Federal Natural Resources Minister Jonathan Wilkinson says legislative changes in response to the Supreme Court of Canada’s ruling last year that curtailed Ottawa’s powers to regulate resource projects could come in next month’s budget.
Last October, the court ruled that the federal government doesn’t have nearly as much jurisdiction to regulate resource projects as it assumed it had under the Constitution. Currently, mines, oil and gas projects and pipelines are regulated based on a roughly 50/50 split between the federal government and the provinces through two separate and often overlapping processes. Ottawa’s oversight should instead be restricted to certain areas, such as assessing the impact of projects on fisheries, the bird population, species at risk and Indigenous rights, the top court said.
After the ruling, the federal government said it intended to introduce legislation to change the 2019 Impact Assessment Act, but did not say when that could happen. Immediately after the ruling, it was unclear what would happen to dozens of resource companies that had already spent years working on federal impact assessments that were not yet completed. At the time, there were 42 active assessments under way. Ottawa said then it would assess each project on an ad hoc basis, which only added to the confusion.
Citing the “need to restore certainty,” Mr. Wilkinson, in an interview last week at the Prospectors and Developers Association of Canada annual mining conference in Toronto, said that an action plan, including possible legislative changes, are coming soon, and may roll out as part of the federal budget scheduled for April 16.
“It may come in the budget, it may come a little after,” he said.
Chief Justice Richard Wagner last year was clear that the impact assessment process is unconstitutional in connection with Ottawa’s ability to classify certain projects as “designated.” Under that purview, the federal government could conduct broad-based environmental reviews, and essentially had the ability to say yay or nay to a project in one fell swoop.
After the court’s ruling, Ottawa paused Environment Minister Steven Guilbeault’s power over designated projects, but stopped short of saying it would do so permanently. On the subject of designated projects, Mr. Wilkinson said that “we certainly are going to be ensuring that we are tethering the federal government’s role in environmental assessments to areas that are very much areas of federal jurisdiction. That will mean probably less projects go through the federal process.”
For mining companies, less federal involvement should speed up the timeline to put projects into production. Compared to some other resource-heavy countries such as Australia, Canada has considerably longer and more cumbersome regulatory hurdles. In its 2022 critical minerals strategy, Ottawa said that mines can take up to 25 years to become operational and the federal government has acknowledged that red tape is part of the problem.
Mr. Wilkinson said the government is working on devising a public dashboard system that will better integrate the federal and provincial environmental assessment systems, and that should allow the public to track the progress of permits for sizable resource projects in real time. That should bring increased attention to projects that are dragging on, and put a greater onus on the federal and provincial governments to identify ways to expedite the process.
“The intent is to better integrate with the provinces and to shrink timelines in a manner that does not impact the protection of the environment, which is the point of all of these processes. And certainly that does not derogate from fulfilling our constitutional obligations to Indigenous communities,” Mr. Wilkinson said.
While Ottawa will have less power to regulate resource projects, it has been clear it will continue to assert its jurisdiction stringently where appropriate. Mr. Wilkinson said the government will continue to be involved in regulating Ontario’s undeveloped Ring of Fire nickel project in the province’s far north, where the environment and Indigenous rights are front and centre.
Niall McGee