Continuing to supply safe, reliable, and economic electricity while reducing greenhouse gases and air pollutants requires large investments in electricity generation, transmission, and distribution. For example, hydro power developers alone are planning to invest over $50 billion in Canada over the coming decade to help generate the electricity and meet this challenge.
To make these investments, though, the electricity sector requires regulatory efficiency and predictability. Unfortunately, the current federal environmental assessment regime, especially when combined with authorizations under other federal statutes and provincial environmental assessment legislation, causes considerable duplication, delays, and uncertainty. These problems jeopardize Canada’s capacity to modernize and expand its electricity infrastructure.
The major projects management office initiative and the 2010 amendments to the CEAA have brought some improvements, and we are thankful for that. However, much more needs to be done to make the process really efficient, timely, and predictable. Deeper changes to CEAA need to be made and will have to be accompanied by changes to some of the other acts that CEAA interfaces with.
Please do not misunderstand me or the CHA members. Environmental stewardship is a priority concern for our industry. Both the CEA and CHA support the principle of rigorous environmental assessment; we're not trying to get rid of it. We cannot successfully develop and operate our projects without a social license to operate. It's more than getting a legal permit; we need a social license. This needs to be earned and maintained through hard work with the first nations, local communities, and a wide range of stakeholders.
We believe that well-designed changes to CEAA can not only bring greater improvement in regulatory efficiency but can also enhance environmental performance by allowing more focus on the priority environmental issues.
Our main recommendations are laid out in our submission, but in brief, they are: reduce duplication through process substitution, delegation, tighter scoping, and avoiding triggering the environmental assessment process when it does not bring added value; improve consistency between the environmental assessment and the authorizations that follow; improve timelines, especially in screenings and panel reviews; and take into account positive environmental effects in the assessment of the projects and have all project benefits recognized in the final decision under CEAA.
Going into a bit more detail, all hydro power projects and many other electricity sector projects are subject to both a provincial and a federal environmental assessment. A clear and efficient environmental assessment is one where duplication is avoided, where one project is subject to one assessment only, and where the assessment is led by the best-placed jurisdiction. Currently, despite the coordination agreements that have been signed, there is still considerable overlap and redundancy between the federal and provincial EA processes. If coordination means only that two similar processes take place at the same time and look at the same things, it still leaves much duplication. This is a waste of public, government, and corporate time, effort, and resources.
To really reduce duplication we need to recognize that CEAA is not the only process capable of delivering a robust EA. The provinces all have sound processes too. When projects are subject to a full provincial EA, CEAA should allow the federal minister to recognize these processes by using the provincial output to inform the federal decision-making. To ensure consistency between the assessment phase and the authorization phase, federal authorities such as the DFO should be required to participate in the provincial EA process when process substitution occurs.
These changes to enable substitution can be made while respecting the jurisdiction and the constitutional separation I was referring to earlier of the two levels of government. In all cases the federal government would still retain its ultimate decision power under the CEAA, the Fisheries Act, and other legislation.
When substitution cannot be granted--and in many cases, that would be the case--CEAA already provides a partial form of substitution called delegation; however, CEAA should be modified to enable delegation to be more flexible. This delegation provision should be used to ensure that all environmental assessment tasks not primarily in areas of federal jurisdiction are delegated to the provinces whenever the two levels of government assess the same project.
More focused scoping of the federal EA process would also contribute to reducing redundancy and making the process more efficient. For example, when provincial legislation adequately ensures that all project impacts will be addressed, focusing the federal EA on the triggering components of the project would help reduce duplication and inefficiency without reducing the effectiveness of the process. In order to facilitate a working solution to the 2010 scoping amendment to CEAA, further changes are required to the act. Those amendments were good, but they're not fully operational yet. This would mean that the project scope should be established before the assessment track is determined by the minister, and that the track decision would then be made on the project as the minister has scoped it.
Triggering the Canadian environmental assessment process only where it leads to an improved environmental outcome can also reduce duplication or excessive redundancy. Yes, we agree some redundancy is needed, but we think there's too much.
Today, the federal government and the provinces both have, in addition to their EA processes, legislation or regulations that protect important environmental resources. In this increasingly regulated context, the CEAA process should apply only where it brings added value. In other words, CEAA should not be triggered if significant impacts are effectively addressed through other federal or provincial regulatory means. This is often the case for smaller, more routine projects that are well-studied and better understood.
Sustainable development requires an evaluation of environmental, social, and economic factors, but CEAA is focused solely on the avoidance of negative environmental effects.
Environmental benefits like those that occur when a hydro power project creates new fish habitat are not taken into account in the assessment. They may only be used currently at the very end to decide whether significant environmental effects are justified or not. We recommend that positive environmental effects, not just the negative ones, be considered in the EA phase. This should be in addition to including an explicit provision that ensures all project benefits, social and economic as well as environmental, are taken into account in the final decision under CEAA.
To conclude, I’d like to stress the critical importance of timelines in the assessment processes and the authorizations that follow. For a large hydro power facility, a delay of one year may result in large losses. For example, a one-year delay in the $8-billion Conawapa generating station project that my company, Manitoba Hydro, is working on, would cause a loss of in the order of half a billion dollars in revenue, delay thousands of jobs, and result in increased greenhouse gases.
In summary, reducing duplication, ensuring consistency between environmental assessment processes and their downstream authorizations, improving timelines, and optimizing triggering and scoping are all achievable. None of these improvements would affect the assessment outcome, and they would greatly encourage investments in clean and renewable Canadian electricity generation and their associated infrastructure.
Thank you, Mr. Chair and committee members.