Canadian Power - Environmental Law

Key Developments in 2020

In 2020, there were a number of key environmental law developments across Canada with potential impacts on the energy sector. Highlights include the following:

BRITISH COLUMBIA

BC’s New Environmental Assessment Regime Now in Force: In March 2018, the BC government launched the process for revitalizing the Province’s environmental assessment (“EA”) process. On December 18, 2019, the Province’s new Environmental Assessment Act, 2018 (“BC EAA”) came into force. The BC EAA introduces significant changes to the provincial EA process including the creation of an early engagement process, increased opportunities for public participation, and prescriptive measures to meet the BC government’s commitment to implement the United Nations Declaration on the Rights of Indigenous Peoples. BC’s Environmental Assessment Office (“EAO”) has entered into the The Impact Assessment Cooperation Agreement (“IACA”) with the Impact Assessment Agency of Canada (“IAA”). The IACA is a consolidation and update of existing memoranda of understanding between the EAO and the IAA that have been in place in various forms since 2004 (under the previous Environmental Assessment Act, 2002). Under the IACA, cooperation options include coordination, substitution, and joint review panel. The IACA applies to all projects being assessed under the new BC EAA.

Delay to Carbon Tax Increase: In response to the COVID-19 pandemic, the BC government announced in March 2020 that the scheduled increase to the Province’s carbon tax rate would be delayed until April 1, 2021. BC’s carbon tax rate is currently $40 per tonne of carbon dioxide equivalent (“tCO2e”), which is expected to increase to $45 per tCO2e in April 2021.

Refreshed Mandate for Minister of Environment: In a snap fall election, the provincial NDP won a majority government on October 24, 2020. The BC Minister of Environment, the Honourable George Heyman, retained his position and was given a refreshed mandate after the election. The Minister’s priorities focus on the Province’s post-pandemic economic recovery, the phase-out of plastics, setting sectoral and interim targets to reach BC’s 2030 greenhouse gas (“GHG”) emissions target, legislating a target of net-zero carbon emissions by 2050, ensuring that additional funding is available to support industry efforts to reduce GHG emissions, implementing a provincial Climate Preparedness and Adaptation Strategy, accelerating the move toward a net-zero emission bus fleet powered by zero-emissions technologies, advancing public transportation projects, and creating a Watershed Security Strategy. To assist the Minister in meeting the Ministry’s commitments, a Parliamentary Secretary for Environment has been assigned to support delivery of the identified priorities.

BC Sets 2025 Emissions Reduction Target: In December 2020, the BC Government set a new near-term emissions reduction target for 2025, supported by a new 2020 Climate Change Accountability Report detailing actions under the CleanBC climate change plan. The new target requires a reduction in GHG emissions to 16% below 2007 levels by 2025. It provides a benchmark on the road to BC’s legislated emission targets for 2030, 2040 and 2050 of 40%, 60% and 80% below 2007 levels, respectively.

Alberta graph

ALBERTA

Conservation and Reclamation Directive for Renewable Energy Operations: Alberta Environment and Parks (“AEP”) provides an environmental stewardship framework and regulates natural resource access, allocation, and use through planning, policy and compliance assurance programs through the Environmental Protection and Enhancement Act (“EPEA”) and the Conservation and Reclamation Regulation (“C&R Regulation”). Under EPEA, after a specified land activity (which includes the land that is being or has been used or held for or in connection with the construction, operation or reclamation of a renewable energy operation) has been decommissioned, operators must obtain a reclamation certificate. Reclamation certificates are managed through AEP and the Alberta Energy Regulator.

The conservation and reclamation planning requirements outlined in AEP’s Conservation and Reclamation Directive for Renewable Energy Operations (14 September 2018) create minimum regulatory requirements and set out the information that must be submitted to the AUC with an application for an AUC power plant approval. Operators must maintain a conservation and remediation plan (“C&R Plan”), the content of which will vary based on whether the operator is currently seeking approval for a new project or whether the operator has received approval from the AUC.

On or after January 1, 2020, all AUC power plant applications for renewable energy projects must meet the requirements under the Conservation and Reclamation Directive for Renewable Energy Operations (14 September 2018). AEP provides support to the AUC for the review and assessment of such C&R Plans submitted in approval applications. This is done concurrently and in alignment with wildlife reviews and, when approved, the formal disposition application on public lands. Renewable energy projects that submitted an approval application to the AUC prior to January 1, 2020, unless otherwise directed, are considered to have met the initial conservation and reclamation requirements under the Conservation and Reclamation Directive for Renewable Energy Operations through the environmental evaluation or environmental plan submitted to the AUC.

A Coal Policy for Alberta repealed: In an effort to modernize Alberta’s coal development policies and facilitate favourable conditions for investment in coal export, the Government of Alberta repealed A Coal Policy for Alberta (also known as the 1976 Coal Policy) in May 2020. Following the rescission of the 1976 Coal Policy, restrictions on issuing coal leases within the former coal categories 2 and 3 were removed. Coal leasing, exploration and development within category 1 remained restricted. As described in Alberta Energy’s May 25, 2020 Coal Information Bulletin 2020-02, proponents with active coal lease applications were offered a right of first refusal by Alberta Energy for the coal leases they held. Following the right of first refusal, Alberta Energy intended to open all lands for public lease sales, except within category 1 lands.

Alberta Energy completed one sale on December 15, 2020, but later, on January 18, 2021, cancelled leases issued in category 2 lands within that offering period. As of January 20, 2021, all plans for additional lease sales within category 2 lands were suspended. Although the leases issued in this first public offering period were cancelled, a number of new leases on category 2 land have been issued since the revocation of the policy in June of 2020.

The rescission of the 1976 Coal Policy was intended to update the leasing process in Alberta, however, it resulted in a lack of clarity around intended protections on sensitive lands within the Province. In early February 2021, the Government of Alberta reinstated the 1976 Coal Policy, effective February 8, 2021, following a significant amount of public concern and outcry. The objections to the revocation of the 1976 Coal Policy include an application for judicial review (Blades, et al v Her Majesty the Queen in Right of Alberta and the Minister of Energy for the Province of Alberta, Alberta Court of Queen’s Bench Court File No. 2001-08938) and many objections from local organizations, governments and Indigenous groups, some of which adopted resolutions questioning the decision to revoke the policy, or demanded the Government of Alberta reinstate the policy. With the reinstatement of the 1976 Coal Policy, the Government of Alberta intends to engage in public consultation, seeking input from all Albertans to implement a modernized policy.

The 1976 Coal Policy restricts the development of coal in certain areas within the Province, and has done so since 1976. The scope of the policy is wide-ranging and includes, among other items, a land use classification system. The policy divides the Province into four categories which dictate where and how coal leasing, exploration and development could occur. The original intention of the 1976 Coal Policy was to ensure there was appropriate regulatory and environmental protection measures in place before new coal projects were authorized. This objective is now being met by Alberta’s current regulatory, land use planning and leasing systems (i.e. the Alberta Land Stewardship Act, the Responsible Energy Development Act, the Coal Conservation Act, the Water Act and the Environmental Protection and Enhancement Act).

The 1976 Coal Policy prevents development of coal resources in category 1 lands on the eastern slopes of the Rockies and only permits the development of new underground mines (rather than open-pit mines) in category 2 lands. Following the reinstatement of the 1976 Coal Policy, the Government of Alberta provided specific direction to the Alberta Energy Regulator (“AER”), including: (i) a prohibition on mountain-top removal and the application of all restrictions under the 1976 coal categories, including all restrictions on surface mining in category 2 lands; and (ii) until such time as the Government of Alberta can engage in widespread consultation on a new coal policy, all future coal exploration approval in category 2 lands remain paused.

Although direction has been given not to process new applications for approval and exploration programs, this prohibition does not apply to exploration programs already approved by the AER. Nor does the reinstatement of the policy revoke the leases granted to proponents in the time between the initial revocation of the policy and the time of its reinstatement.

Going forward, all coal development projects will continue to be considered through the existing AER review process. This review is based on each project’s merits, including its economic, social and environmental impacts.

Liabilities Management Statutes Amendment Act, 2020: In April 2020, Alberta enacted new legislation intended to strengthen the powers of the AER and the Orphan Well Association (“OWA”). Alberta also extended its loan to the OWA by up to $100 million to facilitate its reclamation efforts and to generate oil services jobs in March 2020. The legislation amends the Oil and Gas Conservation Act and the Pipeline Act by:

– Establishing an additional duty for licensees and approval holders to “provide reasonable care and measures to prevent impairment or damage in respect of a well, facility, well site or facility site.” Impairment or damage is defined as “impairment or damage that results in or could reasonably be expected to result in harm to the integrity of a well or facility or harm to the environment, human health or safety or property”. If AER concludes that a licensee or approval holder cannot fulfil this new duty, the duty must be fulfilled by the working interest participants (or “WIPs”). If the WIPs are not performing this new additional duty “in a manner satisfactory” to AER, then under the new Section 26.2(3) of the Oil and Gas Conservation Act, AER may order the licensee, WIP or a delegated authority under Part 11 (which now includes the OWA) to provide reasonable care and measures to discharge the duty.

– Adding the OWA to the definition of “delegated authority” allows the OWA to assume management and control of wells, with any production being subject to the consent of the owner or holder of the mineral rights.

– Expanding the scope of activities that the funds within the Orphan Well Fund can be used for including costs associated with monitoring the behaviour of orphan wells and facilities and the costs of a receiver.

– Expanding the OWA’s jurisdiction to include undertaking remediation activities associated with orphan sites in addition to suspension, abandonment and reclamation activities and that the costs of these activities can now be recovered from the Orphan Well Fund.

 

" Notably missing from this legislation, and promised by Alberta’s government, are comprehensive measures to address the challenges facing Alberta’s oil and gas industry and the increasing number of orphan well and facility problems, including underfunding for end of life liabilities. However, more comprehensive measures have been promised and are anticipated in 2021. "

ONTARIO

Amendments to Ontario’s Environmental Assessment Act: The COVID-19 Economic Recovery Act, 2020 (Bill 107; Royal Assent on July 21, 2020) made significant changes to Ontario’s Environmental Assessment Act (the “EAA”) which will come into force in phases, the timing of which has not yet been specified.

The EAA currently applies to public sector undertakings and only to some private sector undertakings that are specifically designated by order or regulations. Public sector undertakings, unless exempted, are required to undergo either a self-directed class environmental assessment process or, for some larger undertakings with potential significant and unknown environmental effects, an individual environmental assessment that is subject to Ministerial approval. Bill 197 replaces Part II of the EAA, which deals with individual environmental assessments, with a new Part II.3 which requires projects designated by regulation to complete a comprehensive environmental assessment. Bill 197 also replaces Part II.1, which deals with class environmental assessments, with a new Part II.4 which requires projects designated by regulation to complete a streamlined environmental assessment process. Once the changes are in force, the EAA will apply to designated undertakings (similar to the manner in which the federal Impact Assessment Act regime applies to designated undertakings) that are required to undergo either a comprehensive environmental assessment or a streamlined environmental assessment.

Approved class environmental assessments will continue to apply to undertakings until they are revoked and replaced with designating regulations and streamlined assessment requirements. On September 11, 2020, the Ontario government posted for comment a draft “Projects List” of projects subject to comprehensive environmental assessments. The draft Projects List was similar in scope of the designated projects list under the federal Impact Assessment Act. It will be interesting to see if and how this list changes once public comments are considered.

Industrial Greenhouse Gas Emissions in Ontario: In September 2020, the Supreme Court of Canada (“SCC”) heard appeals from the Alberta, Saskatchewan and Ontario Courts of Appeal on the constitutionality of the Greenhouse Gas Pollution Pricing Act (the “GGPPA”). This is discussed in further detail below. The Ontario Court of Appeal, in a decision released in June, 2019, held that the GGPPA was constitutional. A decision from the SCC is anticipated in the second half of 2021.

In September 2020, just prior to the SCC hearing, the federal Minister of the Environment and Climate Change announced that the federal government had determined that Ontario’s emission performance standards (as set out in the Greenhouse Gas Emissions Performance Standards regulations under the Ontario Environmental Protection Act) met the requirements of the GGPPA. As a result, Ontario’s industrial emitters are in the process of transitioning from the federal output-based pricing system under the GGPPA to the Ontario emissions performances standard program. Both the federal and provincial programs are based on setting emission performance standards for industries. The generation of electricity using fossil fuels is an industrial activity that is regulated, subject to certain threshold requirements, under both the federal output-based pricing system and the Ontario emission performance standards system.

Notwithstanding the foregoing, the SCC’s decision on the constitutionality of the GGPPA remains relevant to Ontario, because the GGPPA also imposes a charge on fossil fuel distribution in Ontario, which continues to apply pending the Court’s decision.

Greener Fuel: Ontario amended its clean fuel regulations to gradually increase the requirement for renewable fuel (such as ethanol) content in gasoline and diesel. The provincial government revoked previous regulations which addressed renewable fuel content in gasoline and diesel and created a new regulation: Ontario Regulation 663/20 Cleaner Transportation Fuels: Renewable Content Requirements for Gasoline and Diesel Fuels. For gasoline, fuel suppliers will be required to have an average renewable content in regular gasoline of 11% by 2025, 13% by 2028 and 15% by 2030.

Court Quashes the Minister’s Revocation of the Renewable Energy Approval for the Nation Rise Wind Farm Project. As we reported last year, in December 2019, the Ontario Minister of the Environment, Conservation and Parks granted an appeal of the Renewable Energy Approval (“REA”) issued for the operation of the Nation Rise Wind Farm. In granting this appeal, the Minister revoked the REA, citing reasons related to irreversible harm to bats in the local area. On May 13, 2020, the Ontario Divisional Court quashed the Minister’s decision to revoke the REA on the basis that it was unreasonable because: (i) the Minister had acted without statutory authority in raising new issues on the appeal; (ii) the Minister applied the wrong legal test in making his decision; and (iii) the Minister had made factual conclusions that were not supported by the evidentiary record. The Minister did not appeal the Court’s decision and the Nation Rise wind project is proceeding. Further commentary on this decision can be found in the Energy Litigation chapter of the Canadian Power – Key Developments in 2020, Trends to Watch for in 2021 publication (download full copy below).

QUÉBEC

Québec Sets 2030 GHG Emissions Reduction Target: On November 1, 2020, Bill 44 (An Act mainly to ensure effective governance of the fight against Climate Change and to promote electrification) (“Bill 44”) came into force. Bill 44 confirms Québec’s target of reducing the Province’s GHG emissions by at least 37.5% in 2030 compared to 1990 levels, and modified the provincial governance structure regarding energy transition measures and the Province’s Green fund. On November 16, 2020 the Québec Government also announced its 2030 Plan for a Green Economy backed by a $6.7 billion budget for the 20212026 period. Among other things, the Plan seeks to chart Québec’s course towards carbon neutrality by 2050, and also provides for the following targets:

Alberta graph

New Regulations to Modernize the Environmental Authorization Regime: Further to the adoption of a new environmental authorization regime on March 27, 2017 (Bill 102), Québec adopted a new set of environmental regulations which came into force on December 31, 2020, including the Regulation respecting the regulatory scheme applying to activities on the basis of their environmental impact). Among other things, these regulations are intended to accelerate the environmental permitting process by streamlining the documents and information required in support of permit applications for projects deemed to represent a moderate environmental risk. The regulations also broaden the list of activities that may qualify for a declaration of compliance, a fast-track permitting process for activities deemed to represent a low environmental risk.

FEDERAL

New Impact Assessment Regime Now in Force: On February 8, 2018, the federal government introduced new rules for environmental assessment under Bill C-69, the Impact Assessment Act (“Bill C-69”), which was designed to replace the current Canadian Environmental Assessment Act, 2012. Bill C-69 received Royal Assent in June 2019 and came into force in August 2019.

Carbon Pricing Update: In October 2016, the federal government announced that it would establish a minimum price on carbon starting at $10 per tonne of carbon dioxide equivalent (“CO2e”) in 2018, increasing by $10 per year until it reaches $50 per tonne of CO2e by 2022. This approach was recently reviewed (as discussed below) to confirm the path forward, including continued increases in stringency. The federal carbon pricing backstop is governed by the Greenhouse Gas Pollution Pricing Act and consists of two components: (i) a charge on 21 types of fuel and combustible waste that are consumed within a backstop jurisdiction and which is administered by the Canada Revenue Agency; and (ii) an output-based pricing system that applies to emission-intensive industrial facilities (i.e. facilities with emissions ≥ 50,000 tonnes of carbon dioxide equivalent, or CO2e), starting in January 2019 and is administered by Environment Canada and Climate Change. The fuel charge began to apply in: (i) Saskatchewan, Manitoba, Ontario and New Brunswick on April 1, 2019; (ii) Nunavut and Yukon on July 1, 2019; and (iii) Alberta on January 1, 2020.

Federal Government Releases Climate Plan – A Healthy Environment and a Health Economy: On December 11, 2020, the federal government released its Healthy Environment and a Healthy Economy Plan (the “Federal Climate Plan”), which builds on the Pan-Canadian Framework on Clean Growth and Climate Change and provides a road map forward to meet the country’s 2030 emissions reduction target under the Paris Agreement of 30% below 2005 levels by 2030. Together with the PanCanadian Framework, the federal government expects to achieve reductions within the range of 32 to 40% below 2005 levels by 2030, thereby exceeding Canada’s emissions reduction target under the Paris Agreement. The Federal Climate Plan is also intended to establish the building blocks to reach Canada’s goal of net-zero emissions by 2050, which was announced by the federal government in 2019. The Federal Climate Plan outlines actions in five main areas, including: (i) energy efficiency in homes and buildings; (ii) lower emission transportation options; (iii) increasing the price on carbon pollution; (iv) supporting the decarbonization of Canadian industry; and (v) building more resilient communities. The Federal Climate Plan also excludes solid and gaseous fuels from the scope of the Clean Fuel Standard, which will now cover only liquid fossil fuels.

Constitutional Challenge to the Federal Greenhouse Gas Pollution Pricing Act: The GGPPA came into force on June 21, 2018 and sets out the regulatory framework for the federal carbon pricing backstop system, which consists of two components: (i) a fuel levy, and (ii) an output-based pricing system (“OBPS”) for large industrial emitters. The purpose of the GGPPA is to ensure there is a minimum national standard on GHG emissions to spur emission reductions across the economy. Part 1 of the GGPPA imposes a levy on GHG-producing fuels and combustible waste, while Part 2 implements the OBPS.

Four provinces challenged the constitutionality of the GGPPA: Alberta, Ontario, Saskatchewan and Manitoba. Each of the decisions from the Ontario Court of Appeal (“ONCA”), Saskatchewan Court of Appeal (“SKCA”) and the Alberta Court of Appeal (“ABCA”) challenging the constitutionality of the GGPPA (collectively, the “Appeals”) were heard together by the SCC in September 2020 and a decision is anticipated in the second half of 2021. Manitoba’s judicial review application was heard by the Federal Court of Canada on December 7, 2020.

Each of the decisions from the Ontario and Saskatchewan Courts of Appeal upheld the GGPPA as constitutional on the basis that the GGPPA is constitutionally valid under the federal government’s “national concern” branch of the “peace, order and good government” (“POGG”) powers. A finding that the GGPPA is properly enacted under the national concern powers means that the subject matter which the GGPPA legislates requires the need for one national law. The ABCA was the only court to find the GGPPA as unconstitutional and held that the GGPPA’s regulation of GHG emissions exceeded the ambit of any federal head of power.

" The SCC is considering whether the federal government has the authority to legislate on the subject matter of the GGPPA. "

At a high-level, whether the SCC finds that the GGPPA is constitutional is contingent on whether it can find that the GGPPA, and its subject matter, properly fall under a federal head of power, such as the national concern branch of the POGG powers contained in Section 91 of the Constitution Act, 1982.

Federal Government Introduces Draft Regulations for Clean Fuel Standard: On December 18, 2020, Environment & Climate Change Canada published the proposed Clean Fuel Regulations (“CFR”) in Part I of the Canada Gazette. Efforts to develop a Clean Fuel Standard started in 2016, and the objective of the CFS is to achieve 30 million tonnes of annual reductions in GHG emissions by 2030. The proposed CFR would require liquid fossil fuel primary suppliers (i.e. producers and importers) to reduce the carbon intensity (“CI”) of the liquid fossil fuels they produce in, and import into, Canada from 2016 CI levels by 2.4 gCO2e/MJ in 2022, increasing to 12 gCO2e/MJ in 2030. The proposed CFR would also establish a credit market whereby the annual CI reduction requirement could be met via three main categories of credit-creating actions: (1) actions that reduce the CI of the fossil fuel throughout its lifecycle, (2) supplying low-carbon fuels, and (3) specified end-use fuel switching in transportation. Parties that are not fossil fuel primary suppliers (e.g. lowcarbon fuel producers and importers) would be able to participate in the credit market as voluntary credit creators by completing certain actions. In addition, the proposed CFR would retain the minimum volumetric requirements (at least 5% low CI fuel content in gasoline and 2% low CI fuel content in diesel fuel and light fuel oil) currently set out in the federal Renewable Fuels Regulations (“RFR”) and the RFR would be repealed. The draft regulations are available for a 75 day comment period, ending in March 2021. Final regulations will be published in late 2021, with the coming into force of the regulatory requirement in December 2022.

Establishment of the Emissions Reduction Fund (ERF): On October 29, 2020, the Minister of Natural Resources launched the $750-million Emissions Reduction Fund to reduce methane and GHG emissions. The Fund will provide repayable funding to eligible onshore and offshore oil and gas companies to support investments that reduce GHG emissions by adopting greener technologies and to help maintain jobs during the current environment of economic hardship and uncertainty. The program will offer up to $650 million to the onshore upstream and midstream oil and gas sector to lower or eliminate routine venting of methane rich natural gas from conventional, tight and shale oil and gas operations, through either repayable contributions (for reduction of methane) and partially repayable contributions (for methane elimination). Up to $75 million will also be invested in offshore emission reductions by investment in the following programs:

Alberta graph

Consultations on new Canada Water Agency: In December 2020, the Minister of Environment and Climate Change and the Minister of Agriculture and Agri-Food jointly announced the launch of public consultation to help establish the new Canada Water Agency to help manage Canada’s fresh water resources. Consultation will occur until May 31, 2021 and comments can be posted on ECCC’s online PlaceSpeak Platform. The issues being considered at outlined in the Canada Water Agency Discussion Paper, “Toward the Creation of a Canada Water Agency”.

The Year Ahead

BRITISH COLUMBIA

BC EAA Regulations Still Under Development: While most of the regulations supporting the BC EAA came into force in December 2019, there are several regulations still under development as part of the Province’s EA revitalization process. The following regulations are in development and being engaged on with Indigenous nations, stakeholders, the public and industry: Dispute Resolution Regulation; Capacity Funding Regulation; and Regional/Strategic Environmental Assessment Regulation.

Carbon Tax Increase: In response to the COVID-19 pandemic, the BC government announced in March 2020 that the scheduled increase to the Province’s carbon tax rate would be delayed until April 1, 2021, when the carbon tax rate will increase to $45 per tCO2e. In April 2022, there will be another scheduled increase to $50 per tCO2e to keep it in line with the federal carbon pricing benchmark.

BC to Set Sectoral Emission Reduction Targets: As noted above, the BC Government set a new near-term emissions reduction target for 2025, which provides a benchmark on the road to BC’s legislated emission targets for 2030, 2040 and 2050 of 40%, 60% and 80% below 2007 levels, respectively. The BC Government is expected to establish sectoral targets before March 31, 2021, and to develop legislation to formalize BC’s commitment to achieving net-zero emissions by 2050.

Working Towards BC’s Environmental Priorities: In 2021, we expect the BC Government to develop and implement initiatives on the range of its Ministerial priorities including climate preparedness and adaptation, reducing plastic pollution, reducing GHG emissions, and improving public transportation.

ALBERTA

Key Developments to Watch: As Alberta continues to diversify its economy, new and existing legislation and environmental regulation will play a role in providing incentives for development and investments. Significant opportunities exist in emerging technology, renewable energy development and in Alberta’s traditional oil and gas industries. Key developments to watch include the outcome of the SCC decision with respect to the constitutionality of the federal GGPPA, future changes to the liability regime for oil and gas assets, and the roll-out of Alberta’s stimulus investments.

" Changes to the liability regime for oil and gas assets has the potential to impact other growing industries such as geothermal and lithium development, as changes and regulations are enacted to enable the reuse and repurposing of infrastructure and wells for new purposes. "

ONTARIO

Amendments to Ontario’s Environmental Assessment Act: As noted above, most of the significant changes that have been made to Ontario’s Environmental Assessment Act (the “EAA”) have not yet come into force. It is likely that the Ontario government will finalize the comprehensive projects list in 2021, i.e. the list of projects that will be subject to comprehensive environmental assessments under the EAA, and that regulations to transition individual environmental assessments to the designated comprehensive environmental assessment regime will be released. We would also expect that the government will start to roll out regulations that replace class environmental assessments and set out the projects that will be subject to the new, streamlined environmental assessment process.

Industrial Greenhouse Gas Emissions in Ontario: The SCC’s decision on the constitutionality of the GGPPA is expected in 2021 as noted in the federal section of this publication. The decision will be relevant for Ontario, as the GGPPA imposes a charge on fossil fuel distribution in Ontario which is currently in effect. If the Court rules that the GGPPA is constitutional, the fuel levy will continue to apply. If the Court finds that the GGPPA is not constitutional, the fuel levy will not apply and regulation of GHG emissions in Ontario will (for the time being) be limited to the emission performance standards that apply to industrial emitters, as set out in the Greenhouse Gas Emissions Performance Standards regulations under the Ontario Environmental Protection Act.

QUÉBEC

Omnibus Bill amending the Environment Quality Act (EQA) and its Regulations: The Government of Québec is expected to table an omnibus bill in 2021 to continue the ongoing modernization of the EQA, with a view to simplifying administrative processes and adapting the permitting and administrative requirements based on the environmental risks associated with each project.

New Rules for the Cap-and-Trade System for 20242030: In 2021, the Government of Québec is expected to publish the proposed rules for the allocation of carbon emission credits for the 2024-2030 period under the Province’s cap-and-trade system for GHG emissions. These new rules are highly anticipated by large industrial operators and are likely to include new measures aimed at encouraging further reductions in the carbon footprint of Québec’s main GHG emitters.

FEDERAL

Canada’s Net-Zero by 2050 Legislation: In November 2020, the federal government introduced Bill C-12, An Act respecting transparency and accountability in Canada’s efforts to achieve netzero greenhouse gas emissions by the year 2050). The proposed legislation is expected to pass in 2021. With the introduction of Bill C-12, Canada joins over 120 countries in committing to netzero emissions by 2050, including the UK, Germany, France, and Japan. The Healthy Environment and a Healthy Economy Plan is intended to establish the building blocks to reach Canada’s goal of net-zero emissions by 2050.

Actions Under Federal Climate Plan: In addition to the priorities outlined in the Federal Climate Plan, the federal government has committed to developing Canada’s first-ever national adaptation strategy. The Federal Climate Plan also contains new measures to support Indigenous climate leadership. One of the more notable policy proposals under the Federal Climate Plan includes continued annual carbon price increases of $15 per tonne (beginning in 2022) until the carbon price reaches $170 per tonne in 2030 (under the Pan-Canadian Framework, the carbon price will reach $50 per tonne by 2022).

SCC Decision Expected on GGPPA: As noted above, a decision from the SCC on the constitutionality of the GGPPA is expected in the second half of 2021. It is challenging to predict the likely outcome of the SCC Appeals. That said, considering that there are provincial appellate courts that have decided differently and the GGPPA is a high profile and significant law, it is unlikely the SCC will do anything other than uphold the law or strike it down in its entirety. Cases concerning issues of federalism, and particularly the powers given to the federal government under the national concern branch of the POGG power, are rare, adding further uncertainty to the outcome of the Appeals.

 

Authors

Subscribe

Stay Connected

Get the latest posts from this blog

[form_control_error]
Please enter a valid email address