Thank you very much, Mr. Chair. Merci beaucoup.
Members of the standing committee, I'm pleased to appear before the committee today to provide the Canadian Electricity Association's perspective and views on the Canadian Environmental Assessment Act and our recommendations for changes to this act.
The Canadian Electricity Association thanks the committee for giving it this opportunity to submit its concerns and recommendations with regard to the act.
The Canadian Electricity Association members generate, transmit, and distribute electricity to residential, industrial, commercial, and institutional customers on a daily basis across Canada. We represent all aspects of the electricity system.
I am pleased to be joined today by Mr. Terry Toner. Terry is the director of environmental services for Nova Scotia Power Incorporated and the chair of our association's stewardship task group. This task group deals with a wide range of issues relating to electricity and marine species and fisheries, including the Species at Risk Act and the Fisheries Act. He is also the vice-chair of the Canadian Environmental Assessment Act joint working group that we established with our colleagues at the Canadian Hydropower Association. The joint working group developed the submission that we've tabled today, containing the recommendations that I'll outline this morning.
Canada is a world leader in non-emitting and lower-emitting electricity generation. According to Stats Canada, roughly 80% of Canada's electricity is currently generated from non-emitting and lower-emitting sources, such as hydro and, to a lesser extent, wind, solar, and tidal. Canada's electricity sector mostly interfaces with the Canadian Environmental Assessment Act through hydroelectric generating facilities, though there are some other touch points with the act through wind projects and transmission and distribution projects as well.
The timing of the committee's review is especially important, given the pressing need for significant investment in Canada's electricity infrastructure. We often talk about natural resources being the backbone of our economy, but we rarely ever think about the role that electricity plays in our economy.
Our system has had competitive prices at its core for the duration of its existence, with lower prices than in many other parts of the world. This is a tremendous competitive advantage for Canadian business—the product of the foresight of our parents' and grandparents' generations, who built the stable and reliable system that we've come to depend on.
The electricity system—also named the grid, as you may all be aware—is the largest and most complex interconnected machine in North America. It's safe, solid, and well-maintained, but it is also showing its age. Like other major infrastructure, our electricity system is in need of major transformation and investment, as our current system is outdated.
Today, the challenge faced by the electricity sector is three-pronged. We need to replace aging infrastructure while simultaneously managing new demand; achieve continuous improvements in emissions reduction efforts; and incorporate digital technology to progressively replace analog equipment.
As a result of this investment deficit and the new pressures on the system, estimates range globally—from the International Energy Agency as well as from a recent report that the Conference Board of Canada put together—to indicate a minimum of $293 billion over the next twenty years is required. That's approximately $15 billion per year. These funds are required on electricity infrastructure to maintain existing assets and meet market growth.
In the last decade, these infrastructure projects have faced growing legislative and regulatory complexity, characterized by lengthy and often duplicative regulatory processes. In some cases, regulatory approval processes and construction periods for electricity infrastructure projects can take more than 10 years, from project initiation to grid connection. Of this 10-year period, approximately four years are spent in the federal EA process.
The Canadian Environmental Assessment Act is a central part of the EA process. But because of the existing complex nature of the act and its interaction with other legislation, as Ms. Jackson pointed out, it contributes to unnecessary delays in project assessments. At times, it results in no additional positive environmental outcomes. In addition to the federal complexity, there are duplicative provincial processes as well.
This statutory review that's currently taking place provides an opportunity for you, as committee members, to recommend changes to the act, which will facilitate required investment in electricity infrastructure renewal while ensuring positive environmental outcomes. I will stress that we, as an association, also want to see positive environmental outcomes from any legislative changes required.
We'd like to emphasize that increased efficiency and coordination is needed across the suite of environmental legislation and regulation, and that improvements made to the federal environmental assessment process should not be done in isolation from the overall federal regulatory regime.
As I mentioned, currently the typical timeframe for approval of major projects in Canada is four years, not counting the studies carried out by the proponents themselves. This is troubling for our industry. In addition to the pressing need for infrastructure renewal across Canada, these types of utility investments are sensitive to market timing and cannot be postponed due to regulatory delays and entanglement.
Changes to the act should be targeted at enhancing the coordination of the assessment of processes across jurisdictions by facilitating the one project/one assessment principle, with assessment being led by the best-placed jurisdiction. I will note that we're not the first witness you've heard from, nor shall I suggest we will likely be the last who has made this important recommendation.
The joint brief we've done together with the Hydropower Association, which you've received today, outlines the sectors, priority issues, and recommendations for changes to the act. These include avoiding duplication between federal and provincial EA processes through equivalency agreements, focusing the triggering of the act on projects where it can bring added value and by optimizing scoping mechanisms. Second, we recommend ensuring consistency between assessments and authorizations; third, improving timelines; and fourth and finally, allowing for the benefits of a project to be included in the process through a sustainable development approach, rather than a continued focus on adverse environmental effects.
Our colleagues from the Canadian Hydropower Association will address the issue of duplication in greater detail during their appearance, which is scheduled for November 15. Our focus today is on the latter three of these priority issues.
I'd like to start by addressing the disconnect between the EA process and subsequent permitting. There's a lack of clarity surrounding how CEAA and other triggering acts interact. In addition, once a project is approved to go forward, the roles and responsibilities of federal authorities are poorly defined. This disconnect does lead to inconsistencies between requirements agreed upon in the EA and those needed for getting authorizations.
I'll provide you with an example from a hydro power project in Manitoba. In this case the responsible authority, the Department of Fisheries and Oceans, demanded that additional work be done after the completion of the EA. This included additional research and mitigation beyond what was agreed to during the EA phase, resulting in significant delays in authorizations being issued on a just-in-time basis right before construction was scheduled to begin.
To ensure consistency between the assessment and authorization process, we recommend that decisions made under the act be binding on responsible authorities that administer the triggering acts and other authorization processes. Proponents should also be able to opt for the concurrent review of authorizations and permits during the EA process.
Timelines are also a key concern for industry. An average of four years to move through the process is unnecessary. Regulations establishing timelines for comprehensive studies that were adopted in June were a good start. However, the proposed time limit isn't strict enough, nor does it take into account the whole process. Limits should be established for all types of assessments and for all authorization processes, from the time an application is filed all the way to completion.
In addition, the act is outdated. Its sole focus is now the avoidance of adverse environmental impacts. I will remind members that the original intent of environmental assessment globally, not just in Canada, was not to halt or stop projects, but to mitigate for or remove environmental impacts prior to moving forward.
The net effect of a project should be factored into assessment decisions, along with socio-economic impacts. The bottom line is that positive environmental effects of a project should be a factor in assessment decisions.
Other equally important recommendations include the avoidance of duplication, the importance of focusing on triggering at an appropriate level, and optimizing scoping mechanisms. In other words, keep it focused on the key issues. The EA process was not intended to be minutiae; permits are focused on small detail, not assessment itself.