Law in Quebec

Bill 102, the most significant overhaul of the Quebec Environmental Quality Act (EQA) since it was adopted in 1972, is widely expected to have significant repercussions on the environmental assessment procedure and on the authorization scheme of industrial projects carried out in Quebec if it is adopted in its current form.

Bill 102, which will be the subject of a consultation process by a National Assembly parliamentary committee this fall, proposes to shelve the various authorization and attestation schemes currently in place by a single staggered assessment regime based on the impact projects are expected to have on the environment. Business, frustrated by the lack of clarity, efficiency, predictability and prohibitive delays that hampers the current system, have generally viewed the facelift favourably even though many questions remain unanswered.

“The current system is very complex, cumbersome, and is not necessarily adapted to today’s realities,” said Guillaume Pelegrin, a Montreal environmental lawyer with Sodavex. “Its application creates a lot of inefficiencies, and above all a lot of uncertainty. The bill is welcome news.”

Michel Bélanger, an environmental lawyer who is president of Nature Québec and co-founder of the Centre québécois du droit de l’environnement (C.Q.D.E.), is divided, pleased that a process that has remained fundamentally unchanged since its inception is being revamped but disappointed that the government was not bolder. “I’m divided because there are positive aspects to the bill but I had hoped that the government would have been more audacious rather than pay careful attention to industry who were seeking to relax standards.”

At present, under section 22 of the EQA certain projects or activities that may impact the quality of the environment requires prior approval from the Ministry of Sustainable Development, Environment, and the Fight against Climate Change (MSDEF). According to the MSDEF, over 5,000 ministerial authorizations are granted each year, a figure that is expected to be slashed by 30 per cent under the new regime.

Under Bill 102, approval applications will be risk-based, and will fall under one of four categories, depending on their risk profile. Projects that fall under the high-risk category will still be subject to environmental impact assessments and review procedure while moderate-risk projects will still be obliged to obtain ministerial authorizations. The big change applies to projects deemed to be low risk. They will be required to file a declaration of compliance with environmental laws and will be permitted to begin operations 30 days following the submission – a marked improvement over current practice that can require obtaining an approval that takes on average 200 days to receive. Projects with negligible risks will be exempt from obtaining an authorization or any other filing.

“On the whole what is set out in the Bill is positively viewed by people who people who practice in environmental law and by most people who are subject to the law,” remarked Diana Lyrintzis, a Montreal lawyer at Davies Ward Phillips & Vineberg LLP. “A lot of people are excited that potentially they won’t have to go through a lengthy process to obtain an authorization where there is activity that is so minimally risky from an environmental point of view that they feel it is a waste of time and money, and often leads to uncertainty in their commercial transactions and their ability to operate their business.”

While the new proposals have also been lauded for streamlining the approvals process by requiring only a single type of ministerial authorization per project and making it possible to transfer environmental authorizations when a business changes hands, there are concerns over impending regulations. When assessing a ministerial authorization application, the Minister must consider the nature of the project, how it will be implemented and the characteristics of the environment that will be affected. The Minister will also have to take into account the nature, quantity, concentration and location of contaminants that will be released into the environment as well as greenhouse emissions. But Bill 102 does not spell out how it will determine the risk profile of a project. That will be laid out in the regulations, pointed out Paule Halley, a law professor at the Université Laval who is the Canada Research Chair in Environmental Law.

“It is difficult to evaluate the impact this bill will have because it rests on regulations which have yet to be adopted,” observed Halley. “It’s a bit unfortunate that there is a trend towards giving a lot of weight to regulations but not publishing them at the same time as the bill. In order to have a clear vision of what is being proposed it is essential to have the regulations be published at the same time as the bill.”

There are also concerns that the Minister, as is now the case under the current framework, will have far too broad discretionary powers. Under Bill 102, the Minister can impose any condition he deems advisable and can even refuse to issue an authorization if he believes that the measures being proposed by the applicant are insufficient to ensure adequate protection of the environment. The Minister can also amend applications that previously received authorization. “It’s the same concern we have now,” said Lyrintzis. “We probably won’t know whether or not discretion is circumscribed in any way until we see the criteria that they are going to establish for an analysis of the different levels of risk.”

Bélanger too is uneasy. He believes that the Minister should enjoy “some,” albeit constrained, discretionary powers under certain circumstances like when there is a public outcry over a project that raises “important” environmental concerns as is now the case over the controversial – and temporarily delayed — exploratory oil and gas drilling in Anticosti Island. The Minister’s broad discretionary powers should be curbed when the authorization process begins and when endangered species are at stake, added Bélanger.

Bill 102 also contentiously plans to increase the transparency of information that forms part of the environmental approval process. To the delight of environmentalists and the consternation of business, Bill 102 proposes to make accessible most documents that form an integral part of an authorization application as well as the studies on which an authorization is based. Information on low-risk projects that require a compliance declaration will ostensibly be made public in a registry accessible on the ministry’s website. Only information with an impact on the administration of justice and public safety will supposedly be exempt from the new rules. That information can be invaluable from a mergers and acquisition perspective, noted Lyrintzis.

At present when a company is performing due diligence on a business or asset it is interested in acquiring, there is “only so much information you can obtain” on the government’s public registry, explained Lyrintzis. The rest has to be obtained by doing off-title searches and making formal requests under the Access to Information Act.

But Pelegrin, like Lyrintzis, is concerned that increased access to documents will lead to the divulgation of commercial secrets. “This is the kind of information that makes up their industrial know-how,” said Pelegrin. “It is how they are able to keep a competitive advantage, and it should be obviously be kept confidential from the competition. This is going to lead to some problems.” But Bélanger believes that business have too far often used such confidentiality clauses “to skirt, and not respect, the spirit of the law. An improvement was necessary.”