Ottawa is getting a warning from veteran proponents of Western Canadian energy projects that it needs to make sweeping changes to speed up its regulatory processes, if it hopes to build the infrastructure needed to meet national climate commitments and compete in a low-carbon economy.
The call is delivered in a report titled Future Unbuilt, being released on Thursday by the Business Council of Alberta, which assembled a task force of representatives from companies, organizations and Indigenous groups with experience trying to push major projects through environmental assessments.
Its dozens of recommendations include calls to set firmer timelines for federal regulatory decisions, defer more often to provincial agencies deemed to apply comparable regulatory standards and establish clearer processes for consulting with Indigenous communities. It also recommends minimizing third-party interventions by people not directly affected by the projects under consideration, and setting up a new body to co-ordinate permitting decisions across federal departments.
In an interview, Business Council president Adam Legge said the report was prompted by a belief that with existing regulatory processes, it would be impossible to build the clean-energy infrastructure needed to meet Canada’s greenhouse-gas emissions targets, including a 40-per-cent reduction from 2005 levels by 2030.
Mr. Legge also argued that faster project approvals are key to competing with the United States for low-carbon investment. While Canada can’t match the hundreds of billions of dollars in subsidies that President Joe Biden’s administration has committed through the Inflation Reduction Act, he said, it has had a regulatory advantage because processes in the U.S. are even slower. But that could be reversed because of emerging efforts in Washington to dramatically accelerate energy permitting.
“If they get their approval process streamlined better than ours, they’ll not only have the capital and the incentives side, but they’ll have the regulatory side and Canada will have no competitive advantage after that,” Mr. Legge said.
The report is likely to be met with suspicion by environmental groups, since companies involved in crafting it are primarily in the oil-and-gas sector – including Shell Canada, ARC Resources, TC Energy and Enbridge. It specifically mentions pipelines for liquefied natural gas among investments that need to be accelerated, effectively taking the position that LNG fits into decarbonization plans. And Mr. Legge acknowledged that the proposed changes would stand to benefit oil-and-gas projects in general.
The argument for overlooking that possible motivation is that those companies have as much experience as anyone in navigating regulatory processes that will now be faced by proponents of major projects needed to decarbonize existing industry and build new low-carbon sectors.
That includes the build-out of carbon-capture technology, which is of particular interest to an oil-and-gas sector trying to prove it can be more sustainable; it also ranges from hydroelectricity and large-scale wind and solar projects, to energy storage, to battery-material mining and hydrogen production.
The government has itself publicly acknowledged that it needs to move faster on approvals, or risk losing clean-economy investments. Its 2022 fall economic statement committed $1.3-billion to increase regulatory capacity across various agencies and departments. And Natural Resources Minister Jonathan Wilkinson has been spearheading an effort to find regulatory efficiencies.
Mr. Legge said his organization was encouraged by Mr. Wilkinson to put forward proposed solutions, and that the government has been receptive to the Business Council’s recommendations.
As for what those recommendations would involve, many of them relate to the work of the federal Impact Assessment Agency (IAA), which conducts reviews of major projects under processes established in 2019 through Bill C-69.
While that legislation establishing a new impact-assessment process is still being challenged in court by the Alberta government, which contends that it’s too expansive and restrictive toward energy projects, the report is premised on it remaining in place. And Mr. Legge said he has seen some causes for encouragement about its interpretation.
That includes a willingness by the IAA to substitute comparable provincial assessment processes for the federal one – something that happened with this year’s approval of Cedar LNG, a gas export facility in British Columbia.
The report calls for more such agreements to be struck, although it’s unclear which provinces other than B.C. would be considered by Ottawa to have strong enough regimes in place. (Alberta is notably one of the only provinces not to have signed on for new federal-provincial working groups meant to facilitate that sort of co-operation.)
The Business Council also wants some significant tweaks to C-69. Among them would be reintroducing the concept of legal standing, which would set parameters for third-party intervention that it complains is bogging down reviews with frivolous complaints and information requests.
It’s calling for a range of measures to both strengthen and expedite Indigenous consultations – including clearer definitions and guidelines for engagement, centralization of consultations currently spread across federal departments, and financial mechanisms to support Indigenous equity in projects.
It also wants less discretion for politicians – clearer criteria for which projects are large enough to be sent for impact-assessment reviews, and an end to ministers extending deadlines once those reviews are sent back to them for final decisions.
And it wants to speed up all the regulatory decisions that happen across federal departments after impact assessments are done, and on smaller projects that aren’t part of the impact-assessment process in the first place. Among other things, that would mean firmer enforcement of timelines and less duplication, partly through a new federal office to oversee this whole permitting stage.
In one instance, the report is more specific than elsewhere – calling out the Department of Fisheries and Oceans, which has regulatory jurisdiction anywhere with waterways, for slowing things down and needing higher standards.
For the most part, it suggests that Ottawa needs to seize on its climate imperatives to broadly change ways that it addresses other environmental considerations.
Mr. Legge contended this doesn’t necessitate tipping the balance away from high standards that are supposed to be advantages for Canada, as it competes internationally to attract companies and investors increasingly setting sustainability goals.
“Nobody is suggesting that any changes to the system should undermine environmental protections,” he said. “We should just do things faster.”
Adam Radwanski