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Trans Mountain and beyond: How we can improve confidence in the regulatory process

Read it in The Globe and Mail here.

Jennifer Winter is director of energy and environment policy at the School of Public Policy, University of Calgary. Martha Hall Findlay is executive fellow in the School of Public Policy, University of Calgary and chair of the advisory council for the Positive Energy Project, University of Ottawa.

You bought the lot, your house plans are ready, they comply with all applicable bylaws and construction code requirements, and you have all of the necessary permits in hand. Indeed, you’re proud of the expected energy-efficiency of your home, maximizing solar heat by using glass walls all along the east, south and west sides. Yet, just as you are about to start digging the foundation, a group of people arrive on the street and block the bulldozer, carrying “Save the Birds” signs. They claim that an inordinate number of birds will die from flying into the glass.

You call your municipal councillor, asking her to have the city enforce your right to start building – but she and her colleagues have been receiving calls all week from the protesters. They have decided not to enforce your right to build according to your building permit because, they say, you don’t have the “social licence” to proceed.

There are – or were – no rules against glass walls. Does this involve all of your neighbours-to-be, or a small number of avid, vocal, bird protectors? You might very well ask who is deciding the scope of this additional level of “permit”, and how to obtain it – or even if it is attainable at all. You wonder if there will be similar protests if you decide to replace the glass with bright green siding.

The National Energy Board has just recommended that the Kinder Morgan Trans Mountain pipeline expansion proceed, but with 157 conditions. But will it go ahead? Not long ago, a regulatory decision such as this one would be followed, and government authorities would enforce it. But then, Northern Gateway happened. Just two years ago, the NEB recommended that the Northern Gateway project proceed (in that case subject to 209 conditions), but almost immediately, various political leaders said that they would not support it, claiming that the project had not obtained “the necessary social licence.” It remains unclear whether it will now ever proceed – and it remains to be seen if a similar fate awaits the Trans Mountain expansion.

The scope of the challenge facing major energy infrastructure projects, from pipelines to wind farms to dams, is much larger than a personal home. So too are the economic, environmental and political consequences. Yet the questions are the same: What is “social licence”? Who decides what “it” is? Who decides who “gets” it and who doesn’t? How do we provide the certainty needed for investment? If, after the official regulatory process has been complied with and approvals given, but a project still cannot proceed because of such an elusive concept, does it mean that the regulatory process itself is broken?

No, not quite, according to a white paper just published by the University of Calgary’s School of Public Policy, the result of a year-long, cross-country and interdisciplinary collaboration. It includes a comprehensive look at the concepts of public acceptance and social licence, and analyzes the history and meaning of the terms and related concepts. Most importantly, the authors use this research to provide concrete suggestions for improving, and improving public confidence in, Canada’s various energy-related regulatory processes.

These recommendations include:

• Greater co-ordination of regulatory processes between the federal and provincial governments.

• A consistent, transparent and rigorous system for identifying and reaching out to stakeholders.

• Care in using vague terms such as “social licence”, if at all.

• Ownership by the federal and provincial governments, not the private sector alone, of the duty to consult with First Nations.

• An independent review of the National Energy Board Act and its regulations to determine the stakeholders who should be consulted, and how, and provide for appropriate time, and processes, to do so thoroughly.

• Broader use of information gained during assessment processes, including mechanisms to report recurring concerns that are outside of the scope of any particular regulator’s mandate.

• Public availability of timely and relevant data relating to the compliance and postapproval status of projects, including posting data on a government portal to increase accessibility for stakeholders.

• Providing for a level of cross-examination in regulatory hearings that is proportionate to the magnitude of the impacts of the ultimate decision.

The federal government has promised to amend the regulatory process for major energy projects. This research and these recommendations should help inform how to best fulfill its mandate. All stakeholders need to be able to rely on a properly functioning and efficient regulatory process, and then be confident that decisions will be supported. However, if there is a lack of public confidence in the objectivity and thoroughness of a process, there will be doubt about the resulting decisions. Everyone benefits from greater confidence in the process itself.

Jennifer Winter and Martha Hall Findlay are two of the nine co-authors of the white paper referred to here.


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