Regulatory reform recommendations improve jobs, growth, prosperity outlook while continuing to deliver responsible environmental outcomes

Contributed to The San Francisco Chronicle
Dave Collyer
President and CEO
Canadian Association of Petroleum Producers
March 23, 2012

Changes to the Canadian Environmental Assessment Act (CEAA) recommended last week by Parliament's Standing Committee on Environment and Sustainable Development would improve Canada's cumbersome Environmental Assessment process for natural resource projects while continuing to deliver responsible environmental outcomes.

These recommendations would increase regulatory efficiency and effectiveness and provide a foundation upon which to improve our overall regulatory system.

Canada's upstream oil and gas industry believes that broad-based regulatory reform is fundamental to Canadian competitiveness - attracting and enabling investment that creates jobs, economic growth and prosperity for Canadians.

Our industry is the largest single private sector investor in Canada - investing more than $50 billion each year and employing more than 500,000 Canadians.

But capital is mobile. And it's rather sobering that a variety of domestic and international authorities, including the International Energy Agency and the World Economic Forum, have cited our overly complex, redundant and open-ended regulatory system as a threat to Canada's ability to attract the capital necessary to develop our abundant natural resources. This issue impacts our international competitiveness across a range of industries, not only the upstream oil and gas sector.

The bottleneck in the regulatory system is about more than delays in project approvals. It's also about potential project cancellations, significant deferrals of projects and a chilling effect on investment because market opportunities pass or competitive alternatives materialize while the regulatory process chugs along.

The existing system has grown more complex, inconsistent and uncertain as legislative and administrative layers have been added over time. In our view, this issue must be addressed with some urgency.

Canada's regulatory system mustenable
the '3Es' - Environment, Economy and Energy

We believe our overall regulatory system must enable the "3Es" - environmental performance, economic growth and energy security and reliability.

Our high standard of environmental performance must be maintained - all Canadians expect responsible environmental outcomes - but our economic growth and energy security and reliability objectives are also critically important and must be given due consideration.

Regulatory reform needs to address both inter- and intra-governmental coordination. We need to sort out regulatory overlap and redundancy among the federal, provincial and territorial levels of government. And we must address lack of alignment and overlapping responsibilities among departments with regulatory responsibilities within each level of government.

Regulatory reform needs to improve process timelines and efficiency, with results based on sound science. We must move to more streamlined process and time-limited decision-making.

CAPP has provided extensive input on federal regulatory reform, including submissions to the Standing Committee on the Environment and Sustainable Development and to the Species at Risk Act review and the CEAA review.

Our input on CEAA included the need to move to a "one project, one assessment" approach; the need to establish mandatory regulatory timelines and increased accountability to deliver timely results; and the need for clear direction as to where CEAA fits into the broader policy and regulatory framework. On the latter point, it is important to ensure CEAA's mandate and scope are defined so as to separate broader policy and regional planning decisions regarding whether to develop a particular resource from the subsequent assessment of how to develop the resource.

The Standing Committee's recommendations clearly address the need for "one project, one assessment" and the need to establish mandatory timelines. While the report does not specifically address the need for clarity on the issue of broader mandate and scoping, we are encouraged by the committee's comment that "Reforming CEAA is a good start." The committee's report also encourages the federal government to implement the aforementioned reforms, and to consider the potential reforms to other environmental laws.

Industry disagrees
with dissenting reports

In dissenting reports, both the New Democratic Party and the Liberal Party criticize the Standing Committee process and suggest implementing the Committee's recommendations would weaken Canada's commitment and ability to achieve responsible environmental outcomes concurrent with natural resource development.

We strongly disagree with these assertions.

While our industry is strongly supportive of maintaining Canada's high environmental standards, a federal Environmental Assessment is not a tool to assess whether a project meets sustainable development criteria or addresses broad socio-economic impacts.

Further, it is not about assessing impacts distant from the project; it is not about regional planning; it is not a tool to interfere with the legitimate role of other jurisdictions to conduct environmental assessments; and it is not a permitting process. Importantly, it is not a tool to review or attempt to undo resource development or related policy decisions that are appropriately within the broad purview of policy makers.

And finally, it should not be used unreasonably as a tool to frustrate, delay or stop development

As recognized by the Standing Committee, CEAA must be clearly grounded in its proper role of enabling informed decision-making in the early stages of specific project review for which there is a federal trigger. And we need to remember that the absence of a federal trigger does not mean a lack of environmental review, as evidenced by the robust provincial review of oil sands projects in Alberta.

If such a trigger is present, the regulatory authority must determine under CEAA whether a project is likely to result in significant adverse environmental impacts, and consider related impacts pertaining to socio-economic effects and Aboriginal people.

The dissenting reports identify the need to improve the Aboriginal consultation process. Industry agrees that improving this process - for all groups - is essential to realize fully effective economic and regulatory reform.

Federal and provincial authorities should provide consistent, time-limited requirements and better define government responsibilities for Aboriginal consultation.

Our industry consults extensively with a wide range of stakeholders and Aboriginal communities throughout the project lifecycle.

Summary

Summing up, the existing Canadian regulatory system is broken. It needs to be fixed.

Implementing the Standing Committee's recommendations will improve regulatory efficiency and effectiveness and provide a foundation upon which to improve the overall system - resulting in substantial positive impacts on jobs, economic growth and prosperity, while continuing to deliver the responsible environmental outcomes that all Canadians want and expect.

We look forward to the federal government advancing its recommendations on CEAA as part of a broader regulatory reform initiative over the next several months. And we continue to encourage federal-provincial coordination of regulatory reform initiatives.

View the full Standing Committee report

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