Bill C-69 & the New Federal Impact Assessment Act: The Impact on the Role of the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) and the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB)
February 20, 2018
By Daniel Watt, at McInnes Cooper
On February 8, 2018, the Canadian federal government proposed a new Impact Assessment Act in 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. The newly proposed Impact Assessment Act doesn’t implement a wholly new regulatory regime for the offshore oil and gas sector (as the Canadian Energy Regulator Act does for the offshore renewable energy sector). But it is clear that under the new Impact Assessment Act, the existing Offshore Boards – the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) and the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) – will play a clearer – and ultimately greater – role in the new impact assessment regime for offshore oil and gas activities.
Offshore Boards’ Current Role. Major offshore oil and gas activities trigger environmental assessments under the existing federal environmental assessment law, the Canadian Environmental Assessment Act, 2012 (CEAA 2012). CEAA 2012 assigns responsibility for environmental assessments of various activities in a so-called “designated project list” to particular federal agencies, called the “responsible authority.” Currently, the Canadian Environmental Assessment Agency (CEA Agency) is the responsible authority for offshore activities. In 2015-2016, the federal government began the process to make the Offshore Boards responsible authorities under CEAA 2012, but never completed it; the CEA Agency remains responsible for major offshore environmental assessments. Under the current law, Offshore Boards don’t participate directly in assessing major offshore projects; however, they are responsible for environmental assessments for smaller activities that don’t trigger environmental assessments under CEAA 2012.
Offshore Boards’ New Role. With the proposed Impact Assessment Act the CEA Agency will continue, but under a new name: the Impact Assessment Agency (IA Agency). The Impact Assessment Act won’t change the basic assignment of responsibility for impact assessments of offshore oil and gas activities that are on the project list or designated by the Minister, despite some public discussion about the Offshore Boards assuming responsibility for them under the new regime. The IA Agency will continue to be in charge of impact assessments for offshore activities on the designated project list; the Offshore Boards will continue to conduct environmental assessments for smaller projects that are not. But the Impact Assessment Act will change the Offshore Boards’ role in impact assessments in other ways, giving Offshore Board expertise a clearer – and ultimately greater – role in the assessment process. The Impact Assessment Act mandates the inclusion of Offshore Board expertise on impact assessment review panels. And while it’s not yet clear how the designated project list might change, if an impact assessment is required for a designated offshore oil and gas project the Minister will have no choice but to order a review panel assessment.
- Mandated Offshore Board Expertise on Review Panels. Under the proposed Impact Assessment Act, Offshore Board members must be among the persons appointed to review panels assessing offshore projects, though they won’t be directly responsible for assessments of designated offshore projects. The existing regime doesn’t require any offshore expertise. And – in theory at least – under the new regime the Minister could appoint a review panel composed entirely of Offshore Board members.
- Rosters. The Minister must establish rosters of members of each Offshore Board who can be appointed to review panels.
- Panel Appointment. When the Minister establishes a review panel for designated projects involving work regulated by either Offshore Board, the Minister must appoint a panel of at least five persons, including a chairperson and at least – but not a maximum of – two persons from the applicable Offshore Board roster.
- Unbiased & Knowledgeable. As under CEAA 2012, all review panel members must be unbiased and free from any conflict of interest relative to the proposed project. They must also either have knowledge or experience relevant to the project’s anticipated effects or knowledge of Indigenous peoples’ interests or concerns relevant to the assessment.
- Review Panels Required. Under the proposed Impact Assessment Act, if the IA Agency determines an impact assessment is required for a designated offshore oil and gas project, the Minister will have no choice but to order assessment by a review panel (a group of individual experts appointed by the Minister). This means it’s likely there will be more review panel assessments – depending, of course, on what the final designated project list looks like. Under CEAA 2012, the Minister can require review panels, instead of the CEA Agency or other responsible authority, to conduct assessments. Review panel assessments are typically reserved for major projects with potentially significant adverse environmental effects, that attract public concerns, or both, because they’re more involved: they entail greater public input, the possibility of public hearings and longer completion timelines. Under the proposed Impact Assessment Act, the Minister will no longer have any discretion to permit offshore oil and gas projects to be assessed by the more streamlined IA Agency process, rather than the lengthier review panel process.
- Changes to Designated Project List. The Impact Assessment Act doesn’t address how the designated project list might change, and it remains to be seen what the new criteria will look like and whether smaller offshore activities will be excluded from the list. The federal government indicates it will be revising the designated project list (currently called the Regulations Designating Physical Activities), and thus subject to an impact assessment, as part of its review of environmental assessment processes and proposed new legislation. However, the CEA Agency has proposed new criteria the government might use to determine what projects should make the designated project list. Its proposal would limit the list to only those projects with the most potential for adverse environmental effects in areas of federal jurisdiction. Projects with potential for smaller effects would be subject to other federal regulatory processes – like those the Offshore Boards currently carry out. And since the Impact Assessment Act will subject any assessment of offshore activities on the designated project list to an onerous review panel process, industry and the Newfoundland and Labrador government have suggested excluding exploration and other activities short of development and production from the designated project list.
- New Planning Phase. The Impact Assessment Act also proposes a new “planning phase” for assessments in which the project proponent must submit to the IA Agency an initial project description containing prescribed information. Although this phase is new, the Offshore Boards’ role in it will be familiar: the IA Agency can require the Offshore Boards to provide any specialist or expert information they have about the project, an obligation they already have with respect to environmental assessments under the CEAA 2012. This new phase seems intended to allow the IA Agency to determine whether an impact assessment is required as well as establish the potential scope of any impact assessment through public input and regulatory consultation.
Please contact your McInnes Cooper lawyer or any member of the Oil & Gas Team @ McInnes Cooper to discuss this topic or any other legal issue.
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