Canadian Chamber Addresses Proposed Amendments to the Impact Assessment Act Before Senate Committee

On May 28, 2024, our Senior Director of Natural Resources, Environment & Sustainability, Bryan Detchou, addressed the Standing Senate Committee on Energy, the Environment and Natural Resources to discuss the proposed amendments to the Impact Assessment Act (IAA) and their implications for Canadian businesses and investments.

Canada is uniquely positioned to lead the global energy transition due to its abundant natural resources and strong regulatory framework. However, the challenges posed by lengthy project approval processes hinder Canada’s ability to meet its net-zero goals and to become a reliable global supplier of responsibly sourced natural resources. In his remarks, Detchou underscored the need for regulatory certainty to attract investment and support long-term projects. He also addressed the recent Supreme Court ruling on the IAA, urging for amendments that provide clarity and predictability to ensure Canada’s competitiveness in the global market.

The Canadian Chamber of Commerce advocates for a collaborative approach to create a more predictable, transparent, and efficient regulatory framework, essential for achieving Canada’s economic and environmental objectives.

The full remarks and video recording can be seen below.

Mr. Chair and Honourable Senators,

Je vous remercie de me donner l’occasion de participer à la discussion d’aujourd’hui au nom de la Chambre de commerce du Canada, afin d’examiner les modifications proposées à la Loi sur l’évaluation d’impact et leurs implications pour les entreprises et les investissements canadiens.
Senators, allow me to begin my remarks by stating the obvious. No country is better positioned than Canada to lead the global energy transition. With its vast natural resources, skilled workforce, strong regulations, commitment to ESG, and focus on reconciliation with indigenous communities, Canada stands out as a responsible and reliable global supplier.

Canada has grand ambitions and the talent and natural resources to see them fulfilled. However, we also have a record of getting in our own way. Canada will not meet its net-zero goals, let alone become a reliable global supplier of responsibility sourced natural resources, if we cannot get major projects built. Project approvals cannot continue to take 10 or more years — whether what’s proposed is a major Carbon Capture Utilization and Storage project that would continue to reduce emissions or a transportation gateway that would help ensure Canadian businesses can get goods to market reliably and efficiently. Regulatory certainty is essential to generate the investment and growth our nation requires, which cannot be achieved without private sector partners committed to long-term projects. Though governments have made several commitments in recent years to improve regulatory efficiencies, streamline permitting for major projects and clear permitting backlogs, the status quo remains. This multijurisdictional process certainly has many actors involved, but the federal government has a unique role to play to ensure Canada rids itself of the reputation of a place where major projects can’t get built.

Consider the Electric-Vehicle battery industry. The federal government aims to make Canada a major player in the global EV supply chain by investing heavily in EV production. Alongside Quebec and Ontario, they have committed tens of billions to attract major automakers. Critical minerals like lithium, cobalt, nickel, and graphite are essential for EV batteries, but since 2005, only four new critical mineral mines have opened in Canada. Government data shows that to support domestic EV battery production, Canada must open over 20 new mines by 2035—five times faster than the current rate. This is challenging, as the typical mine takes 10 to 15 years to pass regulatory approvals and community consultations. Canada’s EV transition is hindered by these regulatory and logistical challenges in utilizing our mineral resources.

Last October, when the Supreme Court of Canada released its judgment, finding parts of IAA unconstitutional, it simply underscored the ongoing challenges that businesses in Canada face due to regulatory uncertainty. In a world where capital is highly mobile, countries that can offer regulatory clarity and efficiency will attract more investment. To remain competitive, Canada must demonstrate that it can deliver major projects in a timely and predictable manner.

In response to the court’s judgement, the Government of Canada pledged “surgical” amendments. However, the efficacy of this surgical intervention remains uncertain. As this committee conducts its study, certain key questions demand attention:

1. Will the amendments provide the certainty and predictability desired by project proponents?
2. Have the amendments sufficiently addressed the pivotal concerns outline by the Supreme Court?
3. What are the consequences if the amendments are insufficient?

To answer the first question, the proposed amendments to the IAA show that the government’s main priority, after the Supreme Court’s ruling, was to ensure the IAA’s constitutionality rather than improve clarity on its applicability, timelines, and decision- making authority. As a result, a key opportunity to create a regulatory environment that boosts business confidence and minimizes risks has been missed.

To address the second and third questions directly, our primary concern is that if the amended Act is finalized in its current state, it may again face constitutional challenges from the provinces. Meanwhile, as companies and investors once again await clarity, many will either keep their funds on the sidelines or invest them in other countries, hindering Canada’s economic prosperity and energy transition.

La rhétorique et l’ambition ne suffiront pas à faire construire de grands projets au Canada. La réalisation de nos objectifs économiques et environnementaux exige une véritable collaboration entre les secteurs privé et public. Il est impératif de reconnaître que la réussite de ces projets est intimement liée à la croissance économique et à la productivité de notre pays. Bien que le Canada soit prêt à mener la transition énergétique mondiale, cette position n’est pas garantie et ne doit pas être présumée.

Getting the amendments to the IAA right is essential.

The Canadian Chamber of Commerce believes that an amended IAA, developed through collaborative efforts, can create a more predictable, transparent, and efficient regulatory framework. We are eager to support the government in its aims to establish a modern and efficient regulatory system that responds to the needs of industry and respects the jurisdictions of all levels of government.

Thank you.