Controversy about the scope of the federal government’s role in the environmental assessment of major projects, particularly resource and energy development projects, reached fever pitch with the introduction in 2018 of Bill C-69 for the Impact Assessment Act (IAA), labelled by several of its opponents as the “No More Pipelines Bill.” Just five years later, the Supreme Court of Canada ruled that major sections of the IAA were unconstitutional, sending the government back to the redrafting board. The resulting measures to address the Supreme Court’s ruling have now been enacted (coincidentally introduced in a Bill with the same number as the original IAA, C-69) and became law on June 24, 2024.

In the lead article in this issue of Energy Regulation Quarterly, Claire Seaborn et al. review the amendments and, notably, the accompanying “Cabinet Directive on Regulatory and Permitting Efficiency for Clean Growth Projects” published soon after the amendments were enacted. The authors observe that the public interest test appears to have been refocused on the federal effects of a project rather than the project itself. The practical effects of the amendments and the Cabinet Directive, however, remain to be seen: “…the actions of the federal government over the next 12 to 18 months, including the implementation of the IAA and Cabinet Directive, will materially influence public confidence in the regime.”

“Electrification” and “net-zero” dominate the policy and public discourse on the challenge of responding to climate change. Two articles in this issue of ERQ step back and analyze some of the underlying challenges that these ubiquitous concepts present. The contributions are offered by two respected former chairs of provincial energy regulatory agencies and bring invaluable “in the trenches” experience to the discussion.

First, in “Regulatory Decision-Making in Evaluating Electrification Initiatives,” Mark Kolesar, former Chair of the Alberta Utilities Commission, observes that regulators are increasingly confronted with the dilemma posed by proposals to advance electrification or, alternatively to undertake investments that may appear to oppose electrification — proposals that raise issues with respect to the assessment of benefits and costs and their effect, not only on utility rates, but on social welfare. Kolesar submits that a transformation in economic regulation is required to review proposals to encourage and facilitate the adoption of new technologies that support emission reductions. He argues that applicants for approval of electrification programs should include an analysis of the benefits and costs of projects, whether or not an analysis is required by the regulator.

In “Electricity Regulation of the Future Must Support System Reliability,” Joe McKinnon and Channa S. Perera, from Electricity Canada, also argue that prudently incurred net-zero investments require alternative benefit-cost assessments. They note, however, that there is not yet a consensus regarding the application of such assessments. Furthermore, prioritizing electrification as a policy goal is not included in the mandates of many regulators which, they argue, need to be broadened to align with decarbonization and electrification policy objectives.

The Alberta electricity market is unique in Canada. In “Comments on Electric Industry Restructuring and the AUC Inquiry into Land Use,” Rick Cowburn, one of the original designers of that market, observes that the model has been effective and durable for approximately 30 years, “but it has run its course.” He focuses on the Government of Alberta’s announced intention to advance policy, legislative and regulatory changes restricting land uses that will constrain future generation development, observing that under the generator-centric model, “landowners had no seat at the table.” The government’s land use resolutions “take a useful step in what appears to be the right direction.”

The second of the pervasive concepts referred to above, “net-zero”, is analyzed by David Morton, former Chair of the British Columbia Utilities Commission, who asks the foundational question: “What is Net-Zero – and How Do Offsets Help to Get Us There?” He makes the obvious point that, without offsets, if emissions were to be reduced to zero, all human-made GHG emitting processes must be eliminated or replaced with non-emitting processes: “Offsets put the “zero” in “net-zero”… However, the viability of offsets depends on many things, including their integrity, their economics, their public and political acceptance and the ingenuity of developers.”

In “What Does La Rose Tell Us About Climate Change Litigation in Canada?,” Nigel Bankes et al. comment on a significant recent decision of the Federal Court of Appeal (FCA), arising from a claim by the plaintiffs (15 children and youth residing in seven provinces and one territory) that the federal government’s failure to address the problem of climate change constituted a breach of sections 7 and 15 of the Canadian Charter of Rights and Freedoms. The Federal Court had granted Canada’s motion to strike, principally on the basis that the claims were not justiciable. The FCA affirmed the decision of the Federal Court to strike in relation to the section 15 claim, but allowed the appeal with respect to the plaintiffs section 7 claim by giving leave to amend their pleadings.