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1998 Report of the Commissioner of the Environment and Sustainable Development

Chapter 6—Environmental Assessment—A Critical Tool for Sustainable Development

Main Points

Introduction

Inadequate environmental assessment can result in high financial and environmental costs

What is environmental assessment?

We all have an interest in environmental assessment

Federal requirements for environmental assessment

Focus of the audit

Observations and Recommendations

Environmental Assessment Must Look at the Right Things

Not all federal projects are assessed
Important portions of projects may be excluded from environmental assessments
Environmental assessments may not consider all potentially significant environmental effects
Cumulative effects are difficult to assess

Information on Environmental Assessment Is Inadequate

Information in the Federal Environmental Assessment Index is incomplete and difficult to use
Screening reports are often incomplete
Poor information undermines public participation
The Agency's annual reports avoid difficult issues

Opportunities Exist to Improve the Efficiency of Environmental Assessment

An important efficiency tool is not being utilized
There is little evidence of federal-provincial duplication
Federal authorities need to co-operate with each other

Environmental Assessment Does Not End with Project Approval

Mitigation measures are not always monitored
Follow-up of environmental effects needs to be strengthened
The Agency and responsible authorities are not gathering information on results

Decentralized Implementation Needs Quality Control

Policy and Program Assessments Are Not Setting the Tone

Why policies and programs need to be assessed
Departments have been slow to implement environmental assessment of programs and policies
Steps to improve the environmental assessment of programs and policies may not be enough
Departments need to be encouraged to implement the Cabinet directive

Conclusion

There are many opportunities for improved environmental assessment

Several factors contribute to the deficiencies that we observed

About the Audit

Main Points

6.1 Environmental assessment is the examination of planned projects, programs, policies or activities to ensure that potential impacts on the environment receive careful consideration before decisions are taken in connection with them. It is a critically important planning tool, given the potential for serious and irreversible damage to the environment from human activity.

6.2 Significant environmental consequences can be overlooked and environmental damage can occur as a result of some of the deficiencies that we have noted in the conduct of screenings. Screenings account for more than 99 percent of the approximately 5,000 environmental assessments carried out each year under the Canadian Environmental Assessment Act.

  • Screenings may not consider all of the elements of a project or all of its potentially significant environmental impacts.
  • Monitoring of mitigation measures and follow-up of environmental results are insufficient.
6.3 There are significant deficiencies in the quality and usefulness of public information about federal environmental assessment, particularly information on screenings. For example:

  • Information in the federal environmental index is incomplete and difficult to use.
  • A majority of the screening reports we examined did not provide sufficient information to determine if all significant environmental effects had been considered.
6.4 Environmental assessment is an important tool for dealing with broad environmental and sustainable development implications of policies and programs. Departments have been slow to implement environmental assessment of programs and policies as required by a 1990 Cabinet directive.

6.5 The federal government is not gathering the information needed to let Canadians know whether or not environmental assessment is achieving expected results.

6.6 Good practices identified during our audit provide a basis for improving the quality of environmental assessment.

Introduction

Inadequate environmental assessment can result in high financial and environmental costs
6.7 Environmental assessment is the examination of planned projects, programs, policies or activities to ensure that potential impacts on the environment receive careful consideration before decisions are taken in connection with them. It is a critically important planning tool, given the potential for serious and irreversible damage to the environment that can result from human activity. Failure to consider adverse environmental impacts before carrying out an undertaking can lead to significant environmental degradation, damage to human health, and increased economic costs. The high clean-up costs and environmental damage at the Sydney Tar Ponds in Cape Breton illustrate some of the consequences of lack of environmental foresight.

What is environmental assessment?
6.8 Although those involved in environmental assessment are not unanimous on what constitutes a "good" assessment, a review of current practices, legislation and literature suggests that it should include the major components set out in Exhibit 6.1 . Whether or not each of these components is actually factored into an individual assessment will depend on the potential environmental significance and on the judgment of the individual conducting the assessment. Most of these components are included in the requirements of the Canadian Environmental Assessment Act.

We all have an interest in environmental assessment
6.9 Different parties have an interest in environmental assessment, including the proponent of the undertaking, the public that might be affected by it, and various governments. The interests of the parties sometimes coincide, but often may conflict, given that the costs and benefits of an undertaking, including the environmental costs and benefits, are different for each of the parties.

6.10 Project proponents. Project proponents recognize the need to conduct environmental assessments in order to avoid environmental damage for which they might be found liable. Many project proponents also recognize that they have a role to play as responsible citizens in their communities and that there is a potential economic benefit to be gained from being environmentally responsible. At the same time, conducting an environmental assessment often involves costs and delays, and the assessment may sometimes recommend costly measures that will not necessarily provide a return on the proponent's investment. Many of the costs of harming the environment are indirect and a proponent may see little reason to worry about costs that will be borne by the general public, by someone else or by future generations.

6.11 The public. The public has a general interest in protecting the environment in order to provide for its use and enjoyment by present and future generations. Generally people are concerned about sustainable development, and they understand that if the environment is damaged, it is they and their children who will bear the costs and suffer the consequences. People also benefit from undertakings through the creation of jobs and wealth. Some conflict can occur where different segments of the public share unequally in an undertaking's costs and benefits. Conflicts between loggers and environmentalists are examples.

6.12 Various governments. Governments must plan their own activities carefully in order to incorporate potential environmental effects into their decision making. For undertakings by other parties, governments also have a broader interest to protect the health of current and future generations and of the environment. Furthermore, in many cases it will be up to the government to bear the cost of repairing environmental damage. Environmental assessment is a critically important tool that governments can use to protect their interests and to promote sustainable development.

Federal requirements for environmental assessment
6.13 The federal Environmental Assessment and Review Process came into effect in 1974. In 1984, Environmental Assessment and Review Process Guidelines were issued by order-in-council. The order-in-council, which required that all federal proposals be subject to an environmental assessment, was sometimes ignored by departments and agencies until a series of legal challenges - particularly those related to the Oldman River and Rafferty-Alameda Dams- resulted in the determination that the guidelines had the effect of law. In 1987, the federal government began extensive consultations on reforming the Environmental Assessment and Review Process. The Canadian Environmental Assessment Act came into effect in January 1995.

6.14 The Act applies to "federal authorities", that is, federal departments and a limited number of federal agencies. A distinctive feature of the Act is that most assessments are "self-directed". That is, federal authorities rather than a single government agency are responsible for ensuring that an environmental assessment of a project is conducted under the Act. Exhibit 6.2 sets out the process for determining whether a federal authority is required to conduct an environmental assessment. When a federal authority is required to conduct an assessment, it becomes a "responsible authority" under the Act. Both "federal" authority and "responsible" authority are used in this chapter depending on the circumstances.

6.15 The Act provides for four levels of environmental assessment. Each level represents additional public consultation and Agency involvement in the process. Exhibit 6.3 describes each type of environmental assessment and the numbers reported in the three years since the Act came into force. The table shows that more than 99 percent of environmental assessments are screenings. In such cases, it is the responsible authorities that are responsible for all of the decisions with respect to the environmental assessments.

6.16 The role of the Canadian Environmental Assessment Agency (the Agency) is to administer the Act and to provide related advice and assistance to the Minister of the Environment and to federal authorities with respect to the Act . Under the Act the primary operational responsibility of responsible authorities is the conduct of screenings, whereas the Agency's primary operational responsibility is the administration of the comprehensive study process and panel reviews.

6.17 Most of the federal authorities operate on a decentralized basis. Decisions to authorize projects, provide funding, dispose of land, or issue permits may be made in various regional or district offices rather than at a central headquarters. As a result, environmental assessments are reviewed by a wide variety of officials across the country. They may be dealing with different types of projects, proponents, and environments. They also may be dealing with a variety of different provincial, territorial or municipal governments and Aboriginal groups, whose attitudes may differ about the importance of environmental assessment or about what they may view as federal interference in their areas of jurisdiction.

6.18 The Canadian Environmental Assessment Act applies only to physical works and a limited number of physical activities. Four critical regulations were included at the time the Act came into force:

  • The Law List Regulations list the various federal statutory and regulatory approvals that trigger an environmental assessment under the Act. An example is a permit to build bridges under the Navigable Waters Protection Act .
  • The Inclusion List Regulations describe physical activities that must be subjected to an environmental assessment. Examples are low-level flying and ocean dumping.
  • The Exclusion List Regulations identify those undertakings with respect to a physical work that do not require an environmental assessment. Examples are routine maintenance of existing physical works and construction of small buildings.
  • The Comprehensive Study List Regulations describe those types of projects that require a more thorough assessment than for a screening. An example is the construction of a new uranium mining facility.
6.19 To complement the Act , there is also a Cabinet directive that creates a non-legislated requirement for the environmental assessment of all federal policy and program initiatives, where these are relevant.

Focus of the audit
6.20 Much of the public awareness of environmental assessment is based on the handful of high-profile cases that are the subject of panel reviews, comprehensive studies, or court cases. These represent considerably less than one percent of the environmental assessments that are carried out each year under the Act .

6.21 We chose to focus our audit on the challenges that responsible authorities must face in dealing with the approximately 5,000 screenings carried out each year under the Act. We also examined the processes in place for the environmental assessment of programs and policies in accordance with the Cabinet directive.

6.22 For our audit we selected 11 organizations that together account for more than two thirds of all environmental assessments carried out under the Act. In part, the organizations were chosen to reflect a cross-section of government activities and the various triggers for assessment under section 5 of the Canadian Environmental Assessment Act. (see Exhibit 6.4) .

6.23 In each organization, we reviewed the procedures for conducting environmental assessments and examined a selection of files to determine how the processes actually functioned. We reviewed 187 screenings for projects located primarily in British Columbia, Alberta, Québec and Nova Scotia. For the Northern Affairs Program of Indian and Northern Affairs Canada, we examined files in the Yukon; and for the Atomic Energy Control Board, most of the projects examined were either in Ontario or Saskatchewan. The screenings were selected by the audit team and by the organizations to reflect typical activities and challenges in carrying out their responsibilities under the Act . The 187 projects vary greatly in size, location and potential for causing significant environmental damage. Where possible, we selected screenings for larger and potentially more environmentally significant projects.

6.24 The audit objectives, scope and criteria are set out in more detail at the end of this chapter in the section headed About the Audit .

Observations and Recommendations

Environmental Assessment Must Look at the Right Things

6.25 Environmental assessment can work only if those responsible are looking at the right things. We considered three questions:

  • Are all projects that should be assessed under the Canadian Environmental Assessment Act and Regulations being assessed?
  • Do the assessments consider the whole project?
  • Do the assessments consider all of the potentially significant environmental effects?
Not all federal projects are assessed
6.26 Federal authorities have put control procedures in place. The federal authorities included in our audit have procedures in place that should ensure that an environmental assessment is carried out if required by the Act before a final decision on a project is taken. However, there are situations where environmental assessments are not conducted. These can occur where a federal authority is not aware of a project; where opinions differ on whether an assessment is required; or where the system breaks down and the assessment is conducted either after the project is approved or so late in the planning phase that it cannot influence the project. Although such occurrences do not appear to be frequent, they point out a need for more vigilance.

6.27 Not all proponents apply for required permits. We were told that there are circumstances where no application is made for a required federal permit because the project's proponent either is not aware of the requirement or wants to avoid the costs related to the permitting and the environmental assessment. Penalties for not obtaining a federal permit can be much lower than the cost of going through the permitting and environmental assessment procedures. Canadian Coast Guard officials in one region told us they suspect that more than half the structures that should be requesting licenses under the Navigable Waters Protection Act are not. As a result, these structures do not undergo an assessment under the Canadian Environmental Assessment Act.

6.28 Federal authorities should strengthen compliance measures to ensure that all project proponents apply for required permits and licenses in the Law List Regulations.

6.29 There are uncertainties about the application of the Fisheries Act . Section 35 of the Fisheries Act makes it an offence to destroy fish habitat unless authorized in advance to do so by the Minister of Fisheries and Oceans. Penalties for destroying fish habitat without prior authorization can include jail terms, fines of up to $1,000,000 or both. Many observers consider the Fisheries Act one of the most potentially powerful pieces of federal environmental legislation. Environmentalists successfully lobbied to have authorizations under section 35(2) of the Fisheries Act included in the Law List Regulations so that such authorizations would trigger an environmental assessment under the Canadian Environmental Assessment Act.

6.30 Proponents frequently consult Fisheries and Oceans prior to undertaking projects that might destroy fish habitat. In many cases, the Department may simply advise, either orally or in writing, that the project as planned is not likely to result in destruction of habitat. Fisheries and Oceans officials may also make recommendations to modify the project or to take other mitigating measures designed to prevent the destruction of fish habitat. In reviewing projects, the Department's officials focus on avoiding fish habitat destruction and they consider it a success if they do not have to issue a letter authorizing the destruction of habitat.

6.31 Environmentalists have pointed out to us that they believe that the Department is not issuing section 35(2) authorizations in order to avoid having to conduct environmental assessments. The Department's position is that if Fisheries and Oceans meets the primary objective of avoiding habitat destruction, then no authorization for destruction is required. Consequently, there is also no requirement to conduct an evaluation under the Canadian Environmental Assessment Act.

6.32 Poor statistics and uneven interpretation of section 35(2) within Fisheries and Oceans before the Canadian Environmental Assessment Act came into force may have contributed to misunderstanding about how many section 35(2) authorizations would be issued each year. In recent years, Fisheries and Oceans Canada has clarified the situations that require a section 35(2) authorization and improved its information on such authorizations. Nevertheless, there are still large variations from one region of the Department to the next in the numbers of environmental assessments triggered by section 35(2) of the Fisheries Act .

6.33 Fisheries and Ocean Canada should enhance procedures to ensure that habitat protection provisions of the Fisheries Act, and consequent environmental assessment requirements, are applied consistently in all regions of the Department.

6.34 Last-minute environmental assessment contributes little to project planning. A couple of responsible authorities have a tendency to conduct environmental assessments only after all other factors in a project's approval have been considered. This is quite common with projects funded by the Atlantic Canada Opportunities Agency. We even noted a few cases in other organizations where, notwithstanding the control procedures in place, the screening was conducted after the project had been approved. Last-minute environmental assessment can put pressure on officials conducting the screening to deliver a product that is less detailed than required and has little likelihood of reducing a project's potential environmental impact.

6.35 Responsible authorities should ensure that environmental assessment is integrated early in the project planning and approval process.

Canadian Environmental Assessment Agency's response: The Agency agrees with the recommendation, as it is one of the fundamental principles of the Act.

The Agency is working with responsible authorities (RAs) to establish a Compliance Monitoring Framework, which will assist RAs to implement quality control mechanisms so that all environmental assessments can be integrated early in the project planning and approval process.

6.36 Many federal organizations are not required to conduct environmental assessments. Federal agencies such as Crown corporations and Harbour Commissions are not responsible authorities under the Canadian Environmental Assessment Act . Projects they undertake are not subject to the Act unless a responsible authority is involved in the project either through funding, the transfer of land, or the issuance of a licence or permit. The Act includes provisions that allow for the development of regulations for Crown corporations and Harbour Commissions. These regulations have not been developed, so projects undertaken by these organizations that do not involve a responsible authority are excluded from any formal requirement to comply with the Act. Furthermore, most of these federal organizations are also exempt from provincial environmental assessment requirements for projects they undertake. With the current trend to transfer certain federal activities to corporations outside the umbrella of federal departments, we can expect that an increasing proportion of such activities will not be subject to environmental assessment. For example, the Act is unlikely to apply to projects undertaken on federal airport lands that are now leased to local airport authorities.

6.37 Projects that receive funding and that are on Indian lands are also excluded from environmental assessment under the Act, although there are provisions for making regulations to include them. In the absence of regulations, Indian and Northern Affairs Canada, Health Canada and the regional economic development departments and agencies have agreed to carry out environmental assessments before providing funds for such projects. Since these assessments are not carried out under the Act, they are not reported in the Federal Environmental Assessment Index. Nevertheless, we included a number of them in our review.

6.38 Where appropriate, the Canadian Environmental Assessment Agency should accelerate its plans to develop regulations to include a broader range of federal activities under the Canadian Environmental Assessment Act.

6.39 Federal authorities should ensure that leases of federal lands include provisions for environmental assessment of future projects.

Important portions of projects may be excluded from environmental assessments
6.40 The Canadian Environmental Assessment Act requires that in screenings and comprehensive studies the responsible authority determine the scope of the project, that is, those components of the proposed development that should be considered part of the project for purposes of the environmental assessment. These are to include the principal project and any other physical works or physical activities that are interdependent or linked to the principal project.

6.41 The Agency has developed guidance on the scoping of projects. The Act allows considerable latitude to responsible authorities in setting project scope. We expected that guidance would be provided by the Agency and departments that would be sufficient to achieve consistency in the scope of projects to be assessed. The Agency's guidance is intended to apply to the broad range of projects and activities that federal authorities deal with, and generally it provides a good starting point for scoping projects. However, some of the federal authorities we interviewed suggested that the Agency's guidance on scoping was too theoretical and thus not particularly useful for dealing with the types of projects for which they were responsible.

6.42 We expected that those departments who felt the need for more specific guidance would have developed such guidance with the Agency's assistance. However, only one of the federal authorities in our sample, Agriculture and Agri-Food Canada, had developed guidelines for scoping the projects it typically deals with under the Prairie Farm Rehabilitation Administration. One region of the Canadian Coast Guard has developed an informal guideline on the scoping of bridge projects that require a license under the Navigable Waters Protection Act ; it limits the project to the bridge, 30 metres on either side of it, and 0.5 kilometre upstream and 1 kilometre downstream. While these distances may be sufficient to assess the impacts of a bridge on the local fish habitat, this guideline does not consider whether the bridge is in fact part of a larger project, such as a road.

6.43 Where principal projects clearly have no interdependent or linked projects or activities, determining the scope is relatively simple. Where the project scope could conceivably have included more than just the principal project, however, 6 of the 11 responsible authorities we reviewed had leaned to a project scope more narrow than recommended in the Agency's "Responsible Authority's Guide". Generally, scoping of projects tends to be narrower where the assessment is triggered by funding or by the delivery of a license or permit. In the 187 screenings that we reviewed, there were about 15 percent where access roads or other project components that could have been scoped with the principal project were not.

6.44 We cannot state with certainty whether or not the scope of any individual project was determined "correctly". We can state, however, that there have been inconsistencies from region to region or over time in the way some responsible authorities determined the scope of projects that were similar. The inconsistencies are due to a combination of factors: uncertainty and differences of opinion about the how project scope should be determined, particularly for assessments triggered by the issuance of a license or permit; the general nature of the Agency guidelines; lack of departmental guidelines; and concern about federal intrusion in areas of provincial jurisdiction. None of the federal authorities we reviewed had procedures in place to periodically review the appropriateness of the scope of projects they had assessed.

6.45 Federal authorities, in conjunction with the Canadian Environmental Assessment Agency, should develop guidelines specifically designed for the scoping of typical projects with which they deal.

Agency's response: The Agency is leading an interdepartmental forum on Guidance and Training to improve the quality, timeliness, and customization of information for departments. The committee will share best practices and resources for the development and implementation of guidance and training material, and will assist departments in dealing with such issues as scoping.

Environmental assessments may not consider all potentially significant environmental effects
6.46 The Act requires that a number of factors be considered for a screening (see Exhibit 6.3 ). These include the environmental effects of the project (including any cumulative effects), the significance of the effects, comments from the public where appropriate, economically and technically feasible mitigation measures, and any other matters "that the responsible authority may require".

6.47 The factors that the assessment will consider can be influenced by the wording of the Act, previous legal decisions, the advice and guidance provided by the Environmental Assessment Agency or by departments, input from the public, and the personal judgment of the individual responsible for the assessment. Moreover, the individuals making these judgments have a variety of skills and backgrounds. Every decision or judgment made along the way can affect the substance of the environmental assessment and the eventual decision made about the project.

6.48 Information on the project environment is often deficient. To determine the environmental effects of a project, and their significance, the individuals conducting the environmental assessment need a good understanding of the project and of the environment in which it is located. In at least 77 of the 187 projects that we reviewed, information on the existing environment was not provided or was too sketchy to allow a reader of the screening report to assess whether the assessment had considered all significant potential environmental effects. In some cases, the official carrying out the assessment or reviewing a third-party assessment did not even visit the site. We question whether, in the absence of a clear understanding of the project and the environment in which it is to be undertaken, it is possible to determine whether the screening has included all potentially significant environmental effects.

6.49 We found that 5 of the 11 responsible authorities whose assessments we reviewed tended to include a broader range of environmental effects than the other 6. The organizations that used checklists of potential factors to consider generally included a wider range of factors in their assessments. However, it was not always clear from the information available in the file that some of the items on the checklist had actually been seriously considered. We had more confidence in the usefulness of the checklists when supplementary information was provided explaining the responses.

6.50 Screenings triggered by the Law List Regulations consider only a narrow range of effects. We have already noted that such screenings tend to take a narrow approach to the project scope. They also tend to examine a narrower range of environmental effects than those for projects whose proponent was the responsible authority. Basing the screenings on a narrow project scope and on a limited range of potential environmental effects results in a greater likelihood that potentially significant environmental effects will not be examined.

6.51 Concern about federal intrusion in provincial spheres of responsibility is one reason for this narrow approach to environmental assessment. Some of the environmental assessments triggered by the Law List Regulations are for projects that are primarily under provincial jurisdiction. The most obvious examples are private sector forestry and mining projects and provincial road construction. Such projects frequently require a permit under the Navigable Waters Protection Act or an authorization under the Fisheries Act, or both.

6.52 This means that in a typical environmental assessment for a bridge permit under the Navigable Waters Protection Act , the Canadian Coast Guard would consider only the bridge, and not any logging road of which it may be a part. Furthermore, it would consider the effects on fish habitat (a federal responsibility) but not, in most cases, on other wildlife habitat (a provincial responsibility), nor would it consider general effects of the logging operation on fish habitat (as this is beyond the scope of the bridge project). Parallel provincial environmental assessment processes may look at some of these issues in some provinces, but this is not always the case.

6.53 Environmentalists feel that the responsible authority in such cases has an obligation to broaden both the project scope and the range of issues to be assessed. Provincial authorities and private sector proponents generally disagree. The Agency's guide on scoping provides advice to responsible authorities exercising their discretion for setting the scope of projects and the effects to be considered. The guidance advises that for environmental assessments triggered under the Law List Regulations , the scope of the project and of the effects to be considered may have to be less broad than for assessments triggered for other reasons. An environmental group in Alberta is currently taking court action to require that a responsible authority broaden both the scope of the project and the range of factors to be considered in the case of a series of bridges being built for a logging road.

6.54 There is evidently considerable difference of opinion on how far the federal government may go in looking at environmental effects that come under provincial heads of power. Court decisions might provide additional guidance on how to deal with this issue.

Cumulative effects are difficult to assess
6.55 The Canadian Environmental Assessment Act requires that the environmental assessment "shall include a consideration of. . .any cumulative environmental effects that are likely to result from the project in combination with other projects or activities that have been or will be carried out." The assessment of cumulative environmental effects presents some difficulties, due to the complexity of the issue and to disagreements on how such effects should be assessed.

6.56 Parks Canada has developed a guide on the evaluation of cumulative effects, and deserves to be acknowledged for taking the lead in cumulative effects assessment in the federal government. In December 1997, the Agency issued for discussion its own draft guide on the evaluation of cumulative effects. Both guides are based on an ecosystem approach and provide a good starting point for cumulative effects assessment. However, this approach requires a good understanding of the ecosystem in which the project is taking place and of the stressors that are acting on that ecosystem.

6.57 The challenge for responsible authorities and for project proponents is that normally they do not have complete information about the ecosystem where a project is being proposed. There is also some dispute over whether it is the responsibility of project proponents or of governments to develop baseline information about ecosystems and their stressors. The Act does not provide any clarification of that issue. What is clear is that without the necessary information, it may be very difficult to assess the cumulative environmental effects of a proposed project.

6.58 Of the 187 environmental assessments in our sample, 159 were conducted by responsible authorities other than Parks Canada. We found that 48 of these 159 assessments indicated that cumulative environmental effects had been considered. In most of those assessments, however, there was little evidence to indicate the nature of the cumulative effects assessment, including whether there had been an analysis of the ecosystem and its stressors. In practice, only Parks Canada is considering cumulative environmental effects on a regular and rigorous basis.

6.59 The Canadian Environmental Assessment Agency should accelerate its work with federal authorities, provincial governments, academics, and other interested parties to encourage the assessment of cumulative effects, where appropriate.

Agency's response: The Agency is currently consulting widely on a draft Practitioner's Guide on Cumulative Effects Assessment (CEA), prepared for the Agency by a working group of CEA specialists from the federal, provincial and academic communities. The Guide will be finalized and distributed in the coming months. Feedback to date from the consultations indicates that the Guide will be practical and useful, and will assist in effective assessment of cumulative effects.

Information on Environmental Assessment Is Inadequate

6.60 Public participation is an important principle of environmental assessment. Members of the public can often bring valuable input to the environmental assessment through their knowledge of local conditions or of broader environmental issues. They may also have important knowledge or experience related to the proposed project or its proponents. The public, as we have noted, also has an interest in the results of environmental assessment. Good communication of information is essential in order to obtain public input. One of the underlying principles of the Canadian Environmental Assessment Act is public participation. The Act contains provisions to facilitate such participation.

Information in the Federal Environmental Assessment Index is incomplete and difficult to use
6.61 Although the Act does not require it to do so, the Agency has created a computerized database called the Federal Environmental Assessment Index (the Index). Its purpose is to provide a "one-window access to information on the who, what, when, where, and why of any environmental assessment conducted under the Act, regardless of the responsible authority. It also directs the public to contacts and document listings related to specific environmental assessments." While federal authorities are not obligated to use the Index, all of the organizations we reviewed have elected to do so.

6.62 The concept underlying the Index is good, but it has been difficult to implement. Officials of responsible authorities find the Index difficult to use. Several complained that the procedures for entering data in the system were slow, awkward and time-consuming. This may account for the fact that fewer than half of the 187 projects we reviewed had been registered in the Index before the assessment was completed and a decision made. More than 10 percent of the projects we reviewed still had not been registered at the time of our review.

6.63 Even when information is entered properly and on time, the Index is not as useful as it could be. It provides no information on the substance of the projects or the related assessments. Anyone wanting this information would have to request the related documents, such as the screening reports, from the contact person identified in the Index. Given the short time normally available for public comment on screenings, these delays may effectively preclude public input. Furthermore, the organization of the data in the Index and the related search tools are so poor that it is difficult to find information or to analyze it.

6.64 The Canadian Environmental Assessment Agency should review the Federal Environmental Assessment Index and make improvements required to:

  • facilitate prompt data entry by responsible authorities;
  • facilitate access by interested stakeholders and researchers; and
  • provide improved search tools for stakeholders and researchers.
Agency's response: The Agency is making technological and other improvements to its web site, which includes the Federal Environmental Assessment Index (FEAI). An upgraded version of the FEAI will be easier to use by government departments and will encourage more timely data filing. Improved search tools will facilitate easier access to the Index by stakeholders and researchers.

6.65 The Canadian Environmental Assessment Agency and responsible authorities should assess the feasibility of modifying the Federal Environmental Assessment Index to allow screening reports to be accessed directly through the Index as early in the screening process as possible.

Agency's response: The Agency will work with responsible authorities to look into the possibility of making screening reports accessible through the FEAI. The Agency is also looking into the feasibility of making comprehensive study reports available on its web site. Panel reports are already accessible and can also be consulted on the Agency's CD-ROM library, which is updated annually.

Screening reports are often incomplete
6.66 The CEAA requires the preparation of a screening report that "summarizes the results of the screening". The Agency's Responsible Authority's Guide provides guidance on what should be included in the screening report. This includes a description of the project, a description of the environment, a summary of environmental effects and their significance, and a list and description of any mitigation measures needed to reduce significant adverse environmental effects.

6.67 A majority of the 187 files we examined had screening reports that did not meet the minimum criteria set out in the Agency's guide. In particular, the description of the project or of the environment was often incomplete. This would make it very difficult for a member of the public to determine whether the environmental assessment had in fact considered all of the potentially significant environmental effects of the project.

6.68 Responsible authorities should ensure that screening reports meet the requirements for public information as set out in the Responsible Authority's Guide of the Canadian Environmental Assessment Agency.

Agency's response: The Agency is leading the development of a compliance monitoring framework for the Act and its regulations. This will assist federal departments to gather consistent information on compliance with the Act, and on the quality of their environmental assessments. This will in turn assist the RAs in standardizing the information they gather for screening reports and will improve the consistency and quality of information.

Poor information undermines public participation
6.69 Public participation in the federal environmental assessment process is one of the fundamental principles set out in the Act. Having an information source that is neither timely nor complete, that is difficult to access and to use, and that may not meet Agency guidelines compromises the principle of facilitating public participation in the environmental assessment of projects.

6.70 Despite these shortcomings, there are some signs that responsible authorities are trying to improve the quality of information to the public. For example, Parks Canada is very sensitive to public concerns about environmental degradation in our parks. In one of its regions, we were told that project proposals and requests for public input are posted in Parks Offices and Parks Visitor Centres before any environmental assessments are completed. In some cases, copies of this information are also faxed to public interest and environmental groups who have shown an interest in a particular park.

The Agency's annual reports avoid difficult issues
6.71 On behalf of the Minister of the Environment, the Canadian Environmental Assessment Agency prepares an annual report to Parliament "on the activities of the Agency and the administration and implementation of this Act." The report "shall include a statistical summary of all environmental assessments conducted or completed" during the year under review.

6.72 The Agency has faced significant challenges in implementing and administering the Act. Nevertheless, the Annual Report makes little mention of these concerns, focussing instead on the Agency's activities and a statistical summary of assessments conducted. As a result, the report does not sufficiently address, for the public and parliamentarians, whether steps need to be taken to improve the implementation of the Act. However, such information was included in the Agency's first Performance Report to Parliament in November 1997 and its 1998-99 Estimates - A Report on Plans and Priorities, tabled in Parliament in March 1998.

6.73 The Canadian Environmental Assessment Agency should prepare its Annual Reports to Parliament in a manner that points out the challenges to be met in implementing the Canadian Environmental Assessment Act or, as a minimum, makes reference to any other of its reports to Parliament that contain this information.

Opportunities Exist to Improve the Efficiency of Environmental Assessment

6.74 We have pointed out situations where better environmental assessment is required. However, resources are not limitless, and those available may already be stretched to the limit. With thousands of projects to be approved each year, it is important to seek ways to make environmental assessment as efficient as possible. One way to increase efficiency is to focus the most effort on projects with potentially the greatest environmental impact. Another is to use information and experience from previous environmental assessments, particularly when dealing with new cases involving similar situations. Further, when several parties have an interest in ensuring that a particular environmental assessment is conducted, there are opportunities to streamline and co-ordinate their efforts.

An important efficiency tool is not being utilized
6.75 While many environmental assessments are unique, others can involve repetitive situations with similar projects in similar environments. Under the Act , a screening report that could be used as a model in conducting screenings of other projects in the same class can be declared a "class screening". The intent of this provision is to simplify subsequent screenings of similar projects. Even with class screenings, however, the responsible authority needs to take into account site-specific circumstances and cumulative environmental effects.

6.76 We noted three instances where procedures have been put in place for dealing with repetitive situations without "reinventing the wheel" each time. This usually involves collecting basic information on the project, activity and environment at the initial planning stage, and using the information to conduct a screening. For many repetitive and small-scale projects, this basic information is sufficient for the responsible authority to determine whether there may be any potentially significant environmental effects. If this basic information raises any concerns, or if there is uncertainty about the information, a more in-depth screening would be conducted.

6.77 These situations would seem an ideal basis on which to prepare a model screening and have it declared a class screening. The Agency feels that there are gains to be achieved in both efficiency and quality through the class screening process. Since the proclamation of the Act, the Agency has worked with departments to identify potential class screenings. As yet, however, only Parks Canada has brought forward a class screening for approval.

6.78 Responsible authorities indicated to us that they felt the procedures to declare a class screening were too cumbersome. They find it more expedient to conduct individual assessments of similar projects than to initiate a class screening declaration.

6.79 The Canadian Environmental Assessment Agency and responsible authorities should intensify their efforts to improve quality and efficiency in the environmental assessment of similar projects by taking advantage of the class screening provisions of the Canadian Environmental Assessment Act or of other similar approaches.

Agency's response: The Agency is actively assisting federal authorities in the development of class screening documents across Canada. Several departments are presently developing class screenings including Indian and Northern Affairs Canada, Fisheries and Oceans and Parks Canada. Several process issues have been resolved to move this opportunity forward.

There is little evidence of federal-provincial duplication
6.80 Concerns have been expressed publicly, primarily by industry groups, that federal and provincial environmental assessment processes may overlap and that this leads to duplication, cost increases and delays to proponents. The Canadian Council of Ministers of the Environment has made environmental harmonization, including environmental assessment, one of its priorities. The federal government has signed harmonization agreements for environmental assessment with Alberta, British Columbia and Manitoba. On 29 January 1998 the Canadian Council of Ministers of the Environment, with the exception of Quebec, signed ``A Canada-wide Accord on Environmental Harmonization". A sub-agreement on environmental assessment was also signed as a part of this accord.

6.81 The nature of our federal system is such that there can be overlap of federal and provincial responsibilities with respect to a project. Of the 187 projects we reviewed, 25 required provincial environmental assessments. In most of the 25 cases, there was more evidence of federal-provincial co-operation than of duplication of effort.

Federal authorities need to co-operate with each other
6.82 Another complaint from project proponents relates to interdepartmental differences of opinion or delays in getting feedback from one "expert department" on an evaluation involving more than one federal authority. In some cases, these concerns are real. Expert departments, primarily Fisheries and Oceans and Environment Canada, may not have sufficient information or resources to provide a quick response. Furthermore, because of the latitude allowed to responsible authorities by the Act, they may have different opinions on how a project or an assessment should be scoped for the purposes of the Act.

6.83 In other cases, however, the delays are not attributable to the Canadian Environmental Assessment Act . If an environmental assessment is not started until late in the planning process, then it is the poor planning process and not the environmental assessment that is responsible for the delay. We also noted that the reviews that Fisheries and Oceans is required to undertake under the Fisheries Act could cause delays, even if there were no requirement for environmental assessment.

6.84 The Agency and federal authorities have established Regional Environmental Assessment Committees (REAC) in several regions across the country to provide a forum for federal officials to discuss environmental assessment issues and individual cases that may involve more than one federal authority. Members we interviewed indicated that the Committees are a valuable forum for improved interdepartmental co-operation.

6.85 The Regulations Respecting the Co-ordination by Federal Authorities of Environmental Assessment Procedures and Requirements , which came into force in April 1997, propose to eliminate delays where more than one federal authority is involved. The Regulations impose deadlines on federal authorities for determining whether or not they will require an environmental assessment and for identifying and notifying all other potential federal authorities who may have responsibilities under the Act with respect to the project. All of the screenings we reviewed were for projects approved before April 1997, so we have not examined the results of the new Regulations.

Environmental Assessment Does Not End with Project Approval

Mitigation measures are not always monitored
6.86 Environmental assessment is supposed to identify potentially significant adverse environmental effects and any mitigation measures that will reduce them to insignificance. Responsible authorities have generally been including mitigation measures in the terms and conditions of their approval, or building them into related contract documents. It is less obvious from the information provided to us that responsible authorities have verified whether mitigation measures were actually implemented by project proponents. In some cases, departments said they had to allocate scarce resources to activities other than the monitoring of mitigation. The two cases in Exhibit 6.5 point out the importance of monitoring mitigation measures.

6.87 Responsible authorities should ensure that mitigation measures are included where required as a condition of approval and that project proponents implement them.

Follow-up of environmental effects needs to be strengthened
6.88 Environmental assessment is a predictive science, and there is an element of uncertainty about the effects being predicted, or about the effectiveness of the mitigation measures even if carried out as recommended. The Agency's Responsible Authority's Guide recommends that in cases of uncertainty, a follow-up program should be implemented to verify whether actual environmental effects match predictions. This process should help to ensure that any unanticipated environmental damage is avoided, and can build up a base of knowledge to improve predictions in future assessments. The Federal Environmental Assessment Index allows responsible authorities to indicate whether a follow-up is to be conducted.

6.89 Of the 187 projects that we examined, 48 met the criteria in the Agency's Guide indicating that follow-up of environmental effects would be appropriate. Information on file indicated that responsible authorities planned to follow up on about three quarters of these 48, yet none of them was identified for follow-up in the Index. We are concerned that one quarter of required follow-ups are not requested as a condition of approval. Because most of our audit samples were environmental assessments of recent projects, it was too early to verify whether follow-up of actual environmental effects had been conducted or whether the responsible authorities shared the results of follow-ups with other federal authorities and the Agency.

6.90 Responsible authorities should ensure that, where appropriate, follow-up of the environmental effects of projects is carried out and that the results of these follow-ups are shared with the Agency and other federal authorities.

Agency's response: The Agency is chairing an interdepartmental committee to investigate the problems with follow-up under the Act and to analyze possible options, including a regulation to address these problems. This forum will assist federal authorities in gathering and sharing information on follow-up with the Agency and other federal departments.

The Agency and responsible authorities are not gathering information on results
6.91 Environmental assessment is widely accepted as a valuable planning tool, not only by environmentalists but also by proponents of projects. However, many of the financial and environmental benefits of environmental assessment are difficult to quantify. Given the costs to governments and project proponents of conducting environmental assessments, it is important that the costs and results be measured and reported. The Canadian Environmental Assessment Act includes a requirement for comprehensive review of the provisions and operation of the Act five years after the Act coming into force. Such a review will require good information on program costs and results. A Joint Monitoring Program conducted by the Agency and Industry Canada examined some aspects of program delivery, costs and results over a one-year period early in the implementation of the Act. It recommended an expanded monitoring program. However, in the three years since the Act came into effect, the Agency has still not established a comprehensive framework for gathering such information. The weakness in monitoring mitigation measures and following up on results will make it more difficult to gather the required information.

6.92 The Canadian Environmental Assessment Agency, in consultation with federal authorities, should:

  • establish a framework for conducting a comprehensive review of the provisions and operation of the Canadian Environmental Assessment Act ; and
  • collect the information required to conduct the review .
Agency's response: The Agency will soon be developing an overall framework for conducting a comprehensive review of the provisions and operations of the Act. In support of the upcoming review, the Agency has undertaken a number of initiatives that will ultimately provide useful information.

As mentioned in the response to 6.68, the Agency is leading the development of a compliance monitoring framework for the Act and its regulations.

The Agency has also developed, in partnership with Industry Canada, Environment Canada and Natural Resources Canada, a multi-year Ongoing Monitoring Program to follow up a one-year Joint Monitoring Program.

The Ongoing Monitoring Program will collect information on:

  • the costs and source of costs of assessments associated with comprehensive studies, public reviews and large-scale screening projects;
  • the benefits to industry and the public of preparing environmental assessments; and
  • actual contributions to sustainable development brought about through comprehensive studies, public reviews and large-scale screening projects.
The results of the Ongoing Monitoring Program will assist the Agency in refining the process to maximize benefits and minimize costs to the government and to the private sector.

Both initiatives outlined above will contribute much information for use in the five-year review of the Act.

Decentralized Implementation Needs Quality Control

6.93 The Act is implemented in a very decentralized fashion. This can be a positive feature, as it means that officials directly involved in decision making are also responsible for the environmental assessment of the project. The risk with decentralized delivery is that, as we observed in the case of the Canadian Environmental Assessment Act, it can result in uneven application of legislation. Only a few of the organizations we audited have adequate measures to monitor whether or not environmental assessments are conducted in accordance with the requirements of the Act and the Agency's Responsible Authority's Guide.

6.94 Federal authorities and the Canadian Environmental Assessment Agency should establish procedures to:

  • monitor whether or not environmental assessments are conducted in accordance with the requirements of the Canadian Environmental Assessment Act and the Agency's Responsible Authority's Guide; and
  • ensure that decisions with respect to the need for an assessment, project scope and potential effects to be considered are made consistently from region to region and by all federal authorities.
Agency's response: As indicated in the responses to 6.68 and 6.92, the Agency is leading the development of a compliance monitoring framework for the Act and its regulations. This will provide information on whether environmental assessments are conducted in accordance with the requirements of the Act and the Agency's Responsible Authority's Guide.

The Agency will be developing guidance and training (as described in the response to 6.45) to assist federal authorities in the areas mentioned. The Agency will also continue to facilitate consistency of approach through its various interdepartmental committees.

Policy and Program Assessments Are Not Setting the Tone

Why policies and programs need to be assessed
6.95 The environmental assessment of programs and policies, also referred to as "strategic environmental assessment", is seen as an essential tool for dealing with the broader environmental and sustainable development implications of programs and policies that may not be addressed easily at the project level. We are concerned that without environmental assessment of programs and policies, federal departments and agencies may not be able to implement the government's sustainable development objectives. A 1990 Cabinet directive established a non-legislated process for environmental assessment process of federal policy and program initiatives submitted for Cabinet consideration, and for other policy and program decisions made by ministers without reference to Cabinet.

Departments have been slow to implement environmental assessment of programs and policies
6.96 In 1996, the Agency published a "Review of the Implementation of the Environmental Assessment Process for Policy and Program Proposals". The study concluded that there was a need to strengthen the implementation of the Cabinet directive. In particular, the study found that:

  • 60 percent of departments and agencies indicated that they had conducted environmental assessments of policy and program proposals;
  • 45 percent had prepared documentation on the environmental implications of their proposals;
  • 25 percent had prepared guidance material on the environmental assessment of policy and program proposals;
  • 20 percent had frameworks for accountability;
  • 10 percent had maintained a regularly updated list of proposals assessed.
6.97 The interviews we conducted support the findings of the study. We found that most departments had not developed guidelines or directives on the environmental assessment of policy and program proposals. Even when they are done, these assessments are more often broad than comprehensive. In addition, officials preparing these environmental assessments do not necessarily consult other departments with environmental expertise or their own experts in project environmental assessment. We were surprised to discover that in a couple of departments, the senior officials to whom we had been referred as those responsible for the preparation of Cabinet documents either were not aware of the existence of the Cabinet directive or did not know how it was being implemented.

Steps to improve the environmental assessment of programs and policies may not be enough
6.98 An Interdepartmental Committee on Policy and Program Environmental Assessment, composed of officials from 13 federal departments and the Agency, is working to improve the implementation of the Cabinet directive. In January 1997, the Agency and the Committee produced a training module on the environmental assessment of programs and policies. However, we are concerned that the training module may not be enough. Our interviews suggest that little has changed since the 1996 study in the way departments deal with the environmental assessment of policies and programs.

6.99 Two organizations stand out as having taken steps to implement strategic environmental assessment. Parks Canada is conducting environmental assessments of park management plans, and has also conducted environmental assessments of other proposals, including a proposal on the setting of its fee structure. Agriculture and Agri-Food Canada has been developing agro-environmental indicators, which are incorporated in the analysis of program proposals.

Departments need to be encouraged to implement the Cabinet directive
6.100 Some departments and the Agency have suggested that the tabling of sustainable development strategies, as required by a 1995 amendment to the Auditor General Act , will help speed up the implementation of the Cabinet directive. In our opinion, departments may need additional pressure from parliamentarians, the public and the Commissioner of the Environment to fully implement the directive.

6.101 The Canadian Environmental Assessment Agency should work with other federal departments and agencies to improve compliance with the Cabinet directive on the environmental assessment of policies and programs.

Agency's response: The Agency concurs with the strong link drawn between the environmental assessment of policies and programs and the implementation of sustainable development objectives. It is increasing efforts interdepartmentally and with senior officials to increase awareness and encourage widespread use of policy environmental assessment. The Agency intends to conduct a follow-up to its 1996 survey on the application of policy assessment in order to measure progress.

Conclusion

There are many opportunities for improved environmental assessment
6.102 We identified several areas where environmental assessment needs to be improved. These include the need for:

  • a broader and more consistent view of projects and potential impacts to be assessed;
  • better information in screening reports and in the Federal Environmental Assessment Index, and improved public access to this information;
  • better use of efficiency tools such as class screenings;
  • more thorough monitoring of mitigation measures and follow-up on results; and
  • increased attention to the environmental assessment of policies and programs.
6.103 Good practices need to be shared. The shortcomings we noted are neither universal nor catastrophic. We also found examples where responsible authorities, on either a regional or a national basis, had developed procedures or processes to improve the consistency and efficiency of implementation of the Canadian Environmental Assessment Act . However, more effort is needed by responsible authorities and by the Regional Environmental Assessment Committees in promulgating and encouraging sharing of best practices to improve consistency and efficiency. The good examples that we found confirm that the recommended improvements are achievable.

Several factors contribute to the deficiencies that we observed
6.104 The principal factors contributing to the deficiencies that we have noted include lack of clarity in the Act; guidance from the Agency that is not always as practical as it could be; insufficient guidance from responsible authorities; different backgrounds and skill levels of officials; and uncertainty about whether or how far federal environmental assessment can extend into areas of provincial jurisdiction. In our opinion, a significant contributing factor to the problems noted is a lack of review or quality control, by either the Agency or responsible authorities, to ensure consistent and predictable application of the Act .

6.105 The Agency could be more forceful. The Canadian Environmental Assessment Agency does not have the authority to interfere in decisions that are the responsibility of the responsible authorities under the Act . However, we believe that the Agency could be more forceful in expressing its concerns when it observes problems in the way responsible authorities are carrying out their responsibilities under the Act .


About the Audit

Objectives

Our objectives were:

  • to assess whether the Canadian Environmental Assessment Act and Regulations are being implemented in an economic, efficient, consistent and predictable way by the Canadian Environmental Assessment Agency, responsible authorities, and expert departments;
  • to identify impediments to implementation of the Act; and
  • to determine whether departments and agencies are complying with the Cabinet directive on the environmental assessment of proposed policies and programs.

Scope

The Canadian Environmental Assessment Act (CEAA) currently applies to all federal departments and to a limited number of federal agencies, such as the Atlantic Canada Opportunities Agency and the Atomic Energy Control Board. The Act does not apply to Crown corporations. We included in our audit a sample of federal organizations that together account for approximately two thirds of all environmental assessments carried out under the Act:

Agriculture and Agri-Food Canada

Atlantic Canada Opportunities Agency

Atomic Energy Control Board

Canadian Heritage (Parks Canada)

Environment Canada

Fisheries and Oceans (Habitat)

Fisheries and Oceans (Coast Guard)

Indian and Northern Affairs Canada (Northern Affairs Program)

Indian and Northern Affairs Canada (Indian and Inuit Affairs Program)

Public Works sector of Public Works and Government Services Canada

Western Economic Diversification

Most environmental assessment is carried out on a decentralized basis, usually at the regional or provincial headquarters of the organization. We selected for detailed review a sample of 187 environmental assessments carried out by the federal organizations in British Columbia, Alberta, Québec and Nova Scotia. For the Northern Program of Indian and Northern Affairs Canada we examined files in the Yukon, and for AECB, most of the projects examined were either in Saskatchewan or Ontario.

We reviewed the environmental assessment processes established by each of these organizations at their corporate headquarters and in the selected regions. We also examined how these processes were actually put in place with respect to the 187 sample files selected.

The Canadian Environmental Assessment Agency is responsible for administering the CEAA and for providing advice and guidance to the federal authorities. We reviewed the guidance provided by the Agency and its activities in support of its responsibilities under the Act.

Criteria

We set out detailed criteria for each of the audit issues that we examined. Because of the large number of criteria, only the major ones are listed here. Some of the criteria focussed on the Act itself, or on the role of the Agency. In particular, we expected that the Agency would be a leader in environmental assessment in the federal government. We expected that the Agency would provide guidance on the implementation of the Act such that federal authorities, project proponents, and other stakeholders would have a common understanding of what is required by the Act . We also expected that the Agency would develop a reporting framework for federal environmental assessment that would provide complete, relevant, and reliable information on overall progress in implementing environmental assessment in the federal government.

Other criteria focussed on the federal authorities who are responsible for conducting screenings under the Act. We expected that federal authorities would implement environmental assessment in their own organizations in accordance with the Canadian Environmental Assessment Act and with guidance provided by the Agency. We also expected that federal authorities would take steps to ensure that Agency guidance was tailored to their specific organizational programs and that environmental assessment was implemented in a consistent manner across all regions and programs. We expected that federal authorities would implement the Act in co-operation with the Agency, other federal authorities and provincial agencies. We expected that information would be solicited from the public and provided to the public in a manner that respected the public participation objectives of the Act .

Audit Team

Principal: Wayne Cluskey
Director: Jacques Leduc

Nancy Adams
Dolly Chakrabarty
Louise Grand-Maison
David Harris
Carolle Mathieu
Lucie Talbot
Emily Zinger

For information, please contact Wayne Cluskey.