One of the Trudeau government’s election promises was to “modernize” the National Energy Board (“NEB”). Canada convened an Expert Panel to make recommendations that would inform the process. The Expert Panel released its report last month.
The Panel had some harsh words for the NEB, saying that it “had fundamentally lost the confidence of many Canadians.” The Panel identified a number of reasons why this has happened, including that:
- NEB hearings have become a de facto forum on broad energy and climate issues, and the NEB has been left to decide on them in a policy vacuum;
- The NEB is dominated by people with a background in the energy industry, particularly as a result of the requirement that Board members live in Calgary;
- NEB decision-making lacks transparency;
- Public participation in NEB processes in constrained and favours well-resourced proponents; and
- Cabinet’s deliberations are confidential, and it does not give reasons for rejecting or approving projects.
The Panel viewed its recommendations as so far reaching that it suggested that the NEB should be renamed the “Canadian Energy Transmission Commission” (“CETC”).
One of the Panel’s most notable recommendations was to adopt a two-stage approach to decision-making, including:
- A one-year assessment by the federal cabinet of whether a project, in broad strokes, is in the “national interest.” The Panel felt that the “public interest,” the current standard, did not give enough weight to constitutionally-protected Aboriginal and treaty rights.
- A two-year joint technical review and environmental assessment by the CETC and the Canadian Environmental Assessment Agency.
The Panel recommended that consultation with Indigenous peoples start at the beginning of the decision-making process, rejecting the Crown’s current approach, which is to consult (if at all) only after the NEB makes its decision or recommendations.
One of the most controversial questions before the Panel was whether the federal cabinet or the NEB should have the final say on whether to approve projects. The Panel came down on the side of cabinet, arguing that it is a political decision rather than the quasi-judicial application of specific rules.
The Panel called on Canada to establish a nation-to-nation relationship with Indigenous peoples in determining energy strategy, but did not get into the nitty-gritty of what that would look like. The Panel observed that Crown consultation under NEB processes suffered from an acute lack of clarity and accountability, but did not jump into the fray surrounding whether the NEB is required to assess the adequacy of consultation. The Panel’s main recommendations were to:
- Create an Indigenous Major Projects Office to design consultation processes; and
- Specify that the Major Projects Management Office has the duty to carry out consultation.
How workable is the two-stage approach?
At first glance, the two-stage approach sounds like a sensible way to weed out bad projects before millions of dollars and countless hours are spent on a review. However, there is a tension between the Expert Panel’s statements that the first stage would be in broad strokes and that the national interest must give appropriate weight to impacts on Aboriginal and treaty rights. How can the cabinet meaningfully take Aboriginal and treaty rights into account without, at a minimum, having a clear understanding of:
- What rights may be potentially affected, including the strength of claim of asserted rights;
- What the potential impacts on those rights are;
- What would be appropriate accommodation measures; and
- Whether any infringements are justified.
This seems to call for a pretty detailed assessment. Given that the first stage is supposed to take only one year, consultation with Indigenous peoples would have to be quite intense. The result would be that cabinet would base its decision on a detailed understanding of Indigenous issues and a high-level understanding of all other issues. It’s unclear what exactly the Expert Panel envisions in practical terms.
How does Indigenous consent fit into the process?
The Expert Panel spoke approvingly of the United Nations Declaration on the Rights of Indigenous Peoples, including Article 19, which requires Indigenous peoples’ free, prior and informed consent in all matter that affect them. But unlike the expert panel that reviewed federal environmental assessment processes, the NEB Expert Panel doesn’t specify whether Indigenous peoples’ consent should be required, and if so, where it would fit into the decision-making process.
As consultation and the assessment of impacts on Aboriginal and treaty rights would happen in the first stage, it seems logical that this would be the place to ask for Indigenous consent. It also seems reasonable that Indigenous peoples should be able to withdraw or modify their consent based on any new information that arises during the detailed project review and environmental assessment in the second stage. Does this mean Indigenous peoples would be asked for their consent again at the end of the second stage?
Another question is whether the decision to withhold consent is reviewable, and by whom? The environmental assessment Expert Panel recommended that such decisions be reviewed by a review panel struck by the Impact Assessment Commission, with a right of appeal to the federal cabinet. Is the decision to withhold consent a matter of administrative law that should be decided by the courts, a decision requiring technical expertise that should be decided by an administrative decision maker, or a political question that should be decided by the cabinet?
What happens next?
Canada is accepting comments on the Expert Panel’s report until June 14, 2017. After that, the process of amending the NEB Act will presumably be set in motion. We have yet to see an indication from Canada what it has in mind, including how far it will go in adopting the Expert Panel’s recommendations.