Federal Impact Assessment Act hobbling capital investment and resource development

By Catherine Brownlee and Mike Martens

Catherine Brownlee is President of the Alberta Enterprise Group. Mike Martens is President of the Independent Contractors and Business Association (ICBA) Alberta.

Canada’s economy and its future prosperity are in jeopardy, no thanks to the federal Impact Assessment Act or Bill C-69.

Even with a global energy crisis and the world pleading for Canada’s responsibly and sustainably produced natural resources, Canada, according to the Organization for Economic Co-operation and Development, is on track to have the worst performing economy of the G20 over the next 10 years.

Perhaps this dismal forecast reflects the regulatory uncertainty, increased red tape, and resource opposition codified in Bill C-69. Most disturbingly, as a country, we can no longer make the promise that the next generation will be better off than we are — unless things change significantly.

That is why our organizations — the Alberta Enterprise Group and ICBA Alberta — are in the Supreme Court of Canada, supporting the Government of Alberta and almost all other provinces and territories in their fight against the federal government’s Impact Assessment Act.

Canada was already struggling to approve resource development projects before 2019, when the Act came into force; now it is even worse. 

This is most apparent in the case of Liquid Natural Gas. The U.S. and Canada stood together on the starting line in 2013, both considering how to launch an LNG industry in their respective countries.

A decade later, the U.S. now stands as the largest exporter of LNG in the world, while Canada remains at least two years away from exporting any measurable volume of LNG.

In the time Canada took to approve and build one LNG export facility — LNG Canada in Kitimat, B.C. — the United States approved and built seven LNG export facilities, with five more under construction and an additional fifteen approved.

Canada has done such a thorough job of saying “no” and turning away capital and talent through regulatory uncertainty, red tape, and resource opposition — $150 billion in cancelled energy projects alone since 2017 — that two years ago, the World Bank ranked Canada 64^th in the world in the time it takes to approve a major construction project.

Furthermore, in Canada, in every year since 2014, outbound investment has exceeded inbound investment. This has had a very negative impact on small and medium sized businesses — including our members — who provide goods and services required by major projects.

Legislation creates regulatory duplication and uncertainty

What precisely is it about the federal Impact Assessment Act that discourages capital investment and resource development?

The federal Impact Assessment Act or Bill C-69 replaced a streamlined National Energy Board with the bureaucratic multi-layered Canada Energy Regulator (CER), and the narrow-scoped Canadian Environmental Assessment Agency with the broad-scoped Impact Assessment Agency.

In addition, the Act essentially institutionalizes jurisdictional duplication and red tape. For example, a project may have to go through both a provincial review as well as a federal assessment; time limits for review may be suspended at the discretion of the CER, while stakeholder participation is expanded — meaning one no longer needs to be directly affected by a project, or even be in the affected provinces, to participate in the process.

These changes, along with expanded discretionary practices, makes the major project approval process both vague and uncertain, in terms of the criteria to be applied and the time it will take to get a decision.  

Investors can be forgiven for thinking that Canada is focused on entrenching regulatory gridlock with the never-ending demands it places on project proponents. Thus, for investors, the risks are too high and the uncertainty too great; meaning, Canada is a bad prospect for investment.

Canada’s long-term prosperity is at risk if investments are not made today for developing our incredible resources and improving our infrastructure. 

Of course, investment should not come at the cost of a healthy environment. We believe we can do both. But robust regulations do not have to mean lengthy and uncertain timelines for assessments and project reviews, or unreasonable environmental and social requirements bound by sticky layers of red tape.

Indeed, the current Impact Assessment Act puts everything — environment, social, and governance issues — ahead of economic or employment benefits, rather than weighing the trade-offs carefully.

If we wish to establish a framework to strengthen Canada’s economy and future prosperity, then we need a better development regulatory process. This would be a process that appropriately balances the care for the environment we all want with the economic and resource development we need within appropriate constitutional boundaries to ensure prosperity now and for the future.

That is why we are standing in front of the Supreme Court of Canada, supporting the Government of Alberta and almost all of the other provinces and territories in opposing this legislation.

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