ARCHIVED — Regulations Amending the Exclusion List Regulations, 2007

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Vol. 143, No. 10 — May 13, 2009

Registration

SOR/2009-131 April 30, 2009

CANADIAN ENVIRONMENTAL ASSESSMENT ACT

P.C. 2009-681 April 30, 2009

Whereas the Governor in Council is satisfied that the environmental effects of certain projects in relation to physical works are insignificant;

And whereas the projects set out in the Exclusion List Regulations, 2007 remain subject to all other applicable laws;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to subparagraphs 59(c)(ii) (see footnote a) and (iii) (see footnote b)of the Canadian Environmental Assessment Act (see footnote c), hereby makes the annexed Regulations Amending the Exclusion List Regulations, 2007.

REGULATIONS AMENDING THE EXCLUSION LIST REGULATIONS, 2007

AMENDMENTS

1. Section 5 of the Exclusion List Regulations, 2007 (see footnote 1) is replaced by the following:

5. The projects and classes of projects that are set out in Schedule 4, to be carried out in places other than a national park, park reserve, national historic site or historic canal and funded under any of the following plans, funds or initiatives, are exempted from the requirement to conduct an assessment under the Act:

(a) the Building Canada Plan;

(b) the Canada Strategic Infrastructure Fund Act;

(c) the funds referred to in sections 300 and 303 or the initiatives referred to in sections 309 to 315 of the Budget Implementation Act, 2009;

(d) the Recreational Infrastructure Canada, Helping Municipalities Build Stronger Communities or Investments in First Nations Infrastructure initiatives referred to in Chapter 3 of the Canada’s Economic Action Plan (Budget 2009) tabled in the House of Commons on January 27, 2009, published by the Government of Canada under ISBN 978-0-660-19853-8 and available on the Web at www.budget.gc.ca/2009;

(e) the Border Infrastructure Fund referred to in the Infrastructure Canada Departmental Performance Report for the period ending 2007–2008 tabled in the House of Commons on Feb 5, 2009, published by the Government of Canada under ISBN 978-0-660-63741-9 and available on the Web at www. tbs-sct.gc.ca/dpr-rmr/2007-2008;

(f) the initiative administered by the Canada Mortgage and Housing Corporation to provide funding for the renovation and energy retrofits of off-reserve federally funded and administered social housing units that are subject to an operating agreement under a National Housing Act social housing program; or

(g) the Municipal Rural Infrastructure Fund announced in Budget 2003 and administered by Infrastructure Canada to provide funding for smaller-scale municipal infrastructure projects that support sustainable development, improved quality of life and economic opportunities and increased connectivity for smaller and rural communities.

2. The heading of Schedule 4 to the Regulations is replaced by the following:

EXCLUSION LIST FOR PROJECTS AND CLASSES OF PROJECTS FUNDED UNDER CERTAIN INFRASTRUCTURE PROGRAMS AND CARRIED OUT IN PLACES OTHER THAN NATIONAL PARKS, PARK RESERVES, NATIONAL HISTORIC SITES OR HISTORIC CANALS

3. Schedule 4 to the Regulations is amended by adding the following after section 13:

14. The proposed construction, installation, operation, expansion or modification of an outdoor pool or rink, sports field or court, community park, recreational trail or bicycle path if the project

(a) is not to be carried out within 250 m of an environmentally sensitive area; or

(b) is to be carried out within 250 m of an environmentally sensitive area and

(i) complies with any law and any management plan, in relation to the environmentally sensitive area, and

(ii) in the case of an environmentally sensitive area protected by a federal government body, measures are in place to protect the area and the project has a total cost, other than the cost of land, below $10 million.

COMING INTO FORCE

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

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issue: First Ministers have agreed to work together on a number of important actions to provide stimulus to the Canadian economy. One of the actions identified is to streamline the regulatory and environmental approvals process for infrastructure projects to avoid unnecessary overlap and duplication, while continuing to protect the environment. Concerns have been expressed that federal environmental assessment requirements can unnecessarily slow down funding decisions, particularly for community and transportation infrastructure projects that have insignificant environmental effects. Another area of concern is situations where a federal environmental assessment is triggered after the completion of a provincial assessment, or relatively late in the project development process. Within the context of the current economic situation, in March 2009, the environmental assessment process, through existing legislative authority, was modified for infrastructure projects funded under the Building Canada plan. The modifications were put forward to improve the efficiency of the process so as to not impede timely decisions on public infrastructure projects without jeopardizing the protection of the environment. Similar infrastructure projects are funded under other federal infrastructure funding programs which should also benefit from an improved environmental assessment process.

Description: The Exclusion List Regulations, 2007 are amended to extend the applicability of Schedule 4 of the Regulations, which includes 13 classes of infrastructure projects to be funded under the Building Canada plan that are exempted from requiring a federal environmental assessment, to fourteen other federal infrastructure funding initiatives. Projects funded under these additional initiatives could already be excluded from requiring a federal environmental assessment under the classes of projects listed on the current Exclusion List Regulations, 2007, if they fit within one of those existing classes of projects. In addition, these same funding initiatives will also be added to the Infrastructure Projects Environmental Assessment Adaptation Regulations to allow projects funded under those programs, that cannot be excluded and trigger both federal and provincial environmental assessments, to be considered for substitution in accordance with the Regulations.

As well, one new class of infrastructure projects is added to Schedule 4 of the Exclusion List Regulations, 2007. As a result, recreational infrastructure projects such as tennis courts, community parks and recreational pathways that have insignificant environmental effects are excluded from requiring a federal environmental assessment.

These regulatory amendments will be in effect until March 31, 2011.

Cost-benefit statement: The direct cost savings related to a reduced number of environmental assessments is estimated to be $240 to $400 million. The regulatory amendments are also expected to generate economic benefits to Canadians by facilitating earlier implementation of infrastructure projects. This will be done by reducing the number of federal environmental assessments required for infrastructure projects that pose insignificant adverse environmental effects. In turn, it will allow government resources to be focused on projects with the potential to cause significant adverse environmental effects. The changes with respect to environmental assessment are just one of the regulatory and administrative measures being used to speed up the implementation of infrastructure projects and stimulate the economy. The potential costs or risks posed by the regulatory amendments are expected to be small. Projects excluded from federal environmental assessment are those with a history of environmental assessments that indicate the types of projects to be excluded have insignificant environmental effects. For non-excluded projects, there may be a substitution to a provincial process, but an environmental assessment meeting prescribed conditions is still conducted.

Business and consumer impacts: The Regulations will reduce unnecessary delays in delivering infrastructure projects, while maintaining environmental protection. They are consistent with ongoing efforts to improve the federal environmental assessment framework by focussing federal environmental assessments where they are most needed and by identifying means of further integrating federal and provincial assessments. Coordination and cooperation on the delivery of infrastructure projects should improve as a result of faster federal decisions that will accelerate construction and flow federal money in a more timely fashion.

Domestic and international coordination and cooperation: Enabling the substitution of the federal process will avoid duplication, while ensuring the fundamental requirements of the Canadian Environmental Assessment Act are met. The Canadian Environmental Assessment Agency will work with its provincial counterparts to ensure that a substituted process for a specific project or a class of projects meets federal requirements. The Agency will also work with other federal regulatory agencies if and when required. These Regulations do not affect the existing ability under the legislation to coordinate environmental assessments on projects that may cross the international border.

Issue

In the current global economic climate, the Government of Canada is working with provinces, territories and communities to build much needed infrastructure across the country. With this in mind, on March 12, 2009, the Government of Canada amended the Exclusion List Regulations, 2007 under the Canadian Environmental Assessment Act to exclude specific classes of infrastructure projects funded under the Building Canada plan from requiring a federal environmental assessment, based on a determination that the projects have insignificant environmental effects.

At the same time, the Government of Canada also introduced the new Infrastructure Projects Environmental Assessment Adaptation Regulations to help streamline the environmental assessment process by allowing, under specified conditions, provincial environmental assessments to substitute for the federal environmental assessment process for projects funded under the Building Canada plan.

When the initial infrastructure regulatory package was developed, the government’s main vehicle for providing stimulus to the Canadian economy was to accelerate the provision of funding under the Building Canada plan. The essential details of the government’s new infrastructure spending as part of its economic stimulus package were unknown and it had not been approved by Parliament. Thus, it could not be reflected in the initial regulatory package. Since then, Parliament approved the Budget Implementation Act, 2009 and more detailed information surrounding the various funding initiatives has been released.

Part of the government’s economic stimulus package relies on a number of infrastructure funding initiatives to be delivered over the next two years. In order to have an impact on the Canadian economy, in addition to other measures the government is implementing to stimulate the economy, the government would like to flow program funds as soon as possible while continuing to protect the environment. In order to achieve this, one of the government’s commitments in its Economic Action Plan, was to implement regulatory efficiencies for projects subject to the Canadian Environmental Assessment Act, including reducing overlap and duplication with provincial processes and eliminating the need for federal environmental assessments for projects that have insignificant environmental effects.

Therefore, the applicability of the March 2009 amendments made to the Exclusion List Regulations, 2007 and the new Infrastructure Projects Environmental Assessment Adaptation Regulations is extended to eleven funding initiatives announced in Budget 2009 as well as three existing infrastructure funding programs.

Objectives

The objective of these Regulations is to build on the infrastructure regulatory package that was approved in March 2009 (Regulations Amending the Exclusion List Regulations, 2007 and the Infrastructure Projects Environmental Assessment Adaptation Regulations). That package included the addition of a new schedule to the Exclusion List Regulations, 2007 to exclude thirteen classes of infrastructure projects funded under the Building Canada plan with insignificant environmental effects from requiring a federal environmental assessment and, the new Infrastructure Projects Environmental Assessment Adaptation Regulations which allow for the substitution of the federal environmental assessment process by a provincial process subject to certain conditions.

The current regulatory amendments extend the scope of applicability of the March 2009 regulatory initiative to include federal infrastructure funding initiatives that are part of the government’s economic stimulus package, as well as three existing infrastructure programs that are nearing completion. The existing programs are being added because the few remaining projects to be funded under these programs fall under the same classes of projects as those funded under the BuildingCanada plan and the other new infrastructure funding programs. In addition, they will be undertaken over the next two years which will contribute to stimulating the economy. The number of projects to be funded under those existing programs over the next two years is relatively low at approximately 225.

This initiative will ensure that the environmental assessment process applicable to infrastructure projects funded under the included programs is the same as that applicable to projects funded under the Building Canada plan. As a result, more projects will be able to get under way over the next two years while still protecting the environment. Under the Infrastructure Stimulus Fund (described below) alone, it is expected that between 8 000 and 12 000 projects will be funded and that a large number of these projects will be excluded from requiring an environmental assessment as a result of these regulatory amendments.

These regulatory amendments will contribute to accelerating the approval of public infrastructure projects as part of the government’s economic stimulus initiative. In enabling more spending on public infrastructure over the short-term, these regulatory amendments are expected to have a positive effect on efforts to stimulate the economy, without compromising environmental protection. Thus, assessment resources will be focused on projects having potentially significant effects.

Description

An environmental assessment is an assessment of the potential adverse environmental effects of a project and identification of measures to eliminate or mitigate those effects. An environmental assessment must be conducted for any project, as defined under the Canadian Environmental Assessment Act (see footnote 2), if a federal authority proposes the project, funds the project, grants an interest in land for the project, or allows the project to proceed by issuing an authorization pursuant to any of the statutory or regulatory provisions identified in the Law List Regulations. A project is either a physical work or an activity not related to a physical work identified in the Inclusion List Regulations. An environmental assessment is not required for classes of projects listed on the Exclusion List Regulations, 2007. An environmental assessment is required to be conducted by a federal authority that is considering one of the above-noted actions in relation to a project. The environmental assessment is then used as part of the decision-making process related to the project. Under the Canadian Environmental Assessment Act (paragraph 5(1)(b)), an environmental assessment is required before a federal authority can make a final decision to provide funding for specific projects. Currently, approximately 7 000 federal environmental assessments are conducted annually across the whole federal system.

The Infrastructure Projects Environmental Assessment Adaptation Regulations that came into force in March 2009 enable a provincial environmental assessment to substitute for the federal environmental assessment process, provided that the former meets requirements specified in the Regulations. In those cases, the time required to conduct the environmental assessment would be significantly reduced, by as much as 12 months, by relying on a provincial environmental assessment, while retaining federal decision-making authority on the potential significance of environmental effects in relation to a project. The Regulations are designed to avoid duplication with provincial processes without compromising the quality of the environmental assessments, which should result in timelier decisions on infrastructure projects receiving funding from the Government of Canada.

Federal responsible authorities, provincial governments and recipients of infrastructure funding, have expressed concerns that federal environmental assessment requirements can unnecessarily slow down funding decisions. Of particular concern are community and transportation infrastructure projects that have insignificant environmental effects (e.g. buildings, convention centres, improvements to grade separations or installation of an intelligent transportation system to improve road safety), situations where a federal environmental assessment is triggered after the completion of a provincial assessment, or relatively late in the project development process because of the timing of federal funding approval.

Within the context of the current economic situation, there is a need to extend the application of the March 2009 regulatory initiative to other infrastructure funding programs.

This regulatory initiative will ensure a more efficient environmental assessment process and eliminate a potential barrier to timely decisions on projects funded under certain programs that are part of the economic stimulus package in Budget 2009, without jeopardizing the protection of the environment. The regulatory package includes:

1) The addition of one class of infrastructure projects to Schedule 4 of the Exclusion List Regulations, 2007 under the Canadian Environmental Assessment Act — targeting specific recreational projects such as tennis courts and community parks — and extending the coverage of that same Schedule to other specified federal infrastructure funding programs. The regulatory changes are in effect until March 31, 2011.

2) Amendments to the Infrastructure Projects Environmental Assessment Adaptation Regulations, which are in effect until March 31, 2011, extending the applicability of the Regulations to other specified federal infrastructure funding initiatives.

The infrastructure funding programs to be added to both Regulations include three existing programs that are nearing completion and eleven new infrastructure funding initiatives announced as part of the 2009 Economic Action Plan amounting to roughly $12 billion in federal investments.

Existing infrastructure funding programs

1. Canada Strategic Infrastructure Fund

Created under the Canada Strategic Infrastructure Fund Act, the object of this fund, administered by Transport Canada and Infrastructure Canada, is to provide for the payment of contributions to eligible recipients for carrying out strategic infrastructure projects that contribute to economic growth or quality of life in Canada and that advance Canada’s objectives with respect to infrastructure. The program will end on March 31, 2013 with only seven transportation and transit related infrastructure projects left to be funded for a combined federal investment of approximately $370 million.

2. Border Infrastructure Fund

This fund will end in August 2013. It is administered by Transport Canada and Infrastructure Canada. There are less than 25 projects left to be funded under the program which focus on infrastructure improvements in the Windsor Gateway and security enhancement measures for a total federal investment of up to $56 million.

3. Municipal Rural Infrastructure Fund

This fund will end in 2010-2011. It is a cost-shared program with provinces, territories, municipalities and First Nations that is administered by Infrastructure Canada. The goal of the fund is to target infrastructure projects that provide a better quality of life for small and rural municipalities and First Nations communities. The types of projects funded include: water, wastewater, solid waste, municipal energy improvements, public transit, culture and tourism, recreational infrastructure, local roads and broadband connectivity. There are approximately 200 community infrastructure projects left to be funded for a total federal investment of approximately $485 million.

New infrastructure funding initiatives

Eleven new infrastructure funding initiatives are added to Schedule 4 of the Exclusion List Regulations, 2007 and to the Infrastructure Projects Environmental Assessment Adaptation Regulations. The initiatives are described below.

As a result of these regulatory amendments, the Government of Canada will be able to provide funding, without undue delays, for

  • the repair, modification (including energy retrofits) and construction of social housing to support low-income Canadians, including seniors, persons with disabilities and Aboriginal Canadians;
  • low-cost loans to municipalities for housing-related infrastructure;
  • the development and maintenance of critical community infrastructure on reserve for the delivery of basic needs and services such as clean water and schools;
  • the rehabilitation of existing assets, that were built decades ago, such as water, wastewater, public transit, highways, roads, culture, parks, trails and municipal buildings;
  • the upgrading and renewing thousands of community recreational facilities across Canada, including hockey arenas, soccer fields, tennis and basketball courts, swimming pools and recreational trails. Many of these facilities were built in 1967 to help mark Canada’s Centennial year;
  • ensuring that Canadians have access to safe and reliable drinking water and wastewater facilities; and
  • the acceleration of repairs, maintenance and construction at post-secondary institutions across the country.

These new funding initiatives are largely focused on the repair, maintenance, modification, refurbishment and expansion of existing infrastructure. A significant portion of these projects would be excluded from requiring an environmental assessment under already existing exclusions in the Exclusion List Regulations, 2007 without these regulatory amendments. The number of additional projects that will not require an environmental assessment as a result of these regulatory changes will depend on the total number of projects funded under each initiative and whether an environmental assessment would have been triggered.

1. Infrastructure Stimulus Fund (see footnote 3)

This is a $4 billion fund, created under the 2009 Economic Action Plan, which will be delivered by Infrastructure Canada. It complements existing federal infrastructure funding by focusing on short-term objectives for economic stimulus. To further this goal of rapid economic stimulus, the Infrastructure Stimulus Fund will focus on construction–readiness as an important project selection criterion. The full $4 billion will be distributed in fiscal years 2009-2010 and 2010-2011. Projects will focus largely on the rehabilitation of existing assets such as water, wastewater, public transit, highways, roads, culture, parks, trails and municipal buildings. Eligible recipients include provinces, territories, local regional governments and public sector, not-for-profit organizations and, in limited cases, private companies. Projects receiving funding under this program must complete construction by March 31, 2011. It is anticipated that some 8 000 to 12 000 projects could be funded under this fund. A conservative estimate is that 40% of these projects will be excluded under existing exclusion provisions in the Regulations.

2. Green Infrastructure Fund (see footnote 4)

This funding program, created under the 2009 Economic Action Plan, will be delivered by Infrastructure Canada and will allocate up to $400 million over the next two years. It is expected that a small number of larger projects will be funded.

This fund is intended to focus on green priorities such as building transmission lines for clean hydro, upgrading wastewater treatment systems, and investing in wind and solar power. Sustainable energy infrastructure, such as modern energy transmission lines, will contribute to improved air quality and lower carbon emissions.

Eligible projects are those that promote cleaner air, reduced greenhouse gas emissions, and cleaner water and fall within any of the following categories: wastewater infrastructure; green energy generation infrastructure; green energy transmission infrastructure; and solid waste infrastructure.

Eligible recipients include provinces, territories, local or regional governments; public sector bodies, non-profit organizations and private companies, either alone or in partnership with a province, a territory or a government.

Whether or not the projects funded under this initiative will be eligible for exclusion or substitution as a result of these regulatory amendments will depend on the parameters of the projects selected for funding.

3. Recreational Infrastructure Canada (see footnote 5)

This new initiative, created under the 2009 Economic Action Plan, will be delivered by Industry Canada in Ontario, Indian and Northern Affairs Canada in the three northern territories until the new regional development agency for the north is operational, and regional agencies including the Atlantic Canada Opportunities Agency, Western Economic Diversification, and the Economic Development Agency of Canada for the Regions of Quebec.

Up to $500 million will be provided over the next two years to support rehabilitation or repair of recreational facilities, including new construction to expand or replace existing infrastructure assets or capacity. Eligible facilities include recreational facilities owned by municipalities, First Nations, counties, community organizations and other not-for-profit entities. Examples of projects to be funded include arenas, gymnasia, swimming pools, multi-purpose facilities that have physical recreation activity as the primary rational, sport fields, tennis, basketball, volleyball, other sport specific courts, parks, fitness trails, and bike paths. It is expected that over 2 000 projects will be funded under this initiative. Given that a large number of them will be for upgrading existing facilities, the number of projects impacted by these regulatory amendments is not expected to be significant. It is not anticipated that any will be subject to a substituted process.

4. Helping Municipalities Build Stronger Communities (see footnote 6)

Up to $2 billion will be made available over two years in direct, low-cost loans to municipalities to finance improvements to housing related infrastructure, such as sewers, water lines, and neighbourhood regeneration projects. The funds will be administered by the Canada Mortgage and Housing Corporation through its Municipal Infrastructure Lending Program. It is expected that this initiative will mostly benefit from the amendments to the Exclusion List Regulations, 2007. The number of projects impacted by these regulatory amendments will depend on the number of projects funded and on whether they would have already been excluded under existing provisions.

5. Knowledge Infrastructure Program (see footnote 7)

Created under the 2009 Economic Action Plan, this fund will be delivered by Industry Canada. It provides up to $2 billion to support infrastructure enhancement at post-secondary institutions. The Program’s objectives are the acceleration of repairs, maintenance and construction at universities and colleges to provide substantial stimulus in communities across Canada. In addition, it will help achieve the objectives of the Government’s Science and Technology Strategy by enhancing the research capacity of these institutions and enabling them to attract students and provide a better educational experience for the highly skilled workers of tomorrow. Eligible projects under the Knowledge Infrastructure Program will be for the repair, rehabilitation or construction of infrastructure assets that will be completed no later than March 31, 2011.

The University component of the Knowledge Infrastructure Program will include projects intended to improve the scale or quality of research and development facilities; or projects intended to improve the health and safety, environmental, or waste management aspects of research and development facilities.

The college component of the Knowledge Infrastructure Program will include projects intended to support a more innovative economy through improving the quality of college facilities or projects intended to improve health and safety, environmental or waste management aspects of college facilities.

It is expected that between 300 and 350 projects will be funded. Of these, it is estimated that about 100 projects will benefit from the amendments to the Exclusion List Regulations, 2007.

6. First Nations Housing Fund

Created under the 2009 Economic Action Plan, this funding represents up to $400 million in infrastructure funding, to be allocated over the next two years, for projects such as on reserve housing, new social housing projects, remediation of existing stock and complementary housing activities. The funding will be administered by Indian and Northern Affairs Canada ($150 million) (see footnote 8) and the Canada Mortgage Housing Corporation ($250 million) (see footnote 9). The number of projects impacted by the amendments to the Exclusion List Regulations, 2007 will depend on the number of projects funded and on whether they would have already been excluded under existing provisions.

7. Renovation and Retrofit of Social Housing (see footnote 10)

This funding, identified in the 2009 Economic Action Plan, will provide a one-time federal investment of $1 billion over two years (2009/2010 and 2010/2011) to address the backlog in demand for renovation and energy retrofits of the social housing stock. The initiative will be administered by the Canada Mortgage Housing Corporation (CMHC), $850 million is to be cost-shared with provinces and territories and $150 million is to address needs of existing social housing which the CMHC administers. The number of projects impacted by the amendments to the Exclusion List Regulations, 2007 will depend on the number of projects funded and on whether they would have already been excluded under existing provisions.

8. Housing for Low-Income Seniors (see footnote 11)

Under the 2009 Economic Action Plan, $400 million were identified for the Canada Mortgage and Housing Corporation to provide funding to the provinces and territories for the construction of housing units for low-income seniors. The number of projects impacted by the amendments to the Exclusion List Regulations, 2007 will depend on the number of projects funded and on whether they would have already been excluded under existing provisions.

9. Housing for Persons with Disabilities (see footnote 12)

Under the 2009 Economic Action Plan, $75 million were identified for the Canada Mortgage and Housing Corporation to provide funding to the provinces and territories for the construction of housing units for persons with disabilities. The number of projects impacted by the amendments to the Exclusion List Regulations, 2007 will depend on the number of projects funded and on whether they would have already been excluded under existing provisions.

10. Northern Housing (see footnote 13)

Under the 2009 Economic Action Plan, $200 million were identified for the Canada Mortgage and Housing Corporation to provide funding to the territories for the renovation and construction of social housing units. As the Canadian Environmental Assessment Act has limited applicability in the territories, very few projects under this initiative will be affected by these regulatory amendments.

11.Investments in First Nations Infrastructure (see footnote 14)

Under the 2009 Economic Action Plan, $515 million will be available for First Nations projects in three priority areas: schools, water and wastewater systems, and critical community services. Over the next two years, the construction of ten new schools on reserve and three major school renovation projects will be undertaken, and drinking water and wastewater infrastructure projects to address health and safety priorities in 18 First Nations communities across the country will be completed. The funding for these projects will be administered by Indian and Northern Affairs Canada.

Regulations Amending the Exclusion List Regulations, 2007

The Exclusion List Regulations, 2007 specify that projects involving physical works, for which the Governor in Council is satisfied result in insignificant environmental effects, are excluded from undergoing an environmental assessment under the Canadian Environmental Assessment Act. The legal authority to make the Exclusion List Regulations is found in subparagraphs 59(c)(ii) and 59(c)(iii) of the Act. An essential component of the federal environmental assessment legislative framework, a project exclusion list has been in existence since the Canadian Environmental Assessment Act came into force in 1995.

In addition to extending the applicability of Schedule 4 of the Exclusion List Regulations, 2007 to the above-noted federal infrastructure funding initiatives, the amendments include the addition of one new class of infrastructure projects. It will exclude outdoor recreation and sporting facilities such as outdoor swimming pools, sport fields and courts, community parks, recreational trails and bicycle paths from requiring an environmental assessment. A provision was previously included in the Regulations to exclude buildings for the purpose of providing recreation and sporting facilities and services under prescribed conditions. For example, the provision exempts a swimming pool that is housed in a building from requiring an environmental assessment. The current amendment is intended to supplement the existing provision to exclude outdoor facilities such as an outdoor community pool.

Since 2003, approximately 40 recreational projects approved and funded under federal infrastructure development programs have undergone a screening level of environmental assessment. The findings of these assessments indicate that the nature and environmental settings of these projects are well understood. Associated physical works typically include lighting, benches, fitness stations, playground equipment, picnic areas and facilities, pedestrian bridges, storage and equipment sheds, wash and change rooms, information kiosks, signage, access roads and parking. In many cases, these works are either not considered projects under the Canadian Environmental Assessment Act, or they are already subject to an existing exclusion under the Regulations.

Environmental effects associated with these projects are generally of low risk, particularly when they are located in previously disturbed municipal settings and/or involve the restoration or rehabilitation of existing sites and facilities. Effects associated with site preparation and construction related activities can be minimized or avoided in many cases through proper siting and the use of good construction practices. Operational effects from the use of these sites and facilities are limited and insignificant, while effects of maintenance activities can also be managed with the application of good practice standards, such as maintaining buffer zones along water bodies and managing litter.

The additional projects that will be exempted from requiring an environmental assessment as a result of these regulatory amendments will still be subject to applicable municipal, provincial and other federal environmental laws and approvals.

These regulatory amendments will have the effect of eliminating additional unnecessary federal environmental assessments and concentrating limited federal resources on those projects or classes of projects where the potential for adverse environmental effects is greatest.

Regulations Amending the Infrastructure Projects Environmental Assessment Adaptation Regulations

The Infrastructure Projects Environmental Assessment Adaptation Regulations, which came into force on March 12, 2009, enable the streamlining of the environmental assessment process through the use of provincial environmental assessments where appropriate. The Regulations adapt current substitution provisions in the Canadian Environmental Assessment Act so that the Minister of the Environment, under certain conditions, can allow for the substitution of a federal environmental assessment by a provincial environmental assessment, while retaining federal decision making. The ability to make use of a substituted process is extended to the funding initiatives added by these regulatory amendments. The proportion of projects funded under these new initiatives that will be eligible to be considered for substitution under these Regulations is expected to be low. The reason for this is that a significant portion of the projects that will be funded would have already been excluded (e.g. repair of existing buildings) or will be excluded as a result of these regulatory amendments from requiring a federal environmental assessment.

Regulatory and non-regulatory options considered

There are no non-regulatory options available to extend the applicability of the Regulations to other federal funding programs which are part of the government’s economic stimulus package.

These amendments are being made under existing legislative authority within the existing legislative framework.

Benefits and costs

These regulatory amendments are expected to generate economic benefits to Canadians by facilitating earlier implementation of more infrastructure projects; and by creating cost savings through reducing the number of federal environmental assessments required for infrastructure projects that pose insignificant adverse environmental effects. In turn, it will allow government resources to be focused on projects with the potential to cause significant adverse environmental effects.

Economic benefits are expected to accrue from the stimulus effects of having infrastructure spending begin to flow earlier than would otherwise be the case, leading to broader economic benefits. These benefits are proportional to the total number of projects that will be exempted in the next two years and the funding allocated to them.

These regulatory amendments, along with other measures, are expected to facilitate acceleration of more than $12.4 billion in federal infrastructure spending for three existing programs that are nearing completion and eleven new initiatives announced as part of the 2009 Economic Action Plan, as described earlier in this document. With matching contributions by eligible recipients, it is assumed that almost $24 billion in infrastructure spending could be injected into the Canadian economy in 2009 and 2010.

There is uncertainty as to what portion of infrastructure spending could be directly affected by these regulatory amendments. The economic stimulus effects and potential cost savings to project proponents will depend on the number and types of projects approved for funding over the next two years. Also, a large portion of projects under the various infrastructure funding initiatives would already have been excluded from requiring a federal environmental assessment under existing provisions. Therefore, the total economic stimulus effects and potential cost savings from these regulatory amendments will be based on only a portion of the total potential funding of almost $24 billion (federal investment plus matching contributions from eligible recipients).

For the purposes of this analysis, only the potential spending under the Infrastructure Stimulus Fund has been used to assess the potential stimulus effects and cost savings that could be facilitated by the proposed regulatory amendments. The federal government has committed $4 billion to the Infrastructure Stimulus Fund covering up to 50% of the cost of funded projects. With matching contributions by eligible recipients, project spending under the Infrastructure Stimulus Fund could reach at least $8 billion over 2009 and 2010.

Potential Output and Employment Impacts

To estimate the economic benefits of accelerated infrastructure spending, output and employment multipliers from Finance Canada were used. Multipliers are summary measures that take into account the channels from fiscal stimulus to short-term economic activity, including first-round, indirect or induced impacts, and leakages to saving and imports. The Finance Canada model for estimating the economic impact of infrastructure spending is explained in Canada’s Economic Action Plan, Budget 2009 — Annex 1, Economic Action Plan: Employment and Output Impacts.

For infrastructure investment, the expenditure multipliers are 1.0 in 2009 and 1.5 in 2010. This means that a permanent one dollar increase in infrastructure spending is expected to generate a $1 impact on real gross domestic product (GDP) in 2009 and a $1.50 impact in 2010 (see table A1.1 — Expenditure and Tax Multipliers). The short-term multipliers for infrastructure spending are relatively high, reflecting smaller leakages to savings or imports.

Employment effects are based on the assumption that a 1% increase in real GDP translates into an immediate 0.2% increase in employment, rising to about 0.6% after eight quarters. According to Finance Canada, this ratio is consistent with the historical relationship between growth in real GDP and employment in Canada.

Using this approach, and assuming that the $8 billion in total infrastructure spending resulting from the Infrastructure Stimulus Fund is equally distributed across 2009 and 2010, it is estimated that the level of real GDP could increase by about 0.26 percentage points in 2009 and about 0.36 percentage points in 2010. Total employment impacts would be an additional 36 000 jobs created or maintained by the end of 2010.

Potential cost savings

As a result of these regulatory amendments, there will be some cost savings to project proponents and the federal government — both in terms of the actual conduct of these assessments, as well as staff time to review and approve — for those projects that would have required a federal environmental assessment. However, as noted earlier, the number of projects that will not require an environmental assessment as a result of these regulatory changes will depend on the number of projects funded and whether an environmental assessment would have been triggered. While the overall funding amounts are large, a significant portion of projects funded under these initiatives would already be excluded under the current Exclusion List Regulations, 2007, in force since 2007.

It is difficult to precisely estimate cost savings, since there is a wide range in the scope and scale of both projects and the cost of environmental assessments. A 1999 study estimated the average relative cost of screenings to be 2.9% (range of 0.4% to 7.6%) of project costs (On-Going Monitoring Program of the Canadian Environmental Assessment Act). However, this study did not distinguish federal environmental assessment costs from provincial environmental assessment costs.

An interdepartmental committee of environmental assessment experts estimated that costs for federal environmental assessments of large projects would be less than 1% of project costs. For smaller projects, environmental assessment costs could range from 3% to 5% of project costs. These estimates appear reasonable compared to the 1999 estimates cited above for total federal and provincial environmental assessment costs (i.e. within the 0.4% to 7.6% range). Most of the projects affected by the regulatory amendments are expected to be smaller projects, with environmental assessment costs estimated to fall within the 3% to 5% range.

To determine potential cost savings of implementing the regulatory amendments, these cost estimates were applied to spending under the Infrastructure Stimulus Fund of $8 billion (federal investment plus contributions from eligible recipients) over 2009 and 2010. If federal environmental assessments were required for all projects funded under the Infrastructure Stimulus Fund (estimated at between 8 000 and 12 000), the costs for federal environmental assessments could range from about $240 million to $400 million. Based on experience with similar previous programs, the regulatory amendments are projected to eliminate the need for most of those assessments thus reducing the costs over the next two years by at least this amount.

It is important to note that the potential stimulus and cost savings effects of these regulatory amendments are likely to be much larger than the estimates provided above, which are based only on the Infrastructure Stimulus Fund.

Potential costs/risks

The potential costs or risks posed by the regulatory amendments are expected to be small.

The potential cost of the regulatory amendments is the risk of proceeding with a project that has significant adverse effects on the environment, without first completing a federal environmental assessment.

This risk is expected to be small because the exclusions are based on a history of environmental assessments that indicate that the types of projects to be excluded have insignificant environmental effects. For non-excluded projects, there may be a substitution to a provincial process, but an environmental assessment meeting prescribed conditions is still conducted.

Rationale

The regulations in this regulatory package will achieve the goals of reducing unnecessary delays in delivering infrastructure projects for a large number of projects, while maintaining environmental protection. They build on and are consistent with ongoing efforts to improve the federal environmental assessment framework. The application is targeted to projects funded under specific infrastructure funding programs over the next two years. Even though a federal environmental assessment may not be required, projects that will be excluded will still be subject to all other applicable laws, including environmental laws.

The Canadian Environmental Assessment Act requires environmental assessments to be conducted on any physical work, unless excluded. This “all-in unless out” approach means that a list of exclusions is necessary, and has been in place since the Canadian Environmental Assessment Act was implemented. The list of exclusions has been added to since then, notably in 2007, to ensure that assessments are not necessary for projects that cause little or no effect on the environment.

Enabling the substitution of provincial processes for the federal process will avoid duplication of processes, while ensuring the fundamental requirements of the Canadian Environmental Assessment Act are met and federal decision making is retained. The Regulations that allow for substitution are consistent with ongoing federal-provincial discussions to improve collaboration between federal and provincial environmental assessment systems, including identifying measures to support the concept of “one project-one assessment.” The concept of relying on other processes is a part of the current Canadian Environmental Assessment Act, as well as being consistent with international practices in other jurisdictions such as Australia and the United States.

The conditions, that will have to be met before the Minister of the Environment agrees to the use of a substituted process, will ensure that the key requirements of a federal environmental assessment are met.

Coordination and cooperation on the delivery of infrastructure projects will improve as a result of faster federal decisions, which should accelerate construction and flow federal money in a more timely fashion.

Consultation

As indicated in the Regulatory Impact Analysis Statement accompanying the regulations made in March 2009, no specific consultations were undertaken on this or the previous urgent regulatory package. Development of the Regulations followed a significant number of high-level discussions on the need for such a package, including a First Ministers’ Meeting in November 2008, and national consultations between the Minister of Transport, Infrastructure and Communities and his counterparts on the need to accelerate infrastructure investments. Engaging in consultations specific to these regulatory changes would not enable the amendments to be in force in time to affect projects that the Government would like to fund in 2009/2010 and 2010/2011.

Comments received and commentaries in the media following publication of the March 2009 regulations expressed concern about the lack of consultation during the development of the regulations.

Implementation, enforcement and service standards

There is no formal compliance or enforcement mechanism applicable to the Canadian Environmental Assessment Act or its regulations. As with the Act, the regulations are based on the principle of self-assessment; that is, when a federal authority has a decision to make about a project, it will be responsible for determining whether an environmental assessment is required and if so, for ensuring that it is conducted in accordance with the Act and its regulations.

However, the Agency does have a role in promoting and monitoring compliance with the Canadian Environmental Assessment Act and its regulations. The Agency assists federal authorities in meeting their obligations through the issuance of guidance and the provision of training. In addition, Agency staff is available to assist federal authorities when required.

With respect to the substitution of the federal process by a provincial process, the Minister of the Environment will have that decision-making authority and will need to be satisfied that provincial processes meet the prescribed conditions before authorizing any substitution. Responsible authorities may participate in the provincial environmental assessment process to ensure that they have the information required to make their environmental assessment decision.

These regulatory amendments will be in effect until March 31, 2011.

Contact

John Smith
Director
Legislative and Regulatory Affairs
Canadian Environmental Assessment Agency
160 Elgin Street, 22nd Floor
Ottawa, Ontario
K1A 0H3
Telephone: 613-948-1942
Fax: 613-957-0897
Email: john.smith@ceaa-acee.gc.ca

Footnote a
 S.C. 2003, c. 9, s. 29(2)

Footnote b
 S.C. 2003, c. 9, s. 29(2)

Footnote c
 S.C. 1992, c. 37

Footnote 1
 SOR/2007-108

Footnote 2
Consult the Questions and Answers provided on the Canadian Environmental Assessment Agency’s Web site at www.ceaa.gc.ca/010/basics_e.htm to learn more about federal environmental assessment and the CEA Act.

Footnote 3
 This funding initiative is referenced on line 300 of the Budget Implementation Act, 2009. Details about the initiative are available at www.buildingcanada-chantierscanada.gc.ca/creating-creation/isf-fsi-eng.html.

Footnote 4
 This funding initiative is referenced on line 303 of the Budget Implementation Act, 2009. Details about the initiative are available at www.buildingcanada-chantierscanada.gc.ca/media/news-nouvelles/2009/gif-fiv-eng.html.

Footnote 5
 Details about the initiative are available at www.budget.gc.ca/2009/plan/bpc3d-eng.asp.

Footnote 6
 Details about the initiative are available at www.cmhc.ca/housingactionplan.

Footnote 7
 This funding initiative is referenced on line 309 of the Budget Implementation Act, 2009. Details about the initiative are available at www.ic.gc.ca/knowledge-infrastructure.

Footnote 8
 This funding initiative is referenced on line 310 of the Budget Implementation Act, 2009. Details about the initiative are available at www.ainc-inac.gc.ca/index-eng.asp.

Footnote 9
 This funding initiative is referenced on line 311 of the Budget Implementation Act, 2009. Details about the initiative are available at www.cmhc.ca/ housingactionplan.

 Footnote 10 This funding initiative is referenced on line 312 of the Budget Implementation Act, 2009. Details about the initiative are available at www.cmhc.ca/ housingactionplan.


Footnote 11
 This funding initiative is referenced on line 313 of the Budget Implementation Act, 2009. Details about the initiative are available at www.cmhc.ca/ housingactionplan.

Footnote 12
 This funding initiative is referenced on line 314 of the Budget Implementation Act, 2009. Details about the initiative are available at www.cmhc.ca/housingactionplan.

Footnote 13
 This funding initiative is referenced on line 315 of the Budget Implementation Act, 2009. Details about the initiative are available at www.cmhc.ca/housingactionplan.

Footnote 14
 Details about this initiative are available at www.ainc-inac.gc.ca/index-eng.asp.