Federal Government Releases Strategic Assessment of Climate Change

Bennett Jones LLP

Bennett Jones LLPOn July 16, 2020, Environment and Climate Change Canada (ECCC) released its Strategic Assessment of Climate Change (SACC). The SACC provides detailed new guidance to project proponents required to assess climate change impacts within a federal impact assessment under the Impact Assessment Act, SC 2019, c 28, s 1 (IAA). The SACC will also inform consideration under the IAA of the extent to which a designated project hinders or contributes to the Government of Canada's ability to meet its commitments in respect of climate change.

The process leading to the publication of the SACC was launched in July 2018 following the introduction of Bill C-69 to replace the Canadian Environmental Assessment Act, 2012. In addition to explicitly adding climate change and Canada's international commitments to the list of factors considered in a federal impact assessment, the IAA introduces new powers that allow the Minister of ECCC to conduct a "strategic assessment" of any Government of Canada policy, plan, or program, or of any issue that is relevant to conducting impact assessments (IAA, section 95).

While the development of the SACC was begun before the IAA came into force, the SACC is deemed to be a strategic assessment pursuant to section 95(2) of the IAA (SACC, Annex II). 

What Is the SACC?

The stated objective of the SACC is to "…enable consistent, predictable, efficient and transparent consideration of climate change throughout the impact assessment process" (SACC, section 1.1).

The SACC applies first and foremost to designated projects required to complete an impact assessment under the IAA. A "designated project" is defined broadly in the IAA as an activity or activities designated in the Physical Activities Regulations or by the Minister of ECCC under section 9, and includes all ancillary activities.

The SACC also notes that the principles and objectives underlying the SACC will be built into guidance for the review of non-designated projects on federal lands and outside Canada under the IAA, and that "[g]uidance for projects regulated by the Canada Energy Regulator (CER) will similarly consider the principles and objectives of the strategic assessment of climate change."

The SACC provides explicit guidelines for its application at every stage of an impact assessment, including in relation to quantification of greenhouse gas (GHG) emissions and assessment of emission reduction technologies.

Key Takeaways

While current and potential project proponents will wish to review the SACC in detail, the following provides a summary of some key points of interest:

  • Project GHG emissions and certain upstream GHG emissions will be included in impact assessments; downstream emissions will not. Proponents of projects undergoing a federal impact assessment will be required to provide an estimate of the project’s GHG emissions and, in certain cases, an upstream GHG emissions assessment. An estimate of downstream emissions is not required, nor will it be considered.

    The SACC defines upstream GHG emissions as "…the domestic and non-domestic emissions from all stages of production, from the point of resource extraction or utilization, to the project under review" (SACC at page 8). Until 2029, project proponents will only be required to assess upstream emissions where those emissions are likely to exceed 500 kilotonnes of CO2 equivalent per year. This threshold will decline in 2030, 2040, and 2050. 

  • Assessable GHG emissions will be calculated on a net basis. The GHG emissions of a project to be assessed will be equal to the project's total emissions and acquired GHG emissions, from which will be subtracted any CO2 captured and stored, avoided domestic GHG emissions, and any offset credits. 

    Acquired GHG emissions include emissions associated with the generation of electricity, heat, steam or cooling, purchased or acquired from a third party for the project (SACC, page 7).

    Avoided GHG emissions may only be applied to reduce the project's net GHG emissions—they cannot be applied to an accounting of upstream emissions. The SACC suggests that proponents consult Infrastructure Canada’s Climate Lens – General Guidance for additional guidance on how to quantify avoided emissions. 

  • Avoided foreign emissions cannot offset project emissions, though project proponents will have the opportunity to discuss potential impacts of their project on global GHG emissions as part of the discussion of how the project will support the reduction of global GHG emissions.
  • Projects with a lifetime beyond 2050 will be asked to provide a credible plan to achieve net-zero emissions by 2050. This applies only to the proposed project—not its upstream GHG emissions. Importantly, enforceable conditions imposed on a project as a result of an impact assessment decision may include a reporting program in which the proponent would demonstrate progress towards implementing mitigation measures and the plan for reaching net-zero emissions by 2050.
  • Project proponents must assess how their project may impact federal emissions reductions efforts and global GHG emissions. 
  • A Best Available Technologies / Best Environmental Practices Determination (BAT/BET) must be included in the Project Impact Statement. The six-step process to prepare a BAT/BET Determination (SACC, page 14) must be undertaken to assess "…the most effective technologies, techniques, or practices, including emerging technologies, that can be technically and economically feasible for reducing GHG emissions during the lifetime of the project" (page 14).  The scope of analysis will be set at the project, as opposed to the equipment, level to give proponents flexibility. ECCC intends to publish a technical guide for proponents containing additional information on technical, economic, social and environmental considerations.
  • The SACC Comments on the Decision Making Process and Conditions to Approval. Under the IAA, the Minister or Governor in Council's decision will determine whether a project is in the public interest, having regard to, among other things, the extent to which the effects of the designated project hinder or contribute to the Government of Canada’s ability to meet its environmental obligations and its commitments in respect of climate change (IAA, s 63(e)). 

    The SACC notes that this decision will be informed by analysis including but not limited to the project’s GHG emissions in the context of Canada’s emissions targets and forecasts, such as Canada’s 2030 emissions targets, Canada’s Mid-Century Long-Term Low-Greenhouse Gas Development Strategy, and Canada’s goal for achieving net-zero emissions by 2050 (SACC, page 18).

    Any GHG emissions-related conditions would only be applicable to a project's net GHG emissions, not to upstream activities. 

Conclusions and Next Steps

The SACC is the first strategic assessment issued under the IAA. Notwithstanding its title, the SACC is less a strategic assessment of the federal government's process for assessing impacts of GHG emissions in Canada as it is a detailed, action-oriented checklist that proponents are required to adhere to when engaging in a federal impact assessment. For all intents and purposes, the SACC purports to set out binding legal requirements for impact assessment that are not otherwise contained in the IAA or its associated regulations.

While coordination with provincial and territorial legislation and policies is mentioned as a potential GHG mitigation measure (SACC, page 13), provincial GHG reduction measures appear to factor very little into the SACC. Instead, the SACC appears to be consistent with the federal government's ongoing efforts to take unilateral action on climate change and GHG emissions, as evidenced through legislation such as the Greenhouse Gas Pollution Pricing Act and the proposed Clean Fuel Standard.

ECCC intends to publish technical guides in 2020-21 to provide more details on the following specific elements of the SACC: 

  • quantification of net GHG emissions, upstream GHG emissions, and carbon sinks;
  • GHG mitigation measures, BAT/BET, and plans to achieve net-zero emissions by 2050; and 
  • climate change resilience.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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