Projects stuck in planning phase of federal impact assessment raise questions about revamped process, report warns

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Although the federal Impact Assessment Act (IAA) was designed to speed up cumbersome application processes for major infrastructure and resource projects, a new report has found that all projects progressing under the act remain stuck in Phase 1 or 2 of the four-phase process.

The Calgary-based Canada West Foundation report notes that three-and-a-half years after the Impact Assessment Act came into force, projects under Phase 1 are taking nearly double the legislated limit of 180 days. Once permitted “clock stoppages” for the process are taken into account to allow for consultations and other project requirements, and even unforeseen elements such as the pandemic, the average Phase 1 length was 332 days.

“While stopping the clock may sometimes be unavoidable, the consistent use of it indicates systemic problems that undermine the key objective of improved efficiency that the new process was supposed to achieve,” states the report. “The data also do not bode well for the likelihood of completing subsequent phases in a timely manner, as subsequent phases are more complex and have longer timelines than Phase 1.”

Projects that completed the planning phase did so in times ranging from 127 days to 693 days, with a mean of 332 days, the report found. The report’s authors noted that this “doesn’t appear to be a learning-curve issue,” under the new legislation, but more likely represents “a systemic problem – one that undermines the key objective of re-designing the federal impact assessment system to achieve improved efficiency.”

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The IAA was introduced in 2019 to address lagging project timelines under the Canadian Environmental Assessment Act of 2012. Under the old Act, it took almost 3.5 years for a project to either receive approval or be terminated, with some projects taking more than a decade.

The Canada West report analyzes a dataset of 25 projects under the IAA (it excludes 26 projects that were already in the review pipeline when the Impact Assessment Act was enacted). None of the 25 projects under the Impact Assessment Agency of Canada (IAAC) have yet to make it to stage three or four of the review process. It should be noted that three projects have moved into a separate provincial impact assessment process, such as the Cedar LNG project in British Columbia, the only province that currently has a substitution agreement in place with the federal government.

“Phase 1 was designed to speed things up for the back end of the IA process, and we won’t know for several years whether or not it has been successful in doing that,” states the report.

Other reasons why project “clock stoppages” may occur include elements such as provincial coordination; overly broad or detailed information requirements; proponent unreadiness; and dispute resolution.

The report’s authors note that the new delays have not gone unnoticed. The federal government and others have recognized that regulatory efficiency needs to be improved and has earmarked $1.3 billion in Budget 2023 to be used by IAAC, the Canada Energy Regulator and 10 other departments to improve regulatory efficiency.

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