www.lexpert.ca/usguide | LEXPERT • June 2019 | 25
will it impact investment? I think there's
a wait-and-see attitude," he says. "People
who might invest in Canada say, 'until
Canada sorts itself out, we're going to sit
on the sidelines.' I think that is the num-
ber one trend or issue facing investment in
Canada right now."
Bill C-69, "An Act to enact the Impact
Assessment Act and the Canadian Energy
Regulator Act, to amend the Navigation
Protection Act and to make consequen-
tial amendments to other Acts," would,
if passed, affect how major infrastructure
projects are reviewed and approved in
Canada. Changes could include replac-
ing the National Energy Board, which
approves such projects, with a new Cana-
dian Energy Regulator; and an amended
federal environmental assessments process
would see a new Ottawa-based Impact As-
sessment Agency review a range of envi-
ronmental impacts.
After a bill has passed third reading
in Canada's House of Commons it goes
through a similar process in the Senate,
where Bill C-69 has now passed second
reading. Once both Chambers pass the
bill in the same form, it is given Royal As-
sent and becomes law.
The Canadian Association of Petro-
leum Producers, for one, has expressed
concern that the new Act would create
greater regulatory uncertainty and litiga-
tion risk. Denstedt agrees.
"Bill C-69, in my view, will not solve the
uncertainty issue in relation to environmen-
tal assessment; it will make it worse the way
it's currently drafted," he says. The bill has
been drafted within the context of indi-
vidual projects, which is a poor way to make
policy decisions, he says; and it eviscerates
the expertise available under the Calgary-
based National Energy Board for regulating
energy projects, by separating the environ-
mental review from the NEB's mandate.
"The problem with that is the people
who are best equipped to understand the
impacts of energy development are no lon-
ger charged with that obligation."
The National Energy Board was cre-
ated as an expert regulator in all aspects
of the energy business, from economic
to environmental to safety to social as-
pects, he says, "and by separating those
functions, we're doing the exact opposite
of what sustainable development really
means, which is to actually integrate those
decision-making processes." The Impact
Assessment Agency will be charged with
looking at the environmental assessment
of a project, and the National Energy
Board will then look "at the energy side
of it" under the proposed new legislation,
says Denstedt; "so you've actually pulled
those two pieces apart."
Penalties have also increased signifi-
cantly in environmental prosecutions,
particularly under the Fisheries Act and the
Migratory Birds Convention Act (MBCA)
since increased penalties were introduced
in 2013 and 2017, says Bradley Gilmour, a
partner at Bennett Jones LLP in Calgary.
"The trend over the last decade is up-
ward in terms of increasing inspections,
prosecutions and amendments to legaliza-
tion to increase penalties," says Gilmour.
Under the above-noted two Acts, penalties
have increased significantly — for example,
for a second offence, if the Crown chose to
proceed summarily, the fines could reach as
much as $8 million, with fines multiplying
by the number of days an environmental
incident is not successfully managed.
The trend has crystallized into consid-
ering five different factors, Gilmour adds:
culpability, prior record, damage or harm,
remorse and deterrence. "The courts have
said the most important is culpability,
which goes back to having proper pro-
cedures in place [to] prevent an incident
from occurring" and will provide a de-
fense or at least will lower the penalty. Due
diligence is key. The second most impor-
tant factor would be the degree of damage
or harm, he says.
Rosalind Cooper, an environmental
