​The Senate’s seven new steps to put an end to Canada’s “pipeline paralysis”

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Removing “pipeline paralysis” is in the best interest of Canadians, but the regulatory system for projects is dated and insufficiently inclusive, says a new report from the Standing Senate Committee on Transport and Communications.

In March 2016 the Senate set out to examine the development of a strategy to facilitate the transport of crude oil to eastern Canadian refineries and to ports on the East and West coasts of Canada.

It has come back with seven recommendations designed to restore legitimacy to the pipeline approval process, citing the federal government’s obligation to make use of the country’s abundant resources so that all Canadians can benefit.

“Pipeline construction in Canada has been become political and divisive. The National Energy Board is not equipped to address valid environmental and Indigenous concerns,” said Senator Michael MacDonald, deputy chair of the committee.

“Canada needs a more inclusive, rational and fact-based regulatory process if we are to undertake the much-needed expansion of our energy infrastructure.”

Here are the recommendations:

  1. Natural Resources Canada, in collaboration with Indigenous peoples, industry and academia, should develop and update annually a working document of best practices in building partnerships with Indigenous communities in the natural resources sector.
  2. An Indigenous peoples’ representative should be permanently appointed to the National Energy Board; this person should be chosen in consultation with Indigenous communities.
  3. The NEB process should be modernized by:
    • Removing Cabinet’s automatic final approval of pipeline projects, thus empowering the NEB to act in Canada’s national interests on pipeline decisions. These NEB decisions would be subject to appeal to the Governor in Council, similar to some licensing decisions by the Canadian Radio-television and Telecommunications Commission.
      “The current requirement for final approval from cabinet virtually guarantees the regulatory process is highly politicized rather than decided on the merits of the proposal at hand.”
    • Ensuring that Canadians have multiple ways of participating in the NEB process, including online participation.
    • Broadening the NEB’s mandate to include greenhouse gas emissions and other environmental matters that are within the scope of pipeline construction.
    • Broadening the NEB’s mandate to ensure effective communication and consultation with stakeholders.
    • Having the federal government conduct its consultation with First Nations at the same time as the NEB’s review of a pipeline project, and feeding the results of that consultation into the NEB process before the board’s final decision on a project.
  4. The National Energy Board, as part of its hearings on the proposed Energy East project, examine the Strait of Canso area as an alternative end point of the pipeline.
  5. Natural Resources Canada should focus on improving public knowledge about regulatory processes, the economic importance of the oil and gas sector, and its impact on Indigenous peoples and the environment.
  6. Fisheries and Oceans Canada should ensure that the Oceans Protection Plan includes enhancements to the Canadian Coast Guard, including an expansion of resources and bases of operations for the purposes of oil tanker spill mitigation and prevention.
  7. The Government of Canada continue its research into the behaviour of various types of oil in water and how aquatic ecosystems can be better reclaimed after an oil spill, as outlined in the Oceans Protection Plan.

“Like the construction of the Canadian Pacific Railway almost 150 years ago, pipeline construction is an exercise in nation building,” said Senator Terry Mercer, a member of the committee.

“An expanded pipeline network will ensure more Canadians share in economic benefits from the Western oil patch while enhancing our ability to get our oil to tidewater and to global markets that offer better prices.”