The Canadian Environmental Assessment Act, 2012 - 3rd challenge facing project proponents

This article is the last of three articles on challenges facing project proponents under federal environmental assessment law. These articles address the terms of the current Canadian Environmental Assessment Act, 2012 (CEAA/12)¹ in the absence of any court judgments interpreting its provisions.

At a high level, the present regime appears similar to the predecessor regime set out in 1992 legislation (CEAA/92): both focus on assessing significant adverse environmental effects.  However, in other key respects, CEAA/12 departs from the approach of CEAA/92 and introduces new principles to federal EA practice.

As set out in the initial article, many of these new principles arise within three core attributes of CEAA/12:

(1) Few projects trigger CEAA automatically.

(2) Where triggered, the project subject to EA is broad, if not comprehensive.

(3) The scope of each assessment or determination of effects is project-specific and restrictive.

The present article deals with the third core attribute. Further details on all of these points may be found in the recently published 2016 Guide to the Canadian Environmental Assessment Act (LexisNexis Canada 2015), hereafter referred to as the “Guide."

This aspect of CEAA/12 is new. It has broad application to virtually all decisions under CEAA/12, not just EA decisions. It is also, unquestionably, the most complex aspect of this regime.

Unfortunately, this complexity is paired with risk.  It is difficult to get the right answer, and yet a failure to get the right answer is jurisdictional.  An incorrect approach to scoping the assessment and its coverage of effects has clear potential to put in doubt an entire EA. These points thus create fundamental challenges for proponents dealing with CEAA/12. 

The effects subject to CEAA/12 are project-specific and restrictive

It is useful to review the approach to assessing environmental effects required by CEAA/92 and the predecessor federal EA regime before addressing how CEAA/12 deals with this topic.

Prior to CEAA/92, the 1992 decision on federal EA from the Supreme Court of Canada in Friends of the Oldman River Society (“Oldman”) ²  included reasons on the meaning of the term “environmental quality.” The Court rejected suggestions that this term was limited to the biophysical environment. The Court concluded that this term included the biophysical environment as well as the human socio-economic environment. This aspect of Oldman suggests a broad meaning to the scope of environmental effects.

Additionally, based on the terms of the federal EA regime at the time, Oldman set out three constitutional principles on the scope of federal EA and the effects reviewed:³

(1) the constitutional scope of a federal EA is project-specific, not general;

(2) each federal EA must consider all “federal responsibilities” affected by a project; and

(3) the scope of environmental effects depends on the nature of the federal decisions involved.

The Court devoted considerable attention to Principle (3).  In particular, the Court distinguished between: (a) resource-impact decisions (e.g., whether a project was likely to cause harmful alteration, disruption or destruction of fish habitat), which were narrow in scope, and (b) public interest decisions (e.g., whether it was in the public interest to authorize a dam across a navigable waterway), which were broad in scope. The latter could include purely “local effects,” for example.

CEAA/92 was drafted and passed by Parliament prior to Oldman, but not proclaimed in force until after Oldman. Importantly, CEAA/92 followed the first two constitutional principles of Oldman, but did not demand adherence to the third Oldman constitutional principle.⁴ 

Most importantly, CEAA/92 expressly contrasted with Oldman on the scope of environmental effects. CEAA/92 imposed a two-tier structure on “environmental effects” from a project. The first tier was reserved for biophysical effects set out in the CEAA/92 definition of “environment.” CEAA/92 required that an EA consider all of these biophysical effects of a project. However, CEAA/92 relegated all socio-economic effects to second tier status. In contrast to Oldman, CEAA/92 provided that a federal EA could consider socio-economic effects only if the project directly changed the biophysical environment and such change to the biophysical environment was likely to result in indirect effects on the socio-economic environment.⁵

CEAA/12 follows a new path in relation to Oldman. Like CEAA/92, it does not follow the broad meaning for the “environment” set out in Oldman; however, unlike CEAA/92, CEAA/12 creates a two-tiered approach to the Oldman constitutional principles.   

Section 5(1) addresses the first tier of the CEAA/12 constitutional hierarchy.  It sets out those effects that are mandatory for virtually every federal decision under this regime, including not only EA decisions but also section 67 determinations.  Through this section, CEAA/12 identifies a very narrow range of mandatory effects. Not only is the CEAA/12 approach narrower than Oldman, it is also narrower than CEAA/92.  It is narrower in the range of mandatory biophysical effects as well as the range of socio-economic effects.

CEAA/12 constrains biophysical effects through section 5(1)(a). Although CEAA/12 uses the same definition of the “environment” as CEAA/92, it employs a pathways approach to limit what must be taken into account.⁶ CEAA/12 limits what must be taken into account to three biophysical endpoints: fish and fish habitat, migratory birds, and aquatic species at risk.  Thus, the core of federal EA is limited to changes that affect at least one of these three biological endpoints.⁷ Table 1 below summarizes the scope of s.5(1)(a).

Table 1 Environmental changes to be taken into account under paragraph 5(1)(a) of CEAA/12
No.	Sub-section	Para-graph	Types of environmental changes
			Column 4 Pathways	Column 5 End Points
(1)	5(1)	(a)	Changes to the environment that cause or contribute to changes in Column 5:   - A. air (air quality, noise) - B. water (quality/quantity) - C. land (soils, stability) - D. organic matter and living organisms - E. natural systems (wetlands, forests, grasslands)	(a)(i) Environmental change to fish and fish habitat
(2)				(a)(ii) Environmental change to aquatic species at risk
(3)				(a)(iii) Environmental change to migratory birds

 

Section 5(1) of CEAA/12 provides three exceptions to this very narrow scope for biophysical effects.  Having regard for the range of projects developed in Canada, these exceptions are very narrow: they arise only if the project changes the environment (a) on federal lands, (b) outside the province where the project is located, or (c) across an international boundary.  CEAA/12 mandates that each of these changes must be taken into account through s.5(1)(b). Table 2, below, summarizes the scope of the s.5(1)(b) additions to the scope of mandatory EA.  

 

Table 2 Environmental changes to be taken into account under paragraph 5(1)(b) of CEAA/12
No.	Sub-section	Para-graph	Types of environmental changes
			Column 4 Pathways	Column 5 End Points
(1)	5(1)	(b)	Changes to the environment that cause or contribute to effects in (b).   In particular: - A. air (air quality, noise) - B. water (quality/quantity) - C. land (soils, stability) - D. organic matter and living organisms - E. natural systems (wetlands, forests, grasslands)	(b)(i) Environmental change to federal lands
(2)				(b)(ii) Environmental change across provincial boundaries
(3)				(b)(iii) Environmental change across international boundaries

 

CEAA/12 constrains socio-economic effects through s.5(1)(c).  It provides that the mandatory consideration of socio-economic effects is limited to project effects on aboriginal peoples.   Through s.5(1)(c), CEAA/12 provides that any environmental change resulting in one of four listed effects on aboriginal peoples must be taken into account.   This narrowing is inconsistent with Oldman and CEAA/92. Table 3, below, addresses these effects.

 

Table 3 Environmental changes and effects to be taken into account under paragraph 5(1)(c) of CEAA/12
No.	Sub-section	Para-graph	Types of environmental changes and effects
			Column 4 Pathways	Column 5 End Points
(1)	5(1)	(c)	Changes to the environment that cause or contribute to effects in (c).   In particular: - A. air (air quality, noise) - B. water (quality/quantity) - C. land (soils, stability) - D. organic matter and living organisms - E. natural systems (wetlands, forests, grasslands)	With respect to aboriginal peoples, an effect in Canada of any change to the environment on (i) health and socio-economic conditions, (ii) physical and cultural heritage, (iii) current use of lands and resources for traditional purposes, and (iv) any structure, site or thing of historical, archaeological, paleontological or architectural significance
(2)
(3)
(4)

 

In sum, s.5(1) of CEAA/12 provides explicit guidance on the mandatory scope of  environmental effects. It demands consideration of three biological effects, three territorial effects, and socio-economic effects on aboriginal peoples.  All seven categories of effects are firmly grounded in the powers of the federal government under Canada’s Constitution.  Nevertheless, this first tier of the CEAA/12 constitutional hierarchy raises constitutional issues.  It appears to be fundamentally at odds with the Oldman decision which demanded that federal EA be tied to federal decision-making powers. This aspect of CEAA/12 appears to authorize federal EA where there is no tie to federal decision making.

Subsection 5(2) provides the second tier to the CEAA/12 constitutional hierarchy.  It implements the third constitutional principle of Oldman. This subsection has two parts.  The first part is set out in paragraph 5(2)(a) and summarized in Table 4, below.  This first part deals solely with  environmental changes that were not listed in section 5(1).  It permits a federal EA to take into account additional environmental changes, but only where such changes are relevant to a specific federal approval required by the project.⁸

Table 4 Examples of environmental changes that meet the 2-part test in paragraph 5(2)(a)
No.	Sub-section	Para-graph	Part 1 Environmental Changes	Part 2 Regulatory Linkage	Examples of environmental changes that meet the 2-part test
(1)	5(2)	(a)	The change must be to the environment, BUT Change must be other than a change referred to in paras. (1)(a) and (b)9	2.  Change must be directly linked/ necessarily incidental to a federal exercise of a legislative power, duty or function10	1. Radiation  2. Emission of toxic substance  3. Navigability
(2)
(3)

 

The second part of s.5(2) deals exclusively with socio-economic effects.  CEAA/12 sets out a three-part test for a socio-economic effect to be part of federal EA:¹¹ (1) the effect must result from a s.5(2)(a) change to the environment, (2) the effect must fit one of three categories of effects: health and socio-economic conditions, physical and cultural heritage, or a structure, site or thing of cultural significance, and (3) the effect must be other than an effect taken into account in s.5(1)(c) (i.e., an effect on aboriginal peoples). The test applicable to socio-economic effects on non-aboriginal persons and communities is set out in Table 5, below.

Table 5 Environmental effects that meet the 3-part test in paragraph 5(2)(b)
No.	Sub-section	Para-graph	Part 1 Environmental Changes	Part 2 Included Effects	Part 3 Excluded Effects
(1)	5(2)	(b)	The effect must result from a change to the environment within the meaning of paragraph 5(2)(a)	The effect must be on: (i) Health and socio-economic conditions (ii) Physical and cultural heritage, or (iii) Structure, site or thing of cultural significance	The effect is other than an effect referred to in para. (1)(c)12
(2)
(3)

 

In sum, s.5(2) has a novel approach to the Oldman constitutional principles.  Consistent with Oldman, s.5(2) demands that the scope of an EA be project-specific, not general.  Similarly, like Oldman, s.5(2) demands that the scope of an EA be directly tied to required federal decision making on a project.  However, s.5(2) makes no provision to follow the second Oldman principle, which is to ensure that a federal EA considers all effects on matters of federal responsibility.

Conclusions

Overall, CEAA/12 introduces many novel principles to federal EA regarding the scope of  environmental effects.  These principles present challenges to all proponents of designated projects.  Though the approach looks advantageous to proponents because the scope of such effects is narrower than the scope set out in CEAA/92, the scope is tied to legal requirements to identify all federal decisions relevant to a project and correctly identify the effects specifically tied to these decisions.  There are also constitutional issues with the CEAA/12 approach.

Based on the experience with CEAA/92, it is likely that litigation is required to clarify the scope of these novel CEAA/12 provisions and departures from earlier EA principles and practices.