THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
CALGARY, Tuesday, April 9, 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 1:02 p.m. to give consideration to the bill.
Senator Rosa Galvez (Chair) in the chair.
The Chair: Good afternoon, and welcome to this meeting on the Standing Senate Committee on Energy, the Environment, and Natural Resources. My name is Rosa Galvez. I’m senator from Quebec and I’m the chair of this committee.
I will ask senators around the table to introduce themselves, starting with my left with Senator Richards.
Senator Richards: Dave Richards from New Brunswick.
Senator Mockler: Percy Mockler from New Brunswick.
Senator Neufeld: Richard Neufeld from British Columbia.
Senator Cordy: I’m Jane Cordy, another Atlantic Canadian from Nova Scotia.
Senator MacDonald: Michael McDonald.
The Chair: Colleagues, today we are continuing our study of 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.
On panel number one of this afternoon, we invite, from the C.D. Howe Institute, Grant Sprague, Senior Fellow, together with Grant Bishop, Associate Director of Research. And from TransCanada, Patrick Keys, Senior Vice-President, Legal.
Each one of the groups will have five minutes for a statement. Would you like to start, Mr. Sprague?
Grant Sprague, Senior Fellow, C.D. Howe Institute: Thank you very much, senator. Good afternoon, ladies and gentlemen. My name is Grant Sprague. I’m a senior fellow, and my colleague, Grant Bishop, is the associate director of research at the C.D. Howe Institute. In our roles with our non-partisan policy think tank we jointly authored a paper: “A Crisis of Our Own Making: Prospects For Major Natural Resource Projects in Canada.” A copy of that report is available should any of the senators wish to have it at the end of our presentation.
I should also add we have a slide deck that we have prepared, and I believe it has been distributed, that we may refer to in questions, but we won’t refer to as part of our presentation.
The focus of our paper was the current investment climate for natural resource projects across Canada in both the mining and oil and gas sectors, together with the potential implications of Bill C-69.
We very much appreciate the committee’s invitation to appear today and hope that our paper and our comments will be of assistance to you in your work.
Our message today is that Canada’s resource sector is viewed increasingly negatively by investors relative to other countries and Canadian developers are increasingly unable to access new capital for projects. This relative unattractiveness of Canada is because of perception of significant political and regulatory risk around approvals of projects and for oil and gas projects, pipelines to get product to market.
Our paper underscored the plunge in prospects for our resource sector and flagged the likelihood that Bill C-69 in its present form will further scare off investment. We believe the bill before you amplifies the political risk facing project approval and the turndown in planned new projects reflects investors’ unwillingness to roll the dice on politics with this uncertainty on the horizon.
To briefly summarize our paper, announcements of new energy and mining projects slowed after 2015 and between 2017 and 2018 the planned investment value of major resource sector projects has decreased by $100 billion, equivalent to roughly 4 1/2 per cent of Canada’s gross domestic product. Since 2012 projects in Canada on average face federal environmental assessments that take much longer than in comparator jurisdictions, mining projects are substantially longer than Australia, and Canadian pipeline approvals are longer than those in the United States.
We emphasize that environmental assessments play a critical role in mitigating negative effects on the environment and people and in resolving information differences between proponents and affected stakeholders. Assessment processes, however, should not discourage beneficial projects by imposing high regulatory costs, protracted review timelines, and substantial uncertainty around the process and finality of approvals and their process.
Again, we believe that C-69 will broaden the scope for political discretion to approve or reject process, diminish the decision-making role of technical and scientific expertise of independent agencies, and increase uncertainty about what is required for an approval. The increased political risk heighten uncertainty for potential investors and thereby hinder further investment in our broader, natural resource sector.
Grant Bishop, Associate Director of Research, C.D. Howe Institute: So we see heightened political risk in four main deficiencies of the present legislation.
First, the legislation imposes a public interest test that will practically apply to every project. This is because Bill C-69 removes the significant threshold for effects that exists under CEAA 2012 and effectively delimits those projects on which a political balancing is appropriate.
Second, the legislation introduces new nebulous mandatory considerations capable of practically boundless interpretive discretion for a political decision maker. That is the minister or cabinet.
Third, many new factors invite wider matters of public policy into what should be a project-specific assessment on known criteria. Indeed, the mandatory considerations are factors like climate change, sustainability, and gender and identity raise major division of power concerns under Canada’s Constitution. For example, can the federal government reject a mine because of its assessment of labour market impacts. Clearly an area of local concern within provincial jurisdiction.
Combined with any lack on standing for participation in hearings, Bill C-69 risks contorting review panel hearings into forums for political grandstanding and crowding out directly affected stakeholders.
Fourth, much remains unknown about the legislation. The federal government has promised that more will be clear with draft regulations for a project list and strategic policy statements on climate change. On these issues, it is Parliament’s proper place to limit the discretion of the executive. The definition of considerations and the basis for designating projects for assessment should be spelled out in the legislation. Looking forward, Canada’s aim should be an assessment that appropriately addresses the environmental and social impacts of a project with an efficient, certain, and comprehensible process that balances environmental risk and economic development.
We look forward to your questions.
The Chair: Thank you.
Patrick Keys, Senior Vice-President, Legal, TransCanada: Thank you, Madam Chair. Hello, and good afternoon, senators. Thank you for taking the time to come to Calgary, which I want to acknowledge, is within the traditional territories of the people of the Treaty 7 region in southern Alberta.
We recognize the important work that this committee is doing, to seek out and listen to a wide range of perspectives on Bill C-69, and we at TransCanada appreciate the opportunity to share TransCanada’s views with you.
I’ll start my substantive remarks by clearly and unequivocally stating TransCanada’s position. TransCanada is not supportive of Bill C-69. We don’t see how any new major linear energy infrastructure can reasonably move forward under these provisions. To explain the basis for this position I’ll start with some background on TransCanada and its experiences that provide some useful context and informs our views. I’ll then turn to talk briefly about certain concepts that are in the bill.
As you may know, TransCanada has a long history and extensive expertise in building and operating pipelines and other large linear infrastructure that safely and reliably delivers the energy that millions of people across Canada and elsewhere in North America need every day. Our portfolio of almost 93,000 kilometres of natural gas pipelines transports more than 25 per cent of the daily North American demand and our roughly 5,000-kilometre liquids pipeline systems transports about 20 per cent of all Canadian production.
Our experience goes back more than 65 years with the development of the original Canadian mainline pipeline, which transports clean burning abundant natural gas that’s produced here in Western Canada to markets in Eastern Canada and into the U.S. When it was constructed many decades ago, the mainline was a critical piece of energy infrastructure in Canada, and it remains so today.
In our view, an effective regulatory regime balances a wide range of viewpoints ensuring any negative impacts on people and the environment are managed appropriately while meeting the public need for safe, reliable energy infrastructure. It should also follow established and well-articulated federal policies and have certainty of process, review criteria, and timelines. And in recent years our federal regulatory process has not been effective in achieving this mandate for major energy infrastructure and it’s become increasingly challenging to navigate it.
What was historically a stable regulatory regime in Canada has become unstable, due to changing standards, political engagement, and increasing uncertainty in the scope of assessments and timelines.
Surprisingly, perhaps to us, pipelines have become a very divisive subject in our country, making media headlines almost every day and our industry has become the focal point for interests that go far beyond the basic purpose and the science of safely delivering the energy that’s critical to Canadians’ lives. Important projects have stalled or been cancelled due to delays or uncertainty in the regulatory process, and increasingly, legal challenges follow the decisions that were made by the regulator or the federal government after a lengthy and detailed analysis. And as you have heard from many other presenters before me, this climate has had a chilling effect on investment in Canada and it’s reducing Canadian competitiveness and now, we believe, is seriously threatening national economic interests.
It has also stranded our natural resources in Canada, denying not just our own citizens’ access to energy that’s produced in a sustainable and socially responsible manner, but it’s also limiting our ability to be an energy supplier of choice internationally for countries that are transitioning to less carbon-intensive energy systems, or they’re otherwise striving to maintain our quality and standards of life.
Now, in this context, others before me have talked to you about TransCanada’s Energy East project, and I’ll spend a moment discussing our experience with it because it’s a well-documented example we believe of the risks and the challenges pipeline companies have recently faced.
Energy East, as you may know, is the largest project TransCanada had ever undertaken. It was a proposed 4600-kilometre oil pipeline from Alberta to New Brunswick at a proposed cost of more than $12 billion. It was based on an innovative concept that then underutilized capacity on the Canadian mainline, that’s the natural gas pipeline I talked about, could be used in conjunction with new-build clauses to ship more than 1 million barrels of oil a day from western Canada to refineries and markets in eastern Canada, but today rely in part on imports from other countries. It also would have reached tidewater on the east coast of New Brunswick, providing access to new international markets and fair prices for Canadian crude oil.
We filed our application with the National Energy Board in October of 2014. It consisted of more than 30,000 pages that detailed two years of work that TransCanada did on engineering and environmental planning, socio-economic studies, and an unprecedented level of community engagement and consultation.
However, three years later, in 2017, we were still only in the early stages of the review process. Many new factors and changed circumstances arose that broadened the scope of the overall assessment process, including the never-before imposed requirement to assess upstream and downstream GHG emissions. And it was these factors that created significant additional risk and uncertainty for TransCanada. And it was at that point, in late 2017, that TransCanada made the very difficult decision to cancel the project. And we did so because we determined there was too much uncertainty about the assessment’s scope, the regulatory timing, the potential additional and ultimate costs that could be incurred for the project, and we could not confidentially move forward. Terminating Energy East resulted in about $1 billion in sunk costs for TransCanada and its shareholders. The shareholders include Canadian pension plans and individual Canadians, but it also represented many other lost opportunities, from thousands of jobs the project would have supported to billions of dollars in additional tax revenues, economic spinoffs that communities across the country would have realized.
Building new large linear infrastructure is a significant financial undertaking for a proponent to originate and to develop and to bring it forward to and through a regulatory review process, let alone to construct and operate it. Regulatory uncertainty, lack of clarity, and changing expectations, such as we experienced on Energy East, are like poison to those who are considering whether and where to invest billions of dollars in large-scale, long-term projects. When these conditions exist, proponents and their shareholders are unlikely to bring these projects forward. In our view, it’s critical that any regulatory assessment regime provide a clearly defined and transparent framework for assessment and decision-making according to realistic and predictable timelines. Proponents must be able to see that there’s a viable path to get project reviews completed and assuming stated requirements are met to get them approved.
The regulatory process should not be a venue, in our view, to establish or debate government policy, not on a project-specific basis, and it should not be used as a political tool, subject to radically different approaches under different or changing political philosophies. Unfortunately TransCanada has serious concerns that Bill C-69 does not provide these improvements and in fact, in the current form, likely further exacerbates the problems we face today. Consequently, TransCanada does not support Bill C-69.
We recognize, however, that the federal government has the ability and presumably the intent to move forward with this bill, and in this context we join with CEPA and others to advance a suite of proposed amendments to address key concerns, which taken collectively may reduce some of what we believe to be the more troublesome provisions of the bill. We’ve submitted in advance a full package of recommendations that we’re making and detailed amendments for your later review and consideration. And I’ll just spend one moment before I conclude on a few of those important points.
First, we recognize that determining that Canada’s approach to addressing issues such as climate change, sustainability, and Indigenous reconciliation is extremely important, but the development of national policies on these issues needs to be undertaken outside of the assessment process for individual energy projects.
Project assessment processes should not be used as forums for fundamental policy debates.
Second, we’re concerned that Bill C-69 introduces a new, often unclear, and largely untested regulatory process for major projects that includes, among other things, the potential for greatly expanded participation by parties and groups whose individual interests are not directly or negatively affected by the projects, but whose interest may instead be focused on broader political and policy objectives or other individual independent interests.
Appropriate scoping of participation rights we believe is necessary to ensure that the voices of the stakeholders, including Indigenous groups who are directly affected and have legitimate and relevant views, are not lost, not drowned out, or not otherwise misunderstood, resulting in more complex proceedings, longer timelines, increased costs, and increased exposure to judicial reviews and legal appeals.
Third, we have significant concerns about how major projects will be defined.
We’ve not seen the proposed project list and we’re concerned that relatively smaller scale projects, and even pipeline maintenance activities and minor expansion projects on existing systems, may be required to submit to the highest level of review under Bill C-69.
Fourth, we’re concerned about the multiple opportunities in the bill for politicization of the process, from exercises of apparently unbounded discretion and opportunity to extend timelines to a final political decision at the end.
To conclude, the regulatory process plays a very critical role in ensuring that safe, reliable, and economic transportation of energy occurs in Canada. It’s in the best interests we believe of all Canadians to have an efficient and an effective regulatory system to ensure both a clean environment and a strong economy, and we think these objectives are not mutually exclusive. In our view, Bill C-69 does not provide the process clarity and timing certainly required for the Canadian energy sector to attract necessary investment and to remain competitive on the international stage, and, consequently, we cannot support it.
Thank you for the opportunity to provide TransCanada’s perspective, and I’ll be glad to address any questions you may have at the appropriate time.
Senator MacDonald: Thank you all for being here. I think I’ll direct my first question to you, Mr. Keys. One of the arguments we keep hearing in favour of the bill from the proponents is that there’s shorter timelines. But you rightly pointed out, and many people have pointed out, that the ability to stall or to belly up to the microphone in any public hearing could delay this stuff indefinitely.
In your amendments you talked about safeguarding against legal challenges, and of course legal challenges can be very time consuming. I’m wondering if you could elaborate more on what you would put in place to safeguard against legal challenges.
Mr. Keys: Thank you, senator. We start from the observation that these are expert panels that are undertaking these reviews, and we think as a consequence of that expertise that their decisions should be afforded an appropriate level of deference on determinations particularly of facts and their reasonable exercise of judgment. As a consequence, we’re suggesting, as you’ll see and read in our proposed amendments, a privative clause be added to the provisions to limit any judicial review to narrowly focus on matters of law and of jurisdiction and that we don’t get back in through the courts to re-litigating the basic facts or the exercise of the judgment of an expert tribunal in applying those facts.
Senator MacDonald: Thank you.
I’ll put my next question to the C.D. Howe Institute. As you have correctly identified, there is quite a crisis in the energy sector, in the resource sector in this country, and you’ve done some comparisons. Of course most of the western countries, I believe, Australia, the United States, have fairly good regulatory regimes. Are there things that they are doing that we’re not doing that we could be doing to make it easier to sell our projects politically in these countries?
Mr. Sprague: Thank you, senator. Perhaps just as an opening comment, I think one of the things that when we look at other regulatory systems is that there is a well understood process and there is some tried and tested rules that are in place.
I think, from my perspective, one of the most important things that we can do, as many people have told you, is set out a process that is going to be certain, that’s understandable, and to a certain degree has been tried and tested. You can’t get tried and tested all the time, but certainly in your process it should be straightforward and there should be as much certainty on a go-forward basis as to what the steps will be and what are then the methodologies or the tests that need to be met.
I think, as you’ve heard from Mr. Keys, a problem really exists if you embark on one of these large processes and sort of in midstream you’re told to add in a different review or a different aspect or to change your methodology. These are very, very difficult things for folks to do in midstream.
So for me the importance is having the clarity upfront of what the process is going to be, what are the steps that need to be taken, what are the issues to be considered, and, importantly, how are they going to be considered.
Mr. Bishop: I will just add to that, for your reference, on page 9 of the deck that we provided, you will find the so-called clock-stop time faced by the roster of projects in the last six years, pointing to a substantial amount of the review time that is consumed by proponents responding to information requests.
Now, that burden is on the proponents to respond in a timely way. Certainly, we hear anecdotally about proponents changing scope midstream, and that blows out many of those clock-stop timelines; uncertainty about the level of information that will be required; and back to the drawing board continued information requests that add to the burden. Proponents have every incentive to anticipate before they embark on a project the scrutiny that will be required. Our worry about this bill is that it creates great uncertainty in the new factors being imposed on proponents, factors in many cases that have practically boundless interpretation.
Senator MacDonald: Thank you, Madam Chair.
Senator Cordy: Thank you very much for being here this afternoon. If you were here this morning you would know that we are hearing a lot of the same kinds of concerns being raised.
When the committee did the consultation before the bill was drafted or was made public, one of the things that they said was that Canadians overall felt that approvals and extensions should be made by the minister or the Governor-in-Council rather than some committee because there is more accountability to the public, the public knows who has made the decision, and with this bill the reasons have to be given, unlike CEAA 2012, decisions have to be made public or the reasoning behind it.
What do you think about that? I mean, that’s what Canadians have said, number one.
Number two, Mr. Keys, in one of your amendments you reference three ministers — natural resources, energy, and finance. We have heard in testimony previous that it shouldn’t be just the environment minister making these decisions, that in fact if we’re talking about industry and environment, then we should be talking about those three ministers that you mentioned. By the way, thank you for the amendments that you’ve put forward, and it’s clear to read where you’ve written things in and scratched things out. It’s easy to see, to follow it.
Mr. Keys: Thank you, senator. I’m glad that that submission is helpful to you.
Maybe I’ll start with the latter part of your question. The context in which we suggested those amendments to add in the Ministers of Finance, Natural Resources Canada, and Environment and Climate Change Canada is in the context of an early ministerial notification in particular as well. So we suggested as TransCanada that proponents should have an opportunity to actually seek out or request that early ministerial notification, not that it may be something only that comes as a discretionary component from the government, but proponents can come forward and say at the front end, “We’re asking you now directly do you see any yellow flags or show stoppers that we should know about at the front end of this process, and if so please advise us of that now before we embark on what we would expect would be a multi-year process and expend significant dollars to advance through the regulatory realm.” So that’s the context in which we suggested those amendments.
Mr. Sprague: Thank you, senator. To the first part of your question, I think there’s always a tension between this desire for accountability and at the same time a desire to ensure that we are bringing expert, evidence-based decision making to the fore. I think the challenge is that that tension is palpable.
From my perspective, the important part is that we actually have an evidence-based and expert process put in place. We have several cradle-to-grave regulators. They undertake and they have institutional knowledge and understanding of many of these areas, and we think it’s important that they be allowed to discharge their function.
How do you balance then, if that is so, that question of accountability? There are two ways to do that. One is that ultimately the government is, of course, accountable, answerable anyways, for the decisions, and if there are problems with decisions, then the government has the opportunity to go in and fix, if I could use that word, the regulator and make different choices.
At the same time, one of the most important things for government to do is to set the policy construct within which the regulators are going to operate. Mr. Keys in his comments made some important points in that regard, about how do we have the policy debate where the policy debate should be, which I would argue is for our parliamentarians to sort out, as opposed to having that in the context of a project-specific review, where unfortunately a proponent is then caught up in these political winds and is ill suited and unable really to respond to them.
So, from my perspective, I would urge that we be clear that accountability lies with the government — they can discharge that through the creation of their policy — and we leave the experts to hear the actual issues and the evidence and make their determinations thereon. That’s how I would set it up, senator.
Mr. Bishop: Senator, I think your question was specific to reasons being given for timeline extensions, and I also interpreted your question about adding reasons for the public interest determination, which does not exist now for the significant determination, at least in CEAA 2012. Parenthetically I will say it exists for pipelines by virtue of the reasons requirement in the National Energy Board Act, clause 52. So pipelines effectively require reasons.
We would see that as a desirable improvement on accountability for ultimate decision-making. Reasons being given provides transparency of why a decision was made. However, with regard to both the public interest determination and the time extension, you are crowding in many more factors under Bill C-69 that impart again nearly limitless political discretion, particularly since the significant standard has been removed. All decision-making is now polycentric, public interest decision-making. That is dangerous for the reasons that Grant spoke to. No longer do you have a separation between the significant determination by an independent agency or regulator. Everything is political.
I would push with timelines as well: We should not expect, despite the prescribed timelines in the legislation, that those will be met, given the additional factors for consideration and the ability, albeit with reasons, to expand timelines by ministerial and cabinet order.
I hope that addresses your question.
Senator Cordy: You said in your comments, in effect, that industry should come — you didn’t say first, but that is what I’m hearing in my head, that industry should come first and we shouldn’t look at environment, social issues or Indigenous issues, that there should be a little bit more of a priority given to industry. Did I mishear that?
Mr. Bishop: With respect, senator, yes, that was not our intention to convey.
In fact, our report sets out the economic importance of environmental assessment, impact assessment as a means to ensure that proponents internalize the otherwise externalized risks and costs that a project might pose.
Put tangibly, if a mine imposes risks on stakeholders, a proponent might not internalize those costs.
An environmental assessment ensures that all stakeholders are playing on a level playing field with respect to information. It reveals that information that the proponent has differential access to. It also ensures that we put conditions on projects so that they don’t cause those risks to broader stakeholders. That is sort of an economic view of the purpose of environmental assessment.
However, one doesn’t want to impose excess costs or timelines that crowd out good projects. Those projects that you would like to see come forward may not come forward if they price the net present value in the negative, because they perceive a risk of being rejected that is inaccurate or face extensive costs for running through a regulatory process. I think the Energy East project may provide some glimpse of the extent of those costs and the risk of blowout of timelines.
Senator Simons: Thank you very much. Mr. Keys, I want to thank you for that quite grim autopsy of the death of the Energy East pipeline, and I want to thank Mr. Bishop for that sort of graphic picture. I’m now imagining what it would mean for a cabinet minister to have to approve every exploratory drilling permit and every bridge over a river. That can’t be a logical way to structure a regulatory regime.
But I had a question I wanted to ask first to the two Grants and then to Mr. Keys.
Mr. Sprague and Mr. Bishop, I don’t know whether you have had a chance to go through the CEPA, CAPP suite of amendments — Mr. Keys has a version of them. If so, do you feel that were those amendments made it would address some of the key concerns that you’ve raised about a competitive regulatory regime?
Mr. Keys, if we were able to successfully amend C-69 along the lines that you outline, can you imagine that we could create a regulatory regime where a version of Energy East might be viable? Clearly, the status quo is not working or we would have Energy East and TMX.
Mr. Sprague: Senator Simons, thank you for your question. We have not had the opportunity to go through those CEPA and CAPP-proposed amendments, and our papers sort of to look at that broader piece of Bill C-69.
What I would say is that we remain very concerned that there are fundamental tenets of the proposed bill rather that are highly problematic. So our anticipation is there would need to be some significant amendments to the bill in order to decrease the concern to investors about the certainty of Canada’s process on a go-forward basis.
Mr. Keys: Senator, I wish I was sitting here today telling you something different about Energy East than I was required to, but unfortunately that’s the circumstances that we’re in. I do agree with you, that they are critical circumstances in terms of trying to advance long, linear energy infrastructure right now in Canada. We’re critically constrained, as I think all the senators are aware, for transportation capacity, whether it’s oil or gas, and trying to move our abundant natural resources within Canada, to the United States or offshore through tidewater.
You asked if enactment of the revisions that TransCanada and/or CEPA have proposed would solve the problems. From our perspective they’ll certainly reduce some of the concerns we have, but they’re not going to eliminate them. We looked at them in part, and forgive the colloquialism, but they are little more than a rounding off of some of the sharpest edges. Our perspective is based on a project like Energy East, and it takes a billion dollars just to get to the front end of that regulatory process.
A brand new regime, even with these revisions, is going to be new, it’s going to be untested. A lot of unknowns will continue to remain in terms of the factors to be scoped in and assessed and how they’re going to be applied, what the right timelines are going to be. We don’t know what the project list is going to look like today, which from TransCanada’s perspective is critically important because it will define which of our linear infrastructure projects are actually going to fall into this extensive, expansive impact assessment regime. We understand what the process is today. We don’t understand what it’s going to be going forward.
Frankly, I’ll be blunt: We marvel in some respects how legislation can get to this point and potentially pass without knowing a critical defining feature of it from a pipeline perspective.
Senator Simons: Thank you very much.
Senator Patterson: Just to follow up, how is the project list as important in the pipeline world, Mr. Keys?
Mr. Keys: Well, in this case, if the project list designates infrastructure that is, for example, of a short linear length, our understanding is that will move it into the IAA and subject it to what we consider to be the highest level and most rigorous environmental assessment and socio-economic assessment out there.
A lot of what we as TransCanada construct even today, in Canada certainly, and in Alberta in particular, is expansions and extensions and looping of existing systems in disturbed right-of-way. These are not greenfield projects. In fact, we have several billion dollars’ worth of sanctioned projects here in Western Canada moving forward on some of our systems, and none of them right now fall into new, greenfield rights-of-way.
As a consequence, we would propose and want to see those types of projects, which is the majority of the work that most pipeline companies do, fall into the purview of the CER and not be subjected to the assessment regime under the IAA.
In our amendments, we’re proposing actually for the project list a demarcation of 500 kilometres of new right-of-way associated with the project in order to move it into that extensive assessment regime. From our perspective that will catch all of the major new long linear infrastructure in Canada. It would catch a Northern Gateway. It will catch an Energy East. It will catch a Trans Mountain pipeline. Those are the ones that should only be subject to that highest level of assessment.
Senator Patterson: Thank you. You refer to it in your proposed amendments.
Would those amendments be complementary with and in addition to the amendments that have been developed by CAPP and other related natural resource industries?
Mr. Keys: Just to be clear, TransCanada as a member of CEPA, the Canadian Energy Pipeline Association, worked closely with them for some time and the other members in deriving and ultimately aligning on the proposed amendments. So TransCanada’s amendments, I would say, are entirely consistent with the amendments that you have received from CEPA and largely consistent with the amendments that you’ve seen from CAPP.
Senator Patterson: To the C.D. Howe Institute, thank you so much for the chilling details that you’ve provided about slumping investment in our natural resource economy, the lifeblood, the engine that pays for the social programs we all care about in this country.
You talked about the project announcements slowing after 2015, but you focused on C-69. I’m just wondering, some people say, “Well, C-69 is not so relevant to this problem, it originated before C-69.” Can you just comment on what factors have led to this investment chill that is of such worry today beginning in 2015? What were the factors and how does C-69 play into that now?
Mr. Sprague: I think it is important that we understand that there’s a number of factors that have had an impact with respect to that decrease within our natural resource sector, not the least of which would be commodity prices. But for us it was critically important that we turn our mind to that view of investment and how do we, as you described it, maintain that flow of lifeblood in the Canadian natural resource system.
We talked about commodity prices. We also need to be mindful of the increased competitiveness of the rest of the world and how that has fundamentally shifted, certainly in the oil and gas context, of which I’m sure you’ve heard much. What we as Canadians need to remind ourselves about all along is, regardless of whether it’s oil and gas or mining, that we are competing in that global sphere, and we need to effectively keep our heads up and be mindful of what other changes are happening there.
While there’s many important things that we need to address as Canadians, if you wish, within our own borders, we need to be incredibly mindful that the majority of our investment capital is coming in competition with all of those other countries.
So when we embark on a review to improve our environmental assessment process, something we think is important, something we think needs to be done, we need to do that, though, in the context of this global competitiveness.
When don’t want to embark on a system, with respect, that is not mindful of how we are going to compete with other jurisdictions, the United States, for example, but many others around the world — especially when thinking about mining — so we need to construct in that context. Yes, we should always look to improve. Yes, we should make sure that we’re doing world-class work. I would submit that we are doing world-class work. So we need to understand where we’re starting from, as opposed to thinking that we’re inventing a brand new system never thought of before.
In summary, there are a number of factors we need to take into account, the most important of which, in my view, is thinking about our competitiveness and ensuring that we are achieving the goals that Canadians want within that context.
The Chair: I have a quick question.
Mr. Keys, are you saying that you prefer to keep the status quo, the present regime, despite the fact that you couldn’t build pipelines under it?
To Mr. Sprague, some polls have shown that the NEB had the trust of the public and that there were no indications of lack of trust. Your group also did a document on recuperating the trust on the NEB.
Could you please elaborate on these points? Mr. Keys and then Mr. Sprague.
Mr. Keys: Madam Chair, to come directly to your question, we prefer the existing regulatory regime over the provisions of Bill C-69. We recognize that the existing regime is not perfect, that it has problems with it, problems that need to be legitimately addressed in a number of different areas. We saw what some of those problems were, and I described some of them in my recounting of the journey of Energy East, where new assessment factors, upstream, downstream, greenhouse gas emissions, came in for the very first time in Canada through the NEB-assessment process into that project. So there was a form of political involvement in the project at the time.
So the existing regime is not perfect, but it is understood. It has a long history associated with it of how some of the provisions will be applied, and it certainly has a long history of judicial review and consideration as to what some of those provisions mean.
Part of our concern with the existing regime could be addressed even without legislative amendments simply by what we call “honouring the process,” whereby what’s black and white on the pages in the legislation is followed faithfully and honestly by all of the parties involved, the original intents and purposes of those provisions. Move forward through the regulatory process on timelines that were originally envisioned. Don’t have multiple timeouts. Don’t utilize inappropriately delays in the process for ancillary purposes. If the parties that were involved, including the regulator and government, honoured that process, then it is a workable regime. It was a stable regime for decades in Canada.
Mr. Bishop: I’ll speak to the previous C.D. Howe research that you cite. We have done a great amount of research over the years about the design of regulatory processes, particularly in the pipeline context. The report that you cite dug into, I think, discreet changes that could be needed in NEB processes to improve its relationships with stakeholders, its efficiency, its application of science. That report did not advocate displacing it from its primary lead role in doing the environmental assessments for which it is technically experienced and appropriately placed to do.
Indeed, that report highlighted the importance of the NEB as life cycle regulator in monitoring and enforcing conditions, informing those conditions at the outset during the clause 54 recommendation process and the complementary CEAA 2012 process.
I think it’s also relevant to point out that the NEB has a strong record of doing robust environmental assessments and to highlight that the judicial tripwires to projects, what has resulted in the quashing of projects, are primarily, in fact almost exclusively owed to failures in the duty to consult, and the duty to consult at the cabinet approval stage after the NEB, or joint review panel in the case of Northern Gateway, completed its review.
For the reference, we have the scorecard on court challenges, which you’ll find at page 11 of your deck, and the detailed court challenges that have related to CEAA 2012 at page 19 of your deck. Again, the source of projects being squashed overturned has been a failure of cabinet to fulfil the duty to consult.
The Chair: Thank you.
Senator Carignan: I have two questions. The first is for the C.D. Howe Institute. You provided a document in French, and I want to say that it is very appreciated. Non-profit organizations seem to produce their documents in both languages, unlike for-profit organizations, and I am not sure why. I would like to get a clarification. On page 10, you have a table on the length of environmental assessments in Canada, Australia and the United States, but I am having difficulty understanding it. I don’t know whether the figures are erroneous or they mean something else. Can you explain to us that part of the presentation?
Mr. Bishop: My pleasure, senator. This figure you will find more thoroughly explained in our report Crisis of Our Own Making, I believe, at page 31. This report shows the comparison of average, maximum, and minimum times over the period since 2012 for Canadian, Australian, and U.S. Federal Energy Regulatory Commission project reviews.
So going from left to right, we have divided these up between the relevant sectors. All of the triangles represent the mean duration, all of the dashes represent the median duration, and the bars show the maximum and the minimum duration of projects within that basket.
For Canadian pipelines the project that you see at the maximum, 11 years, is Northern Gateway. The average of all pipeline projects in Canada, the mean duration, is roughly 3.5 years, and the median duration, so 50 per cent of the projects, were at 1. 86 years duration.
Senator Carignan: I understand.
Mr. Bishop: So that is how you read the plot. I hope that is helpful.
The takeaway from this plot is that mining projects in Canada take much longer to get approved than in Australia. Pipelines take markedly longer on average in Canada and some take a really long time relative to comparator jurisdictions. Similarly, oil and gas extraction relative to Australia is also significantly protracted.
I hope that’s helpful.
Senator Carignan: Thank you.
My other question is for TransCanada. Given Quebec’s uniqueness in terms of consultations, do you think the substitution process set out in Bill C-69 would facilitate or complicate environmental studies in Quebec’s case?
Mr. Keys: That’s an excellent question. Going forward, I guess time will tell if we find ourselves in that situation. I’m reminded of how we approached Energy East in that context, you may be familiar with that, where there was some disagreement over whether or not the provincial process in Quebec needed to be followed and approvals obtained in addition to the federal process.
In order to address and resolve that, of course, TransCanada voluntarily submitted to that provincial process in Quebec.
Having the opportunity for substitution may help to address some of those differing views, those distinct views, as to which process applies and which doesn’t.
Senator Mockler: You’re not permitting me to ask five questions?
The Chair: No, sorry. Nice try.
Senator Mockler: To the witnesses, well done, a job well done.
The Council of Atlantic Premiers, the four Premiers of Atlantic Canada, wrote a letter to the Prime Minister of Canada February 14, 2019, and they say, and I quote: “Our assessment of Bill 69 as it is currently drafted is that the significant changes being proposed to the scope and scale of federal environmental assessment in Canada will not meet the dual objectives of environmental protection and economic growth.”
Senator Simon talked about the topsy/turvey that was well described by Mr. Keys on Energy East. I have a question for you on Energy East, and I don’t think it’s a project that will disappear from the moving targets. It’s important as a nation-building project for Canada. I have a question for you on the basis of questions asked of the Representative of the Government in the Senate and also of the former Minister of Natural Resources. They had mentioned that Energy East was cancelled for two reasons: The price of oil declined and other pipelines like Trans Mountain were approved.
Is that accurate? From what I’ve heard from you, Mr. Keys, there’s contradiction with what was told us in the Senate of Canada.
Mr. Keys: Senator, I don’t believe, with due respect to the minister, that explains the entire story. I think TransCanada, when it took that very difficult decision in late 2017 to cancel the project, was fairly explicit when it sent a letter to the National Energy Board. And I’ll read perhaps a passage from that to assist in clarifying the direct reasons why TransCanada decided to terminate the project.
After recognizing some of the changes to the project assessment that occurred TransCanada stated, and I quote: “There remains substantial uncertainty around the scope, timing, and costs associated with the regulatory review of the projects. There’s also a question of jurisdiction that arises from the NEB’s decision. After completing its careful review of these factors, the existing and the likely future delays resulting from the regulatory process, the associated cost implications, and the increasingly challenging issues and obstacles facing the projects, the applicants will not be proceeding further.”
That gives you, I’ll call it, an extrapolation, an insight into the multiple factors that TransCanada was considering at the time. It wasn’t driven by the existence of other pipeline proposals. At that time, and even today, we know that multiple additional pipelines are required to realize the production potential of Canadian resources, and right now investment in upstream is becoming severely constrained in Canada because of the inability to actually transport that product.
Senator Mockler: My guess is that there are more Canadians working in the energy sector in Texas and elsewhere than anywhere in Canada, if I look at what has happened. Being from a border town, I remember working with governors from the states of Vermont, Maine, New Hampshire, and even down to Massachusetts, and there was an integrated North America energy sector grid. When we looked at North America, companies like yours and others were given a chance to participate.
So there was this integrated North American energy sector. Right now the sector is booming in the U.S. and it’s completely dead in Canada. My question to both of you is: Why?
Mr. Keys: I’ll make some observations, senators, first, and then perhaps Mr. Sprague and Mr. Bishop will have comments as well.
So an initial observation I would make is that the United States used to be one of our biggest customers for energy oil and gas resources produced in Canada, and, quite frankly, they’re now one of our biggest competitors as they’ve moved forward in the last half a dozen years to begin to capitalize on and realize the potential of their energy resources. They are pushing natural gas into Canada, whereas they used to be takers of natural gas all across our southern border. They’re developing oil at an astonishing rate. Some of the submissions you’ve seen from other parties have demonstrated and quantified that. Quite frankly, they’re beating us in that energy space. In that context the regulatory regime plays a very important part in decisions that investors and proponents of energy infrastructure must make.
As you’ll recognize, capital is fluid. It will go where the opportunities are for the lowest risk investment. Right now Canada is not, from our perspective, or from that of many other Canadian companies or external international investors, seen as a receptive climate, particularly when you consider the regulatory challenges that we’ve been having in constructing and moving forward with large energy infrastructure.
For example, more than half of our earnings at TransCanada now come from outside of Canada and probably half of our current $36 billion sanctioned investment portfolio is now focused outside of Canada as we consider what opportunities are available for ongoing investments for our shareholders.
I think those are some of the factors that combined have lead to the current environment and state of affairs that we have in Canada, compared to the United States.
The Chair: We have exhausted our time, unless you have a very short comment to add.
Mr. Sprague: Senator, just the smallest of comments, a very fulsome answer. I think it reflects our inability to respond quickly enough to the global competitiveness that is the reality for our natural resource sectors.
The Chair: Thank you very much for your testimony and the conversation.
Now, we welcome our second panel. From Osler Hoskin & Harcourt LLP, we have Martin Ignasiak, Partner; Sander Duncanson, Partner; and Jessica Kennedy, Associate.
As an individual, we have with us the Honourable Nick Taylor, Former Senator, Former Member of the Alberta Legislative Assembly, Member of the Association of Professional Engineers and Geoscientists of Alberta, in oil and gas business since 1949.
You have five minutes for your introductory statement, after which we will proceed with questions and answers.
Hon. Nick Taylor, Former Senator, Former Member of the Alberta Legislative Assembly, Member of the Association of Professional Engineers and Geoscientists of Alberta, as an individual: Honourable senators, welcome to the home of the 2019 Stanley Cup winners. Thank you for taking the committee travelling and allowing me to speak to you. As you may have seen in my intro, I have served ten years in the Alberta legislature in opposition and seven years in the Parliament of Canada as senator. As well, during my 70 years since graduating I was a farmer, oil and gas person, and mining prospector.
As a former chairman of this committee 20 years ago, I realize how much reading and listening you have to do to prepare a report to your fellow senators.
First, without beating around the bush, after reading the Bill C-69 twice and calling on a number of people whose opinions I respect, I think this bill should be passed without any amendments. I believe the bill is part of the natural evolution from when all mineral and energy developments were a good, controlled by science only. This was so when I worked on projects as a young geologist or engineer after the war in the late 40s. In those days, possibly because of the war scares, the public demanded a reserve of metals and energy and were willing to overlook all sorts of things. They were amenable to a little tweaking of the environment or Indigenous rights in order to be ready for any coming conflict or war. “Who cares for a little sulphur in the air, a few chemicals in the water. We have plenty of fresh air and plenty of fresh water” my fellow hewers of wood and water carriers would say.
I well remember in 1950 my first brush with the public and environmentalists as an eager geologist and engineer in what was called the tar sands then, being sent down to Almagordo, New Mexico as part of a team to acquire an atom bomb to plant under the sand, which hopefully when exploded would refine the oil in place. My job of explaining this to Alberta politicians and the media was, thank God, a failure.
Bill C-69 does not take away from any innovations of science, it just ensures that each advances are subject to acceptance by the average citizen. Isn’t that what democracy is all about? Isn’t it incumbent for a project initiator to get the support of the public, as well as those affected? I know they are much maligned words, but shouldn’t major projects have a social licence? Social licence is the new wave in both the U.S. and Canada. Alberta media is fond of blaming Ottawa for delays in getting pipelines built, ignoring that south of the border, Trump, who is no friend of the environmentalists, is being challenged on building the pipelines we need to get our heavy oil to refineries in the Gulf of Mexico. Being born and raised in Alberta, I was taught when I was young that if the cows don’t milk and the hens don’t lay, blame Ottawa.
South of the border in an energy-rich Colorado — and this is interesting — nobody seems to have mentioned it — in the last month — like Alberta, Colorado is snuggled up to the Rocky Mountains —legislators approved a bill that prioritizes public health and safety over oil and gas industry development, and even stronger than C-69 in that municipal governments will have a veto.
Bill C-69 broadens what we have now to cover marine and Indigenous problems and puts a limit on each stage of hearings, which may or may not be the right length, but that can be amended in the future if need be.
As an former politician who has served mostly in opposition, I’m quite aware that the most effective way to kill a bill is to delay it by suggesting amendment after amendment, by calling for more study and amendments. I ask, that you not let it happen here.
In conclusion, Bill C-69 is a good bill. Thank you.
Senator Patterson: That’s the first time we’ve ever heard that.
Martin Ignasiak, Partner, Osler, Hoskin & Harcourt LLP: Good afternoon, senators. My name is Martin Ignasiak, and I’m the co-chair of Osler, Hoskin & Harcourt’s national regulatory, environmental, Aboriginal, and land group. With me today are my partners, Sander Duncanson, and a senior associate in our group, Jessica Kennedy. We together have extensive experience in advising clients on large-scale industrial projects across Canada, including oil sands facilities, various types of mines, pipelines, and renewable projects, including wind, solar, and hydro projects. We have appeared before joint review panels established under CEAA 1992 and CEAA 2012, as well as the NEB and the Canadian Nuclear Safety Commission.
We have also on behalf of our clients negotiated over a hundred impact benefit agreements with various Indigenous groups across all parts of the country.
Before Mr. Duncanson and Ms. Kennedy address some of the specific issues with Bill C-69, I want to provide some context for your deliberations on this very important piece of legislation. Over the past 20 years, three fundamental shifts have occurred in the regulatory review of major projects. Together these shifts have made regulatory reviews in Canada more complex and time consuming, but have not resulted in better environmental outcomes for our country.
First, developments in Canadian jurisprudence regarding a Crown’s duty to consult with Indigenous groups have resulted in a situation today where many Indigenous groups use the regulatory process for purposes unrelated to the environmental assessment, such as exerting leverage over the proponent for the purposes of negotiating benefits or raising issues with the government that go beyond the scope of the project in question, which cannot be meaningfully addressed by the proponent or the regulator.
Second, there has been a dramatic increase in the participation of non-governmental organizations in the regulatory process. Many of these groups participate for the purposes of increasing their public exposure in order to enhance their fundraising. The concerns raised by these groups are often not relevant to the specific project being considered, but instead are focused on overall government policy and the impacts of industrial developments generally.
Third, the Government of Canada, when it enacted CEAA 2012, significantly expanded its jurisdiction by moving away from a trigger-based approach to include projects even in cases where the project under review did not require any federal approvals or permits. In our view, the old trigger-based approach was more appropriate and helped focus the assessment on the purpose of federal EA, which Mr. Duncanson will speak to. The government must take these trends into account and ensure that any reforms do not exacerbate existing problems in the legislation.
Sander Duncanson, Partner, Osler, Hoskin & Harcourt LLP: Senators, the reason why governments conduct environmental assessments, or EAs, is to ensure that before the government makes a decision allowing a major project to proceed the government informs itself of the environmental consequences of that decision. EAs should therefore consist of a technical assessment of the proposed project’s merits performed by specialized experts who review all relevant evidence. That approach is in line with the current government’s commitment to science-based decision-making.
The current process under CEAA 2012 has become a forum to debate national policy issues that go far beyond the scope of a given project. The current version of Bill C-69, in our view, exacerbates this problem by requiring a consideration of a number of factors that are beyond the ability of any individual proponent or regulator to remedy. In addition, the trend toward using environmental assessment as the primary forum to debate national policy issues has led to these processes becoming highly politicized, which has made project approvals subject to significant political risk and uncertainty. Refocusing the assessment on the merits of the specific project will depoliticize the process and allow the regulators to concentrate on the issues that are specific to that project, resulting in better environmental outcomes.
Jessica Kennedy, Associate, Osler, Hoskin & Harcourt LLP: Senators, we urge this committee to recommend more robust provisions regarding timelines and participation. The proposed assessment framework makes it very easy for project opponents to highjack the process and drag it out unnecessarily. If you focus the assessment on what it needs to be and take steps to depoliticize the process, shorter and firmer timelines are achievable.
For example, we see no reason why the process for a typical impact assessment should take more than two years once the documents are deemed to be complete. To achieve this, a scope of public participation should be narrowed through some form of standing test, which is in line with the practices of other regulators in Canada.
Finally, we urge the committee to consider the matter of efficiency. The vast majority of the projects we work on are comprehensively assessed by the provinces or territories. Bill C-69, in our view, fails to adequately take this into account. If Canada is to remain competitive in the global fight for capital, the Government of Canada must recognize that the assessments carried out by the provinces and territories are valid and that duplicating or overriding those processes through a federal review does not result in better outcomes for anyone.
We look forward to addressing your questions, and, on behalf of all of us, thank you very much for the invitation to appear today.
The Chair: Thank you and now we go to questions. Senator MacDonald has given his spot to Senator Carignan.
Senator Carignan: First, I want to commend you on your testimony because it is rare for lawyers to speak against a piece of legislation that will increase the number of litigations. It is encouraging for the profession. As for recourse, according to what I understand of your testimony, the criteria, added to the notion of standing for participating in the consultation, are so broad that individuals or groups will use that power or that right to consultation to slow down or deviate the main objective of the consultation. They may even demand things that have nothing to do with—so, something of a catch-all forum is being created where the entrepreneur has to respond to issues that should be handled by the government in other forums. Is that correct?
Mr. Ignasiak: First, I want to thank you for your testimony.
Mr. Ignasiak:First, I know it’s rare to see lawyers concerned about additional process.
Senator Carignan: I’m a lawyer, so I want to salute you.
Mr. Ignasiak: No offence taken. Our concern, however, is that the process is such that too often we hear, and you heard this earlier today, that people aren’t going to pursue projects here because they have no certainty on the timelines. When we view this legislation, we do not view it as something that is really geared toward delivering better outcomes at the end of the process. It’s really about creating additional process that we don’t think is merited because it won’t result in those better outcomes. That’s primarily one of our concerns as regulatory lawyers.
Our clients don’t typically complain about the environmental standards in Canada or the requirements, they complain about the uncertainty of the process and the timelines.
Going to your issue about standing, we think standing is critical. We have been in many hearings over the last several years, and this is an issue already under CEAA 2012, which does contain a looser form of standing but does require some in that it provides the agency specifically some authority to determine standing. We are seeing in many hearings now that numerous regional issues are being discussed that don’t relate specifically to the project. In other words, those regional issues exist and are a problem for the communities we’re dealing with in the hearing whether or not the project being proposed goes ahead. That is something that we think needs to be addressed and isn’t addressed in the current legislation.
Senator Carignan: Do you have specific amendments to regulate the criteria to be considered in this environmental assessment? What about reducing the notion of standing to individuals who are directly affected by a project?
Mr. Duncanson: A few points in response.
We did submit on behalf of our firm, and I think it was also a little unprecedented, a submission to the House committee that was considering Bill C-69, some specific amendments, including taking the policy considerations out of clause 22.
I’ve reviewed some of the proposals from CAPP and CEPA, and they do similar things as well. That’s critical, taking the policy out.
Even if you take the policy factors out as they exist under the current legislation today, without parameters around who can participate and how the process is implemented, it can be abused by parties. It’s more than just taking the policy factors out. The standing tests, as Martin said, are very important, in our view.
In terms of standing, it doesn’t need to be limited to parties that are directly affected. There can be parties who are not directly affected and who do have relevant information for the regulator, and those are the two key prongs of the test as it exists today.
The converse of that is if you want to participate in a process for a project that won’t affect you in any way and you have no relevant information to provide to the decision maker, to me you shouldn’t have the same rights of participation as everyone else.
Senator Cordy: Thank you very much to the witnesses for being with us this afternoon, and it’s great to see you again, Senator Taylor. You were chair of this energy committee, I believe, when you were on the Senate.
You said that major projects should have a social conscience. I wonder if you could expand on that. We did hear testimony from the Native Women’s Association, and they spoke about how they were pleased with this bill and the process because, they said, it was inclusive and that it included First Nations, and they also spoke about it being an opportunity for women’s voices to be heard. They said that this bill is the first bill that contains gender-based analysis, and they explained the importance of looking at how various projects will affect the women in the community. They also said that it’s better to work together with First Nations than to be litigating. Those I think are some of the things that you would consider in the social licence.
Mr. Taylor: I would agree with that 100 per cent.
I noticed after sitting here since this morning everybody complained that they had submitted or knew of a good thing that didn’t go through, the lawyers didn’t get their pipelines through, the pipelines didn’t get their markets. The point is somebody has to decide sometimes that these projects are no good, sometimes they are doomed to fail. They should fail. Just because the scientists and geologists and engineers say they’re wonderful doesn’t mean they are. I can’t agree more with the idea that if Indigenous people, and women in general want to make a presentation, okay. I know with bills the process may be longer than it has been and maybe some amendments are necessary to shorten periods in time, but in all my years in politics I’ve never seen a perfect bill. There’s always going to be somebody who is going to want to amend it as time goes on.
As you just said, the process has to be broadened. Just don’t listen to the lawyers who want to get it nice and narrow, just to us engineers.
Senator Cordy: Our chair is an engineer. So we’ve got engineers and lawyers around the table here as well.
To the three lawyers, I’m concerned about your take on standing and who determines who would be allowed to appear before the hearings or before the process and who would not be able to. Sometimes though you might not be on the doorstep of a project you’re certainly affected by it. For example, the Winnipeg Free Press recently put out an article about the Fox Lake Cree Nation and the power dam that affected them with flooding. There are things that you might not think of, like the caribou changing their migration patterns so that they weren’t there for the Indigenous peoples to hunt.
We might look at the face value of something and say, “Well, you’re 100 kilometres away so you can’t be affected by it.” But when you look at issues like flooding or caribou changing their path, which affects the hunting of the Indigenous peoples, they should indeed, I would say, be privy to standing.
Mr. Ignasiak: That’s a great question, senator. I think that it’s really the regulator at the end of the day who has to make the decision on standing, taking into account the project.
For instance, I think one of the bizarre scenarios we’re in with the current legislation, and I think this legislation will exacerbate, is that there’s no difference taken into account between a linear project, such as a pipeline that may go 5, 6, 700 kilometres, and a mine that’s in one community.
The regulator should be able to look at the impacts of those projects. One has impacts on groundwater, the mine, one might have impacts on vegetation over a vast area, the mine; and then the pipeline, which, you know, if put next to a roadway really doesn’t change the landscape at all pre and post pipeline. The regulator has to be able to look at the actual impacts of the project and then make a determination on standing, taking all those factors into account, including what the process will look like going forward.
I think one of the ways that the current legislation has ill served us and that this legislation will ill serve us is that linear projects, such as a pipeline or a transmission line, extend over a vast area, and it’s even more important that the people actually affected by that project have a good opportunity to participate in the process. Potentially, there are hundreds of people or hundreds of communities affected due to the length of it. Whereas a mine in one area may affect three communities that surround it, as well as Indigenous and other groups that will want to participate in the process.
So at the end of the day, it has to be a regulator who’s got expertise and who is able to look at the nature of the project and come to a determination of how you’re going to balance all those interests.
Ms. Kennedy: If I may just follow up on that, to answer your point about Indigenous communities, in our experience, the directly and adversely affected component of a standing test, in addition to the relevant experience and knowledge, has been used to include the voices of Indigenous groups that have traditional territory that may be impacted by a given project.
The standing test, as we would propose it, does allow for potentially affected Indigenous groups to participate, which should address those issues as you mentioned.
Senator Cordy: You mentioned NGOs, meaning environmental groups, I think, from the way that you said it. So are we not to hear environmentalists because you said that they might highjack the project? I think what this bill is trying to do is balance between industry, environment, and the rights of the Indigenous nations. So how can you exclude one group and have a balance?
Mr. Duncanson: So I would say it depends. Just because a group puts their hand up and says “We’re concerned about the environment” shouldn’t be enough to get a seat at the table like everyone else.
In our view, environmental groups may have a place in the process, depending on the project, but they would need to demonstrate how they intended to participate in the process and what useful knowledge or experience they could contribute to the regulator to assist the regulator in making a better informed decision. As long as they can assist the process, they can participate.
If their goal is simply to, as Mr. Ignasiak said, identify concerns that everyone knows are concerns and won’t really be affected one way or the other by the project in question, if that doesn’t help the regulator make a decision, then they should not be allowed to participate to deal with those issues.
Senator Cordy: I personally have received thousands of online contributions by Canadians. So that’s one way to do it. I’ve certainly received lots of mail and phone calls at my office. That would all be part of public participation, in addition to the work that we do in Ottawa and travelling across the country, hearing from witnesses. So participation doesn’t necessarily mean that you’re going to sit at the table and present and have questions and answers, but there are many ways of participating.
Should we close all that off?
Mr. Duncanson: No, and that’s an excellent question. To clarify, we’re not suggesting that any member of the public shouldn’t have the ability to make that type of an online submission if they want to. Currently under the process, under CEAA 2012, it’s typically quite open ended and allows for that as well.
There is a challenge with how to deal with the volume at times, when you get literally tens of thousands of submissions that need to be considered and responded to.
But our concern is when you’re in a formal hearing process and you need to consider the project and move through the process in an efficient way, there needs to be some sort of tiered participation to do that effectively. That’s what we’re talking about, tiered participation. It’s not excluding anyone from the process overall.
Senator Cordy: So it is good standing but tiered. Senator Taylor.
Mr. Taylor: I disagree. I think the regulator should only be concerned with whether the one who wants to make a presentation is repeating something, not whether it’s good or bad. That’s not his business or her business. It’s just whether they’re repeating something that’s already heard.
I’m not worried about the whole pile of people coming into the thing and delaying it by going on and on. They’re going to try to do that. That’s natural. People against the measure will try to delay it. But I think it’s up to the regulator to decide whether or not they’re repeating something.
Something like your chairman has to do now.
The Chair: Yes, thank you. Exactly.
Senator Simons: Thank you, Madam Chair.
I have to say my life is sort of flashing before my eyes, because as a journalist I covered Mr. Ignasiak when he was crusading against corruption as chair of the Edmonton Police Commission, and I covered Mr. Taylor when he was an MLA, the very iconoclastic leader of the Liberal Party of Alberta, and I know well that he has never been one to shy away from saying something that might be unpopular in Alberta if he feels it’s right.
I very much take to heart your caution, Mr. Taylor, about not letting the bill die just by arguing over amendments and amendments and amendments until it dies on the Order Paper because given that the status quo is dysfunctional, I don’t think that’s a very good solution.
I wanted to ask Mr. Ignasiak and your colleagues a question. CEPA and CAPP have presented us with a suite of amendments, including one that is sort of what I might call a “soft standing test.” I don’t know if you’ve seen the text of it, but the way they have proposed that we amend clause 27 is to say that the agency has a discretion to determine the manner in which a member of the public may participate in an impact assessment of a designated project conducted by the agency, taking into account the degree to which the member of the public is directly affected by the designated project or whether in the opinion of the agency the member of the public has relevant information or expertise regarding the matters to be decided. It’s not a hard and fast standing test. It leaves it to the discretion of the committee who could certainly broaden the scope of who they would hear from.
Would that answer some of your concerns?
Mr. Ignasiak: Yes, thank you, senator. And you can imagine how nervous I am appearing with Senator Taylor, who is well known for his wit and eviscerating people in the legislature.
Yeah, I think that test is excellent. I mean, it’s very consistent with the point I made before when a regulator has a project to get through approval. We have worked on projects that very few people have heard of that had environmental challenges that were major works and caused major disruption to certain disciplines of the environment. We’ve worked on those, and they’ve received little public attention and we got through a regulatory process.
We’ve seen other projects that by most objective measures from an environmental perspective are far more benign but end up on the front page of newspapers and end up in very elaborate or lengthy regulatory processes where the project is only discussed about 10 per cent of the time. So we’ve seen the gamut of these. I think the amendment you’ve referred to, which we’ve seen and discussed actively in our office, is the right way to go. The regulator has to be able to look at the nature of the project, take into account timelines, take into account the profile of the project, and determine the best way to determine who’s directly affected, who has standing and then if there’s really a need for a tiered level of standing.
If people want to submit papers, submissions saying no, don’t let this go, that’s fine. We understand that there is more. As Mr. Taylor said, this is more than just having engineers and geologists in a room. We get that, but there’s another thing we’re trying to accomplish here.
Our main concern with Bill C-69, it has numerous references to public participation, but it does not explicitly give the agency or the review panels any explicit authority on whether or not to allow someone into the process or to exclude someone from the process. If our client says we’ve got 10,000 people who want to participate in a process, it’s very difficult for us to say, “Well, okay, we’ll argue these people shouldn’t participate.” because there’s no legislative provision right now expressly giving the regulator the power to make that determination, and that creates some of the risk you’ve heard about.
Senator Simons: It just seems to me that part of the problem here, which is especially clear to me after spending yesterday in Vancouver, is that we have a whole project of reconciliation that we have not completed. Most First Nations in British Columbia have no settled right to their traditional territory, and we’re kind of using C-69’s provisions as a proxy for dealing with the more serious question of how we reconcile the colonial project in British Columbia.
Mr. Ignasiak: You heard me say that’s one of the big trends over the past 20 years. When I started doing this, Aboriginal law wasn’t really viewed as part of the regulatory world, and now you can’t do what we do without having a firm understanding of Aboriginal law. The landscape has switched.
There’s no doubt reconciliation is one of the great challenges that exists in Canada right now. My concern is that people who think we can accomplish a significant degree of that through the environmental assessment process are not understanding the environmental assessment process, the limits of the proponent, and the limits of the regulator when reviewing an individual project. That’s not what we’re going to address all of these issues with.
Senator Neufeld: Thank you for being here. I also had a question on standing, but I think we’ve heard a lot of information about that so I’ll just ask one about timelines.
Senator Mitchell from Alberta is the sponsor of this bill, to take it through the Senate, and he consistently argues that the timelines that are presented in C-69 will actually get to decision a lot faster than what we have in CEAA 2012. I would like you folks to comment on that and tell me whether, in your estimation and working with this process before, is that in fact true.
Mr. Ignasiak: We’re all going to give the same answer.
Mr. Taylor: I really don’t know. I mean, my fellow panelists here have mentioned Indigenous rights. They have become a lot more than looking after the hunting and the water and the environment. Many of the Indigenous people might want to participate business-wise. You have to look at both sides. I just really don’t know. That’s why I say pass it as it is, and as time goes on you may have to amend the bill. Who knows?
Senator Neufeld: Or amend it and then later on amend it again.
Mr. Taylor: Exactly. That’s what democracy is all about.
Ms. Kennedy: From our perspective, I think as a matter of simple math the numbers may add up to smaller numbers. I think it will depend partly on how the early consultation phase plays out in terms of whether any timeline efficiencies are gained, but the large issue, and I think that you’ve probably heard a lot from people here in Calgary, is the certainty around those timelines.
So if we had a client come to us and say, “When do you really think we could get a decision on our project?” Looking at Bill C-69, we would have huge caveats around when we would expect a decision because there’s just so many opportunities for discretion on those timelines.
Again to the point of depoliticizing, I think the level of ministerial discretion creates opportunities for public pressure to influence timelines, which makes proponents very nervous and makes it difficult for us to evaluate likely timelines.
Senator Neufeld: So how would you compare that to CEAA 2012? Use the same scenario and tell me what you think there.
Ms. Kennedy: Certainly there are problems with CEAA 2012 in terms of timelines. The same types of issues are there in terms of opportunities to delay, to pause the clock, particularly in relation to the information request process, which we’ve seen significantly expand the timelines of impact assessments.
Mr. Ignasiak: Senator, if I could on that point, there’s one thing that’s been missed on this discussion of timelines, and that’s the practical reality of environmental assessment. The legislation talks about 180 days for the preplanning phase. There’s then a clause that says at that point, once the final notification is issued the proponent has up to three years to prepare and file the environmental assessment or the impact assessment. That starts the second phase.
It’s important for people to recognize that these 10,000-, 20,000-, 30,000-page reports or maybe sometimes 5,000-page reports aren’t prepared overnight. They involve seasons of baseline work, people going out in the field, counting birds, assessing vegetation, counting trees, measuring water flows, water quality. All of that’s done in that time. So what we have created by this legislation is the preplanning phase where we’re supposed to be discussing a project in extremely high level, and then it’s supposed to be put to bed for potentially a year or two or three while the proponent prepares all of that work to file the environmental assessment.
Our concern is it’s just not a practical approach when you look at how companies operate, the fact they have to retain people to do this work, the fact that they’ve got disclosure obligations about what their future plans are and they have to be careful what they release when. There’s a lot of things we think haven’t been thought through in that regard.
Senator Neufeld: Thank you.
Senator Mockler: I have a question for Senator Taylor. Your father and grandfather being from Miramichi, there’s no doubt that you can answer those questions.
Mr. Taylor: I’ll poach a little salmon first.
Senator Mockler: Get the right salmon.
With your experience — there is a difference when you’re in opposition and on the government side, and I’ve been there with seven elections under my belt in the Legislative Assembly of New Brunswick, how do you define social licence?
Mr. Taylor: That’s a good question. Actually, the term “social licence” was first used by an acquaintance of mine. He was a dyed-in-the-wool Tory, a guy by the name of Morgan. He was trying to get a pipeline through here in Alberta, and in the hearing he said that we realize we have to have social licence. He meant — and I take it to mean — and that’s why I apply it here — it’s a dirty word in Alberta now, a four-letter word — that social licence means nothing more than you have to have all of society behind what you’re trying to do. You can’t put anything through if society doesn’t agree with it. And if society doesn’t agree with it, it’s because you haven’t done a good enough selling job, number one; or, number two, maybe the thing is truly no good.
Senator Mockler: You having been an elected official serving in the legislative assembly here. You’re the first one to tell us that we should give Royal Assent to this particular bill and do the amendments later down the road. I don’t buy that as a parliamentarian.
However, I would like to have your opinion on the assessment of the Council of Atlantic Premiers, who said: “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.” That sentence was in a letter to the Prime Minister of Canada, and I was informed last week that they’re still awaiting an answer. It was sent to the Prime Minister of Canada February 14, 2019, and signed by the four premiers.
My question to you regarding this bill is: Have you talked to Senator Mitchell about it?
Mr. Taylor: Yes, I have, and a few other senators. I don’t want to go to confession just in case they don’t want their names heard. I’ve also talked to a number of people involved because I’ve kept an interest in politics. I must admit, being mostly in opposition, ten years, one of the tricks used is getting so-called experts to come in and say that something is wrong with the bill. That’s one of the ways of defeating a bill, taking time out and waiting for the next session of parliament or the next session of the legislature. So I realize that goes on.
However, I think that this bill is nothing more than a natural evolution. When I first came out of school, every project was good because we needed it for the war effort. It’s evolved now to where more and more people are involved. My friends on my right are saying, maybe they don’t know anything about it, but how do you know they don’t know anything about it? How do you know that what they’re bringing up might be important, especially if it’s environment or Indigenous rights. It could affect something quite wide, much wider.
So I think this is a natural evolution. I have operated in, for instance, many countries around the world, I think 20 countries all totalled, and England and Denmark are the worst. That was 20 years ago. They had Bill C-69 types going early on. Then there are countries like Namibia, where I operated. They gave me great cheers and marched me down the street with flowers and everything else. They didn’t care what the project was because they needed it.
Senator MacDonald: I’ll direct my questions to Mr. Ignasiak and his team. It’s great to see you here.
The elusive designated project list, the government seems very reluctant to share it. They haven’t given any information on it. It certainly has not been shared with our committee and we hear concerns that offshore exploratory drilling, in situ oil sands projects, and potash mines will be placed on this project list.
Based on your experience and reading of the government’s consultation documents, do you expect these project types to be placed on the designated list, and are there some that I haven’t mentioned that you also expect to be on the list?
Mr. Duncanson: Thank you for the question, senator. We don’t have any more specific information than any of the rest of the people in this room, I don’t think. Certainly the early consultation from the government indicated that those types of projects would be included. Presumably there’s been some work behind the scenes to discuss whether or not that’s appropriate. We don’t know where that’s landed.
We mentioned earlier that one of the challenges that we have as regulatory lawyers in assessing this legislation and giving advice to our clients about what it means, is that so many of the details about how this bill is actually going to be implemented we don’t have yet. Legislation is only so good as it’s actually implemented. Without those details, it’s very difficult to understand exactly the implications.
Senator MacDonald: We’ve heard a lot of testimony on the expanded list of factors to be considered in the IAA in clause 22 and clause 23. Do you believe these clauses will insert more policy debate in the project reviews, and do you think these clauses will increase in uncertainty for the proponents of projects?
Mr. Ignasiak: Yes. Currently we have the main test, that being whether there’s a potential for significant adverse effects, and over decades we have developed a better understanding about what that means. How do you consider reversibility, magnitude; all of those things are taken into account when environmental scientists and different disciplines are trying to determine whether we’re likely to see significant adverse effects.
I think it actually goes back to some of the exchange that occurred with Mr. Taylor about amend, amend, amend. This is very important legislation. It comes from the EARP guidelines that pre-existed the original CEAA, where we had some tweaks, and we then had CEAA 2012, which had some more tweaks, some of which were significant. We’ve talked about moving away from the trigger-based approach.
Here we are seeing a wholesale starting over on the impact assessment.
There’s no doubt in our mind that the criteria here will result in increased politicization. You can read those factors in either of those clauses, and you’re going to have a policy debate on many of them as people try to determine the final answer. For us, to advise our clients on whether they’ve met that test and what happens in either case becomes very difficult.
Senator Patterson: Senator Taylor, we’re honoured by your presence here and your experience, but I was quite shocked to hear you say that opposition members employ a trick by inviting experts to give evidence, if I heard you correctly. I would like to ask you, do you believe then that people who have appeared before our committee — respected industry stakeholders like the Canadian Energy Pipeline Association, the Canadian Association of Petroleum Producers, the Canadian Electricity Association, we heard from Chief Roy Fox today and the protesters who took time out of their day to come here condemning this bill — are they a trick, those people, that we should dismiss?
Mr. Taylor: No. I think you should listen to them. They are saying what you said, that they can see their own living affected. I think part of the problem in Alberta is exaggerated a bit. There’s been a depression in two things. One, geologically, horizontal light oil has been discovered in Texas and Oklahoma. That put our type of geology out of business. So they get a lot more oil income.
The second thing I would like to get across is that we, in the last 10, 20 years, have had a boom. Don’t forget I’m a lot older than they are, and I remember when it was hard to get money. They’ve had very good times, and really what we have now is we’re back to normal. It’s not that we’re depressed that much, but the big boom has dropped down.
There are a lot of people, unfortunately, unemployed and it’s taken a lot to adjust, but it is coming back. I am part of an engineering firm. We’ve had a number of clients and in the last six months they have doubled. In other words, once the engineering and energy start figures increase, it will show up in the field. We’ve had a big boom and now we’ve crashed. That’s the nature of the oil business. You’ve got to get used to it going up and down.
Senator Patterson: To the Osler firm, I just want to say that we’ve heard over and over again about these serious problems with the bill: no certainty on the project list or even the guidelines, there’s no certainty on substitution — provinces don’t know whether they’re going to be substituted or not— no certainty on timelines, wide open standings — exacerbated by shocking evidence we heard yesterday about ambitious foreign funded support to environmental organizations and even Indigenous groups.
There was a day when there was a mantra: one project, one review. When I look at this bill, I see basically a trifurcated process. You’ve got the impact assessment, the licensing, and then the regulatory process, all with potentially different panels composed of different people.
Is this a perversion of the one-project-one-review goal that seemed to be commonplace in recent years?
Mr. Ignasiak: Our view is that that is a major problem with the legislation. It started becoming a major problem under CEAA 2012, and even with the previous CEAA. What we saw more and more was, even if there was a completely competent provincial regulator or territorial regulator dealing with a project, the insistence of a full-blown federal review of that very same project. It doesn’t produce better outcomes, but it certainly increases the costs and the length of the process. You know, there are some who say CEAA 2012 was a step back in terms of federal involvement in the environment. From our perspective, we are seeing projects now that require no federal permits or approvals whatsoever. All of their permits or approvals are coming from the provincial government. Yet, despite that, they have to file a project description with the agency and undergo a federal review because of the existing legislation, and this legislation just goes a step further in that regard.
So you heard me refer to the old trigger approach that we have used since the EARP guidelines and the original CEAA. I think that would go quite a ways toward helping us streamline that and trying to keep as much as possible to a one-window review.
The Chair: Thank you, witnesses, for your testimony.
Thank you, colleagues, for the questions and the discussion and debate.
We now continue our study of Bill C-69 with panel 3. We host, as an individual, Arlene Kwasniak, Professor Emerita of Law, University of Calgary; and from Young Pipeliners Association of Canada, Sarah Vandaiyar, President and Chief Executive Officer.
Arlene Kwasniak, Professor Emerita of Law, University of Calgary, as an individual: Thank you very much, everyone, and thank you for inviting me to speak on this very important bill. As I say in my brief, I’m a Professor Emerita of Law at the University of Calgary, and I’ve been involved in environmental assessment for over 25 years. I write on it and I publish on it. I also was a member of the Regulatory Advisory Committee under CEAA 1992 for about 11 years. I have been a member of the Canadian Environmental Network, environmental assessment caucus as well.
I’m going to start by making a few comments on the Senate’s very important role in review of legislation, and then just go over a few points in my brief. I know you all have it. Then I will respond to some comments made in the testimony that was given last week that didn’t make it into my brief.
With respect to the role of the Senate and reviewing legislation, I make these comments certainly not to advise this committee or the Senate of their role because they know that, of course, and it’s not my place. But, on the contrary, these comments are just, I guess, in a broader context, because so much has been brought to the committee with expectations that the committee will make certain recommendations to the Senate and will be doing all kinds of things.
One of the things that the Senate committee has been asked to do is kill the bill, which I take to mean either delay it so much that it won’t be passed by the end of this legislative period — I’m sure that there’s no intention to do that — and The other would be to defeat the bill, which is sometimes called the absolute veto, which is rarely exercised. In fact, I’ve read of only four times since World War II and only in really extreme and exigent circumstances, and I would submit this Bill C-69 is certainly not one of those. Some of the proposed amendments to the bill would help to clarify it, make it more certain, better reflect its policy, but some would undermine its policy or present some completely different policy. So I think it’s a good question to ask what really is the role of Senate.
Obviously that role is evolving with an independent Senate and I’m not even sure exactly where it is right now. Amendments are certainly within the Senate’s purview.
I want to read something by Senator Harder from an April 12, 2018 publication, because it certainly rings true to me. He says:
When the Government, with full political accountability and the assent of the confidence chamber, has made its policy choice, one that is legitimate and reasonable, it is not enough to argue that it would be preferable for the Government to adopt an entirely different public policy. If within the range of reasonable policy options available to it to meet its objectives, the Government has selected one policy over another as reflected in its bill, its policy choice should in most cases be left intact. The Senate is not designed to be a rival to the House of Commons, and it is not the role of senators to govern from the relative comfort (and electoral safety!) of the Red Chamber. To be blunt, amendments to government bills are not cheaper by the dozen.
I know it’s going to be very difficult, if you choose, to amend the bill. I personally was very happy to hear the Honourable Nick Taylor say just leave it as it is and amend it on an as-need basis, but I do sort of understand that there may be amendments.
I guess it’s my hope that, reflecting Senator Harder’s statement, the underlying policy is respected and that amendments that tend to undermine that policy are carefully looked at because it could be, possibly, even improper to go that route.
Now, with respect to my brief, I’m going to talk a little about three things, plus review amendments. Part of my brief gives reasons why the reasons given to kill the bill actually benefit the detractors. I mention that Bill C-69 does not radically change federal assessment and that the claims that it does are truly not accurate. It’s predominantly based on 2012. I, like Mr. Ignasiak, would have been really tickled to see triggers back. I think they do better reflect federal jurisdiction. But the major project list is still there and substitution is still there. Then by adding sustainability factors, I think it makes the bill even more beneficial for industry. It will make projects more socially acceptable to the communities where they’re being carried out and for Canada, and also it will make the federal legislation more consistent with the provincial and territorial legislation.
My brief has a super long footnote where I go over all the provincial legislation and all the territorial legislation and demonstrate how environmental factors are only one of the many factors that are required to be taken into account throughout Canada.
Restoring public participation rights is a key underlying policy in the bill and should not be changed. We had over 20 years with open participation and it was not a big deal. It would certainly lend more credibility to the bill.
Mr. Roman’s name was mentioned earlier today as supporting a limitation on public participation. I certainly haven’t seen anything that Andrew Roman has said like that. In fact, when he testified before this committee, he said it’s generally a waste of time to put in standing rules as well as privative clauses and it’s better just to go ahead with an assumption of open participation.
Also, adding GBA+ as a factor will facilitate the proponent’s social licence to operate, but I would certainly strongly recommend that the agency provide guidelines as to how those will be implemented: what the proponent and who is overseeing the assessment needs to do in order to do that.
With respect to improvements on the bill, in my brief, I echo and support Senator Éric Forest’s recommendations that municipalities be given a larger role. I’m not going to go over these, but I do add one, which is that municipalities be considered jurisdictions for some very limited purposes of the act.
I also make some recommendations on how perhaps the relationship between clause 22 and clause 63 might be clarified. This has been raised often enough. And I agree there may be some questions as to how those two relate to each other. I suggest that the statutory review be reduced to five years from ten years. I think we will have a lot to learn over the next five years, and we might want to have an extensive review of the legislation.
I recommend reinstating the original wording for subclause 22(f), which concerns alternatives to the project. I recommend that you take out the words “are technically and economically feasible and directly related to the designated project.” They were added in this flurry of House of Commons’ amendments. I think that if that was thought through a little more, it might not have been passed. I think that the original wording was correct. I’m happy to discuss this.
With respect to my comments on some of the testimony from last week, I want to comment on something Aaron Henry said for the Chamber of Commerce. That was last Thursday. It was the inclusion of what he called a “federal backstop.” As I understand him, the federal backstop would be a statutory requirement that the federal Crown compensate the proponent and possibly Indigenous groups and communities if Crown consultation and duty to consult and accommodate doesn’t turn out in such a way that a project goes ahead. His brief wasn’t available yet. At least I couldn’t find it. I have expressed a lot of concerns about it. One is that it seems to be an extraordinary way to use the word “backstop,” but that’s perhaps not so important. I think it’s also demeaning to Indigenous communities to presuppose that all projects should go ahead when there’s a duty to consult and accommodate because sometimes exercising that duty will lead to the conclusion that a project shouldn’t go ahead. That should always be a possibility and there should not be compensation in such a situation.
Also, I think it’s demeaning to Indigenous communities to presuppose that we know everything that there is to know about consultation and accommodation. In fact, our courts are clarifying this as time goes on. Sometimes it’s not the Crown that is actually doing its own consultation. It may be the NEB or even the proponent. I mean, the whole idea of compensation in such a situation would get very complex, to say the least. It opens the door to all kinds of projects just being put forward, even though they may not have a lot of merit, but with the knowledge that there might be compensation. Most important, there’s really no place for such a thing in environmental impact legislation, because environmental impact legislation is not the place to put these kinds of pressures with respect to constitutional duties, which are a different thing. Environmental impact legislation can assist in carrying out these constitutional duties, but it’s not the place to put them so squarely.
There’s so much talk about the politicization of clause 22 factors.
The Chair: Professor, you need to wrap up.
Ms. Kwasniak: Okay.
I don’t think that is the case. We just need a lot of guidance as to how those would be carried out.
With respect to privative clause, I will just agree with Professor Olszynski’s comments of this morning, that there shouldn’t be one.
Sarah Vandaiyar, President and Chief Executive Officer, Young Pipeliners Association of Canada: Good afternoon. Thank you for the opportunity to speak about the impact of Bill C-69 on young professionals in the industry.
My name is Sarah Vandaiyar. I’m the president and CEO of a non-profit called the Young Pipeliners Association of Canada. I represent over 1400 young professionals across the country that work in the pipeline industry, including professionals in engineering, communications, business development, and academia.
YPAC’s vision is to ensure the sustainable future of the pipeline industry and we provide access to educational events, networking, and opportunities to engage with senior professionals. YPAC is proud to be the next generation of leaders in the Canadian pipeline industry, working alongside organizations, including the Canadian Energy Pipeline Association, the Canadian Standards Association, and the Canadian Gas Association; in addition to our international pipeliner counterparts in the U.S., Brazil, Australia, and Europe.
YPAC is aware of the concerns raised about the bill, and I am here to speak about implications that it could have on young people hoping to get into the pipeline industry. YPAC echoes concerns expressed by CEPA and its member companies regarding the lack of clarity and certainty in Bill C-69. Canada’s resources are landlocked due to lack of pipelines and the economy misses out on revenue which contributes to our declining competitiveness. This in turn hinders growth in the industry and the attraction and development of talent that drives progress. Simply put, improvements to C-69 are required to ensure the long-term sustainability of the Canadian energy sector, with this being especially critical to the young professional members of YPAC, who are looking for long-term careers.
What may not be apparent is that today’s pipeline industry possesses incredible creativity and talent that drives innovation. Every two years Calgary hosts an international technical conference on pipelines and world-renowned experts discuss pipeline integrity, welding, construction best practices, among many other things. Young pipeliners are heavily involved in events such as these and are part of conversations that drive environmental stewardship and safety.
I can tell you that when I graduated from the University of Waterloo ten years ago, the oil and gas industry was the place to be, to be part of exciting projects and solve interesting problems. Many of my classmates moved to Alberta and have made this province their home.
Legislation, such as Bill C-69, reduces the competitiveness of the industry, which in turn diminishes the entrepreneurship, passion, and drive that exists in young Canadians to continue to make the industry better. In addition, the uncertainty in the regulatory process creates roadblocks to realizing opportunities to develop Canadian resources, the revenue from which will support a transition to a low carbon future.
The uncertainty created by Bill C-69 impedes Canada’s ability to move our oil and gas resources. YPAC is concerned that less regulated countries are not only increasing their production to meet world demand, but are also increasing their deliveries to Canada’s coasts and, as a result, the Canadian economy misses out on billions in long-term revenue.
YPAC recognizes that the energy landscape will shift to a low carbon future, and this shift requires significant capital and investment and research to get there. Building out our pipeline infrastructure to obtain the maximum value for our resources provides value that supports this transition.
What does the pipeline industry represent for many young professionals?
I would like to close my statement with a personal account of my experience. I am proud of the industry that I work in. Over the last five years as an engineer at TransCanada I’ve been on pipeline rights-of-way during construction, worked with engineering contractors, among other things. Very recently I was seconded to CEPA, the Canadian Energy Pipeline Association, where I could learn more about industry initiatives that drive continuous improvement.
So what does it say about an individual like me that’s an engineer seconded to CEPA that runs the Young Pipeliners Association of Canada? Hopefully it conveys to this committee that young pipeliners bring a great deal of passion, creativity, and are personally invested in ensuring that there is a sustainable future for the industry.
Is industry listening to its young professionals? Absolutely. YPAC has a position on an industry board which shows a real commitment to new ideas. Let’s continue to work together to ensure that the Canadian energy industry remains competitive to ensure a bright future for young pipeliners across the country.
Thank you, and I look forward to your questions.
Senator MacDonald: Thank you both for being here.
Professor Kwasniak, in your brief you said in your opinion that the IAA was strongly influenced by the energy industry and the provinces.
The Premier of Alberta and the leader of the opposition in Alberta have both condemned Bill C-69. The Manitoba, Ontario, New Brunswick governments are also extremely critical of the bill. If the provinces and the energy industry influence the IAA so strongly, how do you explain their intense opposition to the bill?
Ms. Kwasniak: I honestly can’t explain that because I think the status quo, and I think a lot of the industry would agree, is worse.
It could have gone quite differently. I know that environmental communities were pushing for a return to triggers — I was kind of surprised to hear Mr. Ignasiak wants triggers again — and to have totally independent decisions being made, and more environmental considerations. Most of that was not accepted. A lot of the expert panels’ recommendations weren’t accepted. I think what we ended up with in Bill C-69 was a compromise, but I think a compromise mainly that favours the energy industry. That they would complain I suppose is not surprising because they would like it even more favourable to themselves, which is understandable.
I think that’s all I have to say in response.
Senator MacDonald: Well, I just have to respond to that. Mr. Ignasiak is an experienced lawyer in this field and has spent years working on these projects. With respect, I do defer to his judgment on this stuff because —
Ms. Kwasniak: I’m saying I agree with him with respect to triggers. I am in agreement with him. In fact, I think a lot of the things that he said made sense. I think there are some things in the bill that people who are meant to administrate the act will have some problem figuring out as to what they’re supposed to do. That’s why in my brief I suggest that there be clear agency guidance, at least, and maybe some amendments to clarify — for example, the relationship between 22 and 63. I think that’s really important.
Senator MacDonald: Thank you.
Ms. Vandaiyar, it’s great to have you here today. It’s not so much a question. I just want to say that I have great faith in engineers and people who can do things with their hands and create things. I also have great faith in young people like yourself, and I’m so glad to see you here at the table.
Years ago when they were trying to exploit the oil sands, we never had the technology to get it out of the ground efficiently or economically, but today we do because we worked with it for decades. I just want to make the point that young people like you in the engineering field have to be allowed to work with the industry, to advance the industry, to take it to the next level to improve it. We’re not going to be able to get those things done unless young people like yourself are going to be allowed to work and keep working at the industry so you can make those improvements and make our industry safer and cleaner and more efficient.
It’s great to have you here speaking on behalf of the young pipeliners, and thank you for taking the time and having the courage to come.
Ms. Vandaiyar: Thank you, senator.
Senator Cordy: Thank you to both for bringing your perspectives on C-69 to the committee.
When I’m speaking at events, I’m always thinking please don’t let me be the last panel of the day, but you’ve certainly jogged our interest. Thank you very much for that.
Ms. Vandaiyar, you spoke about some of the things like lack of clarity in the bills, the kinds things that we have heard before. You said you worked for CEPA for a while. You didn’t mention any specific amendments today. Are you happy with the amendments brought forward by CEPA?
Ms. Vandaiyar: So YPAC is aware of the concerns that have been brought forth by CEPA. We work extensively with CEPA. As an organization we partner with them on various volunteer initiatives.
What I would say is that we echo their concerns regarding competitiveness. We haven’t put forward any amendments however.
Senator Cordy: Ms. Kwasniak, I was interested when you spoke about municipalities being considered as participants in assessments, but then you said in a limited manner. If we had every municipality in Canada involved it might be cumbersome, but you’ve made a caveat that it be in a limited manner. Could you just expand on that.
Ms. Kwasniak: Yes, thank you for your question. I guess, like I said, I was somewhat echoing Senator Forest’s remarks. He had three ways in which municipalities could be included. He prefaced his remarks, and I agree, that municipalities are governments. They are accountable to their people. They have regional plans, land use plans, environmental plans. they have industrial development plans. They have all these things in place within their own ambit.
Moreover, they bear the brunt of climate change. They have emergency response issues, they have to take care of the people, floods, and all this. Yet, throughout its history in Canada, federal environmental assessment legislation hasn’t given municipalities any more of a role really than the public and, with CEAA 2012, the directly affected. One of my areas is municipal law, and I’ve always been amazed how this level of government is neglected. They have special participation rights and they have to be given notice of things.
Municipalities should be considered jurisdictions for limited purposes, and that would be just for the purposes of participating in regional assessments and strategic assessments where they may be relevant. Their municipal plans could be part of an IAA regional plan.
Also, the municipal plans would have to be included as part of the proponent’s project description. Therefore, when the proponent does its project description, if there’s a municipal plan in place that is relevant to the project, it would somehow be front and centre in the assessment.
I don’t think we’re quite ready for municipalities to be jurisdictions for all purposes in the act, although there is in the literature a lot of talk about federal assessments that are cooperative assessments with municipalities, just like we would have with provinces. Municipalities have impact assessments as well and sometimes they may involve matters that are under federal authority.
Senator Cordy: You also spoke about a statutory review after five years instead of ten years. The industry has changed significantly. Senator Taylor was here earlier and he talked about what it was like in the 1950s, but even now changes are just being made so quickly. So is that why you suggested five years instead of ten for a statutory review?
Ms. Kwasniak: Yes, and it’s new legislation. The first review of the Canadian Environmental Assessment Act was a five-year review. I participated in that. I think it was really good to have that kind of navel-gazing to see what has happened and what we should change and what shouldn’t be changed.
The next review was going to be in seven years because we had learned some things, but then that was ended by an omnibus bill. We ended up with CEAA 2012.
But it seems to me, especially with this new legislation that has given rise to so much discussion and concern, it would make a lot more sense.
I also suggest that a quality assurance program be developed by the agency, or whoever is the proper person, group or body, to track the implementation of the act to see if everything is working so that when it comes to a five-year review or the need for consequential amendments these are all well informed.
Senator Cordy: Thank you.
Senator Carignan: My question is for Ms. Kwasniak. I was not expecting Senator Harder’s comment to be used. I just want to remind you that, when you quote Senator Harder, you have to mention that he is a government representative in the Senate. That is important, as he speaks on the government’s behalf. You have to understand that, when the government speaks, it does not want amendments to the bill to take the legislation too far from the intentions. You said that amendments must be developed to rebuild public trust. People who were in front of the hotel this morning to tell us to kill Bill C-69 are the public in my opinion. With everything I have heard here—and what we have heard since the beginning of these hearings—if this bill is not amended substantially, I am worried about losing public trust. Do you think the expression ”public trust” is being used—it has been somewhat adopted by groups, by opponents—to justify not amending this bill or not increasing the number of environmental consultations? In this kind of a situation, people want economic interests to be taken into account—and those are their interests, as well—and they want us to play our constitutional role by either amending or killing the bill. What do you think about that?
Ms. Kwasniak: Thank you for your question. The bill should not be killed. I take it that would mean voting against it. From what I’ve heard, and I’ve listened to most of the testimony before this committee, there hasn’t been a resounding request to kill the bill, though there have been requests for many amendments. There has been much criticism of CEAA 2012. A lot of the economic downturn, the problems with the court cases and the pipelines not going through were under CEAA 2012, not under a bill that hasn’t been made into law yet.
I think a lot about the problems and frustration. Some of them have to do with environmental assessment and some are broader than that. Some have to do with pipelines being objected to by other provinces or by cities. It’s just a lot of frustration that does not necessarily relate directly to Bill C-69 or CEAA 2012 or environmental assessment really at all.
It’s going to be a difficult job for the committee to sort everything out and figure out what problems are truly inherent in Bill C-69 and what are just more general problems.
I agree completely that the people who were out in front of the building today are part of the public -and their voices need to be heard as well.
Senator Carignan: Thank you.
Senator Neufeld: I thank both of you for being here and making your presentations.
I want to ask Ms. Vandaiyar a few questions. You represent the Young Pipeliners Association. We listened to Ms. Smith from the Young Women in Energy earlier. I think it’s wonderful when we have women coming in and talking about how they’re participating in these kinds of jobs, these kinds of careers, and that are long-term. I think that’s something we need to hear and something that the public needs to hear, that there are young people and females who want to work in this industry, and they should have the opportunity.
You also said that you worked in the field, stayed in camps, I imagine, did all the work on the pipeline. Just so you know, my background is the oil and gas industry and I have built a few pipelines, but a long time ago, a long time ago. My neighbour, a lady, she’s worked in the pipeline industry for probably over 20 years, and still is.
We’ve heard from some people that there are problems with the camps and those kind of things and somehow we have to review that in this legislation. Can you tell me, what were the impediments to staying in camp? Did you feel frightened to be there? Was there something that you didn’t like, or is there something that we should know that maybe could be adjudicated?
Ms. Vandaiyar: I’m happy to share my experience. So one of my first roles was as a field engineer a pipeline job just north of Grande Prairie. I have to be honest, I did not have any issues with any of the inspectors and fieldworkers. I had a great deal of support from the construction manager I worked with. I was well supported and in my experience I was never made to feel uncomfortable in camps. I know that there have been issues with other individuals, but my experience has been one of great learning, and I’ve always been treated respectfully.
Senator Neufeld: That’s good to hear. In fact, just to put it on the record, my neighbour, the lady who works on the pipeline is with a large company out of Fort St. John, they’re installing 42-inch pipe as we speak for the Coastal GasLink. A labourer on those jobs starts at $32 an hour. You only go up from there. It’s obviously a place where you can make some fairly good money.
But can you tell me, what are the barriers to young women getting into the industry? Is there something that we should be looking at to help reduce those barriers, if there are any?
Ms. Vandaiyar: You might have heard from Katie Smith this morning that one of the things that young women especially benefit from is mentorship. I know a lot of large companies are moving to have more integrated mentorship programs so that when young women like myself go out into the field they have someone they can talk to and bounce ideas off of. But I think that’s being taken care of very well within the industry.
Senator Neufeld: Thank you very much for your presentation.
The Chair: I have a quick question for you, Ms. Vandaiyar. I am very happy to hear that women are in engineering and that you are receptacles of creativity and innovation and that you also promote sustainability as one of the pillars or objectives in the future development of the oil and gas industry.
Can you give us some examples of innovation in the industry with respect to climate change and the production, destruction and remediation of residues in the oil patch?
Ms. Vandaiyar: What I can speak to very generally is what I’ve seen in my experience as an engineer and as part of the Young Pipeliners Association. YPAC works very closely with a group out of the U.S. called the Pipeline Research Council International. They are at the leading edge in different types of research related to pipeline integrity. They even have a component now that looks at artificial intelligence and that looks at copious amounts of data that come in from tools that are used to assess pipelines. I would say that those are the major themes right now. All those in aggregate contribute to more efficient pipelines and safer pipelines.
Senator Simons: I have a question for each of you, if I may. For Ms. Vandaiyar, I think people in Alberta understand that pipelines are a safe way to transport fuel, safer than rail, safer than lots of other potential options, and that doesn’t matter whether they’re transporting dilbit or oil or liquified natural gas. However, there has grown up around pipelines this kind of fear and loathing that people are not so much afraid of the carbon intensity of what comes out, but of the pipelines themselves. If you’re speaking to other millennials that you encounter, what does the industry have to do? What do people like the Young Pipeliners have to do to convince people that pipelines themselves are a safe piece of technology?
Ms. Vandaiyar: I’ll speak to one of the programs that YPAC is working on right now in conjunction with Queen’s University. We went into one of the engineering classes, and I think we had about ten students who came out to Alberta, went onto a right-of-way and looked at how pipelines were constructed. We got some really interesting questions, you know, related to how construction is completed, inspection tools and that type of thing. I think being able to see some of that or actually have professionals go out and talk to young people is really important.
I think you’re right, for a lot of individuals who are not in the pipeline industry, the technology and all the work that really goes into making pipelines safe and reliable is very foreign.
Senator Simons: Taking one Queen’s class is nice, but how do you get that message out to a larger audience?
Ms. Vandaiyar: What we’re trying to do is expand that program to other universities, particularly in Ontario, and that’s the way that we’re approaching it right now.
Senator Simons: I have a question for Professor Kwasniak.
You mentioned in your presentation the idea of treating municipalities as jurisdictions in some instances. Yesterday when we were in Vancouver we heard from Indigenous leaders who wanted to have First Nations treated as jurisdictions. What do you think of that and does that present any complications that you can think of?
Ms. Kwasniak: Under Bill C-69, First Nations will be treated as jurisdictions for some purposes, like for substitution and for cooperation. And I believe that they would also be treated as jurisdictions for the purposes of regional assessment. So I’m not sure what additional ways they had in mind.
Senator Simons: One group wanted substitution to be mandatory, that if a First Nation asked for substitution powers, those should be assigned to them so that they could carry out their own environmental impact assessment.
Ms. Kwasniak: That was a problem with the current legislation; that is, if a province asked the federal government that an assessment be substituted, it had to be granted provided that certain conditions were met, and for an Indigenous jurisdiction, it was discretionary.
That’s been changed under Bill C-69 and both provinces and Indigenous jurisdictions are on the same footing.
Senator Patterson: Professor Kwasniak, thank you for your work outlining the approach to impacts across Canada. I found that very interesting in that long footnote.
You say that the federal impact assessment should be consistent with all of the provincial and territorial regimes, but I would like to challenge you on that. I mean, these guidelines in provincial and territorial regimes are, at most, a couple of lines. They set out generic guidelines. I like the one in Nunavut, ecosystemic or socio-economic impacts. That’s four words. Most of them are fairly short. Whereas in clause 22 we have, off the top of my head, over 20 different criteria which, it’s been pointed out, have not been defined and are therefore ripe for litigation and court challenge.
If you’re holding up the provincial and territorial regimes as examples of being consistent with C-69, you’ve got to admit that they have used much fewer words and, therefore, are exposed to much less risk. You know, the generic guidelines will allow a focus on the unique character of each different project.
Would you agree that we could have a lot more economy of words in C-69, compared to the regimes you’ve outlined in the provinces and territories? It’s a much fuller list, ripe for challenge.
Ms. Kwasniak: Thank you very much for your question.
The list that I provided summarized the purposes for an assessment. So it would be the same as the purposes for federal assessment, which is to assess the economic, the environmental, the social, and the health impacts. Alberta assesses most of those things, the economic, the environmental, and maybe the health. Some other jurisdiction will assess for other purposes, but it’s always more than environment.
I think the right comparison there is the purposes for assessment. Under Bill C-69, the purposes of assessment will change from CEAA 2012, where we’re just assessing environmental effects. Now we’re assessing environmental, social, economic, and health. So just like in the other provinces and territories, you’re assessing for all these various things.
Now the factors described in clause 22 are a different kind of thing. Those are the factors you consider in trying to determine what the economic, environmental, health, and social impacts are. I didn’t go through all the legislation to determine all the factors that had to be examined to assess whatever the assessment is assessing for, whether it’s environmental and health, environmental and social, or whatever. I think it’s a bit of apples and oranges there because the factors are different from the purposes of the assessment.
You also had a question as to whether I think that clause 22 is clear. Some parts of it are. I think there could be more clarity in clause 22, and I would really recommend that the agency set out guidelines as to what a proponent should be supplying in order to provide evidence under a factor.
These will be factors as scoped by the minister or the agency, and so there will be some narrowing of them. The intention behind the legislation is that the entity that’s carrying out the assessment will provide the proponent with the framework — the terms of reference — as to what kind of information is meant to be provided.
I think the minister and the agency should be given more guidance as well. GBA+ factors is one of these. I think it’s a really great inclusion, but it’s such a new field of study that it definitely needs some guidance. It’s just not clear enough to be just put out there in the blue.
Senator Patterson: I have got to challenge you, Professor Kwasniak, on your quote of Senator Harder, who lectures us on a lot of things and probably doesn’t believe in the Westminster model of having an official opposition.
You said the government’s policy choice should be mostly accepted. Well, that may be fine, but is that a guarantee that the legislation will be well drafted? I think it’s our duty in addition to representing regions and protecting minorities, which is historic from the Fathers of Confederation, to also make sure bad legislation is made better.
I’ll just give you one short example. Bill S-3 came to the Senate, purporting to eliminate gender-based discrimination amongst First Nations women under the Indian Act. The bill was significantly amended, and I’m not overstating how significantly those changes were. Based on a huge body of evidence heard by the committee it did not eliminate gender discrimination under the Indian Act. We may be getting there now with the amendments that were recommended.
You’ve even gone ahead and recommended amendments in your presentation. Surely, you would not be telling us that the amendments that we are going to thoughtfully consider as we study this legislation and hear from experts, surely you’re not recommending we should shy away from addressing considerable concerns we’ve heard that the bill can be improved.
Ms. Kwasniak: I don’t think I disagree with anything you said. Your first comments seem to fall squarely within the role of the Senate.
Indeed, I want to repeat: I wasn’t trying to lecture the Senate. It’s just that it seems to me, or I get the idea from hearing testimony that people in general just think that you can just write a brand new bill and that’s part of your job. That’s behind what I was trying to put forward.
I agree with everything you said. I also said that where an amendment would seemingly undermine the policy of the bill, you have to look at it very carefully, especially if it’s a matter of clearing up an ambiguity. I would be very happy if the Senate cleared up some of the ambiguities and uncertainties in the bill that need to be cleared up.
The Chair: Thank you very much. That concludes our hearings today.
(The committee adjourned.)