ARCHIVED — Vol. 149, No. 26 — June 27, 2015

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Federal Authority as a Responsible Authority for Designated Projects Regulations

Statutory authority

Canadian Environmental Assessment Act, 2012

Sponsoring agency

Canadian Environmental Assessment Agency

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Government of Canada shares responsibility for managing oil and gas activities in the Canada-Nova Scotia offshore area with the Government of Nova Scotia. Offshore oil and gas activity in the area is regulated by the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB).

Certain oil and gas activities proposed in this offshore area are also subject to the Canadian Environmental Assessment Act, 2012 (CEAA 2012). In such cases, responsibility for conducting the environmental assessment under CEAA 2012 rests with the Canadian Environmental Assessment Agency (the Agency), while responsibility for carrying out the regulatory review, which must also include consideration of environmental factors, rests with the CNSOPB. This situation results in regulatory overlap and duplication between the regulatory review requirements that the CNSOPB must meet and the environmental assessment requirements that the Agency must meet under CEAA 2012.

Background

On February 26, 2015, the Energy Safety and Security Act (Bill C-22) received royal assent. This legislation was introduced to modernize safety and security for Canada’s offshore and nuclear industries, ensure a world-class regulatory system and strengthen safety and environmental protection. The legislation modifies Canada’s civil liability regimes both for the offshore oil and gas industry and for the nuclear energy industry.

While the majority of the Energy Safety and Security Act is not related to federal environmental assessment, it includes provisions that amend the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act (collectively referred to as the Accord Acts) to provide the CNSOPB and the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) with the necessary tools and authorities to enable them to conduct environmental assessments under CEAA 2012. These provisions include providing the CNSOPB and the CNLOPB with the authority to establish participant funding programs and to hold public hearings. The provisions also establish timelines for completing environmental assessments under CEAA 2012.

Environmental assessments under CEAA 2012 are conducted by a “responsible authority.” Currently, there are three responsible authorities: the National Energy Board (NEB) and the Canadian Nuclear Safety Commission (CNSC) for projects they regulate, and the Agency for all other projects. The Regulations Designating Physical Activities list the physical activities that are considered “designated projects” subject to CEAA 2012 and identify which responsible authority would be responsible for conducting an environmental assessment.

With respect to offshore oil and gas projects that are subject to CEAA 2012, the Agency is currently the responsible authority for projects in the two Atlantic offshore areas while the NEB is the responsible authority for projects elsewhere in Canada’s offshore (i.e. the North, the Gulf of St. Lawrence and the West Coast). Therefore, at present, for projects in the two Atlantic offshore areas, the Agency is responsible for conducting the environmental assessment under CEAA 2012, while the CNSOPB and the CNLOPB are responsible for regulating the project under the Accord Acts, which also includes the consideration of environmental factors. This situation is not consistent with the objectives of the Government of Canada’s Responsible Resource Development plan, which include reducing duplication as well as achieving more predictable and timely project reviews. In addition, it is not consistent with the regulatory responsibilities for offshore oil and gas projects in other parts of Canada, where the NEB is responsible for both the CEAA 2012 environmental assessment and the regulation of the project.

Federal authorities that perform regulatory functions and that have the authority to hold public hearings can be responsible authorities under paragraph 15(c) of CEAA 2012 if they are prescribed in regulations. Authorities so prescribed then become responsible for ensuring the environmental assessment requirements of CEAA 2012 are met through their own regulatory review processes.

By providing the CNSOPB and the CNLOPB with the necessary tools and authorities to enable them to conduct environmental assessments under CEAA 2012, the Energy Safety and Security Act outlined the intent to make them responsible authorities under CEAA 2012. Given this intent to make both the CNSOPB and the CNLOPB responsible authorities under CEAA 2012 for the offshore oil and gas projects that they regulate, the federal government entered into discussions about how implementation would occur. At this time, while the CNLOPB is not yet in a position to assume this role, the CNSOPB is ready to proceed.

Objectives

The objective of the proposed Federal Authority as a Responsible Authority for Designated Projects Regulations (the proposed Regulations) is to reduce duplication and streamline the regulatory process for offshore oil and gas projects in the Canada-Nova Scotia offshore region, consistent with the Government’s plan for Responsible Resource Development.

Description

The proposed Regulations would prescribe the CNSOPB, which, under paragraph 15(c) of CEAA 2012, would then become a responsible authority with respect to designated projects that are subject to an environmental assessment.

“One-for-One” Rule

Currently, proponents of offshore oil and gas projects that are regulated by the CNSOPB and that are also designated projects subject to CEAA 2012 are required to submit a project description to the Agency under CEAA 2012. This project description supports a determination by the Agency of whether an environmental assessment is required. This requirement only applies when the Agency is the responsible authority. The proposed Regulations would eliminate this requirement for projects for which the CNSOPB would be the responsible authority, and would therefore avoid the time spent by proponents submitting these documents. The proposed Regulations therefore trigger the “One-for-One” Rule and would result in a reduction of annualized administrative burden costs (an “OUT”) of $391, or $130 per affected business. (see footnote 1)

The Agency assumes that three companies would no longer be required to submit a project description to the Agency over the 10-year period of analysis, resulting in one fewer submission every 3 years.  All companies would avoid upfront costs associated with becoming familiar with information obligations, and other costs for each submission as follows:

  • — One hour for upfront familiarization with information obligations by natural and applied sciences staff ($41.59 per hour);
  • — Four hours for returning and reporting or submitting information by administrative support staff ($28.86 per hour);
  • — Thirty hours for information retrieval by natural and applied sciences staff ($41.59 per hour); and
  • — Five hours for authorizations by senior management ($59.80 per hour). (see footnote 2)

The estimate of submission frequency was based on the number of projects in the past, and information from industry experts regarding the expected level of future offshore oil and gas development activity in the Atlantic region. Administrative activity assumptions were based on consultations with Agency staff with professional knowledge and experience related to the preparation of project description documents.

Small business lens

The small business lens does not apply to this proposal as there are no costs for small business.

Consultation

Prior to publication in the Canada Gazette, Part I, there was no formal consultation specifically on this regulatory proposal. However, the intent to make the CNSOPB a responsible authority under CEAA 2012 was outlined in the Energy Safety and Security Act, which includes provisions to provide the CNSOPB with the necessary tools and authorities to be made a responsible authority under CEAA 2012. The Energy Safety and Security Act was subject to the Parliamentary review process, and no concerns were raised about the CNSOPB becoming a responsible authority under CEAA 2012.

In the spring of 2013, during consultations on proposed amendments to the Regulations Designating Physical Activities, the oil and gas industry associations, the CNSOPB, and the Province of Nova Scotia provided comments on those proposed amendments and also indicated that they would like to see the CNSOPB made a responsible authority under CEAA 2012. They indicated that the CNSOPB and the CNLOPB, as regulators of the offshore industry in the Atlantic, would be best placed to conduct the environmental assessments under CEAA 2012 since they have more technical expertise in offshore oil and gas projects than the Agency. They indicated that this would reduce duplication and regulatory overlap between the CEAA 2012 process and the CNSOPB regulatory processes.

In the fall of 2014, the Assembly of First Nations Chiefs in New Brunswick (AFNCNB) wrote to the CNSOPB and the CNLOPB to express concerns with the proposal to make them both responsible authorities. The AFNCNB indicated concern that the rights of the New Brunswick First Nations members would be compromised with the changes to Canada’s offshore oil and gas regime. They are concerned that they will not be represented in the same manner by the CNSOPB and the CNLOPB as they are by the Agency, particularly with respect to the ability of the Agency to provide participant funding that will allow the AFNCNB to participate in the engagement process.

In January 2015, the Mi’kmaq Rights Initiative, or Kwilmu’kw Maw-klusuaqn Negotiation Office (KMKNO), wrote to the CNSOPB regarding the duty to consult on proposed offshore oil and gas exploration and development activities. The KMKNO indicated that they would like to work with the CNSOPB to develop a process to ensure that the duty to consult is met.

With respect to the concerns of these Aboriginal groups, Natural Resources Canada is working with the CNSOPB and the Government of Nova Scotia to ensure that the Crown’s duty to consult with Aboriginal groups is fulfilled, as appropriate, for offshore oil and gas activities that fall under the regulatory jurisdiction of the CNSOPB.

As a responsible authority, the CNSOPB would be required to ensure that the environmental assessments it conducts under CEAA 2012 meet all of the requirements of that legislation, including providing opportunities for public participation and establishing a participant funding program.

Rationale

If an offshore oil and gas project in the Canada-Nova Scotia offshore area is subject to an environmental assessment under CEAA 2012, the assessment will examine the effects of the project in areas of federal jurisdiction. Separately, the CNSOPB is also required to consider environmental factors during its regulatory review of those projects. For example, factors such as the effects of the project on fish, fish habitat, migratory birds, and water quality may be considered in both processes, resulting in duplication.

Making the CNSOPB the responsible authority for the offshore oil and gas projects that it regulates would reduce the regulatory overlap and duplication that currently exist by allowing the environmental assessment requirements of CEAA 2012 and the regulatory review requirements under the Accord Acts to be met by one regulator through a single process. Making the CNSOPB the responsible authority will not change which projects are subject to CEAA 2012.

The CNSOPB is well placed to conduct environmental assessments of offshore oil and gas projects in the Canada-Nova Scotia offshore area. It has the relevant technical expertise, experience in conducting environmental assessments of these types of projects under the former Canadian Environmental Assessment Act, and experience in reviewing the environmental impacts of offshore oil and gas activities under the Accord Acts.

Making the CNSOPB a responsible authority would also address the regulatory difference that currently exists between oil and gas projects in the Atlantic offshore areas and those elsewhere in Canada’s offshore areas, where the primary regulator of offshore oil and gas activities is also the responsible authority under CEAA 2012.

Ensuring that the best-placed regulator is responsible for meeting the requirements of CEAA 2012 through a single review process supports the Government’s Responsible Resource Development plan by providing a more stable and predictable regulatory environment. This, in turn, would provide project proponents with more certainty in the course of project planning and other stakeholders with a clear point of contact through the regulatory review process.

Implementation, enforcement and service standards

With the coming into force of the relevant provisions of the Energy Safety and Security Act, the CNSOPB will have the necessary tools and authority to be able to conduct environmental assessments under CEAA 2012.

The CNSOPB will put in place the necessary programs and procedures for it to act as a responsible authority under CEAA 2012, such as a participant funding program. With these programs and procedures in place, the proposed Regulations could be brought into force. At the same time, amendments to the Regulations Designating Physical Activities would be made to indicate that the CNSOPB is the responsible authority for prescribed offshore oil and gas activities when they are regulated by the CNSOPB.

As a responsible authority under CEAA 2012, the CNSOPB would be responsible for ensuring that the requirements of CEAA 2012 are met in accordance with the time limits established in the legislation. It would also be required to issue the environmental assessment decision statement that would identify conditions, including required mitigation measures and follow-up program requirements. The CNSOPB would be responsible for the compliance and enforcement of the decision statement conditions.

Contact

John McCauley
Director
Legislative and Regulatory Affairs Division
Canadian Environmental Assessment Agency
160 Elgin Street, 22nd Floor
Ottawa, Ontario
K1A 0H3
Telephone: 613-948-1785
Fax: 613-957-0897
Email: Regulations@ceaa-acee.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to paragraph 83(b) of the Canadian Environmental Assessment Act, 2012 (see footnote a), proposes to make the annexed Federal Authority as a Responsible Authority for Designated Projects Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to John McCauley, Director, Legislative and Regulatory Affairs Division, Canadian Environmental Assessment Agency, 160 Elgin Street, 22nd Floor, Ottawa, Ontario K1A 0H3 (tel.: 613-948-1785; fax: 613-957-0897; email: Regulations@ceaa-acee.gc.ca).

Ottawa, June 18, 2015

JURICA ČAPKUN
Assistant Clerk of the Privy Council

FEDERAL AUTHORITY AS A RESPONSIBLE AUTHORITY FOR DESIGNATED PROJECTS REGULATIONS

Federal authority

1. For the purposes of paragraph 15(c) of the Canadian Environmental Assessment Act, 2012, the Canada-Nova Scotia Offshore Petroleum Board is the prescribed federal authority.

Registration

2. These Regulations come into force on the day on which they are registered.

[26-1-o]

  • Footnote 1
    Administrative burden costs were calculated using the Treasury Board of Canada Secretariat Regulatory Cost Calculator tool, which uses a 10-year forecast period and a discount rate of 7%. Estimates are presented in 2012 Canadian dollars.
  • Footnote 2
    The hourly rates are those included in the Treasury Board of Canada Secretariat Regulatory Cost Calculator tool, which are based on Statistics Canada data from Table 282-0070, compiled from the Labour Force Survey.
  • Footnote a
    S.C. 2012, c. 19, s. 52