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Former Xeni Gwet'in First Nations Chief Roger William stands at the edge of Fish Lake Sept. 10, 2010 near Williams Lake, B.C. William and other members of his first Nation are trying to stop the Fish Lake from becoming a tailings pond.

John Lehmann/The Globe and Mail

The Harper government is about to dramatically shrink the federal oversight of proposed natural resource developments, handing over environmental reviews for many projects to the provinces and cutting back the number of smaller construction projects that are subject to any environmental assessment.

Natural Resources Minister Joe Oliver is expected to unveil a sweeping legislative plan on Tuesday that will focus Ottawa's role in environmental assessments to projects it deems to be of national significance.

Since taking office as a rookie minister last summer, Mr. Oliver has promised to streamline and overhaul Ottawa's environmental assessment process, which the government insists is too cumbersome, duplicative and subject to tactical delaying efforts by environmental groups who are determined to block development.

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More broadly, the move reflects Prime Minister Stephen Harper's vision of proper federal and provincial roles, in which Ottawa is far less active in areas of provincial jurisdiction like natural resource management, environmental protection and health policy.

Mr. Oliver's announcement in Toronto puts some flesh on the promise contained in the March 30 budget that Ottawa would streamline the environmental assessment process to provide more timely reviews of major resource projects. Critics have already warned that the government is prepared to rubber-stamp resource developments regardless of their environmental impact even as it works to demonize opponents as "radical" and "foreign funded" groups that are working to undermine the national economic interest.

Under the proposed legislation, Ottawa would concentrate its effort on environmental assessments of "major economic projects," according to background information obtained by The Globe and Mail. Provinces will set their own level of oversight for smaller projects.

It was unclear how federal and provincial governments will determine which projects require federal assessment and which require only provincial consideration, though those that cross provincial boundaries will remain federal matters.

Saskatchewan Premier Brad Wall, who leads a province that has seen a boom in mining and other resource extraction projects in recent years, said the new policy would eliminate unnecessary duplication between federal and provincial regulation efforts.

"We want to make sure we have a rigorous environmental assessment process," he said. "But we don't think that means we need two. This is welcome news and we thank the federal government for doing this."

Mr. Wall said both he and other premiers had been asking Mr. Harper for such a change. Streamlining these processes, he said, could help attract new investment by signalling to businesses that reviews would not be unnecessarily delayed.

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He said it was appropriate for the federal government to reserve the right to undertake environmental assessments in some situations, such as where a project could affect more than one province. For instance, he said, Saskatchewan's government wants to protect its lakes, some of which lie downwind and downstream from Alberta's oil sands.

Ontario Premier Dalton McGuinty also reacted to the new policy on Tuesday.

"If there is a way for either one of us to take on a responsibility that does not compromise our heavy responsibility to protect the environment for ourselves and our families, then we are open to that," Mr. McGuinty told reporters.

"Having said that," he added, "I have yet to see specifics that are being put forward by the federal government."

Environmental groups worry the government is using the excuse of streamlining the process to gut the regulations and abdicate the federal role for environmental oversight.

"The goals are reasonable," said Stewart Elgie, a lawyer and chair of the Sustainable Prosperity Institute at the University of Ottawa. "The problem is that their solutions go well beyond what is needed and could undermine the integrity of the environmental assessment process."

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Ottawa will also impose strict deadlines on the review of projects, ranging up to two years from the time a proponent files the project plan. Mr. Elgie said the rigid timelines will make if difficult for regulators to complete proper reviews, especially if companies fail to file adequate information, as is often the case.

The government has said it will apply those timelines in the case of the proposed Northern Gateway pipeline, which would carry oil sands bitumen to the B.C. coast for export by supertanker to Asia. The highly controversial project is now being reviewed by a joint panel of the National Energy Board and Canadian Environmental Assessment Agency (CEAA), a process that could take three years or more.

Mr. Oliver has pointed to the Mackenzie Valley gas pipeline project as an example in which the environmental and social assessment became bogged down and lasted so long that the pipeline was no longer commercially viable by the time it was approved.

He also complained that a recently approved oil sands mine planned by France's Total SA took six years to work its way through the regulatory maze, though the company itself was responsible for much of that delay.

It remains unclear how Ottawa intends to ensure it meets its constitutional mandate to fully consult with first nations and to accommodate their concerns about resources projects. British Columbia Indian bands have vowed a court challenge to the anticipated federal approval of the Gateway pipeline project, arguing the current hearings are a sham because the Harper government is determined to proceed.

In the budget, the government said it would "enhance consultations" with aboriginal peoples.

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Ottawa also plans to centralize all environmental oversight in three agencies, rather than the 40 departments and agencies that can now have a say before any major project is approved.

The Harper government will also impose new financial penalties, ranging from $100,000 to $400,000, that will be imposed on individuals or businesses that violate environmental regulations. Currently, the federal government lacks the power to levy financial penalties under environmental law, short of laying criminal charges.

New Democratic Party MP Megan Leslie said the higher penalties will do little good because the government is gutting its enforcement capability within Environment Canada.

"Stiffer fines makes absolutely no sense if there isn't enforcement and monitoring and robust environmental assessment in the first place," Ms. Leslie said in an interview Monday night.

Mr. Oliver will also announce a 50-per-cent increase to pipeline inspections, "to safeguard the environment and identify pipeline issues before they occur," as background information stated.

Mr. Harper has been aggressively selling Canada on the international stage as a natural-resources superpower, with not just booming oil sands but also natural gas, electricity and mineral wealth to be developed and exported.

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The Conservatives have targeted natural-resource exports as a major priority. According to statistics provided by the government, the sector employs more than 760,000 workers across the country, with more than 500 new projects cumulatively valued at $500-billion planned over the next 10 years.

Pierre Gratton, president of the Mining Association of Canada, welcomed the planned legislation, and especially the effort to end duplication with the provinces. He added, however, that he expects Ottawa will continue to do assessment of projects in smaller provinces and territories, where governments don't have the capacity to meet federal standards.

Regulatory reform is "super important for Canada, in terms of competitiveness," said Travis Davies, spokesman with the Canadian Association of Petroleum Producers, which supports a move to shift reviews to provinces.

"We've got provinces here in Canada that have been doing very good regulatory work for a very long time – in the case of Alberta, for almost a century," he said. "We know we have good regulators in the west, and there's no reason why that's not going to help us have a more efficient system."

Even in the oil sands, however, the federal government has historically taken a limit role among many projects. Devon Canada, for example, was asked to answer federal questions only on the third phase of its Jackfish project. Jackfish uses oil wells, and not an open-pit mine, to extract crude, which limits its surface footprint.

Still, industry has often found dealing with the federal government to be an exercise in frustration. Companies welcome any move to deal with solely one regulator so they have to "answer the questions one time," said Chris Seasons, president of Devon Canada.

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With files from Nathan Vanderklippe, Adrian Morrow and Karen Howlett.

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