Legislation to reform, or “modernize”, the federal regulatory review process for major energy infrastructure projects is expected to be tabled in Parliament in the near future, perhaps as early as this fall. Regardless of how extensive any proposed changes may be, the legislation will establish a new regulatory framework and will seek to address challenges that have emerged in reviewing major projects in recent years, ranging from Northern Gateway to the expansion of the TransMountain pipeline and the reversal and expansion of Enbridge’s Line 9. The success, or otherwise, of the new framework will play a pivotal role in determining the extent to which future development of Canada’s hydrocarbon resources will proceed. The proposed legislation should, therefore, be carefully scrutinized by the energy regulation community.

Any changes proposed to the role of the National Energy Board (‘NEB’) must be considered in conjunction with changes proposed for the federal environmental assessment process, as is clear from the single Discussion Paper tabled by the federal government at the end of June titled “Environmental and Regulatory Reviews”. The Paper states the government’s commitment “to deliver environmental assessment and regulatory processes that regain public trust, protect the environment, introduce modern safeguards, advance reconciliation with Indigenous peoples, ensure good projects go ahead, and resources get to market.”

This issue of Energy Regulation Quarterly includes three articles that we believe will be helpful in preparing for the coming debate. In his article on “The Report of the Expert Panel on the Modernization of the National Energy Board and the Response of the Government of Canada”, Professor Nigel Bankes reviews developments to date specifically as they relate to the NEB. Michael Fortier contributes with his article “Federal Environmental Assessment Reform: A Practitioner’s Perspective.” Together, the two articles provide a valuable foundation for assessing the merits and likely effectiveness of whatever specific changes are proposed when legislation is ultimately tabled.

To date, the discussion of federal environmental and regulatory review processes has largely focused on mandate, structural and procedural issues. Scant regard has been paid to the purpose of regulation in the context of energy infrastructure projects. The question has not, however, been ignored entirely. Earlier this year, the C. D. Howe Institute published a Commentary titled “Defining the Public Interest in Regulatory Decisions: The Case for Economic Efficiency”, by Jeffrey Church, in which the author argues that “[m]any of the concerns regarding regulatory decisions would vanish, or be minimized, if governments clearly articulated in law that regulators should base their decisions solely on economic efficiency grounds.” In “The Mandate of the National Energy Board”, Peter Miles, formerly senior economist at the NEB, responds to Church’s thesis, with particular reference to changes proposed to the objectives of regulation as outlined in the government’s Discussion Paper on “Environmental and Regulatory Reviews”.

Meanwhile, as federal energy regulatory reform looks forward, the challenges in implementing change – and “getting it right” – are illustrated by recent experience in implementing policy changes in Ontario. Adam White reviews the development of Ontario’s electricity policy in his article “Premier’s Bane: A Folk History of Electricity Policy in Ontario”. Challenges specific to implementation of the “Fair Hydro Plan” are addressed by David Stevens in “Ontario’s ‘Fair Hydro Plan’ Comes at a (Future) Cost” and by Tom Adams in “Ontario’s Fair Hydro Plan Act Upends Rate Administration and Finance”.

Finally, in the Case Comment in this issue of ERQ, John Vellone and Jessica-Ann Buchta discuss the recent decision of the Ontario Energy Board approving a contested application by ELK Energy Inc. to expand its licensed service area to supply electricity distribution services to a single customer. The authors conclude that the decision is significant in articulating the criteria the OEB will consider in similar applications in future.

In the second Case Comment, the same authors provide “An Update on Natural Gas Expansion in Ontario”.

  1. Government of Alberta, Climate Leadership Plan (Edmonton: 22 November 2015), online: <http://www.alberta.ca/climate-leadership-plan.cfm>.
  2. Ernest & Young LLP, “Alberta climate change leadership plan announcement” (Calgary: 2015), online: <http://www.ey.com/Publication/vwLUAssets/Alberta-climate-change-leadership-plan-announcement/$FILE/Alberta-climate-change-leadership-plan-announcement.pdf>.
  3. See, for example, Rick McConnell, “Alberta’s climate-change plan selling point for pipelines, Rachel Notley says” CBC News (19 July 2016), online: <http://www.cbc.ca/news/canada/edmonton/alberta-s-climate-change-plan-selling-point-for-pipelines-rachel-notley-says-1.3686055>.
  4. Bill 27, Renewable Electricity Act, 2nd Sess, 29th Leg, Alberta, 2016.

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