Rules of the game in Flux

How major pipeline projects are approved has been in a renewed state of flux. This is not new. Canada has gone through periods of political intrigue and conflict about pipelines since at least the mid-1950s, when the TCPL Mainline was first approved.

What is new is a barrage of forces contributing to delays and uncertainty. Some actors have been frustrating established regulatory processes through extensive use of the courts and other procedural tactics, such as delaying municipal permits. Meanwhile, governments and project owners have been responding as courts refine how duties and obligations are to be implemented, such as the recent Federal Court of Appeal (FCA) ruling on the Trans Mountain Expansion Pipeline (TMX). Laws which frame how major projects are considered and implemented are before Parliament, notably the Impact Assessment Act (Bill C-69) and the Implementing UNDRIP Act (Bill C-262).

In late August 2018, the Federal Court of Appeal (FCA) dismissed most of the claims in a major case about TMX, but ruled there were issues with the 2016 National Energy Board (NEB) Report the federal Cabinet used to approve TMX. The FCA found the NEB did not include west coast marine shipping impacts in the original assessment scope. The FCA also ruled there was a procedural issue with how the Government of Canada undertook its constitutional duties to consult and accommodate Aboriginal peoples.

The Government of Canada revisited these two key areas of the FCA’s ruling. First, the NEB was instructed to include marine shipping and other impacts on Indigenous Traditional territories, under a TMX Reconsideration. This was completed in February 2019. The NEB recommends that TMX remains in the National Interest and should proceed. Meanwhile, the federal Cabinet is completing its duties to consult and accommodate Indigenous peoples. The PLCAC has been closely monitoring developments, including observing the Indigenous peoples testimony before the NEB, and has reported to the Canadian Pipeline Advisory Council (CPAC) about implications for future projects.

Winding its way through the Senate of Canada at this time is the Government of Canada’s proposed Impact Assessment Act C-69. Bill C-69 is potentially transformative legislation. It was fast tracked through the House of Commons in early 2018. It’s now before the Senate Energy, the Environment and Natural Resources committee, where it is being studied for implications and improvements. There are no guarantees the House of Commons will accept Bill C-69 amendments from the Senate. It has been widely-reported that Bill C-69 as currently written is a significant contributor to dampening investment and increasing uncertainty about future resource projects.

Unforeseen project delays fueled by regulatory uncertainty impacts contractors ability to bid properly, schedule jobs and resources, plan and finance for equipment lifecycles and materiel, and effectively manage workforces. Without amendment, Bill C-69 has a real potential to open the regulatory system to even more political interference and introduce new uncertainties and delays into resource project regulatory approvals.

The PLCAC continues to monitor Bill C-69 as it moves through Parliament. The PLCAC encourages all stakeholders to learn more about the Impact Assessment Act and to contact their local elected Members of Parliament as well as the Senators appointed for their province or territory to discuss how Bill C-69 could impact pipeline businesses, employees and suppliers.