Alberta to Ottawa: ‘Quit dithering’ and reveal environmental review regime changes

Alberta Environment Minister Shannon Phillips called on the federal government Wednesday to "quit dithering" and immediately reveal the types of resource development projects that would trigger environmental reviews under a proposed new approval process.

Phillips spoke to media on Parliament Hill after meeting with an array of senators, and issued a number of demands in relation to Bill C-69, Prime Minister Justin Trudeau’s significant overhaul of Canada's approval process for industrial projects.

Bill C-69 has had a lukewarm reception from Alberta, which sits on the world's third-largest oil reserves, after Saudi Arabia and Venezuela. Much of Alberta's energy is locked up as crude bitumen, a tar-like heavy substance that must be upgraded to crude oil before being refined into products like gasoline.

The Alberta NDP government supports Trudeau’s goal of modernizing the assessment process to take greater account of things like climate change, but argues the bill should not be approved in its current form.

The minister was joined by Ginny Flood, vice president of government relations at Suncor Energy, and Adam Sparkes, senior manager of corporate affairs at Husky Energy. Both Suncor and Husky have raised concerns with the federal government about investor "uncertainty" related to the bill. Flood authored Suncor's submission herself.

“I’m asking the federal government for an immediate publication of the project list,” said Phillips. “That list is well overdue. We have been given assurances that it will be published, and my call on the federal government today is to quit dithering and do it now.”

Bill C-69, which is currently being debated at second reading in the Senate after passing the House of Commons, replaces two major Canadian regulatory agencies, the National Energy Board and the Canadian Environmental Assessment Agency, with the Canadian Energy Regulator and the Impact Assessment Agency respectively.

While the oil industry is mounting a campaign to derail the bill, Canada's mining industry actually supports it and says it will provide more assurances and certainty for new investments.

'They have promised us immediate action'

The Trudeau Liberals say the changes are necessary to restore public trust in federal oversight provided by Ottawa on proposed projects, after the former Harper government’s alterations to the regime that they characterize as having tilted the playing field toward industry.

But the bill has critics on both the left and right. The energy industry is worried that the new process will scare investors away and make Canada less competitive than industry-friendly foreign locales.

Environmental groups have complained that the bill doesn’t depart far enough from Harper-era changes to the assessment regime, which they say defined reviews so narrowly that many environmentally significant activities weren’t covered.

The debate is taking place as the world's top climate scientists have issued a disturbing warning, that there is only a dozen years left to keep global warming to a maximum of 1.5 Celsius. The UN Intergovernmental Panel on Climate Change (IPCC) said that beyond that, climate change will severely increase the risk of drought, floods and other disasters, and lead to poverty for hundreds of millions.

The government is pushing ahead with approving C-69 without releasing even a draft list of types of resource development projects that would be reviewed, currently covered under a list called the Regulations Designating Physical Activities.

Environment and Climate Change Minister Catherine McKenna has called the current list a “grab bag” based on political motives, and moved to consult Canadians on how to make that list more “robust.”

Consultations on changes to that project list have wrapped up, but consultations on the bill overall are still ongoing, although the bill is near the end of the legislative process. The timeline laid out by the government for completing the consultative process is “early 2019,” by which time the bill may have already passed the Senate.

Phillips said the consultation timeline shouldn’t matter. “There are a number of capital decisions that are out there, waiting for approval right now, and simply knowing ‘Is a project in, or is it out?’ is very important,” she said.

“This is something where we think that the federal government can take immediate action. They have promised us immediate action, so they need to follow through on that.”

McKenna's office says feds 'consulted extensively'

McKenna's press secretary Caroline Thériault said the Trudeau government "consulted extensively on Bill C-69 with other orders of government, industry, stakeholders and Indigenous partners for over two years," before the bill was passed by the House.

"We are committed to putting forward better rules that will restore public trust, create a faster and more transparent process, and provide more certainty for all Canadians," she added.

"We are working to concurrently develop regulations that would, under the typical parliamentary process, not be released for comment until the legislation receives royal assent. We are doing so to provide certainty that good projects can go ahead."

Meanwhile, Canada’s mining industry has sounded encouraging notes about the bill, concluding that it will end the "politicization" of natural resources projects in Canada. Pierre Gratton, president of the Mining Association of Canada, wrote in The Globe and Mail that while "not perfect, for most mining proponents the bill "increases the likelihood of, but does not guarantee, timelier outcomes." He added, "if well implemented, Bill C-69 holds the promise of improving upon predecessor legislation for most mines and the status quo."

Phillips said the mining association likes the bill’s “early engagement” process, a new element where proponents reach out to with concerned groups before a formal assessment is launched, because mining firms typically engage with Canada’s current assessment regime for almost every project.

“I think overall, because they have more interaction with a CEAA almost every time, there’s less nervousness for them around what’s on the project list. Whereas, if you have industries that have not been on the project list — and now there’s no clarity on who’s in or who’s out — that is going to naturally lead to investor uncertainty,” she said.

Alberta wants in-situ projects exempted

Alberta Premier Rachel Notley has tried to work behind the scenes to lobby federal public servants for more favourable conditions for the province’s powerful energy industry. Notley has also faced public pressure from opposition United Conservative Party Leader Jason Kenney for not speaking up sooner about C-69.

On Tuesday, Phillips said she met with Sen. Grant Mitchell, a proponent of the bill, as well as senators Douglas Black, Rosa Galvez, Francis Larkin, Larry Smith, David Tkachuk and Richard Neufeld, among others.

She said there was an “appetite” among them to introduce amendments favourable to Alberta’s position — her preference, she noted — or to send observations back to the House of Commons.

The Alberta minister is also calling for an exemption from federal assessment of in-situ projects, which extract bitumen crude by injecting steam into the ground and pumping the oil to the surface instead of mining it from an open pit.

In-situ projects are becoming more popular in Alberta, but green groups say they emit more greenhouse gases per barrel because of the large amounts of energy required to create the steam, usually with natural gas.

Phillips argued that they already face a environmental review process in Alberta, and that the one area of shared jurisdiction with Ottawa is greenhouse gas emissions, which is already covered under Alberta’s climate plan.

Asked whether other considerations — such as whether their location encroaches on First Nations, or whether their operation would affect wildlife — wouldn’t also matter, Phillips said those would be covered by provincial regulatory frameworks.

“It is our position that in situ oil sands ought to be exempted from the project list, because its only federally-regulated environmental effect is greenhouse gas emissions, and in Alberta, those...are both priced and subject to a 100-megatonne oilsands emissions limit. The other environmental effects of in situ extraction are provincial in nature,” she said.

Alberta also wants to see “appropriate” timelines for project reviews, for its climate plan to be recognized in strategic assessment criteria, and for downstream emissions — meaning the carbon pollution generated by consumers after products like gasoline are burned — to be excluded as grounds for rejection.

Thériault said the federal government's "approach will recognize Alberta's Climate Leadership Plan and the means by which emissions are managed."

Editor's note: This story was updated at 11:58 a.m. EDT on Oct. 25, 2018 to add a response from McKenna as well as additional information about the positions taken by the Canadian mining industry and background information about climate change science.