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Substitution under the Canadian Environmental Assessment Act A Report on the Evaluation of the Substitution of the National Energy Board Review Process for a Canadian Environmental Assessment Act Review Panel for the Emera Brunswick Pipeline Project The Canadian Environmental Assessment Agency February 2009 Table of Contents Executive Summary 1. Introduction............................................................................................................................. 1 1.1 Background, .................................................................................................. 2 1.2 Objectives ..................................................................................................... 2 1.3 Conduct of the Evaluation .................................................................................................. 2 2. Context ................................................................................................................................... 4 2.1 The Canadian Environmental Assessment Act ....................................................... 4 2.1.1 Track Decision..................................................................................................... 4 2.1.2 Referral to Minister.............................................................................................. 5 2.1.3 Panel Composition and Procedures ..................................................................... 5 2.1.4 Joint Review Panel............................................................................................... 5 2.1.5 Substitution .......................................................................................................... 6 2.2 The National Energy Board ............................................................................... 6 2.2.1 Members .............................................................................................................. 6 2.2.2 Public Hearings.................................................................................................... 7 2.2.3 Public Participation.............................................................................................. 7 2.2.4 Government Participation .................................................................................... 9 2.2.5 NEB and the Environment................................................................................... 9 2.3 Substitution in the Case of the Emera Brunswick Pipeline...................................... 10 2.3.1 Public Hearings................................................................................................... 11 2.3.2 Final Arguments and Reports ............................................................................. 12 2.3.3 NEB Reasons for Decision ................................................................................. 13 2.3.4 Differences with the Joint Panel Process ............................................................ 13 2.3.5 Participant Funding Program under the CEA Act .............................................. 13 2.3.6 Timeline of Events.............................................................................................. 14 2.4 Principal Expectations of Substitution ............................................................... 16 2.4.1 Expectations of the National Energy Board ........................................................ 16 2.4.2 Expectations of the Canadian Environmental Assessment Agency .................... 19 2.4.3 Participant Expectations of the Substituted Process............................................ 20 3. Evaluation ............................................................................................................................. 21 3.1 Conditions for Substitution ............................................................................. 21 3.1.1 Condition # 1....................................................................................................... 21 3.1.2 Condition # 2....................................................................................................... 22 3.1.3 Condition # 3....................................................................................................... 22 3.1.4 Condition # 4....................................................................................................... 24 3.1.5 Condition # 5....................................................................................................... 24 3.2 Analysis of Expectations and Findings .............................................................. 25 3.2.1 National Energy Board........................................................................................ 25 3.2.2 Canadian Environmental Assessment Agency.................................................... 29 3.2.3 Participants and Intervenors ................................................................................ 29 3.2.4 Federal Departments............................................................................................ 32 3.3 Considerations for the Future........................................................................... 33 3.3.1 Participation in a Quasi-judicial Process .............................................................. 33 3.3.2 Formality of Process ............................................................................................. 33 3.3.3 Federal Coordination ............................................................................................ 35 3.3.4 Panel Composition................................................................................................ 36 4. Summary of Key Considerations and Final Thoughts ................................................ 37 4.1 Key Considerations….……………………………………………………………………33 4.2 Final Thoughts...….………………………………………………………………………41 Executive Summary In November 2006, National Energy Board (NEB or the Board) hearings were substituted for a review panel in the environmental assessment of the Emera Brunswick Pipeline Project in New Brunswick. The NEB Review Panel Report was approved by the Governor in Council in May 2007 and the project was approved by the relevant regulatory authorities. The substitution of process, in this instance, was done on a pilot basis and has been evaluated in order to inform ongoing consideration of policy and operational issues associated with the substitution of a process for an environmental assessment by a review panel under the Canadian Environmental Assessment Act (CEA Act). In carrying out the evaluation, the Canadian Environmental Assessment Agency (the Agency or CEAA) has sought to determine, based on the results of the evaluation, how the substituted process specifically differed from the typical panel review, what worked well, and what would need to be considered before exercising the CEA Act’s substitution provisions on another project. The pilot was determined to be, in general, successful and provides a good illustration of what substitution as a tool may accomplish. Overall, the principal expectations of the parties to the pilot substituted process were realized, although some insufficiencies were noted, particularly with respect to informal opportunities for public participation. As well, the lack of direct involvement of the Minister of the Environment in the selection of panel members and in the establishment of the panel’s terms of reference created among some participants a perception of bias toward energy development and trade. This report provides valuable information on the initial use of the substitution provisions. The next step for the Minister of the Environment and the Agency is to discuss the findings in this report with the federal environmental assessment community and consider its implications on the future use of the substitution provisions of the CEA Act. Substitution Evaluation Report February 4, 2008 1 1. Introduction 1.1 Background In March 2006, the NEB, in consultation with Fisheries and Oceans Canada (DFO) and Transport Canada (TC), requested that the Minister of the Environment (the Minister) refer the assessment of the proposed construction and operation of a 145-kilometer pipeline between the Canaport Liquefied Natural Gas Facility at Mispec Point in Saint John, New Brunswick to the international border near Saint Stephen, New Brunswick (the project) to a review panel pursuant to section 25 of the Canadian Environmental Assessment Act (CEA Act). The NEB further requested that the review panel process be conducted by the NEB under section 43 of the CEA Act – the substitution provision. In May 2006, the Minister of the Environment wrote to the Chairman of the NEB approving the request for substitution, subject to a number of conditions which outlined how the substituted process would need to be conducted to meet the requirements of the CEA Act (outlined on page 20 of this report). The Chairman of the NEB committed to conduct the NEB public hearing process in such a way as to meet the Minister’s conditions. The NEB held public hearings on the project from November 6 to 20, 2006 and the NEB Review Panel issued its report on April 11, 2007. The federal government’s response to the NEB Review Panel Report was approved by the Governor in Council (GIC) in May 2007. The federal responsible authorities (the RAs – NEB, DFO, TC, and the Canadian Transportation Agency and Environment Canada who were identified as RAs later in the process) then determined that they could exercise their powers with respect to the project. These included permits and authorizations under the National Energy Board Act, the Canada Transportation Act, the Canadian Environmental Protection Act, 1999, the Fisheries Act and the Navigable Waters Protection Act. The substitution of the NEB review process for an environmental assessment by a review panel under the CEA Act in relation to this project (the substituted process) was the first use of the CEA Act’s substitution provisions and was undertaken on a pilot basis. The evaluation focused on the identification of facts associated with the substituted process, and not on the outcomes of the NEB review of the project. 1.2 Objectives The objective of the evaluation was to examine, in a fact-based manner, the substitution that took place in relation to the project. The results of this examination will contribute to policy and operational considerations with regard to the application of substitution provisions by the Minister of the Environment. To this end the evaluation examined: a. Whether, and if so how, the conditions for substitution were met? Substitution Evaluation Report February 4, 2008 2 b. What were the principal expectations of the substitution process? Were these expectations realized? If so, what key factors contributed to this success? If not, what key factors contributed to the situation? c. What additional process considerations can be identified based on the experiences of participants in the substituted process? 1.3 Conduct of the Evaluation The evaluation was conducted by the Agency and includes a general account of the pilot substituted process. The latter was developed with the cooperation of the NEB, through a fact-finding review of NEB proceedings. The review examined public documents related to the substituted process, as well as other NEB documents related to the project and NEB procedures. The evaluation also focused on assessing and reporting on whether the expectations of the parties involved in the substituted process were met. The expectations of the NEB and the Agency were outlined in advance of the process. In the case of the NEB, a discussion paper on substitution of NEB hearings for panel reviews under the CEA Act was written; and, with respect to the Agency, a letter from the President of the Agency was sent to the Chairman of the NEB outlining the conditions for the substituted process. The evaluation also included a survey of parties who participated in the substitution. The surveyed parties consisted of participants, such as public stakeholders and Aboriginal parties, among others, who either made oral statements, submitted written comments or acted as intervenors in the public hearing. The results of these interviews have been used to supplement the fact-finding information. A third party external contractor was hired to conduct structured interviews using questions developed in consultation with the Agency. The results of the survey were analysed by the Agency. The interviews explored such matters as: whether interested parties had access to the appropriate information to help them to understand the project and its potential impacts; whether in their view there was an opportunity for meaningful participation in the process; whether the means and requirements of participation were clear and understood; and whether they believe that the issues of concern to them were well considered as part of the process. A survey of federal government environmental assessment and regulatory authorities was also undertaken. The purpose of this element was to determine facts associated with the participation of federal authorities in the substituted process, as well as the views of the implicated departments on the effectiveness of the substituted process. Where appropriate, comparisons are made to the processes of other comprehensive studies, panel reviews, and joint review panel assessments. Substitution Evaluation Report February 4, 2008 3 2. Context 2.1 The Canadian Environmental Assessment Act The Canadian Environmental Assessment Act (CEA Act) requires a federal authority (such as a Cabinet Minister, a federal department or agency, or a parent federal Crown Corporation) to ensure the conduct of an environmental assessment of a project under circumstances where a federal authority exercises a power or performs a duty or function as follows: When the federal authority is the proponent of the project. When the federal authority provides certain forms of financial assistance to the proponent, for the purpose of enabling the project to be carried out in whole or in part. When the federal authority sells, leases or otherwise disposes of federal lands or interests in them, or transfers control of those lands or interests to a province, for the purpose of enabling the project to be carried out in whole or in part. When the federal authority issues certain permits or licenses or grants certain approvals for the purpose of enabling the project to be carried out in whole or in part. A federal authority that exercises any power or performs any duty or function as set out above is known under the CEA Act as the responsible authority. The CEA Act provides for four types of environmental assessment processes: screening (including class screening), comprehensive study, mediation, and panel review. Assessments typically commence as screenings, or where set out in regulation, a comprehensive study. If at any time the Minister of the Environment is of the opinion that the project may cause significant adverse environmental effects, or public concern warrants, the Minister may choose to refer the assessment to a review panel for examination. Under the CEA Act, only the Minister of the Environment may order an assessment by a review panel. The CEA Act provides a number of mechanisms by which a project may be referred to the Minister for a review panel. The two most commonly used mechanisms, track decision and referral to Minister, occur based on section 21.1 and section 25 of the CEA Act, and are described below. 2.1.1 Track Decision Section 21 requires responsible authorities undertaking a comprehensive study to provide the Minister of the Environment with a report regarding the scope of the project, factors to be considered, public concerns, and the potential of the project to cause adverse environmental effects. The report also provides an assessment of the ability of a comprehensive study process to address issues relating to the project, and a recommendation to the Minister as to whether the assessment should continue as a comprehensive study, or if it should be referred to a review panel. Under Section 21.1, Substitution Evaluation Report February 4, 2008 4 the Minister, using the track decision mechanism, can decide whether the assessment should continue as a comprehensive study, or if it should be referred to a review panel . 2.1.2 Referral to Minister Section 25 of the CEA Act allows responsible authorities to request that the Minister of the Environment refer projects to review panel where they are of the opinion that the project may cause significant adverse environmental effects, or public concern warrants assessment by a review panel. This request can be made at any time during the assessment, and does not require preparation of a specific report, such as is the case for referrals with the track decision mechanism under section 21.1. Moreover, the use of section 25 to request the referral of an assessment to a review panel could be applied to a screening type assessment, whereas the track decision mechanism is only used for comprehensive studies. 2.1.3 Panel Composition and Procedures A panel review is conducted by a group of experts who are selected on the basis of their knowledge and expertise, and appointed by the Minister of the Environment. The Minister also appoints one of the panel members as chairperson. The review panel must ensure that the information required for the assessment is obtained and made available to the public. Their role is to review and assess, in an impartial and objective manner, a project with likely significant adverse environmental effects or public concern. The panel is required to hold hearings in a manner that offers the public an opportunity to participate in the assessment. It must also prepare a report setting out the rationale, conclusions and recommendations of the panel relating to the environmental assessment of the project, including any mitigation measures and follow-up programs, and a summary of any comments received from the public. The review panel must then submit the report to the Minister and the responsible authority. The responsible authority must respond to the report with the approval of the Governor in Council (GIC). After taking into consideration the report submitted by the review panel, the responsible authority takes a course of action based on the panel’s recommendations and in conformity with the approval of the Governor in Council, on whether to exercise, or not, a power or perform a duty or function that would permit the project to be carried out in whole or in part. Review panels encourage an open discussion and exchange of views, as well as inform and involve large numbers of interested groups and members of the public. Individuals may present information, concerns and recommendations at public hearings. A panel allows the proponent to present the project to the public and explain the projected environmental effects, and provides opportunities for the public to hear the views of government experts about the project’s potential environmental effects. 2.1.4 Joint Review Panel When a project requires a decision from the federal government and another jurisdiction (for example, a province or the National Energy Board) the Minister may enter into an Substitution Evaluation Report February 4, 2008 5 agreement with that jurisdiction to conduct the environmental assessment through a joint review panel. The agreements that govern a joint review panel must be signed by both responsible Ministers. The agreement, which establishes the panel, also sets out the rules for conducting the joint review process, the procedures for appointing panel members and the panel's terms of reference. For joint review panels, the Minister of the Environment appoints or approves the appointment of the Chairperson of the panel, appoints at least one of the other panel members and fixes or approves the terms of reference of the review. In many cases, where a joint review panel is held with a quasi-judicial body, such as the National Energy Board, the practices of the quasi-judicial body will be adopted to govern the proceedings. In some cases a quasi-judicial body has altered their rules of practice to accommodate the more flexible procedures provided for under the CEA Act. 2.1.5 Substitution The Minister of the Environment, as an alternative to a review panel, has the discretionary power, pursuant to section 43 of the CEA Act, to approve the substitution of another federal review process used for assessing the environmental effects of projects, such as that of the National Energy Board or a body established under a land claims agreement, for an environmental assessment by a review panel under the CEA Act. The conditions for considering substitution, outlined in section 44 of the CEA Act are: • the process includes consideration of factors required pursuant to subsections 16(1) and 16(2) of the Canadian Environmental Assessment Act; • the public are given an opportunity to participate in the assessment; • a report is submitted to the Minister of the Environment and is also published; and • any additional criteria established by the Minister of the Environment. 2.2 The National Energy Board The National Energy Board (NEB or the Board) is an independent federal agency established in 1959 by the Parliament of Canada to regulate international and interprovincial aspects of the oil, gas and electric utility industries. The purpose of the NEB is to promote safety, environmental protection and economic efficiency in the Canadian public interest, within the mandate set by Parliament, in the regulation of pipelines, energy development and trade. These principles guide NEB staff in carrying out and interpreting the organization's regulatory responsibilities. The NEB is accountable to Parliament through the Minister of Natural Resources Canada. 2.2.1 Members Under the National Energy Board Act (NEB Act), up to nine permanent members of the Board (including the Chairperson and Vice-Chairperson), and up to six temporary members can be appointed at any given time. Members are appointed by the Governor in Council, and are initially appointed for a seven-year term. Reappointment may be for seven years or to the age of seventy. Members typically have a wide range of government and energy industry experience, and are subject to terms and conditions set out by the Substitution Evaluation Report February 4, 2008 6 Governor in Council to ensure their role as a member does not create a conflict of interest. A member shall not, during their term of office, accept or hold any office or employment inconsistent with the member’s duties. 2.2.2 Public Hearings The Board operates as a court of record, in a quasi-judicial fashion that is very similar to a civil court. Its powers include the swearing-in and the cross-examination of witnesses, and the taking of evidence. Before a hearing, individuals, interest groups, companies and other organizations are given an opportunity to register as intervenors or interested parties, and in this way can actively participate in the process. The Board deals with approximately 750 applications annually. For major applications, the Board holds public hearings where applicants and interested parties can participate. These hearings can be either written or oral proceedings and are held at locations across Canada where there is a particular interest in the application and which will be most affected by the Board's decision. Normally, a panel consisting of three Board members is assigned to hear applications. 2.2.3 Public Participation Members of the public are permitted to participate in the hearing in three ways: filing a letter of comment, providing an oral statement, or gaining intervenor status. Letter of comment A letter of comment may be filed with the Secretary of the Board when someone wishes to make their views known to the Board, but does not wish to directly participate at the oral phase of the hearing. The letter of comment states the writer’s views on the application and should be accompanied by any facts or information that supports those views. Letters of comment are taken into consideration in the Board’s proceedings, even though it is not sworn evidence and may not be given the same weight as other evidence in the proceedings, especially if the content is challenged. Once filed, the letter becomes a public document. The Secretary of the Board provides copies of the letters of comment to all parties to the proceeding. An applicant, or any other party, may formally reply to the letter by serving a letter of response. In this case a copy is filed with the Board’s Secretary and also becomes part of the public record. People who file a letter of comment do not receive correspondence from the other parties involved in the review, and are not permitted to question parties or cross-examine intervenors. Oral presentations Oral statements may be presented by interested persons who do not wish to become intervenors, but who still wish to present their views to the Board. Oral presentations are made “under oath or affirmation” and are subject to questioning by the Board, the applicant, or other parties, as permitted by the Board. As a general rule, only parties Substitution Evaluation Report February 4, 2008 7 “adverse in interest” (opposed to the project) may seek leave to question oral statement makers. Persons who make oral statements are not required to file anything in writing at the time of making their statements. Oral statement makers do not receive the application and are not entitled to make information requests, to cross-examine parties to the proceeding, or to provide final argument. The content of and argument given in any oral statement is not known by any parties prior to the oral portion of the hearing, unless that interested party has accompanied their request with a letter of comment. While the content of the information is not known ahead of an oral statement being made, any prejudice suffered by a party as a result of the content of an oral statement can be rectified by cross-examination. Intervenor status To participate as an intervenor in a public hearing, interested parties must send a letter, facsimile, or formal legal submission to the Secretary of the Board stating their interest to participate and a supporting rationale. A time limit for the filing of interventions is set in the hearing order. If a party is unable to show it would be affected by the Board’s decision, the Board may refuse to recognize the party as an intervenor in the hearing. However, the Board recognizes that many public groups, such as environmental associations, may raise issues relevant to the broad public interest of Canadians and such groups are frequently given intervenor status. It is not obligatory for an interested party to retain legal counsel in order to participate in a hearing. However, the NEB document, How to Participate in a Public Hearing, notes that because of the complexity of legislation involved and the quasi-judicial nature of NEB hearings, intervenors may wish to be represented by legal counsel. Intervenors are provided the right to be served with a copy of the application, to file evidence, to request information from various parties, to ask questions in the hearing, to submit a final argument, and to participate in other ways during the proceedings. Information sessions While it does not occur for every hearing by the NEB, information sessions may be held ahead of hearings, in order to inform members of the public on the NEB’s process and how they may become involved. These sessions are not for discussing the merits of the application, or for debating issues that should be considered in the hearings, rather they are for information purposes only. Consultation on list of issues Once the Board is satisfied that an application is complete, it issues a hearing order containing the procedures for the hearing. The order gives the location and date of the public hearing, and directions on procedures including the steps to be followed by the Substitution Evaluation Report February 4, 2008 8 applicant and intervenors, as well as any specific deadlines, such as the date by which intervention notices must be received. The Board issues a news release to announce the hearing, and the project proponent is required to advertise the hearings and basic information about the project. Attached to the hearing order, in most cases, is a list of issues that are to be dealt with at the hearing, as well as a list of the parties involved. The Board holds a consultation period on the list of issues, permitting parties to suggest additional relevant issues to be discussed at the hearing. 2.2.4 Government Participation In 2003, the National Energy Board launched an initiative to facilitate improved coordination and working relationships with other federal authorities involved in environmental assessments carried out within NEB processes. Subsequently, the Board created a new Federal Government Participant (FGP) role for federal authorities within the NEB hearing process. The objective of this role is to support federal authorities in meeting their CEA Act responsibilities, while protecting the integrity of the NEB process. The FGP role works in tandem with the Federal Environmental Assessment Coordinator under the CEA Act to improve the understanding and the participation of other departments in NEB hearings. The FGP role does not prevent departments from accessing all other participation options, including the provision of letters of comment, oral statements, and full intervenor status. While FGPs are considered parties to the hearing and included on the distribution of parties, they are not served with all documentation in a hearing, as much of it is not of relevance to them. Parties to the hearing are required to serve a FGP with information and cross-examination requests. The federal authorities may ask information requests of the applicant, but not other intervenors or government participants. FGPs are also permitted to make written submissions. The Board may ask questions of the FGP even when the FGP has not filed evidence, in order to determine whether the environmental evidence meets the FGP’s needs. The Board, the applicant and the intervenors may ask information requests on the FGP’s evidence. If the FGP objects to answering an information request, it is required to file a letter with the Board setting out the reasons for its objection. A FGP may be subject to cross-examination, but only if leave of the Board is received. 2.2.5 NEB and the Environment Even though not explicitly part of its legislative mandate and authority, the NEB nevertheless seeks to manage environmental issues throughout all phases of a regulated facility. The five main phases include the planning and application phase, the application Substitution Evaluation Report February 4, 2008 9 assessment and public hearing phase, the construction and post-construction phase, the operations and maintenance phase, and the abandonment phase. The NEB has approximately 20 environmental specialists deployed to teams throughout the organization. These specialists deliver environmental assessments, environmental inspections, audits of environmental management systems, lands administration, and landowner complaint resolution. Regulated companies are required to submit an environmental and socio-economic assessment as one part of a complete application. When the NEB receives an application, its staff assesses a range of issues related to the application, including environmental, socio-economic and land issues. The NEB fulfills its environmental assessment duties under the NEB Act, the Mackenzie Valley Resource Management Act, and the CEA Act. As stated earlier, for larger or more complex projects, the NEB will hold a public hearing to hear the views of the public. Joint panel reviews In the past, panel reviews under the CEA Act have often been integrated with the NEB’s public hearing process under the NEB Act. This integration occurs through projectspecific agreements between the two organizations, and typically, the general NEB rules of procedure are followed. The Minister of the Environment appoints one member to the review panel, who is appointed as a temporary member of the National Energy Board for the duration of the environmental assessment. The Minister also approves the appointment of another member of the NEB to act as the Chairperson of the joint review panel. 2.3 Substitution in the Case of the Emera Brunswick Pipeline In January 2006, Maritimes and Northeast Pipeline Management Ltd. submitted a project proposal to the Canadian Environmental Assessment Agency and the National Energy Board for the proposed construction and operation of a 145-kilometre pipeline between the Canaport Liquefied Natural Gas Facility at Mispec Point in Saint John, New Brunswick to the international border near Saint Stephen, New Brunswick (the project). The NEB notified potential federal and provincial authorities about the project, pursuant to the Regulations Respecting the Coordination by Federal Authorities of Environmental Assessment Procedures and Requirements under the CEA Act. The NEB, DFO and TC were responsible authorities (RAs) pursuant to the CEA Act for the environmental assessment (EA) of the project. Environment Canada and the Canadian Transportation Agency identified themselves as possible RAs for the EA. To assist in the EA process, Natural Resources Canada and Health Canada provided expert advice in relation to the project. Substitution Evaluation Report February 4, 2008 10 The project was also registered as an undertaking pursuant to the New Brunswick Environmental Impact Assessment Regulation under the New Brunswick Clean Environment Act. The New Brunswick Department of Environment and Local Government (NBDELG) administers this regulation and requires that an environmental impact assessment be carried out and approved by the Government of New Brunswick before the project can proceed. In a letter, dated January 19, 2006, the NBDELG indicated that they would participate in a harmonized assessment process with the NEB. This type of harmonization has occurred in the past for reviews of other pipeline projects. In those cases, the province participated either as an intervenor or in the government participant role, and the NEB ensured that their review encompassed the information requirements of the province. The NEB coordinated the EA process with all involved federal and provincial departments. The Agency was also involved in activities related to the project in its usual coordination role prior to the environmental assessment being referred to a panel review. During the hearings, the Agency administered the Participant Funding Program, allocating the financial assistance to eligible review participants. In March 2006, the NEB, in consultation with other federal authorities involved in the assessment, requested that the Minister of the Environment refer the assessment of the project to a review panel pursuant to section 25 of the CEA Act. The NEB further requested that the review panel process be conducted by the NEB under section 43, the substitution provisions of the CEA Act, as the NEB has a process and responsibility for assessing the environmental effects of a project under its enabling legislation. In May 2006, the Minister of the Environment wrote to the Chairman of the NEB approving the request for substitution of process, subject to a number of conditions that were subsequently agreed to by the NEB. The substitution arrangement was approved in order to allow the federal authorities involved and the Agency an opportunity to test the substitution provisions of the CEA Act on a pilot basis. During that same month, Maritimes and Northeast Pipeline Management Ltd. notified the NEB that Emera Brunswick Pipeline Company (the proponent) had taken over ownership of the project. 2.3.1 Public Hearings Public hearings were held as part of the NEB review of the project from November 6 to 20, 2006. In accordance with NEB hearing procedures, the public was invited to participate. Seventy-two parties registered as intervenors and three parties (Fisheries and Oceans Canada, Health Canada and Natural Resources Canada) registered as government participants in the hearing process. In addition, 184 letters of comment from the public were entered onto the record and oral statements were provided by 19 individuals, two of whom represented organizations in Saint John. The NEB panel considered these comments from the public. Substitution Evaluation Report February 4, 2008 11 Prior to the public hearings, the NEB held public information sessions to inform them of the process, and allow consultation on key guiding documents. These included public meetings on April 5, as well as on June 19 and 20, 2006 and a pre-hearing planning session on October 12, 2006. Additionally, two public consultation periods were provided to allow comments on the Environmental Assessment Scoping Document and the list of issues. The 33-day comment period on the Environmental Assessment Scoping Document ended June 7, 2006, while the period for comment on the list of issues was 25 days, ending on July 4, 2006. Application deadlines Those who wished to register as intervenors were required to do so by July 4, 2006, 25 days after the hearing order was issued, and roughly two months after the Minister of the Environment referred the project to a substituted review panel. Individuals and groups wishing to submit a letter of comment, or register to make an oral statement were required to file notice with the Board by September 12, 2006, 95 days after the hearing order was issued, and roughly four months after the notice of commencement was published. Several late applications to make an oral statement or provide a letter of comment were received. The Board used established criteria when considering whether to accept applications or letters of comment submitted after deadline. These criteria included whether the applicant for the late participation provided a justification for their interest in the application, a rationale for applying late, and whether any other party would be prejudiced by their participation. Based on these criteria, the Board allowed 4 of the 11 late applicants to participate. 2.3.2 Final Arguments and Reports Argument is the final stage of the hearing, and is where the applicant and intervenors state their views on the issues that have been discussed. The basic difference between evidence and argument is that evidence presents facts and argument presents conclusions based on the evidence. In this case, the Board accepted final arguments submitted in written form. The deadline for intervenors to file written arguments was December 15, 2006, after which the proponent had 7 days to file a rebuttal. The Board released its report on April 11, 2007, and recommended that the project be allowed to proceed to regulatory and departmental decision making, as long as the recommendations in the Board’s report were made part of the requirements of any approval by the NEB. The other responsible authorities, with the approval of the Governor in Council, responded to the recommendations contained in the NEB Review Panel Report on May 17, 2007. Substitution Evaluation Report February 4, 2008 12 2.3.3 NEB Reasons for Decision In fulfilling its obligations under the National Energy Board legislation, the NEB prepares a document outlining its reasons for decision. The Board releases the Reasons for Decision document to the applicant, all interested parties in the proceedings, and persons on the Board’s mailing list. The Reasons for Decision shall be issued before any required approvals by the Governor in Council. In addition, the Board issues a news release outlining its decision. The Board released its Reasons for Decision document to the public on May 31, 2007. 2.3.4 Differences with the Joint Panel Process Past panel reviews under the CEA Act have been integrated with the NEB’s public hearing process under the NEB Act where a project required review under both Acts. The hearing process used for the Emera Brunswick Pipeline proceeding was very similar to that used for the previous joint review panels. The primary differences, as noted in the Environmental Assessment Report, between a panel review carried out in an integrated manner with the NEB public hearing process and the substituted process for the Emera Brunswick Pipeline are: • all panel members are members of the NEB in the substituted process (rather than other federal and/or provincial appointees) and the Minister of the Environment did not appoint, nor approve the appointment of any of the panel members; and • the project was quickly referred to a panel review and a substituted process as opposed to undergoing a more extended EA track decision process which would have included a public consultation process on the proposed scope of the EA followed by the preparation and submission of a track recommendation report to the Minister of the Environment. 2.3.5 The Participant Funding Program under the Canadian Environmental Assessment Act The Canadian Environmental Assessment Agency administers a Participant Funding Program (PFP) to support individuals and non-profit organizations interested in participating in environmental assessments. This program exists for all comprehensive studies, panel reviews, and joint panel reviews conducted under the CEA Act, but does not extend to substituted panels. In the case of the substituted process for the assessment of the Emera Brunswick Pipeline Project, the Agency exceptionally agreed to administer the Participant Funding Program in order to allow for the pilot evaluation to take place, although the Board hearings were not a process under the CEA Act. An independent funding committee assessed applications for funding and awarded a total of $135,900 to six parties. The funds were to assist recipients in reviewing the application and in preparing for and participating in EA portions of the NEB proceeding. These parties were required to secure intervenor status, and this was facilitated by the Board. Substitution Evaluation Report February 4, 2008 13 Successful recipients of the PFP funding were announced on July 18, 2006 although some of the parties did not actually receive financial assistance until September. The deadline for intervenors to submit information requests to the proponent was August 15, 2006, before some parties received their funds. This required groups and individuals to file formal requests with the Board to extend the deadline for filing evidence, to allow time to hire consultants, and to have information requests prepared and submitted. On August 15, 2006, the Board extended the deadline for one group, the Friends of Rockwood Park, to file its evidence. For efficiency and to avoid confusion related to deadlines, the Board later extended deadlines for all intervenors to match those granted to the Friends of Rockwood Park. In light of this extension, the deadline for the proponent to file and serve its reply evidence was also extended. 2.3.6 Timeline of Events A summary of the key events and duration of process intervals is presented in Table 1. A more detailed table outlining the entire timeline of events in this process is presented in Appendix 2. Although some preliminary work by the NEB occurred before an environmental assessment was triggered, this analysis focused on timelines related to requirements of the environmental assessment process. Table 1: Key process events, dates, and time durations for the substituted process. Process Event Days from NOC Posting Date Establishment of the Canadian Environmental Assesment Registry (CEAR) for posting of the notice of commenement. 23-Feb-06 0 Letter sent to the Minister of the Environment recommending a substituted review panel (CEA Act section 25 referral). Letter includes the draft scope, confirmation of support from RAs and the province, and confirmation of participant funding from the Agency. 16-Mar-06 21 21-Mar-06 26 27-Mar-06 32 3-May-06 69 5-May-06 71 The Agency response letter to NEB's request for referral and substitution. Commitment from the NEB to the Agency regarding process requirements/conditions. Minister's decision on EA referral and substitution. Draft scoping document made available for public consultation (RAs and province consulted if scope changes significantly as a result of public comment or project updates). Substitution Evaluation Report February 4, 2008 14 The Agency Participant Funding Program (PFP) announced with 30-day application period. Complete section 52 application filed by Emera Brunswick Pipeline Company (EBPC). Consultation period on draft scoping document closes. NEB hearing order issued, including list of issues and the deadline (typically about 2 weeks) for registering as an intervenor or indicating intent to provide written or oral comments (is this typically 2 weeks as well?). Final scoping document issued. List of parties released. Public hearings start, including further information requests and oral hearings. Public hearings end. EBPC deadline to reply to intervenor final arguments/ close of written arguments. Panel report submitted to the Minister of the Environment (public release). Government response receives GIC approval. RAs take decisions on the EA. GIC EA decision published. NEB posts decision on the CEAR NEB releases Reasons for Decision document. GIC approval of NEB decision. 23-May-06 89 23-May-06 89 7-Jun-06 104 9-Jun-06 106 23-Jun-06 10-Jul-06 120 137 6-Nov-06 256 20-Nov-06 270 22-Dec-06 302 11-Apr-07 412 17-May-07 17-May-07 24-May-07 31-May-07 31-May-07 7-Jun-07 448 448 455 462 510 517 = Period represented by the substituted process Legend Federal Responsible Authorities (RAs) and Fedaral Authorities (FAs) Government of New Brunswick Proponent National Energy Board Canadian Environmental Assessment Agency Participant Deadline Public Consultation Minister/Cabinet/Governor in Council Responsible authorities are required to post the notice of the commencement of each environmental assessment under the CEA Act on the Canadian Environmental Assessment Registry Internet site (CEAR). This is a common milestone for all environmental assessments and has been used to calculate all subsequent time periods. Four time periods have been considered in this evaluation of the duration of process intervals: the time from the posting of the Notice of Commencement on CEAR to the time the assessment was referred to a review panel; the time from the referral of the assessment to a review panel to the release of the Review Panel Environmental Substitution Evaluation Report February 4, 2008 15 Assessment Report; the time from the release of the Review Panel Environmental Assessment Report to the release of the government response of the review panel environmental assessment report; and the overall process time, from the notice of commencement to the release of a government response to the review panel environmental assessment report. Figure 1 shows a basic timeline of events for a panel review, and the specific period in which the substituted process occurred. Although only part of the overall environmental assessment review process was replaced by the substituted NEB hearing, the evaluation examines the duration of all the relevant milestone periods. Figure 1: Basic timeline for steps in a panel review Period of process substitution Notice of commencement posted Assessment referred to a review panel Review Panel Environmental Assessment Report released Government response issued The substituted process resulted in the following timelines for those four intervals: Notice of commencement publication to referral to a review panel 71 days Referral to a review panel to publication of Review Panel Environmental Assessment Report Review Panel Environmental Assessment Report released to government response issued Notice of commencement to publication of government response to the Environmental Assessment Report 342 days 36 days 455 days 2.4 Principal Expectations of Substitution 2.4.1 Expectations of the National Energy Board The expectations of the National Energy Board for a substituted process were presented in the document NEB Substitution under the CEA Act: NEB/CEA Agency Discussion Paper. This discussion paper was prepared by the National Energy Board and provided to the Agency in July 2004. The paper was not prepared specifically for the Emera Brunswick Pipeline Project, but rather to inform, in a general way, the application of the substitution provisions in the CEA Act. The substituted process proposed by the NEB was expected to achieve the following objectives, while employing panel members with experience with assessments under the CEA Act: • Minimize potential duplication where the NEB has responsibilities to assess a project under two separate federal processes; • Minimize procedural redundancy; • Allow the Agency resources to be more focused on other federal EAs where an additional review body does not exist; Substitution Evaluation Report February 4, 2008 16 • Reduce unnecessary complexity and uncertainty regarding regulatory process for the NEB and its regulated industries; and • Be responsive to the need for efficient and effective environmental assessments. For example, time savings would be realized by having to avoid appointment of a review panel member by the Minister of the Environment. One issue that the paper identified was possible time savings that might be achieved as a result of substituting the NEB process for a panel review under the CEA Act, rather than conducting a joint process. The NEB paper identified three elements where these time savings could be found. They are: Early track decision process (section 21) Comprehensive studies are intended to address projects that have the potential to cause significant adverse environmental effects, but that do not warrant review by an independent panel. Under section 21 of the CEA Act, the Minister of the Environment performs a formal step, involving public consultation, early in the process. This step, commonly referred to as the Minister’s track decision, determines whether the assessment should continue as a comprehensive study or be referred to a panel under section 25. For projects that commence as comprehensive studies, the NEB envisioned that a time savings would be realized by proceeding directly to a panel review where a project has the potential to cause significant adverse environmental effects, or if public concerns warrant a referral to a review panel, in accordance with the criteria in section 25. This section 25 referral would eliminate the preparation work required for a section 21 track decision when the project is such that the likely determination is that the assessment should be referred to a panel. The time and effort savings at this stage of the process, envisioned by the National Energy Board in the context of substitution, were as follows: • 50 person-days saved by avoiding section 21 public consultation (NEB); • 10 person-days saved by negating need for preparation of track report for the Minister; • 10 person-days saved during process of obtaining Minister’s decision (Agency); and • 70 person-days equivalent to 70 days for overall process in this instance. It is important to note that a process for assessing the environmental effects of a project that is followed by a federal authority, such as the National Energy Board, may only be substituted in the case of an environmental assessment by a review panel. Approval of substitution must take place after the Minister of the Environment has referred the project to that type of assessment, pursuant to sections 21.1, 25 or 28 of the CEA Act. Substitution Evaluation Report February 4, 2008 17 It is also important to note that the use of section 25 as opposed to section 21 to refer a project to the Minister of the Environment for a panel review is not relevant to the use of substitution. To the extent that this can result in time savings, the same could be achieved for joint review panels. Hearing panel composition (section 33(1)(a)) The CEA Act outlines criteria (related to bias, conflict of interest, knowledge and experience) which the Minister of the Environment shall follow when appointing the members of a review panel. Conformance to these criteria and appointment of members by the Minister and as temporary members of the NEB means that confirming the panel composition can require considerable analysis and take a number of weeks. The NEB asserts that many of its members are competent to hear and evaluate environmental evidence as members of a review panel. Many members of the NEB have been members of joint review panels established by the Minister of the Environment and the NEB in the past, and are familiar with the objectives and procedures of environmental assessments. Members also hold experience in environmental regulation and possess diverse professional backgrounds and regional representation. Additionally, the Governor in Council may appoint temporary members to the Board to improve regional representation or specific expertise where necessary. In the NEB’s discussion paper NEB Substitution Under the CEA Act, it is noted that most joint review panels would likely consist of two NEB members (who are appointed on a standing basis and assigned to the panel), and one member appointed by the Minister of the Environment specifically for the panel review, and who is also appointed as a temporary member of the National Energy Board. The Minister of the Environment either appoints or approves the appointment of the panel’s chairperson. It is also relevant to note that where an NEB hearing is held in conjunction with an environmental assessment at the screening or comprehensive study level, the environmental effects are assessed by a panel composed solely of members of the National Energy Board. Through a substituted process, and using only NEB appointed panel members, the National Energy Board envisioned the following process time savings: • • • • 20 person-days saved by avoiding the CEA Act panel appointment process (Agency); 10 person-days saved by negating the need to prepare joint review panel terms of reference (as this document is not required for an NEB-only process where other documents such as the hearing order and list of issues govern the process) (Agency); 10 person-days saved by avoiding the need to train CEA Act panel member in NEB regulatory process (NEB); and 40 person-days overall, 30 days for overall process. Substitution Evaluation Report February 4, 2008 18 Government response under section 37(1.1) Section 37(1.1) of the CEA Act requires that where a report is submitted by a review panel, the responsible authority shall take into consideration the report, and with the approval of the Governor in Council, respond to the report. Under section 52 of the NEB Act, the Board may, subject to the approval of the Governor in Council, issue a certificate in respect of a pipeline if the Board is satisfied that the pipeline is required by the present and future public convenience and necessity. In considering an application for a certificate, the Board shall have regard to all considerations that appear to be relevant, and may have regard to, among other issues, any public interest that in the Board’s opinion may be affected by the granting or the refusing of the application, including environmental considerations. The requirement by both Acts to obtain the approval of the Governor in Council results in some procedural duplication, where a project would require two separate Cabinet approvals. Through a fully substituted process where the RA would use the NEB Governor in Council approval to make its decision, the National Energy Board envisioned the following process time savings: • 50 person-days saved (RAs, NEB) through a single “trip to cabinet” of the NEB Act section 52 decision (Cabinet approval of EA report not required). Section 44(c) of the CEA Act states “at the end of the assessment, a report will be submitted to the Minister”. The provision for substitution states “the Minister may approve the substitution of a process for an environmental assessment by a review panel”. This indicates that all requirements of the CEA Act which occur after the environmental assessment still apply, regardless of whether the process was substituted or not. This includes submission of the panel report and the government response. The use of the substitution provisions of the CEA Act therefore does not result in any time savings at this stage. 2.4.2 Expectations of the Canadian Environmental Assessment Agency The primary expectation of the Agency was that the substituted process would comply with the provisions of the CEA Act. To ensure this, conditions for the substituted process were agreed to by the President of the Agency and the Chairman of the National Energy Board. The five conditions as outlined in a March 21, 2006 letter from the President to the Chairman were: Condition 1 - The substituted process for the Emera Brunswick Pipeline Project (substituted process) shall apply fully the scope of assessment, factors to be considered and scope of factors as set out in the Environmental Assessment Scoping Document provided as Attachment 1 to the NEB referral letter. Substitution Evaluation Report February 4, 2008 19 Condition 2 - The substituted process shall make the Environmental Assessment Scoping Document publicly available. Condition 3 - The substituted process shall include informal opportunities for the public to convey their views to the National Energy Board hearing panel, including written and oral presentations. Condition 4 - On the completion of the environmental assessment, the National Energy Board shall submit a report (Report) to the Minister of the Environment and the responsible authority Ministers. Condition 5 - The (environmental assessment) report submitted to the Minister of the Environment shall set out the National Energy Board’s rationale, findings, conclusions and recommendations, including mitigation measures to be implemented, the follow-up program recommended by the NEB, and publication of the report. In addition, the NEB was to assist the Agency in ensuring the successful applicants of the Participant Funding Program received intervenor status in the hearings, and that the NEB submit a report on the participation of successful Participant Funding Program applicants, ensuring they had provided evidence at the hearings regarding the factors considered or other environmental assessment issues. 2.4.3 Participant Expectations of the Substituted Process Respondents to the Ipsos-Reid participant experience survey indicated expectations based on their type of involvement with the process, and their experience with project reviews. Members of the general public expected their views to be considered in a meaningful way and that the outcome of the review would reflect their input, including considerations of alternatives and the evaluation of cumulative effects. Conversely, participants who were involved in the review in a professional capacity had often taken part in other project reviews, some under the National Energy Board, and expected the substituted process to reflect their previous experiences. In general, participants expected to have their viewpoints heard, and given some weight in the hearings, and deliberations of the Board. Substitution Evaluation Report February 4, 2008 20 3. Evaluation The following section addresses the issues outlined in the Terms of Reference for the Evaluation of the Substituted Emera Brunswick Pipeline Project Environmental Assessment Process, including whether the conditions for substitution, and the principal expectations of stakeholders were met. This section focuses on considerations that have been raised throughout the information-gathering stages of the evaluation process, including the results of the participant experience survey. 3.1 Conditions for Substitution This section examines whether, and if so how, each of the specific conditions for substitution outlined in the Agency’s letter to the NEB were met. The evaluation identifies the presence or absence of these issues and is not intended as a substantive analysis of their content. 3.1.1 Condition 1 The substituted process for the Emera Brunswick Pipeline Project (substituted process) shall apply fully the scope of assessment, factors to be considered and scope of factors as set out in the Environmental Assessment Scoping Document provided as Attachment 1 to the NEB referral letter. This condition was met. Within the Environmental Assessment Scoping Document three key areas are included to determine the scope of the environmental assessment: the scope of the project; the factors to be considered, and the scope of those factors. Scope of the project The scope of the project was considered throughout the environmental assessment report, including all listed components of the project itself. The only area excluded was the issue of project abandonment, where the NEB noted that “pursuant to the NEB Act, an application would be required to abandon the facility, at which time the environmental effects would be assessed by the NEB and other relevant agencies”. Factors to be considered All factors to be considered were included in the final environmental assessment report of the Board. Cross-references between the factors to be considered and specific report sections are presented in Appendix 3. Scope of factors The issues identified in this section were generally included throughout the Environmental Assessment Report and in the analysis of the effects of the project. Some issues (natural variation of a population or ecological component, and the time required for a population to recover from an effect and return to pre-project conditions) were included in the analysis as methods of determining the level of significance of an effect. Other issues, such as the timing of sensitive lifecycle phases of wildlife species in relation to the project were addressed briefly in the listed mitigation measures. Substitution Evaluation Report February 4, 2008 21 3.1.2 Condition 2 The substituted process shall make the Environmental Assessment Scoping Document publicly available. This condition was met. The NEB posted the draft version of the Environmental Assessment Scoping Document on their registry site on May 5, 2006 as document A12021 or G-28-b -- A0U1V9. The Agency also posted the draft version of the scoping document on the Canadian Environmental Assessment Registry on May 8, 2006. The final Environmental Assessment Scoping Document was made available on the National Energy Board Public Registry website as document A12360 on June 23, 2006. Written comments from the public were received on the draft scoping document between May 5 and June 7, 2006. Comments were considered by the NEB, but no substantial changes were made to the scoping document. Following the public comment period, the Board issued the following statement: “The Board has therefore determined that the scope of the environmental assessment as outlined in the draft Environmental Assessment Scoping Document is appropriate. The Environmental Assessment Scoping Document has been modified to reflect minor changes in the description of the components listed under the scope of the project to accurately reflect the project as proposed by Emera Brunswick Pipeline Company Ltd. in its application to the NEB.” 3.1.3 Condition 3 The substituted process shall include informal opportunities for the public to convey their views to the National Energy Board hearing panel, including written and oral presentations. This condition was generally met. Section 2 of this report has outlined the three methods by which interested parties could become active in the review process. They can either become intervenors, provide oral statements, or submit a letter of comment. The role of intervenor is a highly structured one, and thus should not be considered an informal opportunity. However, the oral statements and letters of comment have been considered as informal opportunities for the purposes of this evaluation. The deadline to file intent to present an oral statement, or write a letter of comment was much later than the deadline to apply for intervenor status, although this was still well before the hearing. Written Statements The public was afforded the opportunity to express their views through written statements. The NEB’s hearing order invited any interested person, who did not wish to Substitution Evaluation Report