“Building Common Ground” Report Released:How the Recommendations May Affect Mining Companies

In a significant step in the federal government’s review of key environmental and regulatory legislation and processes, an Expert Panel established by the Minister of Environment and Climate Change, released its report, Building Common Ground – A New Vision for Impact Assessment in Canada, The Final Report of the Expert Panel for the Review of Environmental Assessment Processes1 in April 2017. In June, the federal government released a discussion paper outlining a new approach to environmental assessments and regulatory reviews.2 In the April Report, the Panel recommends significant changes to the current environmental assessment, to the extent that even the term “environmental assessment” (EA) has been amended to “impact assessment” (IA) in order to broaden the focus from merely the bio-physical to include the five pillars of sustainability: environmental, social, economic, health and cultural. The Report and the recommendations it outlines, including the creation of an independent federal Impact Assessment Authority, have been positioned by the federal government as key to restoring public trust and reducing protracted environmental protests related to major projects. However, critics have suggested that the Report will lead to a period of uncertainty for project proponents and developers. What is clear is that proponents of major mining projects will want to track the discussion of this Report and the implementation of its recommendations closely.

Background
On August 15, 2016 the Minister of Environment and Climate Change announced that a four person Expert Panel was established to conduct this review.  In the eight months that followed, the Panel sought input from Indigenous Peoples, provinces and territories, key stakeholders and other Canadians. The results of their research, including 48 recommendations regarding legislative and regulatory changes to the current environmental assessment processes associated with the Canadian Environmental Assessment Act, 2012, are set out in the Report. If adopted, the Report’s recommendations would alter the current approach to federal EA processes and could have a substantial impact on mining project developers and proponents. In particular, and for the purpose of this article, we will focus on the Report’s recommendations that redefine triggers of federal impact assessments and would shift the assessment process to a three-stage approach once triggered.

Triggers
The current Panel’s recommendations expand the number of projects that trigger an environmental assessment by outlining the threshold as “activities with potential impacts on matters of federal interest that are consequential to present and future generations.”3 According to the Report, “the term ‘consequential’ is of utmost importance in triggering meaningful federal IA”4 and is meant to eliminate Projects with a “trivial impact” on federal interests from triggering IA, a distinction that the Report indicates can be accomplished through a materiality test. Examples of activities that are consequential to present and future generations include those that “affect multiple matters of federal interest; are of a duration that will be multi-generational; and/or extend beyond a project site in geographic extent.”5 However, the report does not supply concrete examples of testing what would constitute a consequential impact. A further trigger allows “proponents or any person or group to request that a project require a federal project IA.”6 The Expert Panel anticipates that hundreds of Project IAs would be triggered each year under this proposal. It notes that this compares to the current approach under CEAA 2012, which applies to dozens of projects annually, and the legislation that preceded CEAA 2012 that applied to thousands of projects annually.

Three Stage Focus

The proposed three-stage federal IA approach, comprised of a Planning Phase, a Study Phase and a Decision Phase, represents a significant departure from the current environmental assessment process. The recommendations in the Report look to streamline the hearing process and focus on issues of non-consensus, incorporate an independent decision maker, and build in transparent, evidence-based decisions. Overall, the process outlined in the Report focuses on outcomes for projects on sustainability using net benefits, rather than the current “significant adverse environmental effects” test. 
 
The Planning Phase is the biggest change from the early stages of the current environmental assessment process. According to the Report, one of the primary reasons for the suggested amendment is that the starting point for the current environmental assessment is “perceived to be too late for communities, stakeholders and Indigenous Groups to provide input into project design or alternative means by which a project could be realized.”7 In an attempt to discipline the IA processes, the Panel recommends that the IA authority “be required to develop an estimate of the cost and timeline for each phase of the assessment and report regularly on the success in meeting these estimates”8 during the Planning Phase, and that the estimate would be made public. The IA timelines are to be established on a project-by-project basis that takes into account each project’s specific context and issues, and that should take into account timelines “applicable to any provincial assessment process and where an Indigenous jurisdiction was leading its own process.”9  The Study Phase is essentially the same as the current federal environmental assessment process. 
 
The Decision Phase follows the completion of the Impact Statement, and comprises the phase in which the IAC will determine whether the project should be allowed to proceed. If there is consensus for the Project to proceed, the Commissioner then drafts an order reflecting the consensus. If there are areas of non-consensus, a review panel will be appointed to hold a hearing on all issues of non-consensus and will make the decision. In particular, the Report recommends that the IAC should seek Indigenous consent and issue a public decision statement on whether the project provides an overall net benefit to Canada across the five pillars of sustainability for present and future generations. The test for determining whether a project is allowed to proceed will involve a project-specific “sustainability test” to “assess the impacts of the project across the five pillars of sustainability, based on the project-specific sustainability framework.”10 In addition, the adequacy of Indigenous consultation would be addressed in the Decision Phase. The report does not outline the steps that would be taken in the event that experts are unable to reach agreement. The Decision Phase will conclude with the issuance of a Decision Statement allowing or rejecting the project.

A Tiered Approach

The Panel’s research determined that a tiered approach would provide a means of incorporating regional issues into the project approval process. According to the Report: 
“Regional IA can play a major role in managing cumulative impacts on matters of federal interest in an airshed, watershed or other regionally defined area. It may therefore play an important role in addressing cumulative impacts on Indigenous communities and their ability to exercise their constitutionally-protected Aboriginal and treaty rights.”11 

There are five key objectives outlined for regional IA:
1. To streamline, inform and improve project IA;
2. To gather information about and improve management of cumulative impacts affecting the sustainability  of matters of federal interest;
3. To inform federal decisions on future projects in the region;
4. To build trust and relationships with Indigenous Groups; and
5. To set a preferred direction and strategy  for achieving sustainability in a region through the assessment of alternative development scenarios.12  

Although the current federal environmental assessment regime includes mechanisms for the assessment of federal initiatives and the undertaking of regional studies, participants noted that these mechanisms are infrequently used and ineffective in achieving the desired result.
The recommendations made by the Expert Panel could render strategic and regional IAs mandatory, in some cases. The Report provides some guidance on the process for completing strategic and regional IAs; however, the work proposed is not a simple task and requires cooperation among several parties. The Report does not provide insight or recommendations to guide the coordination of parties, and while it mentions the efficiencies that come with a “linked hierarchy of tiered assessments”13 it does not indicate when strategic and regional IAs would be available to inform project IAs. 

Conclusion:

The recommendations set out in this Report, if implemented, could directly impact Canada’s ability to attract new mineral investment and to move projects forward. There were several additional changes outlined that, as a result of spatial constraint, remained outside of the scope of our assessment in this article. These include recommendations for the establishment of a new regulator and new assessment and decision-making processes.  Some view the revised proposed process as a welcome change that will improve cooperation among provincial and federal departments, help to restore public trust, and improve consultation of First Nations Groups. However, others point to the additional costs that will be incurred through the additional experts and processes involved in the new IA, as well as the uncertainty that comes with any reviews and amendments to key environmental legislation, as potentially detrimental to investment in Canada’s mining sector. Project proponents, particularly industry, must pay close attention to the federal government’s response to the Panel’s recommendations. The message remains that assessments will continue to be required for new projects.

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