The text that follows is a draft of the final chapter--a postscript--of a book I am completing on federal environmental assessment since 1984. This postscript describes some of the key challenges to the Canadian Environmental Assessment Act (CEAA), two options for a process to conduct the five-year review of CEAA which must be undertaken prior to January 2000, and some preliminary ideas on the substance of some reforms. 

The idea is to get some comments on the postscript before the book is published by the Canadian Environmental Defence Fund in early 1998 (if all goes well).  

Please let me know what you think. 

Stephen Hazell

How well has the Canadian Environmental Assessment Act (CEAA) worked in the three years since it came into force? Clearly, the Act has succeeded in some ways. While this postscript focuses on challenges facing CEAA and its implementation, the legislation has clearly spurred the development of a culture of environmental assessment in at least parts of all major federal departments. The CEAA public registry system has also greatly increased public access to information about federal environmental assessments. Enviromental assessment is by and large taken much more seriously by the federal government than it was in the late 1980s and early 1990s.  

Unfortunately, a number of challenges have already emerged. The most damaging has been the perceived lack of government commitment to federal environmental assessment arising out the November 1996 decision of the Ministers of International Trade and Finance not to conduct an environmental assessment with respect to the sale of two CANDU reactors to China supported by a $1.5 billion loan by the Government of Canada.  

The litigation launched by the Sierra Club of Canada challenging the government's decision not to undertake a CEAA environmental assessment of the China CANDU sale, discussed in greater detail in Chapter 7, is not the only challenge facing federal environmental assessment. The Canadian Environmental Assessment Act is under attack on numerous fronts; and may not even survive in any recognizable form the five-year review, which must be undertaken by January 2000. The year of CEAA's proclamation--1995--could well represent a highwater mark for the federal commitment to environmental assessment and to ecological approaches to decision making.  

Opposition to CEAA and how it is being implemented has again been growing within federal and provincial governments as well as the environmental community. Within the federal government, this resistance has been driven partly by the dramatic cuts to environmental assessment budgets, but also by concerns that most screenings of projects required by law are unnecessary as these projects are known to have no environmental effects. At the same time, the confidence of many in federal environmental assessment seems to have fallen. In particular, there is much cynicism about public review panels, such as the BHP diamond mine public review, among others, not to mention the failure of the federal government to conduct environmental assessments for megaprojects such as China CANDU reactor sale and the Louisiana-Pacific and Saskfor MacMillan oriented strand mills in adjacent parts of Manitoba and Saskatchewan respectively.

This postscript first reviews the major challenges that could be addressed in the five-year review, sets out two options for a participatory process for conducting the five-year review, and then suggests principles and elements that might serve as the basis for reforms to CEAA that meet those challenges.

Section 72 of the Canadian Environmental Assessment Act requires the Minister of Environment to undertake " a comprehensive review of the provisions and operation of this Act" "(f)ive years after the coming into force of this section", and to report to Parliament on this review "within one year after the review is undertaken.". Thus, this review must be undertaken by January 2000 and the report submitted by January 2001--all within the probable four- to five-year mandate of the current Liberal government that was elected in June 1997.

The five-year review has potential to generate reform proposals that are politically explosive from various perspectives, but perhaps most notably from that of Canadian unity. The Quebec Liberal government of Daniel Johnson strongly opposed the enactment of Bill C-13 in 1991 and 1992; the Parti quebecois government of Lucien Bouchard--among other provincial governments--can be expected to be no less vigorous in opposing any proposed changes to CEAA that would enhance federal authority in any way. Given the likelihood of a Quebec general election in 1998, and a third sovereignty referendum soon thereafter, the federal government will not be eager to propose legislative reforms that could be used by sovereigntists to attack federalism. Thus the unity issue is likely to be an overriding consideration in how the government conducts the five-year review.

Three years experience in implementing the Canadian Environmental Assessment Act have revealed a number of serious challenges. Some can be addressed through administrative measures, others only through amendments to CEAA that could come through the five-year review process. These issues and challenges include the following:

• federal funding for environmental assessment is declining precipitously;

• there is evidence of growing public distrust of panel reviews, and increasing cynicism about the government's failure to assess major projects and to abide by recommendations of high-profile review panels;

• CEAA and its regulations are too complicated and difficult to understand;

• the application of CEAA to federal Crown corporations is uncertain;

• EA regimes are proliferating and approaches at harmonization to address this proliferation have had limited success;

• Many CEAA screenings appear to be a waste of resources;

• CEAA environmental assessments are perceived to be inefficient, uncertain, and too lengthy;

• implementation of the Cabinet Directive remains weak with few environmentally important proposed policies, programs and plans receiving scrutiny for their environmental effects;

Declining Funding - Federal environmental assessment is being squeezed hard by reductions in funding and personnel driven by Finance Minister Paul Martin's 1995 and 1996 budgets and the associated Program Review exercise within the federal government. An Agency study has estimated that total federal spending on environmental assessment was roughly $40 - $45 million in the first year of implementing CEAA. The Green Plan provided about $32 million of that total. With the Green Plan coming to an end in March 1997, funding for environmental assessment has been sharply reduced with little public controversy. Some of that Green Plan funding has been rolled into the permanent (A-base) budgets of the Agency and departments, but the shortfall is still dramatic.

Further, funding for the Agency's public participation program ($1.2 million/year) terminates on March 31, 1998 unless a new program is put in place. The government is considering putting a place a system to recover costs of public participation in panel reviews from proponents in order to meet the legal obligation in CEAA to have a program to fund public participation in panel reviews.

Several departments are attempting to reduce expenditures on environmental assessments by devolving responsibilities to the provinces. For example, the Department of Fisheries and Oceans (DFO) has clearly signalled its intention to delegate responsibilities to manage freshwater fisheries and protect freshwater fish habitat, with the exception of the British Columbia salmon fisheries. This initiative is largely driven by budget cuts. Bill C-62, which was introduced into Parliament in October 1996 but not enacted, would have provided the Minister of Fisheries and Oceans with authority to delegate some habitat management responsibilities to the provinces. Bill C-62 would also have established a permitting process for prescribed projects (set out in a schedule similar to the Comprehensive Study List Regulations) for which the federal government would retain fish habitat decision-making authority. Environment assessments under CEAA would not be required for projects delegated to the provinces. The proposed legislative changes would have had obvious financial benefits to DFO, in that the number of environmental assessments carried out by DFO would be reduced to a fraction of the current level (roughly 1000 per year) with resultant reductions in departmental expenditures. As well, the Coast Guard (which is now part of DFO) is proposing to delegate to provinces authority to approve works that interfere with navigation on some navigable waters, also for financial reasons, at least in part.

A second aspect of the budget squeeze on environmental assessment is cost-recovery. Cost-recovery entails attempts to recoup expenditures by a federal department on some programs through charges levied on users of the program's services. In the context of environmental assessment, proponents could be compelled to pay the costs of a panel review, mediation or comprehensive study. The Canadian Environmental Assessment Agency has produced a discussion paper that sets out the option of charging proponents (including federal government proponents) for costs associated with panel reviews and mediations, including funding of public participation, and costs associated with screenings and comprehensive studies. The discussion paper provides four useful guiding principles for determining which environmental assessment costs should be cost-recovered:

• Government proponents will be subject to the same rules as external proponents and will pay costs through interdepartmental charges.

• There is no point in government funding a project and requiring that part of this funding be returned to pay for environmental assessment. When setting the funding level for projects it supports, the government will take environmental assessment into account.

• One-time costs, such as the initial costs of implementing the new Canadian Environmental Assessment Act, will not be recovered.

• Costs that are inherently in the public interest should not be recovered; these include many of the costs of operating the Canadian Environmental Assessment Agency.

Unfortunately, the discussion paper does not comment on the policy implications of recovering up to half of the federal government's $40 to 45 million annual expenditures on environmental assessment on the integrity of the CEAA process.

The danger is that, in the absence of safeguards, implementation of cost-recovery could mean that projects with likely significant adverse environmental effects--which by law should be referred for public review--may not be referred at all because the proponent or the responsible authority does not have the financial resources to pay for the public review. Financial constraints resulting from cost recovery could result in improper pressure being brought to bear on managers of environmental assessments to ensure that projects are not found to have significant or uncertain adverse environmental effects. The potential for legal actions embarrassing to the government based on allegations of such improper pressure may increase as the screws of cost recovery tighten.

Public Distrust -- A second challenge is mounting distrust and frustration among environmentalists and other members of the public with the conduct of panel reviews. The distrust and frustration stems from several sources:

• the lack of opportunities for the public to participate fully in panel reviews;

• the government's failure to accept the recommendations of high-profile panel reviews;

• the government's decisions to exempt projects from environmental assessment and the Minister of Environment's reluctance to use his or her discretionary powers under sections 28, 46,47 and 48 to establish panel reviews for major projects having transboundary effects.

In the matter of panel reviews, many participants have expressed dissatisfaction with the rules set for public participation in such recent reviews such as the BHP Diamond Mine Panel, and the Military Flying Activities in Labrador and Quebec Panel. One common theme in the complaints has been that Panels have set goals for completion of hearings that are too ambitious. To achieve these ambitious goals, unreasonable restrictions have been placed on time available for questions of witnesses by participants. For example, a question period of only ten minutes might be allowed to follow a presentation by a key proponent witness.

Project proponents clearly have an interest--to which review panels and the government should be sensitive--in completing hearings in a reasonable period of time. But surely one of the most important roles of a Panel is to determine the truth about the environmental effects of a project. It is difficult to see how this can be achieved unless ample opportunity for questions by participants are permitted to test the claims of the proponent This does not mean that courtroom-style cross-examination by legal counsel is necessary or desirable. But it does mean that participants--including the representatives of the proponent--should be permitted to pursue a line of questioning at general hearings so long as it is relevant and respectful of the witness.

In 1997, the CEAA Regulatory Advisory Committee (RAC) developed guidelines entitled Procedures for an Assessment by a Review Panel , which has been released for public comment as a proposed ministerial guideline under section 58 of CEAA. As well as suggesting certain time periods and notice periods, the RAC has generated some proposals that may provide for a panel review process that is more credible for participants.

Environmentalists have expressed dismay at the government's failure to accept the recommendations of high-profile panel reviews, such as the Oldman dam, Northumberland Strait Crossing Project (Fixed Link, or Confederation Bridge) and Toronto International Airport expansion panels, among others. All three of these panels were in fact under EARP, but nonetheless have contributed to an atmosphere of mistrust, not to mention demands that panel reviews be authorized to generate legally binding decisions, as opposed to recommendations for consideration by federal Ministers.

A third source of dismay has been the government's decisions to exempt projects from environmental assessment and the Minister of Environment's reluctance to use his or her discretionary powers under sections 46 to 48 to establish panel reviews for major projects having transboundary effects. The China CANDU sale was, purportedly, exempted from a CEAA comprehensive study by virtue of an order in council, as was the Kemano Completion Project from a panel review under EARP. Such decisions are corrosive to the credibility of the environmental assessment process. If major projects with demonstrable adverse environmental effects can avoid environmental assessment, why should the thousands of small projects, which cause far less environmental harm, be subject to the process?

Further none of the three Liberal environment ministers who have held the portfolio since CEAA came into force (i.e., Sheila Copps, Sergio Marchi, Christine Stewart) have exercised their discretion under sections 26, and 46 to 48 and referred a project that may cause significant adverse transboundary environmental effects to panel review. This failure to use these discretionary provisions has not come because of any reluctance on the part of environmental and aboriginal groups to request such referrals. Panel reviews have been requested for the Vancouver Port Corporation's Deltaport container terminal project in the Fraser River delta, and for the Louisiana-Pacific oriented strand board mill in Manitoba, among others.

CEAA is Too Complicated and Difficult to Understand -- The CEAA legislative regime (statute and regulations) is too complicated. Chapters 5 and 6 of this book summarized the parliamentary debates and public consultations that led to the coming into force of the Act and regulations. A key point to emphasize is that the complicated structure of the Act was developed by federal bureaucrats led by FEARO officials without public involvement. The environmental community, industry and the provinces had considerable input into important amendments to the Act, but these did not affect the basic structure of CEAA with its bifurcated definition of project, arcane rules for triggering the Act, four types of environmental assessments (i.e., screenings, comprehensive studies, panel reviews, mediations) with their different processes, and complicated regulations.

The highly complicated nature of CEAA and regulations has led to considerable frustration among environmentalists and members of the public. Even experts and lawyers often have difficulty determining whether or not certain projects are subject to CEAA, and if so under what process. For members of the public, the rules must seem incomprehensible at times. For example, pulp and paper mills in Alberta (e.g., Alberta Pacific, Celgar) were subjected to federal-provincial panel reviews under EARP and Alberta law, but major oriented strand board mills in Saskatchewan and Alberta (e.g., Louisiana-Pacific, Saskfor McMillan) were not assessed under CEAA. Expansions of Toronto International and Vancouver International airport were subject to EARP panel reviews, but the expansion of Montreal's Dorval Airport was not assessed under CEAA. The expansion of port facilities at Roberts Bank was subject to an EARP panel review, but the Deltaport container terminal port at the mouth of the Fraser River was not subject to any CEAA assessment. The decisions not to refer projects such as these for panel reviews under CEAA may have been justified in law and policy, but laypersons may be excused for their sense of frustration. The not unreasonable calculus of an average Canadian may be that if a proposed development project is of national environmental interest, the federal environmental process should be triggered.

The Application of CEAA to Federal Crown Corporations is Uncertain -- The application of CEAA to federal Crown corporations such as the Export Development Corporation and Atomic Energy of Canada Ltd. is uncertain. Section 8 provides that Crown corporations shall ensure that assessments of environmental effects are conducted "in accordance with any regulations made for that purpose", but no regulations are in force or are likely to be promulgated in the near future. Not only is this provision poorly drafted, it adds another level of complexity to CEAA by creating yet another assessment process that differs from that governing federal departments. As outlined in Chapter 7, the federal government has taken the position, probably incorrect in law, that federal Crown corporations have no obligations under CEAA until such time as applicable regulations come into force.

The federal interpretation, if correct, creates an important loophole that allows major projects with serious adverse environmental effects to escape environmental assessment altogether, because provincial environmental assessment laws often do not apply either. As observed in Chapter 7, the Export Development Corporation and Atomic Energy of Canada Ltd. have employed this loophole to finance the construction of CANDU reactors in China, which have had no Canadian market in several decades. As well, projects built by port authorities, among other Crown corporations, on federal lands are also avoiding environmental assessments.

Even if Crown corporations do have some assessment responsibilities under section 8, the bigger issue is why these responsibilities should differ from those of federal departments. Federal Crown corporations are created to serve some important public policy objectives. If the public interest in a Crown corporation no longer exists, presumably the corporation should be privatized, as for Air Canada and Canadian National Railways. If the federal Crown is to continue to own these companies, they should be subject to the same environmental assessment requirements as federal departments and agencies.

The Proliferation of Environmental Assessment Regimes -- A third challenge is the proliferation of environmental assessment regimes at different levels of government and the threat of gridlock. In addition to CEAA, various federal boards and agencies, such as the National Energy Board, have legally entrenched environmental review provisions. Every province has an environmental assessment law. Further, all aboriginal comprehensive claim agreements--such as the James Bay and Northern Quebec Agreement--have environmental assessment regimes, and proposed self-government agreements--such as the Nisga'a Agreement in Principle--would authorize First Nations to legislate environmental assessment. Some municipalities, such as the City of Ottawa, have developed environmental assessment provisions.

The risk is increasing that larger development projects such as dams, mines or pipelines could trigger CEAA, one or more provincial environmental assessment regimes, and one or more aboriginal environmental assessment regimes. For proponents and governments, this is a nightmare scenario of duplicative environmental assessment documents and multiple hearings--for a single project.

A further complication is the potential for multiple environmental assessments by federal departments or agencies such as occurred with respect to the Northumberland Strait Crossing Project (Confederation Bridge) connecting Prince Edward Island and New Brunswick. The potential for duplication remains whenever there is more than one responsible authority involved, because each has an independent responsibility to assess under CEAA.

Provincial governments have seized on this issue of environmental assessment overlap and duplication and are again arguing that the federal government should delegate its environmental assessment responsibilities in most circumstances to provincial governments having environmental assessment regimes equivalent to CEAA.

In recent years, the Canadian Council of Ministers of Environment (CCME) has sanctioned an approach known as harmonization for reducing overlap and duplication in the environmental assessment activities of federal and provincial governments. Harmonization still enjoys favour within federal and provincial governments as an approach to provide for coordination in environmental assessment activities and the project decisions that follow. Harmonization does not necessarily lead to a uniform, or even an integrated, process. Rather it is a set of administrative measures to improve communication and coordination among distinct regimes, based on the premise that each level of government has the right, if not the duty, to assess the environmental effects of projects within its jurisdiction.

Multilateral as well as bilateral harmonization schemes have been proposed by CCME. The multilateral approach was most recently embodied under the so-called Sub-Agreement on Environmental Assessment (Draft Text) developed in late 1996 and early 1997 pursuant to A Canada-Wide Accord on Environmental Harmonization which was signed by federal, provincial and territorial ministers of environment on November 20, 1996. The Harmonization Workplan agreed to by ministers under the Accord envisaged a consultation process on a sub-agreement during the winter 1996/97 and a completed sub-agreement by spring 1997.

The objectives of the Sub-Agreement are:

The key--and for environmentalists most egregious--feature of the Sub-Agreement is Article 5.6 which determines a "lead Party" for environmental assessments that are triggered under the laws of two or more jurisdictions. Article 5.6 provides that a provincial government is the lead party for "proposed projects on lands within its provincial boundary" with certain exceptions. The federal government is lead party only for "proposed projects on federal lands where federal approval(s) apply to a proposed project" with an exception relating to aboriginal land claims. The effect of the Sub-Agreement would be that for projects other than those proposed for federal and aboriginal lands, the federal government would be limited to a supporting role in the conduct of environmental assessments, but would not give up decision-making responsibilities with respect to the adequacy of the environmental assessment or regulatory or other decisions following on that environmental assessment .

The federal election in the spring of 1997 forced the cancellation of the May 1997 CCME meeting at which the Sub-Agreement on Environmental Assessment was to have been approved. Fierce opposition of environmentalists to the Sub-Agreement may lead Minister of Environment Christine Stewart to reconsider the approach taken, although the Accord and Sub-Agreement may be signed as early as November 1997. Historically, CCME has been secretive in its deliberations, although the most recent round of discussions on harmonization has allowed for some public involvement. Still, the very structure of CCME is problematic. A first point is that the people sitting around the table making the decisions are the ten provincial ministers, two territorial ministers and one federal minister. Accountability to the public for decisions is at best indirect, and at worst represents the antithesis of participatory democracy. Second, the federal government is outnumbered twelve to one around the CCME table. In the absence of public participation in CCME decisions, this imbalance in numbers virtually guarantees that national interests in environmental assessment are not given appropriate weight.. The Sub-Agreement on Environmental Assessment ignores the national interest, basing its allocations of assessment responsiblities on a territorial approach, which ignores the reality that ecosystems transcend International, provincial and territorial boundaries.

The bilateral approach to harmonization was first authorized by the CCME in November 1992, when Ministers agreed to the Framework for Environmental Assessment Harmonization. This framework provides a basis for negotiating bilateral federal-provincial harmonization agreements. Federal Environment Ministers have signed such bilateral agreements with Alberta, Manitoba and British Columbia. The agreements provide for early notification between the parties of proposed projects, cooperative environmental assessments, joint panel reviews and the establishment of regional Agency offices ("single windows") to implement federal responsibilities under the agreements.

The British Columbia - Canada Agreement for Environmental Assessment Cooperation goes further. The British Columbia Environmental Assessment Act requires that the federal government be invited to participate in any environmental assessments of projects triggered by that legislation. This means that federal scientists are entitled to participate on the project review team, providing input or advice, whether or not the federal process is triggered. In exchange for this commitment, the Agreement requires that a so-called cooperative environmental assessment be undertaken where both governments have an interest in a project. For cooperative assessments, screenings and comprehensive study reports under CEAA will be undertaken and completed using the process under the British Columbia legislation. The Agreement also allows for, but does not require, the formal delegation of the conduct of federal screenings or comprehensive studies to the province. The concept of cooperative environmental assessments does not apply to panel reviews; the Agreement provides for establishment of joint review panels along the lines of accepted practice.

The bottom line is that federal representatives would or could be at the table, but the provinces would take the lead in carrying out the work. The federal and provincial governments would retain authority to make their own decisions about the project (e.g., go/no go decision, terms and conditions of approvals) once the environmental assessment is completed. In practice, such decisions would be coordinated to the greatest extent possible and the Agreement in fact commits the two governments to coordinate the announcement of their respective decisions..

The British Columbia - Canada Agreement represents the most useful model yet for future harmonization agreements with provinces and First Nations; the agreements could allow a building of trust and respect for the responsibilities of each level of government, while establishing a clear focus for the environmental assessment work itself.

Interagency relationships within the federal government are also important challenges to environmental assessment under CEAA given the self-assessment approach that has been employed. The so-called Process Efficiency Regulations, issued in 1997, set out a complicated process to be followed by federal authorities in cooperating in environmental assessment activities. In July 1997, the Agency issued draft criteria for substituting the public review process of a federal authority (e.g., the National Energy Board) or of a body established pursuant to a land claims agreement for the panel review process under the Canadian Environmental Assessment Act. Such substitutions are another approach to ensuring that these federal authorities meet their environmental assessment obligations without delays occasioned by multiple hearings. The question that needs to be addressed in the five-year review is whether the CEAA system of independent legal obligations of federal authorities justifies these very complicated arrangements or whether a radical simplification of responsibilities is called for.

Independent environmental assessment regimes are also being established under comprehensive claims and self-government agreements and for projects that occur on Indian reserve lands. The federal government faces the challenge of ensuring that the aboriginal regimes under such agreements are amenable to harmonization, especially in situations where a provincial as well as federal environmental assessment process may be triggered. Without harmonization, certain projects, especially in northern Canada, could be subject to environmental assessment laws under aboriginal comprehensive claims or self-government agreements in addition to federal and provincial/territorial assessment laws. If the claims do not provide for harmonization, and the federal, provincial/territorial and aboriginal representatives do not agree on a process, there could be a gridlock of conflicting or inconsistent legal requirements.

Aboriginal environmental assessment processes appear to be moving in at least two different directions. Under the March 22, 1996 Nisga'a Agreement in Principle, the Nisga'a Central Government would have authority to make laws in relation to the environmental assessment of projects that are on Nisga'a lands, provided that in the event of a conflict between Nisga'a laws and federal or provincial laws of general application, the latter would prevail to the extent of the conflict. The Nisga'a Agreement in Principle includes provisions for coordinating environmental assessment activity among the three levels of government, such as by providing notice in appropriate circumstances.

The proposed Mackenzie Valley Resource Management Act, which would implement environmental management provisions of Dene/Metis comprehensive land claims in the western Arctic, represents a very different approach to the issue of overlap and duplication. This proposed statute would establish an environmental assessment regime for the Mackenzie Valley region that would have the effect of explicitly excluding CEAA in most circumstances. The federal government has not yet settled on the circumstances under which CEAA would continue to apply (e.g., projects having transboundary adverse effects).

This proposed draft legislation could constitute a thin edge of the wedge for the breakdown of the national application of CEAA. Once Parliament agrees that CEAA applies in only unusual circumstances in the Mackenzie Valley, it is very likely that other jurisdictions, such as the larger provinces, would redouble their demands for similar arrangements.

Finally, environmental assessment harmonization must take into consideration Canada's international commitments relating to environmental assessment. In 1991, Canada signed the United Nations Economic Commission for Europe (UNECE) Convention on Environmental Impact Assessment in a Transboundary Context, which formalizes procedures for the environmental assessment of projects that have potential transboundary environmental effects. This convention has not yet been ratified by Canada. Further, the Commission for Environmental Cooperation under NAFTA is also working to develop proposals to harmonize environmental assessment requirements in Canada, the United States and Mexico.

The continuing enthusiasm within federal and provincial governments for harmonization as a way to improve the efficiency of environmental assessment processes and reduce overlap and duplication seems ill-placed. Despite considerable efforts, harmonization is not delivering the goods and probably cannot. The key problem is this: it is difficult enough to negotiate a harmonization agreement between the federal and one provincial government. But if aboriginal environmental assessment processes must also be harmonized, and international obligations met as well, the negotiations--let alone the agreements that might follow from success in negotiations--would be as tangled as the Gordian Knot.

The Need for National Environmental Assessment Standards --The proliferation of environmental assessment regimes points to another challenge, the need to develop national standards for various aspects of environmental assessment (e.g., content and public participation requirements) that could apply throughout Canada. At its May 31, 1996 meeting, CCME ministers agreed that a multilateral agreement on standards development should be prepared to further cooperation and coordination among the provincial, territorial and federal governments. The proposed draft Sub-Agreement on Environmental Assessment in fact included some minimal requirements for environmental assessments that would have been conducted under its provisions.

An underlying theme of the CCME discussions on this point is that government-initiated regulatory processes need no longer be the sole means for developing environmental standards that have applicability across Canada. Alternative processes that employ independent, non-governmental organizations to develop and enforce national environmental standards through multi-stakeholder, consensus-based approaches should be explored, as well as conventional government-initiated processes.

Process standards oriented to industry, such as those developed by the International Organization for Standardization (ISO) and the Canadian Standards Association (CSA) could be key to any CCME approach. The ISO 14000 series is already having a considerable impact on how companies around the world deal with environmental management and environmental auditing. The Nova Scotia government is considering providing tax credits for 25 per cent of qualifying expenses incurred by companies for ISO 14000 certification. The United States departments of defence and energy may soon require that in order to business with them, companies have certification in ISO 14001 (the environmental management systems standard) in order to do business with these departments.

In 1996, the Environmental Council of the CSA accepted a proposal from the Canadian Environmental Assessment Agency to establish a technical committee to begin the development of a standard for the environmental assessment of projects at the screening level. The original objectives of the proposal were to:

• maintain or improve the quality of screenings
• encourage proponents to do voluntary screenings of projects early in the planning process.

However, the Agency has recently agreed that the primary focus should be on improving the quality of screenings. The proposal also seeks to interest provinces and territories in using the proposed screening standard, suggests that a third-party certification system might be appropriate, and proposes that links be established with interested professional organizations.

This initiative by the Agency is a first attempt to use CSA-type standards. A series of environmental assessment standards adopted by all jurisdictions could help to untie the Gordian knot if those jurisdictions were prepared to accept the same standards. Everyone would be playing by the same rules. The rules might well then be national in scope, even if they were not administered by the federal government.

Many CEAA Screenings are a Waste of Resources -- An ominous trend that represents a challenge for federal environmental assessment is growing dissatisfaction among federal environmental assessment practitioners with screenings under CEAA. Some practitioners take the view that many of these screenings are no longer useful from an environmental perspective, if they ever were, and should no longer be required to be conducted.

It should be emphasized that the federal approach to screenings is unique. Screenings under CEAA are a form of environmental assessment, not a procedure to sift through proposed projects to determine which should be subject to environmental assessment, as is the case under most provincial systems. Other appropriate approaches to managing adverse environmental effects of small-scale government-supported projects are being put into place such as through departmental environmental stewardship programs and the sustainable development strategies which are required to be developed under recent amendments to the Auditor General Act.

The Agency has estimated that of the $24.5 million that the federal government spent on operational activities for environmental assessment in the 1995-96 fiscal year, $18 million was spent on screenings, $2 million on comprehensive studies, and $2.9 million on panel reviews. In that same year, roughly 3,100 screenings of projects were carried out. Not one project was stopped as a result of the screening, and follow-up programs were required for only five per cent of screened projects. Projects subject to screening are rarely found to have significant adverse environmental effects and the public is rarely consulted.

The case against screenings has not been made out yet, but it may be that the screening process needs to be refocused to become environmentally relevant. If the $18 million (now much lower) is not being well-spent, perhaps resources should be reallocated to comprehensive studies and panel reviews, strategic environmental assessment, and public participation funds.

CEAA Environmental Assessments are Inefficient, Uncertain, and Too Lengthy -- Over recent years, representatives of industry in Canada have expressed concern that the CEAA environmental assessment process would place Canada at a competitive disadvantage compared to its major trading partners. Specific concerns have been issues of overlap and duplication with provincial and other environmental assessment processes, discussed above, and the uncertainty, expense and length of panel reviews. In September 1994, the government asked Sheila Copps, then Minister of Environment and John Manley, then Minister of Industry to establish a joint monitoring program to review the implementation of CEAA with a view to assessing the impact of CEAA on competitiveness and whether or not it would be burdensome for industry.

A final draft report on the Joint Monitoring Program revealed no significant impacts on the competitiveness of Canada industry although few comments were received from companies. Respondents expressed concern that having multiple responsible authorities involved in the environmental assessment of a project would cause delays and difficulties, and wondered how decisions would be made in such cases with respect to, for example, project scoping and assessing sustainability. Respondent companies suggested that regulated timeframes were required for panel reviews and comprehensive studies.

Implementation of the Cabinet Directive remains weak -- As discussed in Chapter 8, The Environmental Assessment Process for Policy and Program Proposals ("the Cabinet Directive") requires, as a matter of policy, that federal departments assess the environmental effects of proposals for policies and programs requiring Cabinet approval. Compliance with the Cabinet Directive over the seven years that it has been in force has been weak, and only two strategic environmental assessments have been released publicly since June 1990 Interestingly, compliance with the Farm Income Protection Act, which requires as a matter of law that strategic environmental assessments be carried out for farm income support programs, is much higher and the strategic environmental assessments that were carried out are of higher quality.

A Proposal for the Process -- How to go about undertaking the five-year review for reforming the Canadian Environmental Assessment Act? A first step is to develop a review process, currently under consideration by the Agency. In the development and drafting of the EARP Guidelines Order, there was little public debate. For CEAA, national consultations were held dealing with the basic structure and principles of the new legislation. However, the preparation of the draft bill itself was developed by FEARO and other bureaucrats in secret. Following introduction of the legislation, the Parliamentary process was engaged to refine the legislation and obtain public input.

In the five-year review of CEAA, the process could be taken one step further--to make the legislative process fully participatory from the outset to a draft bill ready for consideration by first the federal Cabinet, then the Parliament. A covenant among people across Canada interested in environmental assessment of projects, policies and programs could be built from the bottom up, through a consensus-building process.

Given that the CEAA Regulatory Advisory Committee continues to provide regulatory and other policy advice to the Agency and the Minster of Environment, its advice should be sought first on the process to be followed. Two basic options for participatory approaches for the conduct of the five-year review and preparation of draft amendments to CEAA, suggested below, could be submitted to RAC for its consideration:

• a multistakeholder committee with an independent chair, supported by the Agency as secretariat;
• a House of Commons committee similar to that which undertook the five-year review of the Canadian Environmental Protection Act.

The Multistakeholder Committee Approach -- Given the contradictory pressures on the Agency and the government by environmentalists, industry and the provinces, a multistakeholder committee similar to that employed by Government of Ontario (and described in Chapter 8) in preparing the draft Environmental Bill of Rights Act could be struck and given the mandate to conduct the five-year review and prepare draft amendments to CEAA. The committee would have representation from industry, the environmental and aboriginal communities, federal departments and provincial governments, with the Agency providing secretariat assistance. The committee would be charged with developing a consensus on issues, proposed approaches, and amendments to CEAA, consulting with interested stakeholders and members of the public and providing a report setting out a consensus bill. It is essential that the federal government participate in the activity of the committee and provide secretariat support, that the federal government not control the work of the committee, and that it be chaired by an individual independent of the Agency and the government generally. The Regulatory Advisory Committee (RAC) cannot serve the role that is proposed. First, the RAC is chaired by the Vice President of Policy of the Agency, and the agenda of the RAC is largely set by the federal government.

As a starting point for this participatory, consensus-building approach could employ the principles developed by the Canadian Round Tables in their document Building Consensus for A Sustainable Future: Guiding Principles. These principles are as follows:

• Purpose Driven -- People need a reason to participate in the process

• Inclusive not exclusive -- All parties with a significant interested in the issue should be involved in the consensus process

• Voluntary Participation -- The parties who are affected or interested participate voluntarily

• Self Design -- The parties design the consensus process

• Flexibility -- Flexibility should be designed into the process

• Equal Opportunity -- All parties must have equal access to relevant information and the opportunity to participate effectively throughout the process

• Respect for Diverse Interests -- Acceptance of the diverse values, interests, and knowledge of the parties involved in the consensus process is essential

• Accountability --The parties are accountable both to their constituencies, and to the process that they have agreed to establish

• Time Limits -- Realistic deadlines are necessary throughout the process

• Implementation -- Commitment to implementation and effective monitoring area essential parts of any agreement.

One crucial advantage of the multistakeholder committee approach is that it could be a learning experience for all, giving stakeholders opportunities to understand from each other about the challenges and issues that each face in federal environmental assessment. Federal civil servants could present evidence supporting their claims that many CEAA screenings are not necessary from an environmental perspective. Environmentalists could detail their frustrations with panel review processes and procedures. Industry representatives could explain how harmonized environmental assessment processes support sustainable development.

A second advantage is that concensus-building processes allow for deliberation among individuals with sometimes conflicting interests, which can lead to new ideas, energy, and synergy. A multistakeholder committee could also allow deliberations to be taken out of the Ottawa context. Given the fundamental schisms that remain about federal environmental assessment, this is probably a good thing.

A crucial disadvantage of the approach is the current fatigue with multistakeholder processes generally. Some environmentalists have come to see them as cooptation by powerful governmental and industry interests; while some civil servants argue that after so much talk, they know what needs to be done and just want to get on with it. Given this consultation fatigue, it may be difficult for the government to establish a multistakeholder process that is not subject to its control.

House of Commons Committee - An alternate approach would be for the government to give a House of Commons committee, such as the Environment and Sustainable Development Committee, the task of holding hearings and preparing recommendations on amendments, as was done for the five-year review for the Canadian Environmental Protection Act in 1995. The report of the committee, chaired by Charles Caccia, was an exhaustive and insightful document that laid the foundations for many of the amendments proposed by the government in Bill C-74, which was introduced into Parliament in late 1996, but not enacted. Such a parliamentary committee could be engaged to conduct the five-year review of CEAA. The committee would require a significant research budget, and would solicit briefs and hold hearings across Canada. An important difference between the CEPA five-year review and the CEAA five-year review is that Caccia's Environment and Sustainable Development Committee had a mandate to review the provisions of CEPA, whereas the CEAA review will examine the operations of the Act as well as its provisions. This aspect of operations takes the review at least partly out of the bailiwick of legislation and Parliament. One disadvantage of the parliamentary committee approach is that the House of Commons would in due course have opportunities to review and hold hearings on any legislation introduced by the government into Parliament in any event.

In Chapter 8, the argument was made that, as the acme of democracy at the federal level, Parliament should be engaged in the development of environmental and other policies. Giving a House of Commons Committee the task of conducting the five-year review of CEAA would qualify as a genuine policy role. The key disadvantage of adopting the parliamentary committee approach is that the various interests (e.g., environmentalists, industry associations) do not usually have an opportunity to listen to the concerns of others and deliberate on ways to accommodate other legitimate interests. The typical approach of parliamentary committees is to receive briefs from interested persons, and hold hearings, sometimes not just in Ottawa. Such persons are not compelled in this process to contend with the contrary views of others submitting briefs or appearing at hearings. The analysis and creative balancing of different views is left to the parliamentarians and their staff in preparing their report and recommendations.

This is not to say that a parliamentary committee could not utilize concensus-building techniques. The committee could conceivably commission multistakeholder subcommittees to address particular controversial issues of importance to the five-year review. For example, such a multistakeholder subcommittee composed of federal and provincial officials, environmentalists, aboriginal people and industry representatives could be struck to consider fundamental issues such as what the scope of the federal role in environmental assessment should be. The multistakeholder subcommittees would attempt to reach consensus on the issues assigned to them, and would then report their findings back to the parliamentary committee.

Prior to initiating a process for amending CEAA, the Agency, together with federal departments, would presumably undertake a major effort to prepare for the participatory process. Prior to the CEPA five-year review, Environment Canada prepared numerous background papers preparing a framework for the work of the Environment and Sustainable Development Committee. The Agency and federal departments would presumably want to carry out work in a number of areas to ensure that the review committee had the facts needed to make informed recommendations. The research effort would no doubt be guided as well by the recommendations of the Auditor General of Canada, who is currently conducting an audit of federal environmental assessment to be released in 1998. Some areas of research by the Agency could include the following:

• assessment as to whether or not different types of environmental assessment are generating information useful in meeting sustainable development objectives, and whether or not that information is being used by decision makers
• information prepared by federal authorities as to whether or not conduct of environmental assessments under provisions of the regulations are yielding environmental benefits

For example, the Agency may wish to consider a study that would attempt to determine using a rigorous, objective and quantitative approach the value and utility of public panel reviews. One approach could be to compare projects that had been subjected to a federal or joint federal-provincial panel review with "matched" projects that had not been subjected to any federal or provincial public panel review process. Possible examples of "matched" projects could include:

• the ALPAC Pulp and Paper Mill (which was subjected to a joint federal-provincial review) and the Lousiana-Pacific pulp and paper mill (which was not subjected to a public panel review);
• the Sunshine ski resort expansion (which was subjected to an EARP panel review) and the Blackcomb/Whistler ski resort expansion (which was not);

• the Roberts Bank Port Expansion Project (which was subjected to an EARP panel review) and the Vancouver Port Corporation's Deltaport container terminal project (which was not); and

• the expansion of the Vancouver or Toronto international airports (which were subjected to EARP panel reviews) and the Dorval airport expansion or possibly the initial construction of Mirabelle airport (which were not).

The recommendations of the public panel reviews would then be identified and compared to government decisions taken with respect to the projects. The decisions would include, but would not necessarily be limited to, terms and conditions of project approvals under federal, provincial or territorial licences and permits, land sale or lease agreements with proponents, and contribution agreements with proponents.

The comparison of panel recommendations and terms and conditions of government approvals should generate objective and quantitative information on the extent to which decision makers are incorporating panel recommendations into their decisions. This research would provide a profile of public reviews' influence, and allow conclusions to be drawn regarding how and on what subjects panels have shaped government decision-making.

Another phase of the project could review implementation of terms and conditions of reviewed and non-reviewed projects to test whether or not the panel review had some influence that extended beyond the life of the panel in promoting implementation of terms and conditions related to the environmental sustainability of the project.

The Agency also might wish to undertake some public opinion research on what Canadians think about the federal role in environmental assessment, among other issues relevant to the five-year review. Consideration could be given to employing novel tools for participatory democracy, such as the deliberative opinion poll, championed by James Fishkin.. A deliberative opinion poll "models what the public would think, if it had a more adequate chance to think about the questions at issue." According to Fishkin, deliberative opinion polls are a way to overcome the difficulty in much opinion polling that the members of the public being sampled may know little about the issues dealt with in the poll. The basic concept would be that citizens participating in the poll would be randomly chosen and given a range of briefings from various stakeholders representing a range of interests setting out their perspectives on the relevant issues facing environmental assessment and the Canadian Environmental Assessment Act.. Only then would be the survey questions be provided to the participants and the results tabulated.

A federal role based on an expression of the national environmental interest -- The review committee could consider what the national interest in environmental assessment is and how this national interest could be articulated in CEAA. Major development projects often have environmental effects that transcend the boundaries of particular provinces, territories or aboriginal lands. Should determinations of federal environmental assessment authority in the national interest be limited to the narrow grounds of current federal statutory jurisdiction or embrace a broader approach supportable under the peace, order and good government federal head of power under the Canadian constitution? On the other hand, should federal authorities be requiring environmental assessments where there is some federal regulatory requirement, for example, but no manifest demonstration of any national interest?.

Based on some criteria of national environmental interest, a list of projects likely to have significant adverse environmental effects--not unlike the current Comprehensive Study List Regulations--could be prescribed by regulation. But unlike the Comprehensive Study List Regulations, a CEAA environmental assessment with public involvement could be required for every prescribed project regardless as to whether or not the federal government had regulatory or other authority over the approval of that project. That is, this national projects list would serve as a trigger for the application of CEAA. Prescribed projects would be prohibited from being carried out until the environmental assessment was completed.

The concept of a list of projects under CEAA that affect the national environmental interest and hence trigger federal environmental assessment would no doubt attract the attention of constitutional lawyers, not to mention provincial governments. The national concern test under the peace, order and good government clause as confirmed by the Supreme Court of Canada in the Anti-Inflation case and elaborated in R. v. Crown Zellerbach Canada Ltd. would appear to provide clear opportunities for carefully worded legislation to create a national list. Note as well that sections 46 to 48 of CEAA already suggest criteria of national environmental interest. These provisions allow the Minster of Environment to establish panel reviews where projects have significant adverse transboundary effects (e.g., international, interprovincial, and between federal and non-federal lands) so long as there is no other federal trigger. The concept of likely adverse transboundary effects could provide one basis for a national list of projects requiring federal assessment that has already been accepted by the federal Department of Justice.

Focus resources in areas where the federal government can best advance environmental and sustainability objectives -- Most federal environmental assessment operational resources are currently devoted to screenings, with apparently meager benefits to the Canadian environment. Virtually no resources are devoted to consideration of the adverse environmental effects of proposed federal policies, programs and plans, which can have tremendous, unintended adverse effects. The five-year review committee could consider how CEAA could be amended to attempt to ensure that resources are expended according to the environmental importance of the matter at hand--whether a project, policy, program or plan.

Simpler legislation -- CEAA is very complicated legislation; to what extent could the review committee recommend simplification? A radical suggestion would be to eliminate the legal requirement that screenings be conducted, and devote the resources saved thereby to ensuring high-quality comprehensive studies, panel reviews and strategic environmental assessments, all with a high level of public involvement. A less dramatic suggestion would be to simplify the definition of "project" by eliminating physical activities from the definition. Environmental assessment of physical activities could be dealt with under strategic environmental assessments of departmental programs, which would be subject to audit by the Commissioner for Environment and Sustainable Development. This measure would result in the elimination of the Inclusion List regulations. A more modest simplification would be to eliminate provisions of the Law List dealing with projects that no longer require assessment based on evidence submitted by federal authorities and others.

Another simplification would be to make federal Crown corporations such as Export Development Corporation and Atomic Energy of Canada Ltd. subject to the same environmental assessment requirements as federal authorities.

Reconsider the Principle of Self Assessment -- Under CEAA, each federal authority has independent legal responsibilities to assess the environmental effects of projects. This has led to confusion about roles to the point that the government has issued the very arcane Process Efficiency Regulations that set out some groundrules for cooperation among federal authorities. If screenings are dropped from CEAA, authority for the conduct of comprehensive studies and panel reviews could be easily centralized under the auspices of a single agency as is done in most, if not all, other Canadian jurisdictions. The Process Efficiency Regulations would no longer be needed, and cooperation with other jurisdictions would also be greatly simplified.

The conduct of comprehensive studies could be transferred from federal authorities to the Canadian Environmental Assessment Agency, The Agency could be empowered to make decisions about whether further environmental assessment by a panel review or mediation is required, whether or not the project should be permitted to proceed and if so what the terms and conditions of such EA permits would be. An appeal procedure relating to the issuance of permits could be established.

Decrease time taken for Panel reviews -- One of the biggest delays in completing panel reviews is the often lengthy time taken to appoint panel members. Too much of this time--often months--is taken seeking the approval of ministers of environment of Agency recommendations for panel appointments. Unfortunately, and too often, Ministers and their political staff are more concerned with the political pedigree of recommended panel members than the appropriateness of the individuals for the work. The five-year review could consider several approaches to "professionalize" review panels. One suggestion is to create rosters of panel chairs and members, approved in advance by the Minister, who could be selected for a review panel position by the Agency as the need arises. A more dramatic change would be to create a permanent Canadian Environmental Assessment Board, which could have members appointed on a contracted basis. Either of these suggestions would decrease the substantial delays related to appointment of panels. Another benefit of such approaches would be that panel members could be properly trained so as to ensure fairness and consistency in the conduct of panel proceedings.

Establish legal requirements to conduct strategic environmental assessments -- The review committee could consider legislative approaches to better ensure that environmental considerations are incorporated into government policies, programs and plans as they develop. Compliance with the Cabinet Directive, which requires, as a matter of policy, consideration of environmental effects in the preparation of Cabinet submissions, by federal departments is poor, and the strategic environmental assessments that are prepared are of uneven quality. On the other hand, strategic environmental assessments prepared pursuant to the legal requirements of the Farm Income Protection Act are of much higher quality and compliance is high.

Improve public participation in environmental assessments -- The review committee could consider ways to improve public participation in panel reviews, comprehensive studies and screenings (should the latter continue) Following the discussion in Chapter 8, a question to be posed is whether or not environmental assessments conducted without public participation are of any value to decision makers. Funding for public participation in panel reviews could be increased to allow greater scope for truth-seeking by participants, and provided for comprehensive studies.

Develop national standards for environmental assessment -- The five-year review committee could consider amendments to CEAA that would allow for the setting of national environmental assessment standards with participation of other governments and stakeholders, and the certification of environmental assessments and environmental assessment professionals. In considering approaches to the setting of the standards, the committee could also consider non-regulatory approaches to standard-setting that might be mandated under a revised CEAA, and ways in which non-governmental organizations could provide some of the services.

As already noted, the above substantive suggestions must be taken to be preliminary. The most important feature of the five-year review must be the process--participatory, consensus-building, and inclusive of all interests.

Whether or not CEAA is gutted or continues to evolve as a key instrument for achieving an ecological vision is largely a political issue to be resolved in the context of the five-year review. If Canadians argue loudly that the national interest demands that the federal government should play a strong role in assessing the environmental effects of projects over which it has decision-making responsibility, then the Liberal government will likely not abdicate its commitments to the Canadian people and environment. As it stands, environmental protection and environmental assessment remain a low priority for the government, and not offending provincial governments a high priority. However, it may be a serious political miscalculation to attempt to amend CEAA to satisfy the demands of provincial governments. But as with the reform of EARP, the future of CEAA rests largely with those Canadian citizens who take an interest in the Canadian ecology.