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Report on Business Despite Alberta’s objections, Ottawa asserts environmental-protection legislation is constitutional

Ottawa is asserting its right to regulate greenhouse-gas emissions from oil sands projects under its new impact assessment regime despite the objections from Alberta Premier Jason Kenney.

Under the Liberal government’s new environmental assessment law, Ottawa would have the right to assess in situ oil sands projects that use steam and solvents to extract crude from underground, but would provide an exemption because the province has a legislated cap on GHG emissions from the oil sands. The cap was contained in legislation enacted by the previous Alberta NDP government, but the NDP did not pass regulations that will be needed to enforce it.

On Wednesday, the federal government spelled out which proposed projects would be subject to review under the Impact Assessment Act, a hotly contested bill that will overhaul the way Ottawa approves major resource projects. They include oil sands projects – though the non-mining ones would be exempt – as well as large nuclear projects, inter-provincial or international pipelines and transmission lines, and offshore wind developments that have more than 10 turbines.

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The bill is now before a Senate committee that will hear on Thursday morning from Premier Kenney as well as federal Environment Minister Catherine McKenna and Natural Resources Minister Amarjeet Sohi.

Premier Kenney is pledging to roll back much of the climate-change policy enacted by his NDP predecessor Rachel Notley. While he opposes the cap, the Premier said Wednesday that he is not prepared to rescind it because emissions are expected to remain well below the 100-megatonne limit until late in the next decade. However, he served notice that he would battle any federal intrusion on provincial ownership and jurisdiction over resources.

"The federal government has zero constitutional authority to bigfoot in here and pretend that they can regulate in situ oil sands development,” Mr. Kenney told reporters Wednesday.

But he added that the “whole question of the emissions cap is academic because we’re nowhere close to hitting it. So for us, it’s not a fight that we’re going to get into at this point.”

Mr. Kenney has promised several legal battles aimed at the federal government. In addition to Bill C-69, he also plans to challenge the constitutionality of Bill C-48, which would ban tanker traffic off B.C.’s northern coast, and the federal carbon tax. He’s also facing a lawsuit, filed by B.C. on Wednesday, over his decision to proclaim legislation that would allow Alberta to cut off oil shipments to British Columbia in retaliation for opposition to the Trans Mountain pipeline expansion.

The Liberal government says the legislation provides greater environmental protections and a stronger voice for Indigenous communities in reviewing resource projects that affect them, while federal and provincial Conservatives echo oil industry complaints that it will kill development and jobs.

The project list “covers all major projects within federal jurisdiction that pose significant environmental risk, and is one of many tools to ensure good projects can move forward in a timely and transparent way that protects the environment, rebuilds public trust and strengthens our economy,” Ms. McKenna said in a release.

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Environmentalists accused the government of pandering to industry concern by exempting in situ oil sands projects. Even with a cap, emissions from the oil sands would grow by more than 40 per cent from 2017 levels; Canada is committed to cut its overall GHGs by 30 per cent below 2005 levels.

“The proposed project list was written by [the Canadian Association of Petroleum Producers],” said Stephen Hazell, a lawyer with Nature Canada. “Not only does it ensure that no in situ projects are assessed, [but that] fewer pipelines and fewer coal mines will be assessed due to higher thresholds.”

However, CAPP president Tim McMillan said any effort by Ottawa to assert jurisdiction over the in situ oil projects is a step backward. “We were worried the federal government was going to politicize the bill … and unfortunately they’ve done just that,” Mr. McMillan said. He said CAPP opposes any change that would move assessment of oil or pipeline projects into an Impact Assessment Agency and away from the existing industry regulator, the National Energy Board.

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