THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Thursday, February 7, 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 9 a.m. to give consideration to the bill.
Senator Rosa Galvez (Chair) in the chair.
[English]
The Chair: Good morning and welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Rosa Galvez. I am a senator from Quebec and I’m the chair of this committee. I will now ask senators around the table to introduce themselves.
[Translation]
Senator Mockler: Percy Mockler from New Brunswick.
[English]
Senator Patterson: Dennis Patterson, Nunavut.
Senator McCoy: Elaine McCoy, Alberta.
Senator Woo: Yuen Pau Woo, British Columbia.
Senator MacDonald: Michael MacDonald, Nova Scotia.
Senator Mitchell: Grant Mitchell, Alberta.
[Translation]
Senator Massicotte: Senator Paul Massicotte from Quebec.
[English]
Senator Cordy: Jane Cordy, Nova Scotia.
Senator Simons: Paula Simons, Alberta.
Senator Tkachuk: David Tkachuk, Saskatchewan.
Senator LaBoucane-Benson: Patti LaBoucane-Benson, Treaty 6 territory, Alberta.
Senator McCallum: Mary Jane McCallum, Treaty 10 territory, Manitoba region.
Senator Richards: David Richards, New Brunswick.
Senator Seidman: Judith Seidman, Quebec.
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.
Today, we welcome, from the Canadian Nuclear Safety Commission, Rumina Velshi, President and Chief Executive Officer; and Mike Rinker, Director General, Directorate of Environmental and Radiation Protection and Assessment. And from the National Energy Board, we have Sandy Lapointe, Executive Vice President, Regulatory; Jim Fox, Vice President, Integrated Energy Information and Analysis; and Robert Steedman, Chief Environment Officer.
Thank you all for joining us. I now invite each of you to proceed with your opening statements after which we will go to a question and answer period.
[Translation]
Rumina Velshi, President and Chief Executive Officer, Canadian Nuclear Safety Commission: Good morning, Madam Chair and members of the committee.
My name is Rumina Velshi and I am President and Chief Executive Officer of the Canadian Nuclear Safety Commission, the CNSC.
I am joined this morning by Mike Rinker, Director General of the CNSC’s Directorate of Environmental and Radiation Protection and Assessment.
[English]
Before beginning my remarks, I would like to acknowledge that the land on which we gather is the traditional unceded territory of the Algonquin people.
I have been CEO since August 2018. Prior to that, I served as a CNSC commission member for six years. For over 30 years before that, I worked as a scientist, nuclear engineer, and manager in Canada’s nuclear sector for Ontario Hydro and Ontario Power Generation.
Thank you for inviting me to provide comments on the proposed legislation, Bill C-69. Let me state at the outset that the CNSC supports the government’s intent to enhance the impact assessment process. We will do everything within our authorities to support a successful transition and implementation. Implementing the new process successfully will require ongoing and close collaboration between us and our governmental partners.
The CNSC is an independent, quasi-judicial administrative tribunal whose decisions are based on science and not subject to government or political review. The commission’s decisions can only be reviewed in Federal Court.
The CNSC gets its mandate from the Nuclear Safety and Control Act and reports to Parliament through the Minister of Natural Resources. We are responsible for regulating everything nuclear in Canada. Our mandate is: one, for the protection of health, safety, security and the environment; two, to respect Canada’s international obligations on the peaceful use of nuclear energy; and, three, to disseminate information to the public. It is a clear mandate and one that we have fulfilled faithfully for over 70 years.
Canada’s nuclear sector is broad and ranges from uranium mining, nuclear reactors, nuclear medicine, industrial applications of nuclear technology to the safe management of nuclear waste.
Bill C-69 does not modify the NSCA, and the commission’s authorities for the licensing and life-cycle regulation of nuclear facilities remain unchanged. The bill therefore preserves the independence of the commission and its role to ensure the safe and secure operation of nuclear facilities in Canada throughout their life cycle.
There is, however, an important difference proposed in Bill C-69 for the CNSC. Currently, all environmental assessments for nuclear projects, including designated projects, are conducted by the CNSC. Under Bill C-69, the assessment, which would be known as an impact assessment for designated nuclear projects, would be conducted by a panel established by the Minister of Environment and Climate Change.
The panel the minister appoints would include at least one person from a roster composed of members of the commission. In this context, there would be an important responsibility to ensure close collaboration and sharing of expertise between the staff of the CNSC, the new impact assessment agency of Canada, and the review panel.
We must ensure that, in support of the goal of one project, one review, the impact assessment put forward by the panel informs properly all required decisions. This includes the Governor-in-Council’s decision under the impact assessment act on whether adverse effects within federal jurisdiction of the project are in the public interest. It also includes the commission’s decision on whether to issue the licence — for example, to prepare a site — under the NSCA.
In other words, we must work towards ensuring that one assessment serves two distinct authorities who exercise distinct roles and who make complementary but distinct decisions. Together the CNSC and the new impact assessment agency can support a rigorous, efficient and effective regulatory system.
In support of the one project, one review policy direction, our goal is to achieve a fully integrated process where review panels for designated nuclear projects are able to make both impact assessment recommendations as well as licensing decisions.
For this to work, a review panel must also be constituted as a panel of the commission under the NSCA to make a licensing decision after the impact assessment decision has been made.
Commission licensing decisions must consider several areas beyond health, safety and the environment, such as security, international non-proliferation, nuclear engineering and financial guarantees. It is key to the success of a single, integrated review process that the review conducted is based on science and evidence, sufficiently robust to support all required decisions, including licensing decisions.
As a life-cycle regulator, we are here for the long term. We are also the only place in government with significant and specialized nuclear expertise. As such, it is critical that we are included throughout the impact assessment process for any nuclear project.
We also need to be part of all engagement and consultation activities with Indigenous peoples from the very beginning. Continuing to encourage and welcome the public and stakeholders into the process will also be very important. These are relationships that we value and must continue to nurture for the long-term, well after impact assessment and initial licensing decisions have been made.
To conclude, the CNSC has the required and necessary expertise and capacity to support the proposed impact assessment review process. We have an extensive and positive history of close collaboration with other governmental partners. This experience will be important as we move forward together with the impact assessment agency and other government departments.
We are working closely with our interdepartmental colleagues and are confident a process can be established that effectively integrates the licensing review into the impact assessment process.
Nuclear projects often span many, many decades. The CNSC, as Canada’s nuclear life-cycle regulator, will be there for the entire life of a nuclear project, ensuring Canada’s nuclear facilities and activities remain safe and secure.
Legislative requirements and processes may evolve, but the assessment of potential impacts to the environment and protection of the environment will always be a focus for the CNSC.
[Translation]
I will be happy to answer any questions that you might have. Thank you.
[English]
The Chair: Thank you.
Ms. Lapointe?
Sandy Lapointe, Executive Vice President, Regulatory, National Energy Board: I would like to begin by acknowledging that the land on which we gather is the traditional unceded territory of the Algonquin Anishnaabeg people.
Thank you for inviting the National Energy Board to appear before the committee today to discuss Bill C-69. My name is Sandy Lapointe. I am accompanied by Jim Fox, the NEB’s Vice-President of Integrated Energy Information and Analysis, and Dr. Robert Steedman, Chief Environment Officer, National Energy Board.
As an independent regulator, with decades of experience regulating energy projects in the Canadian public interest, we fully understand the current challenges and concerns raised by Canadians that the government is seeking to address through Bill C-69. Having existed since 1959, our organization has effectively implemented a number of legislative changes over the years. This broad and deep expertise in regulating energy projects in the Canadian public interest, together with experience in successfully adapting to legislative changes in the past, puts us in a strong position to effectively implement Bill C-69.
To this end, my opening statement will highlight how the NEB is committed to implementation and the vital role that life-cycle regulators have to play in impact assessment and regulatory review of energy projects in Canada.
Bill C-69 proposes to repeal and replace the National Energy Board Act with the Canadian energy regulator act. Our job, however, would fundamentally remain the same. We will continue to regulate pipelines, power lines, energy development and trade on behalf of Canadians in a way that protects the public and the environment, while supporting efficient markets.
The government has been clear about its overarching objectives for the future of energy regulation in Canada. I would highlight a few of these key objectives, as reflected through the proposed Canadian energy regulator act, namely: timely and predictable review processes; reconciliation with Indigenous peoples; early engagement and inclusive participation; and strong safety and environmental oversight. These are the very themes and objectives that have driven changes in our organization over the past several years.
We are an organization focused on continual improvement and have recognized for some time now that we needed to adjust and adapt within our existing mandate to respond to Canada’s evolving context.
In our view, many of the changes in the Canadian energy regulator act would reinforce our existing work and formalize some of the best practices that we have been focused on.
The CER act promotes timely and predictable decisions through legislated timelines and other measures to promote consistency and transparency. This supports the NEB’s work in recent years to measure and transparently report on our performance through our departmental results framework and other mechanisms.
The CER act is also express about the government’s commitment to reconciliation. Toward that end, the act includes a range of ways of enhancing Indigenous engagement and involvement, including, for example, the establishment of an overarching Indigenous advisory committee with the mandate of enhancing the involvement of Indigenous peoples throughout the life cycle of regulated facilities.
This advisory committee would build on our existing work with the Indigenous Advisory and Monitoring Committees, or IAMCs, for the Trans Mountain expansion and Line 3 pipelines. IAMCs were co-developed with Indigenous peoples to support collaborative, inclusive and meaningful Indigenous involvement in the monitoring of these pipelines.
The CER act has a strong focus on meaningful engagement and inclusive public participation. This builds on the work of the NEB to embed engagement into every aspect of the work we do.
The NEB has been working to engage more deeply with Indigenous peoples and all stakeholders in recent years through more innovative and flexible means, prior to the adjudicative process, through our assessments and into the project’s life cycle.
Strong safety and environmental oversight has always been the primary focus for the NEB. I’d like to point out two specific areas where the CER act builds on or clarifies our existing work in this area.
The first area is through the enhancement and clarification of the powers of our inspection officers. This bill increases specific authorities, including those for search and seizure, bringing them in line with more modern federal statutes.
The second area enhances our existing framework to ensure that companies remain financially responsible for abandoning pipelines at the end of their useful life. In response to a long-standing concern of landowners, the NEB established a robust framework to ensure that companies proactively set aside funds. The CER act complements and advances that framework. For example, it allows the regulator to take control of a pipeline where there is no identifiable owner to ensure it can be operated and abandoned safely.
The CER act expands our role and mandate and introduces a number of changes to our organizational structure and processes. For example, the CER would have a modern governance structure with more clearly defined roles and responsibilities among the commissioners, CEO and board of directors. This structure would set a clear separation between the organization’s adjudication and management functions.
The governance structure would also allow, through regulations, certain technical or administrative decisions to be made by designated officers instead of commissioners. The CER would have new authorities over land compensation disputes, a role that is currently undertaken through the Department of Natural Resources.
Lastly, in what will probably be less of a shift for our organization, the bill also seeks to modernize the regulatory review possess, including setting out an explicit and broad list of factors to consider. We have always assessed the potential environmental, socio-economic and health impacts of the projects we regulate, as well as the impacts on Indigenous rights, and all relevant economic and safety considerations. The inclusion of explicit factors adds further clarity and sets a transparent framework for project assessments moving forward.
This leads me to my final point today. I would like to say a few words about the change associated with integrated impact assessments for designated projects. We are already working hard with our counterparts at the Canadian Environmental Assessment Agency. Our focus is on ensuring that an integrated impact assessment between our respective organizations can be undertaken in an efficient, effective and truly integrated manner. It will be critically important for life-cycle regulators to be actively engaged from the earliest stages and throughout the process for designated projects within their jurisdiction.
With the goal of reducing harm and delivering better safety and environment outcomes for Canadians, our sustained involvement in the impact assessment process will be essential for two main reasons. The first is the value we bring as an experienced, expert regulator. We have been conducting reviews of energy infrastructure for decades and have been including environmental assessments in our decisions since the 1970s. Energy infrastructure projects are unique, and we have the specialized knowledge and expertise on the range of issues to be assessed. This includes areas such as engineering, safety, project design, environmental and socio-economic impacts, and market factors, among others.
The second reason is that life-cycle regulators play an important role in shaping project-specific conditions that are enforced by the life-cycle regulator within the broader regulatory framework. Project-specific conditions are designed during the assessment phase to reduce possible risks over the life cycle of a project, if approved.
The CER will be responsible for monitoring and enforcing condition compliance within this larger regulatory framework. It is important that these conditions can function as intended. The link between assessments and condition compliance is critical. Each one informs and helps shape the other, ultimately leading to better safety and environmental outcomes.
In conclusion, there will naturally be some uncertainty and a period of adjustment as we transition to the new system, but the NEB is well placed to continue on as Canada’s modernized energy regulator. I am exceptionally proud of the dedicated staff of the NEB. We have the competency, experience and expertise to put a renewed legislative framework into action and deliver a regulatory system that is fair, transparent, timely and accessible.
Thank you, Madam Chair, for hearing from us today.
[Translation]
The Chair: Thank you for that very interesting presentation. We will now move to the first question period. I want to remind senators of the rules: the first to ask questions are the two deputy chairs, who are members of the steering committee, then the full members, and then the sponsor of the bill, and its critic.
In this first round, I will invite senators sitting at the back, who are not committee members, to ask questions if they wish. Then, if there is any time left, we will continue going around the table. Now I invite Senator MacDonald or Senator Cordy to ask their questions.
[English]
Senator MacDonald: Since the Canadian Nuclear Safety Commission and the National Energy Board both have direct impact on the Province of New Brunswick, I would like to defer my first question to my colleague Senator Mockler.
Senator Mockler: For the Canadian Nuclear Safety Commission, I first want to say that you’re very reputable, and I want to congratulate the team. You represent Canadians well. But New Brunswick Power — we have certain concerns I would like to bring to your attention. Especially when you look at Point Lepreau, which was our first, there is no doubt that it has been an icon across the world also in scientists visiting and the performance of Point Lepreau.
So with New Brunswick Power, we have certain concerns. We believe that assessments should remain at the CNSC — and I have listened very diligently to what you have mentioned in your remarks — as the most efficient and effective way of conducting reviews.
First, are you certain that the new impact assessment agency will be able to match the CNSC’s outstanding performance and level of expertise?
Second, how long do you estimate it will take a new organization to acquire such expertise? As we all know, there are all these questions on nuclear, but I would still call it a “green belt.”
Do you believe that there is value in having one large organization in charge of reviews instead of a specialized organization like yours?
I would like your expertise on those three questions in order to secure Canadians.
Ms. Velshi: Senator, thank you for your kind words about the CNSC. Let me go through the questions or concerns that you have raised.
The first one was whether we think it better that impact or environmental assessments remain with the CNSC. As I mentioned in my opening remarks, the CNSC has worked under many different legislative frameworks and regimes, and in each and every one of those, the CNSC has made sure that assessments, as they deal with nuclear projects, have been robust and thorough. So whether the process is led by another agency or by the CNSC, with our mandate we will make sure that Canadians’ health and safety, and the environment, are protected when it comes to nuclear projects.
As you have seen from the bill, it sees the CNSC having a very significant role in the impact assessment process. For designated projects, an integrated panel will be established that will include at least one member from the commission.
Your second question was around nuclear expertise. The impact assessment agency is not contemplating building their own expertise in this area. They will be looking to the CNSC to be providing that expertise, so that expertise will always remain available for impact assessment processes.
Your third question was around the value of a large organization, which is the CNSC, carrying on with these assessments. As I mentioned also in my opening remarks, we very much support the government’s intent of enhancing the impact assessment process. The impact assessment process has a broader scope than what environmental assessment processes did. It would look at socio-economic impacts, gender-based considerations, sustainability and so on, which are outside the mandate of the CNSC. We welcome that. I think those are all very required, worthwhile factors and considerations.
In summary, senator, I would like to reassure you that, even with this new process and new legislation being proposed, we will be firmly engaged in making sure that our expertise is well utilized.
Senator Mockler: However, the Minister of Environment and Climate Change said the government we will create “A single agency, the Impact Assessment Agency of Canada, will lead all impact assessments for major projects, to ensure the approach is consistent and efficient.” Do you believe, then, with what I’ve heard, that the CNSC’s reviews have been inconsistent or inefficient?
Ms. Velshi: I’ll answer the last part first. I certainly do not believe that the CNSC’s reviews have been inconsistent or inadequate when it comes to nuclear safety aspects or environmental protection associated with that. The front part is that this new agency will lead the assessment, but the CNSC will be actively engaged or involved in providing our expertise and lending our experience in making sure that the process is robust and efficient.
Senator Cordy: Thank you very much to our witnesses this morning. It has been very helpful to hear the perspectives of the other agencies that have been working on the issues under this bill.
Ms. Velshi, you spoke about the role that the Canadian Nuclear Safety Commission has currently and how that role will change. You said that you support the government’s intent.
When we’re looking at the changes that are coming about and when I read about the consultations that were done, one of the big things that came over from the people who were speaking to the government officials when they were travelling was that the timeliness was one of the main criteria, and therefore the government adopted the one project, one review, in this bill, which is I believe where the assessment agency came about.
Do you think you will be able to work well with the new way in which things have been set up, one umbrella and you will work under that umbrella, with the knowledge you have of the nuclear industry and the expertise that you and your agency have gathered up over the years that you’ve been in place? Do you think that will be a problem or an easy fit?
Ms. Velshi: Thank you for the question. We have had decades of experience working with the Canadian Environmental Assessment Agency, and it has been a positive, collaborative relationship. We have conducted joint environmental assessment reviews very successfully in the past. I am confident going forward that that arrangement of an integrated assessment process will work. We have been working very closely with them, even as the legislation is getting finalized. So yes, I am confident that we would work very well together.
Senator Cordy: You also said that some of the things the government has prioritized in terms of making decisions were outside the realm of what your commission would do. You spoke about considerations of a gender-based nature, which is currently being done — it’s formalized now — and reconciliation with Indigenous peoples. This new assessment agency will be able to compile everything under one roof so it will be easier to have one project, one review. Would that not be true?
Ms. Velshi: Partly true. Yes, the new impact assessment agency would have a broader mandate than what we in the CNSC have looked at in environmental assessments; certainly when it comes to socio-economic impact, for instance. But when it comes to reconciliation, Indigenous peoples engagement and consultation, that always has been and continues to be a big part of the CNSC’s assessment process. So that wouldn’t be new for us.
Senator Cordy: Thank you.
Senator Mockler is from New Brunswick and I’m from Atlantic Canada. Point Lepreau is pretty important. The difference in having the new agency as compared to the Canadian Nuclear Safety Commission is not going to affect the operations of Point Lepreau, or will it?
Ms. Velshi: That is correct. Our mandate, our authority under the Canadian Nuclear Safety and Control Act remain unchanged. We are still the life-cycle regulator, so all that licensing, all the side regulatory responsibilities remain ours.
Senator Cordy: Thank you.
Ms. Lapointe, you spoke about the orphaned oilfields and about the proactive funds set aside for the number of oilfields that have been abandoned. I’m reading that that number is already significant but is increasing. Is there enough money set aside to deal with abandoned oilfields? Will this legislation change what happens to abandoned oilfields?
Ms. Lapointe: We primarily deal with the abandonment of pipelines, so the funds set aside are for any future abandonment of pipelines. The proposed CER legislation will go further in terms of looking at funds for orphaned wells in addition to that.
I will have my colleague speak further on the orphaned wells.
Jim Fox, Vice President, Integrated Energy Information and Analysis, National Energy Board: The issue of our orphaned wells is primarily one for provincial jurisdictions. The production of petroleum is regulated in the provinces. This has been an issue in the news for the Alberta government recently and the Alberta Energy Regulator. We regulate a small amount of oil production work under the Canada Oil and Gas Operations Act in Northern Canada, but it generally has not been a significant issue for us so far.
Senator Cordy: Thank you.
The Chair: Before we continue with questions, I didn’t hear any statistics in your statements. Would you please tell us how many projects you have analyzed in the last couple of years for each agency and the type of projects? Do you have projects that are coming in the pipeline? I will first ask the Canadian Nuclear Safety Commission.
Ms. Velshi: I will ask Mr. Rinker to answer that.
!!
Mike Rinker, Director General, Directorate of Environmental and Radiation Protection and Assessment, Canadian Nuclear Safety Commission: In the last couple of years, meaning under CEAA 2012, we have only made one decision under that act. We have had some projects. That decision was a transition from CEAA 1992. The project transitioned into CEAA 2012.
The Deep Geological Repository was also another project that transitioned from an earlier version of CEAA to CEAA 2012. There is not yet a decision on that.
There are three projects ongoing. These are waste projects for the Canadian Nuclear Laboratories, one in Whiteshell, Manitoba, and two projects near Chalk River.
The Chair: Thank you.
And on the NEB side?
Ms. Lapointe: There are large pipeline facilities that are typically over 40 kilometres in length, and then we have our small facilities. For large facilities, in fiscal year 2014-15 we had three. In 2015-16 we had one. In 2016-17 we had one. We had none last year, and we’ve had two this current fiscal year.
The numbers for the small facilities are much higher. Back to 2014-15 we had 52. And these are all infrastructure. In 2015-16 we had 43. In 2016-17, 35. In 2017-18, 56. And we have 31 to date for this current year.
The Chair: Do committee members wish to have this information in written form? Yes.
Could you please send us that?
Ms. Lapointe: Absolutely.
The Chair: Thank you very much.
[Translation]
Senator Massicotte: Thank you all for being here this morning. It is much appreciated and your expertise is very helpful.
I would like to talk some more about the decision-making. In Canada, for about 20 years, we have had a constant debate about the approval of projects, which should be done by scientists. For 10 years, the final approval has been given by politicians and by cabinet.
Personally, you are totally independent. From your experience, what comparisons do you make between the old method, the method used in a number of countries, where decisions are made independently, with no political involvement, and the method we have been using for 10 years, where politics can hold up or jeopardize the approval of some projects. Ms. Velshi and Ms. Lapointe, I would like to hear your comments on that.
[English]
Ms. Lapointe: The projects that are undertaken, are undertaken by independent review panels. They are based on the science and the evidence that comes before that panel. It comes from the proponent. It comes from other interest groups that are potentially affected. Our organization is supported by a significant depth of expertise.
Senator Massicotte: Let me clarify my question. I understand that. That’s why I’m interested in your comments. Both of you are regulated but without intervention from the political side. Meanwhile, what is proposed under Bill C-69, and has been the case for the last 10 years, is that a final decision and approval is basically by the cabinet, by the government in place. Therefore, you introduce a political element which is beyond pure science, as we all know.
How do you compare the two methods? Are we making an error? We used to have strictly scientific-based, without political approval, but in the last 10 years we’ve changed that around. It seems to have delayed things. It gets very political, not necessarily only science-based. How do we compare the two? Are we making an error? Should we correct the system in place to make it more science-based without political implications?
Ms. Lapointe: Dr. Steedman will speak to that.
Robert Steedman, Chief Environment Officer, National Energy Board: Thank you very much for the question. I note that the National Energy Board’s recommendations and decisions on major projects have always been subject to final ratification by Governor-in-Council. That has always been the case. There were some adjustments made in the case of projects, for example, that the NEB panel recommended against. There were some changes in the rules there in 2012.
But to your main question, we see our role as making sure that we have a process sure that all the relevant opinions and expertise is available to the board. The panel may have to make decisions on conflicting expert or scientific evidence. There can be significant uncertainty in some areas, but less uncertainty in terms of the engineering aspect, for example, which is an area we focus on very closely because in the end all environmental protection is based on having pipelines that are safe and hold the product internally.
Federally regulated infrastructure like pipelines can be thousands of kilometres long and can cross hundreds of Indigenous traditional territories. In spite of our best efforts to quantify and balance local, regional and national benefits and burdens, in the end, the overall decision has been in legislation directed by Parliament and that final call has been made by the Governor-in-Council. We do our very best to provide factual, tested evidence in our recommendations and conditions that would ensure the project can be built and operated safely to protect the environment, but sometimes those big questions involve other considerations.
Senator Massicotte: Are any other comments or observations?
Ms. Velshi: The only thing I would add to what my colleagues from the NEB have said is our role is to make sure the science is considered in whatever decisions have been made. The environmental assessment is a planning tool. Ours is just to make sure that the science and evidence has been listened to and taken into consideration.
We mentioned the Point Lepreau plant earlier. We provided technical expertise, but it was led by the Ministry of the Environment at the time. So there have been different regimes.
You asked what the international experience was, and that, too, varies. Many of my counter-regulators were not at all involved in the environmental assessment process other than maybe to provide technical expertise.
The Chair: Thank you very much.
Senator Patterson: To the Canadian Nuclear Safety Commission, you mentioned designated projects. We know this bill allows exemption for projects. We’re being asked to pass this legislation imminently. Do you know which nuclear projects are going to be designated or which will be exempted? Are you going to be considering small nuclear reactors?
Ms. Velshi: We have provided our input into what should be on this designated project list. Our input is based on our assessment of risks on international standards and on benchmarking. So we have provided that input.
Senator Patterson: So what’s the answer?
Ms. Velshi: I don’t know.
Senator Patterson: So you don’t know?
Ms. Velshi: Yes. My understanding is they’ve received input from a whole bunch of stakeholders and are looking at that.
Senator Patterson: Do we expect small modular reactors to be under your authority?
Ms. Velshi: I don’t know. I don’t know what to expect. What I do want you to all have reassurance on is if they are not on the designated products list and are exempted and under our authority, they will get just as robust and thorough a review when it comes to the nuclear safety and environmental protection side of things.
Senator Patterson: Both witnesses talked about the new impact assessment panels. There’s an article in the academic journal Energy Regulation Quarterly that you might be familiar with recently that said:
. . . nuclear . . . proponents may be dissuaded by the regulatory uncertainties created by the lack of expertise of the review panel and variation of impact assessments caused by the review panel’s impermanency.
Does Bill C-69 ensure that members of review panels for nuclear projects will have sufficient expertise in the field? And do you think review panels with different members for each project will match the consistency previously of the CNSC?
Ms. Velshi: When it comes to designated nuclear projects, the review panel will include at least one member of the CNSC commission. The CNSC staff will be providing all the nuclear expertise and support. That has been the case of previous environmental assessments that have been done jointly by the CNSC and CEAA of the time.
So if your question and concern is whether the panel will not have sufficient expertise and support for rendering a sound decision, I don’t share that concern because the CNSC will be very closely involved and engaged in making sure that expertise is provided.
Senator Patterson: To the NEB, I was struck by your statement, Ms. Lapointe. I appreciate your candour when you said earlier:
In conclusion, there will naturally be some uncertainty and a period of adjustment as we transition to the new system . . . .
Now, talk about uncertainty. We’ve had two major pipeline projects cancelled, Northern Gateway and Energy East. The third is in, shall I say, limbo. The Alberta economy is suffering. Hundreds of thousands of people have been thrown out of work. We have, most people would say, already uncertainty in the investment climate in Canada, at least in pipelines. Now you’re admitting there will naturally be some uncertainty.
At this critical period in our economy, is this the time to redesign the system in 400-plus complex pages that are very challenging for us legislators to understand? Is this the time to completely revamp the system and integrate your corporate culture with that of the new impact assessment panel? And the same applies to the Canadian Nuclear Safety Commission. Is this the time to add to the uncertainty, which you frankly admitted is going to result from this bill?
Ms. Lapointe: Well, I certainly don’t want to speculate on the policy choices in terms of the decisions that the policy-makers ultimately need to make.
Senator Patterson: That would be career threatening, yes.
Ms. Lapointe: But I will say that we have been aware of the bill for some time, and so we have been mobilizing. We have a team of dedicated people we have put together to work on implementation. We take this very seriously. We are committed to the objectives that have been stated, as I spoke to in my opening statement. We are confident that we will be successful in our implementation, recognizing that there are always challenges with a transition.
We are working hard, and we’ve already initiated a lot of that work to make sure we have a good foundation and will be ready.
Senator Mitchell: Thanks to the panellists.
I’m interested in what you said, Mr. Steedman, about the fact that cabinets always had to sign off on projects. Can you give us an idea of how many projects over the last 20 years that politicians have ever actually not signed off on?
Mr. Steedman: Thank you for the question, senator. I’m not aware of any.
Senator Mitchell: There certainly is something to be said for assessing broader factors that are now outlined in clause 22 but have probably been assessed from socio-economic, cultural, gender-based analysis, most of which have been done. But when it comes to actually making a decision on the broader considerations — and I was taken by your endorsement, Ms. Velshi, of the importance of these broader considerations — clearly that goes beyond technical, in the weeds, scientific, engineering expertise. And there is something to be said, I would argue, for a broader perspective at a political level by people who are accountable to the public in a democracy. Would you agree? I don’t want to put you on the spot.
Mr. Steedman: I’d like to note that the NEB has been doing what amounts to impact assessments for decades now, because the NEB Act has always required the independent panels to consider much in addition to the technical aspects — social, cultural, economic — and that’s not new for us. We have staff and expertise. The bill specifies in detail and expands the list of factors that must be considered, but all of those are within the range of things that we’ve seen as part of our business.
Senator Mitchell: I think some people believe or think that the NEB would actually do reviews, or ever did reviews, of oil sands plants, but that’s not the case; they don’t. That has always been done by the Canadian Environmental Assessment Agency, which will now become the IAA, which will be integrated with you. So, in a sense, we’re integrating an agency, which has had a great deal of experience with the energy industry, with another agency, yours, which has had a great deal of experience with the energy industry. It seems to me we’re bringing the benefit of both agencies’ strengths together to unify and streamline the process and make that process better overall. I’m not so sure we’re going to have a problem with the transition. I can’t speak for you.
Is it not explicit in the bill — it is; you must be aware of it — that all people in your agency are going to be shifted to the Canadian energy regulator that is provided for?
Ms. Lapointe: Our interpretation of the legislation with respect to designated projects only is that there would be an integrated review between the new impact assessment agency and the Canadian energy regulator, the life-cycle regulator. So only in those instances of an integrated review would the NEB then be working jointly with the new impact assessment agency.
Senator Mitchell: From the breakdown you gave us, it seems to me the bulk of your work really is the smaller projects, which will be non-designated, so there isn’t that much of a change.
Senator Patterson: We don’t know what’s on the list.
Senator Mitchell: Well, we know that the smaller won’t be.
Senator Patterson: Oh, you know that? Everybody wants to know. Tell us.
Ms. Lapointe: For projects that do not fall into the category of designated, we will continue to do impact assessments in accordance with factors that are quite similar to the impact assessment legislation, and we will carry those out with our robust review processes in protecting the environment and people, and safety.
Senator Mitchell: To the CNSC, it seems to me you’re very comfortable with making the transition. It seems to me that this is a win-win situation. Again, you’re getting the broader perspective from the Canadian Environmental Assessment Agency, which becomes the IAA. Their broader perspective and your technical perspective are being brought together to still assess what you’re assessing but also to assess these overreaching public interest, socio-economic and cultural impacts.
Ms. Velshi: Senator, yes; as I said, we will make sure that the integrated process works. I do want to highlight, though, that this process is going to address two distinct needs. One is a decision by the minister or Governor-in-Council around the impact assessment, but there is a licensing decision that is still the mandate of the CNSC. I share the NEB’s not so much a concern but making sure that our objective, that one review can meet both of those needs efficiently and effectively, is something we have to make sure we’re working in collaboration on.
Senator Mitchell: Great.
Senator Woo: I’d like to pick up precisely on the nexus between the assessment and licensing, principally for the CNSC but the NEB may well want to comment as well.
One would imagine that if the assessment were done simply by the CNSC and the NEB in your respective cases, there would be greater seamlessness, you might say, between the assessment decision findings and the licensing outcomes. I want your views on any risk to the seamlessness between assessment and licensing now that we’ve created a bit more of a hybrid situation, where the assessment is led by the new agency, with participation and expertise from both of your organizations in their respective cases — but then the life-cycle regulation, particularly the licensing, will be left to your organizations only.
I did not hear that there was necessarily a problem, but you did flag it in your presentation. Talk a little bit more about potential risks of a disconnect between the assessment and the licensing.
Senator Patterson: Good question.
Ms. Velshi: Let me say, first, that we have been under this regime before where there’s the impact assessment and licensing. As I said in my opening remarks, from my perspective, for this integration to be seamless, it would be I think appropriate for the panel that has been established to do the review. The impact assessment review is also constituted as a panel under the NSCA, under the commission, so that it too can make a licensing decision. It is listening to all the evidence, all the science, and it can then seamlessly, after the decision been made on the impact assessment, make the licensing decision.
Senator Woo: Any comments from the NEB? I have a second question at this time.
Ms. Lapointe: We are in agreement and concur with Ms. Velshi’s comments.
Senator Woo: And under the current legislation, that is entirely possible, of course. Is that your view?
Ms. Lapointe: Yes.
Ms. Velshi: Yes.
Ms. Lapointe: From an integrated impact assessment perspective.
Ms. Velshi: It may need some clarity, but it’s absolutely the principle. That’s what we want to achieve.
Senator Woo: All right. Thank you for that.
Let me ask the NEB about the introduction of a new design element in the assessment process, a so-called preplanning phase. Can you talk about any experience that the NEB might have with this concept of preplanning, because we hear some hesitation from the industry about preplanning. Perhaps you can enlighten us on your own experience in using this tool in your assessment process.
Ms. Lapointe: We currently have an option for proponents with larger projects to file a project description with us now, today under our current legislation, whereby we would initiate an early planning phase where we would look at traditional territories. We would look at those communities that are potentially affected, and we would begin our outreach into those communities to explain the National Energy Board’s process and for people to have an understanding of how they can potentially participate in that process. That’s something we do today.
We are looking and want to align with the intended early engagement phase as outlined in the legislation. Our intent is to align under the Canadian energy regulator act and be able to set even more robust objectives in doing that, which is really to start to build in getting feedback on how people want to participate as well as looking at issues that could potentially get resolved, even prior to a hearing process, depending on the nature of those issues, and for there to be much more two-way communication in advance. We feel that doing that could streamline a review process.
Senator Woo: What has been your experience with previous experiments using the preplanning approach?
Ms. Lapointe: Our experience has been allowing participants and those interested in participating to have a much better understanding of what a review process looks like and how they might participate. It also allows for a future panel to look at which areas of the country they might need to travel to with respect to holding a hearing. So it does provide valuable information.
Senator Woo: I was trying to get at whether it in fact expedites or slows down the process overall. Do you have a sense of whether this is a helpful tool or whether it simply drags out what in effect would be part of an assessment anyway?
Ms. Lapointe: We see it as an overall helpful tool.
Senator Woo: Thank you.
[Translation]
Senator Carignan: I would like to go back to the matter of the independence of the commission, or of its decision-making process.
When I visit the Canadian Nuclear Safety Commission’s website, I read: “Nuclear safety means independent decision making.”
I read a presentation given by the President of the National Energy Board in 2016 that talks about independence, specifically about the decision-making process, about politics not being a part of the decision-making process, and about the need for robust governance mechanisms to protect the workings.
Are you comfortable with the fact that the people who will decide to make recommendations or studies are appointed for each mandate and are replaceable, to the extent that, if things are not moving quickly enough, the minister could suspend their mandate and turn it over to the agency?
Are you in agreement with that, given the impact that the recommendations can have in the decision-making process?
[English]
Ms. Velshi: I’ll go at this first. I don’t know if the question was to the NEB or to —
Senator Carignan: Both.
Ms. Velshi: As far as the independence of the commission is concerned, you’re absolutely correct; Canada is a signatory to international conventions, the treaty-like conventions, that mandated to have an independent nuclear regulator. We get scrutinized on this on a regular basis. As I said in my opening statements, our decisions are free from any political interference.
As far as the impact assessment is concerned, that is not a licensing decision. That is a planning tool to decide whether the project is in the public interest. All I can say is we will be providing the expertise, the science, to make sure that that is considered in arriving at that decision, but that decision includes a lot more than just the science and the evidence we would provide. There are a lot of other factors under consideration. But as far as the licensing decision, which is in our mandate, it’s absolutely independent and there would be no political interference allowed or expected.
Ms. Lapointe: That’s consistent as well with the National Energy Board. The reviews that would be carried out under the Canadian energy regulator act would be fully independent decisions with an independent panel that would be based on the evidence that comes before them, so there is no political interference.
With respect to any impact or with respect to panel members, there are the timelines associated with when decisions need to be issued, but there is no political interference in terms of the decision making.
[Translation]
Senator Carignan: The government is still appointing them for each project. If the minister finds that a project is not moving fast enough, he can suspend it. We do not know what the salaries will be. We do not see the process. Perhaps it will be in the regulations, of course, like a kind of code of ethics, but we can’t see anything about it.
So all the normal protection mechanisms that you currently have in your organizations are completely missing from the committee, the commission, that will be studying those projects and making recommendations that will have a major impact on communities.
[English]
Ms. Velshi: Let me start off with that. The panel member that will be appointed, or at least the one member from the commission —
Senator Carignan: One?
Ms. Velshi: Yes, at least one, but not the majority. If it was a panel of five, it could be two. That is a member from our roster, the commission’s roster, and those are GIC appointments. Those aren’t ministerial appointments.
[Translation]
Senator Carignan: Mr. Fox, would you like to add anything?
[English]
Mr. Fox: No.
Senator Tkachuk: I would like to add my congratulations to the National Energy Board as well as the Canadian Nuclear Safety Commission and thank them for the good work that they have been doing. I’m not one who has a lack of trust in either of them, especially the National Energy Board. I come from a province that deals with both. I’m from Saskatchewan.
I want to ask about this question of a designated project. Is a designated project, from your understanding, based on complexity or is it based on size? If you could both answer that, I have a couple of follow-up questions.
Ms. Velshi: I don’t know what they are going to be based on. Our submission has been it should be based on the risks associated with these projects, or potential risks associated with them, to help safety and the environment, and what the international standards are around those as well.
Ms. Lapointe: Obviously we don’t have that project list yet, and for us, I think it’s just a combination of the factors associated with risk as well.
Senator Tkachuk: Are you going to be asked for advice on whether a project is designated or not? I understand you said earlier on that you have given advice —
Ms. Velshi: I have given advice.
Senator Tkachuk: Have you been asked as well?
Ms. Lapointe: Yes, we have been asked for advice.
Senator Tkachuk: The minister will just decide that this is designated, this is not.
I didn’t ask you, Senator Mitchell, I asked them.
Ms. Lapointe: It is a decision of the government, yes.
Senator Tkachuk: It is a decision of the government in both cases?
Ms. Velshi: Well the project list — we have got folks here —
Senator Tkachuk: If you’re confused —
Ms. Velshi: I’m not confused. It’s a regulation. It will be a GIC decision.
Senator Tkachuk: So it will be a cabinet decision, a Governor-in-Council decision.
Is your advice public? In other words, are you going to make it public when you give advice, or is it going to be private advice to the government? It will be, I think, right, because it’s advice to cabinet? So the general public won’t have a clue as to whether you have said this should be designated or not designated, is what I’m getting at. It won’t be a transparent process?
Ms. Velshi: Our advice is to cabinet, yes.
Senator Tkachuk: Yes.
And your advice is to cabinet?
Mr. Fox: Yes, that is correct.
Senator Tkachuk: So it will be a totally political decision? Okay.
Ms. Velshi, on the question of the panel, which is appointed by the minister, I believe, in this process, you mentioned that you do all the environmental assessment, and both of you have done it satisfactorily. So the panel really won’t be doing environmental assessment. My understanding is they will be doing sustainability, gender. What is the other one?
Senator Patterson: Climate change.
Senator Tkachuk: Climate change. That’s what the political panel will be doing, because there will be a political panel. There will be one representative on the panel. The rest will all be political appointments?
Ms. Velshi: It will be an integrated panel, and as a panel they will look at all the factors that are in their terms of reference.
Senator Tkachuk: So they will be looking at what you have decided?
Ms. Velshi: Not what I have decided.
Senator Tkachuk: The nuclear agency. Will they be looking at what you have decided and reviewing it, or it will be totally different stuff?
Ms. Velshi: The panel will be looking at the terms of reference given to them by the minister on what their scope of review is going to be.
Senator Tkachuk: Which is?
Ms. Velshi: Which will be all the factors that are relevant for that particular project.
Senator Tkachuk: Including?
Ms. Velshi: Including the ones that we historically looked at.
Senator Tkachuk: That you have looked at?
Ms. Velshi: No, not for this particular project, because we would not have done any assessment for these designated projects.
Senator Tkachuk: Okay.
Ms. Velshi: It’s only the one review that’s going to take place.
Senator Tkachuk: It will be climate change, gender, sustainability —
Ms. Velshi: Safety, health, environment. They will look at all of it.
Senator Tkachuk: Stuff that you have done?
Ms. Velshi: We haven’t done it. We have historically done something similar for other projects. No, this would be only the one assessment that will be done for that particular project.
Senator Tkachuk: So on a designated project that they will be involved with, what will you be doing? Because you’re saying that they are going to be doing all this stuff about the environment that you have already done successfully over time.
Ms. Velshi: For other projects.
Senator Tkachuk: They are taking it away from you.
Ms. Velshi: They are not taking away, because we’ll still have a member on the panel. And the expertise in the areas that we have around nuclear and so on, our staff will still be providing that support to the agency and the panel. That remains unchanged.
The Chair: Thank you very much.
Senator Tkachuk: I have one follow-up question.
The Chair: You are already at five, six minutes.
Senator Tkachuk: I appreciate that as well, as I did yesterday with my seven minutes, but put me on a second round and I’ll continue this. I want to get more information.
The Chair: Perfect.
Senator Richards: Thank you very much, panel.
You may be aware that the Premier of New Brunswick is going to try to revive Energy East, concerning the people in New Brunswick. It concerned them a great deal that it was cancelled. Many of us think it was a political decision that it was cancelled. It has never really been clarified what happened here, so I’m going to ask Ms. Lapointe.
On the one hand, the Canadian Energy Pipeline Association said:
TransCanada’s announcement follows the NEB Energy East Panel’s decision to consider upstream and downstream greenhouse gas (GHG) emissions for the projects.
On the other hand, Minister Jim Carr told senators last year that the Energy East cancellation had nothing to do with government action. He said:
The proponent decided, for its own reasons, to withdraw the application.
Well, this was withdrawn at the last minute. This was a project that had been in the works for some time. So I’m wondering, Ms. Lapointe, if you might clarify this for the people of New Brunswick.
Ms. Lapointe: The Energy East project was under review by an independent panel, and in October of 2017 the proponent did submit a letter to the National Energy Board withdrawing its project from that independent review process. They did state their reasons in that letter when they withdrew it.
Senator Richards: And the reasons? Was it because of upstream/downstream emissions testing?
Ms. Lapointe: I believe they had a number of reasons for which they withdrew. It’s difficult to speculate, because I suspect business decisions are made on a number of factors, and so I can’t really speculate on it exactly. The letter is public in terms of what they filed.
Senator Richards: But in theory there was a chance that if the government didn’t issue this upstream/downstream emissions testing, the project might have continued?
Ms. Lapointe: That’s difficult to speculate on.
Senator Richards: Thank you.
The Chair: Do you have the letter regarding when they abandoned the project? Would it be possible to send the letter to the committee clerk?
Ms. Lapointe: Yes, it’s a public letter, but we can send the link to it.
The Chair: We would appreciate that very much.
Senator Richards: Thank you.
Senator Simons: I want to start with a question for Ms. Velshi. I think it’s also relevant to the NEB.
There are very strict parameters on the number of representatives of life-cycle regulators who can be on these panels, a minimum of one, but it can’t be a majority and the chair can’t come from the agency.
Do you think, given the degree of specialized knowledge that you possess, is it enough to have one representative on a panel, or do those panels need to have more representatives from your agency who have that very particular knowledge?
Senator Patterson: Good question. That was my question.
Senator Simons: I thought it might have been.
Senator Patterson: Let’s see if we get a better answer.
Ms. Velshi: I can’t comment on why it’s not the majority.
What I can say is that the support that would be provided by our staff would provide them the expertise that is needed. And we have had joint panels before for nuclear projects, and temporary commission members have been appointed for those panels. For these reviews to be effective, they will have to make sure that they have panels that have the requisite expertise and experience to do a good job.
Senator Simons: My parallel question for Ms. Lapointe is about commission appointments under the CER. The commission rules are that a commission term is six years, and it is suggested in rare circumstances you can be reappointed for no more than ten years.
The concern I have heard from some industry people in Alberta is that given the degree of technical knowledge you need to understand the tolls and tariffs part of what the NEB does, it might take six years to really be able to master the topic. I am wondering what you think about the term limits that are quite strict under CERA.
Ms. Lapointe: Having commissioners with a variety of backgrounds, of course, is always important to have backgrounds of regional and other diversity across Canada.
We have very expert staff who support our commissioners. We have a very robust on-boarding program, and we spend time to make sure that commissioners are able to get up to speed on the issues they will be faced with in making decisions. Our focus is primarily on how we on board and ensure we are supporting those commissioners.
Senator Simons: What is the rationale for such strict term limits? I say this as someone who is appointed to the age of 75, why six years as a cap?
Ms. Lapointe: I believe it’s appointed for — is it five years or six years?
Mr. Fox: Six years.
Ms. Lapointe: Six years, okay.
I’m actually not aware of the rationale as to why that was chosen.
Senator Simons: A concern has been raised, particularly by the Canada West Foundation, that when we change the NEB to the CER, we will lose an entire discourse of jurisprudence and that things will not be able to reference past decisions from the courts.
Are you concerned that in putting aside the NEB to become the CER, you’ll lose all those legal precedents as points of reference for courts?
Ms. Lapointe: We have learned from the legal principles that have come out of the court cases with respect to tribunals and have adapted our processes and made adjustments. In becoming the CER, we will continue to lean on those legal principles. We will continue to learn from any future court —
Senator Simons: I guess the concern is this: Will the courts show deference to those past decisions? It’s not so much what you will lean upon as what the Federal Court will look at.
Ms. Lapointe: I can’t speculate exactly what they will look at, but those legal principles in terms of how they apply to tribunals, we will obviously utilize those in terms of the way we have and learn from future situations.
Senator Simons: Thank you.
Some people have raised an idea with me that what Canada really needs is a utility corridor. Since you regulate both pipelines and power lines, which is a growing field of interest for Canada’s grid, what do you think about the merits of setting aside land to be a utility corridor so we don’t have to relitigate every single project? If we had an actual utility highway, would that speed things up?
Mr. Steedman: It’s an idea that has been explored quite a bit, including formally in the United States. It’s driven partly by where the energy supply is and where the markets are. They’re not always in the same place.
Across the Prairies, we in essence have that. We have multiple pipelines in relatively narrow corridors. It’s achieved often by following highways, but the actual routing and the need to make decisions that are just regarding landowners’ rights and tradition territories of Indigenous nations make it complicated.
Senator Seidman: Thank you all very much for being with us today.
Ms. Lapointe, in your presentation to us, you put forward a section on new changes in the CER act. You make reference to this explicit and broad list of factors to consider and conclude that this adds further clarity and sets a transparent framework for project assessments.
However, as I’m sure you’re aware, many stakeholders are not confident that clause 22 sets out an explicit list of factors to consider in an impact assessment. It’s quite the contrary, in fact; they argue that policy considerations are inserted in every review, and these result in a move away from a technical and science-based approach. A technical and science-based approach is, of course, predictable and transparent. I refer to health and social conditions, the so-called cumulative effects, and the result of any interaction between these effects.
You go on to mention the vital role of the life-cycle regulators in an impact assessment. Based on all this confusion and concern about how these factors are going to be defined and measured in a scientific way, what tools or training will the life-cycle regulators have? How will they assess factors like this in a wholly scientific, transparent way?
Ms. Lapointe: Having clarity is important with respect to the list of factors. Our expectation is that additional guidance is going to be developed. Some of it, I believe, is being developed right now. We certainly involve ourselves with respect to the development of that guidance. It will be important to have clarity.
The factors will really inform the evidence that the applicant will need to file, as well as the kinds of evidence that others will bring to a review. It will be up to the specific project and that panel to really determine how that evidence is evaluated and weighed, depending on the relevance to a specific project. So it’s really an evidence-based way of looking at those factors.
I’m going to turn to my colleague to see if he wants to add anything.
Mr. Steedman: Most of those are things that are not new to the National Energy Board. The NEB Act requires a look at anything relevant to the present and future public convenience and necessity. We have looked at health; we have looked at environmental, safety, security, social and cultural factors as well. So we are not troubled by those inclusions.
Not all of them require scientific evidence. Some of them require judgment and balance, as things related to social and cultural factors are not necessarily quantifiable. So we’re not too troubled by that. A good impact assessment is always required, something that looks a lot like this list.
Senator Seidman: But judgment is what stands out right away in response. Judgment is not scientific evidence. Judgment is subjective and can be anything but transparent, so I have a little trouble with that. If you’re talking about science- and evidence-based, you have to have objective measures. Where are these objectives measures going to come from?
It’s pretty major, from a statistical point of view; it’s statistical language to talk about cumulative effects and the result of any interaction between those effects. That’s a pretty far-reaching analysis. Is that going to be based on judgment, or is there going to be some kind of scientific measure? I don’t really know what that would be, though.
Mr. Steedman: We do cumulative effects analysis on every assessment we have done. You’ll typically see the evidence laid out in a tabular form, with a language discussion about significance, degree and a variety of factors that make it as transparent as we can. Our reports always provide the reasons, and they go back and forth on who said what, as well as where the panel lands. We try to make that as transparent as we can. We do try to get better at that.
I’ll comment on the role of a panel member, because I think that came up earlier. It’s a role where, ideally, the panels have some technical expertise and background on the project, while noting that a big pipeline is an extremely diverse set of potential effects on Canadians. They have evidence, they have to weigh it, and they need to decide what is relevant.
Having testified in spill trials, it’s a bit of a justice of the peace role. They have experts helping them marshall the evidence and witnesses testing it on both sides. They then need to use their judgment, common sense and the science to make a recommendation. So it is both science and art, but it’s mostly about good judgment and fairness.
Senator Seidman: There is this registry that is supposed to facilitate transparency. These decision-making processes, the factors considered and the analysis are supposed to be posted on the registry. Is that your understanding?
Mr. Steedman: It’s very much the case. In the case of assessments that will be done by the Canadian energy regulator, or the NEB now, all of the documents in the public proceeding are public. The reasons are provided in the report, and when we have done joint processes with the Canadian Environmental Assessment Agency, we either provide links or post material on their registry.
The Chair: This question from me is also very important, so I will ask a supplementary question.
We all know that science goes very far, very fast, and to integrate this knowledge into regulations and policies there is a gap in time. It can sometimes take years.
Of course, we learn from accidents. We learned from Chernobyl. We learned from Lac-Mégantic. We learned from Deepwater Horizon. From there, scientists ran and did a lot of things and were supposed to come back to regulations.
What is the mechanism by which you increase your knowledge?
Ms. Velshi: For our industry, you are absolutely right: An accident somewhere is an accident everywhere. We stay abreast. We are very well connected with our international community.
I’ll approach this in two forms. First, how we stay abreast of knowledge? Second, if there are accidents, what are the learnings and how we make sure we have learned from those?
When it comes to science, ours is a scientific organization, and staying abreast of science and what’s current is a key part. I’ll get Mr. Rinker to elaborate later on how we do that.
Let me tell you about accidents. A fundamental aspect of the nuclear industry is what they call operating experience, or OPEX. There are all kinds of mechanisms to ensure that across the globe those learnings are shared in a transparent, open manner. There are also mechanisms in place to make sure that it is independently validated, that you have actually learned from someone else’s mistakes and you won’t have that happen in your jurisdiction.
For instance, when Fukushima happened, within the CNSC we had a cross-functional task force. It included licensees, technical experts and academics for us to assess what this means for us, how robust we are and how vulnerable we are. Once we came up with what the corrective actions would be for us, we had those independently validated to make sure that we had actually assessed those objectively and thoroughly and then we monitor it on a regular basis. It’s a very critical part of how we manage the regulatory framework in our business.
As far as staying abreast with science, I’ll get Mr. Rinker to elaborate.
Mr. Rinker: There are several ways to make sure that, from a science perspective, we are the leader. We’re involved in many international communities, for example, for used fuel waste repositories. Out of Europe, there are a number of international bodies that collaboratively do research together. We have adjunct professors on staff. We have students doing research on effects of glaciation on repositories and areas like that.
We have a research budget to fund universities to help us understand the cycling of radionuclides through the environment. We have health experts on staff — epidemiologists — who do studies on the health of Canadians living near nuclear facilities, for example.
Finally, for those areas outside our mandate or area of expertise, we always rely on a whole-of-government approach. At our hearings, whether there’s an EA or not, Environment Canada attends our hearings and provides their expertise. Health Canada attends our hearings, as do the Department of Fisheries and Oceans Canada and the provinces. We have a whole-of-government approach for licensing or for an environmental assessment.
The Chair: Thank you.
Ms. Lapointe: We do take learnings and being able to expand our expertise quite seriously. We definitely have things that we do internally with respect to our staff. Dr. Steedman will talk about those.
We also influence the industry in a very deliberate way about learnings through the industry. We expect and require companies to have their management system, and we require them to update, learn and make changes with respect to their practices.
I’m going to ask Dr. Steedman to talk about what we do internally.
Mr. Steedman: Thank you very much.
While we have scientists and highly trained technical people on staff in applied technology, such as engineers and our human health and environmental specialists, the NEB is not a research agency. We don’t do research or fund it, but we’re very active in shaping research in terms of steering committees for federal and international science related to pipeline integrity, oil spill preparedness and response, et cetera.
I would subscribe to everything my CNSC colleagues mentioned. It was a very good description.
I’ll just note that in our project assessments, much of the assessment as a planning tool is about how the project will work when it works as designed. That’s a big focus. But preparedness and assessment of potential malfunctions and accidents is a whole unique, stand-alone exercise that happens. You’ll often see a couple chapters in our reports on that sort of thing. We will typically have in evidence a great deal of historical review of the probability of hazards and various activities associated with a federal pipeline. We will hear contradictory evidence often from people who don’t believe that evidence, so we get a pretty rich record on how things have actually worked in the past.
As a regulator, we judge the science as it is realized in practice. We need to understand the hazards, but particularly we need to be expert on what works and what doesn’t always work in practice, because that’s key to us. We’re a life-cycle regulator.
All in all, through our hearings and through our staff training, we have great mechanisms to stay in touch with both what we think is going on and maybe where the surprises might come from.
Senator LaBoucane-Benson: I want to talk about the Indigenous Advisory and Monitoring Committees you referred to. Who do these committees work for, the proponent or the government? And in the new act, who do they work for?
Ms. Lapointe: The current Indigenous Advisory and Monitoring Committees were established by the government. The terms of reference were co-developed with the government, Indigenous communities and the National Energy Board.
Senator LaBoucane-Benson: How is their expertise integrated into the development of a project? I’m trying to understand. When I read about the Line 3 IAMC, it says they’re paving the way for enhanced relationships between Indigenous nations and participate in meaningful oversight. The TMX IAMC says that they are involved in the review and monitoring of environmental, safety and socio-economic issues.
I’m not saying it’s tokenism, but some of that language smacks of tokenism. Practically speaking, what do they do and how does it affect the pipeline work? How do they have a meaningful voice?
Ms. Lapointe: I’ll start. Dr. Steedman is actually very much involved in the IAMCs.
In the work that we’re doing with both of those IAMCs, we’ve had a real focus on monitoring and having Indigenous monitors participate in the inspections that we do. We created a pilot approach because we wanted to test that. We worked with the IAMC. They have a subcommittee on monitoring, and we worked with them to come up with an approach. We have been having Indigenous monitors on site with us, with our inspections, and they are participating in those inspections. It’s actually been very useful in terms of the safety and environmental outcomes in terms of the work we’re doing. It has brought a lot of awareness of the communities’ concerns and cultural awareness to our inspectors as they’re on site.
It’s a journey. We have taken the first steps. We’re actually quite excited that we’re going to be able to build on this and have a broader effort with respect to the new legislation.
I’ll turn to see if Dr. Steedman wants to add anything.
Mr. Steedman: That was a great overview.
I have the honour of being the NEB regulatory representative on the Line 3 Indigenous Advisory Monitoring Committee at the table, but we have a dozen staff supporting various subcommittees as well on both the Trans Mountain and the Line 3 committee. The two committees are quite different, partly because Line 3 has been under construction for the last 18 months or so, and Trans Mountain is Trans Mountain.
I’ll speak briefly about the point mentioned in the monitoring. Another big effort of the Line 3 committee is that they are spending money administered through a secretariat hosted by Natural Resources Canada called Indigenous Partnerships Office - West, an amazing group of people. The Line 3 committee is also focused and has spent a lot of time and effort on “filing review,” they call it. In essence — they do not use these words — it’s a third-party audit of our regulatory compliance activities with the company post-approval, so regulatory filings related to construction compliance and cleanup and reclamation.
It has been extremely interesting. The Indigenous monitors have been in the trucks with our inspection officers. They have already contributed to findings in the field in monitoring, and they have engaged expert consultants on the filing review piece. This is a very bright and challenging light being shone on us as a regulator through an Indigenous lens. It has been quite a journey for sure.
Senator LaBoucane-Benson: Can you give me an example of a community concern that was brought to the inspectors, something very practical?
Mr. Steedman: Yes. We have a few examples. The good news is that in general they’re not finding things going wrong in the field, which is exactly what we strive to do.
In one case, an Indigenous monitor was out with our inspection team and noticed buffers incorrectly flagged around wetlands. It was not so much an Indigenous issue but just good eyeballs and noticing that the company did not necessarily have the right person doing that flagging. Work was stopped, which we will often do in these cases until things get sorted out. Indigenous monitors write their own independent reports. They are filed publicly with the nations that participate.
Those have been done in other cases. At Trans Mountain, the Indigenous monitors have contributed directly to chance finds or cultural artifact finds that weren’t detected in the pre-construction archaeological scan, for example. A number of things like that. There’s a huge amount of mutual cultural learning going on.
The Chair: Thank you very much.
Senator McCallum: Thank you for your presentations. This is an area that I’m just starting to understand. It’s very important for Indigenous peoples and for all of Canada. It’s good for us to have this forum so we can increase our awareness, our understanding and make good decisions on it.
For the record, I want to say that when you look at issues involving energy, environment and natural resources, they involve more than scientific knowledge. They involve Indigenous knowledge, which is science-based or I wouldn’t be sitting here. Many studies have been done with the help of elders and knowledge keepers, but the intellectual property didn’t acknowledge them.
When we look at the sciences, we are looking at physics, astrology, ceremony, medicine and language. In language, the Cree phrase pas ta ho win means you have crossed the line. On this issue of climate destruction, we have arrived there. So this becomes a huge point. That’s where I come from as an Indigenous person.
You also mentioned that international treaties are respected, but there is no mention of the treaties within Canada. There is reconciliation, but we have treaties.
And scientific knowledge is involved in climate destruction. That’s why this bill is important. Qualitative data documents the social determinants of health, which is why people didn’t understand what had happened to us, including me, and the destruction of my life and my community. I wanted to put that on record.
My question is about the CER act complementing and advancing the framework. For example, it allows the regulator to take control of a pipeline where there is no identifiable owner. I don’t understand. Is this a gap that was left with the other act? How can you have a project where there is no identifiable owner? When we look at the sites of destruction, it is the cleanup in uranium mines, in mining and with oil; it is that toxic material that is still exists there today. That’s why people cannot get a company to come in and clean up. There was no oversight for them.
How could that happen? You said it’s only for pipelines? Okay. So how was this allowed?
Ms. Lapointe: Currently, the National Energy Board has the ability to step in if a company, for some reason, walks away from a pipeline. We do have the ability to step in. We have a framework where we do require companies to have letters of credit in order to secure funds associated with any future abandonment of that pipeline.
We have that provision currently in place, and where a company, for some reason, goes bankrupt, we are notified by the banks in advance and can withdraw that money from the line of credit prior to anybody else being able to use it.
Senator McCallum: My second question is for Mr. Fox and is about provincial jurisdiction in relation to orphan wells. There is provincial jurisdiction, but as Indigenous people, we are under federal jurisdiction and provincial issues have not been addressed for us, especially in the Prairie provinces. You had said so far it’s not a significant problem, but it has been for us. What is the government doing to close this gap?
Mr. Fox: From the perspective of the National Energy Board, abandoned wells, which we regulate only north of 60 in Canada, where provinces don’t exist, so in Nunavut and certain other parts of the offshore in Northern Canada, we would regulate those wells. For those specific set of wells, orphan wells have not particularly been a problem.
For other parts of our regulatory responsibility, which would be pipelines all over Canada, we haven’t had a significant problem with orphan pipelines, per se. My statement was that in Southern Canada, oil and gas production on provincial land is regulated by the province. My best understanding is that oil and gas on reserve lands are actually undertaken by Indian Oil and Gas Canada, another agency that we don’t have much interaction with.
Senator McCallum: So do you see that as a problem?
Mr. Fox: I would say an orphaned facility that has the possibility of creating an environmental hazard or a safety hazard is definitely a problem. That’s something that a provincial government should be looking to and putting in place a structure to ensure that those oil and gas activities are cleaned up after.
Senator McCallum: The provinces really don’t negotiate with Indigenous people. That’s the problem. What would you recommend happen to close this gap?
Mr. Fox: Unfortunately, that goes well beyond my capacity. I would see that as an issue between the federal and provincial governments to work together with the First Nations and the Indigenous peoples to close that gap.
Senator McCallum: Thank you.
Senator McCoy: Thank you for being with us today. It’s good to see some Albertans at that end of the table as well. I’m sorry we don’t have any experience with nuclear projects, so don’t feel slighted. My comments and questions are definitely directed to the NEB.
The Expert Panel on Modernization of the National Energy Board said at page 7 of its report:
Both industry and environmental groups told us the same thing: Canadians feel forced to use NEB project reviews as the venue for resolving policy questions about climate change because of an absence of any better alternative. The end results are NEB proceedings that serve no one’s interests and which needlessly exacerbate conflict . . . .
They say that is in large part the reason for what they called a crisis of confidence in the NEB.
Let me pose the question this way, in lieu of the lengthy time for discussion: How is Bill C-69 going to resolve this crisis of confidence given that it is caused by your inability or an inability to have the review panel be a venue for a broad policy discussion between energy policy and climate change?
Ms. Lapointe: The policy choices, of course, are set out in the legislation.
In terms of the impact assessment legislation, we had talked before about the one project, one assessment. That legislation is centralizing to have one impact assessment process for energy projects.
It is also spelling out the factors in a deliberate way as to what is to be assessed and looked at with respect to that legislation. Those factors identify the environmental considerations around climate change, so it does set out some clarity as to what will be assessed as part of a project.
That’s essentially how we see that. That’s the framework they have chosen for that.
I’ll see if my colleague wants to supplement my response.
Mr. Steedman: Thank you very much. That’s been a huge question for us.
I would note that since 2008, the interest of Canadians in that topic has changed dramatically, and we did start to hear about it in our hearings.
Starting in 2005, we appeared before a committee in Parliament to talk about the Kyoto accord and how, in general, the climate issue appears in our world as greenhouse gas emissions of various kinds. This has been an issue since the late 1980s, actually. It has been showing up. Various panels made various decisions on when and how those things might be part of the proceedings before them.
The interim measures, since 2015, provided a way for Canada to introduce quantification of upstream greenhouse gas emissions associated with a pipeline project. That is something we have several projects worth of experienced with. The NEB cooperated with Environment and Climate Change Canada on the calculations involved in that.
In our world, even though Canada’s debate on energy futures and energy systems is not over by any means, at least there is a mechanism now in a major pipeline hearing to make sure that, to the extent possible, greenhouse gas emissions of interest to Canadians are quantified and on the record, and can form part of the advice that a panel would provide to cabinet, for example.
Senator McCoy: Thank you for that answer.
Let me ask another question. Time is of the essence. You have heard concerns about the neutrality of the decision maker. Since 2012 in particular, the decisions have been either ministerial or cabinet, so they are political. There is still a great deal of concern about the expertise and neutrality of decisions that will come through the Canadian energy regulator because there is only going to be one of you on the panel.
I point you to subclause 17(1) in the bill, which says that the minister can declare that a project has “unacceptable environmental effects.” Of course, the minister can also tell you what to do. If a minister made that declaration, gave a proponent that notice, what would the CER do?
Ms. Lapointe: I want to make sure I understand the question: It relates to the impact assessment process. The new impact assessment agency would be the lead in that case, and we would be working in an integrated way with the impact assessment agency.
I’m looking to my colleague here, who is looking for the section.
Senator McCoy: The proponent has basically been told that the minister would not accept your advice if you approved the project, because he or she said that the project is going to have unacceptable impacts. At the same time, any project that comes through you — because it’s your pipeline; interprovincial or international transmission line, et cetera — it’s mandatory to have a review panel. So that clicks in. Now what happens? Do you proceed?
Senator Patterson: Politics trumps science.
The Chair: The time is up. We are at seven minutes. We must move on.
Senator Pratte.
Senator McCoy: Consternation at the other end of the table.
Senator Pratte: It’s nice to see your faces.
I have a short question that follows from the questions from Senators McCoy and Woo. I am wondering how the process will work, since both your organizations have to issue licences and permits. When there is this integrated process review for a designated project, eventually you have a decision to make also, whatever the decision is by the minister or the Governor-in-Council. What happens if there is a contradiction? If the minister or the Governor-in-Council decides that, based on the integrated review, this project should go ahead, but the Canadian Nuclear Safety Commission, for instance, decides that the conditions for issuing a licence are not there, what happens and who decides the future of this project?
Ms. Velshi: When it comes to designated nuclear projects, the bill contemplates that the review panel will come up with a report that will have two separate parts to it, the first of which is recommendations on the impact assessment that the minister or the GIC makes a decision on. Once that decision has been made — and say it’s a favourable decision, with these conditions — it would then come to the CNSC, along with the report that talked about the licensing areas that were assessed. Then it would be up to the CNSC, under our act, to make the licensing decision. There is a possibility that we may say, “No, we do not believe this project is safe or meets our requirements, and it cannot proceed on those grounds,” or there are additional conditions required. But those are two very distinct decisions made by distinct parties.
Senator Pratte: If I understand correctly, in this scenario where the government minister approves and you, for whatever reason, decide that you’re not issuing the licence for the moment, your decision decides the fate of the project, unless other conditions are met?
Ms. Velshi: Right. We would give reasons for why we made that decision, but we have that authority. That’s what I’m trying to express.
Senator Pratte: Would the same be applied to the NEB?
Mr. Steedman: In that case, in the provisions in the impact assessment act relating to an integrated panel, it’s clear that the report must meet all the needs that would be required to issue a certificate or order under the Canadian energy regulator act. So I don’t think that scenario would be likely. In any case, there would be specific conditions arising from that hearing and evidence that would set the requirements for the pipeline to be built and operated safely and in a way that protects people and the environment.
In addition, at that stage, it’s an approval typically for a corridor, for a new pipeline. There is a whole other process in the NEB Act and the CER act called the detailed route hearing process, where the location of the pipeline, the timing and method of construction are dialled in to meet the needs of landowners. So lots of additional technical review goes on. In addition, there are many technical checkpoints on the construction, operation and final leave to open. All of those things would have to happen before that pipeline was ever constructed or built. It’s a fairly robust system that would detect those kinds of fatal problems quite early, I think.
I don’t think the scenario is likely, but it’s a good question.
Senator Pratte: To finish with that, in the review panel, the NEB member, commissioner or the CNSC will always be in the minority, so the reality is that such a scenario could happen, no? Then a judicial review or —
Mr. Steedman: I think Dr. Velshi’s comments would apply there. There are technical steps that would ensure that such a decision could not become an environmental or safety issue.
Senator Pratte: Thank you.
Senator Wetston: I’m not so sure if it’s so great to see your faces, but I’ll follow up on Senator Pratte — except for my colleague on the right here, of course.
I would like to pursue what Senator Pratte was pursuing, only to the extent that, as I see it, we have a lot of independent administrative tribunals here. Am I correct that the consideration in the legislation is that the impact agency is an independent administrative tribunal, the CER is an independent administrative tribunal, the CNSC is an independent administrative tribunal, and the only party in this who is not is the Governor-in-Council? It’s the only party that doesn’t hear the evidence and has no expertise with respect to these matters, as I understand it.
Following up on the licensing issue, which I think is important, and looking at the litigation risk associated with it, I see three points of litigation risk immediately in this process. I want to understand it, because I think it’s important from the point of view of the legislation.
So two reports, I take it?
Ms. Velshi: One report with two sides.
Senator Wetston: Right, so two chapters.
I don’t want to complicate it, but when examining that situation, would there be judicial review of the decision of the impact agency in that circumstance? The report has been issued. Is there an opportunity for judicial review?
Ms. Velshi: We have people here from CEAA. I would ask them to comment on that.
On the licensing decision, yes.
Senator Wetston: I expect there is from the impact agency as well, so I don’t want to confuse things. So there would be on the licensing decision, and there would be on the cabinet decision as well? Would that be possible?
Ms. Velshi: I won’t comment on that.
Senator Wetston: Just to understand the licensing, then — forgive me for pursuing this, Madam Chair, but I’m trying to understand the framework — it seems to me that one cannot avoid the potential challenges that occur in litigation, obviously. I’m not suggesting that’s the case, but I’m trying to understand at what points along the decision-making process there would be this opportunity. I take it if you’re all independent administrative tribunals, there would be opportunities for judicial review in those circumstances.
Let me ask you a question, following up on the TMX decision. In that decision, does the legislation now provide for the fact that the impact agency or the CER or the CNSC are now representatives of the Crown, to avoid what occurred in the TMX decision?
Ms. Lapointe: The proposed CER act does identify the CER as an agent of the Crown.
Ms. Velshi: The CNSC has always been the agent of the Crown.
Senator Wetston: And what about the impact agency?
Ms. Lapointe: I believe they are the agent of the Crown.
The Chair: They are there.
Brent Parker, Director, Legislative and Regulatory Affairs, Canadian Environmental Assessment Agency: The agency has been and would in the future continue to be the agent of the Crown. In terms of the impact assessment process, the one major difference is that in the integrated review, the agency would be playing the role of Crown Consultation Coordinator, so there would be one point of contact for Indigenous groups and others to come into the process and be able to engage with the federal government.
Senator Wetston: Do you believe that would lessen the risk that occurred in the context of the TMX decision, in the context of the Federal Court of Appeal decision, for example? I realize you can’t speculate, but do you believe that might be the case?
Mr. Parker: I think if you walk through the structure of the legislation, it does provide for additional opportunity upfront to be able to engage in consultation and to structure some of that at the outset such that what we now call the phase 4 consultation, which transpired on TMX, there would be more of a window at the front end for that.
The other thing that I would say on TMX, in particular, is that one of the findings was that there was engagement between the Crown and Indigenous groups, but in that engagement there was no clarity around the government’s actions in relation to that with respect to accommodation.
One of the things we certainly are committed to, and that we do at the agency now, is empower staff to be out there and having those conversations, and using, in the future, the early impact assessment stage in order to get those issues on the table such that we can have real conversations with groups and begin to lay out what we think the accommodation measures or mitigations would be in the final decision.
Senator Wetston: Is the certificate of public convenience and necessity going to be managed in a similar way as the licensing from the CNSC in the process of the impact agency and the two reports we talked about, or the two chapters we discussed here? Do you know that to be the case?
Ms. Lapointe: My understanding is that it is an integrated review in which the decision coming out of the integrated impact assessment would inform both — the certificate.
Senator Wetston: Both licensing.
Ms. Lapointe: Both licensing, yes.
Senator Wetston: Thank you.
[Translation]
Senator Miville-Dechêne: I would like to ask the two organizations here with us a more general question about the social acceptability of the projects.
That may not be one of the criteria as set out in the act, but we know that, in terms of indigenous peoples, their point of view will be considered.
I know that we have talked a lot about the scientific and social aspects, but how can we measure and include them? As members of the panels in question, are you going to consider the really difficult issue of measuring social acceptability, so that, with major projects, you can report to the government?
[English]
Ms. Velshi: I’ll try. When it comes to social acceptability, one of the aspects of our mandate is dissemination of knowledge, and very much tied in with social acceptability is understanding the risks and whether they are acceptable. As part of our mandate, we try to make sure when it comes to dissemination of information that we are proactive and make that information accessible.
As part of our outreach to members of the public, we are out in the community on a regular basis. We have what we call CNSC 101, where we can talk about what the regulator is and what we do. We address their issues and concerns, and we talk about risks associated with nuclear.
Our website is very accessible. Similarly, at our hearings and proceedings, anyone can come and intervene, and we provide funding to facilitate that. So if a prerequisite of social acceptability is knowledge and understanding, we try our best to make sure we do that.
Senator Miville-Dechêne: However, sometimes it works and sometimes it doesn’t.
Ms. Velshi: Sometimes it doesn’t.
Senator Miville-Dechêne: If it doesn’t, how heavily would this be a factor in your decisions?
Ms. Lapointe: I’ll start and then I’ll turn to Dr. Steedman.
Our decisions take into account the public interest, which is looking at environmental, social and economic considerations. It is inclusive of all Canadians and looks at changes in societal preferences. It’s sort of an overall, broad way of looking at public interest.
Dr. Steedman will talk a bit more about the specifics around sustainability.
Mr. Steedman: National Energy Board hearings are designed to make sure that Indigenous nations that may be affected by a project have a chance and are supported with participant funding to make their concerns known. They are rights holders in the process; they are not just stakeholders.
We find, in the more technical kind of landscape impacts of a pipeline, that we get good evidence on local concerns, such as historical sites, areas of medicinal plants, hunting, trapping, et cetera. We get that information quite reliably from First Nations.
The NEB, for 10 or 12 years, has been having traditional oral evidence sessions where elders or knowledge holders come in. They will often talk about history but also about the connections to these kinds of things that may, in some cases, be mitigated by routing of the line or through other kinds of biophysical things.
Senator Miville-Dechêne: However, on Energy East it was more than that. It was the general population and the social acceptability. Can you address that?
Mr. Steedman: I can only say that a proper impact assessment will ensure that everyone has a chance to make those needs known. Information out is part of that.
We find a big issue is often disagreement on the likelihood of accidents, for example. So we can have a technical, scientific basis for that, but if that is not trusted as a reality, that colours everything about the project. Some of that isn’t just going to be sorted out.
The process, in essence, done properly now and under the new bill would make sure those concerns are reflected and explained in the reasons. So the nations want to see their comments reflected or acknowledged somehow in the decision. They want to know there’s meaningful engagement and it was meaningfully considered.
There’s no guarantee at all that they will all be satisfactorily met or accommodated. That basically gets wrapped up in our recommendation to cabinet, and it becomes more than a scientific or biophysical kind of recommendation.
The Chair: Thank you very much. We will now start our second round.
Senator Cordy: I was left with the impression by comments somebody made that both pipelines, TMX and Energy East, were squashed by the government, when in fact we know that the order-in-council made the decision to approve TMX. It was the Federal Court of Appeal. Whether or not we agree with the court, we’re pretty lucky in Canada that we can go to the court system if we’re not happy with something. We know the Energy East project was withdrawn by the proponent. So in neither case were these stopped by the government itself.
Senator Patterson: I didn’t suggest that, senator.
Senator Cordy: I just said “my impression.”
Senator Richards: I asked for clarification of that.
Senator Cordy: Thank you very much, Senator Richards, for asking for the letter and for the clarification.
In doing research on the bill, I’ve heard concerns that Bill C-69 will allow members of the new Canadian energy regulator and the Canadian Nuclear Safety Commission and the offshore petroleum boards to participate in the impact assessment. The concern that has been expressed, and that I also wonder about, is if you’re involved in the approval process, how can you then be part of the regulatory process? Is there not a conflict? Can you help me with that?
Ms. Velshi: Historically, we have been involved in some way or fashion in environmental assessments, either having done them ourselves or supporting other agencies in doing so. There is the importance of accessibility to our expertise and knowledge, and making sure there is a seamless transition from the environmental assessment over to the licensing and life-cycle regulation is also critical.
So if the concern is that by having been involved in the early planning stage our independence or our oversight role is somehow compromised, I don’t share that concern at all. If anything, it strengthens us to carry out our function as a life-cycle regulator, having been involved up front and being able to have provided our expertise and our know-how.
Senator Cordy: What about you, Ms. Lapointe?
Ms. Lapointe: I fully concur with Ms. Velshi.
The assessment and review that a project goes through is really about having a fair, transparent, timely and accessible process.
In terms of projects that are found to be in the public interest and are approved, the role of the regulator is around preventing harm to people and the environment and looking at how that can be done very well. Making sure there is that involvement from an expertise perspective is important to make sure that the conditions and the design are consistent with the regulatory framework and that we can carry that out and ensure that pipelines are safe.
Senator Cordy: Thank you. That’s very helpful.
In response to another question, I wondered whether or not your advice to cabinet was not transparent and was private. Is it not true that any advice you would give to cabinet, regardless of the government, would be confidential information?
Ms. Velshi: That is correct. That question was in terms of, I believe, the project list and advice given. If the concern was around the public having an opportunity to hear and express, the process is that there will be public involvement and engagement and that it will be very transparent.
Senator Cordy: That would be all true; the confidential aspect to cabinet will always be confidential.
Ms. Velshi: That is true.
Senator Cordy: I’d like to go back to Senator McCallum’s question about the orphan wells. I asked about them earlier. Her question was specific to Indigenous people. It’s like they’re in limbo. It’s provincial jurisdiction, but if you look at the Indigenous lands, it’s under the umbrella of federal responsibility. It just seems that they’re left out and that nobody is going to be responsible for the orphan wells. I think Mr. Fox spoke about it. Is that not a concern? Perhaps it can’t be directly within this bill, but is it something this committee should be looking at, at a later date? I agree that it seems to be “not my problem” at both levels of government. Maybe you don’t want to comment on that.
Mr. Fox: I will reiterate that orphan wells in Canada south of 60 in those provincial jurisdictions are not within the responsibility of the National Energy Board. So we don’t have a solution for Senator McCallum’s issue.
Senator Cordy: Thank you.
Senator MacDonald: I want to go back to the question asked by Senator Richards on the National Energy Board. I want more information on this.
Minister Carr came and spoke to senators last year, and he said the Energy East cancellation had nothing to do with the government action. I will quote him:
The proponent decided, for its own reasons, to withdraw the application.
Perhaps you can you clarify this for the committee. Did the upstream and downstream emissions tests imposed on the Energy East project occur before or after the present Trudeau government came into power?
Ms. Lapointe: After.
Senator MacDonald: Can you describe how that test is applied to a pipeline project such as Energy East?
Ms. Lapointe: We can certainly describe how that test was applied. It was applied to a couple of projects.
Do you want to speak to it?
Mr. Steedman: Thank you for the question, senator.
A key point is that an independent panel was setting the list of issues for that proceeding. It was in the context of the interim measures that had been established where Environment and Climate Change Canada was quantifying emissions associated with upstream emissions.
The National Energy Board has required, in recent history, quantification of greenhouse gas emissions associated with the project construction operation. That has always been part of the record and was built into the context of our advice.
The upstream piece, which is most directly related to Canada’s international climate commitments, has been quantified under the interim measures for the last several years on several projects. We don’t really know what would have happened next on the Energy East proceeding because it didn’t go ahead.
Senator MacDonald: Does Bill C-69, then, allow for the government going forward to impose upstream and downstream tests on the pipeline?
Mr. Steedman: The way we read the factor there is we would need to provide and hear evidence on greenhouse gas emissions that were relevant to Canada’s climate and environmental commitments. I’m speculating at this point, but we would see that mostly as upstream production.
In the case of export oil pipelines, of course, 80 per cent of emissions are associated with combustion by the downstream users, so that is not likely, in large part, to be part of the Canadian commitments, but we don’t know. Those issues may come up in different ways in different hearings. We would anticipate, based on the way the bill is drafted, that we would routinely implement the stuff that’s now in place in the interim measures, which is quantifying, to the extent possible, upstream emissions associated with the project.
Senator MacDonald: Thank you.
Senator Doyle: The Newfoundland Offshore Industries Association, NOIA, has requested that offshore exploration projects should not be subject to designation under Bill C-69. Do you agree that they should be pretty well exempt from designation given the fact that we have longer wait times than the U.K. or Norway right now?
Ms. Lapointe: It’s really a policy choice in terms of the designated project list.
Senator Doyle: I see. What about for development projects? Should they automatically be exempt under Bill C-69 given the long waiting periods that we have right now?
Ms. Lapointe: It’s difficult to speculate. The decision for the designated project list is really in the hands of the government.
Senator Doyle: So that wouldn’t be in your hands at all?
Ms. Lapointe: No.
Senator Doyle: It’s government totally?
Ms. Lapointe: Yes.
Senator Doyle: Thank you.
Senator Mitchell: There’s some controversy about the inclusion of consideration of climate change in project reviews. It strikes me that it’s important to ask the question in reverse. This question has been asked: Why are climate change factors being considered in reviews? I would ask the reverse question: What kind of credibility would a review of a fossil fuel-related project have in today’s context if it didn’t consider climate change factors?
Ms. Velshi: In the environmental assessments conducted by the CNSC to date, climate change is included as one of the factors we look at as far as the nuclear projects’ impact on climate change but also the impact of climate change on the facilities themselves. For nuclear facilities, for instance, this past summer, with very high temperatures, plants had to shut down. The impact of climate change is a key part of our assessment.
Senator Mitchell: Thank you.
Ms. Lapointe: As Dr. Steedman said, we do look at GHGs in terms of the assessments we do now, and under the new legislation there is clarity as to what those factors would be.
Senator Mitchell: We hear regularly the sentiment — and it’s important — that pipelines should be evaluated based on science. There’s a huge body of credible science on climate change. It only makes sense, doesn’t it, that if you’re going to consider the science of pipelines, you would also, if you believe in science, want to consider the science of climate change in the context of a project related in some way, as these are, to fossil fuels?
Ms. Lapointe: I think the intent is the factors would be specific to a specific project and would be looked at accordingly.
Senator Mitchell: Thank you.
Earlier today there was an implication that the project list is somehow surreptitiously designed and developed. I think it’s easy to misunderstand that this project list would be a list of projects. It’s not, is it? It’s a list of parameters that would define which kind of project would be designated so that companies and others can quickly see right from the get-go whether their project would qualify as designated or not designated?
Ms. Lapointe: I know a discussion paper on the project list had been issued early on. I can’t speak to or speculate exactly how that project list would be laid out. That would be a question for the Canadian Environmental Assessment Agency.
Senator Mitchell: But the one that exists today is purely public.
Ms. Lapointe: Yes.
Senator Mitchell: I want to go back to the NEB for a moment. It’s important to draw this distinction. Much is made of the alleged fallacy of having politicians make decisions because politicians will inherently delay or deny. Earlier today, we found out that that hasn’t happened.
It’s very interesting to note that a major delay occurred in the Energy East review because — and I don’t mean to be critical — bureaucrats working in the NEB decided to have a meeting offline with the proponent, which tainted the process. It wasn’t a politician who made that decision, was it? It was the bureaucrats who — some would say they apparently are never able to make mistakes — made that critical error. So anybody can make a mistake.
Ms. Lapointe: We were applying a larger engagement strategy, and certainly we learned from that experience. The CER legislation does have a clear separation between the commission and the regulator, which will allow for a better frame for us in how we apply engagement.
Senator Mitchell: Am I right to say that the head of the NEB at that time and today is a former extremely senior — basically the head of the equivalent PCO — deputy minister from Alberta from 2005 to 2014 before he became the head of the NEB and made that decision?
Ms. Lapointe: You’re asking who our chair and CEO is?
Senator Mitchell: Just saying. Thank you.
Senator Patterson: By the way, I want to say that I have the highest regard for the Canadian Nuclear Safety Commission and the National Energy Board and their stellar work and reputation. Yours is 70 years, I believe.
Regarding harmonization with the provinces, I’m quoting your former eminent CEO, Dr. Michael Binder, talking about Bill C-69:
. . . harmonization with provinces in the licensing of uranium mines has been beneficial and efficient in avoiding duplication. We believe the new IA [impact assessment] regime should allow for cooperation and substitution with provinces.
And the provinces, of course, own the uranium resources. Do you agree with Dr. Binder’s assessment?
My concern is that sections 39 and 43 of the impact assessment act will prohibit the minister from allowing for substitution for all projects regulated under the Nuclear Safety and Control Act, as well as uranium mines and mills. You may be aware that stakeholders like the Government of Saskatchewan have criticized these substitution provisions in the impact assessment act. Could you comment?
Ms. Velshi: Let me start by saying that I am in total alignment with my predecessor, Dr. Binder’s, position. The CNSC has had a very successful relationship with the Province of Saskatchewan, as we have worked jointly when it comes to the oversight of uranium mines.
I’ll ask Mr. Rinker to provide more details around that.
Senator Patterson: I want to know about substitution under Bill C-69. It’s worked great in the past.
Mr. Rinker: In Saskatchewan in particular, as an example, a number of very large joint environmental assessments for uranium mining occurred between the federal government and the provincial government. We are still reaping the benefits of those very good joint assessments today.
The outcomes of those assessments were some of the world’s renowned waste management practices in mining, a mining sector that has been 100 per cent complaint with the Metal Mining Effluent Regulations, and targets for an Indigenous workforce, which led to the creation of a school in northern Saskatchewan to make sure it’s an educated workforce.
Senator Patterson: It’s all good, but what about going forward?
Mr. Rinker: We would like to have an act that enables those cooperative joint assessments.
Senator Patterson: Does it, though? Do sections 39 and 43 not prohibit the minister from allowing substitution? If you don’t have an answer handy, I think it would be important for the committee to get a thoughtful answer on that.
Ms. Velshi: Unless folks from CEAA want to comment on that.
Senator Patterson: Well, I’m running out of time here.
Mr. Parker: I could answer that question, if you like, or we could follow up in written form.
Senator Patterson: I’d just like time to ask my second question. Have you got a short answer?
Mr. Parker: Yes. Substitution is not provided for under the current act or under the impact assessment act for certain types of projects. The larger projects that in the case of these two life-cycle regulators would automatically go to review panel, the cooperation tool for those is the joint panel that Mr. Rinker was talking about.
Senator Patterson: But not substitution?
Mr. Parker: Substitution is not available as a tool for those.
Senator Patterson: Thank you for the clear answer.
Ms. Velshi, in answer to a question from Senator Woo about the new regime and the seamlessness of integrating impact assessment and licensing, you said that seamlessness can be guaranteed if the same panel did the impact assessment and licensing. My question is this: What does Bill C-69 say about the possibility of the same panel doing impact assessment and licensing? Is it a “shall”? Is it a “may”? What does the bill say?
Ms. Velshi: In my reading of the bill, it’s not explicit. It doesn’t preclude it. It doesn’t explicitly state that it would also be a panel constituted under the NSCA, but it doesn’t preclude it.
Senator Patterson: Thank you.
Do I have more time?
The Chair: I want to give time to the critic of the bill to ask the last question.
Senator Tkachuk: Subclause 9(1), “Designation of Physical Activity,” is interesting. It states:
The Minister may, on request or on his own or her own initiative, by order, designate a physical activity not prescribed by regulations made under paragraph 109(b) if, in his or her opinion, either the carrying out of that physical activity may cause adverse effects within federal jurisdiction or adverse direct or incidental effects, or public concerns related to these effects warrant a designation.
I have a number of questions for both of you. Can you explain this subclause to me? I’m curious about the words:
The Minister may, on request or on his or her own initiative, by order, designate a physical activity . . . if, in his or her opinion . . . [it] may cause adverse effects . . . .
How does the minister reach that opinion? Is it scientific-based? There’s certainly nothing in the clause that says it has to be, or does it have to be, or is it just the whim of the minister?
Ms. Velshi: So that’s a government decision. All I can say is the existing CEAA 2012 has that same provision in it.
Senator Tkachuk: Has it been used?
Ms. Velshi: I don’t know.
Mr. Parker: I can speak to that. To the first part of your question, the language in subclause 9(1) obligates the minister to respond to requests that would come to her. This was an issue that I think we spoke about yesterday to some degree. The purpose of the language around physical activities that “may cause adverse effects within federal jurisdiction or adverse direct or incidental effects” ensures that this piece of legislation would stay within federal jurisdiction.
With respect to the public concerns, those concerns would typically come to us through a letter and then would be filtered through the subsequent subclause, (2), which looks at the factors the minister would consider, and those are the rights of Indigenous people and any relevant regional assessment that may have been done.
To your last question about whether it has been used, it has been used. I can provide numbers on it as a follow-up, but we don’t get a lot of requests. I think over the last six years, since CEAA 2012 has come in, there have been perhaps 60 or so requests. Of that 60, a small number, I think in the range of three or four, have been designated.
Senator Tkachuk: Because of the expense and uncertainty associated with the designated project list, people doing projects don’t want to be designated, obviously, so they don’t have to go through all this process. So if it’s not designated and it goes through your processes, what will be missing?
Let’s say you’re doing a project. Other projects are designated, but the one you’re dealing with is not, so you end up approving the project. What will that project be missing that the designated project would do? What would be missing? Is the industry going to do it or you’re going to do it?
Mr. Parker: Maybe I could start by describing a couple of things that are different.
Senator Tkachuk: Are you a member of the Alberta energy board or the Canadian energy — sorry. I just want to make sure.
Mr. Parker: As part of the Canadian Environmental Assessment Agency, the measures in Bill C-69 that relate to the impact assessment act are somewhat different than our current process and would be different than the projects that would go through a non-designated review, in that there’s an early planning phase that provides for additional engagement and many of the products at the end of that process that we were discussing yesterday around the tailored impact statement guidelines, the Indigenous engagement plan and public participation plan.
I would say in terms of a comparison of the process, the major projects that would be on the designated list would come through that process and would benefit from that level of engagement. As we discussed earlier, there’s a different sort of decision point at the end where those projects would end up going to cabinet for decision, which is different than the National Energy Board’s approach.
Senator Tkachuk: Let’s say a approach goes through the designated process and a project goes through the non-designated process. What difference is there? What is the end result? Do all of the same issues get resolved — environment, financing, investment? All of those issues get resolved in the other process, so what is the difference? What does the designated project have that the regular process does not have?
Mr. Parker: In the impact assessment act, there are some engagement processes that would be different. There is a consolidated review of the broad spectrum of those different issues, and that is parallel to what would be reviewed under the energy regulator act. I think one of the major differences is the engagement at the front end and the decision-making process that would happen at the point in time of the decision.
Senator Tkachuk: It would just take longer?
Mr. Parker: Yes.
The Chair: Thank you very much. We have concluded this panel.
Do you want to add something?
Ms. Velshi: You were asking about the difference in the assessments. From the CNSC’s perspective, we would have a slightly narrower focus of assessment, so there would be certain factors that we haven’t historically looked at. We don’t necessarily look at the economic impact. We talked about gender-based considerations. But certainly on health, safety, environment, security, the assessments would be the same.
Senator Tkachuk: Would be the same.
The Chair: Thank you very much for your testimony. Thank you, senators, for your questions.
Senator LaBoucane-Benson: Can I make a request for information from the NEB before we close?
The Chair: Okay.
Senator LaBoucane-Benson: I would like, if possible, it would be helpful to me to have three case studies prepared: one for Trans Mountain, one for Northern Gateway and one for Energy East. The questions I would like answered are reflective of what we were talking about today: What was the nature of the impact assessment for each project? Was the clock stopped? Who stopped it? Why did they stop it? How long did they stop the clock for? What were the issues that arose? How were they resolved? If they weren’t resolved, why? And what was the outcome? Most importantly, how would that be different if they went under the Bill C-69 process?
It would be helpful for me to understand that. I have heard from proponents and different people. I would like a case study prepared. Thank you.
Senator Patterson: What a great idea.
The Chair: Thank you very much.
Senators, we have another panel.
[Translation]
Welcome to this second part of the meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. We are continuing our study on Bill C-69.
From the Nunavut Impact Review Board, we now welcome Elizabeth Copland, Chairperson, and Ryan Barry, Executive Director.
Thank you for joining us.
[English]
We are looking forward to your testimony, after which senators will ask questions.
Elizabeth Copland, Chairperson, Nunavut Impact Review Board: Good afternoon.
[Editor’s Note: Ms. Copland spoke in Inuktitut.]
Thank you for this opportunity to appear before you on behalf of the Nunavut Impact Review Board. My name is Elizabeth Copland. I’m the chairperson for the Nunavut Impact Review Board. Appearing with me today is Ryan Barry, Executive Director, Nunavut Impact Review Board, or NIRB.
We have provided the Standing Senate Committee on Energy, the Environment and Natural Resources with a written brief setting out our comments and observations with respect to Bill C-69. Knowing that your time is limited, the focus of my opening statement will be to highlight the key aspects of our submissions and to make ourselves available for questions.
As a member of the Nunavut Land Claims Agreement transition team, I have been involved with the impact assessment in Nunavut since 1994. I have served for about 20 years with the Nunavut Impact Review Board as a nominee of the Government of Canada, including as chairperson appointed by the minister on the nomination of my fellow board members.
I have chaired numerous public hearings for the NIRB for major mining developments across all regions of Nunavut, including the Jericho Diamond Mine, the Doris North gold mine, Meadowbank, Whale Tail deposit and Meliadine gold mine, the Mary River iron mine, the Kiggavik uranium mine and the Back River gold mine.
Throughout my time as chairperson with the NIRB, we have worked closely with the other institutions of public government established under the Nunavut Agreement, and we have developed cooperation agreements with the National Energy Board, the Mackenzie Valley Environmental Impact Review Board and other agencies responsible for transboundary impact assessments along Nunavut’s borders.
With me today is Mr. Ryan Barry, our executive director. Ryan has worked with the board since 2007 in various technical capacities. Since 2011, he has served as the executive director, leading our staff of 25. Our office is located in Cambridge Bay, Nunavut.
At the outset, I would like to remind the committee that the regulatory regime established under the Nunavut Agreement is unique. It consists of a single integrated resource management system for land use planning, impact assessment, and land and water licensing in the Nunavut Settlement Area. Within this unique structure, the NIRB is responsible for impact assessments.
As noted in our submission, although Bill C-69 will not directly apply to the NIRB’s assessments under the Nunavut Agreement, as the Nunavut Agreement area shares borders with many other Canadian jurisdictions, the transboundary and interjurisdictional aspects of Bill C-69 are particularly important to Nunavut Impact Review Board.
In our submissions, the NIRB made the following points.
The NIRB supports the express recognition in the preamble in Bill C-69 of cooperation and coordination between the impact assessment agency and other assessment authorities, such as the Nunavut Impact Review Board.
The board also endorses the importance of regional and strategic assessments that are noted in the preamble to Bill C-69. As the board is currently undertaking a strategic environmental assessment in respect of potential oil and gas development in Davis Strait and Baffin Bay, the board shares the view that these forms of assessment are important and necessary.
The board has offered a few comments about balancing inclusive and broad public participation rights with some certainty regarding what is meant by “the public” and has offered some of the NIRB’s best practices for engaging communities early and transparently.
The board has also offered a comment about the very detailed list of factors that the impact assessment agency must consider, based on our experience with applying this type of list to the board’s review of projects. The board has also identified some of the NIRB’s key practices that have, in our view, contributed to our positive track record of completing thorough assessments in a timely, efficient and inclusive way that meaningfully incorporates the wisdom of our elders, the concerns and hopes of our communities, and the expertise of scientists and regulators.
In closing, the board thanks the honourable members of the Standing Senate Committee on Energy, the Environment and Natural Resources for this opportunity to appear and present our comments with respect to Bill C-69.
Subject to the committee’s questions, those are the board’s submissions.
The Chair: Because this panel is here for only 45 minutes, we will limit the time for questions to three minutes per senator. I need to leave at 12:50, and Senator MacDonald will take the chair for the last 10 minutes.
Senator Cordy: Thank you very much for being here. I have just received some research on the Nunavut Impact Review Board. I think it’s a great idea that you are really taking ownership of what happens in your region, so thank you for that.
You said you agree with the recognition of cooperation and consultation that is in the preamble of this bill. You spoke about the importance of the impact assessment agency and that you hope to be working closely with them. Do you think that Bill C-69 will allow more cooperation and consultation in relation to impact assessments than is currently in legislation related to a project?
Ryan Barry, Executive Director, Nunavut Impact Review Board: Thank you very much for the question. From our perspective only, being familiar with the impact assessment process in Nunavut, our process is very heavy in public engagement. In the past, it has been more so than the federal processes, generally speaking.
With that said, we really can’t comment on the difference between the past regime under the federal assessment system, since it has not applied in our jurisdiction since 2008.
Senator Cordy: Were you consulted? The federal government did consultations for two years, I think. Was your region consulted at all on what changes should be made to the process?
Mr. Barry: That’s a great question. I’ll handle that.
We were not directly consulted on what changes should be made so much as what our experience has been with regard to doing consultation with Indigenous groups, in particular. We have had some direct conversations with staff at the Canadian Environmental Assessment Agency on that.
Senator Cordy: Thank you very much.
Senator Patterson: First, the NIRB has done an amazing amount of work. It has reviewed, I think, eight major projects in about a dozen years — not all of them were approved, by the way. It was done effectively, efficiently and, more important, with the credibility of the public, Inuit, the Government of Nunavut and the federal government. You do impact assessment, licensing, and life-cycle monitoring in over 20 per cent of Canada in a very sensitive environment. Your board is Indigenous, reflecting the majority Inuit population of Nunavut.
It has been asked whether a life-cycle regulator would be placing themselves in conflict. They also conducted the impact assessment. In fact, you are both the impact assessor, the licensor and the life-cycle regulator. Could you explain how you make that work and why it might be beneficial to perform both roles?
Ms. Copland: For technical questions, I’m going to get our executive director to answer, please.
Mr. Barry: Thank you, senator, for those remarks and the questions.
In our experience, the process in Nunavut, as you know, is unique. It’s very holistic in nature. It’s unique across Canada for the role we play in assessments of small to large projects and monitoring for the life of approved projects.
In our experience, we haven’t seen a conflict in the decision-making points that go along between environmental assessment and then regulation afterward. If anything, it just increases the familiarity with the projects in question.
The way our system is designed means that things that had less certainty during the environmental assessment — when they are on the ground and projects are actually operating, the precautionary approach we take yields new information that allows us to adjust in terms of approval as needed as the project actually goes ahead. We have many instances where that has become necessary, where something in theory seemed like a good idea and then goes to licensing, but it doesn’t work as well as expected. So we go to an alternate means of still allowing the project to go ahead but making sure the environment is protected.
Senator Patterson: You said in your submission that the mandatory language of clause 22, from your experience, may have the effect of limiting the ability of an agency to undertake decision making and may require an agency to document factors that may not be relevant to a specific assessment. Could you elaborate on that, because your board takes a different approach than in Bill C-69?
Mr. Barry: Thank you, senator. With our experience, previous to our own legislation coming into force, we just had the direction of the Nunavut Agreement. It set out a series of, I believe, 8 factors that had to be taken into account during an environmental assessment. When our legislation went through, that number went up to 16 factors. As we see in the bill, there are quite a few more factors for the federal process.
Each time it gets more specific, it balances against the discretion of the environmental assessment authority. Sometimes, for certain projects, because there is such a diversity in projects, we do see that when things are on the list, they have to be considered. You have to note how they have been considered, even if they aren’t a relevant consideration. Sometimes that can lead to more uncertainty for the public about whether or not that is a relevant consideration for the project in question, and essentially more paperwork and effort on our part to demonstrate that appropriate consideration was given, even if it wasn’t relevant for that project.
Senator Patterson: Thank you.
Senator McCallum: Thank you for your presentation. I want to talk about the jurisdictional issues and the transboundary aspects. I know that it also happens with hunting and trapping rights in the North, so when you look at the border issues that you are foreseeing, could you give us examples?
Ms. Copland: For example, when we did the — was it Doors North? We invite our neighbours from the N.W.T. or maybe from southern Manitoba. We share hunting grounds, and we may have questions on caribou, on trapping. We invite those parties to come to a public hearing, and we hear their concerns.
Senator McCallum: Is this new bill going to put you at a disadvantage, or do you expect problems from it?
Mr. Barry: Explicitly, no, we don’t expect problems from the transboundary coordination. Nunavut, as a unique jurisdiction, has more neighbouring jurisdictions than any other Canadian jurisdiction. So our practice has been to work with the legislative tools and then enter into memoranda of understanding with other jurisdictions and authorities, like the National Energy Board, which we have worked with and coordinated with in the past, as well as the Canadian Nuclear Safety Commission and the Canadian Environmental Assessment Agency. We are confident that we can continue to do that under the bill.
Senator McCallum: You said that the board shares the view that the forms of assessment in Bill C-69 are important and necessary. Can you comment further on that?
Mr. Barry: I’m going from memory. I believe the comment was with regard to regional and strategic assessments in particular.
As has been noted, we are undertaking our first strategic environmental assessment in Nunavut. That form of assessment isn’t spoken to in our legislation. It is considered to be another function that was assigned because we were seen as the best body to do it.
As an assessment authority, we often do see the value in doing things at a regional and strategic level to help focus project-specific assessments. In Nunavut it’s a relatively new thing. It is complementary to land use planning as well, and we are finding that it’s very useful for our jurisdiction. We see it on the federal level, particularly with past experiences, as helping to narrow the scope of issues that needs to be looked at during a project-specific assessment, if done correctly.
Senator Mitchell: I have a question, to pick up on one of your comments, which is that you are heavy on public consultation. Of course, that’s key to the process we’re developing more broadly in Bill C-69. Can you give all of us an idea of what techniques you use and, in particular, how you determine who actually appears before your review processes?
Senator Patterson: Good question. Thank you for that.
Mr. Barry: I’ll just mention that in our jurisdiction, there is nothing that compares to boots on the ground, getting into communities regularly to talk to them about proposed development and getting their perspectives. We have a very open and inclusive process.
When it comes to determining who stands before the board at a public hearing, we do have rules of procedure that deal with standing. For some assessments, we have had quite a bit of public interest from all over Canada and the world. Sometimes those submissions can be not relevant considerations for the project in question, and there can be many hundreds of submissions that duplicate one another. We have a standing test where the board can look at the applications and determine the best way to hear those interventions or to dismiss them, so we have discretion on the matter.
Senator Mitchell: What techniques do you use? When you say “boots on the ground,” do you do town hall meetings? So it’s extensive and takes a long time? Are you exhaustive in doing that, or are you driven by deadlines?
Mr. Barry: We’re certainly exhausted in doing that.
Nunavut, again, is unique in that we don’t have a prescribed deadline for finishing our assessments, yet we hold ourselves to a high standard and we fit within the standard timelines across Canada. Most assessments, from start to finish, are done well within two years, and usually within 18 months, of our own timeline, and you add to that the proponent timelines for complying with information and that sort of thing.
Senator Mitchell: So without even legislated timelines, you’re able to manage to a deadline?
Mr. Barry: That is correct.
Senator Tkachuk: Why don’t you come and run ours?
The Chair: You said your process for consultation is very inclusive and large. Is there any exception, meaning iIs there anybody that you don’t receive comments from?
Mr. Barry: I would have to say our practice is that oftentimes we will have to get federal government departments that have expert advice to participate in our process, because they might not be used to doing so. The Canadian Transportation Agency, when we were assessing a railway, had not participated in our processes and didn’t know of us in the past. We couldn’t blame them, but we had to explain why we needed their experts at our public events and to be part of our consultation exercises.
The Chair: Thank you very much.
Senator Richards: Thanks very much for being here. This is a question because I’m a hunter and I come from a hunting and fishing territory. Is your hunting and trapping under federal jurisdiction, or is it territorial jurisdiction?
Second, is global warming affecting the migratory herds, the caribou? And how is it affecting the trapping?
These are kind of personal questions, I know, but I think they are of interest.
Ms. Copland: I’ll answer the global warming question, or climate change.
From what we hear about some studies or surveys, the caribou herd is being affected. That could be one factor. We hear that the sinking permafrost is affecting hunting and trapping.
Senator Richards: Do you see that it is?
Ms. Copland: Myself, I see it with the caribou and with the permafrost.
The trapping, I haven’t seen. Ryan may want to comment.
Mr. Barry: Generally speaking, the Arctic experiences global warming and observes it. We have many experts who say that we see it more readily and more pronounced than other jurisdictions.
With regard to your question on the trapping aspect, it depends on the species in question. Most species are regulated by the territory and some are regulated by the federal government, so that dictates who gives the permits and that sort of thing.
Senator Richards: What about hunting, sir?
Mr. Barry: The same answer.
Senator Richards: Thank you.
Senator Simons: I am embarrassed to admit that I didn’t know that the NIRB existed until we started doing this work. I’m very impressed with what you have told us.
Some of the projects you have approved must have been fairly contentious. I wonder if you could tell us a story about one of the most contentious projects you had to deal with. How did you build the consensus to go ahead? This is the great challenge we face: How do we get to a point where people feel consulted enough and respected enough that a project can go ahead? How did you do that?
Ms. Copland: One example I will give is Baffinland. We went to a number of communities and listened to the public and the elders. We heard a lot of pros, that it will help the economy and will help many things. What I heard and felt is that the elders, even though they treasured the land and said don’t change it, they sacrificed their needs so their young could work.
Between the board members, we had to agree amongst ourselves who we would listen to. The elders and the young people who needed work? We had to have a balance, so we came up with a bunch of terms and conditions: Okay, there will be jobs, but there are things you have to abide by. That’s one example I can give.
Senator Simons: Have there been cases where you’ve turned down a project not just because of environmental concerns but because of sociological and cultural ones?
Ms. Copland: An example I’ll give is that the Nunavut Impact Review Board did not approve an application for a uranium mine outside of Baker Lake because no clear time was given for developing the project; therefore, there was not enough confidence in the accuracy of the impact predictions.
Senator Simons: Have there been cases where a project has been controversial and when it went ahead there was still a lot of concern about it, but where people changed their minds? Or the other way around, for that matter?
Ms. Copland: I would say with Baffinland, support and no support. We’re still hearing the pros and cons about the application with other mining companies as well.
Mr. Barry: One thing that stands out for us in terms of building that trust, it’s building the understanding of what’s being proposed, what would be mitigated and if it is reasonable. That’s really what we focus on rather than us trying to build support for a project.
I think what helps us the most in our jurisdiction is that our board members, as Senator Patterson noted, are Inuit. The public sees themselves in the board members. Typically, when we get to the end of our process for a very contentious project, the comment we’ve heard most often, which is still rewarding as a practitioner here, is an elder saying to the board: “We realize you have an important decision to make. We may not agree with your decision, but we respect and stand behind it.”
Going back to our role as a life-cycle regulator to some degree, it also helps that they know that if a project does go ahead, we will be there to monitor the effects of the project and change the terms of approval if it becomes necessary.
Senator LaBoucane-Benson: I want to thank you so much for your presentation. There’s so much common sense and old school community engagement in what you’ve presented. It seems like you have struck a balance to ensure that the communities and people who will be affected the most have the loudest voice.
Would you describe your standing test for us and how you manage that balance?
Mr. Barry: We have a process where parties will apply for intervener status in our public hearings. They fill out a fairly basic application form describing their planned intervention, how they stand to be affected by the development, what their interest is and what area of expertise they’re providing for the board’s information.
Those are then subject to random public comment, where others get to weigh in on the validity of that expertise. Then we get to understand whether there is any duplication between interventions or anything that would be vexatious or not really relevant or germane to the board’s decision making.
The board itself, after having reviewed those applications, will then publicly announce which of those are granted, and if any are not granted, they will explain why, for the reasons I mentioned.
Senator LaBoucane-Benson: Would you share with us, through the clerk, how that works?
Mr. Barry: Absolutely, we will send a follow-up submission.
The Chair: Have you compared your process with Bill C-69, taking into considerations all the factors in the bill, which are cumulative effects, health, social, economic and climate change? Which factors do you consider?
Mr. Barry: Thank you for the question. Speaking generally, we do take into account the same factors that are in the proposed legislation. The difference is that they’re not always explicit legislative requirements for us to do so. We do so when it’s relevant. For example, we’ve had gender-based analysis in our assessments when deemed relevant for particular issues.
We work with many Canadian jurisdictions to stay abreast of the current trends and science of impact assessment and where it’s going to ensure that when we use our discretion we’re using it wisely and taking into account any matters that are relevant for us.
The Chair: You said that the population trusts you will continue monitoring the projects. How many people do you have to continue to monitor the projects?
Mr. Barry: Never enough. The role for us is very distinct. It can’t be duplicative of what other regulators do.
By and large, our monitoring focuses on our own authorization, particularly the terms and conditions of authorizations that are separate and distinct from other authorizations for the projects. The number narrows a bit. We have about 10 technical staff at the moment who do monitoring for the territory.
The Chair: Thank you.
Senator Pratte: Does your standing test — and we’ll see the document — mean that someone has to be directly affected by the project someone to get intervener status? Or can it be, let’s say, a Quebec environmental group that is interested in the mining project in Nunavut because they think it’s good or bad, but they’re not directly affected?
Mr. Barry: It’s not just directly affected. It’s also having expertise or information that would be valuable for the board’s consideration. Those are really the two areas. If there are groups that aren’t affected and don’t have a unique perspective to provide to the board, the board will be able to say they don’t get time during our public hearing to provide an intervention.
Senator Pratte: Or they can send emails or a brief.
Mr. Barry: I should mention that we take any and all submissions to be included in our public record. How they are weighted when the board is doing its consideration is, again, a common-sense approach of looking at who is directly affected, who has specialist knowledge, their credentials and their applicability in the situation.
Senator Pratte: In Bill C-69, there are processes that in some cases already exist in CEAA 2012 but are changed a little bit, like substitution, joint review, obviously, and delegation, which is a new concept in the bill. Have you looked at these? Is there potential, do you think, for working with federal regulators, for instance, or the new impact assessment agency?
Mr. Barry: We have looked at them in trying to consider how they might apply to our situation.
In the Nunavut Settlement Area, it’s different. It’s set through the Nunavut Agreement, a constitutionally protected document that is paramount over other legislation.
By and large, within our borders, our assessment process is the one that goes ahead and is the lead process in all cases. Generally, we look forward to working with other federal regulators to the extent that we can to coordinate processes, but we are the only impact assessment regime for the Nunavut Settlement Area.
Senator Pratte: Even if a federal jurisdiction is concerned, you’re the assessment agency?
Mr. Barry: That’s correct.
Senator Pratte: Thank you.
Senator Cordy: I’m wondering about how you make up the board. I know it is all Inuit, which is really great. Ms. Copland, when you spoke, you said you are the chairperson appointed by the minister but on the advice of the other board members, which is a great idea.
How is the board made up? Is it where the members are situated within Nunavut? Could you explain that?
Ms. Copland: There are three regions. The Kivalliq Inuit Association will nominate a board member. In Baffin, the Qikiqtani Inuit Association will nominate a board member. Then Nunavut Tunngavik Inc. will nominate a board member. These names are forwarded to the federal minister, who will make the appointment. There are nine of us.
Mr. Barry: Also, the Government of Nunavut has direct appointments. It’s a co-management structure where we have four appointments made from nominations from the Inuit organizations, two from the Government of Nunavut, and two direct appointments from the Government of Canada. The chairperson, as Madam Chair said, is selected from the board itself.
Senator Cordy: Thank you very much.
Senator Patterson: I’m delighted that this committee gets to see what I believe is a very effectively functioning, credible board.
I want to point you that you’ve thoroughly reviewed eight major projects in a very fragile environment. One, the Baffinland project, which the chair mentioned, involved shipping in ice waters and building a railway on permafrost. These were not minor projects.
Until the Nunavut Planning and Project Assessment Act was passed by Parliament a few years ago, you relied on a 20-page article in the Nunavut Land Claims Agreement. The Nunavut Planning and Project Assessment Act is only 131 pages. Now we have a 400-page bill which also includes all kinds of guidelines, directives and a designated project list outside of the legislation.
Have you been able to operate effectively with what seems to be a much simpler process where you’re the authority from assessment right through to licensing and monitoring? Is small beautiful and simplicity to be desirable?
Mr. Barry: I would say, in our view, generally yes.
One thing that helped us quite a bit in our experience is that the enabling legislation that was developed for our board took a long time. It wasn’t the highest priority, and it sat for a long time. We had, by that point, 15 years of experience operating under just the Nunavut Agreement instruction, and people saw it worked very well. Many of the lessons learned about where additional discretion would be useful or where less discretion would be useful and more explicit instruction, those were put into our legislation when it finally was developed and before it came into force.
The way that our board evolved and the way the legislation itself came to be was actually helped by a long period of delay where we just operated with the instruction of the Nunavut Agreement and the discretion we have as a board.
Senator Patterson: Just to finish on the criteria for evaluating projects, and we have a long list in Bill C-69, your advice to the committee is that there may be some dangers from taking the prescriptive approach. It should be on a project-by-project basis and that circumstances might change.
Could you comment on how your board does this and allows more flexibility than may be in Bill C-69?
Mr. Barry: I think the more explicit the list of factors in that legislation, the more topical the legislation itself is in danger of becoming. What is at issue today may not be at issue 10 years from now.
In our experience, and looking at the evolution of how Bill C-69 came to be, we see in Bill C-69 most of the same factors that we are required to consider under our legislation, and new factors are added as well.
The new factors are generally things our board would be doing in considering an assessment. We would be considering them under other items the board deems relevant. So we have discretion about whether or not those items are relevant for a particular assessment that’s under way. Because the types of assessments we do can range from mines to dams to roads to everything, what’s relevant for one assessment may not be directly relevant for another assessment, at least to the same extent, in our experience.
The Chair: In any approach to measure environmental impacts, the key element is deciding what is an admissible or an acceptable impact.
In your case, what is an admissible or an acceptable impact? You talked about dams and maybe mines. How do you get to what is acceptable and what is not?
Mr. Barry: Under our legislation, we have items that are required to be demonstrated when determining significance of effects. Of course, we looked at those in determining significance.
In terms of relevance, there are limitations on how far our board goes in determining social impacts, for example, in that our board cannot prescribe what the benefits for a project should be. That goes beyond our board’s jurisdiction. However, we do need to understand what the benefits would be and how they would offset the impacts of a project as well. It’s a bit of a balancing act .
In terms of what are deemed unacceptable effects, a large component of that is public concern and the understanding we gain from the consultation exercise we mentioned — abundant consultation. It helps us gauge what, from a public perspective, is deemed to be unacceptable, and then to test the mitigation being proposed to determine whether or not it goes far enough to mitigate those unacceptable risks.
The Chair: As a quick example, with a dam, mercury goes into the food chain, and you have your fishing population. What is an acceptable risk for putting mercury in the water?
Mr. Barry: It’s a great hypothetical question. Is that lake subject to fishing? Are people consuming it? How much are they consuming? There are many considerations that we’d have to take into account, such as the size of the geography, the population and who would be affected.
Again, some of those things are spelled out in the legislation and some things are largely common sense. If somebody is applying a test and asking if it is an acceptable risk, we need to know who is affected, how many, how much, et cetera.
Senator McCallum: You said that when a project comes and it’s less certain, new information comes about. So the theory didn’t work as expected and you had to improve midstream. Can you give us an example of when this happens and the timelines involved?
Mr. Barry: Perhaps we could follow up in our follow-up submission to give an explicit example because we do have a number to choose from.
Senator McCallum: That would be good.
Do you have a problem with significant discovery licences in your area?
Mr. Barry: No, we don’t at this time.
Senator McCallum: When I hear about the great achievements you’ve had, would it be safe to say that the relationship with the elders and the people is paramount to you being as successful as you are, that you incorporate the people and the technical part? I’m trying to get a sense of the relationship of the people and how important they are.
Ms. Copland: When we address a public meeting, we, first of all, say elders can speak at any time. We need their expertise. We need their traditional knowledge. We need their help in deciding on an application. We set them up really high.
Mr. Barry: I think we’ve been successful in that people can see themselves in both the board itself and in the decisions. We rely heavily on quotes from our transcripts where relevant expertise or advice was given on the record from elders, from youth many times and from other groups as well.
Usually it’s our independence and then our reflection of Inuit values, I would say, that are the strongest factors for success.
Senator McCallum: Our climate in the provinces is very different from yours. I’m just trying to say that the political system has actually held us back such that we’re not able to proceed like you do. You’ve done an amazing job. Thank you.
Ms. Copland: I think the climate is about the same now. It’s colder down here.
Senator Tkachuk: It’s definitely colder.
Senator Simons: You say all the members on the board are Inuit. Is that just what the board makeup happens to be, or is it legislated that all members be Inuit?
Ms. Copland: We do have a woman who is from Edmonton.
Senator Simons: Oh, like me.
Mr. Barry: It’s not an explicit requirement. It’s just the way it turned out. It’s a reflection of Nunavut’s population.
In the board’s history — more than 20 years now — I think three members have not been Inuit, and all those members have been either long-term northerners, for more than 30 or 40 years, or have significant expertise or experience with the northern boards.
Senator Simons: What you have described sounds almost idyllic. I just don’t know if it’s scalable to the rest of the country. Presumably this works. You are a spread out population, but it’s a small population. People are working together.
What are the practical things we can take away to use elsewhere from your self-government — I don’t want to say “experiment;” that’s not the right word for it — experience?
Mr. Barry: I would agree with some of your comments.
In Nunavut, practical realities rule the day. You can’t fight against the limited shipping season. There are practical developments for any kind of situation. Whether people are for or against a particular project, people are generally supportive of developing jobs and opportunities for the communities — projects that also protect the environment. That balancing act is the same no matter where you are in Canada. The way the board allows all information to come in and tries to weigh it and affect the population that stands to be most affected, I would think those are where the most lessons can be learned.
Senator Simons: Thank you.
Senator Tkachuk: I’m looking for a bit of a history lesson, if you can help us out.
Was most of the regulatory framework prescribed in the 1994 bill that established Nunavut? I was around to pass that bill, actually. The Conservative government developed it previous to the election of the Liberal government in 1993. Was it prescribed before, or was it a combination of that plus legislation of the Nunavut territorial government?
Mr. Barry: It’s a combination. As Senator Patterson I’m sure would like to jump in and say, it came through the Nunavut Agreement. It was explicit in article 12 of the Nunavut Agreement in 1993 and came into effect in 1996.
Our legislation, the Nunavut Planning and Project Assessment Act, is federal legislation that came into effect in 2015.
Senator Tkachuk: Was it on the advice of the territorial government that the legislation took place?
Mr. Barry: No, it was a requirement of the Nunavut Agreement.
Senator Tkachuk: Thanks very much.
Senator Patterson: I appreciate Senator Simons’ comments about us learning from this board. I want to confirm something with the board. In all those major project reviews, some of which said no to projects, am I correct that there have not been legal challenges?
My second question is about incorporating Indigenous people into the decision-making process. You have Indigenous people controlling our board, and that gives credibility with the Inuit of Nunavut, but Bill C-69 sets up an advisory committee to the Minister of the Environment — this is clauses 56 and 57 — that’s designed to give advice on the rights of Indigenous people impacted by developments. There has to be one Inuk, one Metis and one First Nation person.
This idea of having an advisory panel to the minister, alongside the regulatory process, how would that work in Nunavut compared to the process that you’ve got set up, which has Inuit making the decisions?
Mr. Barry: I’ll speak to that first.
On the legal challenges and whether there have been legal challenges with decisions of the board, no, there haven’t been any to date — knock on wood. We’ve certainly had decisions recommending approval or denying approval of particular development projects. We’ve been fortunate there.
In terms of whether the model suggested under Bill C-69 would work in a Nunavut context, I hesitate to offer an opinion on that. I would reiterate my earlier remarks that a large part of our success has been that the public in Nunavut — the largely Indigenous population, certainly — sees itself in the board and understands the role of the board as deciders. That has gone a tremendous way in developing public trust for the decisions and the acceptability of the decisions that come from the board.
Senator Wetston: Bill C-69 is obviously oriented toward impact assessments of infrastructure projects. It’s one thing to have an impact assessment; it’s another thing to have a project that may meet the requirements and go ahead.
One of the things I know Senator Patterson and I have talked about, as well as the committee, is the sources of energy supply to Nunavut. Do you see as the result of this bill or the work of your board any opportunities to move away from existing sources of energy supply into either some form of hydroelectric transmission or other supplies of energy to the North? Obviously, this is not just for climate purposes or greenhouse gas emissions but from the point of view of a greater degree of reliable, safe and clean energy for the North?
Mr. Barry: That’s a very interesting question. In looking at the forms of alternative energy that haven’t come to Nunavut to date and what would enable them to do so in the future, I think the assessment regime that applies to development projects is an important component of whether those projects get developed. We see many examples of development in the North that were proposed but that never came to be. We can think of the Mackenzie gas pipeline or other things that never came to be.
I wouldn’t have an opinion on whether the bill or the regulatory regime would stand in the way of those alternative energies coming to Nunavut.
Senator Wetston: Thank you.
Senator McCoy: Congratulations. It’s very interesting to hear your experience.
It strikes me that your territory largely has made the policy decision that they are in favour of a resource-based economy and an environmentally sensitive way of extracting the resources, which I don’t think is true of Southern Canada as a whole yet.
Often we have found a small number of voices — loud voices — having an impact on public opinion and possibly creating an impression of credibility in some of our regulators. Do you encounter a similar situation ever, with a minority view, and how do you handle it?
Mr. Barry: Anecdotally, we have had experience with certain environmental NGOs, for example, coming into the territory with very assertive positions about a project, its risk to the environment and why it shouldn’t go ahead. We’ve also seen the change in tone that’s required once they realize the Inuit who stand to be affected by the project do not necessarily share those views.
It’s quite different to be the only person in a room, the minority at the table. We give a voice and an opportunity to speak. When they realize that the members of the public, who are also in the room, really don’t support the intervention and that they are not speaking for the general public as they purport to, in our experience we have seen a complete change of views, and those parties decide to withdraw from the process, essentially.
It’s a very different environment obviously in Nunavut. The process itself was hard-fought for, negotiated for through many years. The Inuit leadership is certainly supportive of development and opportunities for Inuit that are done the right way and protect the environment. Again, it’s a different operating environment. I think that has been pointed out.
Senator McCoy: Thank you very much.
Senator MacDonald: I want to thank the witnesses on behalf of the committee.
The Chair: We now want to welcome, by video conference, Mr. Mark Taylor, Executive Vice President, Operations, Alberta Energy Regulator.
Thank you very much for joining us. I invite you to proceed with your opening statement, after which we will go to a question-and-answer session. I understand you have some colleagues with you who may help answer the questions. If they do, I will ask them to first state their name and title.
By the way, I’m Rosa Galvez, chair of the committee, and I represent Quebec. Please go ahead.
Mark Taylor, Executive Vice President, Operations, Alberta Energy Regulator: Honourable senators, good afternoon, and thank you for the invitation to appear before this committee today.
The Alberta Energy Regulator, or AER, is responsible for regulating the production, processing and transport of Alberta’s natural gas, oil, oil sands and coal resources, the production value of which totalled $72 billion in 2017.
The AER regulates an incredible amount of energy infrastructure: more than 167,000 natural gas and oil wells, over 426,000 kilometres of pipelines — about half of Canada’s entire pipeline network — 50,000 oil and gas facilities, eight oil sands mines, more than 270 in situ projects, four bitumen upgraders, as well as seven producing coal mines and two coal processing plants.
Under Alberta’s Responsible Energy Development Act, or REDA, the AER is accountable to both the Minister of Energy and the Minister of Environment and Parks. Our regulatory framework ensures that government policy and legislation is implemented so that we achieve the environmental outcomes that Albertans expect.
We are a full life-cycle regulator responsible for all stages of development, from exploration and production to closure and reclamation. With more than 80 years of regulatory experience and expertise, the AER works closely with government departments on regulatory and policy issues. This includes working with the departments of Alberta Energy, Environment and Parks, Alberta Health, and Alberta Indigenous Relations, and also the Aboriginal Consultation Office, which is responsible for managing all substantive aspects of the Government of Alberta’s Indigenous consultation process.
While the AER, as a regulator, does not develop policy, we play an important role in policy assurance, ensuring that the development of the energy resources accrues in a manner that delivers on the environmental and economic outcomes set by government. In addition, the AER is bound by provincial climate change legislation that includes placing limits on greenhouse gas emissions related to oil sands development.
When the Government of Alberta announced its Climate Leadership Plan in 2015, the AER was tasked with creating new requirements to reduce methane emissions from the upstream oil and gas sector by 45 per cent from 2014 levels by 2025. We issued the new requirements in December of 2018.
Before we get into questions and answers, I would like to provide an overview of how the regulatory system works in relation to the development of Alberta’s oil sands.
Before a company can commence development of an oil sands project, they must first apply for a scheme approval under the Oil Sands Conservation Act. A scheme is an overview that provides information on all aspects of the project, including the types of approvals and permits that will be required, technical and economic details, environmental and social impacts, and a cost-benefit analysis.
The scheme approval is the first step in a series of approvals that are required in order to begin development, which could include those under the Environmental Protection and Enhancement Act, or EPEA; the Pipeline Act; Water Act; and Public Lands Act. The AER reviews each application to ensure they are technically complete and to examine all of the concerns put forward by stakeholders.
With the scheme approvals in hand, companies may then submit applications for project-related approvals to the AER. Our technical review includes the geology involved, the nature of the reservoir, any impacts on water, land and air, well operation design and drilling, stakeholder involvement, and socio-economic impacts related to the project.
The socio-economic review examines both the positive and negative effects of a project, including population, available housing, employment, domestic economic activity, traffic and local infrastructure and services, just to name a few. The company is required to demonstrate how it will mitigate any negative effects of the project.
The AER also conducts stringent environmental reviews of projects, from terrestrial and surface water reviews, to impact on air and groundwater. Our technical experts ensure projects meet or exceed AER regulatory requirements and are aligned with government policy. If a project will produce more than 12,600 barrels per day, an environmental impact assessment is required as part of the EPEA application and includes even more information.
Stakeholder involvement is a top priority at the AER. The Responsible Energy Development Act establishes requirements for the AER to hear and address public concerns at every stage of development. Companies submitting applications must demonstrate that they have carried out a stakeholder involvement program and have taken actions to resolve concerns.
Once an application is filed, the AER publishes a notice of application. Anyone who believes they will be directly and adversely impacted by a proposed project may file a statement of concern. All statements of concern are reviewed, and those that meet AER requirements, which most do, are considered as part of the application process. If a company cannot address an outstanding concern, the matter may be referred to our alternative dispute resolution process, which brings parties together to seek the mediated resolution. If no resolution is reached, the AER may call a hearing — a formal, quasi-judicial proceeding where those directly and adversely impacted by an application may participate and technical evidence is presented. This allows hearing commissioners to make a fully informed decision.
As of January 2019, the rules were changed to expand participation in AER hearings. If a hearing is called, any municipalities and Indigenous communities will be invited to participate in a hearing related to projects located in or near their boundaries or territories if they have filed a statement of concern.
Ensuring Indigenous communities are consulted is a crucial component of Alberta’s regulatory framework, and the AER relies on the Aboriginal Consultation Office, or ACO, to determine how Indigenous consultation should occur for all energy projects.
The AER does not determine the adequacy of the Crown’s consultation with Indigenous peoples. Once the ACO has made the decision on consultation adequacy, it submits a report to the AER which allows us to continue our review of the application and issue a regulatory decision.
If a project is approved, it must meet strict requirements at every stage, from construction and operation to eventual closure and reclamation. If companies do not meet our requirements, we have a number of enforcement actions at our disposal, including more frequent inspections, enforcement orders, administrative penalties, prosecution and a shutdown of operations. All of our enforcement activity is publicly reported on our compliance dashboard.
I have provided an overview of our process for determining who may participate in an AER hearing. I would like to take a moment to highlight an important difference between our process and the process under the Canadian Environmental Assessment Act, or CEAA. For example, if the AER decides to call a hearing, participation is based on a number of factors, such as if a person is directly and adversely impacted or if their evidence will materially assist in a decision.
Under CEAA, any interested parties are given an opportunity to participate in a hearing, including those that may be directly impacted and have relevant information. This can create a broader field of participants but can limit the ability of meaningful participation for those most affected.
Today, the 1,200 talented and dedicated employees of the AER work to protect what matters to all Canadians: public safety; the environment; orderly, well-planned energy development; and economic benefit for the entire nation.
Thank you, and I look forward to the opportunity to answer your questions.
Senator Cordy: Thank you for taking the time to be with us by video conference this afternoon. We appreciate it.
I didn’t realize that Alberta had seven producing coal mines. Coming from Nova Scotia, I didn’t realize that, so it’s good to learn something new each day.
You said that in January 2019 the rules were changed to expand participation at the hearings. So I’m wondering, who changed the rules? Did you change them? Did the provincial government change them?
Mr. Taylor: The provincial government changed the rules on January 1 to ensure that if a municipality or Indigenous community filed a statement of concern on a project, they would automatically be engaged in any hearing that was held.
Senator Cordy: You spoke several times about meaningful consultation or meaningful dialogue. Who determines whether or not it’s meaningful dialogue? I know that the rules changed in January of this year to ensure that there was greater participation, but who determines that?
Mr. Taylor: Just to confirm, senator, are you speaking specifically of Indigenous consultation or stakeholder consultation?
Senator Cordy: I’m speaking of stakeholder consultation.
Mr. Taylor: For stakeholder consultation, we encourage public participation in the decision making of energy development all along the line.
Senator Cordy: As for stakeholders.
Mr. Taylor: Right. So basically it’s the regulations of the AER that determine the requirements of what a company needs to do for stakeholder engagement before they even submit an application to us to proceed.
Senator Cordy: Thank you.
You also said that you don’t develop policy but that you play an important role in policy assurance. You did clarify that by saying that the development of energy resources occurs in a manner that delivers environmental and economic outcomes.
So I’m still not sure what policy assurance is. You gave us an indication of the correct balance. Is that what it is, the balance between energy and environment?
Mr. Taylor: An easy one to articulate would be one I mentioned in my opening statement, which is part of the Climate Leadership Plan. Part of that policy included a goal to reduce methane emissions from the upstream oil and gas sector by 45 per cent by 2025. That’s the policy piece. It’s a clear indication of policy from the government regarding an outcome they want to see achieved in the province of Alberta.
The job of the regulator, in this case the AER, was to figure out what regulatory instruments we needed to create in order to provide companies with a clear path to achieve that 45 per cent reduction. So we took the policy direction of the 45 per cent reduction and created directives to make sure that gets achieved by 2025.
Senator Cordy: I was really pleased to see you speak about the balance between energy and the environment. I think some people think it is either/or. I think you did a good job of saying it’s not either/or; it’s a balance. I think that can be done. Thank you.
Senator MacDonald: Chair, we have four senators around the table from the province of Alberta, two of whom are permanent members of the committee. I would like to defer my question and let Senator Simons go ahead with the next question if she would like.
Senator Simons: Thank you very much, Senator MacDonald. I appreciate that.
One of the concerns I have heard from the Alberta government is that Bill C-69 could involve elements of trespass on what has traditionally been provincial jurisdiction. I’m curious to know, in your own reading and analysis of the act, if you see places where you think the act rubs up against what you traditionally have regulated, and how?
Mr. Taylor: Thank you for the question, senator. At this point, we will make use of the fact that I have got a few folks sitting here with me. I will let Mr. Clark from the Department of Energy take the first stab at that answer.
Wade Clark, Executive Director, Resources and Development, Department of Energy, Government of Alberta: Senator, our premier and our ministers are quite engaged in this file and have clearly stated Alberta’s position to the Prime Minister and to the Government of Canada on a number of occasions. Certainly, Alberta looks forward to further opportunities to provide detailed written submissions, and that will detail some of the specifics you’re referring to.
Certainly, the impact assessment act as well as the other acts in Bill C-69, from Alberta’s perspective, are an unprecedented federal encroachment into a number of areas of provincial jurisdiction, specifically the regulation of natural resources and potentially property and civil rights. We’re looking at the proposed legislation as potentially deterring investment and detrimentally impacting Canada’s competitiveness as a resource-rich economy.
We see some concerns around the potential to affect the competitiveness of Canada’s energy and natural resource sectors, including significant potential adverse effect on oil and gas, forestry, manufacturing, hydro development, and potentially sea ports and other northern development. Of course we’re quite focused on Alberta’s resources, and the proposed changes, in our view, erode the regulatory certainty, clarity and stability for investors to understand the legislation and to make decisions with regard to where they are going to place their capital.
Senator Simons: That was the macro answer, but are there specific areas? I know, for example, when I met with Minister Phillips, we talked about the issue of in situ and whether or not it would be captured by the project list. Perhaps it’s not the right time, but since you’re there and I’m here, can you highlight specific areas of the act that for you represent that unprecedented encroachment?
Mr. Clark: Yes, I think in situ is a great example. We will provide a more fulsome summary of the specifics in our written submissions when the time is right. But certainly on the in situ space, as Mr. Taylor alluded to, the oil sands regulatory system in Alberta is quite robust. Oil sands in situ projects have been delisted from the former CEAA legislation for some time, and that process has been executed quite effectively, I think, in Alberta. That is an excellent example of one of the areas where, from Alberta’s perspective, the regulation has been handled quite effectively on the provincial jurisdiction.
Senator Massicotte: Thank you for being with us this afternoon. First, let me congratulate you, because if you look at your success in getting projects approved in a certain time frame, you’re achieving much greater success than the federal government is relative to your time limits. So I’m trying to understand a little more how you’re organized and so on.
Could you tell me, who names the people to the regulatory board and how is that done?
Mr. Taylor: Thank you for the question, senator. I’ll give you a quick overview of our governance model.
We have a governance board, so the chair and the board are appointed by the Government of Alberta through orders-in-council. That governance board essentially ensures we are running proper accounting systems, risk management, people and HR systems, those kinds of things.
When it comes to the day-to-day running of the regulator, that is led by the CEO of the Alberta Energy Regulator. In that part of the organization, the CEO is named by the chair of the governance board. Everybody under the CEO is simply hired and named by the CEO, et cetera, down the org structure.
When it comes to a hearing, the hearing commissioners are independent from the operation side of the Alberta Energy Regulator. They also report to the chair of the governance board, but they are an independent body, so they are not involved in the day-to-day operations or the direction of our strategy, the execution of the regulatory work on a daily basis.
Senator Massicotte: Who approves the projects?
Mr. Taylor: The approval of projects exists within what we would call the AER itself, so under the CEO, hence under myself. I have an authorizations branch, which is ultimately where all of our decisions on new projects get made.
Senator Massicotte: The CEO was named by the board chairman, as you said earlier. Given that he, in conjunction with the board chairman, decides the approval, and given there is a direct link from the chairman to the government, am I correct in saying the government effectively approves the projects?
Mr. Taylor: No. In fact, the legislation that created the AER, so the Responsible Energy Development Act, is very clear in that all the decisions stay under the purview of the staff reporting to the CEO. The decisions aren’t even commented on by our board of directors. Again, they are a governance board, not an operational board.
Senator Massicotte: What specific criteria allows the regulator to approve or not approve a project?
Mr. Taylor: We have a number of different regulatory instruments. The most common one is called the directive. On any given project, there will be one or more directives that set out clearly the criteria required for any proponent to make an application and then to expect approval. All of those decisions as to whether the application meets the criteria in our directives are made by our statutory decision makers that report up to the CEO.
Senator Massicotte: Relative to criteria, you have previously looked to the Canadian government when it was strictly environment or adversely affecting the environment. Now what is being proposed is much larger. Is your criteria as large as that being proposed, or is it closer to managing the environmental risk only?
Mr. Taylor: When the AER was created about six years ago under the Responsible Energy Development Act, the point of creating the AER was to create a single regulator for all energy development in the province of Alberta. Prior to that, there were three different regulatory bodies that you would have to deal with if you wanted to get a project approved, or you may have to deal with. It was not all three in all cases.
For competitiveness reasons and to provide a more transparent regulatory system that is fairer to stakeholders, the government created the single regulator, the AER. We have three parts of our mandate we are continually balancing: one, the protection of the environment; two, protecting public safety; three, the responsible development of energy resources of the province of Alberta. Our requirements are continually a balance of those three broad ranges.
Senator Tkachuk: With your permission chair, I would like to have Senator McCoy from the province of Alberta take my place because we only have an hour.
Senator McCoy: I was deferring to my colleagues. I’m not a member of this committee officially, so thank you for your courtesy.
I’m delighted to have you all with us. I have a follow-up to Senator Massicotte’s questions. I didn’t catch who appointed the commissioners.
Mr. Taylor: The commissioners are appointed by the Government of Alberta. They are again appointed by an order-in-council.
Senator McCoy: Are they part time or full time?
Mr. Taylor: We have a mix. We have some full-time commissioners and some part-time commissioners, again trying to balance the workload.
Senator McCoy: When they hold a hearing, it is a quasi-judicial hearing, I take it?
Mr. Taylor: That is correct.
Senator McCoy: How many projects have you dealt with in the last fiscal year or the last calendar year, whichever way you keep your statistics?
Mr. Taylor: In 2018, we handled approximately 40,000 applications. That’s a standard year.
Senator Tkachuk: Those guys know how to work.
Senator McCoy: How many went to a hearing?
Mr. Taylor: I would say less than 10 and venture to guess it would be less than 5, especially if we don’t include joint review panel hearings that were driven by the fact that we have overlapping federal legislation.
Senator McCoy: What would you say is the secret to your success in terms of effective and efficient timeliness?
Mr. Taylor: It is one piece, really. It revolves around what we call “regulatory excellence.” One key component of regulatory excellence — and you even mentioned it — is efficiency. Efficiency is not about speed; it’s not about doing it faster. It’s about providing fairness for all of our stakeholders, both the industry that is applying, but also to stakeholders who may have concerns about a project or support a project.
We focus on the outcomes of the project on the landscape. So it’s not about an administrative process at the front end necessarily. It’s about the outcomes on the landscape. We make a lot of risk-informed decisions. It’s putting the priority where the highest risk to the environment or public safety and resource development are. If you follow those principles, you end up with a lot of transparency. So anybody looking into how the AER operates has a very clear understanding of how we made a decision and why we made a decision.
For the 40,000 applications we received last year, we had a total of 277 statements of concern filed by stakeholders on 40,000 applications. It’s because we have a very transparent system and it’s predictable. Again, predictable doesn’t mean you get approval every time you apply. Predictable means the process is predictable. So we publish our timelines on every application stream. You can go to our website and see how many days we predict it will take to get your project approved or denied. Our goal is to meet those timelines 90 per cent of the time.
We are currently just getting back up to the 90 per cent level, because on November 1 we cut all of our timelines in half from the previous timelines we had. So we’re currently running at 85 per cent. The team is just getting warmed up.
The Chair: That’s very impressive, 40,000 applications. How many were accepted and not accepted? And why were they not accepted?
Mr. Taylor: I don’t have the exact statistics, but we can get back to you and provide the exact numbers.
Certainly not all of them are approved. This is not a rubber stamp. We do not approve everything that comes before us. There are a number of different reasons why an application for a project may not get approved. The first ones fall into a technical criteria, so they simply are not following the regulations as laid out by the AER or the policy direction of the Government of Alberta. So there could be technical reasons why we do not approve them.
There are cases where projects don’t get approved because there are statements of concern, and there are stakeholders who are not satisfied with how their concerns will be mitigated. We may end up in a hearing or in a judicial review, because a couple of different paths could be followed. And the hearing commissioners could decide that project does not go ahead because of the stakeholder concern. So there are those two buckets of why projects don’t get approved.
The Chair: Would you say half of the projects are accepted?
Mr. Taylor: I would say that probably over 95 per cent of the projects get accepted.
The Chair: About 95 per cent are accepted.
Mr. Taylor: Again, we have a very transparent regulatory system, so the proponents putting in those applications know the expectations, which is why, out of 40,000 project applications, we only had 277 statements of concern.
The Chair: I have a follow-up question. Of the 95 per cent of projects approved, do you monitor the potential impacts of all of those projects?
Mr. Taylor: That is correct. We’re monitoring the potential impacts of all of the development that has happened in Alberta over the last 100 years. As I said in my opening comments, there are over 167,000 wells and over 426,000 kilometres of pipeline in Alberta right now. I have a field inspection branch that has offices across the province of Alberta. Part of our assurance is through the whole life cycle of the project we have staff monitoring any high-risk potential activities.
Senator Patterson: Thank you for being with us.
We understand that the bill gives the government the option of allowing for a provincial body with standards equal to or more stringent than the proposed approach to take over review instead. I’m hoping the federal minister will be able to substitute your well-functioning, experienced board instead of a new process that you, Mr. Clark, said could affect competitiveness, uncertainty and clarity, with negative effects in Alberta.
Will Bill C-69 prohibit the minister from allowing substituting your board in the areas you now cover so well?
Mr. Clark: That is one of the areas of concern, senator — the discretionary nature of the substitution provisions in the act and the requirement for public notice before substitutions can be granted. That’s a bit of a departure from the current system. That’s one of those areas where Alberta would certainly like to see more time for the federal government to provide greater jurisdictional clarity and to provide opportunities like that to reduce overlap and promote certainty in the system in the province.
Senator Patterson: Thank you.
You were clear that, like the Nunavut Impact Review Board we heard from earlier today, you determine standing based on whether a person is directly and adversely impacted or if their evidence will materially assist the decision, among other factors. But CEAA gives any interested parties an opportunity to participate in a hearing, which you’ve said in your presentation can create a broader field of participants but can limit the ability for meaningful participation for those most affected. How would this looser rule for standing limit the ability for meaningful participation? Could you elaborate?
Mr. Taylor: Certainly. Senator, you’ve done a good job of reiterating what I said in my opening comments.
At the front end of our process, anybody who feels they might be directly and adversely affected can certainly file a statement of concern. At the very front end of the process, a similar standard as proposed under CEAA, anybody who thinks they may be directly and adversely affected can make their concerns known. The difference happens when we make a determination as to whether that party could be directly and adversely affected.
With my comments around why the broader approach taken by CEAA to provide access to a hearing might dilute the ability to really focus on those who are directly and adversely affected is simply the scale. We have first-hand experience in the mining sector, where we do joint review panels with the federal government right now on new mine projects.
What tends to happen when we’re under a joint review panel and hence following CEAA, we end up with a much broader scope and a lot more people engaged in the hearing. Usually there are logistics challenges around how long you can run the hearing and how many people you’re going to be able to hear in a given time. It’s really about diluting the time when people who are directly and adversely affected have to make their case to the hearing commissioners, as opposed to getting the small focus groups that are in that directly and adversely affected category. They have more time with the hearing commissioners to build that compelling case of why something different should be decided.
Senator McCallum: Thank you. I’m Senator McCallum from the Treaty 10 area in the Manitoba region.
One of the fundamental issues that we have here is who holds title to the land that we’re talking about? Through treaty, Indigenous people are the title holders. When you hold title, you don’t do consultation; you need permission. Do you practise that?
Mr. Taylor: Thank you for the question, senator. At the AER, we do a lot of work with Indigenous peoples and the Government of Alberta to ensure that Indigenous interests are considered in all of our regulatory decisions. But as the regulator in the province, we are not responsible for Indigenous consultation. This is managed by the Aboriginal Consultation Office on behalf of the Government of Alberta.
I will politely pass this question along to Mr. Rutwind, and he will be able to provide you more background in answer to your question.
Stan Rutwind, Special Advisor, Indigenous Relations, Government of Alberta: Our process mirrors the law. Where there’s a potential adverse impact on a treaty right or traditional use by First Nations or other Indigenous groups, this triggers a legal duty to consult. When our proponents have a project in mind, they are required to contact the Aboriginal Consultation Office and ask them whether a formal consultation is required and, if so, with whom it shall be done. Then the Aboriginal Consultation Office will advise yes or no. If it is yes, it will say you have to consult with such and such First Nations or such and such Metis settlements, as an example. This is done at the earliest time possible and often long before any applications are filed with the Alberta Energy Regulator.
The Aboriginal Consultation Office also advises at what level the consultation will take place. On the major projects, there is a constant interchange of information and questions and answers between the proponents of the First Nations or Metis groups and also the Aboriginal Consultation Office.
We have a staff of approximately 50 people who deal with tens of thousands of applications and have done so since the founding of the consultation office in 2013. We have had a number of cases that have gone to judicial review. It’s to be noted that we are the ones who determine adequacy of consultation rather than the AER. There’s a separation, and the courts have essentially upheld us. We have never been overturned for an inadequate consultation process.
Senator McCallum: Thank you very much.
Senator Woo: Thanks very much for your testimony.
This morning a number of senators asked questions about orphaned oil wells in Alberta. They asked the wrong regulator, who mentioned that it really is Alberta’s responsibility. I wanted to ask you that question. I don’t understand much about it. However, what I read in the papers is that there are many of them and they could potentially cause a big headache for Albertans for a very long time.
How do we understand this problem in the context of the assessment process you have just talked about, your monitoring and regulatory process, and how your process can, should have, will deal with this problem?
Mr. Taylor: Thank you very much for the question, senator.
As I mentioned in my opening, we are a full life-cycle regulator, so we are responsible for the energy development from the time they’re in exploration all the way through to the abandonment and reclamation of any energy site, whether it’s a well or a facility site.
The definition of an orphan well is a well that belonged to a company that has gone bankrupt and essentially no longer exists. For the information of all the senators, abandonment is a good thing. It doesn’t mean left behind. Abandonment means the company has done the proper work to pour cement and plug that well so it can be left and the site can be reclaimed. If the well hasn’t been abandoned and the site reclaimed prior to the company going bankrupt, then in Alberta the AER has the legal ability to declare that well to be an orphan.
In that case, the well is now in the care and custody of the Orphan Well Association. The Orphan Well Association is a not-for-profit organization funded 100 per cent by the industry. Their accountability is to abandon and reclaim all sites that get designated by the Alberta Energy Regulator as an orphan.
Again, to put it in context, there are roughly 167,000 wells in the province of Alberta, and approximately 5,000 wells are currently in the care and custody of the Orphan Well Association. It’s a relatively small number when you put it in the context of the overall development that has gone on over the last 100 years.
As I said, it’s mandatory that industry funds that. The AER determines how much funding is put into the Orphan Well Association every year, and we issue the invoices to industry so they pay for that share of the work. Ultimately, it’s not the taxpayers or citizens of Alberta bearing any of that liability.
Senator Woo: I understand that the fund may be undercapitalized. This is what I seem to be reading in the papers, that there are insufficient funds to deal with these orphan wells.
The secondary question is, obviously, these projects were assessed by the regulator, depending on how far back the projects went. To what extent did the regulator, as an assessment of a project that would have a long life cycle, think about scenarios where oil prices and the global economic climate might lead to very large failures of companies and, therefore, large numbers of wells that might have to be orphaned, thus creating a situation where a reserve fund might be insufficient to deal with this problem?
Mr. Taylor: Thank you again for a very well-informed question.
The funding for the Orphan Well Association is done on an annual basis. In very general terms, the Orphan Well Association looks at all the wells in their care and custody, does a risk assessment to determine which wells have any potential to either impact the environment or public safety, and prioritizes that work. It aims to be able to account, abandon and reclaim approximately 10 to 15 per cent of all the wells in their care in any given year. Essentially, they’re on a plan that would allow them to continuously work on abandonment over an 8- to 10-year period, look after all the wells currently in their care and custody.
Over the last number of years, with the downturn of oil prices, yes, the number of wells in the Orphan Well Association has gone up. We’ve had more companies experiencing bankruptcy and financial difficulty. As a result, the annual payment by industry into the Orphan Well Association has also gone up year over year. Technically, there is no shortfall because it is not a fixed fund. The industry will pay each year based on how much work needs to get done by the Orphan Well Association.
That being said, we are working with industry to put a number of tools in place to allow them to more effectively manage their own wells and get them abandoned in a timely fashion so it reduces the risk down the road of an influx of wells into the Orphan Well Association.
Again, we have a very good joint collaboration going on with industry, service providers and with the regulator called the Area-Based Closure program, which allows companies to abandon and reclaim wells for about half the cost of what our old regulations were requiring. We’re seeing a huge increase in activity from industry to proactively look after this problem, because at the end of the day they are the ones that still pay for everything that ends up in the Orphan Well Association, so they are motivated to do the right thing.
The Chair: The problem with the abandoned wells is one. I think it’s more or less well controlled because, as you said, it’s a smaller amount. But what about the tailing ponds? I remember a period in which you wouldn’t give permits unless the company remediated some of the tailings ponds. However, that condition was removed, so now companies are allowed to keep operating these tailings ponds. Can you please talk about these tailings ponds and the cost of future remediation?
Mr. Taylor: Again, thank you, senator. You are a very well-informed panel. It’s always enjoyable getting questions that are obviously very thoughtful. I’ll start with the tailings and a very good example of how policy meets regulation.
A number of years ago, the Government of Alberta introduced a policy on tailings management. The AER then went out and did an extensive multi-stakeholder engagement, including Indigenous communities, other stakeholders and industry to build a directive that sets the requirements for tailings management in the province of Alberta.
To keep it at a very high level, the goal of the policy and, hence, the regulation that we created means that all tailing ponds associated with oil sands mines in Alberta have to be at a ready-to-reclaim state within 10 years of the mine operation ceasing.
I will remind everybody on the panel that a lot of these oil sands mines have a future life of 40 or 50 years in front of them still. They are very early in recovering the resource available to them, but the legislation and our regulation is very clear that those tailing ponds will have to be reclaimed and the companies have to have them in that state.
That regulation also gave us a lot more insight in being able to induce companies to report to us on an annual basis the volume of tailings fluids and which technologies they are planning to use to get those tailings ponds into that ready-to-reclaim state.
Ready-to-reclaim can mean a number of different things depending on where the tailings pond is located. The reclaimed state of that land might be forested land as it was found before they started mining. It could be a mix of dry ground and lowland water bodies. It could potentially, at some point, be a lake.
Currently under the policy and regulations in Alberta, what are called end pit lakes — just turning a tailings pond into a lake — are not allowed. What the regulation and policy allow is for companies over the next 10, 15 or 20 years to continue trying new technologies to find the most effective way to return the landscape to a state that meets the environmental outcomes of the province.
The Chair: Thank you.
Senator Pratte: I want to go back to the concept of substitution, which was discussed earlier. Have there been any cases where the AER was substituting for the federal assessment agency?
Mr. Taylor: To the best of my knowledge, the answer would be no.
Senator Pratte: But there have been joint reviews.
Mr. Taylor: There have been joint reviews on oil sands mines and coal mines in particular.
I’ll take this opportunity, senator, and I hope you don’t mind, but I mentioned in my opening that we approved in situ projects, and we actually have timelines for mine approvals as well. The last mine approval that went through a joint review process took seven years. It’s not all with the joint process in the hearing itself, but the overall process from application to approval took seven years.
Within the AER, the mine review and approval piece of work is targeted to take between one and two years. The joint review panels add a lot of duplication of effort and a lot of uncertainty as to exactly what the requirements are going to be because you’ve got two different pieces of regulation and legislation in front of you. It adds a lot of uncertainty not just for the proponent or applicant but for all of the stakeholders. They have a lot of trouble, whether it’s an Indigenous community or any other stakeholder. They have a hard time sometimes interpreting our regulations, and when you layer on a second layer of regulation, it muddies the process and makes it complicated for people to feel they can engage.
Senator Pratte: Thank you.
On substitution, Mr. Clark, you mentioned one of the things your government does not like in the bill is the fact that the government will have to ask for public comments on the substitution and have to take into account the public comments.
There are also a series of conditions that appear to be a longer list of conditions than what presently exists in CEAA 2012. Do you have concerns there also for all these conditions that are preconditions to any substitution occurring?
Mr. Clark: Those are some of the areas of concern. Alberta’s intention is to address those more fulsomely in our written submissions where we can lay out more detail and context. It’s another situation where we’d like to see a little more clarity and detail around the enabling regulations and policies behind the legislation as well. Our hope is that we can deal with that more in the fullness of time with written submissions and further discussion with our elected officials.
Senator Pratte: We’re certainly anxious to read your brief whenever it arrives. Thank you very much.
Senator Mockler: As a senator for New Brunswick, in Atlantic Canada, do not ask me if I’m upset at what happened with Energy East. I am frustrated, and it’s unacceptable.
Now I look at Bill C-69. It sets up a fragmented process. What I love about what I’ve heard from you is that you are a one-stop shop. But what is being presented to us and Canadians is the following when we look at authorities: impact assessment, and licensing and life-cycle monitoring are split and staged under Bill C-69.
With your experience, what approach is the best for Canadians?
Mr. Taylor: Thank you very much for the question, senator.
As I mentioned in my preamble, we did a lot of work when we were created, because the Alberta government specifically created the single regulator to address a lot of concerns that I heard in your question. We put a lot of effort in working with the University of Pennsylvania and with regulators from around the world to develop what we call regulatory excellence principles. I touched on those in my opening comments. It’s really about how to make your process predictable and transparent, demonstrating empathy to the stakeholders that have to engage with it.
It’s really about an outcomes-focused approach. In our experience, it’s hard to have an outcomes-focused approach if you don’t have the life cycle under the control of one regulator.
What we are allowed to do now is we don’t have to mitigate all potential risks at the application stage because we have people in the field monitoring those activities for the 40 or 50 years they’re in operation. We have people in the field making sure the wells are abandoned properly and sites are reclaimed to the conditions we want in the province of Alberta. It allows the regulator to make a much more risk-informed decision.
To be perfectly frank, bad things don’t happen when you’re at the application stage. What the regulator should be focusing on is making sure the industry is doing what they said they were going to do. Again, if you’re not regulating the full life cycle, you don’t have the ability to do that. No disrespect to regulators that aren’t full life cycle; they get to do what and where their regulation says they can act, but our experience says the full life-cycle approach definitely works better.
Senator Mockler: As a former chair of our Agriculture Committee, I’ve had the pleasure and also the honour of visiting Western Canada, including Alberta. I know you are leaders in the agricultural field in many ways in Western Canada.
However, Part 6 of the proposed Canadian energy regulator act provides the framework for acquiring, leasing, taking and compensating for land required for regulated energy projects. Clause 335 restricts any person from constructing a facility across, on, along or under a pipeline, or to cause a ground disturbance in a prescribed area, including by operating vehicles and mobile equipment across a pipeline. Do you think that these restrictions could interfere with agricultural activities on such lands across Canada?
Mr. Taylor: That’s a very good question. I will focus my answer on how we regulate.
We’ve got thousands of kilometres of pipeline under farmland across Alberta. We do not have that restrictive criteria. There are definitely ground disturbance requirements. Pipelines are very clearly marked. We have the “dial before you dig” program to make sure that nobody accidentally hits them. But we have not experienced in our 80 years of regulating development in the province of Alberta a need to be that restrictive as to what operations can happen, either above or below pipelines. I think that’s probably the best answer.
Senator MacDonald: Thank you for being here today.
Environment Minister McKenna has claimed that Bill C-69 will actually increase the competitiveness of Canada’s resource sector, although that doesn’t seem to be what we’re hearing from people in the industry. Can you describe the consultation the federal government has conducted with you? Do you feel you were listened to? And were your suggestions incorporated in any way into the bill?
Mr. Taylor: Thank you for the question, senator. Not just to make sure that everybody has a chance to speak here, but I will pass this to Ms. Dent to answer, first, on behalf of the Government of Alberta.
Heather Dent, Senior Manager, Assessment and Continuations, Alberta Environment and Parks, Government of Alberta: Thank you. For the past year, I have been part of a working group that has been working on this bill.
In terms of engagement, it has happened through the environmental administrator’s team that our federal colleagues have stood up. Those meetings have been infrequent. We have also had the opportunity to provide comments in a public comment period in terms of the project list and the timing and information management piece that was posted publicly. There was no opportunity for government-to-government conversation that would happen offline or in advance of those releases.
I think that our government would ask for an additional opportunity to continue to engage on this very important file, and we’d look for opportunities at a working level and at a senior level as well.
Senator MacDonald: Does anybody else want to add anything?
Mr. Clark: I think that about covers it. Alberta looks for further opportunities to provide fulsome input.
From Alberta’s perspective, there is an opportunity to foster greater public and investor confidence, and that’s going to take a little bit of time. We feel like it can only be accomplished if Parliament takes the necessary time to fully consider the jurisdictional and economic ramifications of any changes to the system set out in this proposed legislation.
Senator MacDonald: Thank you.
Senator Mitchell: Thanks very much to all of you for an excellent presentation.
While I have huge respect for Senator Mockler, I disagree with him in the sense that he says this bill fragments the process. Actually, I think this bill does what your bill did, which was to take three regulators and move them into one. That’s exactly what this does.
My question is about another similarity. You have commissioners who adjudicate and are completely separate, essentially, from your regulatory function; is that right? And you have a board of directors on your regulatory function side?
Mr. Taylor: That is correct.
Senator Mitchell: So that’s exactly what this does: It creates commissioners for the first time, because you can’t have the judge, jury and police force doing the same thing. Excellent. Thank you.
Your 40,000 number is remarkable. My colleague Senator Massicotte did a little math. That would be 200 a day, with 200 working days. Clearly, there is a question of scale. At 40,000, you end up doing big reviews of 10. Could you give us an idea of how small some of the 40,000 are? And are there any pipelines in the 10?
Mr. Taylor: I’ll answer the first question last.
Last year, I do not believe we had a hearing on a pipeline. We have had hearings on large pipelines previously. They could happen on small pipelines, too, because they are driven by somebody big.
To get back to how we handle 40,000 a year, first of all, we have a team of about 1,200 people here at the AER. Not all of them are obviously handling applications on a daily basis, but my authorizations branch, where most of that work happens, has about 250 people in it alone.
Using risk-informed decision making, some of the projects are as small as a single well, or it could be a 400-metre-long piece of pipe to connect that single well to the next piece of pipe. Again, it’s certainly a different scale than typically what you’re talking about at the federal regulator.
We’ve also done an awful lot of work to modernize our processes here. We have a software system that we are currently implementing across all of our application schemes called One Stop. That has allowed us to take all of the decision-making knowledge in the heads of the 200-plus staff in my authorizations branch and essentially put it into a computer. So, when an application comes in, the computer does that first triage and says, “Has the company addressed all of the concerns that a human would look at?”
What that allows us to do is approve somewhere in the neighbourhood of 50 or 70 per cent of the applications in those streams; they are approved by the computer. Our staff then focuses their attention, later in the life cycle, on auditing to make sure that the company did what they said they were going to do on watching the operation for the life of the project.
That has allowed us to reduce turnaround times on things like pipelines. If you have a pipeline application that meets all of our requirements, you could get your approval in as little as five minutes.
The second piece of that is the transparency to all stakeholders. We have a lot of positive feedback, not just from industry but from stakeholders in general, and that allows for transparent access to the rules we are looking at and why the AER is making a decision to approve a pipeline. The actual criteria that we use are transparent, and the stakeholders have more confidence that things are being done correctly because it’s repeatable. That’s one of the ways we are handling the work.
Like I said, 40,000 is not an abnormal year. It has actually been quiet for the last three or four years, unfortunately, because of the turndown in oil prices. When we’re doing 40,000 applications a year, those are relatively quiet years compared to where we were back in 2012-13.
Senator Mitchell: Could you give me an example of a project, perhaps a pipeline, that would fall into the category of requiring a one- to two-year review? How long would it be? How much investment would it incur? How long would it take to build? Have you any idea?
Mr. Taylor: Once we go into a hearing, we do not have timelines. I’ll state that for the record. We focus on timelines not just to prove that we can approve things in a hurry. We still do the right work and make sure only projects that should be approved get approved.
If a project is relatively large, typically, if it’s a provincially regulated pipeline to start with, what is going to trigger a hearing is we will have statements of concern from either Indigenous communities or from other stakeholders. We will have made a determination in our authorizations branch that those applicants or concerned stakeholders are directly and adversely affected by the project and the company has not been able to address their concerns.
At that point, it goes over to those independent hearing commissioners. Depending on the scope of the pipeline — typically, we’re talking pipelines of 200 or 300 kilometres in length — they are going to end up in a hearing. If it’s a relatively short pipeline, the company and the landowner usually come to an agreement that makes the project go ahead.
So you’re talking 200- or 300-kilometre pipelines. Those are typically going to be investments in the $50 million to $100 million range, and obviously they will have a lot of production associated with them. The reason somebody is building the pipeline is because there is oil or natural gas to be moved.
The Chair: Thank you very much for your testimony.
I will request that the steering remain because we have to have a meeting.
(The committee adjourned.)