The federal government is streamlining and simplifying the environmental assessment process for major energy and industrial projects in Canada.
Noting that Canada's energy and natural resource industry is a massive asset to the country, one that employs three-quarter of a million Canadians, Finance Minister Jim Flaherty said in his Budget 2012 speech that the government intends to reduce 'red tape across government'.
'The proposed legislation will establish clear timelines, reduce duplication and regulatory burdens, and focus resources on large projects where the potential environmental impacts are the greatest,' he added.
'We will implement responsible resource development and smart regulation for major economic projects, respecting provincial jurisdiction and maintaining the highest standards of environmental protection,' said the Finance Minister. 'We will streamline the review process for such projects, according to the following principle: one project, one review, completed in a clearly defined time period'.
The government will focus on four major areas to streamline the review process for major economic projects:
- Making the review process for major projects more predictable and timely.
- Reducing duplication and regulatory burden.
- Strengthening environmental protection.
- Enhancing consultations with Aboriginal peoples.
Mining and resource companies and oil and gas firms in particular have long complained about a lengthy regulatory and environmental approval system that increases costs, risk and uncertainty. Currently, companies undertaking major economic projects must navigate a complex maze of regulatory requirements and processes.
Approval processes can be long and unpredictable. Delays and red tape often plague projects with few environmental risks. Under the current system, thousands of smaller projects with little or no risk to the environment are caught up in the federal environmental review process.
One example cited in the Budget documents is the NaiKun Wind Energy Group proposal to develop a 396-megawatt offshore wind energy project in Hecate Strait off the northeast shores of Haida Gwaii in British Columbia. The company estimates that the project would have a capital investment of $1.6 billion and would create up to 200 construction jobs. The federal decision to approve the process came 16 months after the provincial decision.
Other examples cited were an Enbridge proposal for a new $2-billion pipeline connecting Hardisty, Alberta to Gretna, Manitoba, approval of which came two years after the National Energy Board's approval of the project, and construction of a uranium mine in northern Saskatchewan.
The Canadian Association of Petroleum Producers says the current process discourages investment in oil and gas projects and jeopardizes the competitiveness of the industry and country. At a parliamentary hearing earlier this month, Natural Resources Minister Joe Oliver called the current structure 'a needlessly complex, duplicative regulatory system'.
Oliver says that system threatens up to half a trillion dollars in potential Canadian investment over the next 10 years. In 2010, natural resource sectors employed over 760,000 workers in communities throughout the country. In the next 10 years, more than 500 major economic projects representing over $500 billion in new investments are planned acrossCanada.
In his budget speech, Flaherty referred to these potential investments.
' The booming economies of the Asia-Pacific region are a huge and increasing source of demand, but Canada is not the only country to which they can turn. If we fail to act now, this historic window of opportunity will close,' he noted.
Responsibility for regulation of new projects in Canada is shared by Ottawa and the provinces. In some areas, this means a project must undergo duplicate assessments. In British Columbia, the government has already moved to blend the federal-provincial assessment process, but this is not the case in every province.
The federal government says the streamlining of regulations will not alter processes that are strictly within provincial jurisdictions, and will maintain 'the highest standards of environmental protection'.
Another area of concern related to the assessment of major resource projects relates to consultations with Aboriginal groups to ensure that their rights and interests are respected.
To support consultations with Aboriginal peoples related to projects assessed under the Canadian Environmental Assessment Act, the government proposes to add $13.6 million over two years to the Canadian Environmental Assessment Agency for this purpose.
The Budget Speech and supporting documents are available here.