Opinion: Latest changes help but project reviews need still more certainty

Published in Financial Post

Project approval is still too political, too concerned with proposals' tangential rather than direct effects, and too slow to consult.

Bill C-39, the “Building Canada Strong Act,” which the federal government tabled in Parliament last month, does improve the country’s laws on project approvals, but there is more Ottawa could do to create real and lasting certainty for investors.

Though the bill makes changes in six separate acts, what’s most important are four changes to the Impact Assessment Act, which in some circles became known as the “No more pipelines act.”

C-39 adds the Canadian Nuclear Safety Commission (CNSC) and Canada Energy Regulator (CER) as responsible authorities to conduct an impact assessment for activities regulated under the Nuclear Safety and Control Act. Empowering the CNSC and CER to lead, and in some cases make the final decision on impact assessments for nuclear, uranium and pipeline projects ensures expert regulators lead these processes and removes the requirement for a joint review panel with the Impact Assessment Agency. In practice, it’s also likely to speed things up simply because the CER, for example, consistently delivers applications on time. A recent C.D. Howe Institute report found that review panels are the most time-consuming type of impact assessment.

A second big change is to allow enabling work to begin on projects even before the government issues a decision. In theory, this will reduce the time between application and construction, which means also reducing the time before proponents start realizing revenues and profits. In practice, however, proponents may want to await final approval to reduce the risk of legal challenges from impacted communities.

Bill C-39 also significantly reduces time limits for reviews. For example, where the current IAA has a time limit of three years for proponents to provide all necessary documentation, Bill C-39 mandates 365 days. And it wants assessments completed in 300 days, with the possibility of reducing that. By contrast, the IAA allows the option of lengthening the process. Of course, time limits can always be extended. Meeting them relies on proponents providing complete submissions upfront and regulators and agencies leveraging institutional knowledge and past assessments to streamline delivery of recommendations and conditions.

Finally, impact assessment decisions will now include required authorizations from other federal agencies and departments. It is not quite clear in reality how these authorizations can be approved using project information received from proponents for their impact assessments unless project proponents collect much more detailed information upfront. But this change seems likely to force improved coordination and information-sharing between the Impact Assessment Agency and federal departments responsible for those authorizations, and that’s a positive development.