Bill C-69
An Act to Prevent Energy Development
June 4, 2019 (Updated June 25, 2019)
Bill C-69 is titled “An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts”, however it could equally have been named “An Act to Prevent Energy Development”.
However, as I will note below, there is hope for energy producers thanks to the Canadian Senate.
Legislative Status
In order to be made into a statute, a bill is introduced in the House of Commons where it receives a first and second reading, and is subject to debate. The bill is then studied by a committee which reports back to the House and then the bill receives a third reading. After the bill is passed through the third reading, it is sent to the Senate which proceeds through the same process. After the bill is passed through the third reading of the Senate, it is sent to the House to approve any amendments suggested by the Senate. The bill then receives Royal Assent. If the Senate did not propose amendments, the bill goes directly to Royal Assent.
At the present time, the Liberal Party of Canada has a majority in both the House of Commons and Senate. In the Senate, the majority is held through a group of Senators named the “Independent Senate Group”. The point to note is that the Liberal Party of Canada has a so-called double majority which normally would allow them to enact whatever legislation they deem fit.
The National Energy Board
Prior to discussing the initial version of the Bill, it is necessary to understand the purpose of the National Energy Board. The National Energy Board describes its mandate as follows:
“The NEB's purpose is to promote safety and security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest. We do this within the mandate set by Parliament in the regulation of pipelines, energy development and trade.
Our main responsibilities include regulating the construction and operation of interprovincial and international oil and gas pipelines, international power lines and designated interprovincial power lines. We also regulate the tolls and tariffs for pipelines under its jurisdiction. As well, we regulate the export of natural gas, oil, natural gas liquids (NGLs) and electricity, and the import of natural gas.
Our regulatory oversight extends over 73,000 kilometres of pipeline across the country, and approximately 1,400 kilometres of international power lines.”
In performing its mandate of regulating the construction and operation of pipelines and power lines, the National Energy Board takes the environment into consideration. In making its decisions, the National Energy Board advises that it may consider the following:
· environmental concerns related to air, land and water pollution
· disturbance of renewable and non-renewable resources
· the integrity of natural habitats
· the disruption of land and resource use
· the protection of landowner rights
These criteria for the National Energy Board to make decisions have come under some criticism from environmentalists for not being broad enough and not being required, as opposed to considered.
The Bill
The initial version of Bill C-69 was widely interpreted to be an attempt to stop all, or nearly all, energy development in Canada, including pipelines, power lines and any other energy project. This was the opinion of people who spoke both for and against Bill C-69.
Environmental activists hailed the bill as the end of energy projects, while energy companies complained about the same thing.
The initial version of Bill C-69 created a new Canadian Energy Regulator to replace the National Energy Board Regulator and created a great deal of factors that must be considered when determining whether to permit the construction of energy projects including pipelines and power lines.
These factors were poorly defined and lack clarity. They seem to be a collection of words to collectively create roadblocks to energy development. Litigation would seem to be the inevitable result of these factors, further delaying energy projects.
Some of the factors that must be included, under the initial version of Bill C-69, when determining whether to approve a project are:
· economic “sustainability”
· Interests and concerns of indigenous peoples
· Gender impacts of proposed projects
· Social impacts of proposed projects
· Any identified public interest.
Given these additional factors that must be considered, the regulatory process would be significantly lengthened.
The initial version of the bill also gives the federal Environment minister a great deal of powers, including the ability to require that projects undertake further reviews. It goes without saying that within today’s political climate, environment ministers are not typically boosters of the energy industry. All of this would serve to significantly delay the construction of energy projects. Thus the initial version of Bill C-69 has been referred to as BANANA legislation – Build Absolutely Nothing Anywhere Near Anything.
This initial version of Bill C-69 passed through all stages at the House of Commons and then proceeded to the Senate.
The Senate’s Review
The initial version of Bill C-69 was passed through the first two readings in the Senate and proceeded to the committee stage.
The Senate’s hearings on this bill were interesting to say the least. A review of these submissions can be seen on the Senate’s website.
At the end of the public hearings, the Senate’s environmental committee proposed 188 amendments that radically changed the bill. The amendments include the following:
· Limit the Environment Minister’s powers to require more review and therefore delays
· Change review consideration from must consider to may consider
· Widen the range of economic considerations to be used in evaluating projects
· Narrow the understanding of who has “standing” to speak about proposed projects
These amendments would also serve to shave timelines for new resource projects.
The amendments were contained in a report that was sent to Senate for consideration and the Senate adopted the report in its whole on May 30, 2019. It is now expected that Bill C-69 with its 188 amendments will pass third reading in the Senate. The entirely revised bill will then proceed back to the House of Commons for consideration.
UPDATE - June 25, 2019
The House of Commons considered the 188 Senate Amendments that would have radically changed Bill C-69. While one would have thought that it would not have been possible for the House of Commons to deal with so many amendments before summer recess, the Liberal government accepted 99 of the amendments and rushed the amended version through the House of Commons, limiting debate on all of the amendments to one hour.
Of the 99 amendments, 62 were accepted as written by the Senate and 37 were modified before accepted. Alberta Senator Paula Simons has summarized the major amendments as follows:
- While the earlier version of the bill required regulators to look at the negative social and environmental consequences of a new project, the amended version requires a regulator to consider economic benefits and Canada's competitive reputation. This is a positive amendment.
- The amended Bill strips power from the Environment Minister and de-politicizes the process, including that the Minister can no longer "stop the clock" on the approval process.
- The new bill allows regional assessments and does not require individual assessments.
- The earlier version of the Bill did not limit who could act as an intervenor, which gave potential for project opponents to drag out the process with days and weeks of testimony. Now the regulator can decide who can intervene.
- The earlier version of the Bill required that every project go through a long list of mandatory factors for assessment. Now those factors can be "scoped" so that factors that are unrelated to a project need not be met.
- There are some projects that will be exempt from C-69. For instance, in situ bitumen projects in Alberta's oil sands are exempted from this Bill, so long as the Alberta government keeps its hard cap on emissions from heavy emitters.
This version of the Bill easily passed through the Senate on June 20, 2019 and awaits Royal Assent. This is still a highly flawed Bill, but is slightly less flawed than its original version.
The amendments accepted by the House of Commons are not insignificant. According to Senator Simons, in 152 years of Canada's existence, a government has never accepted so many amendments to any bill. It is fair to say that Bill C-69 was comprehensively re-written. However, in the writer's opinion, this is still a flawed bill that will likely be an oft-discussed subject during the 2019 federal election.
Byron W. Nelson is the managing partner of Inns Law and practices in the areas of Commercial Litigation and Energy.