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Former Xeni Gwet'in First Nations Chief Roger William stands at the edge of Fish Lake September 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.


The energy and mining industries are applauding the Harper government's plan to dramatically shrink the federal oversight of proposed natural resource developments and hand over much of the responsibility to provinces.

But environmental groups worry the government is preparing to abdicate its responsibility for environmental protection.

Natural Resources Minister Joe Oliver is due 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.

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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.

Executives from the oil and mining sectors say efforts to end current duplication and to streamline the review process will improve the economics of capital-intensive projects and help attract investment to Canada.

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 limited 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 "answer the questions one time," said Chris Seasons, president of Devon Canada.

Many environmentalists acknowledge the current assessment process needs improvement but say the looming changes go too far and threaten to severely limit government oversight of development.

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"Their policies are straight out of the 1950s," said Devon Page, executive director of environmental law group Ecojustice. "It's a bizarre reversal: At a time when most countries in the world are strengthening environmental laws, Canada is rolling them back."

Mr. Page said handing assessments to provinces amounts to a de facto slashing of environmental standards, pointing to the British Columbia recommendation for approval of the Prosperity mine, which the federal government rejected.

"The current laws the provinces have won't ensure effective environmental assessment," he said. "This is about turning environmental assessment into a rubber stamp."

Those who work with industry, however, have a very different view. Shawn Denstedt, a Calgary regulatory lawyer with Osler, Hoskin and Harcourt LLP, said "Alberta's legislation is arguably more strict than the federal government's."

Recent years have also seen substantial harmonization in the environmental assessment processes between provinces, he said. "They're largely the same across the country now," he said.

"In respect of areas where provinces have specific expertise, like energy in Alberta or potash in Saskatchewan, to delegate authority to them makes some sense."

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Many questions remain, however, including what threshold Ottawa will employ to decide what's a large enough project to merit federal involvement, and what criteria will be used to accept that provinces have the ability to conduct environmental assessments on their own.

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 signaling to businesses that reviews would not be unnecessarily delayed.

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.

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"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."

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 super-tanker 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.

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.

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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 last 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.

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.

With a file from Adrian Morrow and Karen Howlett.

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