Environment Committee on April 17th, 2018

[The Chair (Mrs. Deborah Schulte (King—Vaughan, Lib.)), Liberal, Deb Schulte]

I'd like to get started. We have two panels, and there is always the possibility of votes. Our guests have taken a lot of time to prepare for this meeting, so I want to give them as much time as we can to share their wisdom on this very important topic with us.

We weren't able to make complete panels of indigenous or industry representatives, or individual presenters. We've had to do some mixing because not everybody was available at the same time to accommodate that.

We have, as an individual, Martin Olszynski. He's an Assistant Professor in the Faculty of Law at the University of Calgary.

From the Canadian Parks and Wilderness Society, we have Alison Ronson, National Director of the Parks Program.

From Smart Prosperity Institute, we have Stewart Elgie, the Executive Chair.

From Suncor Energy Inc., we have Virginia Flood, Vice-President of Government Relations.

Welcome to each of you. We are going to be running this session until 12:30, and we'll start the next panel after that.

I'll give you just a little bit of information. I don't like to interrupt people, so when you have a minute left in your speech or in the questions—my colleagues know all about this—I put up the yellow card. That tells you you have one minute left. When I put up the red card, it means you are out of time. I don't want you to stop immediately, but just wrap it up quickly so that I don't interrupt you.

Who would like to start?

Go ahead, please, Martin.

[Martin Olszynski, Assistant Professor, Faculty of Law, University of Calgary, As an Individual]

Good morning, Chair and committee members. Thank you for the opportunity to be here today with you in your review of Bill C-69, and the impact assessment act in particular.

Briefly by way of background, I am an assistant professor at the University of Calgary faculty of law. Prior to joining the law school back in 2013, however, I spent almost six years as counsel at the Department of Fisheries and Oceans, where my practice included advising that department with respect to its environmental assessment responsibilities under both the previous Canadian Environmental Assessment Act and the current CEAA 2012.

I hold bachelor degrees in science and law from the University of Saskatchewan, and a master of laws degree from the University of California at Berkeley. I have been an active participant in this reform process for the last two years, having filed submissions with both the expert panel and with the government directly.

With the time I have I will focus on what I believe to be some specific shortcomings in the current bill as drafted, especially with respect to the role of science in impact assessment. I will not be tackling the IAA's general architecture in my opening remarks, but I am prepared to speak to that. As context, essentially I think it's fair to describe the Impact Assessment Act as a kind of CEAA 2012 plus. It has essentially all the same parts as the previous act except for certain parts that have just been expanded.

My comments will track my written submission to the committee. I understand that has been translated and provided to you. I also brought a small supplemental brief. There are three figures in that brief. I don't know that I'll get to all of them, but I wanted to have them with me just in case and to have them for you for your record.

As noted in part II of my brief, one of the more important themes to emerge in the context of the current reform process is that the science of impact assessment needs more rigour. In a 2015 piece in BCBusiness, for example, one professional biologist described these as dark days for his profession, including having his professional opinion heavily pressured, and his wording, results, and interpretations changed.

The expert panel on environmental assessment heard this message loud and clear and concluded that stronger guidelines and standards are needed.

The government itself, in its 2017 discussion paper and in the various policy documents that have accompanied Bill C-69, also seems to understand this issue, yet Bill C-69 falls far short on this score. The terms “science” or “scientific” are only mentioned five times, and in no case are they given any real work to do.

I want to refer the committee members to the first figure in my supplemental materials which is a little triangle diagram that we came up with. The idea basically here is straightforward. Science is foundational to the entire impact assessment exercise. Every step and subsequent step, whether planning phase, assessment, or decision-making, relies on scientific information. The flip side of this of course is that an error or flaw in the science has the potential to compromise the entire process.

As a starting point, Bill C-69 should be amended to include a “duty of scientific integrity” on those persons involved in the impact assessment process, which at a minimum would capture the principles of objectivity, thoroughness, and accuracy.

A further amendment should give the government the power to develop regulations to further flesh out what this duty requires, including guidelines and standards for such things as the design, data collection, and analysis of baseline sampling, as well as monitoring during and after projects.

I want to reiterate here a point that has been made by others in their briefs. There is nothing new under the sun about having a duty of scientific integrity. References to scientific integrity can be found in numerous American environmental laws, regulations, and policies.

A second critical shortcoming along this line of science is the continued gap between the legislated contents of the public registry and the agency's internal project files.

To ensure transparency and open science, the registry provisions—and these are at clause 105 of the proposed impact assessment act—should match the provisions for the agency's internal files which are described at clause 106. The act should also make explicit that all scientific information submitted in the course of an impact assessment is presumptively public unless a request for confidentiality is made and granted pursuant to narrow terms. This would require an amendment to the current clause 107, which appears to create a presumption of confidentiality.

I really need to stress this point. I have never received any explanation, let alone a compelling one, as to why proponent data and models should not be readily available. I can understand that some data and models may be proprietary, but that does not mean they need to be confidential. It simply means their use would be governed by the Copyright Act, which of course includes “fair use” exemptions for academic and other public purposes.

My next set of recommendations has to do with mitigation measures and how they have been dealt with under both previous CEAAs.

Here it is important to recall the basic nature of this regime. I'm referring to 1992, 2012, and the current proposed impact assessment act. Like all of its predecessors, the IAA does not draw an environmental, or any other, bottom line. The whole regime boils down to the consideration of effects, which is then supposed to enable political accountability for project approval or refusal. You need to keep this in mind when I discuss my next recommendations.

While a lot of attention falls on baseline studies—how we decide what the state of the environment is before a project proceeds—mitigation is also a critical aspect of the IA process. Mitigation includes the strategies that a proponent might implement to reduce known adverse environmental impacts or others. It may come as a surprise to the committee, but there is actually a long and troubling history of proponents and EA panels relying on unproven mitigation measures to avoid concluding that a project will result in significant adverse effects.

In my view, this fundamentally undermines the assessment process and the public accountability it is intended to enable. Consequently, I recommend provisions aimed at ensuring that mitigation measures be demonstrably effective or their effectiveness be reasonably certain based on the best available science. Again, this would not mean the projects that cannot meet this threshold would not be approved. There is no bottom line set out in the IAA. It just means Canadians would have a more honest and accurate assessment of a project's likely impacts.

I would also allow some reliance on mitigation measures whose effectiveness is uncertain, but only if a proponent commits to a structured process of learning, otherwise known as “adaptive management”. Here I refer committee members to page 5 of my brief. There is a figure at the top of the page indicating the adaptive management cycle. Adaptive management has a long history. You can pull up any number of joint review panel reports; last summer we did a quick word search, and 90% of the projects on the CEAA registry contained a reference to adaptive management.

The problem is that it's not actually being done. Adaptive management is a good idea in theory, but it's not being done in practice. To substantiate that, I looked at 18 projects in a recent research project at the University of Calgary. We looked at the environmental impact statements filed by proponents where they claimed to rely on impact assessments. Now I'm referring you to the second figure on page 5, which shows the percentage of completeness of the adaptive management cycle by project type. We find that whereas adaptive management is supposed to be this rigorous process for learning that requires identification of objectives, of indicators, of planning and rigour, none of that work is being done. Proponents say they're going to do adaptive management as a way of convincing regulators that everything is going to be fine, but then they never do it.

At appendix A of my submission, I propose some basic language to ensure that adaptive management will actually be done where proponents say they will do it. I pause to note that I submitted a much more detailed set of provisions, three pages' worth, back to the government in August 2017. I've scaled those down considerably for you. They are about three-quarters of a page now. I'm hopeful that the committee will see their merit.

Alternatively, if the committee is not prepared to prescribe some process around adaptive management that would ensure its actual implementation, then I suggest that the IAA should be amended to explicitly bar reliance on it. As things currently stand, it is essentially being used as a smokescreen when proponents don't know how to deal with environmental effects.

Those are the main points I wanted to make. I have five or six remaining recommendations that I will briefly cover. I'd be happy to discuss more during the questions and answers.

Recommendation five is a reflection of existing case law and specifically the problem of what “consideration” means. A series of cases in the last couple of years have basically said that so long as there is some consideration of an environmental effect, then it's not reviewable. There's no error of law. In other words, there would have to be no consideration whatsoever. I think everyone would agree that it's not a very high threshold. I suggest that some kind of modifier needs to be added to the beginning of the term “consideration” at, for instance, proposed sections 22 and 63 to ensure that it's meaningful. Whether it's “meaningful” or “robust”, either of those would be useful.

I think the mandate provisions at proposed subsection 6(2) should be cross-referenced to specific process points in the IAA to make sure that the mandate is being followed. I also am concerned with the total jettisoning of the term “significance”. I think overall it's a good idea that we would frame our environmental assessment or impact assessment around a basic binary significance; non-significance would be problematic. At the same time, however, not having anything also creates real problems and the potential for ambiguity.

I see that my time is up, so I'll wrap up there.

[The Chair, Liberal, Deb Schulte]

It's amazing how fast 10 minutes go by when you're trying to impart a lot of information, but I'm sure much more will come out in the questioning.

Alison.

[Alison Ronson, National Director, Parks Program, Canadian Parks and Wilderness Society]

Good morning to the committee, and thank you for asking me to appear today.

I'm the Director of the Parks Program at the Canadian Parks and Wilderness Society, a charitable non-profit, as many of you may know, with over 50 years' experience in advocating for the protection of Canada's wilderness and wildlife. On a personal level, my background is in environmental sciences and biology, law, and international affairs, with a focus on environmental governance. I've spent the last four years working with CPAWS.

I will be limiting my comments to part 1 of the bill, the impact assessment act. My comments will relate specifically to federal protected areas in general, but I will be referring a lot to our national parks.

Parks and protected areas are what make our country special. They safeguard our natural heritage, protect iconic wildlife, provide us with clean air, fresh water, and traditional foods, and provide opportunities to us for both quiet contemplation in nature as well as life-altering backcountry experiences.

There's a growing scientific consensus that we are currently living in the midst of the world's sixth mass extinction event, and this is being exacerbated by human activities, including resource extraction and development. We're already seeing the impacts of this event here in Canada.

Globally, parks and protected areas are one of the best proven solutions to slowing down this extinction event, as they safeguard habitat for iconic species here in Canada, such as moose, caribou, and grizzly bears, and also the suite of biodiversity represented across our country.

The pieces of legislation that create our protected areas in this country create them for nature and for protecting ecosystems. Given this, and given that they're also so important to our own well-being and are supposed to be our most treasured and valued places, it is logical that the highest possible standard of impact assessment should be applied in these areas.

Unfortunately, in our estimation, Bill C-69 falls short of providing that high standard. The bill largely follows the structure of CEAA 2012. If a project on federal lands is not listed on the designated project list, a federal authority—in the case of national parks, Parks Canada—must determine whether that project or work is likely to create significant adverse environmental effects. This determination regime watered down impact assessment in protected areas and has led to problems with transparency, accountability, and public consultation related to private, commercial, and infrastructure development in our parks.

CEAA 2012 and, likewise, Bill C-69 do not provide provide adequate guidance as to how a federal authority should conduct their determination of a project. In national parks, our impact assessment regime is currently conducted by Parks Canada in accordance with an internal policy that is open to interpretation and applied in an inconsistent manner across the country.

Under their regime, there are developments such as the massive expansion of the Lake Louise ski area, which has been determined not to cause significant adverse effects to Banff National Park even when scientists and the public clearly expressed concern about the impacts of this development on the habitat of important species such as mountain goats and grizzly bears. In fact, in an access to information request submitted by CPAWS, we've learned that since 2012 over 1,500 development projects that were assessed by Parks Canada were considered not to have significant environmental effects, including the Lake Louise expansion.

Under CEAA 2012 and the Parks Canada policy-based approach, CPAWS has observed less rigour, less opportunity for public engagement, and inconsistent application of the policy. In contrast to this, the 1992 act contained provisions that aimed to recognize the special status of federal protected areas and to provide safeguards related to development projects.

Under CEAA 1992, there was an immediate presumption that projects in national parks and federal protected areas would undergo an impact assessment. This presumption was then informed by the regulations. For example, the exclusion list provided which projects in parks would not have to go through an impact assessment, and that included things like routine maintenance, painting of park benches, and so on.

The comprehensive study list regulations provided guidance about which projects required a more rigorous impact assessment. This list included physical works that we obviously wouldn't and shouldn't accept in protected areas, such as dams and mines, and projects that were likely to have significant long-term effects, such as ski area expansions. Under CEAA 1992, the expansion of the Lake Louise ski area would have been subject to a comprehensive study, would have been coordinated by the Canadian Environmental Assessment Agency, and would have provided resources for public consultation.

That act also contained language that required the minister to consider ecological integrity of a protected area when deciding whether a project would have adverse environmental effects.

In CPAWS' opinion, CEAA 1992 was much more protective of our national parks and federal protected areas than CEAA 2012.

Bill C-69 largely maintains the same structure as CEAA 2012 and will perpetuate the same problems with development in parks and protected areas as we are currently witnessing. Those problems include lack of transparency, lack of consultation, proponents conducting their own impact assessment and soliciting only positive feedback on their projects, incredibly short timelines that don't provide the public with enough time to read highly technical documents, and a lack of scientific rigour.

Clause 86 of the bill now obligates the federal authority to provide notice of their intention to conduct a determination. However, it then allows them to make that determination within 15 days. In our estimation, that's wholly inadequate.

To improve Bill C-69, we suggest the following: that the committee include language in the bill that creates the presumption that all projects in national parks and federal protected areas are subject to impact assessment, unless the minister determines, with an adequate notice period, that such projects are likely to cause insignificant adverse environmental impacts; ensure that impact assessment is carried out by the impact assessment agency or, where appropriate, by Parks Canada when Parks Canada is not the proponent of the project; and that the assessment follow legislated process and consultation guidelines. The bill, unfortunately, contains limited guidance as to how the determination process by a federal authority should be conducted.

There should be an option to reject the project, not just apply mitigation procedures, which is what's largely happening with every development project in our national parks at this point.

We should ensure that ecological integrity is the number one priority of the impact assessment agency or the federal authority when they are conducting impact assessments in federal protected areas. We should increase resources available to ensure all Canadians can be consulted on impact assessments in our federal protected areas.

Many of the projects we're seeing right now in national parks will inform the local communities only about the project rather than ask what all Canadians think. CPAWS would argue that our national parks are in the public trust. They are here for all Canadians to enjoy, and therefore, all Canadians should have a say in how they're managed.

More specifically, in clauses 22, 63, and 84 of the bill, which set out the factors to be considered when impact assessment is ongoing, we need to include that the impacts of the project on an ecosystem's biodiversity is a factor. Currently those sections consider climate change, but biodiversity and biodiversity loss in particular are crises that are facing the global community, and we need to address them here in Canada.

On clause 86, making the notice period at least 30 days when a federal authority is conducting a determination would provide adequate time for members of the public to read the information that is provided and provide feedback.

Finally, I would like to stress that nowhere in the bill is there any recognition that Canada is home to some amazing world heritage sites. Many of our national parks have been designated as globally important and as having outstanding universal values. Bill C-69 does not recognize this.

The International Union for Conservation of Nature provides guidance for how a state party should conduct impact assessment when a project is in or near a world heritage site. Our impact assessment regime should incorporate and adopt this guidance.

For the sake of our well-being and that of future generations, I urge this committee to recommend changes to Bill C-69 that would restore the presumption that projects in national parks and federal protected areas require impact assessment by the impact assessment agency.

I would also like to suggest to this committee that trust in the system and government accountability cannot be restored to the impact assessment regime when parks and protected areas, supposedly our most valued and conserved places, are not subject to the same or better requirements than the rest of our landscape. They must be elevated above the rest of the landscape and truly protected for the benefit of both current and future generations.

Thank you.

[The Chair, Liberal, Deb Schulte]

Thank you very much.

Next we have Mr. Elgie.

[Professor Stewart Elgie, Executive Chair, Smart Prosperity Institute]

Thanks.

I'm Stewart Elgie. I'm here wearing two hats today. One, I'm a Professor of Law and Economics at the University of Ottawa. I've taught environmental assessment law for over 20 years. I was involved in the committee process that created the original CEAA in 1992-94, along with Ms. Duncan, as I recall. When I wore my former hat as an environmental lawyer, I litigated six or seven CEAA cases, including two successful ones at the Supreme Court of Canada, so I have had some experience with environmental assessment law.

My second hat is that I am now the founder and chair of something called Smart Prosperity, which is an economic think tank that focuses on green growth. We are led by a leadership council that has 30 prominent CEOs from across the economy, including mining, oil and gas, manufacturing, and banking. The goal of Smart Prosperity is to build a Canadian economy that is stronger, cleaner, and more innovative on the belief that that will be critical to competitiveness for all parts of Canada's economy in the years ahead.

It's from that perspective I'll offer my comments on the act. How does it achieve both better environmental and economic outcomes? I would say at a high level that this act is an improvement over CEAA 2012 from both an environmental and an economic perspective, but it could be better. Let me offer six thoughts, and I'm happy to submit more detailed wording in a brief following my testimony today.

I'll start with the purpose of the act. The big change is that this act is much more explicit in making sustainability the purpose of the act with regard to its economic, environmental, health, and social outcomes. That's a good thing. Sustainability should be the litmus test of development, and developments that meet this test are likely to be more beneficial to Canada and more socially acceptable to Canadians, and therefore give more certainty to proponents.

The challenge, I think, will be to meet this broader mandate in a way that is also efficient and doesn't add time and cost to the approval process. The act can't answer that question. That's going to be answered mainly by how well the agency applies this mandate. The agency has a stronger role in the new act, which is also a good thing. I would suggest that in a couple of years we'll know more about whether or not the agency has applied this broader mandate in the efficient way we hope it will, and it's probably worth coming back and looking at it at that point.

Let me turn now to five key things in the act which I think could be improved.

The first and most important is strategic and regional environmental assessments. To me this is the most important part of the act. I say that as someone who has litigated a bunch of cases. Most of the cases I litigated in my former life involved larger regional issues that had no place to be dealt with so they were shoved into a project-based approval. That wasn't good for the proponent, because they had to carry all the weight of a larger regional issue on their proposal. It also wasn't good for the intervenors, because they didn't have a proper forum in which to debate larger proposals, so issues about a mine were really about planning for the eastern slopes of the Rockies, and issues about oil sands were really about Canada's climate change direction.

One of the most important things this act does is to actually create a place to deal with those larger regional level and strategic level processes. That's a very good thing.

The weakness of the act is that it doesn't actually require that these happen at all. I can say from experience that what's likely to happen is that the urgent takes priority over the important, and these project level approvals are likely to get more and more mindshare and budget of the agency, and these larger regional and strategic assessments are likely to get squeezed out. I would put things in the act to try to guard against that and to create a momentum to encourage doing more regional and strategic assessments, in a few ways.

One is I would actually create a priority list for regional and strategic EAs, the same way we do under CEPA for our priority substances list. I'd make it an explicit requirement that the advisory council advise on priorities for regional and strategic assessments, and perhaps even state in the act that the agency should create a fund in its budget that is set aside for doing regional and strategic assessments. It will help protect what I think is the thing that will actually be the biggest win-win in this act.

The second thing is what gets assessed. An act is only as good as the project it covers, just as the greatest house in the world is only good if there's a doorway into it. In this act, designated projects are what gets assessed. What's surprising is that the act gives no guidance as to what should be a designated project, what should get in the door. I would say this could be improved in a couple of ways.

One is that the act could specify that any project that is likely to cause significant adverse effects should be on the list of designated projects. It could even go further and ask the minister to create criteria for identifying which projects are likely to have significant adverse effects. I note that the minister has done that in a separate document right now. Putting that into the act would simply codify what's already happening. That would give a lot more predictability, certainty, and consistency as to what types of projects get in the door of this very important act.

Next is the issue of ensuring that you actually assess all parts of a project, or avoiding what's called project splitting. It has been a fairly common practice over the years, which has undermined the purpose of an environmental assessment, and it's been to assess only one component of the overall project or scope of activities that you are in fact approving. There have been a bunch of examples that have been litigated in the courts, for example, looking at the movement of electrons along a wire, instead of looking at the Great Whale River dam in Quebec that generated those electrons. That was struck down by the Supreme Court of Canada. Another example is looking only at a new bridge across a river instead of the logging road and the logging activities at a new mill, which were actually being approved by approving that bridge. That was struck down by the courts. Another is looking only at a mine's tailing facilities and not looking at the mine itself. That was struck down by the Supreme Court of Canada, too.

This idea of project splitting really undermines the whole goal of environmental assessment. It's easy to fix, and the act hasn't fixed it. The simplest solution is the one the U.S. has used for over 30 years, and it has worked fine down there, which is simply to say that an assessment should look at all connected actions. The U.S. act even defines connected actions, and I'll put the wording in my brief if you want it, but it basically says to include all interdependent parts of a larger action. In other words, if approving one thing necessarily means other things must happen, look at those other things too, because that's in effect what you're approving. Therefore, avoid project splitting and look at all interconnected parts of an action.

Fourth is to try to strengthen the requirement for sustainability and transparency at the approval stage of projects, which is really the critical part. This act does a much better job than CEAA 2012 in setting out criteria that will guide project approval. That's a good thing. Having more guidance actually provides more predictability for proponents and more consistency in decisions. Ultimately, the goal is sustainability, which is a good thing.

The challenge is that sustainability by its nature involves economic, environmental, and social considerations, and there's generally some kind of a trade-off, usually economic and social benefits for environmental costs. The act would be improved if it were more explicit about what that trade-off was, why the choice was being made to see a project as beneficial to Canada. What I would suggest is a simple revision to clause 63, which is the approval section, to consider whether the project's benefits substantially outweigh the adverse effect, in other words, requiring a justification saying why the benefits of a project are substantially more important than the adverse effects. Just more transparency would be good for everyone, I think.

Fifth is innovation. Smart Prosperity Institute just put out a major report on how you drive clean innovation across all parts of Canada's economy, seeing this as critical to the economic success of resources, manufacturing, and high tech. This act could do more to hard-wire innovation and the use of environmental assessment as a way to support and encourage innovation. Let me give you a couple of examples.

In the list of factors that must be considered in an EA, it's good that it says to include “best available technologies”. It should say “best available technologies or practices”. Many innovative practices are not technologies. They simply are practices that are also a critical part of innovation.

The second thing I would say is that, if it's determined it's not feasible for a project to use best available technologies that are commonly used elsewhere, I think there should be a justification. If we want Canadian businesses to be at the leading edge of clean performance and innovation, if a project is not using technologies that are considered best in class elsewhere in Canada and the world, there ought to be a justification for why we're approving that. Maybe there will be a good justification, but that at least ought to be addressed. That's pretty fundamental.

Also, I would put it in the approval criteria as well. It shouldn't just be something we assess. Using innovative practices and technologies should actually be a factor in favour of approving a project, so I would include as one of the criteria in clause 63 whether a project uses innovative practices and technologies, either best in class or better than best in class.

The other thing I would add, building on Martin's comments on mitigation measures, is that one of the biggest impediments to innovation is overly rigid compliance procedures. I would say allowing for flexibility in compliance is important.

Last but not least, I'm going to open the Pandora's box of the Constitution and jurisdiction. This act tries to define federal jurisdiction. That is a perilous exercise, one that is not necessary and is likely to lead to a too narrow application of the act. It's automatically implied in any federal law that it must act within its jurisdiction. You don't have to say that, and that's why acts don't say it.

To try to set out and define every element of federal jurisdiction is a mind-bogglingly complex task. Think of all the subjects listed under CEPA, everything listed under the Hazardous Products Act, and all the pesticides and health products registered. You could spend your career trying to identify it all, and you don't need to.

The previous act didn't do it. It simply said “environmental effects”. In 20 years, not once did a court strike down a federal environmental assessment for exceeding federal jurisdiction. This is not a problem; there is no need to fix it.

The previous act brought in this requirement in 2012, but it did it the same way this one does. It listed just three areas of federal constitutional jurisdiction, and it said the other ones would be listed by regulation.

What's interesting is that in six years they didn't list any, so for the past six years we've been doing environmental assessment with a dramatically under-scoped approach to federal jurisdiction, because it's an approach you don't need.

I would say go back to the approach that worked well for 20 years. Simply assume, as with every other law, that the federal government will apply it within its jurisdiction, or at the very least have the government come forward with that magical regulation that's going to identify all areas of federal jurisdiction now, before we pass the act, as it's doing with the draft project list.

Thank you.

[The Chair, Liberal, Deb Schulte]

Thank you very much.

Ms. Flood.

[Virginia Flood, Vice-President, Government Relations, Suncor Energy Inc.]

Madam Chair, thanks for inviting Suncor to participate in the work of the committee as you complete your examination of Bill C-69, the impact assessment act.

My name is Ginny Flood. I'm the Vice-President of Government Relations for Suncor. Previous to Suncor, I was with Rio Tinto, and previous to that, I was with the federal government as a regulator for environmental assessment.

I would begin by acknowledging that the land on which we gather here in Ottawa is the traditional unceded Algonquin territory.

Suncor is Canada's largest integrated energy company and a significant contributor to Canada's economy. We are best known for our oil sands production, but we also operate three refineries in Canada, 1,800 Petro-Canada retail and wholesale locations from coast to coast to coast, four wind power projects in three provinces, and the largest ethanol production facility in Canada, which is in Sarnia, Ontario. We are the only company engaged in all four of the major east coast oil exploration facilities, making us the largest producer of oil off Canada's east coast. Together, Suncor's operations are located in every region of the country and in the traditional territories of more than 140 aboriginal communities across Canada.

Suncor has been an active participant throughout the many stages of the consultation held across Canada to provide our views and our experience with CEAA, 2012, the renewal of the NEB, and the Navigation Protection Act. Today we are pleased to share with you our thoughts on Bill C-69.

As part of the committee's call for written submissions on Bill C-69, Suncor did provide a detailed written brief, but today it's not my intention to go through all of those points. I would rather highlight some of the key points. I'll focus my comments on three key themes that are related to the outcomes of Bill C-69.

The first is maintaining competitiveness in the industry. In terms of overall competitiveness, the perception is that the pace, scale, and scope of environmental regulatory change in Canada today is rapid and vast, and is likely unprecedented.

We recognize the need to address environmental concerns related to climate change, and the desire of government to restore confidence in the regulations related to the impact assessment. We recognize the importance of Canada doing its part, but we also are committed to doing our part to advance this agenda and meet Canada's commitments. However, we believe it is absolutely critical for the future of Canada that the federal legislative agenda proceed with great care and deliberation so that environmental policy is enacted in a way that best maintains our competitiveness in a highly fluid, mobile, diverse, and competitive world.

We support broad-based carbon-pricing mechanisms as a tool that can achieve desired outcomes, if they are balanced with other regulatory and fiscal relief, as well as taking into account competitiveness pressures from other jurisdictions that don't have the same costs. We will continue to lead in Canada, but we need to lead with one eye on the environment and one eye on the economy.

New regulations, such as those that will eventually accompany Bill C-69, should strike the optimum balance between improving environmental performance and at least maintaining, and ideally increasing, our competitiveness. We must advance our economy with the same diligence as we protect the environment.

As a producer of a global commodity, we compete on the world stage. We strive to be leaders in sustainability, but limited market access and restrictive policy measures lead to project uncertainty and a diversion of investment outside of Canada. Statistics Canada's latest report shows that direct investment in Canada fell dramatically, with the retreat of investment in the oil sands as a key contributor.

The bottom line is that the cumulative cost and complexity of all the recent regulatory policies across the federal and provincial jurisdictions and the related regulatory uncertainty will have a negative impact on the competitiveness of Canada. While we support strong environmental policy and Canada's ambition to do its part in meeting the 2030 Paris commitment, we also believe that the goals are not mutually exclusive from a competitive regulatory framework.

The second area I want to focus on is to draw your attention to the transition from the CEAA 2012 to the new model that will be put in place under the impact assessment act. By its nature, legislative change introduces uncertainty for project proponents, investors, and the communities where resource development projects are proposed. Bill C-69 needs to clarify the transitional provisions to mitigate uncertainty to the greatest extent possible.

At this time, there is considerable uncertainty with respect to the final wording of the act, the coming-into-force date for the act, the regulations designating physical activities it will include, as well as what guidance will be associated with the new act and the regulations.

Suncor currently commits significant resources and effort to indigenous engagement, discussions with local communities, engineering design, modelling, and the collection of baseline data in the development of impact assessment reports. It is therefore imperative that this work be allowed to continue under the current CEAA 2012 unless a project proponent elects to transition to the new impact assessment act.

Providing this flexibility sends a positive message to industry and the investment community that the government recognizes the value and importance of early engagement work already undertaken by proponents and is willing to provide a level of certainty with respect to project development.

As specified in our written submission, we are formally recommending that the committee consider a change to the transition provisions of the impact assessment act, that the projects undergoing CEAA 2012 assessments will continue under CEAA 2012 unless the proponent requests a transition of the assessment to the IAA. This amendment will clarify the process and mitigate negative impacts related to uncertainty of projects currently undergoing CEAA 2012 review.

The next area I want to talk briefly about is the original intent and spirit of impact assessment. We believe that the original intent of environmental assessments, what we will now know as impact assessment, was never intended to impede development, but it was a mechanism to ensure proponents worked with aboriginal communities and those impacted by the project to mitigate the residual environmental impacts of any project. We strongly recommend that the current IAA clearly articulate this intent to avoid lengthy delays caused by interested parties seeking an avenue to challenge broad policy initiatives of the government of the day, for example, whether to develop our energy resources.

The focus must remain on individual projects, and in fact, should be even more carefully focused on those parts of the project which cannot be mitigated through other activities.

Suncor has stated in its position that where robust provincial environmental assessment processes exist, a harmonized process respecting jurisdictional powers would reduce the risk of duplication and allow the federal government to focus on mitigating residual impacts that fall under their jurisdiction, such as fisheries or navigable waters. We support the proposed impact assessment act's ongoing commitment to coordinate among relevant jurisdictions with the objective of one project, one assessment.

With respect to Suncor's assets, the majority of our resource projects are located in provinces that have proven robust and effective project review processes that are designed to thoroughly assess potential environmental and socio-economic impacts. Provincial governments have the right over the natural resources and some, for example, such as Alberta, have significant experience in weighing the overall economic benefits of the project and assessing the proposed mitigation measures against potential environmental, social, and cultural impacts.

One area of particular interest comes from projects offshore Newfoundland and Labrador that require of Bill C-69 a panel review of offshore projects. This represents a significant change, potentially doubling the review timelines from the current process.

Based on past projects and effects and potential risks associated with offshore development, these are well understood and the environmental assessment process is a standard practice.

For this reason, Suncor would recommend that the requirement of offshore projects to undergo a panel review be removed upon recognizing a rigorous assessment process and the codes of practice currently in place.

I do look forward to your questions.

Thank you.

[The Chair, Liberal, Deb Schulte]

Thank you very much. We do have quite a few lined up to ask questions.

First, I want to recognize some new faces around the table. We have Colin Carrie, Sean Fraser, and James Maloney, Chair of the Natural Resources committee. Thank you very much for being here today.

We're going to start with Mike Bossio.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Chair, I'm going to be directing my questions primarily to Mr. Elgie and Mr. Olszynski.

Mr. Elgie, I'm going to ask you a number of questions, and then I'll have you comment on them.

Do you support the new early planning phase? Should there be meaningful public participation in this phase? Should participant funding be available in this phase?

In your experience, why is meaningful public participation important? Are you satisfied with the public participation provisions within the IAA ? If not, what are your recommendations for reform?

[Prof. Stewart Elgie]

I'll try to answer the questions as quickly as you asked them.

I'm not a deep expert in the public participation part of EA. I won't say that much on it. I would say this though. The early planning stage is vital. By providing that clarity, scoping, and direction for an EA, you actually solve a lot of problems later. It is a measure twice, cut once kind of approach.

Doing the early planning is really important. Again, the proof will be in the pudding. If the agency does it right, it should scope the project in a way that all the key concerns identified by experts and affected communities are identified. At the end of the day, you should have an outcome that gets more social buy-in and is a better project. You can't legislate good performance in an act. I think the goal is good.

As for public participation, most of the cases that I have seen that have gone to court have been a result of a group or a large community feeling that their legitimate concerns about a project didn't have a venue to be heard. Most times when people feel that they've had a chance to air their concerns, that they were listened to impartially, and even if they don't win but were at least taken seriously, they can accept the outcome.

I think it is vital in terms of outcomes.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Would you like to add anything to that Mr. Olszynski?

[Martin Olszynski]

There's scholarship on this point exactly, that in fact, public participation provides an opportunity for groups to.... Essentially, it creates a bubble, if you will, where contentious issues can be resolved. If they are done in an impartial way, then they actually in the long run secure greater acceptability of the project and those kinds of things. There's definitely literature on that point.

I would just reiterate what Professor Elgie said. The more you can do at the front is beneficial. The concern here is about efficiency, and I get that, but a little bit more pain at the beginning can lead to a more streamlined and effective process down the road.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Thank you both.

The second part of it is around proposed section 63 factors. I've been involved in the environmental review tribunal process in Ontario. Mr. Elgie, I'd like to direct this question once again to you, as well as to Mr. Olszynski.

One, should we be establishing a statutory right of appeal that lies from the ministerial cabinet decisions on designated projects to a specialized or independent body established under the act or, in the alternative, to the Federal Court on questions of law and mixed questions of law fact?

Are there any other recommendations for improving proposed section 63 factors that should be considered in the decision-making under the act? What else is needed for accountability purposes?

Once again, Mr. Elgie, I know you've had experience in this area. If you could start, then Mr. Olszynski, you could feed off of that, please.

[Prof. Stewart Elgie]

The first goal, obviously, is to do hearings right in a way that you don't need an appeal or a lawsuit about them. Let's try and make that the main goal. Inevitably, some of these things do end up being taken to court. I guess my experience, having seen jurisdictions where these issues either go to court or go to a specialized review tribunal, is you get better outcomes from a specialized review tribunal.

Australia is a great example. It created a specialized land and resources review tribunal decades ago. It's produced much better outcomes from the perspectives of both sides over the years than having it go to a judge who simply doesn't know this area.

Yes, the experience in Ontario is one you could draw on. Alberta has a review tribunal. Many provinces do. If you're going to have cases that end up being appealed, you're probably better to have a specialist tribunal than leave it to the whim of courts.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Mr. Olszynski.

[Martin Olszynski]

I would second that.

In fact, right now, it's clear that the Federal Court of Appeal has essentially.... There is jurisprudence that really cemented in the last couple of years—and this goes back to what I said in my submission—where they have essentially said they're not going to look at the science. They're not really terribly interested in how this is being done because this is outside of their wheelhouse. They don't totally understand it. The idea is that there would be no consideration of an environmental effect in order for a review or report to be challenged.

I take the point, of course, that yes, we don't want to see these things being challenged. At the end of the day, we recognize that courts have a role in all of this. They ensure the rule of law, and they ensure compliance with the legislative regime. I totally support the notion that a specialized tribunal would be much more sensitive to those issues, and have a better ability to hold all parties to account to the spirit of the law.

In terms of whether or not you have that explicitly laid out in the legislation, that would not be a bad thing at all to make clear that there's a review on questions of law and questions of mixed fact and law. Absolutely.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Are there any other things like that on the factors?

[Prof. Stewart Elgie]

You used the word “appeal” and I know you were using it colloquially. I certainly wouldn't give an open-ended right of appeal, so that you could simply get a court of second opinion any time you wanted it. It should be narrowed to substantial and serious errors, obviously. I think you probably feel the same way.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Thank you both very much.

[The Chair, Liberal, Deb Schulte]

Thank you.

Go ahead, Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Madam Chair, my questions will be directed to Ms. Flood.

Is your CEO still Steve Williams?

[Virginia Flood]

Yes.

[Ed Fast, Conservative, Abbotsford, BC]

In your comments, you had referenced competitiveness and I don't think it was by mistake that it was the first item on your list. You suggested that, at present, there's a diversion of investment taking place in Canada, as well as the retreat of investment in Canada. This is something that's been echoed by economists and other commentators across Canada. We've seen a massive exodus of investment from Canada.

I want to read a quote from your CEO, Mr. Steve Williams. He said, “Absent some changes and some improvement in competition, you're going to see us not exercising the very big capital projects that we've just finished.”

What did he mean by that? Can you explain to this committee why a company would spend billions of dollars in building production capacity and then be forced not to exercise those projects the way that Mr. Williams suggested?

[Virginia Flood]

It's not just the environmental assessment. There are lots of different pieces of regulations and policy happening in this space. I think it's a combination of.... We have just finished our Fort Hills mine which was a $17-billion investment. In our industry, what we have to realize is that these are long-life assets. These are 50-year assets, so when we're going in, we're making a number of assumptions at the front end of these investments.

I believe there are a number of other areas that are actually contributing to that, like lack of market access, obviously, and the low commodity prices. On top of that, as I said in my remarks, there is the uncertainty that every time you have new regulations or policies coming out, it creates more uncertainty, particularly if it's very vague and there's not a lot of detail to them.

I just want to state that we're very clearly supportive of many of the policies of government and what they're doing. We're very supportive of the climate change work and a price on carbon. Our CEO has been out there publicly talking about putting a price on carbon. We're a strong believer in that. I think it's just the cumulation of all of the changes all at once and the pace, scope, and scale of that. We have to sit back and ask what this mean to other investment decisions.