In mid-March, a week before the Supreme Court heard a key case about Ottawa’s environmental oversight of industrial projects, the first major decision was made under the Impact Assessment Act.
The IAA became law in 2019. The aim was to clean up the mess of Stephen Harper’s watering-down of project reviews in 2012. Mr. Harper wanted to make it easier, and faster, to get things built. Instead, the law was too streamlined and major proposals like the Trans Mountain oil pipeline got mired in the courts. The IAA tried to address the gaps, with a bigger focus on Indigenous consultations and climate issues. Alberta and other critics felt the IAA was too restrictive.
Those criticisms were always exaggerated. The IAA wasn’t drafted to kill industry. On March 14, after an IAA review, a liquefied natural gas plant was approved. Cedar LNG, co-owned by the Haisla Nation and Pembina Pipeline, is a $3-billion plan to export LNG from Kitimat on British Columbia’s northwest coast. It is the type of project that critics believed would be rejected by the perceived heavy hand of Ottawa’s IAA.
The review process, from planning to approval, took a little more than three years, typical for such projects in the past. B.C. led the evaluation, as allowed under the IAA. Cedar LNG’s official application landed in late 2021, and B.C.’s approval came 15 months later, in mid-March; the next day Ottawa endorsed the approval.
B.C.’s review concluded that Cedar LNG’s greenhouse gas emissions could fit within the province’s plan to reduce GHGs. The review was also deemed “consistent” with the UN Declaration on the Rights of Indigenous Peoples. B.C. adopted the declaration in law in 2019. Ottawa did so in 2021.
A week after Cedar LNG was approved, the Supreme Court held two days of oral hearings in a case of Alberta against the federal government. The government of Alberta had taken its opposition to the IAA to court and last year found a friendly ear at the Alberta Court of Appeal, which ruled the law is “unconstitutional” because of federal overreach. The same provincial court in 2020 ruled Ottawa’s carbon pricing law to be unconstitutional. The Supreme Court rejected that position in 2021. The IAA, like carbon pricing before it, is a test of the bounds of federal powers, and the intersection of provincial and federal rights. Legal observers suggest the odds may tilt in Ottawa’s favour, similar to the carbon pricing case.
Ottawa should win. It has long been established – the Supreme Court’s 1992 Oldman decision – that there is a federal role in the environmental review of industrial projects within individual provinces. And while IAA opponents called it the “no more pipelines act,” there is no doubt about Ottawa’s right to review pipelines that cross provincial boundaries. Ottawa did so yesterday, it does so today and it will tomorrow. Alberta’s actual worry, and that of the Alberta court, is the IAA’s alleged overreach into provincial projects.
But Mr. Harper’s review process was similar. It included the review of oil sands mines. The IAA isn’t a radical departure from the past. The constitution and case law are clear that provincial control of resources is not absolute.
There’s also the question of a federal “veto.” IAA opponents pretend this is a new Liberal subterfuge and ignore the fact Ottawa had the final say before Justin Trudeau was prime minister. Look back at 2010, and a gold-copper mine in B.C. The province, despite Indigenous dissent, approved the project. Why didn’t it get built? Mr. Harper’s government vetoed it. It did so again in 2014. In 2016, under Mr. Harper’s legislation, Mr. Trudeau said no to the Northern Gateway oil pipeline in B.C., whose earlier approval had been rejected by the courts because of inadequate Indigenous consultations.
One thing is certain: getting big things approved and built is complicated work, with numerous and sometimes contradictory priorities in play. The IAA so far has done its job. The challenges will only increase, with the need to build clean energy projects such as power transmission lines and mines.
While the framework is solid, the functioning of the process can be improved. Cedar LNG, even with a green light, needs numerous provincial and federal permits. That also takes a lot of time. From start to finish, Ottawa is working to provide more resources to speed up the system. Last fall it announced $1.3-billion over six years and the new federal budget promises “a concrete plan” by the end of 2023.
The bottom line is the process must be wide-ranging and robust, as well as efficient. It requires a careful balance.