Ensuring the fox has streamlined access at the henhouse: the federal Smart Regulation initiative.

Jamie Kneen

National Program Co-Lead

On March 24, 2005, Treasury Board President Reg Alcock said, “Ottawa is making sweeping changes to the way it regulates Canadian business to help firms compete at home and abroad in the face of lagging productivity growth, rapid scientific advances and emerging global juggernauts such as China.”

The changes allow the needs of competitive business to trump “safeguarding our health and safety” and “ensuring a clean and sustainable environment”. They rely heavily on voluntary measures from industry and are premised on the hypothesis that there will continue to be no money available for regulation and compliance, despite massive federal surpluses.

The Smart Regulation initiative

After two years of study by the “External Advisory Committee on Smart Regulation”, a report was released by Treasury Board President Reg Alcock on March 24, 2005. It made forty recommendations. The report is available at Smart Regulation Report on Actions and Plans on the Treasury Board web site. The plan will streamline the regulatory approval process to harmonize standards with the United States, to speed up regulatory approval processes. and to achieve “long-term environmental sustainability by fully integrating environmental performance with competitiveness, innovation and investment cycles.”

The plan is already being implemented in the government bureaucracy and is led by the Privy Council Office (PCO). Various regulatory proposals (or the absence of them) on hazardous products, pesticides, the “security and prosperity partnership” with the US and Mexico, campaign financing, electoral reform, lobbyist registration, environmental assessment, and fish habitat can all be linked to “smart regulation”.

At the heart of the plan is a triage system for all regulation which uses a “risk assessment” to divide regulation into low, medium and high risk categories and effectively deregulate the low risk items. Most risk assessments are theoretical models that depend on thresholds set by political decisions. A 1997 study by Health Canada presented at a workshop of the National Orphaned and Abandoned Mines Initiative (NOAMI) in November 2005 found that risk assessment results were highly variable and unreliable. A comparison of results from four contractors looking at the risk of getting cancer from polyvinyl chloride exposure differed from one another by a factor of 100,000,000. The consultants underestimated risk three times out of ten, by 60 to 146 times.

There are “a dizzying number of different policy initiatives” under the Smart Regulation banner.

Just a few of the initiatives we at MiningWatch Canada are dealing with:

  1. Government Directive on Regulating
  2. Commitment Statement on Environmental Sustainability in Canada
  3. Mining Sectoral Sustainability Table
  4. Fisheries Act “streamlining” and amendments to the Metal Mining Effluent Regulations
  5. Retooling of the Environmental Assessment Act

Government Directive on Regulating

PCO’s main “smart regulation” initiative – other than overseeing all of the dispersed initiatives in most if not all other departments and agencies – is developing a replacement for the 1999 Government of Canada Regulatory Policy, to be called the Government Directive on Regulating (GD-R). A series of consultations have just been held on the current consultation draft of the GD-R, and public comment will be received until December 23. In simple terms, the GD-R sets out new rules for the Regulatory Impact Assessment Statement that accompanies the first public posting of proposed regulations and forms the basis for Cabinet consideration of the proposal. Already, cabinet secrecy, solicitor-client privilege for Department of Justice advice provided to its “client” departments, and the day-to-day influence of PCO and the Department of Finance on regulatory departments’ efforts all shroud the regulatory process in secrecy. Civil society organizations are afraid that this will prevent public input into new regulations.

Commitment Statement on Environmental Sustainability

On December 12th the Canadian Council of Ministers of the Environment (CCME) was asked to formalize a federal-provincial version of the federal environmental Sustainability Framework, entitled the “Commitment Statement on Environmental Sustainability in Canada”. The Agreement proposes a dubious “environmental risk” approach to regulation, as opposed to the precautionary approach. New Brunswick has indicated its intent to be the first province to implement the Agreement. To do so, New Brunswick plans to rework all of its existing environmental regulations ranging from environmental impact assessment and pesticide spraying to watercourse alterations and pollution permitting. All of New Brunswick’s environmental laws will then be repealed, to be replaced by a solitary piece of legislation.

Mining Sector Sustainability Table

The federal government has established four “Sector Sustainability Tables”, one of which is mining, to advise the Council of Deputy Ministers (the key civil servant from each department of government) on how to ensure the highest level of environmental quality from the industry sector. The Mining Sector Sustainability Table is chaired by Richard Ross, CEO of Inmet Mining Corporation, and Alan Nymark, Deputy Minister for Industry. It has four other industry representatives, the Deputy Ministers of Natural Resources Canada, the Department of Indian Affairs and Northern Development, and Environment Canada, one labour representative, three environmental representatives (two chosen by the Canadian Environmental Network and one hand-picked by the government), and an as yet undetermined number of Aboriginal representatives. The terms of reference are still being negotiated, as are the actual activities of the Tables. A secretariat has been established. It is expected that the Tables will do much of their work in Working Groups, also not yet determined. Civil society and Aboriginal groups have been told that there will be money for technical assistance, but no figure has been given.

Fisheries Act Streamlining

The Department of Fisheries and Oceans (DFO) is undertaking a “Fisheries Act Renewal Process”, which is likely to see a gutting (sorry – ed.) of section 35 (habitat protection) and section 36 (deleterious substances). A review MiningWatch undertook of the “habitat compensation” provisions confirmed that of the many cases where habitat compensation (no net loss) is a part of permitting for a mine, there was only follow-up in six instances, and no science capacity to see if it actually worked. If it didn’t, nothing is done about it.

We have seen, too, that the Metal Mining Effluent Regulation (MMER), which provides the licence to pollute under Section 36 of the Fisheries Act, is not enforced. There have been no prosecutions to date, although there have been many exceedances of the limits. The industry treats the limits as minimums. Environment Canada enforces sections 36 and 37; Fisheries enforces section 35. Both have had their enforcement budgets steadily eroded.

The Fisheries Department clearly sees its role as enabling mining (and other industrial projects) to go ahead despite the tough language in the Act. Category 4 fish habitat receives no protection at all; Fisheries officers issue “Letters of Advice” to tell companies how to avoid triggering an environmental assessment; the Department submissions in the environmental assessment context are frequently laughable. Recently, Fisheries has insisted on “regulating to its mandate”, and on the Red Chris project has defined tailings disposal as separate from the mine to avoid triggering a Comprehensive Study.

Amendments to the Metal Mining Effluent Regulations are currently being considered and Environment Canada finds itself under attack by industry, which is seeking to eliminate the need for cabinet approval if a company wants to use a lake for tailings disposal. At present it requires an amendment to Schedule 2 of the Regulation to do this. The Aur Resources Duck Pond Mine in Newfoundland is proposed to be added in an amendment waiting to go to Gazette after the election.

For more details, see newsletter #19.

Retooling of the Environmental Assessment Act

The Speech from the Throne announced the government’s plans to “consolidate” the EA process. “The Government will work to get its own house in order. It will consolidate federal environmental assessments and will work with the provinces and territories toward a unified and more effective assessment process for Canada.” The plan is to centralise the assessment of “major projects” within the Canadian Environmental Assessment Agency rather than having the assessments done by the departments with regulatory authority over the project, while a reduced number of screenings would continue to be done by departments. Risk analysis would be used to triage projects by their projected size and impact to eliminate about two thirds of projects currently assessed, and to use a class screening process to eliminate assessments for a multiplicity of “small” projects like culverts. The actual legislation has not yet been developed. Accompanying this legislation will be new bi-lateral “harmonization” agreements with the provinces and territories that set out what the arrangements would be when a joint EA is required. Each joint EA than has its own Terms of Reference; the danger is that the lowest common denominator would be applied rather than the highest available standard.

With devolution in the Northwest Territories and Yukon, CEAA’s role has been substantially diminished and essentially does not apply now to more than a third of the country.