June 27, 2012 – Canada’s Federal Budget: Sensible Streamlining or Unwarranted Removal of Environmental Protection?

After a marathon session in the lower chamber of Canada’s federal parliament last week, the Conservative government majority prevailed and the federal Budget Bill C-38 (Jobs, Growth and Long-Term Prosperity Act) is now working its way through the final stages of the legislative process in the upper chamber.

Bill C-38 brings with it considerable restructuring of Canadian environmental regulation. The federal government says that the objective of Bill C-38 is to improve conditions for business investment and environmental regulation in Canada by making the review of major economic projects more timely and transparent. Opponents argue that the Bill is a wholesale removal of basic environmental protections and rights.

So, what are some of the changes that Bill C-38 makes to federal environmental regulation and what are opponents’ concerns?

“Responsible Resource Development” under Bill C-38 

 1.     Canadian Environmental Assessment Act, 2012 (CEA Act 2012)

Bill C-38 repeals the current Canadian Environmental Assessment Act and replaces it with the new federal environmental assessment regime contained in the CEA Act 2012.  The federal government’s mantra of “one project, one review” within a clearly defined period of time resonates clearly in these amendments.  Changes include:

  • Environmental assessment (EA) will only be required for “designated projects” established by regulation or by the Minister of the Environment. EA for projects, which involve federal money, will no longer be required.
    • The concern: that the discretionary basis for designating projects will result in fewer EA’s being conducted and leaves gaps in what activities are subject to EA.
  • The focus of environmental assessments will be on significant adverse environmental effects of designated projects directly linked or necessarily incidental to federal approval. “Environmental effects” is given a variable meaning depending on circumstances. At its narrowest it means only effects on fish, aquatic species and migratory birds.
    • The concern: that this limitation will compromise the scope of analysis required for a thorough assessment.
  • Time limits for issue of a decision on an EA are introduced. Additional time may be granted at the discretion of the Minister and Governor in Council.
    • The concern: that this may not allow sufficient time for thorough assessment and full public participation.
  • Federal environmental assessments are not required in situations in which a province provides an equivalent substitute.
    • The concern: that, despite ‘equivalency”, differences in federal and provincial regulatory requirements and responsibilities will result in inconsistent EAs.
  • Responsible authorities must ensure that the public is provided with an opportunity to participate in the environmental assessment of a designated project. Public participation for projects currently subject to comprehensive studies will likely not be affected. The public will still be able to submit written comments, which then must be taken into consideration. Public participation will be significantly minimized for those projects that must undergo panel reviews or for pipeline projects. For panel review projects the public will still be permitted to submit written comments regarding a project. However, only “interested parties” will be permitted to participate at hearings. “Interested party” under the amendments is a person who, in the opinion of the responsible authority or the review panel is directly affected by the carrying out of the project; or has relevant information or expertise.
    • The concern: that this limitation will deny a voice to those representing environmental interests. The public interest in the environment is not restricted to the personal and property interests of individual objectors.
  • Federal authorities may not carry out, or do anything authorized by another Act that would permit, a non-designated project on federal lands unless the authority determines carrying out of the project is not likely to cause significant adverse environmental effects; or the Governor in Council decides that those effects are justified in the circumstances.
    • The concern: that these are issues that should properly be tested in the public forum of an EA hearing.

2.     Canadian Environmental Protection Act (CEPA)

CEPA is an Act respecting pollution prevention and the protection of the environment and human health in order to contribute to sustainable development. Under Bill C-38 changes to CEPA include authority for the Minister of the Environment to renew disposal at sea permits.

  • The concern: that the present one year limit for permits for disposing waste at sea can now be renewed four times.

3.     National Energy Board Act (NEB Act)

The NEB Act establishes a National Energy Board (NEB), which regulates certain energy projects in Canada. Under Bill C-38 changes to the NEB Act include:

  • Removing power from the NEB to the Governor in Council to make decisions on certificates for major pipelines.
    • The concern: that decision making on major pipelines will be politicized.
  • Limiting participation to those who are, in the Board’s opinion, “directly affected” and limiting the scope of consideration to factors “directly related” to the pipeline.
    • The concern: that wider impact of the pipeline will not be considered and the wider public will be denied a voice in the proceeding.
  • Imposing time limits for regulatory reviews under the Act. The NEB must make a report and recommendation on an application within 15 months.
    • The concern: that the time limit and the possibility that Cabinet’s will reject the recommendation undermine the NEB’s review process.
  • Giving the National Energy Board responsibility for pipelines and the power lines that cross navigable waters (previously administered under the Navigable Waters Protection Act).
    • The concern: that the NEB will have insufficient resource and expertise to cope with this responsibility and the responsibility of being one of only three responsible authorities for EA under CEAA 2012.
  • Establishing an administrative monetary penalty system for violations under the Act.

4.     Fisheries Act

The Fisheries Act conserves and protects fish and fish habitats across Canada. Under Bill C-38 changes to the Fisheries Act include:

  • Limiting the protection of the act to fish that support commercial, recreational or Aboriginal fisheries.
  • Merging the former prohibitions on killing fish and on carrying out work or undertakings that cause harmful alteration, disruption or destruction of fish habitat (HADD) into one new prohibition against “serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery”. Serious harm to fish is defined as “death of fish or any permanent alteration to, or destruction of, fish habitat”.
  • Authorizing the Minister to create regulations that exempt activities or projects from prohibitions on destroying fish and harming habitats.
    • The concern: that these changes will remove protection for fish and fish habitat, where they do not support commercial, recreation or Aboriginal fisheries.
  • Authorizing the Department of Fisheries and Oceans to designate “prescribed waters” or specific bodies of water, which are exempt from prohibitions.
    • The concern: that this will create incentives to drain lakes in order to fill dry holes with mining tailings.

It is noteworthy, given the changes that have been made, that section 36, the section that prohibits the deposit of deleterious substances in fisheries waters, remains substantially intact.

  • The concern: that broader regulation making powers may be used in the future to authorize pollution of fisheries waters.

5.    Species at Risk Act (SARA)

A key focus of SARA is to identify and protect the critical habitat of the species at risk. Under Bill C-38 changes s to SARA include:

  • Removal of maximum terms on permits issued under the Act. In essence, a permit is an exemption from the prohibitions in the Act.
    • The concern: that there is no longer a maximum term, and hence the need for regular renewal, for SARA permits. The 3 and 5 year time limits, which previously protected species at risk from industrial harm, will be now be open ended.
  • Exempting the NEB from the requirement to ensure that reasonable measures have been taken to minimize impacts on the critical habitat of species at risk when it issues approvals for pipelines and other major infrastructure.
    • The concern: that the exemption removes an important protection for critical habitat of species at risk.


The changes enacted by Bill C-38 go much further than simply making the review of major economic projects more timely and transparent or streamlining the regulatory process. The federal government has clearly prioritized the requirements of business and development over regulatory protection of the environment. Environmental NGO’s and project opponents will doubtless scour the new provisions and regulations closely, as well as other federal statutes, to see where opportunities for challenge remain. We will also see increased reliance on the remedies and review procedures that exist under provincial environmental legislation.

This post has now been published in EHS Journal and can be found at the following link: Canada: Environmental Implications of the Federal Budget 

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3 Responses to June 27, 2012 – Canada’s Federal Budget: Sensible Streamlining or Unwarranted Removal of Environmental Protection?

  1. Pingback: July 12, 2012 – What does Canada’s federal budget mean for Aboriginal environmental rights? | Environmental Law Bites

  2. Pingback: November 22, 2012 – Canada Continues Rollback of Environmental Regulation | Environmental Law Bites

  3. Excerpts from this piece have now been published under the title “What does Canada’s federal budget mean for power developers?” in the November 2012 issue of Ippso Facto, the magazine of APPrO, the Association of Power Producers of Ontario.



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