Alberta Pushes Toward Single Energy Regulator: Proposal Overview and Concerns

By Keith Edmund White

Editor-in-Chief

Single regulator: Smart, efficient government or sly accountability circumvention?  Short answer:  Time will tell.

Alberta Proposed a Single Regulator:  Mondaq Overview

Bennett Jones LLP offers a fantastic overview of the proposed October legislation to create single Alberta legislator.  From Shawn M. Munro and Bradley S. Gilmour’s Mondaq article:

Key aspects of the current regulatory regime will remain in place, with the primary change being the oversight and administration by a single body of most regulatory aspects associated with the life-cycle of energy resource activities. For example, existing authorization and approvals processes will be similar but will in many cases require only one application; hearings will still be used in the case of objections to energy resources activities; and such activities requiring approval prior to the establishment of the Regulator will continue to require approval under the new regime.4 There are, however, numerous other important changes proposed in REDA. The specific circumstances under which hearings will be held, timing and processes involved, cost awards, and other procedural matters will be dictated by rules and regulations yet to be released. At this time, however, there are a number of important proposed changes evident in REDA in addition to the inclusion of specified enactments like EPEA, the PLA and the WA in relation to energy resources and energy resource activities.

…

Changes to Enforcement

Under various consequential amendments to other legislation by REDA, enforcement penalties are substantially increased.

Corporations found guilty of an offence can be fined up to $500,000 and individuals may be subject to fines of up to $50,000, per day. This is a significant increase from penalty amounts currently levied by the ERCB under various legislation regulating energy activities. Furthermore, any person who, in the opinion of the Regulator, has received proceeds derived directly or indirectly from breaches of an ALSA regional plan,REDA or any enactment prescribed in the regulations, or non-compliance with other terms, orders, etc., may have to provide an accounting of the proceeds and pay a penalty in that amount.

Criticism of the Proposal: Calgary Sun on penalties; Environmental Law Centre’s Concerns

But, as would be expected, this proposed legislation still leaves a lot of dots to be connected by a single energy regulator.  A critical issue: how fines are assessed and where those funds go.  Check out this October 25th Calgary Sun article by Bill Kaufman:

But after reading the legislation, Wildrose utilities critic Joe Anglin said he’s concerned about the possibility landowners or industry could be arbitrarily penalized under the plan.

“There’s a possible lack of due process ... when you have an official able to issue a penalty like Court of Queen’s Bench,” said Anglin, MLA for Rimbey-Rocky Mountain House-Sundre.

…

A spokesman for the environmental activist Pembina Institute said the new regulator could be a positive step, though not enough is known about the process to be certain.

The best plain reading overview of the bill, albeit from a critical eye, must go to the Environmental Law Centre’s November 1st posting by Cindy Chiasson.  Beyond making clear why the proposed legislation omits many details, Chiasson makes clear four concerns: narrower standing test to challenge regulatory actions, cutting out one aspect of judicial review, increased political control of the regulatory process, and unclear accountability standards.  From her post:

While this initiative has been touted as addressing energy and environment as two sides of the same coin, it seems the coin is loaded in favor of energy. Existing environmental regulatory processes would be curtailed and limited:

-the current standing test of “directly affected” under the Environmental Protection and Enhancement Act (EPEA)and Water Act would be changed to the narrower “directly and adversely affected” test for energy developments; and

-appeals under EPEA and the Water Act to the Environmental Appeals Board, an independent quasi-judicial body, would be eliminated for energy developments and replaced with self-reviews by the Regulator of its own decisions.

The Bill would also give Cabinet the ability to modify how environmental legislation applies to the Regulator.

…

We also have concerns regarding the potential transparency and accountability of the Regulator. Bill 2 specifically states that the Regulator is not a Crown agent. There is no clear accountability of the Regulator directly to the public.

Other Resources

Blakes November 2, 2012 backgrounder on the proposed legislation.

Huffington Post October 24, 2012 article by Bill Graveland.

Excellent October 26 article that highlights property-owner and political viewpoints on creating a single Alberta regulator by the Calgary Herald’s Tamara Gignac.

CBC’s Jennifer Lee has an excellent news report trumpeting the energy sector’s support for a single Alberta regulator, while also highlighting some of the accountability issues with creating a single regulator.  Two quotes worth particular mention if you have trouble loading up the 2 minute report:

Brad Herald, Cdn Assoc. of Petroleum Producers: “It’s a once-in-a generation opportunity to really calibrate, recalibrate a major system for Alberta.”

Keith Wilson: “They’re essentially going to make this super energy regulator the appeal body of its own decisions. So you’re going to have to go back to that body and say, ‘Well, we don’t think you went fair enough.’ And they’re going to say, ‘Well we’re happy with or decision, get out of here.’ And I think that’s wrong.”

More On the Other Side of Mapping Out a Canadian Energy Strategy: The Shifting Landscape of Canadian Environmental Regulation

By Keith Edmund White
Editor-in-Chief 

Courtesy of this morning’s Mondaq news-update, we get a view of another challenge to Canada crafting a national energy strategy:  environmental regulation.

On this issue, Dianne Saxe—of the Saxe Law Office and the Environmental Law and Litigation website—offers some excellent analysis* on the three-layered cake of Canadian federalism re:  environmental regulation. 

For a recap of her environmental regulation presentation, I'll just re-post Mondaq's summary:

What happens when municipal bylaws try to control energy or resource projects authorized by the federal or provincial governments? (They have some scope). How far will the Spraytech precedent take them? Can corporations use federal insolvency laws to cleanse themselves of irksome environmental liabilities, such as contaminated sites? (sometimes). These are the type of jurisdictional conflicts that Dianne discussed during her keynote address at last week's Hazmat West Conference in Saskatoon. She also discussed shared responsibilities for waste, as in Enviro West v Copper Mountain Mining.

Here is the presentation: Shared Authority, Shared Risks

The Big Insights:

• Limited, But Still Real, Role in Environmental Regulation.  Municipalities, as political creations of Canada’s provinces, have no constitutional status—so they have limited room to maneuver when it comes to environmental regulation. So, according to Saxe’s presentation, a municipality can’t band fracking through a bylaw, but can probably limit toxic substances especially in certain areas (Presentation Page 8). 
• The New CEAA Scales Back Federal Environmental Assessments.  Federal Environmental Assessments are leaner, faster, and perhaps lesser ‘meaner’? The Harper government in Ottawa reworked the federal government’s role in environment assessment this summer by passing a new Canadian Environmental Assessment Act (CEAA). A May 2012 Ecojustice Legal Backgrounder blasted the new legislation: 

Ecojustice believes that improvements to CEAA are achievable, but not by eviscerating the federal role in environmental assessment, devolving reviews to provincial/territorial governments, and by imposing artificial timelines on a much small number of projects.

• Constitutional Showdown.  There’s a tension between the federal government regulation of bankruptcy (and, from that, the discharge of debt) and the provinces wanting companies to pay for environmental damages. So is letting provinces bill bankrupt companies for environmental clean-up costs counter Canada’s constitutional division of powers? We’ll have to wait and see. (Presentation Pages 29-31; And if you like graphs, check out Saxe's helpful Page 11 Presentation graphic). 
• Sum-Up.  Could the Harper's government-spurred CEAA reform come back to bite them by pushing provinces to step-up their regulation--delaying the energy projects so critical to Canada's near-term economic success?  Maybe.  But, then again, will provinces really step on their own energy futures? 
• *Key Caveat:  And, just in case you don’t see if on the Mondaq page, Saxe's presentation is legal research and analysis—not legal advice.