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Canadian Energy Perspectives

A More Detailed Look: Proposed Options for Ontario’s Cap-and-Trade Program

Posted in Climate Change, Climate Policy, Emissions Regulation, Emissions Trading
Selina Lee-Andersen

As noted in our earlier posting, the Ontario government announced in April 2015 that it would implement a cap and trade program that would eventually be linked with the existing cap and trade systems in Québec and California.  Following extensive public consultations over the summer, Ontario has released its Cap and Trade Program Design Options paper, which is open for public comment until December 16, 2015. As part of the current consultation process, the Ontario government is seeking input on various elements of the program design including timing, scope of the program, caps on greenhouse gas emissions, allowance distribution, price stability mechanisms, market design features, compliance requirements, flexibility mechanisms and enforcement. Feedback will inform the development of a regulatory proposal for the cap and trade program, which is expected to be tabled in early 2016. This will be followed by another round of public consultations before the cap and trade regulation is finalized.

Ontario’s proposed cap and trade program will be the primary tool to help the province to achieve its 2020 emission reduction target of 15% below 1990 levels. In particular, the program seeks to reduce the amount of the province’s greenhouse gas emissions by setting a cap on emissions from regulated facilities and activities. Over time, the cap will be lowered, thus reducing overall greenhouse gas emissions. The key proposals for Ontario’s cap and trade program include:

  • Start date: A proposed start date of January 1, 2017 with a first auctioning of emissions in March 2017.
  • Cap: A cap would be set for each year of the program that would limit the amount of allowable greenhouse gas emissions in tonnes of carbon dioxide equivalent. The cap is proposed to be set at forecast 2017 emissions, declining at a rate to help the province achieve its 2020 reduction target and then ultimately to support Ontario’s 2030 and 2050 targets.
  • Coverage: Broad sector coverage is proposed that would capture electricity (including imported electricity), industrial and large commercial activities (e.g. manufacturing, base metal processing, steel, pulp and paper, food processing), institutions, transportation fuel (including propane and fuel oil), distribution of natural gas (e.g. heating fuel). Ontario is considering how the program would cover energy-from-waste facilities.
  • Point of Regulation: The following points of regulation are being proposed for these sectors:
    • Industrial and institutional sources with annual GHG emissions equal to or greater than 25,000 tonnes would be covered at the point of emission (i.e., at the facility).
    • Domestic electricity generation would be covered at the fuel distributor level, and electricity imports at the point the electricity enters the province (first jurisdictional deliverer). Some exceptions may be required for facilities that connect directly to international or inter-provincial natural gas pipelines (these emissions would be covered at electricity generator).
    • Transportation fuels (including fuel oil and propane) would be covered at the distribution level where they are first placed into the market – imports and domestics covered at volumes of 200 litres or more and that are delivered to an Ontario consumer.
    • Distribution of natural gas – For distributors of natural gas that, in aggregate, is associated with annual GHG emissions equal to or greater than 25,000 tonnes, the point of regulation would be at the point the gas is transferred from pipeline into the distribution network for local customers.
  • Emissions Coverage: It is proposed that both fixed process and combustion emissions be covered.
  • New and Expanding Facilities: (1) New facilities that begin operations on January 1, 2016 or later and have annual emissions equal to or greater than 25,000 tonnes per year would have a compliance obligation starting in their third year of operation. (2) Existing facilities that are expanding and whose emissions exceed the compliance threshold of 25,000 tonnes per year would have a compliance obligation starting with the first year the threshold is reached.
  • Program Opt-in: It is proposed that facilities that are obliged to report emissions under Ontario Regulation 452/09, Greenhouse Gas Emissions Reporting, be permitted to opt in to the proposed cap and trade program; firms that opt in would not be permitted to opt out.
  • Market Design Features: It is proposed that Ontario would align its program parameters with those in the Québec-California market, including the auction reserve price and strategic reserve price tiers. The 2015 Annual Auction Reserve Price was set at CAD $12.08 and USD $12.10 in Québec and California respectively.
  • Mitigating Carbon Leakage: It is proposed that a portion of allowances would be distributed free of charge to large emitters with a direct compliance obligation in order to address carbon leakage risk and support their transition to the new cap and trade program. Emissions attributable to electricity generation would not be eligible for free allocations, but emissions due to intensive production of a trade exposed good would be eligible. Facility allocations would be determined according to an equation based on the multiplication of an assistance factor, an emissions benchmark for the facility and a cap adjustment factor. The remainder of the allowances would be sold at auction.
  • Flexibility Mechanisms: Purchasers and covered entities would be allowed to bank allowances, without restrictions on the amount of allowances that may be banked or on how long they may be banked (subject to holding limit).
  • Offsets: Ontario intends to allow the use of offsets for compliance in its program, and to take account of protocols for project types currently accepted in Québec and California. It is proposed that Ontario establish an Offset Credit Registry, issue offset credits for emissions reductions and removals from eligible projects within Canada, allow for the aggregation of projects, recognize offset credits issued by Québec and California, and limit use of offsets to up to 8% of the total compliance obligation.
  • Border Carbon Adjustments: Proposed options include border carbon adjustments for electricity and fuels to level the playing field and reduce leakage. Ontario is also considering the applicability of border carbon adjustments for other sectors that could be covered by the proposed cap and trade program.
  • Recognition of Early Reductions: Ontario is considering whether to recognize early reductions either through product-output benchmarking or early reduction allowances.
  • Enforcement and Penalties: Similar to the Québec and California rules, an entity with excess emissions would be subject to a three-to-one compliance penalty where an additional three allowances for each allowance short at true-up is required, plus the allowance originally owed.

Comments on the cap and trade design proposals are being accepted until December 16, 2015 and may be submitted either by mail to Melissa Ollevier, Senior Policy Advisor at the Ministry of the Environment and Climate Change or online.

On the heels of Cap & Trade Consultation Paper, Ontario releases Climate Change Strategy

Posted in Climate Change, Climate Policy, Emissions Regulation
Selina Lee-Andersen

Ontario’s climate change policy continues to evolve. In February 2015, Ontario released a Climate Change Discussion Paper to help frame the issues for public consultation and in April 2015, it was announced that Ontario would implement a cap and trade program that would link to the existing cap and trade systems in Québec and California.

On the heels of the release of its recent Cap and Trade Program Design Options consultation paper, the Ontario government introduced the province’s Climate Change Strategy on November 24, 2015. The strategy, which is what Ontario will present to the world at the international climate talks in Paris in December 2015, sets out in broad terms the government’s near and long-term vision for a low-carbon future. The Ontario government has said that it will release a detailed five-year action plan in 2016, which will include specific commitments to meet near-term 2020 emissions reduction targets. The detailed action plan will also establish the framework necessary for Ontario to meet its 2030 and 2050 emission reduction targets. Ontario has set an interim emissions reduction target of 37% below 1990 levels by 2030 and a long-term target of an 80% reduction in emissions over 1990 levels by 2050.

Under the Climate Change Strategy, the government will:

  • introduce climate legislation to establish a long-term framework for action and enshrine the cap and trade program in law;
  • integrate climate change mitigation and adaptation considerations into government decision-making and infrastructure planning; and
  • introduce changes to government operations, procurement, employee training, building retrofits and other areas to help government move towards carbon neutrality.

The government will also report on and renew its action plan every five years. This strategy is intended to support Ontario’s proposed cap and trade program and complements earlier climate initiatives, which include establishing a 2030 mid-term emissions reduction target, bringing an end to coal-fired electricity generation, and electrifying Ontario’s commuter rail network.

Most of Ontario’s greenhouse gas emissions come from the transportation, industry and buildings sectors. To tackle these emissions, the Ontario government will implement complementary, sector-specific actions, including:

  • reducing transportation emissions by promoting the uptake of zero emission and plug-in hybrid vehicles, ensuring access to affordable and fast public charging, introducing a modernized vehicle price incentive, making the green plate program permanent, and reducing emissions through use of automated vehicles;
  • reducing emissions from goods movement and exploring additional low-carbon fuel opportunities through the increased use of natural gas and low-carbon fuels in goods movement and the broad-based electrification of the transportation sector generally; and
  • developing a coordinated approach to reduce emissions from new and existing buildings through net-zero building initiatives, energy retrofit programs, updates to Ontario’s Building Code, and incentive programs

The strategy also sets out priorities for turning Ontario into a global hub for clean technology, becoming a resource efficient society, and making Ontario communities climate resilient. Among the key policy actions, Ontario plans to:

  • establish greenhouse gas emission reductions as a priority in the next Long-Term Energy Plan (renewable energy targets to 2025 were established in Ontario’s 2013 Long-Term Energy Plan);
  • support new energy and emissions management approaches through fuel switching and energy reduction, as well as build green infrastructure to minimize climate impacts such as urban heat island effects;
  • review and make recommendations regarding existing policies and programs that support fossil fuel use and fossil fuel intensive technologies, with a view to removing existing initiatives that support fossil fuel use and potentially freeing up resources to better support sustainable development and clean technologies;
  • implement a resource recovery and waste reduction framework to assist Ontario’s shift to a circular economy, which will help to reduce emissions from landfills and industrial production;
  • develop an approach to assess emissions and absorption from agriculture, forestry and other land uses in order to better understand carbon sinks; and
  • develop a one-window source for climate data through the establishment of a climate change modeling collaborative for climate data.

Although the strategy is short on details, it provides an indicator of the Ontario government’s policy priorities for near and long-term climate action. As Ontario gradually develops its program specifics, stakeholders will continue to play the climate change long game.

Proposed Cap-and-Trade Design Options

Posted in Emissions Trading
Joanna Rosengarten

As we noted in an April, 2015 post, Ontario is introducing a cap-and-trade system aimed at reducing greenhouse gas emissions in the province. The government has moved one-step closer in this process, releasing a discussion paper titled Cap-and-Trade Program Design Options on November 16, 2015.  The paper outlines and seeks comments on various aspects of a proposed system, including:

  • Proposed scope of the program, including which sectors should be covered and when they should be phased-in;
  • How new and expanding facilities should be treated;
  • How caps should be set and how allowances should be distributed; and,
  • Market design features, including registration requirements, auction rules, and trade rules;

The Ministry of the Environment and Climate Change is accepting comments on the discussion paper until December 16, 2015. Comments received will be considered in the decision-making process for a draft regulation, expected to be released in early 2016. The government is currently proposing to have the cap-and-trade program begin on January 1, 2017, however comments on the timing can also be submitted.

We are happy to discuss any questions regarding the paper.

British Columbia Court of Appeal Adheres to “Polluter Pay” Principle

Posted in Climate Change
British Columbia
Paul CassidySelina Lee-AndersenMonika Sawicka

On November 20, 2015, the British Columbia Court of Appeal (“BCCA”) demonstrated a steadfast adherence to the “polluter pays” principle underlying the Environmental Management Act (the “EMA”), by  dismissing the appeal in JI Properties Inc v PPG Architectural Coatings Canada Ltd, 2015 BCCA 472. The BCCA decision concerned the allocation of liability for the cost of the environmental remediation of a small island (the “Island”), located just off the Saanich peninsula that was the site of an explosives manufacturing plant for most of the 20th century. Portions of the Island were contaminated with lead, mercury, trinitrotoluene, dinitrotoluene, and other hazardous substances. Continue Reading

At Last: Alberta Unveils its New Climate Leadership Plan

Posted in Carbon Tax, Climate Change, Climate Policy, Coal, Electricity, Emissions Regulation, Energy – Conventional, Energy – Renewable, Alternative and Clean, Power
Kimberly HowardSelina Lee-AndersenGordon Nettleton

On November 22, 2015, Alberta released its long-awaited Climate Leadership Plan (Climate Plan).  Contemporaneously with the Climate Plan, the Government released the Climate Change Advisory Panel’s (Climate Panel) Report to the Minister, Climate Leadership. As background, previous blogs on the Climate Panel’s mandate and the Climate Leadership Discussion Document can be found here and here.

Not surprisingly, carbon pricing has been identified by the Climate Panel as the primary policy tool for reducing emissions in the province. In particular, the Climate Panel recommends that the existing Specified Gas Emitters Regulation (SGER) be replaced in 2018 by a Carbon Competitiveness Regulation that will broaden the reach of the province’s existing carbon pricing regime and implement additional policies to reduce the emissions intensity of the province’s electricity supply and its oil and gas production. Further, the Climate Plan will promote energy efficiency and add value to provincial resources through investments in technological innovation. To protect the competitiveness of Alberta’s core industries, the Climate Panel has recommended the allocation of emissions credits for industrial emitters.

Under the Climate Plan, Alberta will:

1. Phase out coal emissions by 2030:  Emissions from coal are to cease by 2030 either through the retirement of units or by owner action to fully sequester carbon dioxide. In its place, the goal is to replace two-thirds of the existing coal electricity with renewable energy.  Starting in 2018, coal-fired generators will pay $30 per tonne of carbon dioxide on emissions above what Alberta’s cleanest natural-gas fired plant would create for the same amount of electricity.

2. Offer incentives for renewable generation:  Alberta has set a goal of replacing two-thirds of the existing coal electricity with renewable energy (e.g. wind, solar, biomass, etc.), one-third of which will be replaced by natural gas. The 2030 goal is for renewable sources to account for 30% of Alberta’s total operating generation capacity.

While the Government has set ambitious renewable goals, they have provided little detail on how they intend to do this within our current electricity market, except to state that it “will accomplish its transition with policies that fit Alberta’s unique energy market [and] ensure that the electricity system continue to be reliable.”

3. Implement an economy-wide carbon price:  Under the SGER, facilities that emit 100,000 tonnes or more of greenhouse gas emissions are currently required to annually reduce their site-specific emissions intensity by 12% (which will increase to 15% as of January 1, 2016 and 20% as of January 1, 2017). This captures approximately 45% of provincial emissions.  Regulated facilities have several compliance options available to them, including making a contribution to Alberta’s Climate Change and Emissions Management Fund (the Fund). Facilities that pay into the Fund pay $15 for every tonne over their reduction target. The price will increase to $20 as of January 1, 2016, and $30 as of January 1, 2017.

Under the Climate Plan, Alberta will replace its present emissions intensity carbon pricing program under the SGER with one that is based on a product-based, emissions performance standard. It is anticipated that Alberta’s new approach will cover 78 to 90% of provincial emissions and include the following:

  • A carbon price will be applied across all sectors, starting at $20 per tonne on January 1, 2017 and moving to $30 per tonne on January 1, 2018. This price will increase in real terms each year after that. On-site combustion in conventional oil and gas will be levied starting January 1, 2023 while that sector works to reduce methane under the government’s new Joint Initiative on Methane Reduction and Verification (discussed in further detail below).
  • Emissions from transportation and heating fuels will be priced at the distributor and importer stage.
  • Carbon pricing revenue will be invested back into Alberta for clean research and technology, green infrastructure and to help finance the transition to renewable energy and efficiency programs. The carbon tax will also be used for an “adjustment fund” to help individuals and families adjust as the new policy is implemented. The adjustment fund will also be used to help small business, First Nations and people working in the coal industry. Media estimates the costs of the Climate Plan to an average Alberta household as $320 per year in 2017 and $470 in 2018.

4. Legislate a cap on oil sands emissions:  Currently, the oil sands sector accounts for approximately one-quarter of Alberta’s annual emissions and these facilities are currently charged a levy based on each facility’s historical emissions under the SGER.

Under the Climate Plan:

  • An oil sands specific emission performance standard will replace the current approach. A $30/tonne carbon price will be applied to oil sands facilities based on results already achieved by high performing facilities.
  • A legislated maximum emissions limit of 100Mt in any year will be implemented, with provisions for cogeneration and new upgrading capacity, with the goal of driving technological progress and ensuring operators have time to develop and implement new technology.

The Alberta Government claims that while the 100 Mt per year limit provides room for growth and development it will also incentivize change. They have also promised to immediately consult with industry, regulators, environmental organizations and Indigenous and metis communities on the implementation of the 100 Mt limit.

5. Implement a new methane emissions reduction plan: Alberta intends to cut methane emissions by 45% from 2014 levels by 2025. This target matches the US’s recently announced targets on methane. Alberta’s largest source of methane emissions is from the oil and gas industry (venting, fugitive emissions from natural gas driven pneumatics and leaks and from flaring). To cut methane emissions, Albert’s Climate Plan uses two approaches.

  • It will apply the new emissions design standard to new Alberta facilities (i.e. applying standards at the planning stage).
  • It will develop a 5-year voluntary Joint Initiative on Methane Reduction and Verification. This initiative will be tasked with taking action on venting and fugitive emissions from existing facilities, including enhanced measurement and reporting requirements for new and existing facilities.

6. Implement an Energy Efficiency Program: Alberta is currently the only province without an energy efficiency program. Carbon pricing revenue will also be used to fund energy efficiency programs.

In its report, the Climate Panel succinctly states the challenge: “[w]e must demonstrate how an energy-producing jurisdiction can implement climate policy that reduces emissions, protects the competiveness of key industries and spurs innovation.” While the Climate Plan has created significant chatter, the devil is in the details and many ambiguities remain.  Such unanswered questions include: how will the renewable energy be procured and what will happen to the SGER credits and the cogeneration credits? What will the process look like for addressing climate impacts on Aboriginal communities in climate change mitigation and adaptation plans? Further, what emission reductions will the plan in fact achieve?  The Climate Panel suggests that its plan will achieve reductions of 20 Mt by 2020 and 50 Mt by 2030.  Only time will tell whether these policies will deliver meaningful emission reductions.

Stay tuned for more detailed commentary on Alberta’s new climate approach in the coming days.

Québec’s Strategic Environmental Assessment on Hydrocarbons: HEC Montréal Releases Study on Potential Markets for Quebec’s Hydrocarbons

Posted in Liquefied Natural Gas, Natural Gas, Québec
Louis-Nicolas BoulangerMathieu LeBlanc

On October 27, 2015 HEC Montréal released a study on potential domestic and international markets for Quebec’s hydrocarbons. The release of this report constitutes one of the final milestones in the strategic environmental assessment undertaken by the Québec Government regarding its hydrocarbon action plan. The Québec Government is now expected to table a final report on its findings before the end of 2015 which could potentially lead to the adoption of a new broad-ranging bill on hydrocarbons. Continue Reading

The Bill 135 Governance Model: All Roads Lead to the Government

Posted in Electricity, Ontario Energy Board, Ontario Independent Electricity System Operator, Ontario Power Authority
George Vegh

On October 28, 2015, the Government of Ontario tabled Bill 135, that will, if enacted, effectively remove independent electricity planning and procurement authority from the IESO and transmission approval from the OEB.  Both of these types of authority will be transferred to the Minister of Energy.  The Minister will produce long-term energy plans that will be binding on the Ontario Energy Board and the IESO, both of whom must issue implementation plans designed to achieve the objectives of the Government’s plan.  The Government’s new planning authority is broader than the IESO’s.  It includes both bulk system planning (as was in the IESO’s mandate), and also extends to distribution systems.  The Government’s existing procurement authority will also be extended as Bill 135 gives the Government additional powers to direct the procurement of energy storage and transmission.  Continue Reading

Province Signs Memorandum of Understanding with BC Hydro and Clean Energy BC

Posted in BC Hydro, BC Ministry of Energy, Mines and Natural Gas, Electricity, Independent Producers, Power, Utilities
British Columbia
Sebastian NishimotoSven Milelli

On October 21, 2015, the government of British Columbia announced that it had signed a memorandum of understanding (the “MOU”) with BC Hydro and the Clean Energy Association of British Columbia (“CEBC”). A copy of the MOU is available here. CEBC has served as the main industry representative for BC’s independent power producers for the past 25 years.

The MOU is intended to provide a framework to facilitate collaboration between the three parties to promote the goals of fostering a robust independent clean energy sector in BC, promoting partnerships with First Nations and local communities, and ensuring the delivery of reliable, affordable and clean electricity to ratepayers.

Some of the key terms of the MOU include the following:

  • the CEO and other key executives from BC Hydro and the Minister, Deputy Minister and applicable Assistant Deputy Minister of the BC Ministry of Energy and Mines will meet with the board of directors of CEBC once a year, and delegates from the boards of directors of CEBC and BC Hydro will hold annual meetings to promote greater collaboration between the two organizations;
  • recognition of the importance of BC’s independent power sector, and agreement to promote the benefits of this sector to ratepayers and taxpayers;
  • recognition of the importance of providing First Nations with economic opportunities and helping them realize on such opportunities, and agreement to collaborate with First Nations as long-term partners in the development of clean energy resources;
  • an agreement by the parties to engage collaboratively on a number of issues including:
    • BC Hydro’s review of its Integrated Resource Plan (“IRP”) and electricity purchase agreement (“EPA”) renewal policy, including with respect to load growth scenarios, supply forecasts, demand side management (“DSM”) and emerging technologies in renewable energy;
    • the establishment of a process for continuously evaluating and improving BC Hydro’s procurement process, including its Standing Offer Program (which we have previously discussed here and here), and reviewing successful procurement policies in other jurisdictions;
    • improvements to existing extension and interconnection policies, including a greater role for independent power producers, in the interest of expanding the province’s power grid;
    • electrification of certain key sectors of the economy as a means of helping to achieve BC’s greenhouse gas reduction and climate change goals; and
    • the advancement of clean energy projects to replace diesel generation in remote First Nations communities.

The MOU is effective until December 31, 2017. Each of the parties to the MOU will appoint two delegates to a steering committee, which will meet at least once each quarter to discuss, prioritize and advance the activities set out in the MOU.

B.C. Government to Exempt Two Projects from BCUC Review in Response to Load Growth from Upstream Natural Gas Operations in the Peace Region

Posted in BC Hydro, BC Ministry of Energy, Mines and Natural Gas, BC Utilities Commission, Electricity, Natural Gas, Transmission, Utilities
British Columbia
Sebastian NishimotoSven MilelliRobin Sirett

Following a stakeholder consultation this summer, the BC Ministry of Energy and Mines is planning to exercise its authority under the Utilities Commission Act (British Columbia) (the “UCA”) to exempt two transmission projects, the North Montney Power Supply (“NMPS”) project (proposed by Alberta-based ATCO) and the Peace Region Electricity Supply (“PRES”) project (proposed by BC Hydro), from review by the BC Utilities Commission (the “BCUC”) under Part 3 of the UCA. Among other things, this exemption would relieve BC Hydro and ATCO from the requirement under section 45 of the UCA to obtain a Certificate of Public Convenience and Necessity from the BCUC for each of the projects.

In a report issued on April 27, 2015 (available here), BC Hydro describes the PRES project as intended to resolve the “upstream” constraints in the transmission system supplying the Peace Region in Northeast BC. In the same report, BC Hydro describes its need to “serve some of the most dramatic, single industry load (demand for electricity) growth in a discrete area that it has experienced over the past 50 years”. Plans are underway in the Peace Region for natural gas producers to power their compression facilities using electricity drawn from BC Hydro’s grid, rather than their own gas, to generate the requisite power. The NMPS project, which would be built and serviced by ATCO, is intended to deliver power from BC Hydro’s grid to Progress Energy Canada Ltd.’s upstream facilities. Progress is a subsidiary of Petronas, which is the proponent behind the Pacific NorthWest LNG facility in the District of Port Edward on BC’s North Coast.

The BC Government’s decision to exempt the PRES and NMPS projects from Part 3 of the UCA is not without controversy. The move has been opposed by both the BC Public Interest Advocacy Centre, an organization which represents low and fixed-income ratepayers, and the Peace River Regional District.

As discussed in an earlier blog post, an independent task force appointed by the BC government released a report in February 2015 that provided various recommendations for restoring the BCUC as a strong and independent regulator of public utilities, including a recommendation that the BC Government make use of section 5 of the UCA to obtain advice from the BCUC on projects which it may otherwise wish to exempt from BCUC review under Part 3 of the UCA. This procedure would allow the BC Government to obtain advice and recommendations from the BCUC while still retaining the ability to make the final decision regarding the project.

BC Environmental Appeal Board Revokes Horn River Basin Water Licence – Part 2 of 2

Posted in BC Ministry of Forests, Lands and Natural Resource Operations
British Columbia
Stephanie AxmannKimberly HowardSelina Lee-Andersen

On September 3, 2015, the British Columbia (BC) Environmental Appeal Board (the Board) delivered its decision in Chief Gale and the Fort Nelson First Nation v. Assistant Regional Water Manager & Nexen Inc et al (Decision No. 2012-WAT-013(c)), revoking a water licence issued to Nexen Inc. (Nexen) for the purpose of pumping water from Tsea Lake in BC’s Horn River Basin for storage and use in oilfield injection (the Licence). Continue Reading

BC Environmental Appeal Board Revokes Horn River Basin Water Licence – Part 1 of 2

Posted in BC Ministry of Forests, Lands and Natural Resource Operations
British Columbia
Stephanie AxmannKimberly HowardSelina Lee-Andersen

On September 3, 2015, the British Columbia (BC) Environmental Appeal Board (the Board) delivered its decision in Chief Gale and the Fort Nelson First Nation v. Assistant Regional Water Manager & Nexen Inc et al (Decision No. 2012-WAT-013(c)), revoking a water licence issued to Nexen Inc. (Nexen) for the purpose of pumping water from Tsea Lake in BC’s Horn River Basin for storage and use in oilfield injection (the Licence). Continue Reading

Ontario Proposes Amendments to Greenhouse Gas Reporting Regulation

Posted in Ontario Ministry of Environment
Selina Lee-Andersen

In preparation for the introduction of its cap-and-trade system, Ontario’s Ministry of the Environment and Climate Change (MOECC) is seeking comments on proposed amendments to the Greenhouse Gas Emissions Reporting Regulation (O. Reg. 452/09) (the “Regulation”). Currently, the Regulation requires certain facilities (as identified under the Regulation) emitting 25,000 tonnes or more of carbon dioxide equivalent (“CO2e”) per year to report and verify their emissions data. Continue Reading

Federal Court of Appeal Ruling Restores Panel Decision on Darlington Nuclear New Build

Posted in Nuclear
Joanna RosengartenZachary Masoud

As we previously wrote here and here, in a 2014 judicial review application, the Federal Court found that the environmental assessment (“EA”) process for the Darlington New Nuclear Power Plant Project (the “Project”) conducted by the Joint Review Panel (the “Panel”) contained a number of deficiencies. The Federal Court allowed the judicial review application and directed that the EA report be returned to the Panel for further consideration of certain issues, including those related to disposal of nuclear waste and severe nuclear accidents. The Federal Court’s decision was subsequently appealed by Ontario Power Generation (“OPG”), the Canadian Nuclear Safety Commission and the Attorney General of Canada on the basis that it contained errors of law regarding the correct interpretation of the Canadian Environmental Assessment Act and the manner in which it was applied by the Panel in its consideration of the Project.

Continue Reading

BC Hydro Site C Litigation Update – New petition filed by Treaty 8 First Nations, while injunctive relief denied; Federal Court dismisses two challenges to Site C

Posted in BC Hydro, Hydroelectric
British Columbia
Stephanie AxmannJordanna Cytrynbaum

This post provides an update on the latest developments in the litigation proceedings involving BC Hydro’s Site C Clean Energy Project (Site C), and a summary of the current status of each of the judicial review applications that have been filed to date. Please see our earlier posts on July 21st and August 14th for additional background on the judicial review proceedings filed in BC Supreme Court and Federal Court. Continue Reading

BC Government Invites Comments on Proposed Water Sustainability Act Policies

Posted in Water
British Columbia
Paul CassidySelina Lee-AndersenMonika Sawicka

With British Columbia’s (BC) new Water Sustainability Act (WSA) expected to come into force in early 2016, the provincial government is in the process of designing the regulations and operational policies that will support the implementation of the WSA. As part of the BC government’s phased approach to implementation, it recently released four papers outlining proposed new policies which are expected to be incorporated into new WSA regulations. The papers are now available on the WSA blog for public comment until September 8, 2015. Continue Reading

Conversation Starters: Alberta Releases Climate Change Discussion Document

Posted in Climate Change, Climate Policy
Selina Lee-Andersen

On August 14, 2015, Alberta Environment and Parks released its Climate Leadership Discussion Document (Discussion Document) as part of the province’s ongoing efforts to design a comprehensive action plan on climate change. As discussed in our earlier blog, the Alberta government announced in June 2015 that it was taking steps to achieve real, demonstrable reductions in the province’s greenhouse gas (GHG) emissions by tightening its existing GHG regulation, the Specified Gas Emitters Regulation and appointing an advisory panel (Advisory Panel) to undertake a comprehensive review of Alberta’s climate change policy. Continue Reading

BC Hydro Site C Litigation Update – Two Challenges To Site C Heard in Federal Court

Posted in BC Hydro, Hydroelectric
British Columbia
Stephanie AxmannJordanna Cytrynbaum

This post provides an update on recent developments in the litigation commenced in respect of BC Hydro’s Site C Clean Energy Project (Site C). Please see our earlier post for an overview of each of the Federal Court and Provincial Court proceedings. Continue Reading

Monetary Administrative Penalties: Previous Non-Compliances by an Affiliated Entity cannot be considered as an Aggravating Factor

Posted in Climate Change, Projects, Wind
Dominique Amyot-BilodeauCindy Vaillancourt

On June 23, 2015, the Administrative Tribunal of Quebec (the “TAQ”) quashed a monetary administrative penalty (“MAP”) which had been imposed by the Ministry of Sustainable Development, Environment and the Fight against Climate Change (“MSDEFCC”) because of minor violations to a certificate of authorization.[1] Continue Reading

Supreme Court of Canada upholds the constitutional validity of administrative monetary penalties

Posted in Federal, Supreme Court
Michel GagnéCatherine Frémont

The Supreme Court of Canada (the “SCC”) recently upheld the constitutional validity of administrative monetary penalties (“AMPs”) imposed under the Income Tax Act (the “ITA”) by concluding that they are of an administrative nature rather than of a criminal nature. This SCC decision might have consequences in other areas of law, in particular in environmental law, where the imposition of AMPs is now common practice.

In the case of Guindon v. Canada[1], Julie Guindon was assessed penalties totalling $546,747 under section 163.2(4) of ITA, which provides for the imposition of AMPs on every person who makes a false statement that could be used by another person. Ms. Guindon argued that the penalty imposed under the ITA was criminal and that she was therefore a person “charged with an offence” who was entitled to the procedural safeguards provided for in s. 11 of the Canadian Charter of Rights and Freedoms (the “Charter”). The SCC rather concluded that section 163.2(4) of the ITA did not create a “true criminal offence” and that, therefore, Ms. Guindon was not a person “charged with an offence”. Accordingly, the SCC ruled that the protections under s. 11 of the Charter did not apply.

In its reasoning, the SCC indicates that the process under section 163.2 is of an administrative nature because it aims at maintaining compliance or regulating conduct within a limited sphere by promoting honesty and deterring gross negligence on the part of tax preparers. By contrast, criminal proceedings are aimed at promoting public order and welfare within a public sphere of activity. According to the SCC, such administrative process can be contrasted with the process which applies to criminal offences because no one is charged, no information is laid against anyone, no one is arrested, no one is summoned to appear before a court of criminal jurisdiction and no criminal record will result from the proceedings. At worst, once the administrative proceeding is complete and all appeals are exhausted, if the penalty is upheld and the person liable to pay still refuses to do so, he or she risks being forced to pay by way of a civil action.

This SCC decision does not discuss the defences available against the imposition of AMPs nor the issue of the burden of proof. Earlier in 2015, the Administrative Tribunal of Quebec recognized that a person could bring forward the “reasonable, prudent and diligent person” defence that exists in civil law against the imposition of AMPs pursuant to the Environment Quality Act[2]. It will be interesting to see how the case law continues to evolve in relation to AMPs imposed pursuant to environment laws.

[1]       Guindon v. Canada, 2015 SCC 41.

[2]       Excavation René St-Pierre inc. v. MDDELCC, 2015 QCTAQ 02386.

New RFP for a 6 MW Wind Farm in the Îles-de-la-Madeleine

Posted in Québec, Québec Hydro-Québec, Wind
Louis-Nicolas BoulangerMathieu LeBlanc

Hydro-Québec held on July 14 in Montreal an information session regarding the upcoming launch of a request for proposals to develop, build and operate a 6 MW wind farm in the Îles-de-la-Madeleine, in the province of Québec.

That wind farm would be integrated into the off-grid system of the Îles-de-la-Madeleine and would contribute to reducing Hydro-Québec’s use of its Cap-aux-Meules oil-fired thermal plant. Continue Reading

Premiers Unveil Canadian Energy Strategy at Summer Meeting

Posted in Climate Change, Emissions Regulation, Energy – Renewable, Alternative and Clean
Selina Lee-AndersenKimberly Macnab

At the summer meeting of the Council of the Federation that was held in St. John’s from July 15 to 17, 2015, Canada’s provincial and territorial Premiers unveiled their Canadian Energy Strategy (CES). Continue Reading

Hydro-Québec Issues New RFP for Wind Power Integration Service

Posted in Hydroelectric, Québec Hydro-Québec, Wind
Louis-Nicolas BoulangerMathieu LeBlanc

On July 17, 2015, Hydro-Québec Distribution (“HQD”) issued a new request for proposals (A/O 2015-02) (the “RFP”) for the purchase of a wind power integration service for all of its wind farms under contract.

The proposals will be required to include a balancing service to guarantee wind energy deliveries as well as additional firm capacity during the winter period, from December 1 to March 31 of each year. Continue Reading

Site C Update – Federal Court judicial review proceedings to commence this week, following BC Hydro’s receipt of provincial authorizations to begin construction

Posted in Aboriginal, BC Hydro
British Columbia
Stephanie AxmannJordanna Cytrynbaum

This article provides a consolidated overview of recent developments in the six judicial review proceedings challenging the governmental approvals of Site C. Please check our blog for future updates on key developments in the proceedings. Continue Reading

Alberta Takes Two Meaningful Steps Towards Renewing its Climate Change Policy

Posted in Climate Change, Climate Policy
Selina Lee-Andersen

As Alberta’s new provincial government looks to assert itself as a leader on climate change issues, it recently announced that it is taking meaningful steps to achieve real, demonstrable reductions in the province’s greenhouse gas (GHG) emissions. In addition, Premier Rachel Notley has made it clear that she expects to have a long-term climate change strategy in place for the province before she travels to the United Nations Climate Change Conference (COP 21) starting in Paris on November 30, 2015. To that end, Alberta’s Minister of Environment and Parks, Shannon Phillips, announced on June 25, 2015 that the government is taking a two-step approach to climate change policy renewal. Continue Reading