On Thursday, October 24, 2013, the Regulations Designating Physical Activities1 (the “Regulations”) under the Canadian Environmental Assessment Act, 20122 (“CEAA 2012”) were amended.3 As set out in the corresponding Regulatory Impact Analysis Statement (the “Impact Analysis”), the amendments have been made to ensure that:

[t]he Regulations appropriately reflect those major projects that have the greatest potential for significant adverse environmental effects in areas of federal jurisdiction…[This] will, in turn, ensure federal environmental assessment is focused on those projects and increase certainty and predictability for proponents and for Canadians.4

Most notably, as a result of amendments to the Schedule to the Regulations: a) expansions to oil  sands mines have been added to the list of designated physical activities; and b) heavy oil and oil sands processing facilities, and pipelines (other than offshore pipelines) that are not regulated by the NEB, have  been removed from the list. In situ oil sands projects have not been included in the Schedule. As a result, unless designated by the Minister, those projects will not be subject to the federal Environmental Assessment (“EA”) process, but will still be subject to the provincial regulatory framework.

The Canadian Environmental Assessment Agency (the “Agency”) does not expect that the amendments to the regulations will significantly alter the total number of projects that are subject to the federal EA process set out in CEAA 2012.5

CEAA 2012 and EAs - Background to the Amendments

As summarized in the Impact Analysis, CEAA   2012 came into force in July 2012 as part of the Government’s Responsible Resource Development plan, the objectives of which are to achieve more predictable and timely project reviews, reduce duplication, strengthen environmental protection, and enhance consultation with Aboriginal groups. A summary of the federal regulatory reforms appears in the January 2013 Issue of our Oil & Gas Bulletin, found here.

CEAA 2012 and its accompanying regulations provide the legislative framework for federal EAs. Under this framework, consideration is given to whether “designated projects” are likely to cause significant adverse environmental effects, that either fall within the legislative authority of Parliament or result from a federal decision regarding a project.

EAs under CEAA 2012 are conducted by one of three responsible authorities: a) the Agency; b) the Canadian Nuclear Safety Commission (the “CNSC”) for projects that it regulates; or c) the National Energy Board (the “NEB”) for projects that it regulates. EAs are conducted of proposed projects that are “designated,” either under the Regulations, or by the Minister of the Environment. Physical activities for designated projects are listed in a schedule to the Regulations, and are divided into three parts, based on whether the Agency, the CNSC or the NEB is responsible for conducting the EA. Project proposals that include physical activities that are listed in the Regulations that meet or exceed the specified thresholds, are “designated”  projects.

Designated projects that are regulated by the CNSC or by the NEB, and projects that the Minister has designated6, must undergo an EA. However, when the Agency is the responsible authority for a designated project, it must determine, through a screening process, whether an EA is required based on the specific project proposal.7

Under CEAA 2012, unless the Agency has determined that an EA is not required or a decision statement has been issued and the proponent is acting in accordance with the conditions of that decision statement, the proponent is prohibited from carrying out any part of a designated project that will result in:

  • effects on fish and fish habitat, shellfish and their habitat, crustaceans and their habitat, marine animals and their habitat, marine plants, and migratory birds;
  • effects on federal lands;
  • effects that cross provincial or international boundaries; and
  • effects of any changes to the environment that affect Aboriginal peoples, such as their use of lands and resources for traditional purposes.8

Objective of the Amendments

According to the Impact Analysis, the physical activities identified in the former Regulations did not appropriately reflect all of the major projects having the greatest potential to cause significant adverse environmental effects in areas of federal jurisdiction. Some project categories considered to have a high potential for these types of effects had not been included in the Regulations, while others considered to have a low potential, were.9

Replacement of the Schedule

To address these issues, the Schedule to the Regulations has been replaced. When compared to the former Schedule, some notable differences include the following:

  • additions have been made to include, among other projects, expansions to oil sands mines;
  • deletions have been made to exclude, among other projects, heavy oil and oil sands processing facilities, and pipelines (other than offshore pipelines) that are not regulated by the NEB;
  • the threshold size for liquefied natural gas storage facilities has been increased by approximately 10 per cent;
  • the entries related to offshore oil or gas production facilities have been modified to more precisely identify the types of facilities that are covered;
  • the entries for offshore pipelines have been modified to clarify that flowlines are not included; and
  • the entry for NEB-regulated pipelines (other than offshore pipelines) has been modified to align with the NEB’s legislative regulatory process requirements, by reducing the threshold from  75 kms on a new right-of-way to 40 kms of new pipe, whether or not it is on a new right-of-way.

The amendments to the Regulations also include transitional provisions.10

Of significance, in situ oil sands projects have not  been included in the Schedule. As a result, proponents will not be required to submit a project description to the Agency. Unless designated by the Minister, these projects will not be subject to the federal EA process.11

When asked whether projects not on the list would be screened to determine if a full review is needed, Senior Communications Advisor and Agency spokesperson, Isabelle Perrault, is reported to have stated that “the decision on reviews would depend on information from sources such as the public, proponents, the provinces and the [Agency’s] regional offices.” 12

While not appearing in the Schedule to the federal Regulations, in situ oil sands projects will still be subject to the provincial project approval regulatory framework.

We intend to continue monitoring all further regulatory developments at both the federal and provincial levels.

Authors

Michael G. Massicotte
Partner    
403.232.9602
mmassicotte@blg.com

David Farmer


1 Regulations Designating Physical Activities, SOR/2012-147.

2 Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52

3 The Regulations were amended by way of the Regulations Amending the Regulations Designating Physical Activities, which the Agency has posted on its website (found here) to ensure they are available to stakeholders.

4 As stated in the Impact Analysis:

The main purpose of the amendments is to ensure the Regulations are aligned with the objectives of the CEAA 2012 in support of the Government’s plan for Responsible Resource Development. Accordingly, the amendments to the Regulations ensure federal environmental assessment requirements are focussed on those major projects that have the greatest potential for significant adverse environmental effects in areas of federal jurisdiction. Physical activities that typically have minimal impacts on areas of federal jurisdiction have been removed.

5 In the first year that CEAA 2012 was in force, 29 environmental assessments were commenced.

6 As to the Minister’s authority to designate a project, as stated in the Impact Analysis:

A key element of the CEAA 2012 is the Minister’s authority to designate a project that includes physical activities not in the Regulations. This provision recognizes that there may be occasional situations where the specific instance of a physical activity has a unique impact on the environment. If the physical activity is expected to have the potential for significant adverse environmental effects on areas of federal jurisdiction in most situations,
then the physical activity is included in the Regulations. However, if the physical activity is not expected to have the potential for significant adverse environmental effects, except in limited circumstances, then it has not been included. The Minister’s authority to designate can be used, if warranted, in such circumstances. This approach allows the Government to protect the environment in those areas where attention is warranted. Should the Minister be designating physical activities associated with certain types of projects on a regular basis, the Minister can consider amendments to the Regulations in the future to include those activities.

7 In determining whether to require an EA of a designated project, the Agency considers a number of factors, including the description of the project provided by the proponent, the possibility that the carrying out of the project may cause adverse environmental effects, comments received from the public and, if applicable, the results of any relevant regional study.

8 In addition, a federal authority is prohibited from issuing a permit or authorization for a designated project that requires an EA under CEAA 2012 unless a decision statement has been issued for the project.

9 As stated in the Impact Analysis, in developing the amendments:

[t]he aim was to reach a balance between, on the one hand, ensuring that proponents of projects with low or limited potential to adversely impact areas of federal jurisdiction are not unduly burdened with preparing project descriptions and that Agency resources are not unnecessarily used to consider and screen an overly broad pool of projects and, on the other hand, ensuring that the Minister’s discretion to designate projects can be used in project- specific circumstances and not as a second standard means to require an environmental assessment of a project.

10 At the time of the coming into force of the amendments, if a project description had been submitted or if an EA had commenced under CEAA 2012, in respect of a project involving a physical activity removed from the Regulations (and none that has been retained or added), the screening process or the EA terminated because the project is no longer a “designated project.” Other federal permitting and approvals processes, however, continue to apply. If the project is located on federal lands, CEAA 2012 requires that before federal authorities make any decision that would allow the project to proceed, they must determine whether it is likely to cause significant adverse environmental effects. Conversely, in cases where a project was not a “designated project” under the former Regulations but is a “designated project” as a result of the amendments, the new Regulations apply except if permits have already been issued by a federal authority, the carrying out of the project has already started, or an assessment under the process of another jurisdiction, or under the CNSC or NEB regulatory processes, is already underway. An assessment by another jurisdiction, in this case, is limited to one conducted by:  a provincial government, agency or body; a body established under a land claims agreement; or a body established under legislation related to aboriginal self-government. In addition, the transitional provisions provide that the new Regulations do not apply in respect of any project that was subject to a “screening” type environmental assessment under the former Act which, as a result of the coming into force of CEAA 2012, was not required to be continued and completed.

11 The Regulations Amending the Regulations Designating Physical Activities and the related Impact Analysis had been publicly released on the Agency’s website on April 12, 2013 and subsequently published in the Canada Gazette, Part I on April 20 for a 30-day public comment period. The Agency received 51 submissions from interested stakeholders, aboriginal groups, and members of the public. Some members of the public, environmental groups and Aboriginal groups expressed concern with the removal of any project type from the Regulations, and unsuccessfully urged that a number of other project types, including in situ oil sands projects be added.

12 Calgary Herald, “Ottawa backs off assessments, In situ oilsands mines not on federal list”, October 26, 2013.

 

Author

Other Author

Michael G. Massicotte

Expertise

Oil and Gas
Energy