2014 Fall Report of the Commissioner of the Environment and Sustainable Development Chapter 4—Implementation of the Canadian Environmental Assessment Act, 2012

2014 Fall Report of the Commissioner of the Environment and Sustainable Development
Chapter 4—Implementation of the Canadian Environmental Assessment Act, 2012

Introduction

Importance of environmental assessment

4.1 Environmental assessment is a planning tool that helps decision makers identify and understand potential adverse environmental effects from projects and take action to prevent or mitigate those effects. For decades, all levels of government in Canada have recognized the value of this tool, which has been formalized in legislation.

4.2 According to the Canadian Environmental Assessment Agency, an environmental assessment should be conducted as early as possible in the planning stage of a project. This is done so that the proponent can consider the analysis in the proposed plans, including incorporation of mitigation measures to address adverse environmental effects. Environmental assessment can lead to many benefits:

• avoidance or minimization of adverse environmental effects,
• opportunities for public participation and Aboriginal consultation,
• increased protection of human health,
• reduced project costs and delays,
• reduced risks of environmental harm or disasters,
• increased government accountability and harmonization,
• lessened probability of transboundary environmental effects, and
• better-informed decisions that contribute to responsible development.

Canada’s new federal environmental assessment process

4.3 The Canadian Environmental Assessment Act, 2012 (CEAA 2012) establishes the legislative basis for federal environmental assessments. CEAA 2012 came into force in July 2012, replacing the former Canadian Environmental Assessment Act.

4.4 CEAA 2012 was introduced as part of the government’s Responsible Resource Development plan, which aimed to make the review process for major projects more predictable and timely, reduce duplication among various levels of government, strengthen environmental protection, and enhance consultations with Aboriginal peoples. The intent of the new legislation was to focus on projects that have the greatest potential for significant adverse environmental effects in areas under federal jurisdiction.

4.5 Under CEAA 2012, the following federal organizations, referred to as “responsible authorities,” are responsible for conducting environmental assessments:

• the National Energy Board, for projects it regulates, such as international and interprovincial pipelines and international electrical transmission lines;
• the Canadian Nuclear Safety Commission, for projects it regulates, such as nuclear facilities and activities;
• the Canadian Environmental Assessment Agency, for all designated projects under CEAA 2012, except projects regulated by the National Energy Board and the Canadian Nuclear Safety Commission; and
• a federal authority if it has been prescribed by regulation or by order under the Act.

4.6 Under CEAA 2012, project categories are designated for environmental assessment by the Regulations Designating Physical Activities; the Minister of the Environment may also designate projects for environmental assessment. Thirty-seven new environmental assessments began under CEAA 2012: 34 by the Agency, 3 by the National Energy Board, and none by the Canadian Nuclear Safety Commission. (See Appendix A for the list of projects and Exhibit 4.1 for their location.)

Exhibit 4.1—Environmental assessments that began under CEAA 2012 on or after 6 July 2012

[Exhibit 4.1 — text version]

Numbers appearing on this map correspond to the projects listed in Appendix A.

This map does not include

• projects that were determined by Agency screening to not require an environmental assessment;
• environmental assessments that were terminated;
• environmental assessments that began under the former CEAA and continued under CEAA 2012 (for example, panel projects such as the Enbridge Northern Gateway Project); and
• projects under consideration for environmental assessment at the time of writing.

Source: Canadian Environmental Assessment Agency

4.7 The environmental assessment of a designated project must consider environmental effects within federal jurisdiction, including fish and fish habitat, aquatic species, and migratory birds, as well as any change that may occur on federal lands, in another province, or outside Canada. Additionally, the impact of environmental effects on Aboriginal peoples, including health and socio-economic conditions, physical and cultural heritage, structures of significance, and current use of lands for traditional purposes, must be considered in all assessments.

4.8 The responsible authorities must also take into account any additional change to the environment resulting from the exercise of a power, duty, or function of a federal authority that permits the carrying out of a given project—along with any effects on health and socio-economic conditions; physical and cultural heritage; or any structure, site, or thing that is of historical, archaeological, paleontological, or architectural significance, other than as they pertain to Aboriginal peoples.

4.9 Once an environmental assessment is complete, a decision is made as to whether the project is likely to cause significant adverse environmental effects. The Minister of the Environment makes that decision for any environmental assessment conducted by the Agency or by a review panel. Where it is conducted by the National Energy Board or the Canadian Nuclear Safety Commission, these authorities make the decision (except for pipeline projects, where the National Energy Board makes a recommendation to the Governor in Council). If the project is found likely to cause significant adverse environmental effects, the Governor in Council then determines whether those effects are justified under the circumstances; if they are found to be justified, the project may be approved with conditions, including mitigation measures.

4.10 CEAA 2012 requires that an environmental assessment by the Agency be completed within 12 months and within 24 months when an assessment has been referred to a review panel—that is, a group of experts appointed by the Minister of the Environment to carry out the environmental assessment of a specific project. CEAA 2012 does not apply time limits to the National Energy Board or the Canadian Nuclear Safety Commission. Under the National Energy Board Act, the National Energy Board’s reviews of certain pipeline and power line projects must be completed within 15 months. The Canadian Nuclear Safety Commission has committed to completing environmental assessments within 24 months.

4.11 CEAA 2012 allows the environmental assessment processes of some other jurisdictions to be recognized as substitutes for or equivalents to the federal process, when the Agency is the responsible authority. Substitution and equivalency are not permitted when either the National Energy Board or the Canadian Nuclear Safety Commission is the responsible authority.

Mandates of the three responsible authorities

4.12 Canadian Environmental Assessment Agency. Before CEAA 2012, the Agency was mainly responsible for coordinating the process, for providing guidelines on the application of the Act, and, since 2010, for conducting comprehensive studies, a type of environmental assessment. Under CEAA 2012, the Agency is a responsible authority that carries out environmental assessments, and is responsible for monitoring and enforcement of conditions established under environmental assessments.

4.13 National Energy Board. The Board is the federal regulator of pipelines and energy development and trade, including oil and gas activities in some parts of Canada’s offshore. The National Energy Board regulates approximately 73,000 kilometres of pipelines. For simplicity, in this chapter, when using the word “Board,” we are referring to the organization as a whole, including both the Board members and National Energy Board staff.

4.14 Canadian Nuclear Safety Commission. The Commission regulates the development, production, and use of nuclear energy and the production, possession, and use of nuclear substances. Examples of projects regulated by the Canadian Nuclear Safety Commission under CEAA 2012 include new uranium mines or mills and new nuclear power plants, and major expansions to nuclear facilities. In this chapter, we include the Commission members and the staff when we refer to the Commission.

Focus of the audit

4.15 The audit examined three responsible authorities: the Canadian Environmental Assessment Agency, the National Energy Board, and the Canadian Nuclear Safety Commission, and whether they have put in place systems, practices, and procedures to support effective environmental assessments under the Canadian Environmental Assessment Act, 2012. This audit covers the period from July 2012 to July 2014. We did not include any other environmental activities conducted by the Board under the National Energy Board Act or work carried out by the Commission to assess environmental impacts before issuing a licence under the Nuclear Safety and Control Act.

4.16 CEAA 2012 is still in its early stages of implementation. As such, we focused on key aspects of the Act that are relevant at this stage; namely, processes for identifying projects requiring environmental assessment and processes for public and Aboriginal participation. We also looked at processes for implementing the substitution and equivalency provisions of the Act and some aspects of the cumulative effects assessment.

4.17 More details about the audit objectives, scope, approach, and criteria are in About the Audit at the end of this chapter.

Observations and Recommendations

4.18 The coming into force of the Canadian Environmental Assessment Act, 2012 brought substantial changes in areas such as identifying which projects would be subject to environmental assessment, who would conduct them, and how they would be carried out. These changes require the responsible authorities to review and update their approaches and processes to implement the new Act.

Designating projects

4.19 The starting point of environmental assessment is to identify which projects will undergo an assessment. Under the Canadian Environmental Assessment Act, 2012 (CEAA 2012), environmental assessments are to be conducted for proposed projects that have been “designated,” either by regulation or by the Minister of the Environment. The Agency’s role is to provide recommendations to the Minister on the project categories to be included in the Regulations Designating Physical Activities and on projects to be designated on a case-by-case basis. The Agency also has the role of deciding which designated projects under its responsibility undergo environmental assessment.

4.20 Overall, we found that the Agency’s rationale for identification of projects for environmental assessment is unclear, specifically in making its recommendations to designate projects that may require an assessment, its process for supporting case-by-case designation of projects, and its screening process for determining which projects will undergo an assessment. As well, most of the Agency’s processes and the rationales on which recommendations are based are not made public. As the intent of the new legislation is to focus on projects that have the greatest potential for significant adverse environmental effects, it is important for the Agency to have a clear, transparent basis for identifying those projects.

The rationale to identify projects for environmental assessment is unclear

4.21 The Regulations Designating Physical Activities identify the project categories that may require an environmental assessment under CEAA 2012. The Regulations, which are commonly referred to as the “project list,” are the primary means of identifying which projects have the greatest potential to cause significant adverse environmental effects in areas of federal jurisdiction. The initial Regulations that came into force in July 2012 were largely based on the Comprehensive Study List from the previous legislation. The Regulations were amended in October 2013. We examined whether the Canadian Environmental Assessment Agency had established clear and transparent criteria and conducted the analysis necessary for recommending to the Minister which projects should undergo environmental assessments.

4.22 The Agency performed some analysis to develop its recommendations on which project categories should be listed. The Agency indicated that it considered the potential for significant adverse environmental effects, and other factors such as national consistency and alignment with provincial legislation. However, we found that in some cases, there was insufficient documentation to demonstrate how the factors were validated and weighed in the analysis, and how input from stakeholders and Aboriginal groups was used to inform the recommendations. The Agency also indicated that there had been discussion of input and evidence before determining recommendations, but this is not documented in the files.

4.23 Some project categories, such as diamond mines and railway yards, were included in the amended Regulations, while others, such as wind turbines and in situ oil sand operations, were not. What is not always clear are the Agency’s rationales to support its recommendations as to why some projects should be included and others are not. Such an understanding is important for transparency and predictability.

4.24 Under CEAA 2012, a project not included in the Regulations—for example, a project that is below thresholds for designation—can be designated by the Minister on a case-by-case basis if he or she is of the opinion that carrying out the project may cause adverse environmental effects or that public concerns warrant an environmental assessment. The Agency supports the Minister by making recommendations. The Agency has made recommendations on six projects to date, including for a wind farm in the Niagara region of Ontario and for a coal transfer facility in Surrey, British Columbia. We found that the Agency’s process to prepare recommendations to the Minister for responding to public requests sets out the steps to be followed but does not articulate how public concerns and the potential for environmental effects are to be considered. We also noted that the Agency’s process is not disclosed to the public.

4.25 Thorough analysis and public disclosure are cornerstones of effective and transparent regulatory processes and accountability in decision making. They also create confidence and predictability in the environmental assessment process. Greater clarity in identifying projects to undergo environmental assessment would allow Canadians to better understand why certain types of projects will be assessed and why other projects will not be assessed.

4.26 Recommendation. To support future reviews of the Regulations Designating Physical Activities, the Canadian Environmental Assessment Agency should develop criteria to recommend changes to the Regulations. The Agency should also develop a clear process to support its recommendations for the case-by-case designation of projects. The Agency’s criteria and processes should also be made public.

It is not always clear how the Canadian Environmental Assessment Agency has reached its screening decisions

4.27 Designated projects under the responsibility of the National Energy Board or the Canadian Nuclear Safety Commission automatically require an environmental assessment. Designated projects under the responsibility of the Agency undergo a second step, or screening process, to decide whether the projects require an environmental assessment. We examined whether the Agency had established clear and transparent criteria and conducted the analysis necessary for making screening decisions on which projects would be required to undergo environmental assessments.

4.28 According to CEAA 2012, the Agency, in making its screening decisions, must consider whether adverse environmental effects may result from the project. There is no definition of adverse environmental effects in the Act. Further, the Act is silent on determining the significance of effects at the screening stage. Under the Act, the determination of the likelihood of significant adverse environmental effects is to be made at the environmental assessment stage. We found that the Agency, as set out in its guide for preparing a project description, might decide that an environmental assessment is not warranted if it anticipates that the project will have minor environmental effects that can be managed through other existing regulatory regimes. This means that the Agency may make a determination on the potential for significance of adverse environmental effects at the screening stage.

4.29 We found that, while the Agency has developed a step-by-step process along with specific timelines to assist in promoting consistent decision making, the process does not clearly outline how public concern and other types of input are taken into account. As such, it is not always clear how the Agency has considered the input it has received in reaching its decisions. Further, its process and the screening analysis are not readily available to the public.

4.30 Recommendation. The Canadian Environmental Assessment Agency should clearly outline and explain how, in its screening process, various criteria and inputs are considered to support its screening decisions. This information should also be made public.

Public and Aboriginal participation

4.31 Under the Canadian Environmental Assessment Act, 2012 (CEAA 2012), the responsible authorities must ensure that the public and Aboriginal peoples are provided the opportunity for meaningful public participation. We examined whether the responsible authorities had established mechanisms to allow for meaningful public participation and Aboriginal communication and cooperation as required by the Act.

4.32 Overall, we found that mechanisms such as guidance, processes, and some funding programs are in place to assist public participation in environmental assessment processes. We noted that the Canadian Environmental Assessment Agency’s guidance to review panels does not include any interpretation of interested parties. We also noted that some of its tools were not available to the public. We noted that the provisions of the National Energy Board Act differ from CEAA 2012 with respect to public participation and that guidance regarding participation needs to be established for offshore drilling projects. Aboriginal groups and other stakeholders interviewed and surveyed as part of the audit raised concerns over their capacity to participate in a meaningful manner. In the context of federal environmental assessments, the purpose of public participation is to ensure that those who must make decisions during and after the environmental assessment process are well informed, and that the public has had the opportunity to participate in a meaningful way.

Mechanisms for public and Aboriginal participation are in place but there are gaps

4.33 The three responsible authorities have put in place systems and practices for public and Aboriginal participation in environmental assessment processes. We found, however, some gaps and issues in some of the practices, which we detail in the following findings.

Publication of the Agency’s guidance would increase transparency

4.34 The Agency has planned out the stages of public participation (Exhibit 4.2) and developed tools and guides to assist it in conducting its public participation activities and reviewing public input. One of the Agency’s objectives under CEAA 2012 is to engage with Aboriginal peoples on policy issues related to the Act. We found, except for activities conducted in the development of amendments to the Regulations Designating Physical Activities, that the Agency has not undertaken a systematic approach to engagement with Aboriginal peoples on policy issues.

Exhibit 4.2—The Agency has two types of processes for environmental assessments, both of which include opportunities for public participation

[Exhibit 4.2 — text version]

Note: The terms of reference set out the scope and limitations of a review panel’s activities and the environmental assessment.

4.35 We also found that some of the Agency’s internal guidance has not been made public. Sharing such information is important in meeting some of the key elements—accessible information, shared knowledge, transparent results—of meaningful public participation. Guidance on Aboriginal consultation, environmental assessment by a review panel, and approaches to compliance enforcement are examples of the type of information that contribute to informing Aboriginal groups and stakeholders, as well as proponents. Much of this internal guidance is included in the Agency’s Practitioner Guide, which is not publicly available. The guide explains each step of its environmental assessment process and provides information about the Agency’s key determinations, such as screening decisions on whether a project will be subject to an environmental assessment.

4.36 Recommendation. The Canadian Environmental Assessment Agency should develop a systematic process for engaging with Aboriginal peoples on policy issues. The Agency should also make publicly available its detailed working guidance such as, but not limited to, guidance on Aboriginal consultation, environmental assessment by a review panel, and the basis on which screening decisions are determined. The guidance made available should inform Aboriginal groups and stakeholders, as well as proponents on how the Agency carries out its obligations under CEAA 2012.

The Agency will make available to the public additional guidance information on how it carries out its obligations.

Guidance would assist review panels in deciding who can participate in hearings

4.37 CEAA 2012 provides a basis for public participation to be limited to interested parties. The interested party provisions of the Act apply to review panels, meaning they make the decision about who participates in public hearings and in what manner.

4.38 In the absence of guidance from the Agency on this topic, the review panel for the New Prosperity Gold-Copper Mine Project in the interior of British Columbia, which was the first to apply these provisions, developed its own approach, relying on case law to interpret the provisions of the Act. Guidance would promote consistency in the application of these provisions. We believe that the Agency is best positioned to provide this type of guidance.

4.39 Recommendation. The Canadian Environmental Assessment Agency should provide general guidance to review panels to assist them in determining who may participate in public hearings and in what capacity.

National Energy Board public participation guidance does not refer to CEAA 2012

4.40 The National Energy Board has in place a set of systems and practices for consultation with the public. For example, for each CEAA 2012 project it reviews, the Board puts in place a public engagement plan, which includes activities aimed to remove barriers to Aboriginal participation.

4.41 Once the formal environmental assessment process begins, the Board applies its new public participation framework (Exhibit 4.3). In applying this framework, the Board decides who may participate (called “standing”) and in what manner (called “level of participation”). For Board-regulated pipeline and power line projects designated under CEAA 2012, participation is limited to interested parties. The same standing tests and determination of levels of participation that apply to the public are applied in the Aboriginal context; however, the Board told us that it takes into account the unique circumstances of Aboriginal groups.

Exhibit 4.3—The National Energy Board decides who participates in an environmental assessment process and in what manner

[Exhibit 4.3 — text version]

Source: Adapted from National Energy Board guidance.

4.42 We found that the National Energy Board developed its new participation framework internally. We also found that the Board’s current guidance for participation is based on the National Energy Board Act, not CEAA 2012, and that key provisions that set out the standing test for public participation in the National Energy Board Act are narrower than those of CEAA 2012 (Exhibit 4.4). Although the Board told us it applies the standing test per CEAA 2012, the fact that its guidance does not refer to CEAA 2012 may be confusing for the public. This may diminish the public’s ability to demonstrate to the Board that they should be allowed to participate. We noted that work is under way at the Board to put further guidance in place.

4.43 Recommendation. The National Energy Board should update its guidance to ensure consistency with the Canadian Environmental Assessment Act, 2012. This guidance should include clarity regarding criteria and decision making for its standing tests and levels of participation.

There is no public participation guidance in place for offshore drilling projects

4.44 The National Energy Board regulates oil and gas activities under the Canada Oil and Gas Operations Act. Some of these projects are also subject to CEAA 2012. We found that the Board has no public participation guidance for these types of projects.

4.45 The Board is still determining how its participation framework would apply for these projects, but has indicated that it could also apply a standing test similar to the one applied for pipeline and power line projects. However, CEAA 2012 requires the Board to ensure that the “public” (not only interested parties) be provided with an opportunity to participate in the environmental assessment of these offshore projects. At the time of the audit, an environmental assessment process had not yet started for oil and gas activities under the Canada Oil and Gas Operations Act, but a project description has been filed with the Board for offshore oil and gas drilling in the Arctic.

4.46 Recommendation. The National Energy Board should put in place guidance on public participation for projects designated under the Canadian Environmental Assessment Act, 2012 that are also regulated by the Canada Oil and Gas Operations Act. This should be developed and put in place before any offshore drilling applications are filed with the Board.

The Canadian Nuclear Safety Commission has updated its practices for public participation

4.47 The Canadian Nuclear Safety Commission makes decisions on major projects through a public hearing process. CEAA 2012 does not specify the nature of public participation to be provided by the Commission; this is left to the Commission’s discretion. We found that the Commission has developed criteria to determine the specific breadth and timing of public participation opportunities for each environmental assessment. The criteria include public and Aboriginal interest in the project, the Commission’s understanding of the technology, and potential environmental effects. The Commission plans to assess each criterion and include a rationale to support its determination and to make this analysis publicly available. Depending on the determination, the Commission may provide varying levels of opportunities for public participation (Exhibit 4.5).

4.48 The Commission has proposed regulatory amendments that would allow it to apply the CEAA 2012 “interested party” provisions. The Commission stated that its proposed regulatory amendments are meant to limit interventions to stakeholders who have a direct interest in the matter (which corresponds to “directly affected” under CEAA 2012). It stated that this change would clarify a concept that is somewhat vague and too discretionary in its current rules for participation, which are more inclusive. A public comment period on these proposed amendments ended in May 2014.

4.49 We found that the Commission documents its responses to comments received from the public and Aboriginal groups and makes them publicly available. All of this documentation is taken into consideration in decision making. This existing practice is included in the Commission’s proposed approach to carrying out environmental assessments for projects designated under CEAA 2012. The Commission has also developed guidance and processes for Aboriginal engagement. The Commission also recommends that proponents conduct Aboriginal engagement activities at the project proposal stage. We found that the Commission is now planning to make these recommendations and other activities mandatory for proponents.

Some Aboriginal and stakeholder groups are concerned about their capacity to participate

4.50 In conducting our audit, we received input from many stakeholders and Aboriginal groups. Many of them raised concerns about their capacity to participate effectively in environmental assessment processes. Some Aboriginal groups indicated, for example, that they had little capacity in terms of staff, expertise, and funds to respond within the set timeframes, particularly when asked to respond to several requests at once. These factors may affect the meaningfulness of public and Aboriginal participation in the environmental assessment process.

4.51 Funding programs for public participation under CEAA 2012 provide a financial contribution to members of the public, non-profit organizations, and Aboriginal peoples to prepare for and participate in environmental assessments. The funding is a contribution; as such, it is not expected to cover all participants’ costs or address capacity challenges.

4.52 We note that, since the introduction of CEAA 2012, the three responsible authorities have started reviewing and updating their practices, including developing new tools to meet the purposes and requirements of CEAA 2012. Although the participants’ concerns about capacity are not attributable to any specific responsible authority, given the magnitude of the issue, we are concerned that there may be a risk that the stated public participation and Aboriginal cooperation and communication purposes of the legislation might not be met. In our opinion, the three responsible authorities are in a position to assess whether these purposes of the Act are met.

4.53 Recommendation. The Canadian Environmental Assessment Agency, the National Energy Board, and the Canadian Nuclear Safety Commission should assess whether their public and Aboriginal participation processes and time frames provide Aboriginal groups and the public with an opportunity to participate in a meaningful way and to ensure that their concerns are taken into consideration for reviewing projects that may affect them. Where necessary, measures to resolve issues related to these processes should be identified and implemented.

Working with other jurisdictions

4.54 Under the Canadian Environmental Assessment Act, 2012 (CEAA 2012), environmental assessment processes of other jurisdictions may be recognized as substitutes, or, for provinces only, as equivalents to the federal process. The only responsible authority that may apply the substitution provisions of the Act is the Canadian Environmental Assessment Agency. Substitution is not applicable when the Minister refers the environmental assessment process of a project to a review panel.

4.55 Under CEAA 2012, equivalency and substitution differ:

• Under the substitution provisions, the Minister of the Environment retains a determination as to the likelihood of significant adverse environmental effects, using the environmental assessment report received from the other jurisdiction.
• Under the equivalency provisions, the Minister may recommend to the Governor in Council that a designated project be exempt from the application of CEAA 2012. If exempted, the Minister no longer makes a determination on the likelihood of significant adverse environmental effects.

4.56 The Act requires that before approving substitution, the Minister of the Environment must be satisfied that

• the substituted process will include the same factors as the federal process,
• the public will be given an opportunity to participate in the assessment,
• the public will have access to environmental assessment records to enable their meaningful participation, and
• a report will be submitted to the Agency and made public.

4.57 We examined whether the Agency had conducted analysis to ensure that conditions are in place to support the Minister in his or her response to requests for substitution and equivalency from other jurisdictions.

4.58 Overall, we found that the Agency has ensured that conditions were in place for substituting provincial environmental assessment processes for federal ones.

Conditions for substitution have been established

4.59 The Agency has entered into a memorandum of understanding with the Province of British Columbia as a framework for substitution arrangements and has sought input from the public and Aboriginal groups on substitution decisions. At the time of the audit, the Minister had approved substitution arrangements for eight environmental assessment processes in British Columbia and had included four additional conditions:

• involving federal experts,
• adhering to CEAA 2012 timelines,
• applying the procedural aspects of Aboriginal consultation, and
• making funding available to Aboriginal groups.

4.60 As mentioned in paragraph 4.56, one of the conditions for substitution is that the substituted process include the same factors as those required by CEAA 2012. We found that the Agency verified the presence or absence of these factors. For example, the Agency would verify that the assessment of cumulative effects would be included in the provincial process.

4.61 The Agency has not yet developed practices or identified conditions that would qualify another jurisdiction’s process as equivalent to that under CEAA 2012. The Agency is of the view that it wants to gain experience with substitution arrangements before considering requests for equivalency. British Columbia officials have expressed an interest in using the equivalency provisions of the Act.

Assessing cumulative effects

4.62 While the environmental effects of a single project may not be significant when assessed in isolation, the combined effects of multiple projects on water, air, land, and wildlife may have significant adverse environmental effects. The Canadian Environmental Assessment Act, 2012 (CEAA 2012) requires that the environmental assessment of a designated project take into account any cumulative environmental effects. This includes effects that are likely to result from the designated project in combination with the environmental effects of other projects that have been or will be carried out. The significance of the environmental effects of a given project is determined by taking cumulative environmental effects into account.

4.63 In this audit, we examined whether the responsible authorities have put in place systems and practices to assess cumulative effects in their environmental assessment processes under CEAA 2012.

4.64 Overall, we found that each of the three responsible authorities have developed or are developing some guidance for assessing cumulative effects. The Canadian Environmental Assessment Agency’s and Canadian Nuclear Safety Commission’s technical guidance is still in draft, while the National Energy Board still needs to put in place guidance for offshore drilling projects. We also noted that CEAA 2012 has provisions for the carrying out of regional studies, an important step that, once completed, will help in understanding the effects of multiple projects (existing and future) in a given region.

Guidance on the assessment of cumulative effects is not yet finalized

4.65 We found that the Canadian Environmental Assessment Agency has updated its Operational Policy Statement: Assessing Cumulative Environmental Effects. This general guidance sets out the overall requirements and approach for the three responsible authorities. We noted that the Agency and the Canadian Nuclear Safety Commission have developed draft technical guidance on assessing cumulative effects.

4.66 We noted that the National Energy Board’s Filing Manual refers to the Agency’s Operational Policy Statement and contains guidance for assessing cumulative effects in its environmental assessment process. However, the Manual is not applicable to oil and gas projects regulated under the Canada Oil and Gas Operations Act and designated under CEAA 2012.

4.67 Recommendation. The National Energy Board should further develop and update its cumulative effects guidance for projects regulated under the Canada Oil and Gas Operations Act and designated under the Canadian Environmental Assessment Act, 2012.

The Agency is exploring the potential for regional studies

4.68 CEAA 2012 contains provisions for conducting regional studies that consider effects of existing or future projects on a regional scale. This is an important aspect of the Act, as it is commonly understood that the environmental effects of individual projects need to be considered at a regional level in order to assess cumulative environmental change. The available literature also recognizes that evaluating project-specific environmental effects does not adequately address the effects of regional development, including the interaction of effects from multiple projects over time.

4.69 Although the Agency has not yet developed or adopted guidance for determining when a regional study may be conducted, we found that it has started exploring the possibilities and is evaluating the types of approaches that could be implemented. Assessing cumulative effects at the regional level would provide decision makers with information that could contribute to an understanding of the wider implications of development and environmental change.

Conclusion

4.70 We concluded that the three responsible authorities—the Canadian Environmental Assessment Agency, the National Energy Board, and the Canadian Nuclear Safety Commission—have conducted some analysis and have put in place and are putting in place systems and practices to implement requirements of the Canadian Environmental Assessment Act, 2012 (CEAA 2012). Specific accomplishments include

• implementation of practices and procedures to meet specific timeframes, and
• establishment of substitution arrangements with one province to reduce duplication of environmental assessment processes.

4.71 We recognize that CEAA 2012 is still in the early stages of implementation. We noted, however, two areas that are critical to address if the objectives of the Act are to be achieved:

• clarity and transparency around the basis on which projects are designated and screening decisions are made, and
• mechanisms to enhance the capacity of the public and Aboriginal peoples to have meaningful participation in environmental assessments.

4.72 The assessment of cumulative effects is a long-standing concern raised by this Office. We noted that the new legislation provides for regional studies to be conducted to evaluate the effects of projects in a specific region. This represents an opportunity to obtain valuable information to inform the assessment of cumulative effects that can contribute to this important component of the environmental assessment process.

4.74 Addressing the issues noted in this audit would improve existing practices, promote transparency and predictability in the federal environmental assessment process, and strengthen environmental protection.

About the Audit

The Office of the Auditor General’s responsibility was to conduct an independent examination of whether responsible authorities have developed the systems and practices they need to apply the Canadian Environmental Assessment Act, 2012 and to provide objective information, advice, and assurance to assist Parliament in its scrutiny of the government’s management of resources and programs.

All of the audit work in this chapter was conducted in accordance with the standards for assurance engagements set out by the Chartered Professional Accountants of Canada (CPA) in the CPA Canada Handbook—Assurance. While the Office adopts these standards as the minimum requirement for its audits, we also draw upon the standards and practices of other disciplines.

As part of our regular audit process, we obtained management’s confirmation that the findings reported in this chapter are factually based.

Objective

The overall audit objective for this chapter was to determine whether the Canadian Environmental Assessment Agency (the Agency), the National Energy Board (the Board), and the Canadian Nuclear Safety Commission (the Commission) have conducted analysis and put in place systems, practices, and criteria to support effective environmental assessments in order to implement the Canadian Environmental Assessment Act, 2012 (CEAA 2012). We did not include any other environmental activities conducted by the Board under the National Energy Board Act or work carried out by the Commission to assess environmental impacts before issuing a licence under the Nuclear Safety and Control Act.

Scope and approach

We examined whether the Canadian Environmental Assessment Agency, the National Energy Board, and the Canadian Nuclear Safety Commission have put in place the systems and practices that are necessary to implement CEAA 2012.

We assessed the systems and practices for their ability to provide the information needed by the responsible authorities to assess whether the selected CEAA 2012 obligations were being met. Our examination included a combination of document reviews (including policies, reports, procedures, and working tools), detailed file reviews, analysis, and interviews with staff of the responsible authorities, both nationally and in regions. We conducted interviews with a broad range of stakeholders.

We conducted a survey on views of the public participation component of CEAA 2012 as part of the audit. We sent invitations electronically to people who had participated in the process from 2012 to 2014 for the scoped-in projects and who had provided email addresses to either the Agency or the Board as part of their participation. We also sent paper surveys to a random sample of people who had provided only postal addresses. We received a total of 926 completed surveys, a response rate of 16 percent.

We did not include implementation of the National Energy Board Act or the Nuclear Safety and Control Act in the audit.

Criteria

Overall objective: To determine whether the Canadian Environmental Assessment Agency (the Agency), the National Energy Board (the Board), and the Canadian Nuclear Safety Commission (the Commission) conducted analysis and put in place systems, practices, and criteria to support effective environmental assessments in order to implement the Canadian Environmental Assessment Act, 2012 (CEAA 2012).

To determine whether the Agency has conducted analysis and put in place systems, practices, and criteria to decide which projects are to be assessed.

To determine whether the Agency, the Commission, and the Board, when applicable, have conducted analyses and put in place systems, practices, and criteria to decide whether to proceed with substitution, delegation, and equivalency arrangements with other jurisdictions under CEAA 2012.

To determine whether the Agency, the Commission, and the Board have conducted analyses and put in place systems, practices, and criteria for consultation with the public and for cooperation and communication with Aboriginal peoples under CEAA 2012.

To determine whether the Agency, the Commission, and the Board have conducted analyses and put in place systems, practices, and criteria to assess cumulative effects (one of the key factors to be included in the environmental assessments) under CEAA 2012.

Management reviewed and accepted the suitability of the criteria used in the audit.

Period covered by the audit

This audit assessed practices in place during the period from July 2012 to July 2014. Audit work for this chapter was substantially completed on 31 July 2014.

Audit team

Principal: Bruce C. Sloan
Director: Francine Richard

Nicole Hutchinson
Makeddah John
Taylor Wilkes
Erin Windatt
David Wright

For information, please contact Communications at 613-995-3708 or 1-888-761-5953 (toll-free).
Hearing impaired only TTY: 613-954-8042

Appendix A—Environmental assessments in progress under CEAA 2012, begun on or after 6 July 2012

The above list does not include

• projects that were determined by Agency screening to not require an environmental assessment,
• environmental assessments that were terminated, and
• environmental assessments that began under the former CEAA and continued under CEAA 2012 (such as the Enbridge Northern Gateway Project).

Source: Canadian Environmental Assessment Registry

Appendix B—List of recommendations

The following is a list of recommendations found in Chapter 4. The number in front of the recommendation indicates the paragraph number where it appears in the chapter. The numbers in parentheses indicate the paragraph numbers where the topic is discussed.

Designating projects

Public and Aboriginal participation

Assessing cumulative effects