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The National Energy Board (the Board or NEB) is an independent federal, quasi-judicial regulator of pipelines, energy development and trade, with three key roles: adjudicating energy projects, supporting the safety of Canadians and the environment through oversight, and engaging Canadians on energy information. The Board regulates pipelines and electricity transmission lines that cross inter-provincial or international borders, which often involves multiple jurisdictions.
The Board has a legislated mandate to regulate in the Canadian public interest. This means that it must factor economic, environmental and social considerations into its decision-making process, as well as matters with respect to Indigenous interests. The NEB also regulates over the complete lifecycle of a pipeline project (from design through to abandonment) using a wide variety of enforcement tools and activities. This provides one-window for industry and stakeholders, and allows for effective and consistent regulatory approaches at all stages of a project.
The Government has signaled a commitment to modernize the NEB, which was reflected in the Minister of Natural Resources (NRCan Minister) mandate letter where he was directed to: “Modernize the National Energy Board to ensure that its composition reflects regional views and has sufficient expertise in fields such as environmental science, community development, and Indigenous traditional knowledge” and to work with Ministerial colleagues on a review of federal environmental assessment processes.
The NRCan Minister will establish an Expert Panel (the Panel) to conduct a targeted review of the NEB’s structure, role, and mandate pursuant to the National Energy Board Act (NEB Act). Specifically, the Panel shall:
Scope of Review
Efforts to modernize the NEB will deal with a focused set of issues related to the Board’s structure, role, and mandate pursuant to the NEB Act. Specifically, these efforts will aim to position the NEB as a modern, efficient, and effective energy regulator and regain public trust.
NEB Modernization will involve engaging Canadians on reforms to the NEB Act to position the Board to serve the interests of Canadians into the future. Targeted engagement activities will focus on key areas where there may be opportunities to strengthen the NEB. For example, the Panel shall review the structure, role, and mandate of other regulators (e.g., Alberta Energy Regulator) to identify potential best practices and guide its review. The review may also validate areas of strength within the NEB and confirm that actions underway (e.g., the Pipeline Safety Act coming into force) are sufficiently robust. The focus of NEB Modernization shall include:
1) Governance: the mandate letter to the Minister of Natural Resources asks to ensure the Board’s composition is diverse and has sufficient expertise in relevant fields such as environmental science, community development, and Indigenous traditional knowledge. Therefore, potential outcomes could include findings and recommendations in the following areas:
2) Mandate: Canada’s energy sector has undergone significant changes in recent years due to technological innovations and shifting global dynamics. Therefore, potential outcomes could include findings and recommendations in the following areas:
3) Decision-making Roles: Some stakeholders have expressed differing views regarding the appropriate decision-making roles for the NEB, Minister, and the Governor in Council regarding projects, licences, and compensation disputes. Therefore, potential outcomes could include findings and recommendations on whether to maintain or revise the current approach with respect to who is making what decision.
4) Legislative Tools for Lifecycle Regulation: To ensure that the NEB is a modern, efficient, and effective energy regulator, its legislative tools for lifecycle regulation must be comprehensive and robust. To date, there have been significant efforts to optimize these legislative tools (e.g., coming into force of the Pipeline Safety Act). Potential outcomes could include findings and recommendations with respect to the following areas:
5) Indigenous Engagement: Some Indigenous peoples have raised concerns regarding the nature and process of their participation in different aspects of a federally regulated pipeline’s lifecycle. Therefore, potential outcomes could include findings and recommendations in the following areas:
6) Public Participation: Stakeholders have expressed increased interest in the NEB’s activities, including hearing processes and in developing emergency response plans. Potential outcomes could include findings and recommendations in the following areas:
In addition to Natural Resources Canada's efforts to modernize the NEB, Environment and Climate Change Canada is working to review environmental assessment processes under the Canadian Environmental Assessment Act, 2012. Also, the Departments of Fisheries, Oceans and the Canadian Coast Guard and Transport are working together to review changes to the Fisheries Act and Navigable Waters Protection Act, restore lost protections, and incorporate modern safeguards. In preparing for and undertaking the review, the Panel shall take into account the activities associated with the other mandated reviews, with the objective of sharing information received during the respective reviews, where relevant, and coordinating review activities, to the extent possible. If issues arise that fall beyond the scope of NEB Modernization but are related to the other mandate reviews, the Panel shall forward the matter to the appropriate secretariat or department. Participants who would like to participate in the mandated reviews are not expected to duplicate efforts; a single submission can be made to one or more reviews. The relevant information will be shared with the appropriate review bodies with the consent of the participant.
Given that the North has distinct regulatory regimes governed by different legislation and land claim agreements, matters related to these regimes will not be explicitly reviewed by the Panel. However, the Panel may take Northern approaches and frameworks into consideration in developing its report and recommendations on the structure, role, and mandate of the NEB pursuant to the NEB Act.
The Panel shall, in reviewing the NEB structure, role, and mandate, consider the relationship between NEB processes and the Aboriginal and treaty rights of Indigenous peoples, as well as the relationship between NEB processes and the principles outlined in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).
The Review Process
The Minister’s selection of Panel members will be guided by the mandate letter commitment related to the Board’s composition. Therefore, in addition to having background in energy regulation, the Panel should have sufficient expertise in fields such as environmental science, community development, and Indigenous traditional knowledge.
The Panel will consist of five members, including two co-chairs. In the event that a Panel member resigns or is unable to continue to work, the remaining members shall constitute the Panel unless the Minister determines otherwise. In such circumstances, the Minister may choose to replace the Panel member.
By way of letter from the co-chairs, the Panel may request clarification of or an amendment to its Terms of Reference from the Minister. The Panel shall continue with its review to the extent possible while waiting for a response in order to comply with the timelines of these Terms of Reference.
The Panel shall issue a notice to the public regarding any clarifications or amendments to its Terms of Reference and shall make those clarifications and amendments available on its website.
Upon appointment of the Panel, the Panel shall be provided the comments received during the comment period on the draft Terms of Reference. The input received through the online questionnaire “Improving Canada’s Environmental and Regulatory Processes” will also be provided to the Panel.
The NEB Modernization Secretariat
A Secretariat consisting of NRCan and NEB officials will be established within NRCan to provide administrative, technical, and procedural support to the Panel. The Secretariat will work closely with their counterparts in departments and agencies conducting other mandated reviews to share information and ensure a coordinated approach to communications and Indigenous engagement. Members of the Secretariat shall be guided in their work and professional conduct by the Values and Ethics Code for the Public Service.
In collaboration with the Secretariat, the Panel will develop a robust Engagement Plan that encompasses a wide-range of stakeholders interested in providing input in the review. The Panel shall directly engage with provincial and territorial governments to obtain their perspectives on NEB Modernization.
The Panel will prepare a Public Engagement Plan outlining how and when it will conduct public in-person events and other engagement activities. In preparing the Plan, the Panel will take into account the activities associated with the other mandated reviews. This Plan will be posted on the Panel’s website. The Panel shall put procedures in place to allow the public to input into the review in writing and/or in-person and consider this input in the development of its report and recommendations.
The results of stakeholder engagement activities shall be made available on the Panel’s website.
Indigenous Engagement and Consultation
The Panel shall directly engage and consult with Indigenous organizations, groups, communities and individuals during its review in order to gain an understanding of issues and opportunities related to NEB activities.
The Panel shall prepare an Indigenous Engagement Plan, outlining how and when it will conduct Indigenous in-person consultation activities. The Panel shall engage with the leadership of National Indigenous Organizations in the preparation of the Plan. In preparing the Plan, the Panel shall take into account the activities associated with the other mandated reviews. This Plan shall be posted on the Panel’s website. The Panel shall work with regional Indigenous organizations in the planning and hosting of Indigenous in-person consultation activities. The Panel shall also include any procedures necessary for the timely and efficient conduct of these activities. The Panel shall put a process in place to allow Indigenous peoples to input into the review in writing and/or in-person and consider this input in the development of its report and recommendations.
The procedures will allow for the events to be open and to be conducted in a manner that offers all participants an opportunity to provide input. The Panel shall ensure that a record of any Indigenous in-person engagement event is created and posted on the Panel’s website.
The Panel shall, where practicable, hold Indigenous in-person consultation activities in regions or communities where project environmental assessments have been recently conducted or where communities have expressed interest in the review.
The Panel shall, where practicable, recognize and incorporate input and information (i.e., traditional knowledge) from Indigenous peoples on their traditional, cultural and rights-based practices in the review.
The Panel shall take into account the timing of traditional activities in the local regions and communities when setting the time and location of Indigenous in-person consultation activities.
The Panel may retain the services of independent non-government experts, such as establishing expert working groups, to provide advice or information on certain subjects within its mandate. Any advice or information provided to the Panel by those experts will be posted on the Panel’s website.
Natural Resources Canada is offering participant funding to Indigenous organizations, groups, communities and individuals to support their participation in the review.
The Panel shall provide a report to the Minister of Natural Resources that includes the following components:
The Panel shall, on request of the Minister, clarify any of the conclusions and recommendations set out in its report.
The Panel shall conduct its engagement activities commencing in December 2016 and ending in March 2017. The Panel shall complete its review and provide its report to the Minister on or before May 15, 2017.
The results of this work will enable the development of potential legislative changes related to modernizing the NEB. The Prime Minister’s approval would be sought for proposals that engage his prerogative for the machinery of government.
The final report and any other documents produced by the Panel for public dissemination must be produced and made publicly available in English and French. The Executive Summary of the final report will be made available to the public on or before May 15, 2017 in both official languages and the final report in both official languages as soon as possible thereafter. Documents provided to the Panel will be made publicly available in the language that they were received.
All information gathered by the Panel in the course of its work is subject to the provisions of the Access to Information Act and the Privacy Act.