Canada’s Impact Assessment Act: Myth vs. Fact

In late June, Canada’s much-hyped Impact Assessment Act (IAA) received Third Reading in the House of Commons. The proposed law has now been referred to the Senate for review during the fall session.

If enacted, the IAA will repeal and replace the Canadian Environmental Assessment Act, 2012 (CEAA 2012), which currently sets out an environmental assessment process for certain types of projects within federal jurisdiction (e.g. pipelines, mines, oilsands development, nuclear power plants, radioactive waste facilities, etc.).

During the Third Reading debate, the federal Environment Minister characterized the IAA as “better rules” that reflect a “balanced approach” in protecting the environment, building a stronger economy, and addressing “the priorities of Indigenous peoples, stakeholders, and Canadians from coast to coast to coast”.

However, a close examination of the IAA reveals a significant disconnect between this political rhetoric and the legal reality under the new assessment regime.  Therefore, the purpose of this blog is to address some of the erroneous claims, misrepresentations and misunderstandings that have arisen in relation to the IAA in recent months.

MYTH: The IAA fully incorporates the recommendations of the federal government’s Expert Panel, which held extensive cross-Canada consultations on how to reform the assessment process in order to regain public trust.

FACT: While the Minister repeatedly notes that numerous Canadians participated in the Expert Panel’s consultations, the IAA does not actually implement the key recommendations set out in the Expert Panel’s final report. For example, based on the evidence and submissions received from the public, the Expert Panel recommended that a new independent assessment authority should be established to conduct assessments and make final decisions to approve/reject proposed undertakings. However, this recommendation is not reflected in the IAA, and final assessment decisions under the Act will continue to be made by federal politicians behind closed doors, just like the existing CEAA 2012.

MYTH: The IAA will apply to all environmentally significant activities that may affect areas of federal interest.

FACT: Like CEAA 2012, the IAA will only apply to specific types of large-scale projects that are designated by regulation, and will not be triggered by other environmentally significant activities or physical works that engage federal decision-making authority (e.g. granting permits, providing funding or disposing lands).  In addition, despite the imminent passage of the IAA, it is currently unknown which projects will be subject to the new assessment process. At the present time, the federal government is still mulling over the project listing criteria, but has not released any draft regulations for designating projects. 

MYTH: Impact assessments will be automatically required for all designated projects listed by regulation.

FACT: Under the IAA, even projects found on the regulatory list will not necessarily have to undergo an impact assessment before proceeding. This is because the Impact Assessment Agency of Canada has been empowered by the Act to dispense with the need for project assessments on a case-by-case basis.

MYTH: The cumulative effects of multiple projects in the same geographic area will be addressed through broadly framed regional or strategic assessments under the IAA.

FACT: Although regional and strategic assessments are mentioned in the IAA, it is not mandatory for the federal government to actually conduct or complete such assessments. Similarly, the specific triggers, public participation requirements and other implementation details for regional and strategic assessments are absent from the IAA. The result is that by default, cumulative effects will likely continue to be assessed inadequately (if at all) in project-level impact assessments.

MYTH: The IAA significantly constrains the role, function and influence of federal regulators (e.g. Canadian Nuclear Safety Commission, Canadian Energy Regulator, and Offshore Boards) in impact assessment processes for designated energy projects.

FACT: In order to restore public trust and address concerns about regulatory capture, the Expert Panel recommended that regulators should contribute their knowledge during impact assessment processes, but they should not lead (or co-lead) assessment processes. However, the federal government declined to act on this advice, and instead the IAA expressly requires the Minister to appoint regulators to review panels that will conduct assessments and prepare reports on designated energy projects.  

MYTH: The IAA will ensure that only “sustainable” projects will be approved under the Act.

FACT: The extent to which a project “contributes to sustainability” is identified in the IAA as a factor (among others) that must be considered by Cabinet decision-makers at the approval stage of the assessment process. However, the IAA provides no details or criteria on how sustainability is to be evaluated, and contains no explicit rules for making trade-offs between “sustainability” and short-term economic considerations.

MYTH: The IAA operationalizes the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) – including the principle of free, prior and informed consent – within the impact assessment process.

FACT: The IAA only briefly refers to the UNDRIP in the Act’s preamble, which, as a matter of statutory interpretation, is not legally enforceable and confers no substantive rights. Aside from a standard non-derogation clause, other IAA provisions regarding the engagement of Indigenous communities in information-gathering and decision-making under the Act are discretionary, insufficient or ambiguous.

MYTH: The IAA is “better” than the current CEAA 2012.

FACT: A side-by-side comparison between the IAA and CEAA 2012 reveals that both statutes contain many identical (or substantially similar) provisions, and that both share the same basic assessment model (e.g. focus on mega-projects, broad power to scope (or narrow) assessments, overreliance on proponents’ impact statements, politicized decision-making, etc.). Despite some incremental improvements (e.g. creation of an early planning phase), the IAA does not represent a new or radical departure from the widely discredited CEAA 2012. Therefore, the IAA cannot be construed as significantly “better” legislation that fulfils the federal government’s promise to restore public trust, enhance accountability, facilitate meaningful public participation, and ensure robust, science-based decisions.

In conclusion, the IAA is not a panacea that cures all of the well-documented problems in the current federal assessment process. Accordingly, it remains to be seen whether the Senate will rubber-stamp the IAA despite its fundamental flaws, or whether the Senate is prepared to propose appropriate amendments to strengthen the IAA before it is proclaimed in force.