The Energy Regulation and Markets Review - Stikeman Elliott

Canada
require a public hearing and approval by the federal Cabinet) or short-term orders for
a maximum of two years. Oil exports are authorised by short-term orders for periods
of less than one year for light crude oil and less than two years for heavy crude oil.
With respect to electricity, the NEB has issued permits and licences for as short a period
as three months and for as long as 30 years, with the average being for 10 years. In
reviewing applications for electricity exports, the NEB applies a ‘fair market access’
policy under which exporters must afford Canadian purchasers who have demonstrated
an intention and ability to buy electricity for consumption in Canada an opportunity to
purchase electricity on terms and conditions as favourable as those offered to an exporter
customer. The NEB does not regulate imports of oil or electricity.
Provinces regulate oil and gas pipelines and facilities that lie completely
within their borders; this includes regulatory authority over the construction of new
infrastructure and the setting of ‘just and reasonable’ rates for service. Electricity
generation, transmission, distribution and sale are all broadly regulated. Licences to
generate, transmit, distribute or sell electricity are required from provincial regulatory
authorities. Approvals or permits to construct generation, transmission or distribution
facilities must also be obtained from provincial energy commissions or from a variety of
provincial and municipal authorities. Rates for transmitting and distributing electricity
are also set by provincial regulators, as is generation in the case of those provinces with
vertically integrated structures.
In addition, a range of other authorisations may be required from federal,
provincial and local authorities. These will vary depending on the facility’s scale, physical
location, fuel type, discharge characteristics and the potential environmental effects. For
major projects, the most significant approvals required are generally under federal or
provincial environmental assessment legislation. The environmental assessment process
may be consolidated or coordinated with the project approval process, although this can
vary depending on the type of project and jurisdiction involved. Provincial approvals
are often required for air and noise emissions, water intake and discharge, storm sewer
management, archaeological assessment and for decommissioning and clean-up of
contaminated sites. Local land use approvals required may include official plan and
by‐law amendments, sewer use, building permits and servicing easements. In April 2012,
the federal government introduced a plan to streamline the federal project approval
process and better coordinate it with provincial processes.
Section 35 of the Constitution Act 1982 provides protection to the aboriginal
and treaty rights of Canada’s aboriginal peoples. The courts have interpreted this section
as placing a duty upon the government to consult with aboriginal peoples where
approval of a project could affect an aboriginal or treaty right. While the duty belongs
to the government, in practice responsibility for consultation is often delegated to the
proponent. In some cases where the impact upon a right is significant, a proponent may
be required to accommodate the right. The courts have ruled that regulators may assess
whether the duty to consult has been satisfied when issuing an approval, although the
scope of that assessment depends on the nature of the particular approval being sought
and the stage of the project. For example, an economic regulator might assess the duty as
it relates to the issues that are within the regulator’s mandate and not the entire project.
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