Northern Gateway: Federal Court of Appeal Applies Wrong CEAA Provisions and Unwittingly Affirms Regressiveness of 2012 Budget Bills

By: Martin Olszynski

PDF Version: Northern Gateway: Federal Court of Appeal Applies Wrong CEAA Provisions and Unwittingly Affirms Regressiveness of 2012 Budget Bills

Case Commented On: Gitxaala Nation v. Canada, 2016 FCA 187 (CanLII)

On June 20, 2016, the Federal Court of Appeal released its much anticipated decision in the Northern Gateway legal saga (for a list of previous ABlawg posts, going as far back as 2012, see here). The Court quashed the Governor-in-Council (i.e. Cabinet) Order directing the National Energy Board (the Board) to issue a certificate of public convenience and necessity to Northern Gateway on the basis that the federal government did not fulfill its duty to consult. My colleague Sharon Mascher is preparing a blog post on that part of the decision. In this post, I focus on the Court’s approach to the Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52 and its dismissal, in essentially a single paragraph (para 125), of all of the substantive challenges to the Joint Review Panel’s report. As further discussed below, the Court appears to have applied the wrong provisions of the CEAA, 2012, with considerable implications for both the substantive challenges to the JRP report as well as Cabinet’s determination that Northern Gateway’s significant adverse environmental effects are “justified in the circumstances” (CEAA, 2012 subs 52(4)). It is nevertheless important to consider the Court’s approach because the provisions that it did apply are applicable to Kinder Morgan’s TransMountain Pipeline review and TransCanada’s Energy East project.

The Court’s Approach to CEAA, 2012 Sections 29 – 31

The Court set out its analysis and understanding of the CEAA, 2012 regime, and its interplay with the relevant provisions of the National Energy Board Act, RSC 1985, c N-7 at paras 92 – 127. With respect to CEAA, 2012, the Court focused on sections 29 – 31, which are the sections that would normally apply to the Board when it is the “responsible authority” (s 15) for a project listed on the Regulations Designating Physical Activities, SOR/2012-147 (in this case, a pipeline). As noted by the Court, these provisions require the Board, as part of its duties pursuant to the NEB Act, to submit to Cabinet an environmental assessment report. They also contemplate some potential back and forth between the Board and Cabinet in terms of the sufficiency of the former’s environmental assessment report: Cabinet can ask the Board to reconsider any of its recommendations. Of particular importance to the Court here, subsections 29(3) and 30(5) state that except where sent back for reconsideration, the Board’s environmental assessment reports are “final and conclusive”. In light of these provisions, the Court concluded that there can be no direct legal challenge to the Joint Review Panel’s report:

[125] In the matter before us, several parties brought applications for judicial review against the Report of the Joint Review Panel. Within this legislative scheme, those applications for judicial review did not lie. No decisions about legal or practical interests had been made. Under this legislative scheme, as set out above, any deficiency in the Report of the Joint Review Panel was to be considered only by the Governor in Council, not this Court. It follows that these applications for judicial review should be dismissed. (Emphasis added)

This conclusion is problematic for several reasons, including the difficulty of vesting in Cabinet the authority to determine whether or not an environmental assessment report is adequate and conforms to legislative requirements when it was governments’ poor track record of disclosing and considering environmental effects that was the impetus for such legislation in the first place (see Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 CanLII 110 (SCC) at paras 1 and 2). I also have concerns with the Court’s approach to the “final and conclusive” language in sections 29 and 30, which I discuss further below. The biggest problem, however, is that these sections are not actually applicable to Northern Gateway.

Northern Gateway as a CEAA, 2012 s 38 Panel Review

Those following Northern Gateway through the regulatory process will recall that it was initially subject to JRP review under the original Canadian Environmental Assessment Act SC 1992, c 37. Bills C-38 and 45, the infamous budget bills of 2012, were brought into force after that review was already underway, such that the Minister of the Environment had to amend the original agreement establishing the JRP. Of particular importance is the following:

AND WHEREAS pursuant to section 126 of the Canadian Environmental Assessment Act, 2012, the assessment by the joint review panel is continued under the process established under the Canadian Environmental Assessment Act, 2012 as if it had been referred to a review panel under section 38 of the Canadian Environmental Assessment Act, 2012 and the Agreement is considered to have been entered into by the Federal Minister of the Environment and the Board under section 40 of that Act… (Emphasis added)

Consequently and with respect, sections 29 – 31, which refer to the Board in its capacity as a responsible authority, have no application to the Northern Gateway application or litigation. Rather, Northern Gateway involves the relatively straightforward application of the panel review provisions of CEAA, 2012, provisions that are substantially unchanged from the original CEAA and that have been applied – and judicially reviewed – numerous times. The most important of these is section 43, which sets out a panel’s duties and which, for what it’s worth, does not include the “final and conclusive” language of those other provisions:

43 (1) A review panel must, in accordance with its terms of reference,

(a) conduct an environmental assessment of the designated project;

(b) ensure that the information that it uses when conducting the environmental assessment is made available to the public;

(c) hold hearings in a manner that offers any interested party an opportunity to participate in the environmental assessment;

(d) prepare a report with respect to the environmental assessment that sets out

(i) the review panel’s rationale, conclusions and recommendations, including any mitigation measures and follow-up program, and

(ii) a summary of any comments received from the public, including interested parties;

(e) submit the report with respect to the environmental assessment to the Minister; and

(f) on the Minister’s request, clarify any of the conclusions and recommendations set out in its report with respect to the environmental assessment

Once submitted, the standard decision-making provisions of CEAA, 2012 apply (sections 52 – 54). To reiterate, while I don’t agree with the Court’s wholly unprecedented analysis that under sections 29 – 31 environmental assessment plays “a much attenuated role” relative to other federal decision-making regimes (para 123), those sections simply don’t apply. Instead, the Court should have reviewed the Northern Gateway JRP report as it has reviewed numerous panel reports previously, including Pembina Institute for Appropriate Development v. Canada (Attorney General), 2008 FC 302 and Ontario Power Generation Inc v Greenpeace Canada, 2015 FCA 186.

Reviewing the Governor in Council’s (Cabinet’s) Decision

As noted by the Court (at para 129), several of the parties sought to apply its recent decision in Council of the Innu of Ekuanitshit v. Canada (Attorney General), 2014 FCA 189, which I blogged about here, as setting out the applicable legal framework for challenging Cabinet decision-making following a CEAA panel report (at para 40, citing para 76 of the trial judge’s reasons), as well as the applicable approach to the standard of review, which the Court summarized as follows:

[44] Therefore, in my view, the judge correctly found that deference was owed to the decisions made pursuant to [the relevant provisions under the old CEAA], but that a reviewing court must ensure that the exercise of power delegated by Parliament remains within the bounds established by the statutory scheme. (Emphasis added)

Because it focused on the wrong provisions of CEAA, 2012 (an error that first appears in para 46 of the decision), the Court in Northern Gateway distinguished Ekuanitshit and chose not to follow it (at paras 132 – 140). In addition to what it erroneously thought were two very different legislative regimes, however, the Court also appears to be of the view that Cabinet approval of a massive hydroelectric dam found likely to result in significant adverse environmental effects (as in Ekuanitshit) is fundamentally different than the approval of a bitumen pipeline:

[138] The standard of review of the decision of the Governor in Council in Ekuanitshit may make sense where this Court is reviewing a decision by the Governor in Council to approve a decision made by others based on an environmental assessment. The Governor in Council’s decision is based largely on the environmental assessment. A broader range of policy and other diffuse considerations do not bear significantly in the decision…

[139] In the case at bar, however, the Governor in Council’s decision—the Order in Council—is the product of its consideration of recommendations made to it in the report. The decision is not simply a consideration of an environmental assessment. And the recommendations made to the Governor in Council cover much more than matters disclosed by the environmental assessment—instead, a number of matters of a polycentric and diffuse kind.

[140] In conducting its assessment, the Governor in Council has to balance a broad variety of matters, most of which are more properly within the realm of the executive, such as economic, social, cultural, environmental and political matters. It will be recalled that under subsection 52(2), matters such as these must be included in the report that is reviewed by the Governor in Council.

With respect, most decisions to approve major resource projects and especially those found likely to result in significant adverse environmental effects will require a balancing of a “broad variety of matters,” including social, economic, cultural, environmental and political matters (as the Federal Court recognized in Pembina Institute, above, at para 74). Were it otherwise, it is hard to conceive of a basis upon which Shell’s proposed Jackpine oil sands mine expansion, which was also deemed likely to result in significant adverse environmental effects pursuant to CEAA, 2012, could ever have been granted approval (or “justified in the circumstances,” using CEAA, 2012 language). This reality does not lessen Cabinet’s obligation to comply with the statutory requirements set out in CEAA, 2012 (including its subsection 4(2) duty to exercise its powers “in a manner that protects the environment and human health and applies the precautionary principle”) or the courts’ supervisory jurisdiction. On the contrary, the polycentric nature of the exercise underscores the important role of both the Act and the courts in ensuring that environmental concerns are not ignored or marginalized in the face of traditionally predominant considerations (e.g. economic ones).

The foregoing is sufficient, in my view, to cast serious doubt on the cavalier manner in which the Court dismissed the substantive challenges to the Northern Gateway JRP report and Cabinet’s response thereto. The obvious next question is: does it matter? While I would be the first to admit that the Federal Court of Appeal has set a low bar for the substantive review of federal environmental assessments reports, I have to assume that there is some difference between the Court’s direct review of such reports and its review of Cabinet’s assessment of such reports. The Court here accorded Cabinet “the widest margin of appreciation” (at para 155).

Privative Clauses and the Federal Regulatory Review

As noted at the outset, although not applicable in this case, CEAA, 2012 sections 29 – 31 are applicable to the Board’s review of the TransMountain and Energy East pipelines. It seems appropriate, therefore, to spend a bit more time on the Court’s approach to these sections.

In administrative law, the “final and conclusive” wording that seemed to play such an important role in the Court’s analysis is known as a “privative clause,” and a relatively strong one at that. Privative clauses are the legislature’s way of telling the courts to tread lightly (i.e. show deference). As a general rule, Canadian courts acknowledge such clauses and take them into account in establishing the applicable standard of review. Bearing in mind rule of law principles and the separation of powers, however, they have never been interpreted as ousting a reviewing court’s jurisdiction. As the Supreme Court of Canada stated in the (still-current) authority on judicial review, Dunsmuir v. New Brunswick, 2008 SCC 9:

[31] The legislative branch of government cannot remove the judiciary’s power to review actions and decisions of administrative bodies for compliance with the constitutional capacities of the government.  Even a privative clause, which provides a strong indication of legislative intent, cannot be determinative in this respect…

Arguably Northern Gateway is not an example of complete ouster, as a report’s adequacy is still reviewable indirectly through Cabinet’s response to it, but the Court’s analysis (three short paragraphs at 155 – 157) leaves me to wonder whether this is a distinction without a difference.

Finally, if the Court’s approach to sections 29 – 31 is correct (which again, for the various reasons discussed above I doubt), it means that the previous Conservative government’s 2012 omnibus budget bills were even worse than anyone thought. As noted above, leaving Cabinet to determine whether the Board’s environmental assessments are sufficient runs counter to the basic logic behind the legislation and is bound to further undermine public confidence in those assessments. It also means that these provisions should be front and center during the federal government’s upcoming review of environmental and regulatory processes.

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About Martin Olszynski

B.Sc. in Biology (Saskatchewan), LL.B. (Saskatchewan), LL.M. Specialization in Environmental Law (University of California at Berkeley). Assistant Professor. Please click here for more information.
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10 Responses to Northern Gateway: Federal Court of Appeal Applies Wrong CEAA Provisions and Unwittingly Affirms Regressiveness of 2012 Budget Bills

  1. JohnDavidson says:

    No, FCA got it right. You have to start with ss. 54, the decision-making section. Then look at what the Gov in Council took into account. It takes into account reports. The environmental report is submitted to the responsible authority. That brings you into 29(1) which specifically references section 54 decisions which this was. 29(3) says the report is final and conclusive and can be reviewed only under 30 and 31, that is by the Gov in Council. It is an unwelcome result but that is what the words say.

    Your interpretation ignores the division title “section 54 of the National Energy Board Act” (just before section 28) and the sections under it, including the sections that limit review. Like it or not, the decision was a section 54 decision and so the provisions in the division concerning section 54 must apply. The 2012 changes were meant, unwelcome as they are, to oust section 54 matters from other sections in the Act.

    You can’t reach for sections outside of this division (ss. 28-31) and say they apply. You have to start with the sections pertaining to section 54 decisions by the GIC and go from there.

    As you say, the new government might wish to change this.

    To specify, section 54 decisions refer the the Gov in Council decision under section 54 of the NEB Act. The other sections I referenced are with respect to CEAA.

    If sections 28-31 under the heading “section 54 of the National Energy Board act” don’t apply here, where we are dealing with a section 54 NEBAct decision, when do they apply? And, again, the only review of the enviro report is under 30 and 31, ie cabinet. You can’t read those sections out. Ugly stuff, but true. The last govt knew what it was doing.

    All the “whereas” provision Prof Olsyznski cites does is continue the process being conducted by the JRP panel which was already underway. It says “the assessment is continued”. It doesn’t somehow exempt the project from sections 28-31 of CEAA. There are no words to that effect. The aim I guess was to endure that no one later said that the assessment that was already underway was somehow terminated by the passage of the amendments in 2012. The last govt was cunning!

  2. B Thereault says:

    Agreed. On the “privative clause” point I do not agree. Consider legislation where there is a first instance decision by an official that can be appealed to another official and only then after that system of decisions by officials is there review by a court. You can’t go to court until the appeal to an official is done. Won’t the court say “go away and exhaust the appeals given to you by statute”? I think the SCC decided a case called CP v Matsqui. Also Harelkin. A litigant has to go through all administrative channels before getting to court. So here, if you have to pursue administrative appeal to the Cabinet, you cannot run off to a court in the meantime.

  3. J Brown says:

    I think the legislation is clear that for matters involving a certificate under s 54 of the Nat Energy Bd Act, the regime under 29-31 of CEAA applies. Note the preamble (the whereas clause) you cite. It says the EA process that was already underway is to be “continued under the process established under the Canadian Environmental Assessment Act, 2012 as if it had been referred to a review panel under section 38.” The words “as if it had been” are important. It suggests that the 2012 process “established” applies.

    All that goes to the cabinet under the Nat Energy Bd Act is a report of the assessment, not the assessment itself. And the section 5 matters are to be determined by the Cabinet, not a Minister as is usually the case. This seems clear from sections 29-31 of CEAA.

    The legislative system of a report being established that cannot be reviewed and then Cabinet making a decision sure looks like an internal administrative appeal system. Normally the intermediate steps in such a system cannot be appealed to court. Isn’t it law that one must finish all,administrative steps including any appeals the legislation gives you before you can start a JR?

  4. Martin Olszynski says:

    Thanks for the comments. JohnDavidson’s and JBrown’s are fairly similar so I will address them first, especially your comments with respect to which provisions of CEAA, 2012 apply here.

    As a starting point, I absolutely agree that in the normal course of events, sections 29-31 would apply. That is why I mention in the blog post that those sections, and the Court’s analysis, do apply to the TransMountain and Energy East pipeline projects. But Northern Gateway applied for its NEB Act certificate back in 2009, before the NEB Act was amended and before CEAA, 2012 was introduced. Back then, it was referred to a joint review panel pursuant to the original CEAA. Pursuant to section 126 of the new CEAA (CEAA, 2012), under the heading ‘Transitional Provisions’, any assessment by a review panel “commenced under the process established under the former Act before the day on which this Act comes into force is continued under the process established under this Act as if [it] had been referred by the Minister to a review panel under section 38.” Sections 38 to 51 are all grouped together under the heading “Environmental Assessments by a Review Panel” and set out a complete code for review panels: section 38 sets out the general rules for panel reviews; section 39 has to do with studies and the collection of information; section 40 authorizes the Minister to enter into an agreement establishing a joint review panel; section 42 authorizes the Minister to establish Terms of Reference and appoint panel members; section 43 sets out the Panel’s basic duties (which I set out in my blog post, and which sets out the process for submitting the Panel’s report). This scheme is comprehensive and distinct from the process that the NEB, as a section 15 “responsible authority”, has to follow. Once again, in the normal course that process (including sections 29 – 31) would apply, but CEAA, 2012’s transitional provisions (section 126) carved out an exception for projects already undergoing panel review under the old Act. Consequently, sections 38 – 51 govern in this instance.

    With respect to the suggestion that sections 29-31 represent some kind of internal administrative appeal process, the difficulty with this is that the reconsideration provisions are not open to the public or even persons directly and adversely affected by a proposed project, but rather exclusively to a single entity, i.e. Cabinet. There is nothing for them to exhaust. On my reading, these provisions are intended to serve their literal and relatively narrow purpose: to allow Cabinet to require the NEB to reconsider one of its recommendations, e.g. where something is unclear or it has a policy goal in mind (note that subs 30(2) allows Cabinet to specify the factors that it wants the NEB to consider in its reconsideration). They also seem well suited to accommodate subsequent consultations with affected First Nations (as in the case of the unsuccessful Phase IV consultations in Northern Gateway).

    Finally, with respect to the privative clause, I’ll conclude by correcting myself. The “final and conclusive” language alone actually represents a relatively weak privative clause. To be considered strong, it would have to be accompanied with language explicitly ousting appeal or judicial review, which is not the case here. So in the end, I am even less persuaded with the Court’s approach.

  5. J Brown says:

    I think much turns on the interpretation of the transitional provision (section 126). You interpret it as a directive that the Northern Gateway JRP be treated for all purposes as a section 38 assessment, with all of the sections connecting to it applying to it. But the transitional provision does not say that. It says the NG JRP is “continued under the process established in the Act” – here the process under the 2012 amendments – as if it “had” (past tense) been a section 38 assessment. Note the margin heading: “Completion of assessment by a review panel commenced under the former Act”. That’s all the section does. It allows the assessment that was underway to be finished.

    All relevant actors seem to have acted in accordance with that interpretation. The parties sought JR for the JRP report, not a Minister’s action on it. Once the assessment was done, sections 29-31 seem to have been followed.

    Most importantly, check out the transitional provisions in the 2012 Jobs Act (budget omnibus bill): sections 101-104. They clinch the argument. The transitional provisions in CEAA merely continue the assessment as the margin note to that section suggests. The transitional provisions in the Jobs Act state more stuff about the National Energy Bd Act and CEAA. The process that takes the matter through the Cabinet applies according to the Jobs Act transitional provisions and the normal CEAA process is ousted.

    All this explains why no Minister made any decision along the way and everything went to the Cabinet. And since no one made any decision and since the JPR report was merely recommendation for a Cabinet decision, nothing was reviewable, a conclusion buttressed by the sections that say that the report can only be considered by Cabinet, not a court.

    So there you go… Complicated stuff and not good environmental policy, but as the court said, it had to enforce the words as written, not ignore them to get a desired environmental result.

    With respect to your comments in regards to the administrative law point. I still don’t get the point. If the stat auditory analysis is what I say it is, the administrative process has to be completed right? No interlocutory reviews by courts are allowed by courts in the middle of the process. One of the people,above made this point, and it seems to be right though I am not really an admin lawyer.

    So I still think the Federal Court got it right. Thanks for this discussion by the way.

  6. Drew S says:

    Good comments on this interesting problem but everyone including Mr. Olszynski may not have seen the transitional provisions in Bill C-38 over & above the CEAA transitional provisions. The FCA must have. That is how the NG process put everything through to the Governor in Council and took the process out of the usual CEAA provisions. That explains why the only decision in the whole process was made by the Governor in Council.

    By the way, a lawyer in the process told me that there was an agreed statement of facts and everyone agreed that the transitional provisions in s 104 required the process to go through the Governor in Council under sections 52-54 of the National Energy Board Act and all the Minister was supposed to do was provide a report, not decide anything. Maybe one of the parties has that agreed statement. The court must have it.

  7. JohnDavidson says:

    Thanks for the comment on my comment. I looked at it further. I think section 104 of the budget bill in 2012 shows that the sections the FCA applied are the ones that do apply. The court seems to have followed the law as written. It seemed to not like what it had to enforce if you look at [124]. (So the accusation that it was unwitting in reinforcing regressive legislation seems unfair.) Given the sections that apply, it may also be right that the Governor in Council is the only thing that decides anything under those regressive sections so maybe it is right on the stuff about when someone can go to court. Love the blog and thanks.

  8. Martin Olszynski says:

    Hello JohnDavidson, DrewS and JBrown,

    Apologies first for the delay in getting back to you. As a starting point, I have to admit to being skeptical of any analysis that hinges on provisions not squarely addressed by the Court in the decision being discussed, especially in a case like this one where the stakes are so high and the FCA spent considerable time setting out what it thought was the applicable legislative scheme (with respect to the Jobs, Growth and Long-term Prosperity Act, all I can find is a general reference at para 44).

    Second, your references to sections 101 — 104 of the Jobs, Growth and Long-term Prosperity Act, without more, were not particularly helpful. On my reading, all that those sections do (and here I am referring to subsection 104(4) in particular) is substitute the Governor in Council (GiC) for the Minister of Environment with respect to the environmental effects determination (through a transitional change to section 47 of CEAA, 2012 – a panel provision no less!), and the NEB for the Minister of Environment for the purposes of issuing a decision statement (section 54 of CEAA, 2012). You seem to suggest that this somehow makes section 29-31, with their very particular language, applicable. I still don’t see how or why. In my view, the fact that Parliament went to the trouble of including these transitional provisions makes it all the more clear that the panel provisions apply. And if they apply, then sections 29-31 cannot apply. While different in important respects (panel requirements are more robust, requiring not just recommendations but also rationales and conclusions), they each set out a process for preparing and submitting a report; the JRP couldn’t be expected to comply with both.

    If the panel provisions apply, than the NGP report should have been reviewed like any other panel report before the courts unless there is some other reason – and here we would be outside the FCA’s decision – to conclude otherwise. You seem to suggest that the fact that the report went directly to the GiC is one such reason. You may not be aware that, unlike the NEB process, EA reports have always been “recommendations” to government, whether to the Minister of the Environment or other “responsible authorities” under the old Act (most often the Minister of Fisheries and Oceans and/or the Minister of Transport). Nevertheless, such reports have always been directly reviewable in Federal Court for compliance with CEAA, a lawful EA being a sort of ‘condition precedent’ to subsequent government decision-making (see Pembina Institute). I don’t see how changing the decision-maker so that it aligns with the realities of the NEB process fundamentally changes that. In any event, that certainly wasn’t the FCA’s analysis, which fundamentally hinged on the specific wording of sections 29-31 (especially the “final and conclusive” parts).

    For your convenience (and others), I have copied and pasted the relevant transitional sections of the JGLPA below. If you respond further, I encourage you to refer to specific sections and what effect you say they have so that I can follow your argument more closely. The relevant section is s 104, which applies to pipeline applications under the previous NEB Act where a panel agreement had already been entered into but no decision has been made (subparas 104(1)(a) – (c)). I have also included the regular provisions of sections 47 and 54 of CEAA, 2012 for the purposes of comparison (the transitional provisions amend those sections). Thanks for the discussion.

    ***

    “Board” means the National Energy Board established by section 3 of the other Act.
    “Chairperson” means the Chairperson of the National Energy Board.
    “commencement day” means the day on which this section and sections 68 to 85, 89, 90, 92 to 97, 99 and 101 to 114 come into force
    “designated project” means a project that is considered to be a designated project under subsection 126(1) of the Canadian Environmental Assessment Act, 2012.
    “Minister responsible for the other Act” means the member of the Queen’s Privy Council for Canada that is designated by the Governor in Council as the Minister for the purposes of the other Act.
    “other Act” means the National Energy Board Act.

    101. Subsections 6(2) and (2.1) of the other Act, as enacted by subsection 71(2), subsection 11(4) of the other Act, as enacted by section 74, and section 16 of the other Act, as amended by section 77, also apply in respect of proceedings that were before the Board immediately before the commencement day and that continue after that day.

    102. If an application for a certificate under section 52 of the other Act was before the Board immediately before the commencement day and no final decision in respect of the application had been made before that day and no agreement had been entered into with the Board under section 40 of the Canadian Environmental Assessment Act before that day in respect of the pipeline to which the application relates, sections 52 to 55.2 of the other Act, as enacted by section 83, apply in respect of the application, as though the application had been made on that day.

    103. If an application for a certificate under section 52 of the other Act was before the Board immediately before the commencement day and no final decision in respect of the application had been made before that day and, before that day, the Board’s process for assessing environmental effects had been approved as a substitute under subsection 43(1) of the Canadian Environmental Assessment Act, sections 52 to 55.2 of the other Act, as enacted by section 83, apply in respect of the application, as though the application had been made on that day.

    104. (1) Subsections (2) to (9) apply in respect of an application for a certificate under section 52 of the other Act if

    (a) the application was made before the commencement day;
    (b) a review panel had been jointly established before that day under an agreement entered into under subsection 40(2) of the Canadian Environmental Assessment Act in relation to the pipeline to which the application relates; and
    (c) no final decision in respect of the application had been made before that day.

    (2) Subject to subsection (3) and (5) to (9), sections 52 to 55.2 of the other Act, as enacted by section 83, apply in respect of the application, as though it had been made on the commencement day.

    (3) Unless subsection (8) or (9) applies, the reference in subsection 52(3) of the other Act, as enacted by section 83, to the Board is to be read as a reference to the review panel.

    (4) For the purposes of the environmental assessment under the Canadian Environmental Assessment Act, 2012 of the designated project to which the application relates,

    (a) sections 47 and 48 of that Act are to be read as follows:

    47. (1) The Governor in Council, after taking into account the review panel’s report with respect to the environmental assessment, must make decisions under subsection 52(1).
    (2) Before making decisions referred to in subsection 52(1), the Governor in Council may, by order, direct the National Energy Board to require the proponent of the designated project to collect any information or undertake any studies that, in the Governor in Council’s opinion, are necessary for the Governor in Council to make decisions.
    (3) A copy of the order must be published in the Canada Gazette within 15 days after it is made.
    48. (1) If the review panel under subsection 44(2) requires the proponent of the designated project to collect information or undertake a study with respect to the designated project and the review panel, with the approval of the Chairperson of the National Energy Board, states publicly that this subsection applies, the period that is taken by the proponent, in the opinion of the review panel, to comply with the requirement under subsection 44(2) is not included in the calculation of the period referred to in paragraph 38(3)(b) that is established under subsection 126(4).
    (2) If the National Energy Board, acting under an order made under subsection 47(2), requires a proponent of the designated project to collect information or undertake a study with respect to the designated project, the period that is taken by the proponent, in the opinion of the National Energy Board, to comply with the requirement is not included in the calculation of the period referred to in paragraph 38(3)(c) that is established under subsection 126(4).

    (b) section 54 of that Act is to be read as follows:

    54. (1) The National Energy Board must issue a decision statement to the proponent of a designated project that
    (a) informs the proponent of the designated project of the decisions made under paragraphs 52(1)(a) and (b), and under subsection 52(4), if that subsection applies, in relation to the designated project; and
    (b) includes any conditions that are established under section 53 in relation to the designated project and that must be complied with by the proponent.

    Again, for your (and others’) convenience, sections 47 and 54 of CEAA, 2012 normally states as follows:

    Minister’s decisions
    “47 (1) The Minister, after taking into account the review panel’s report with respect to the environmental assessment, must make decisions under subsection 52(1).
    (2) The Minister may, before making decisions referred to in subsection 52(1), require the proponent of the designated project to collect any information or undertake any studies that, in the opinion of the Minister, are necessary for the Minister to make decisions.”

    Decision statement issued to proponent
    54 (1) The decision maker must issue a decision statement to the proponent of a designated project… [the rest is virtually identical]

    *** There are more sections but I don’t see how any of them are relevant to the analysis. Bill C-38 is available here: http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=5697420&File=284)

  9. JohnDavidson says:

    S 126 speaks of the process continuing under the process established by the Jobs Act. Sections 29-31 are part of the process established by the Act. Section 126 otherwise ensures that the review panel established is continued as if it were properly set up. Section 126 does not say the former sections of CEAA apply.

    This can be verified in another way.

    Everyone agrees s 52 of the NEB Act applies in the case. (See transitional provision, s 104). 52(1) of the NEB Act:the Board submits a report to the Minister who is not necessarily the Minister of the Environment (see definition section in NEB Act). The GIC Order here (PC 2014-809) reveals the Minister to be the Minister of Natural Resources, not the Minister of the Environment.

    Note 52(3) of the NEB Act (which again applies because of s 104). The report submitted by the Board must set out the Board’s environmental assessment.

    How does the Board get the environmental assessment ? It does not get it under the sections under the former process in CEAA. Nothing in the former process sends the report to the Board.

    Under the former process, the report would go to the Minister of the Environment (see definition section of “Minister” in CEAA) but there is nothing telling the Minister of the Environment to transmit the report to the Board. If the former process (as opposed to the process “established by the Act” (Jobs Act)) applies, the report would just sit with the Minister of the Environment. Similarly there is nothing that tells the Minister of the Environment to send the report to the designated Minister under the NEB Act, here the Min of Natural Resources.

    The only way the EA gets to the Board is under s 29 of new CEAA. The Board is the responsible authority (section 15 of CEAA). As the responsible authority it has duties under s 29 (part of the new process) . The Board sends it to the Minister designated (not necessarily the Min of the Environment). Here that was the Min of Natural Resources. That Minister submits it along with the report under section 52(1) of the NEB Act and the report is final and conclusive (29(3)).

    This jives with new section 47 (added by 104). The GIC can ask the Board (not the Minister of the Enviroment under the former CEAA) to have the proponent supply more information.

    The only way this process works is if the “process established under this Act” means 29-31 apply. Otherwise the report sits with the Minister of the a Environment and it never gets to the Minister of Natural Resources the designated Min under section 52 and thus never gets to the GIC.

    The real story here is not a mistake by the Court, but the sneakiness of this legislative design.

  10. Martin Olszynski says:

    Hi John,

    I think we’re going to have to agree to disagree. If Parliament intended for sections 29-31 to apply, they easily could have said so. Rather, the transitional provisions of CEAA, 2012 refer to the panel provisions (s 38) of the Act (current – not former). As you know, Parliament then made various other transitional amendments (JGLPA s 104) to the remainder of the panel provisions (e.g. 47) to make sure that the panel process jived with the new NEB process. With respect to NEB Act 52(3), which you refer to above, note that pursuant to JGLPA s 104(3), “the reference in subsection 52(3) of [the NEB Act] is to be read as a reference to the review panel.” If Parliament intended sections 29-31 to apply, one would expect this transitional provision to refer to the NEB as a “responsible authority”, e.g.:

    “52(3) If the application relates to a designated project within the meaning of [CEAA,2012], the report must also set out the [responsible authority’s] environmental assessment prepared under that Act in respect of that project.”

    It didn’t. It specifically referred to the Board as a “review panel.” All of this jives, of course, with the hard-to-overlook existence of the amended panel agreement, which I linked to above in the original blog post. I’ve excerpted some more parts below, namely the content of the report (the language of which tracks the panel requirements of the Act, e.g. the report will set out the Panel’s “rationale, conclusions and recommendations” and “comments from the public” (see s 43(1)(d)), not sections 29-31, which just refer to “recommendations”) and the delivery of the report (which pursuant to the amended panel agreement was tasked to the Minister of Natural Resources):

    9.0 REPORTING AND DECISION MAKING
    9.1 The Panel will prepare a report under section 52 of the NEB Act setting out its recommendation on whether a certificate of public convenience and necessity should be issued… The report will also set out the Panel’s rationale, conclusions and recommendations relating to the environmental assessment of the project, including any mitigation measures and follow-up programs and a summary of any comments received from the public and Aboriginal peoples…

    9.2 Once completed, the report will be submitted to the Minister of Natural Resources who will make it available to the public and Aboriginal peoples.

    9.3 The Governor in Council will make the decision on the environmental assessment
    (whether the project is likely to cause significant adverse environmental effects and if so, whether such effects are justified in the circumstances). The Governor in Council will also decide, by order, whether the Board should issue a certificate and will give reasons for the order.

    Finally, while I can’t agree that the Court got it right, I will agree with you that this is the high water mark of sneaky legislative design. It is also a perfect illustration of my go-to saying whenever discussing the 2012 budget bills: haste makes waste.

    Cheers,
    MO

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