BC and Canada Announce MOU on Environmental Assessment Substitution 


March 2013

Environmental Bulletin

the announcement

On March 15, 2013, the British Columbia government announced the signing of an MOU with the federal Canadian Environmental Assessment Agency (the "Agency") regarding the substitution of provincial environmental assessments under the Canadian Environmental Assessment Act, 2012 (the "Act"). The province also announced its substitution requests relating to the environmental assessments of the Sukunka Coal Mine Project and the Carbon Creek Metallurgical Coal Mine Project.

why was the MOU established?

The MOU is intended to operationalize provisions in the new Act that implement the federal government's one project, one review policy. These provisions were included in the legislation following significant efforts by the province of British Columbia and others to establish a means by which the federal government would rely upon provincial environmental assessment processes, rather than undertaking its own parallel assessment and attempting to coordinate them.

Section 32 of the Act provides that the federal Minister of Environment must substitute a provincial environmental assessment at the province's request, if the minister is of the opinion that the provincial process is an appropriate substitute for the federal process. To approve such a request, a minister must be satisfied of the basic conditions set out in subsection 34(1) of the Act, including whether the provincial assessment will consider the environmental factors set out in the Act, the public will be given an opportunity to participate in a provincial assessment and any other condition that the minister establishes will be met.

what exactly does the MOU do?

The MOU lays out the framework by which a substitution decision will be reached and a substituted provincial environmental assessment will occur. Key procedural steps include the following:

  • A substitution decision will be made at the time (or as close as possible) that the Agency reaches a decision about whether an assessment is required under the Act, or where a project has been designated by the minister as requiring an assessment. (Subsection 3(c))

  • The Agency will provide advice in a "timely manner" to the minister about whether substitution should be approved. (Subsection 3(d))

  • The Agency's advice to the minister may identify federal interests that the minister may wish to consider in determining whether the provincial process is an appropriate substitute, whether any additional conditions should be specified for the provincial process and whether a review panel referral is in the public interest. (Subsection 3(f))

  • A cooperative environmental assessment, or joint review panel, will occur where substitution is not approved. (Subsection 3(g))

  • A substituted provincial assessment must consider the substantive factors set out in subsection 19(1) of the Act. (Subsection 4(a))

  • The procedural aspects of the duty to consult aboriginal groups in respect of a project will be delegated to the province, where appropriate. (Section5(b))


Many aspects of the MOU are fairly straightforward and not particularly controversial. There are however a number of provisions or outstanding questions that are worthy of comment

The MOU appears to permit substitution before the Agency has determined that an assessment is in fact required under federal legislation

One of the first questions to arise when the new Act came into force was whether substitution can be requested and must be approved in advance of a project description being filed and certain steps being taken under the federal legislation. Put another way, the question was "how far down the federal path does one have to go before substitution can occur?"

There is some ambiguity or inconsistency in the legislation in this regard, and competing arguments can be made. One can argue that the legislation is drafted in a way that requires the federal government to receive a project description, send it for public comment, determine that an assessment will be required and that it will not be waived, and determine that the project will not be sent to a review panel, all before a substitution decision could be made.

On the other hand, competing arguments can be made that so long as it is sufficiently clear what "designated project" a substitution request relates to, there is nothing to prevent a provincial minister from requesting and the federal minister from approving such a request well in advance of all of the steps referred to above.

The MOU appears to accept that substitution can in fact occur before various steps have occurred under the federal legislation. Specifically:

  • Subsection 2(a) provides for preliminary information sharing, even before substitution has been requested or any other steps taken under the Act.

  • Subsection 3(c) provides that "the best practice would be for a substitution decision to be made at the time, or as close as possible to the time, when the Agency reaches a decision on whether an environmental assessment is required..." (emphasis added). It does not require the Agency decision in advance.

  • Subsections 3(d) and (e) address situations in which the provincial minister makes a request for substitution prior to or after the time that the federal agency seeks public comments on the project description, and in both cases approval of substitution is a possibility.

The MOU appears to take a broad view of the Agency's role in advising the minister whether to approve substitution

In several places, the MOU refers to the Agency advising the minister on the substitution request. There is of course nothing wrong with the Agency advising the minister on his exercise of powers under the Act, but it is important to note the limits of the minister's powers themselves.

Section 32 of the Act provides that the minister "must" approve the substitution if he is of the opinion it would be an "appropriate substitute", and section 34 provides that he may only do so if he is satisfied certain specified requirements are met. The provisions in the MOU that contemplate the Agency providing advice are not limited to the factors set out in section 34 and instead refer more broadly to matters such as federal jurisdictional interests, the potential for transboundary effects, changes to the environment that may affect federal lands and whether a review panel would be in the public interest. Given that the Act specifies that the minister "must" approve substitution in specified circumstances, it may be argued that these factors which the Agency intends to consider in providing its advice are broader than the legislation contemplates. At the same time, given that the legislation applies where the minister is of the opinion there is "an appropriate substitute", it may also be argued that the Agency can make recommendations in relation to such matters and the minister could consider them if he wishes to do so.

It is also noteworthy that subsection 3(f) of the MOU indicates the Agency, when providing advice to the minister, may also consider whether any additional conditions to address federal jurisdictional interests should be established before a decision is made. This appears to relate to subsection 34(1)(f) of the Act, which provides that in addition to all of the other requirements of subsections 34(1)(a)-(e), the minister may establish further conditions before a substitution will be approved. This section does not however refer to "federal jurisdictional interests" as the MOU does, nor does it appear to be applicable to individual substitution decisions. Rather, it would appear to relate to conditions that the minister may, or may not, establish for all projects.

It is not clear how substitution for "classes" of projects will occur

Subsection 32(2) of the Act provides that substitution may be approved in respect of any designated project or a class of designated projects. The Act itself is unclear whether the class designations could occur in a prospective manner but it would certainly seem that that is the intention.

The MOU contains only limited guidance on class substitution. Subsection 3(h) merely provides that when the provincial minister makes a request for substitution for the class of designated projects, the Agency will provide its advice to the minister within 90 days. It goes on to provide that where a class of projects has been approved, the environmental assessment office will advise the Agency of any particular projects that it believes falls within the class, and the Agency will have 10 days to advise whether it agrees or not.

The MOU contemplates formal procedural delegation regarding aboriginal consultation

While the law is clear that governments can assign procedural aspects of consultation to another entity, that does not discharge the requirement to ensure the Crown's duty to consult aboriginal people has been met before decisions are made. Given that under substitution the federal minister still makes a decision at the end of the provincial environmental assessment process, it will remain necessary for the federal government to ensure that it has discharged its duties to consult aboriginal people. The MOU contemplates the federal government being in this position, through the use of a formal procedural delegation, discussed in part 5 of the MOU. There are related provisions in part 7 of the MOU to ensure that when the assessment report and consultation record are provided to the federal government, a briefing will occur to ensure that the federal government duly considered whether any other mitigation or accommodation measures are required. This appears to be a very practical and sensible approach to these issues.


Overall the MOU appears to be a reasonable and practicable means for implementing the substitution provisions, and in many ways the success or failure of these provisions will depend on the day-to-day administrative actions undertaken by federal and provincial staff charged with implementing them. While some uncertainties remain, this is not unexpected, particularly given certain ambiguities or inconsistencies in the legislation itself. Despite these challenges, given the long history that led to the inclusion of section 32 in the Act, and the importance of eliminating duplication and overlapping environmental assessments, it is hoped that these provisions and the MOU will be implemented with vigour and with full regard to the underlying policy goals of government.

by Robin Junger1 and Brittnee Russell2

1 Robin Junger is a partner in McMillan's Business Law group. He is National Co-Chair of McMillan's Aboriginal and Environmental Law Groups, and Co-Chair of the Oil and Gas (BC) group. He was formerly the Associate Deputy Minister responsible for the BC Environmental Assessment Office and Deputy Minister of Energy, Mines and Petroleum Resources.  

2 Brittnee Russell is an associate in McMillan's Business Law group. Her practice is mainly in the areas of environmental assessment and environmental and aboriginal law.

cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013