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Fighting a regulatory threat in Canada
Provinces, industry wage rearguard battle against federal legislation they say would add to delays, shrink investment in country Gary Park for Petroleum News
Alberta, Saskatchewan and Newfoundland - Canada’s three oil-rich provinces - and the energy industry are waging a last-ditch campaign to smother what many view as the most sweeping, aggressive and threatening federal legislation in recent decades.
But their hopes of overhauling Bill C-69, the Impact Assessment Act, which now rests with Canada’s largely powerless, appointed Senate, face a deadline of May 9 to propose substantive changes to legislation which has undergone 136 amendments since it was introduced in the elected House of Commons just over a year ago.
The legislation fulfills a campaign promise by the Liberal government of Prime Minister Justin Trudeau to rewrite the balance between resource development and protection for the environment.
NEB would be replaced It would replace the National Energy Board with a Canadian Energy Regulator, which would be required to take additional factors into account, including contributions to sustainability and impacts on climate change, Indigenous communities, public health and the economy, causing some to label the bill as “anti-pipeline.”
A study by the C.D. Howe Institute, an independent think tank, said the bill risks “significantly prolonging the assessment process,” instead of the government’s declared goal of speeding up reviews and making their approval criteria clearer for oil and gas extraction projects, mines, pipelines and power lines.
The institute said the legislation “looks likely to worsen Canada’s present disease” of plummeting capital investment for major resource ventures which has “plunged” by roughly C$100 billion in 2017 and 2018, when 37 projects worth C$77 billion were cancelled.
Annual capital spending on energy projects was down C$50 billion in 2018, from a peak in 2014.
C.D. Howe said that the changes would open the door to regulatory hearings for thousands of well-funded interveners, “prolonging the assessment process.”
Final say to legislators It also warns that elected legislators would have the final say on almost every project, unlike the existing regime which confines final cabinet approval to those projects that are found to have significant environmental impacts.
In her appearance before a Senate committee, Alberta Premier Rachel Notley rolled out a series of proposed amendments, arguing that “we can’t swap one broken system for another ... we can’t build trust with more investor uncertainty.”
She told reporters her government does not want to see investments in major petrochemical projects “caught up in duplicative regulatory regimes that scare away the investors we have worked so hard to attract.”
Notley called for a “hard limit” of 730 days for projects to undergo agency assessments, instead of current procedures that often last four years or more.
Tim McMillan, president of the Canadian Association of Petroleum Producers, the industry’s lead lobby group, said CAPP and the Alberta government are concerned that the federal government wants to expand its reviews into areas of provincial oversight, such as in-situ oil sands developments, gas-fired power generators, refining and upgrading facilities, provincial pipelines or offshore exploratory drilling.
Newfoundland Premier Dwight Ball said Bill C-69 “will increase the regulatory burden, costs and timelines without enhancing environmental outcomes.”
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