apparently during the time that the Keystone XL was first approved, stalled and then finally rejected by the former government, eight equivalent Keystone XLs were built in the U.S.
Senator Cordy: Thank you very much. I’m going to ask both questions at the same time so I won’t be cut off.
Mr. Veldman, I’m not sure if you were here for the previous panel. You have said that Bill C-69 has fatal flaws. I’m not sure if you think it’s amendable.
We heard from the previous panel that the previous bill from 2012 left Indigenous peoples on the outside, that it’s better to work together with First Nations than to be litigating. We heard about the importance of Bill C-69, that it must be passed, that it has gender-based analysis in a bill for the first time ever and the opportunity for Indigenous women’s voices to be heard is recognized in Bill C-69, and this process has been inclusive and it has involved First Nations.
Could you comment? We’re looking at witnesses who we hear on every side of the issue. Could you comment on your differences?
My second question, Mr. Bloomer, relates to public engagement. Thank you very much for the way that you’ve put in your amendments. It’s very helpful to put your amendment and the rationale behind what it is. That’s very helpful.
The public engagement and the changes that you’re recommending — number 74 — is that the regulator, instead of saying “must establish processes” you said that we should be saying “may establish processes.”
You’re saying this would provide clarity. We’ve heard from industry a lot that there are times that more clarity is needed. I specifically chose public engagement. If you’d like to speak about the importance of the clarity aspect and what’s the difference between the must and the may to the industry?
Mr. Veldman: I was here for most of the previous panel. I walked in a bit late.
As I said before, I’m surprised that there would be the sense that prior to 2000 or prior to 2012 there was no Indigenous consultation and engagement. As I said, on the Mackenzie Gas Project, that is certainly not my experience.
Also on Northern Gateway, I know there were multiple agreements with the Indigenous groups of people along that right-of-way and Northern Gateway, if I recall, was 2013. On both those counts, there was a lot of engagement. One can perhaps argue about the type of engagement, nation to nation or what was it, but there was absolutely a lot of engagement on both projects. In TMX, we know there was.
Mr. Bloomer: On the question of “must” versus “may” in the context of clarity and public engagement, correct?
Senator Cordy: Yes.
Mr. Bloomer: The “must” versus “may” is basically trying to be less prescriptive, giving some flexibility and options to deal with some of these issues.
On issues of policy, one of our concerns around aspects of the bill is that there are broader policy issues that are being cast as you must look at this. How do you scope those things? The “may” allows for the ability to scope these things within the process. It is not suggesting we ignore it. In the public consultation part of it, it is setting up, it really is around who is going to come in the early engagement process, who is going to be qualified or will have the input that’s required rather than having a broad-based public consultation process whereas it’s really wide open. That can lead to a lot of uncertainty and timing.
I think, from the Indigenous point of view, that early consultation is very important, and they want to be included in that. We need to consider that in the consultation process. We need to narrow it down, be very clear who participates in the consultation, and that the role of Indigenous input is clearly seen as very important and not diluted by very broad-based considerations in the consultation.
Senator Richards: Thank you for being here. I don’t think it would be any surprise to anyone here that I think is a terrible piece of legislation. I’m going to ask: Do you believe this will lead to unending litigation, as I think it will. In that case will it crush our economy even more? Would you prefer the bill from 2012 instead of this bill today? Either of you could answer that.
Mr. Bloomer: We have concerns with the bill. It will lead to potentially a lot of litigation in a couple of areas. For instance, with the new agency processes and policies and so on and decisions that are made with respect to those — bearing in mind we’re not sure how the regulations are going to interplay with all of that. We need to clarify and make sure the intent of the bill is clearer so that we can avoid those kind of litigation concerns.
With respect to CEAA 2012, our view is that we are where we are. We’ve gone through three years of consultation, discussion and so on. We have a bill that we have said is not reconcilable with what we think needs to be done going forward. We’ve proposed amendments to change that. It’s not everything that we’d like to see, but it’s a way to move forward.
We’re focused on what we can do with this bill and how we can make this bill, through the suite of amendments we’ve proposed, workable and reduce the risk of litigation. We’ve proposed a privative clause. We think that can be very helpful, decisions being final, and appealing to an appeals court rather than working it up through the system and burning up a lot of time.
There are some key interlocking amendments we have that address that issue around litigation.
It also clarifies clearly how we can get a process that is clear in its intent that we can all say “this works” and we can all move forward. Because we have to move forward. We need to have something that we can all work with. Our intent is to get something that we can work with, move forward and we can move forward together and get things done.
Senator Richards: What if the amendments that you are proposing aren’t taken?
Mr. Bloomer: I don’t want to be the skunk at the garden party, but if we don’t see a bill that’s workable, we’re going to say that. It’s going to be a really big challenge. It’s going to impact Canada.
We have got to reset what we’re about. We have to use this opportunity — and it’s a big opportunity for everybody — to get this bill in a place that we can all support and then let’s move together to position Canada as a place to invest. This is a real opportunity for everybody to try and achieve that.
That’s our hope in all of this. It is kind of binary; we either get it right or we don’t. I think we’re on a path to get it right and we’re hoping we can do that.
Senator Mitchell: Thank you very much. Mr. Veldman, I want to echo Senator Cordy’s comments about how much we appreciate the way you’ve laid out your case and you’ve worked diligently and you represent —
Mr. Bloomer: It’s all Ben.
Senator Mitchell: You represent a range of companies from Alberta and elsewhere, good people, great contributions to the country and to the west. I want to emphasize that.
I want to touch on one thing that hasn’t come up very much in the hearings at all, and that is strategic assessments and the element of the process contemplated by Bill C-69. It has some advantages and benefits for streamlining and other things. I think that your organization sees some value in that. Could you comment on that and give us your insight?
Mr. Bloomer: It’s a very important aspect. As you say, it has been lost in all the other stuff.
Strategic assessments are important in a couple of ways. If we look at past processes, it’s our view that part of the reason pipeline projects, assessments and so on have been problematic is because it has become the catchall for a whole litany of concerns that are not necessarily related to the pipelines.
The proposed strategic assessments can be a way to have people engage in a way that deals with things at a local level. This all gets down to a local level, in very many ways. You can have these strategic assessments, you can have the input, and you can take that input from those strategic assessments and feed them into the overall assessment piece. It’s a place for engagement and to be heard that can flow into the assessments in the future.
I think frankly it can be a very constructive part of the whole process going forward.
Senator Mitchell: I know we don’t have much time, so I’ll pass.
Senator Patterson: Canada’s been an energy-rich country. Our resources are stranded, currently, and forecasts indicate there will be a demand for oil and gas energy in the world until at least 2040.
You’re proposing 19 pages of amendments that are very well presented. We’ve also heard this morning the bill has fatal flaws that amendments won’t fix. Is there any consensus-building in the energy industry about this suite of amendments you’ve presented? Do you have common cause with other energy advocates in the country?
Mr. Bloomer: The short answer is “yes.” We have been working very hard across the spectrum of the upstream industry, service industry, small exporters and producers, smaller organizations and other groups. If you look at the ICBA in B.C., we’ve worked with them. That’s kind of the grassroots labour aspect of these things — and their view of the bill.
We have worked with the provincial governments on these things.
We’ve been in a very collaborative process around how to amend the bill. The results of what you see, in broad strokes, are very similar. When we put forward our proposals, we were very open to collaborating with the other groups. What you see is reflective of not just CEPA’s input but a broader-based collaboration and view of the bill.
That’s an important way to look at it: It reflects a broad group of stakeholders’ views.
Senator Mockler: Thank you for sharing your ideas with us.
The Council of Atlantic Premiers wrote a letter to the Prime Minister of Canada on February 27, 2019, and they said, collectively:
Our assessment of Bill C-69 as it is currently drafted is that the significant changes being proposed to the scope and scale of federal environmental assessments in Canada will not meet the dual objectives of environmental protection and economic growth.
They go on to say — and I’m coming to my question:
A particular concern to be addressed is that the Bill as drafted places final decision-making power in the hands of the Minister or Governor in Council and provides the opportunity to veto the results of thorough scientific assessment and review of evidence.
I’ve heard from your industry and other industries that Bill C-69 will significantly extend the project approval process — and Canada — 80 per cent plus of our goods and services go south of the border. How long do you expect pipeline reviews to take under what is being proposed to us? How does that compare with other jurisdictions, such as the United States?
Mr. Bloomer: I’ll unpack that a bit.
The timelines — on the issue of a Governor-in-Council decision at the end, after a project report has been tabled with them for decision and they can decide what they want to do, our review is that when the panel makes a report, it’s not just a report; it is a recommendation on the project going into government. The government takes that as a recommendation and considers it within the council.
Right now, we need more clarity that is absolutely going to be the case.
One aspect that’s in the bill is that it will be incumbent upon the Governor-in-Council to provide its reasons for its decision on the project coming out.
There is a little bit more transparency in there.
The other part of the question was around —
Senator Mockler: Our process compared to the U.S.
Mr. Bloomer: Again, in our handy dandy report, we address that issue. I’m being glib, but it is a very serious problem.
The U.S. is just able to get things done in rough estimates in half the time we are able to get it done. There’s clarity of process. Again, since 2015, that’s led to 14 equivalent section 2 projects being proposed and approved in the U.S. versus one in Canada. That’s pretty stark data. Those are facts. That’s our major competitor.
The point is we have to find access to markets for our production and resources. The NEB, in its recent forecast — in its kind of technical case — said that Canada will be producing over 7 million barrels of oil a day by 2040. We’re producing a little over 4 million barrels a day. The NEB is saying we have the resource potential to produce almost double what we’re producing right now. It says nothing about the infrastructure, but it says something about the resource base we have and the economic potential that will require.
That would be a huge impact on the economy. We need to focus on that.
The Chair: I have five names. We have to finish by 10:00.
Senator Neufeld: There has been a lot of talk that the consultation never took place with groups and individuals, First Nations and non-First Nations, prior to any projects being built. I know, from my experience, that’s not true. I can relate to TMX when it went through Jasper, because I was part of that process. There has been a lot of negotiations going on.
Maybe you can clarify for us — and if you don’t have the information now — TransMountain, for instance. It’s real, it’s here today and it’s an issue that everybody is focusing on. Can you tell us how long Kinder Morgan negotiated prior to the formal review process — and obviously is still negotiating — not Kinder Morgan anymore, but hopefully the government is — now? Can you give us some sense of how much negotiation and consultation took place? You can consult forever, but we have to get something done.
Maybe, on the five items — major changes. You have agreement with a broad base of the oil and gas industry. In your estimation, do you think government is sensitive to making those changes? This is for either one of you.
Mr. Veldman: I could say — not having exact dates, but I know CEO Anderson from Kinder Morgan probably spent more time than anybody else I know at that level consulting beforehand. It was multiple years.
I did the TMX or the Trans Mountain looping design through Jasper. I know how much time we spent with the local people and Parks Canada people.
Presently, I have been working on the reactivation through Jasper and Robson, and it is the same thing, multiple years before you actually make the submission.
Senator Neufeld: Can you get that information and provide it to the clerk so it can be circulated?
Mr. Bloomer: To further Mr. Veldman’s comments. In the pipeline industry, there is constant consultation. Kinder operates an operating system and has agreements, relationships and so on with Indigenous groups right along the pipeline. The number is 56 or something like that.
They are constantly communicating, consulting, engaging and so on. It’s not an on/off switch, especially for operating pipelines. And the consultation goes on for years.
The amendments that are being proposed, as a holistic view of the bill, I do believe there is sincere effort to look at these amendments and take a holistic approach to amending the bill, because it’s something that all sides realize we have to move on.
Time is not our friend in all of this stuff. We have to get this moving forward, and we need to have something that we can all support, turn the page and get on with doing things. We think the amendments we have proposed can help accomplish that. I think there’s sincere effort to do that.
Senator Seidman: I’ll just be quick and zero in on you, Mr. Bloomer, if I might. Thank you very much for your substantive submissions.
I would like to look at your amendments, specifically the ones in your category of limiting discretion of the minister. I would also like to look at section 22 in the impact assessment act and the ability to determine the scope of factors to assess.
We’ve heard a lot of discussion around section 22. You’re very clear about the attempts, in your view, the necessity to depoliticize the process.
You’ve made some changes here, if I understand correctly. Could you give us some kind of more in-depth understanding of what you’re proposing and why?
Mr. Bloomer: With the minister’s discretion on the things to be considered, there’s a long list. It’s an extensive list. In principle, some of those issues on that list are policy issues that we feel should be outside the scope of a project review. That’s where we go to the “must” versus the “may” aspect of it.
We think some of those issues should be moved out, but the discretion of the minister to scope those things should be very clear in terms of what that scoping process would be and what’s most important on that list, in terms of determining what’s in or what’s out, and the depth to which it’s evaluated. That’s really what we’re getting at on that one.
Senator Seidman: It’s the “may” as opposed to the “must” that really is the initial —
Mr. Bloomer: That’s the overarching thing. We’re not looking at it — but saying those things are hard. I understand that when we look at that, once it’s scoped in, there are elements of that list and there may have been precedent for in the past. We can look to that, and that’s scoped in and we can deal it based on what has gone on in the past in other projects.
The broader policy issues that can get wrapped into that are outside the scope of a project review when you are talking about a technical type of analysis on these things.
Senator Seidman: Thank you.
[Translation]
Senator Carignan: I’ll ask my question in French. While you put your headphones on, I want to remind you that the Senate committees are bilingual. We always receive your documents in English. I understand that we can accommodate you when deadlines are tight. However, the table of amendments — which is very well done, by the way — is dated March 15. I think that there would have been enough time to prepare a translation.
Can we remind the witnesses and the people who prepare documents that, according to our Rules, the documents must be submitted in both official languages? When deadlines are tight, we can accept documents in one of the two languages to accommodate the witnesses.
The Chair: We just received it yesterday, but I’ll take note of your recommendation.
Senator Carignan: Thank you.
My question concerns the substitution in clause 29. In terms of the delegation issue, I agree with the proposed amendment. I just want to hear your thoughts on constitutional jurisdiction. Does this aspect of the delegation of jurisdiction apply only to the impact assessment with the recommendations, or does it apply up to the decision-making power?
Let me refer you to the Energy East pipeline issue, which involved a dispute with Quebec concerning jurisdiction. Quebec took legal action, and TransCanada ended up voluntarily submitting to an impact study in Quebec, which was suspended. Does this mean that you must comply with a province’s decision to accept or reject a project, or is this limited to a recommendation based on an impact study?
[English]
Mr. Bloomer: I lost the last part of the question. To address the substitution and jurisdictional issue, of course, Quebec has its constitutional issues. We’re dealing with an issue in B.C. on jurisdiction and being able to do things.
The NEB is a national regulator. The NEB has, in the processes, incorporated, and there was the concept of substitution of environmental assessments and other things in different jurisdictions. The strategic assessment processes can accommodate those regional pieces and have input.
The concept of having substitution for certain process, I think, is still embedded in this. If that’s the case, that would have to be adjudicated in the assessment process and determined by the panel as to how to deal with that, we believe.
[Translation]
Senator Carignan: How far should the provincial jurisdiction extend in this process?
Mr. Bloomer: Can you repeat that, please?
Senator Carignan: How far should the provincial jurisdiction extend in terms of pipeline expansion or construction projects?
[English]
Mr. Bloomer: Again, these are assessed under the National Energy Board. It’s a federal government primary jurisdiction, but you have to take into account issues with respect to the provinces. There are environmental processes, there are engagement processes with Indigenous people. That would get rolled into the overall assessment. It’s not a matter of whether a province is not competent to deal with that. It’s a matter that this is an issue of federal jurisdiction. It’s really up to the federal government to be able to determine how it asserts that in these processes.
Right now, it has been passive in all of that. I think it has made accommodations, both in terms of Quebec and British Columbia, in terms of trying to come to grips with that. It’s part of the national interest process.
[Translation]
Senator Carignan: Thank you.
[English]
Senator McCallum: Thank you for your presentations. I want to go back to the litigation risks. We can’t limit the conversation of energy to just technical and professional aspects of resource extraction. We need to consider lives of people and life, including the planet. As Indigenous people, we live on this earth and on this planet, as well.
Litigation risks increase as a result of First Nations asserting their rights and expectations of First Nations involvement. Litigation risk exists until First Nations’ rights are taken seriously. It sometimes becomes the only option for them to move forward. It’s a form of voice.
I would say it is not a specific bill that is causing an increase in litigation. It is the unresolved issues behind the relationship which exists between First Nations, Canada and the people who want to do business, including expediency of resource extraction. Would you agree with that statement?
Mr. Bloomer: Things have obviously evolved through the consultation processes, if you look at what has happened in the courts recently in terms of consultation and accommodation. In both the Gateway and TMX appeals court decisions on those issues, the courts opined it was not the company’s consultation that was the issue and it was not the NEB’s consultation that was the issue, it was the Crown’s consultation that was the issue.
I think somebody earlier used the phrase, “deeper consultation.” I think the appeals court, under TMX, really did lay out the process for how you deal with that, and right now the government is grappling with how to go through that consultation process and take that into account so that there is not a basis or a need to litigate, because you have done it properly.
We’ll see how that process comes out. That should inform us as to how we go together. That was one of the positive benefits of the appeals court decisions. For the federal government, it showed us how to effect its consultation requirements to come out with a conclusion that avoids litigation and meets the needs of Indigenous people.
The Chair: Thank you very much for your testimony and for answering our questions.
Senator Massicotte: We always referred to the project list. We sent a letter to the minister three or four weeks ago. Two weeks ago you said we haven’t received a response. Would you give us an update?
The Chair: We will have a meeting after this and we will discuss three points, including this one.
We now welcome, by video conference from Calgary, Ron Wallace and Dennis McConaghy, retired regulatory and industry experts. Good morning. And from the Canadian Chamber of Commerce, Aaron Henry, Director, Natural Resources and Environmental Policy.
Thank you for joining us. I will invite Dr. Wallace in Calgary to offer his opening statement, followed by Mr. Henry, and then we will open for questions and answers.
[Translation]
Ron Wallace, Retired regulatory and industry expert, as an individual: Good morning, Madam Chair and honourable members of the committee. My name is Ron Wallace. I’m here to introduce our panel. Mr. Harrison, Mr. McConaghy and I are presenting this joint oral statement, which is accompanied by our detailed written brief.
Detailed biographic information is attached at the end of the brief. Unfortunately, Mr. Harrison was unable to join us today. We’ll be highlighting today some of the key points in our written presentation, to which we respectfully refer the committee members.
[English]
Honourable senators, our panel presents three spirits of direct interest to this committee. Regulatory law, Mr. Harrison, senior corporate management, Mr. McConaghy who accompanies me, and environmental assessment and energy regulation. There are three major points to our brief. Bill C-69 essentially dismantles the NEB, it does not modernize it.
The consequences of decades of legal precedents will be lost and the consequence that there will be an open door to new and costly legal challenges throughout the resource sector. The NEB and the quasi-judicial appendants of expert tribunals will be lost. There is a vast difference in the functions and outcomes between a proposed assessment agency reporting through the Department of Environment, along with a diminished Canadian energy regulator as proposed, versus an established, quasi-judicial, independent, expert tribunal proven to be able to assess, licence and perform life-cycle regulation.
The bills establish an IAA and a CER with diminished powers of decision and accords the minister of ECCC enormous, non-transparent powers. This exceptional discretion will increase investment uncertainties for proponents and entrench decision making at the political level, which is contrary to the stated aims of this government and of this legislation as proposed.
The legislation removes the standing test for interveners as being directly affected or possessing relevant information and expertise, and replaces it with a meaningful public participation without defining this term. This will effectively nullify proposed project and review timelines.
Pipeline proponents enter into assessment processes to obtain certificates of public convenience and necessity known as a CPCN which, when granted with appropriate enforceable conditions, continue in perpetuity for that project. Hence the important term “life-cycle regulator” as applied to the NEB and the CNSC.
I would like to conclude my comments on behalf of myself and Mr. Harrison and turn the mic over to my colleague Mr. McConaghy.
Dennis McConaghy, Retired regulatory and industry expert, as an individual: I would like to emphasize two points at the outset and hope to have a conversation with the committee.
First, environmental assessment is not an end in itself. It only has relevance in the context of actual projects advanced by private capital seeking regulatory approval. A regulatory regime has no value unless private capitalists prepare to take on the risk of using it. The whole point of the regime is to nullify that process. I exhort the committee to deeply consider that the best path forward is to stand down on Bill C-69 and look to another attempt at genuinely reinventing our regulatory process where we take out the political risks of the process at the outset and have the policy clarifications made at the outset of a regulatory process. After those have been resolved efficiently at the outset, then allowing the technocratic process of a regulatory approval process to unfold in the hands of the regulator themselves, and in that way restore some of the efficiency and competitiveness that is so required if this country still wants an economic contribution from its hydrocarbon sector.
Thank you.
Aaron Henry, Director, Natural Resources and Environmental Policy, Canadian Chamber of Commerce: Thank you. I’m here on behalf of the Canadian Chamber of Commerce. We are Canada’s most broadly based business association. We have over 450 chambers throughout our network and we represent roughly 200,000 businesses. We have approached Bill C-69 with input from many different stakeholders.
That is one point I would like to make from the outset. When we are considering this bill, it is not simply an energy bill. This is a bill that will impact the Canadian economy writ large. It will impact ports. It will have impacts for utilities. It will have impacts on those who create infrastructure and, of course, it has impacts for those in the resource sector, both in the energy sector and mineral development and exploitation.
On that point I want us to think about this at this high level, that this impacts us across the country and impacts a variety of different sectors. To that point, through our chamber network — and I will submit it to the clerk after I’m finished — we have letters from all of our chambers throughout Canada. They come from the West Coast, the East Coast and Northern Canada, all stating their concerns with this bill.
The Canadian Chamber of Commerce recognizes that the status quo of our regulatory system is untenable. It has not treated any industry well. We have seen particular losses of investment over the last two business cycles in our resource sectors, both in energy and mineral development. It is with this position that we have approached Bill C-69. We are of the same view as CEPA, CAPP and other organizations that, as drafted, we cannot support this legislation. However, with the suite of amendments we are trying to put forward here today, we would like to see this work. We would like to see this work because we see, like the government, that if this bill is successful it will be key to this government’s objectives of growing the middle class and of economic reconciliation with Indigenous communities. It can also be key to addressing our ability to have an impact on climate change on a global scale.
Where we are coming from is in terms of competitiveness. I need to make this clear: Canada is at an interesting crossroads in terms of competitiveness as a nation. We have had comments today about the competitiveness of our jurisdiction to the south. We need to be clear that the United States has become a very competitive jurisdiction for capital investment. As a Canadian state, we do not have the fiscal strength to offer the same discounts in taxes that we might see south of the border. We do not have fiscal manoeuvrability. What we can have is a regulatory system that delivers.
As we go forward, we are echoing our associations that we are seeking a suite of amendments. These amendments are broad compromises. They are things that many different stakeholders from our association think, if put in place, will make the bill workable.
Our submission today has six principles. Given the course of discussion, especially the testimony provided by the regional chief, there are a few key areas I would like to focus on. One goes back to ministerial discretions, one with section 22, we would like to touch upon public consultation and finally I would like to make reference to a proposition for a federal backstop that addresses some of the concerns we have heard about the Crown’s duty to consult, the continued evolution of our relationship with Indigenous communities in this country, while at the same time providing greater certainty for project proponents.
We have the same concerns as others when it comes to ministerial discretion and we make reference to this. Our main hope in addressing these concerns is simply to provide the ministers involved in this act with a clear economic mandate. We recognize that economic considerations fall under section 22, but we would like to see this strengthened into a further cost/benefit analysis comparable to the practice used in the U.K. with all regulators. We feel that might be one way to ensure the act remains balanced.
We have also called attention to section 22. Our members have been clear about their concerns. Their concerns are not the inclusion of this language, necessarily.
They are not against considerations of gender and intersection. They are not against Indigenous knowledge; in fact, most of our members are actively engaged in these key areas already on all consultations. These are things they are concerned with.
Our concern and point with this is that as this section as currently defined, there are real two issues. It is simply not clearly defined, which means it is a back door to endless judicial challenges. It is a significant concern for our members that this will be a way for those who do not want to see projects go forward in this country will find a way to derail them.
The other important point, which is similar to the remarks made by CEPA, is that there needs to be some mechanism in place here that ensures the impact factors are tailored to the specific projects. At this point, it’s not clear whether one particular project or one area will have to account for all of these factors. As a result, that could be a way that the process gets slowed down further down the line by somebody claiming a particular thing wasn’t looked at and is relevant. We would like to see that improved upon, as well, with a clearer way to ensure the impact factors that are used are clear with the project.
Additionally, this cannot be a moving target; this cannot continually change. That’s part of our concerns around these impact factors, as well: For the most part, they remain public policy positions. Our concern is that this becomes a creep of public policy into what should be an objective, technical assessment of a project.
In addition to public consultation, as I’m sure as this committee is now realizing with its travel plans, consultation is lengthy and challenging. It can be hard to get people into the room. We agree with the comment being made that broad-based public consultation is not clearly defined in the bill. We would prefer a replication of language closer to CEAA 2012 in that those for whom there would be significant adverse effects would be given priority. To that point, we’re making a recommendation for a mechanism that would allow those most affected by a project to be heard most clearly.
That does not mean that others who have concerns would not be able to voice those concerns in other forums, but this is crucial for Indigenous communities and other communities in Canada that are usually impacted by resource projects. It is also key for project proponents. Our members have been clear that it is key for them to actually have that kind of engagement.
The last point is that, in the case of project lists, it appears as it is currently designed that designated projects could still be except from assessment. We’d also like to make sure that in the cases of equivalent assessments already existing, especially in the case of ports, that those equivalent assessments are utilized.
Finally, regarding the federal backstop, which is probably the most important element, given the tone of the discussion today, we recognize that TMX basically has not gone through because of a failure of the Crown to consult meaningfully. We see the same issue with Northern Gateway. From a broader perspective, we are seeing that when people want to invest in Canada, you can have project proponents that tick every single box; they do everything right, they follow all the rules. Then, at the eleventh hour, they find that the Crown is not able to carry out meaningful consultation, and the project does not go forward.
We’d like to see a mechanism put in place that when companies invest in the regulatory system and process, and the Crown essentially lets them down, they receive some compensation, as would communities that have signed memorandums of agreement or are dependent upon employment. I recognize that is not an amendment the Senate can put forward, but it could be a recommendation to the House.
The Chair: We want to keep this panel short, because we need to discuss travel and other issues.
Senator Patterson: Thank you for the these presentations.
I believe that the Canadian energy industry and its strength in Alberta have been huge factors in Canada’s wealth and its generous social programs, including universal health care.
We received a report on regulatory competitiveness from the Canadian Energy Pipeline Association that shows that, up to 2017, U.S. capital spending increased 38 per cent from 2016, and Canadian spending decreased 19 per cent from 2016.
From your connections with the energy industry, what is the current trend in recent years? How has this controversial bill impacted the investment climate in Canada in recent years?
Mr. McConaghy: The reality of any of the major energy projects that have gone forward over the last 10 years in Canada, from Northern Gateway to Energy East to TransMountain, require the expenditure on the part of proponent hundreds of millions of dollars just to get through the regulatory process. In some cases, these numbers have approximated $1 billion.
The reality of Bill C-69 is that the risk of taking on those kinds of expenditures, which are fundamentally for projects that would realize greater hydrocarbon production in the export market, creating real wealth for this country — Bill C-69 will make that risk much higher than is already the case — that is already the kind of ambiguities and, as has been referred to by others this morning, the risk of going through the entire process and still having it upended by a failure on the part of the federal government in terms of its obligations in respect of consultation — obligations that are still set by courts after the fact.
The point that is so important to be understood is that Bill C-69 will make this trend much worse. That is why it has to be fundamentally redesigned rather than expect that tweaking a concept that increases risk, if this country wants a significant economic contribution, especially from its hydrocarbon sector that hangs in the balance.
Senator Cordy: You both spoke about the power of the minister. This bill actually gives the minister less power than CEAA 2012 did, which was part of an omnibus budget bill. In Bill C-69, if the minister suspends the process at any time, the rationale or reasons have to be made public. Currently, under CEAA 2012, that’s not the case; the minister can just suspend it.
Mr. Henry, my question is for you. I agree with your comment that the status quo is not tenable. You and others have mentioned that the length of time for the approvals is twice as much as in the United States, and that’s before Bill C-69 comes in.
I would like to talk to you about public consultation. The previous panel also mentioned public consultation. It is challenging. We have planned a West Coast and East Coast trip. You’re trying to be inclusive, but you can’t go to every community across the country. So you are trying to pick where you can go. I understand the challenges of public consultations.
Can you be specific about the changes you want? We want to ensure those who believe they will be affected and are affected are part of the consultation process, without having 5,000 people who want to be on the list.
By the way, do you have a list of your recommendations that you could give to us for amendments?
Mr. Henry: We have our submission, which has our recommendations on it.
I would like to quickly speak to the transparency of the minister’s decision. It is welcome that there is transparency. Ultimately, many would feel far more comfortably if those final decisions were made by regulators in the civil service rather than the minister. This goes back to a point other people have made: We are concerned about the politicization this will create for the regulatory system. Part of that concern is the durability of the regulatory system. If it seems to be unduly politicized, we might simply have another overhaul with another government down the line. That’s something businesses do not want, categorically. They do not want the environment to be more unpredictable.
In terms of the actual consultation process, this is a good one, and it’s a challenging question.
It’s a process that is challenging because in a democracy, everyone has the right to be heard and needs to be heard.
At the same time, as I’ve stated, consultation is crucial from the project proponent perspective. It is crucial in gathering the knowledge needed to make the project go forward, whether it’s from a 90-year-old resident who is helping you cross a river versus all of these other considerations.
I think that, as a mechanism, we’d like to see that those who are within the projects — all those communities that are going to be directly impacted — are given the first hearing, the first opportunity and the priority. As a mechanism, that consultation needs to proceed in that way. Then I think we could design other ways for people who are not necessarily in the immediate reach of the project to have their say, maybe through an online process such as email platforms. That way, the most crucial information needed to actually move the process along to address those concerns lends a voice to the litigation and is made foremost, and the other broader concerns can go into the process at a more general level.
Senator Mitchell: I want to endorse or emphasize Mr. Henry’s assertion that the status quo isn’t acceptable. It’s in stark difference from what we’re hearing from the other two presenters.
My question is to Mr. McConaghy, who is saying the government must be compelled, within the regulatory process, to clarify whether a project is consistent with the public interest as soon as possible, and not disingenuously allow that process to run for years, et cetera.
Mr. McConaghy, have you read section 17(1), which does exactly that? It provides for the government to give an early warning that there could be problems so that companies don’t get $900 million or $1 billion dollars into a project before somebody tells them it’s not going to go ahead. That’s exactly what 17(1) does.
Mr. McConaghy: What 17(1) doesn’t do is provide a statement that a project is in the public interest and, by doing so, takes the politics out of the process thereafter. The point that’s been made here about getting the politicization of the regulators out of this can only get done if the politicians sign off on the project at the beginning of this process, and not at the end. We could write long books about the failures of the Northern Gateway process, where literally hundreds of millions of dollars were expended, including a NEB determination of the public interest, to have that project dismissed years afterwards where politics were imposed after the fact.
This is a fundamental issue of how to actually reinvent this process where the risk to the proponent is made so that they know, within six or 12 months after the initial disclosure, that there is no public interest issue with the project, and the government of the day is prepared to put it into the hands of the regulators to have them impose appropriate conditions on the operations and construction of the project, inclusive of the legitimate impacts of directly affected parties and, within that, signing off on reasonable accommodation proposals.
The issue here is unless that public interest determination, of which there is no absolute onus that that has to be the product of this bill, we will never reduce risk to a level to restore the kinds of competitiveness or economic contribution that we should be realizing, especially from our hydrocarbon sector.
Senator Mitchell: Of course, section 63 is all about establishing the public interest, but there is an interesting contradiction in what you’re saying. On the one hand, you want to depoliticize; on the other hand, you want to have politicians declare the public interest long before the process has evolved, without having the information that comes from a fully evolved process.
Given that you were asking a politician to make a decision very early in the process, which precludes whatever the outcome of your former NEB process would be, what kind of credibility does a process like that have when it hasn’t run its course, the full information is not available and decisions are being made before that is available? Isn’t credibility important in the process?
Mr. McConaghy: I’m keen to respond to your question. You’ve heard abundantly from others this morning about putting into the regulatory process issues of values, which, fundamentally, are political judgments about whether certain considerations are going to be given more weight than others, or even all of the ambiguities after series of very subjective tests.
I’ll give you one clear example of this. The climate test, which is integral to Bill C-69, presently has no guidance as to how it’s going to be applied going forward. Are any incremental emissions attributable to any one specific project that comes forward, which could be argued to be at odds with our Paris commitments, going to nullify that project? If that’s the risk a project faces, it should be clarified at the outset.
The point of my design is to force the government to clarify its policy positions so that those clarifications are made with enough rigour that they can make the statement that we’re prepared to have hydrocarbon development via pipelines or via SAGD developments in Alberta and they are consistent with the public interest as a matter of policy and we delegate to the regulators the establishment of specific conditions on their operations and construction processes, inclusive of adequate accommodation.
We will never reduce risk if, as I said before, hundreds of millions of dollars have to be expended only to find out, at the very end, that a political judgment has been made to totally reverse everything that has occurred heretofore.
That’s really the reinvention that this should have been about. There was feedback in the various consultation processes that occurred in 2017, especially the NEB modernization panel, that made these points. They were largely ignored in the final Bill C-69 design.
Senator Seidman: I’d like to address my question to you, Mr. Henry. You expressed concerns around section 22, specifically the clarification of the project criteria. You said that your members are fearful that the criteria will be in a state of flux and a changing or moving target.
Are you looking for definitions of the factors to be considered? Would you think that hard measures for the criteria should be included in the legislation to make it more transparent and functional?
Mr. Henry: Thank you, senator, for the question. I’ll be really honest that this is a very challenging area. We definitely have some members who want these to be ironclad and clear. The reason for that is they believe that will afford them the greatest judicial protection. The Canadian chamber is inclined to see the merit of that.
At the same, time we also have members who are more familiar with CEAA 2012. Their concern in this is if you make this too rigorous, tight and quantitative, then you will also have your hands tied. You can’t actually satisfy the impact requirements simply because you might be in an area where they don’t apply properly or they can’t meet a certain quota.
I don’t think there is a clear way to resolve this. Going back to the other comments that have been made, part of the issue here is that the impact assessment criteria include numerous social and economic qualities. Some of these are not clear cut, which makes it hard to understand how they will be weighted, put in context and utilized to judge the value of a project.
At the same time, some things are very technical and scientific and that’s an easier step forward.
I think one way you might be able to resolve this to a certain degree is, of course, to ensure that these are not moving targets. That means if government is utilizing these categories in reference to a specific policy, that needs to be stated at the outset. At the same time, those categories themselves within the act cannot be the source of the evolution of that policy.
In addition, it might be the case that some of these issues can be mitigated by having impact assessment criteria factors tailored specifically to the projects. In that case, if you were to create a hard and fast category, you would have to keep in mind the discretion that that category doesn’t apply to this project. Currently, we do not have any kind of clarity on any of those issues.
Senator Neufeld: Thank you, and thank you all for being here. I’ll try to keep my question fairly short.
Mr. Wallace, I believe you worked with NEB for a while. I have great faith in the NEB. I thank you for your work.
We started hearing, prior to an election, that people didn’t trust the NEB. I’ve asked a number of people if, in fact, they ever received letters. Were you ever told that “I don’t trust you anymore as the NEB,” those kinds of things? Is there any documentation that proves that, other than the current Prime Minister saying it and actually creating a problem and that’s why we got Bill C-69?
I’d like to know whether either one of you had been told that they don’t trust the system, we don’t trust you.
That goes to my other question. The end of it is: How is Bill C-69 supposed to restore that phantom mistrust?
I go to Mr. Henry about employment. I live in northeast B.C. The major industry is oil and gas, second is forestry, and the last one is agriculture. I believe the average age in Fort St. John is somewhere around 30 years old, 20 years old and most of them work in the oil patch. I haven’t heard from any of them that they distrust the NEB, but what happens when there’s no employment and all these younger people who have actually staked their lives in the area where I live, and the First Nations who have been there before us all have opportunities to work in that industry, how do we deal with that? Because if you can’t get any investment, our employment goes down.
Mr. Wallace: I’ll turn the microphone over to Mr. Henry for your second part, but I can say on the position that were advanced about the trust of the NEB, first, no regulator is perfect. Every regulator has to be very acutely aware not only of the concerns of the public, including Aboriginal concerns, but also the concerns of the local effect on communities, as you pointed out.
There were a number of polls that were released which showed confidence in the NEB, lack of confidence and so on. My concern is not to debate out the polls, one way or the other — yes, there were concerns. What this legislation initially set out to do was to modernize the NEB. The recommendations that were made prior to the formation of this legislation were very much aimed at that modernization approach.
Bill C-69 doesn’t modernize the NEB, as I said in my opening statement. It essentially dispenses with the NEB and sends us back.
The next point you have, in terms of the investment potentials, I want to very quickly say that Capital Group — and this is contained in part of our submission — one of the largest institutional investors in the Canadian energy sector, sent a letter to the Prime Minister some time ago saying that increasingly investors are questioning the merits of investing in Canadian energy, and with that, Canadian companies will struggle to access capital, create jobs, develop resources and provide a significant revenue stream for the country.
I can say that in 2018 alone, 37 projects, as reported by the C.D. Howe Institute, with an investment value of $77 billion, were cancelled in Canada. Planned energy sector investment dropped by $100 billion, a figure that represents about 4.5 per cent of the Canadian GDP.
My last, very last comment is, to reinforce what my colleague Mr. McConaghy said, if you go to Hansard, February 14, 2018, and listen to the Minister of ECCC talking, she made a quote saying:
. . . the final decision on major projects will rest with me or with the federal cabinet, because our government is ultimately accountable to Canadians for the decisions we make in the national interest.
The National Energy Board is clear it’s not going to be part of this process to determine the national interest. The CER will have a greatly diminished role in taking that forward.
An example is the substitution that was made to the National Energy Board by the Government of Canada during the Energy East process. If you liked the Energy East process, you’re going to just love the CER.
The Chair: Thank you very much.
Senator LaBoucane-Benson: Mr. Henry, thank you very much for coming today. I don’t have your brief in front of me but I did read Senator Mitchell’s.
I am very interested in the idea of a backstop. This is something new I haven’t heard. I know in the past there has been very good consultation done on some projects and very poor consultations done on other projects with Indigenous people.
Can you flesh out what this backstop is? I think the idea is to force the federal government to properly discharge their duty to consult at fully as they can, and this would decrease litigation risk. Can you explain that?
Mr. Henry: I am also mindful that Senator Neufeld had a question as well. I’ll try to speak to both very quickly.
In terms of Senator Neufeld’s question, I completely agree, this is a significant challenge. I think some of this goes back to the actual act itself in terms of its framing and rationale. We support, actually, an amendment proposed by the Mining Association of Canada that resource competitiveness and getting our product to market is embedded in the act simply because this is a way for us to go back and think about what it is we are trying to achieve with this.
I completely agree that this is a fundamental jeopardy to the Canadian economy. Right now, all eyes are on the U.K. They are gambling with about 10 per cent of their GDP with Brexit. The energy sector in Canada makes up about 10 per cent of our GDP. We are gambling with it here too. Those are jobs on the line and we need to find a way we can restore confidence. This is where these amendments are kind of coming in.
To the backstop, it’s an excellent question. We’ve heard essentially that project proponents come into a country, they can spend billions in the actual regulatory process and, again, they are let down at the last hurdle. But it is not just the project proponents who are let down. It’s also the communities that make investments, that make plans, that seek self-economic determination through those projects. And disproportionately that’s Indigenous communities. Indigenous communities are generally always within 200 kilometres of a major project. When these projects fail, it hurts everybody a lot.
The federal backstop initiative we want to put forward to the chamber is to state exactly that, we recognize project proponents will not invest in Canada if they can be let down in the final hurdle. They are not going to do it. It’s too much risk. They can’t expend hundreds of millions of dollars to find out that the project doesn’t go through.
At the same time, we recognize that this economy is going to be strengthened by continuous Indigenous reconciliation. We recognize the duty to consult meaningfully is in evolution, continuing to develop and we need to put both those things on the table and realize that there has to be a way forward, that they’re not in contradiction.
One way to do that is simply to propose that federal backstop, which means in the instance that a project proponent has met all of the regulatory requirements, they’ve checked all their boxes, that ultimately they would be awarded compensation for when the government fails to achieve its own duties.
Senator LaBoucane-Benson: If the government fails it.
Mr. Henry: Sometimes they do and sometimes they don’t. That is the idea behind this. There would also be a measure in place to ensure that communities who have also lost out on economic opportunities would also be awarded.
Of course, the main point is to restore some investment confidence to give some certainty and at the moment, if the duty to consult fails, it’s a huge material risk for a company. It’s a limited risk for the government. This evens the playing field, which also makes this something that the government is going to have to pursue more diligently and avoid litigation, as you say.
The Chair: Thank you very much for your testimony, gentlemen. Thank you very much for your answers. This was a very interesting conversation.
Colleagues, before I suspend the meeting, do you agree that we resume in camera to discuss travel matters and other matters?
Hon. Senators: Agreed.
(The committee continued in camera.)