Bill C-39 and Canada’s Regulatory Alphabet Soup: Former CER CEO Gitane De Silva Explains
This podcast is also available as a video on YouTube
The federal government introduced Bill C-39 (Building Canada Strong Act) on September 21, 2026. The bill aims to complete project reviews in one year, with a single window for proponents, rather than requiring them to deal with multiple federal and provincial agencies. Business stakeholders have responded positively to the draft legislation.
This week on the podcast, our guest is Gitane De Silva, Founder & President of GDStrategic, Executive Director of the Peter Lougheed School of Politics and Democracy at the University of Alberta, and former CEO of the Canada Energy Regulator (CER).
Gitane helps us understand the proposed regulatory process, how it compares with the fast-track process under Bill C-5 (which the new Pacific Link, formerly known as the West Coast Oil Pipeline, will follow), and the process established under Bill C-69, famously called the “No New Pipelines Bill.” She also explains the roles of the various agencies involved, depending on the type of project being reviewed.
Content referenced in this podcast:
- The Alberta Government’s website on the Pacific Link oil pipeline (formerly known as West Coast Oil Pipeline)
- The Government of Canada’s background document on Bill C-39
- The full text of Bill C-39
- The Hub.com article by Sean Speer “Carney’s moves on building and labour are an outright rejection of Trudeau economics” (Sept 26)
- CBC “Facing criticism, Carney says he has a ‘very clear mandate’ to push through major economic changes (Sept 22)
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Episode 340 transcript
Disclosure:
The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.
Announcer:
This is the ARC Energy Ideas podcast, with Peter Tertzakian and Jackie Forrest, exploring trends that influence the energy business.
Jackie Forrest:
Welcome to the ARC Energy Ideas Podcast. I’m Jackie Forrest.
Peter Tertzakian:
And I’m Peter Tertzakian and welcome back. Well, as you can see on our studio table, I have a lot of paper and Jackie over there was trying to convince me to get an iPad, but I am resisting because there’s something fundamentally human about writing things on paper or 10,000 years ago we used to paint on rocks. So I think that the relationship between thinking and writing is fundamentally obscured if you use an iPad, even though you can write on an iPad, but you know what I mean?
Jackie Forrest:
Yeah. No, I know. We’re going to go old school here.
Peter Tertzakian:
I’m going old school.
Jackie Forrest:
Yeah.
Peter Tertzakian:
Yeah.
Jackie Forrest:
I feel like you used to have one of those digital things. Didn’t you talk about how great it was, but now you’re back to paper.
Peter Tertzakian:
I’m back to paper.
Jackie Forrest:
Yeah.
Peter Tertzakian:
And I love the flow of a fountain pen, so that’s kind of old school too. And it’s not because it’s retro or anything like that because a lot of people are doing retro things these days. I just have always liked the feel of a fountain pen.
Jackie Forrest:
Okay. Well, maybe I’ll try to do the fountain pen thing. Well, we’ll stick with the paper for now.
Peter Tertzakian:
But it’s messy. I know.
Jackie Forrest:
It is.
Peter Tertzakian:
It is messy. So I can see the appeal of going digital ink and storing things. But that’s the other thing because I just feel like I can put it in the notebooks. I can kind of flip back, but it forces you to have better recall as well.
Jackie Forrest:
Yeah. And AI can’t tell us what to say. This is legit, like coming right from us with the paper.
Peter Tertzakian:
This is it.
Jackie Forrest:
Old school.
Peter Tertzakian:
Yeah.
Jackie Forrest:
No AI.
Peter Tertzakian:
Yeah. Scattered so that we try and keep focused.
Jackie Forrest:
Okay.
Peter Tertzakian:
Okay.
Jackie Forrest:
Well, we got big news this week.
Peter Tertzakian:
Yeah, it’s looking at-
Jackie Forrest:
LNG news.
Peter Tertzakian:
LNG. So the announcement train has started.
Jackie Forrest:
It really has the last two weeks. So it started out with the C-39, which we’re going to talk to and get to, but also the investment summit, the news of the accelerated cost allowance, super productivity. I keep forgetting the name-
Peter Tertzakian:
That’s right. You have-
Jackie Forrest:
And the tax deduction.
Peter Tertzakian:
Yep. Yep. That’s all important. But now we’re actually hearing about projects, which is not surprising because the Major Projects Office, which is sanctioning some of these, has been around for a year now. And a lot of the work that they’ve put into it is now coming to pass. And then of course in conjunction with the productivity super mega deduction, whatever it’s called, it’s all starting to come together.
Jackie Forrest:
Yeah. So it’s a big, big investment. Ottawa says it’s a $32 billion private investment. This is phase two of LNG Canada. It would go double the facility from 14 million tons to 28 million tons, which is the equivalent of another 1.8 BCF per day of additional takeaway. And just to put that in perspective, it’s about 10% of the production of the basin now. So 10% more that’s going out to international-
Peter Tertzakian:
Right.
Jackie Forrest:
Markets as opposed to being in this very saturated North American market.
Peter Tertzakian:
And the target’s 50 million tons per year, per annum, which is I think by 2030. Is that the target?
Jackie Forrest:
Yes. Yeah, I think so.
Peter Tertzakian:
So there’s potentially a few more announcements coming-
Jackie Forrest:
Yeah, well we got-
Peter Tertzakian:
On the LNG side.
Jackie Forrest:
We’re halfway there and actually some good news on Ksi Lisims, which is the other large scale project that has not yet reached FID, but we have got over the last several weeks, a number of new offtake agreements, one from Centrica out of a UK company and Santos, an Australian company. And so that is great. I mean, their 12 million tons is the total size of that phase, that project that they’re working on. And from my count, they’re well over half contracted.
Peter Tertzakian:
Right.
Jackie Forrest:
So hey, maybe we’re not too far off by having another big chunk of LNG-
Peter Tertzakian:
Right.
Jackie Forrest:
Final investment decision under construction. So it’s pretty exciting. Chris Cooper, who was a former guest, talked about this LNG Canada decision alone, the phase two, would put Canada towards becoming one of the world’s top five LNG exporting nations.
Peter Tertzakian:
Right.
Jackie Forrest:
And so Ksi Lisims would contribute even more to that.
Peter Tertzakian:
Canada goes global and there was other big news.
Jackie Forrest:
Yeah. Well, the C-39 is a big one and we want to talk about that on the podcast today. So the Feds introduced this Building Canada Strong Act, not to be confused with the C-5 one, which is similar name. I think there’s one word different in it, but basically speed up environmental reviews, not just for the projects that are designated as projects of national interest, but for all the projects.
And so we want to talk about that today. It’s been getting some good response from industry groups like Business Council of Alberta, Alberta Government. We’ve had the CEO of Enbridge, Greg Ebel, Vern Yu, just a few examples of CEOs coming out supporting it. So we’ll talk a little bit more about that. And we also had an article that I want to mention from Sean Spear in the hub talking about how this is really great news and shows that the liberals have moved beyond sort of the anti-business policies of the past where they were loading up these projects with not just their technical requirements and environmental requirements, but also social requirements and broader things that were being layered onto the project. So we’re getting back to the basics of just evaluating these projects and his view on technical merits.
Peter Tertzakian:
Technical merits and regulatory reform. And of course there’s the other big announcement with the West Coast Oil Pipeline.
Jackie Forrest:
Right. So West Coast Oil Pipeline deemed a project that will go under the C-5 process, which is the fast track process. We’re going to try to explain all of this and what the difference is. While the C-39 is taking the existing process and making it faster, there’s even a faster process if you follow the C-5 track. And so the oil pipeline getting that will accelerate its ability to get through the approval process-
Peter Tertzakian:
Right.
Jackie Forrest:
I think.
Peter Tertzakian:
So to get us through all this, phone a friend, which we have done. So we’re delighted to have with us Gitane De Silva, former founder and president of GDStrategic and the Executive Director of the Peter Lougheed School of Politics and Democracy. She is also notably the former CEO of the Canada Energy Regulator. So who best to talk to then Gitane about regulations?
Gitane De Silva:
Thanks for having me on. I also came with paper, so I feel like-
Peter Tertzakian:
Okay. Good.
Gitane De Silva:
I’m part of the paper company.
Peter Tertzakian:
Excellent.
Jackie Forrest:
Yeah, good. We’re all old school. So let’s just start. You’re the perfect guest for this moment in time, but maybe just explain a bit about your time at the Canada Energy Regulator, just to give people that context. And then we’re going to try to understand the difference between C-39 and C-5 and all these different bills.
Gitane De Silva:
And the old C-69. So I started as CEO of the Regulator in August of 2020, so full COVID. So a big part of the focus then was just ensuring that the regulator continued in its safety mandate because we were trying to continue to oversee the construction of Trans Mountain Pipeline, but it was still very much that transition period between the NEB and the CER. So also bringing the legislation to life in terms of making sure that we were acting on all the social measures that were in there. It was the first piece of legislation federally that included implementation of the UN Declaration on the Rights of Indigenous People. So that was also a big shift for the organization becoming the crown in terms of the projects that were before the regulator. So there was just a lot of still change management happening and a lot of working with industry to help them understand how this process would be different and hopefully would still be workable for them.
Jackie Forrest:
Okay. And then I guess you were starting to work with the Impact Assessment Group, which would have just been set up under the C-69, I think Jason Kenney called that the No Pipeline Bill.
Peter Tertzakian:
No Pipeline Act. Yeah.
Jackie Forrest:
Yeah. So that group would have been just getting formed at that time too.
Gitane De Silva:
That’s right. And we never had a single application come forward because one of the things that Bill C-69 changed was any pipeline over 75 kilometers was a designated project that had to undergo a joint review by the CER and the Impact Assessment Agency. And we had that Gaza, Duke project that was talked about, but it never actually came forward. So we had lots of conversations with the Impact Assessment Agency, but we never actually undertook a joint review of a project.
Peter Tertzakian:
Yeah. 75 kilometers doesn’t get us very far.
Gitane De Silva:
It’s a very low bar.
Peter Tertzakian:
Yeah. Well, first of all, with the West Coast Oil Pipeline that will qualify as a project of national interests, the C-5 process. So what is the advantage of being a national interest project? Can you explain that to our audience?
Gitane De Silva:
I think the big advantage is that one, you’ve got that political decision right at the outset that this project will go ahead. So it’s just a question of how. And the second part is that that legislation empowers cabinet to exempt the project from certain pieces of legislation. So we’ve seen with these amendments that are coming through Bill C-39, we’ve changed the regulatory process, but there’s still a bar that needs to be met. If you’re designated under Bill C-5, then the government could just decide that with the exception of indigenous treaty rights, Section 35 in the Constitution, a few other things, you could be exempted from an element of the Fisheries Act or navigable waters or something under the Species at Risk Act. Then you’re not having to mitigate that. You’re now just exempt from it entirely. So it could potentially really speed up the process and make construction a bit easier.
Jackie Forrest:
Okay. So you don’t have to worry about species at risk or it’s just that if there’s something that’s deemed to be really changing the economics or the timeline, they’ll be more flexible around species at risk?
Gitane De Silva:
It gives cabinet the ability to exempt so that it’ll explicitly state that this project is approved with the following conditions and this project is not required to meet X. So if it were, for example, West Coast Pipeline and we had an issue with hummingbirds on Trans Mountain Pipeline, that it may be that falls under species at risk that the federal government, the cabinet could decide that they were going to make a decision that was favoring economics over another element. So that would be one example or some things under navigable waters is always a tricky one as well for projects. So it’d be that sort of thing where they would explicitly exempt the project from certain federal requirements. So wouldn’t be that that requirement would be modified. It would be that their requirement would not apply.
Jackie Forrest:
Well, let’s actually just take that example then. And for those that forgot this part of the story, Trans Mountain had many times during its construction where the construction was delayed, or halted, or slowed because someone found a bird nest, or someone found an anthill, or I think they were moving salamanders, and snails, and frogs, and things like that. So in this case, could construction be more predictable and smooth because they decide that because of the economics and the timeline considerations, that the project timeline is sort of the most important thing?
Gitane De Silva:
They could absolutely decide that, but you have to remember as well that a regulator and a project still needs social license. You still need the approval and the acceptance of the communities that you’re moving through. So I don’t foresee this would be used as a hammer. And I think that if you did go down that road, you would likely see a scenario whereby the company would say, okay, we’re not required to fulfill X requirement under the legislation. So instead we’re going to make a donation to a wetland or do something as well that would deem to be an offset. Because if the project moves too quickly, then you have the risk of protests and people in communities that just aren’t happy. So there still is that requirement for industry and the regulator to make sure that they’re bringing people along.
Peter Tertzakian:
Yeah. I mean, I think that’s where historically, and when I say certainly 15, 20 years ago, the industry had shortcomings in terms of dealing with community consultations, indigenous consultations and so on and so forth, which is predictably why there was so much friction. But speak about maybe the indigenous part of it because is the indigenous consultation now separate from all of this or where does it fit into the whole picture?
Gitane De Silva:
The indigenous consultation is still required. There’s no exemption from Section 35 of the Constitution. And actually the amended legislation states that the process can be delayed if more time is required for consultation. But I think the important change, if we talk about Bill C-39, it’s a bit alphabet soup, but Bill C-39 and the changes to the regulatory system that are not these projects of national interest, there’s actually a crown consultation function now that’s taking place. So they’re actually going to have the Impact Assessment Agency lead, which I think is really important because one, you have the advantage there that you have one single federal government department that is consulting with a nation or a community. Previously, if it was a fisheries permit, and then a species at risk permit, and then an Canadian Energy Regulator project, you’d have three separate government departments coming to one community.
So now that will all be done by one part of government. And the other advantage to that is that presumably if that one department is leading, they’ll have existing relationships with those communities. So oftentimes people come in and they have to build that relationship. So hopefully now they’re starting with a strong relationship and then they can actually talk about the project.
Peter Tertzakian:
I guess I want to get back to also the alphabet soup thing, which you just mentioned in terms of the bill numbers, but also the agencies. And again, for clarification, not only for our audience, but also for me, there’s the Canadian Energy Regulator.
Gitane De Silva:
Correct.
Peter Tertzakian:
And there’s also this Impact Assessment Agency, the IAA. How do they differ with different agencies?
Gitane De Silva:
So the Canadian Energy Regulator is the national regulator for interprovincial and international pipelines and power lines. So if you’re proposing, for example, a new pipeline to the West Coast from Alberta, that would fall under the Canadian Energy Regulator Act.
Peter Tertzakian:
Because it crosses the border.
Gitane De Silva:
It crosses the border, right?
Peter Tertzakian:
Right.
Gitane De Silva:
The Impact Assessment Agency still is responsible for mines and ports. So they’re typically responsible for things that are static, right? A big industrial facility, that’s where the Impact Assessment Agency is responsible. And then the Canadian Nuclear Safety Commission now has full authority over nuclear projects. So that is no longer shared with the Impact Assessment Agency.
Peter Tertzakian:
Okay.
Gitane De Silva:
They run the entire process for nuclear projects.
Jackie Forrest:
But Peter, you bring up a good point. While I think this is much improved, but figuring out which category where your project fits and what regulator you fit in, it’s always been confusing and maybe it’s more confusing because we talked about it a few podcasts ago, but there’s also now a change because before pipelines would’ve went under a joint assessment and now they’re just CER. And so there’s things that are changing. C-39 is kind of the new thing. The goal of it is to improve both the CER process, impact assessment process, and even the nuclear process, right, and to make it more streamlined. I wanted to bring back Sean Spears’ article, which we will put a link to his op-ed. There was a term in the bill that says, “That ministers must consider the technical, economic, and practical feasibility.” And he takes from that, that this is very big change, that the Trudeau era C-69 actually burdened projects with much more than that.
Suddenly they were worrying about gender-based analysis, social issues, health issues, even heritage factors. The project was burdened with this wide set of issues that were really outside of the core thing that the business would be thinking about. And it burdened these projects not only with longer timelines, but more conditions and higher costs. Do you think that the spirit of what you read in C-39, do you agree with that?
Gitane De Silva:
Yeah, I think it’s really important. I think it is important to make clear that if you’re actually approving a project, then you want it to be buildable. And sometimes the conditions that were established in the past, I think to a lot of people felt like they were really extreme. And also, it’s just important to point out that a regulator is a political construct. The regulator’s only implementing the legislation that’s been passed in the House of Commons. And so at that time, if we go back to 2015, 2016, 2017 when that debate was happening, if you look at what was on people’s minds, it was much more focused on things like sustainability and social issues than today where we’re focused on affordability. So I think the intent at the time was to enable that social license and make clear that one regulator had that authority, but in practical application made things very difficult. So this is an important change, that you can’t just impose a condition unless you can actually affect it.
Peter Tertzakian:
Okay. So further to C-39, it’s a draft legislation and the prime minister’s announcement at the Canada Investment Summit of one year, one review, one project, which is really quite substantial. So if I wanted to put forth a proposal to build a railroad, or a pipeline, or power lines, am I going to get an answer back yay or nay in a year? Is that how this works?
Gitane De Silva:
Yes. This is how it’s meant to work. Once your application is complete, then the regulator has 300 days by and large to review the project. And then the politicians have 65 days if it needs a cabinet decision, which also is a really important change. That cabinet process used to be extendable-
Peter Tertzakian:
Right.
Gitane De Silva:
And that often is where the delays came in.
Peter Tertzakian:
Right. And where’s the trigger point where cabinet approval is required?
Gitane De Silva:
It depends on the project. So it used to be under old Bill C-69, any pipeline over 40 kilometers required cabinet approval. Any pipeline over 75 kilometers required that joint process between the two agencies. Every pipeline now falls under the CER clearly, full stop. And it’s only a pipeline over 300 kilometers that requires cabinet approval. And the way those longer pipelines work is that initially it goes into the CER, they provide an assessment, is this a doable project? Then it goes to cabinet for a thumbs up, thumbs down. Then it comes back to the CER for conditions.
Peter Tertzakian:
Okay. And are pipelines the only category of infrastructure that have this potential thumbs up, thumbs down from the political branch of our governance? Or is it a power line would also need to go to cabinet, like transmission lines? Historically, pipelines have been really burdened with a lot of rules that other types of infrastructures have not. Has that been more equalized now?
Gitane De Silva:
I think it remains to be seen because usually transmission lines are governed by the provinces and then it’s really just the federal regulator that does the bit that crosses the border. So if you were to actually try to build an east-west grid, presumably the federal government would need to lead in there to actually make it happen. And then it would be a question, would you have the CER review that entire thing or would it be this collection of provincial processes-
Peter Tertzakian:
Right.
Gitane De Silva:
From start to finish?
Jackie Forrest:
But before, I think most of these processes did have a political decision at the end.
Peter Tertzakian:
Yep.
Jackie Forrest:
And one of the complaints with C-69 is as a proponent, you have to spend hundreds of millions of dollars for five years and then find out, oh, well the politician of the day five years in the future, they decide that they don’t want your project and it’s a political decision. Maybe there’s election coming and that’s a huge risk. It was talked about at one point that maybe this political decision should happen right at time zero. And now it looks like in one year you’re going to get this political decision behind you. Do you think that’s still a risk for proponents or do you think that it’s a much more reasonable risk than the previous process?
Gitane De Silva:
Well, I think the magnitude of the project now going for cabinet approval has changed dramatically. So it’s not 40 kilometers, it’s 300 kilometers for a pipeline. And even in that process, the political decision is much quicker. So I think that is important. I think that it’s always a balance when you’re regulating between empowering expert regulators to actually do their job like the NEB used to do and people’s desire that their elected officials have some control over the infrastructure that’s being built. So I think that’s the balance they’re trying to strike. But I think by and large, they’ve moved the decision up sooner, which I think is a positive.
Jackie Forrest:
Well, when you think about it, if they just made the decision before there was any review, it doesn’t look like they really reviewed, there’s no information yet. So it kind of to me, for credibility reasons, it does make sense they make the decision after there’s some regulator that’s done some work.
Gitane De Silva:
Some assessment.
Jackie Forrest:
Right?
Gitane De Silva:
Yeah.
Peter Tertzakian:
Yeah. Yeah.
Gitane De Silva:
Because you need your regulator to be credible. That’s also important for investment attraction.
Peter Tertzakian:
Okay. And if we can also explore for our audience another subtlety, or maybe it’s not so subtle, this concept of one review, because historically there had to be a federal departmental review and then the same kind of review provincially, right? And now it’s being collapsed into one review. And correct me if I’m wrong, but the federal government then would defer to the province to conduct the review if it’s within the province or? How does that work? Am I right? It collapses as-
Gitane De Silva:
Well yeah, if you take the example of an oil sands facility, for example, in Alberta, so explicitly the federal government has said the Impact Assessment Agency is no longer involved in those. Those are solely under provincial purview. And that comes from that MOU sign between the federal government and Alberta. And as a result of that MOU, the federal government has been signing agreements with all provinces across Canada to make clear who is responsible for what on a project. But the other point that’s really important is now one federal government agency is responsible for coordinating all of the permits. So even before, if you’re applying for a pipeline that was regulated by the CER, you still had to go to Environment Canada for one permit, and fisheries for another permit, and transport for another.
Peter Tertzakian:
Right.
Gitane De Silva:
Now CER oversees all of that. The other departments are still issuing those permits, but it’s a one window thing, which also is a huge time saver.
Peter Tertzakian:
I mean, you were obviously the CEO of the CER. Have they reorganized their organization to be able to undertake this?
Gitane De Silva:
Well, the capacity existed before. It’s just one of the challenges in a Westminster parliamentary system is everyone reports to their minister to parliament. So now what they’re doing is I’m sure they’ll be signing more letters of agreement between the CER and other agencies to make clear legally, right, who’s doing what, but the capacity existed before. Now they just have the authority.
Jackie Forrest:
Yeah. It’s important too. This is draft legislation, so I guess it would have to be passed and see what it looks like after it’s passed. Everything we’re talking about could change, although I kind of don’t expect it to change too much. But let’s go back to climate. So one of the things that C-69 did was it added this idea that your project had to be consistent with the goals of the government. And I noticed the new legislation still has that wording and almost the same repetition. I actually counted how many times climate was in C-69 and this one, it was five times in this new 250 page bill and it was seven times in C-69. So what does that mean? I mean, what are the government’s goals around climate? Before with the Trudeau government, they had made the net-zero by 2050 and they had the 2030 goal, but this government has acknowledged that they’re not going to meet at least the 2030 goal. So how does a project that admits CO2, how is this going to be judged under the climate criteria?
Gitane De Silva:
I think that’s a question that remains to be seen. And I think that this legislation needs to be taken in combination with the cabinet directive that was issued with it, which gives a very clear focus on prioritizing speed and the economy. So I think this government has not said a whole lot about their 2050 goal, so that’ll have to be considered. But then they’re also moving to these regions of national interest, right, this sort of cumulative effects approach to a particular region and kind of almost pre-approving projects in that area. So presumably the climate considerations will fall under those designations. But I think it really remains to be seen how they apply this realistically and whether they take a more global view. If the view is that natural gas is better than coal and climate is a global issue, then maybe they push hard on Article 6 of the Paris Agreement to try and actually get those trade-offs in place. We haven’t heard as much from them on their 2050 goals as we had, of course, from the past government.
Jackie Forrest:
Okay. Well, let’s come to that, that you just talked about that regional, I think they call it regions of national interest. See, this is why I need notes to remember all this stuff. So-
Gitane De Silva:
So many acronyms.
Peter Tertzakian:
And paper is good.
Jackie Forrest:
So C-39 had this concept and it seems that if you’re in that region, you would automatically be a C-5 type project. And maybe we could back up a little bit. What’s the advantage of being a C-5 project over this new C-39? I think you did that at the beginning, but does that mean anybody that has any kind of project now will get this national interest fast track if they’re in that region? And what are some examples of regions that might qualify for that?
Gitane De Silva:
Well, I think we’ve seen many different projects go to the Major Projects Office for consideration, right? We’ve got everything from a highway in the north, that Mackenzie Valley highway, to the deep geological repository for nuclear waste in Ontario and now a pipeline. So any major infrastructure project I think can be considered under Bill C-5. I think again, the advantage is you get that political decision and you have the potential that you’re exempted from elements of federal legislation. You also get the advantage of the Major Projects Office putting their weight behind making sure that all the government is moving quickly and doing that coordination for you. So that’s a tremendous advantage. I think if you were to look at a region, probably BC is a great example. And if you look at the first projects that were referred to the Major Projects Office where you had a transmission line, you had new electrical generation, you had a critical mineral mine.
So sort of that whole combination of things, the whole system that would be required to actually extract those critical minerals and process them and then get them to market. So I think if you look at those, like Ring of Fire in Ontario could be one example potentially where you have a region where it’s deemed in the national interest to actually get moving on these things. And then I think the real advantage there is that you could take a systems approach and understand you’re going to need a road to build the transmission lines that are needed to fire whatever industrial process, and then you’re going to need the rail or the port to get those to market.
Jackie Forrest:
So could you have like 10 projects in, let’s say the Ring of Fire, there’s lots of mining projects that could be taken forward there. Could you have like 10 projects and is there the capacity, I guess, to do that if they all automatically qualify for this fast tracking?
Gitane De Silva:
I think that’s the question, is not only is there the capacity within government to fulfill the regulatory requirements, but are you going to have the supply chains and the skilled trades people that you need to build all of these things? So there’s going to have to be some degree of prioritization to actually get this stuff done. You can’t do it all at once.
Peter Tertzakian:
So with the regulatory system having been improved with Bill C-39 and all the other initiatives, so that presumably will go much smoother, but historically, if the regulatory system wasn’t used by opponents of a project to add friction, then the default was to go to the courts. And so do you have any sort of views on what the improvements to the regulatory system mean in terms of opposition, whether it’s individuals or groups go to the courts? How do we play this out?
Gitane De Silva:
This is why I think Bill C-39 is important because Bill C-5 initially was a signal, like a signal that we actually want to build things and we want to build things quickly. But to say that cabinet’s going to make a decision and then you’re just going to build it without clarifying to people the steps, I think that is exposing you to potential litigation. So I think the use of Bill C-5 will become the exception and falling under Bill C-39 where the process is clarified and it’s shortened and it’s really focused on these expert regulators. I think that’s what’s important. So it’s clear to people what the bar is.
Peter Tertzakian:
Right.
Gitane De Silva:
And it’s clear which entity is enforcing that bar. I think that actually decreases your legal risk.
Peter Tertzakian:
And clear to the courts and the judges and everybody else-
Gitane De Silva:
That’s right.
Peter Tertzakian:
Exactly what’s going on.
Gitane De Silva:
Yeah.
Jackie Forrest:
So do you think if you go under the C-5 process and you’re exempt from some of these things like Fisheries Act and navigable waters, that maybe that exposes you to more risk of a court challenge and that you might prefer to go under the C-39 where there’s still requirements made even though they may be made in the interest of practicality and economics in terms of what the requirements are?
Gitane De Silva:
I think anytime you’re first under a process is kind of like that first pancake, right? There’s the potential that some kinks need to be worked out. Now I give full credit to Dawn Farrell and the team at the Major Projects Office, I think they’re doing tremendous work, my former colleagues at the CER, but I think that we have to see is there even a desire? I don’t think that they’ll be just exempting projects left, right and center. I think that they will be looking as much as possible to try and have them meet that bar. And then presumably if someone disagrees with the decision, whether it’s for environmental reasons or landowner rights or whatever it is, it would be the minister or the prime minister, they’d be taken to court.
Jackie Forrest:
Okay. Well, let’s come back to the C-39 process, but this might actually be an issue with C-5. One of the historic issues we’ve had is that a project gets approved. For one example, the Pacific Northwest LNG project, but that was that PETRONAS project. 190 legally binding conditions came with this approval. And there wasn’t a lot of consideration in my view of the economics. Some of these requirements added a lot to the cost of the project. And I believe that ultimately these conditions were part of the reason the project didn’t go forward, right? They said the economics didn’t work. Well, yeah, you burdened this project with all of these expensive requirements that really were in addition to, in my view, the kind of standard regulatory requirements.
Do you think under this new C-39 process that we’re going to see less of these conditions? Because we’re thinking about economics. What is the word? We’re looking at if it’s feasible and practical and economic. And I think if you looked at a lot of those conditions through that lens, they wouldn’t meet that bar.
Gitane De Silva:
Yeah. I think that’s a really, really important change in this legislation because it’s again, a clear signal that we’re prioritizing the economic benefit and the ability to move quickly. And it also protects the regulator from litigation and having their decision overturned because then the minister’s going to have to say, “Yes, in an ideal world, we would do all of these things, but for now we’re going to go for good and not perfect.”
Peter Tertzakian:
Yeah. It’s a thing with a condition. So what you’re saying is, okay, you’ve got one year and you get an answer back. Will the answer be a black and white yay or nay, you can go ahead? Or will the answer be, okay, you can go ahead, but you have to fulfill 109 conditions?
Gitane De Silva:
So I mean, it depends again on the magnitude of the project.
Peter Tertzakian:
Right.
Gitane De Silva:
But if you are a major project, then you will get your political decision. Then it’s a question of how, whether it’s Bill C-5 or Bill C-39.
Peter Tertzakian:
Yeah.
Gitane De Silva:
And I think under no scenario does a project get approved with no conditions.
Peter Tertzakian:
Yeah.
Gitane De Silva:
Right. There’s always going-
Peter Tertzakian:
There’s always something-
Gitane De Silva:
To be things to be mitigated or things that are economic benefit to communities. There’s a whole… We’re fixating on the anthill type of scenario, but sometimes those conditions are, you’ll make sure that you have X number of contracts with indigenous communities, right? There’s all kinds of things there that I think people expect as a way of doing business.
Peter Tertzakian:
Right.
Gitane De Silva:
So it’s just minimizing those numbers that are very impractical and focusing on those that are providing maximum benefits to communities along the way.
Peter Tertzakian:
Well, it would be nice if not ask for aspirational if the proponent and the regulator can be working together over the course of 12 months to identify what potential conditions are going to be so that those conditions are understood and remedied before you get the yay or the nay to minimize the number of potential conditions.
Gitane De Silva:
Yeah. And I think if the proponent has done the research, they will know ahead of time, sort of the deep geological repository. We haven’t built a facility in Canada to store nuclear waste forever before, but most of the other things that we’re looking to do are things that have been done before. So-
Peter Tertzakian:
Right.
Gitane De Silva:
You can look to see what is the trend here and then make sure that you’re mitigating that, you’re having conversations with-
Peter Tertzakian:
Right. And what is your sense? Earlier you talked about oil sands facilities being approved provincially. And is your sense that the provincial regulatory process has also improved in terms of the expeditious need to get these things done?
Gitane De Silva:
Well, they’ve also made changes there provincially with the setting up of this cabinet committee and saying that they will approve projects in 120 days. So a much shorter timeline than federally. And then again, presumably the decision is that yes, this project will go ahead and then it goes to the Alberta Energy Regulator, the other relevant regulator to actually determine the how.
Peter Tertzakian:
Right. Right.
Jackie Forrest:
I just want to come back to these conditions. And I’m not even sure if this was a condition, but I just come back to that PETRONAS Pacific NorthWest project. They had a requirement to do a suspension bridge with the pipe between the mainland and this island to protect some eelgrass. There was things that were put in these requirements for these projects that added so much to the cost of the project. And are we going to look at it like, we’ll make you do this, but by the way, the project’s now no longer economic. So we have to think about is protecting that eelgrass really enough to want to shut down a $30 billion project and the potential to export 2BCF for gas or 4BCF of gas more to Asian markets?
Peter Tertzakian:
Right. I guess if you want my opinion on the eelgrass, and I don’t even know what eelgrass is, to be honest with you.
Jackie Forrest:
Well, it was a spawning ground for some salmon.
Peter Tertzakian:
Okay. But, okay. I am not opposed to restrictions on eelgrass. I am opposed to having differential rules for different projects. So if pipeline companies have to abide by protecting eelgrass, then somebody who’s going to build a condominium over eelgrass also has to be mindful of that. And this is, I think the big thing that is maybe changing, is that building all types of infrastructure under this act, it’s just sort of a more equitable treatment, whether it’s pipelines, or say nuclear, or power lines, railroads, ports, maybe even urban buildings, I don’t know, that they all follow a more homogeneous set of rules to be fair.
Gitane De Silva:
Absolutely. And I think that’s really important for investment. People don’t want to believe that their investment is only viable if it’s in a certain category or has a certain minister’s approval. So I think clarity and certainty is critical.
Jackie Forrest:
I mean, I think that’s still going to be an example. Here’s an example I’ve heard, Gitane. I’d be interested in your view. We’ve got Trans Mountain being slowed down because there’s a bird nest and we need to not continue. But meanwhile, 10, 20 kilometers away, forestry company is cutting down all the trees.
Peter Tertzakian:
Yeah, that’s what I mean. It’s not equitable.
Jackie Forrest:
There’s some things that just don’t make sense, right? And are they stopping cutting down the trees even though there may be bird nests in them?
Gitane De Silva:
Well, technically they should be. If it’s an endangered species and the same rule applies, so it comes back to enforcement. That’s where these projects are going to get hard, right, is that the people that are passionate about protecting the hummingbirds or the southern resident orca whales are going to be very fixated on that impact. Whereas cabinet is looking at what is in the national interest, what is important for Canada’s place in the world? And so there’s going to be trade-offs for sure. And that’s where there’s going to have to be some political capital spent to convince people that this project is actually worth the consequence.
Jackie Forrest:
Okay. Let’s come back to the fast timelines. And you said, was it 120 days under the provincial, Alberta provincial system? And now we’re talking one year under the C-39. But there have been people that have said, they both say you need a complete application. And so, well, maybe it takes you two years to get. What is a complete application and does a proponent actually spend many years getting to whatever the green light is to start this one year time clock?
Gitane De Silva:
I think for those proponents for major projects, they’re pretty sophisticated. And the CER, for example, has a filing guidelines online. It’s very transparent. And with most regulators in Canada, you can have something called a pre-application meeting where you can go through and ask all those questions to make sure that you actually know what is required. In some instances, if it’s a newer entity or a joint venture or something, it may take them a little longer to work those kinks out. But I think by and large, as long as those filing guidelines remain clear and transparent and you’re having those conversations, then there may be some requirements in there that companies don’t like, or maybe they’re required to conduct a study. And sometimes that takes a bit of time if there’s an engineering study or some other type of study that is required.
But I think that, again, you have to go back to pairing this legislation with the cabinet directive, which makes very clear that the government wants to move quickly. And you need to remember that the CEO of the Canada Energy Regulator, the commissioners, they’re all appointed by cabinet. They’re GIC appointees. So they understand what their role is at the end of the day, is to try to fulfill the obligation that’s been set out for them by cabinet, understanding that that’s where the buck stops ultimately is with the elected officials.
Jackie Forrest:
When that guidance has really changed between C-69 and this new Bill, C-39.
Gitane De Silva:
Very much so.
Peter Tertzakian:
So this term national interest, and I know the prime minister has spoken to his critics. I think there’s a CBC article. We can put a link to that too as well, Jackie. So Prime Minister Carney says his government received a clear mandate from voters in the last general election and in subsequent elections to build Canada strong. And it is the Build Canada Strong Act. And he’s pressing ahead with changes to federal project approvals and the labor code despite criticisms from some circles. So national interest, Build Canada Strong, they’re kind of synonymous and the voters have given the prime minister a clear mandate. How does this term national interest now come down into the, I’m going to call it the bureaucracy in the civil service? Is that mentality of build Canada strong, national interest, is that percolating, I’ll call it, down into the system?
Gitane De Silva:
Absolutely. Expectations have been raised. If you think about the fact when the prime minister first came in, he said it would be a two-year approval for major projects and now he’s saying one year.
Peter Tertzakian:
Yeah.
Gitane De Silva:
So I think that the public service has gotten the message. You’ve seen changes throughout senior levels, senior ranks of the public service as well to making sure that departments are moving at speed. And now that ministers also have these marching orders, I mean, they’re going to be putting pressure on their departments as well to really keep things moving.
Jackie Forrest:
I mean, it’s a good point though, Peter, because you hear these stories. Someone at Department of Fisheries far down in the organization is almost holding up a project, right? They’re just continuing to ask for more information, do another study. And these proponents are just like, I have no power in this system, right? This bureaucrat at kind of a lower level is just making delays and there’s just no end to the requirements that they’re asking for. Is there a way for them, do you think, to escalate that in this new construct more than they had in the past? Because a lot of projects have gotten stuck with that kind of thing.
Gitane De Silva:
And that was a real problem in the past because you didn’t have a lifecycle regulator overseeing the entire process, but that’s one of the important changes now, right? If it’s a pipeline or a power line, it’s going to the CER and they will be the ones that will be putting pressure on transport, and fisheries, and environment candidate issue their permits in a timely way. And then again, that cabinet directive, which clearly states there’ll be no more sort of analysis paralysis. There’s no more never ending information requests. It’s now we need to get going and we need to make decisions. And so we need to make decisions based on the best information available and keep going.
Peter Tertzakian:
Right. And now major projects that will have to come under scrutiny of Bill C-39, they’re filed and they’re made public on the CER website so-
Gitane De Silva:
That’s right.
Peter Tertzakian:
People can go look.
Gitane De Silva:
Absolutely.
Peter Tertzakian:
Okay. So we’ll put a link to that as well.
Jackie Forrest:
Yeah, we will.
Peter Tertzakian:
Are you expecting a surge of projects, do you think, as a consequence of this?
Gitane De Silva:
Well, I think that people will wait until this legislation is passed.
Peter Tertzakian:
Right.
Gitane De Silva:
Right? And then typically what you do is you have the option to move forward. If you submit it under the old legislation, you can continue or switch to the new one. So I think that once the legislation is passed, you’ll likely see some projects come forward.
Peter Tertzakian:
I’m not privy to the parliamentary calendar. When is the expectation that this is going to be passed? Do you know?
Gitane De Silva:
Well, I mean, the House is back. That’s when the legislation was introduced. So it’s going to have to go through committee and that whole process sent to the Senate-
Peter Tertzakian:
Right.
Gitane De Silva:
And ultimately where I listen. So-
Peter Tertzakian:
Right.
Gitane De Silva:
I mean, Bill C-5 was passed in a matter of days. I think the government will want to give a bit more time here. They’re getting some pushback on the labor provisions in particular, so.
Peter Tertzakian:
So it’s not going to be one bill one year.
Gitane De Silva:
Well, I think it’ll be passed before Christmas.
Peter Tertzakian:
Okay.
Gitane De Silva:
I’d be surprised-
Peter Tertzakian:
All right.
Gitane De Silva:
If not, just given all the messages.
Jackie Forrest:
I mean, they do have majority. I can’t imagine that the conservatives would object to a faster environmental review.
Peter Tertzakian:
Yeah. No. I just don’t know the complete timeline of process to something like this.
Jackie Forrest:
Yeah, me either. But before Christmas, probably. That’s your bet.
Gitane De Silva:
That would be my guess because they have to go to committee. They have to do first, second, third reading. It has to go to the Senate. But if this is a priority, which it is, it was the first thing they did when they came back, then I anticipate it’ll be passed in fairly short order.
Jackie Forrest:
There’s a lot of criticism, of course, with all of these things. And I’m actually sometimes frustrated that the mainstream media is covering the criticism more than the positive. So I really appreciate you sharing your view on this and that there’s a lot of positives here. But one other criticism is that it does revise the Bill C-5. We keep talking about the super fast tracking, the one that the oil pipeline is going to get, that it no longer has a sunset clause. When it first came out, was it over a year ago? It was just going to be a temporary thing because of the situation Canada was in and it was only going to be available for five years. And I think that’s being changed. Critics are saying, “Oh, well now it’s forever and that’s not great.” What’s your view on that?
Gitane De Silva:
I think that we have to be careful with pieces of legislation that give cabinet unfettered power. I think that the way our system is meant to work is they’re supposed to be checks and balances. And so it’s interesting that they’re choosing to do this because I think that’s what gave some people comfort before, was that five-year sunset clause. And I always ask elected officials, “It’s great if you want to have this power, but assuming you don’t win the next election, how confident would you be with another party having that power?” So we’ll have to see. Sometimes government include things in bills that they know they can amend. It’s sort of like in any negotiation, right? You start with your best offer plus some and then so maybe this is something they put on the table knowing they’ll get pushback. I mean, we have to see.
Peter Tertzakian:
Yeah. Great. Wonderful. Well, we’ve been talking with Gitane De Silva. She’s the Founder and President of GDStrategic. We’ll put the coordinates and your website up on the podcast notes here. She was also the former CEO of the Canada Energy Regulator. So Gitane, thanks so much. I mean, we’ve talked about this, not alphabet soup, but alphanumeric soup of C-5, C-39, CER, IAA, et cetera, et cetera. And I must say, I mean, I come out much clearer and in an understanding. So-
Gitane De Silva:
I’m so glad.
Peter Tertzakian:
Yeah. No, in terms of some of the process. I hope you as our audience do as well. We’re going to have to follow this even more closely because as I said, I think we’re on an announcement train of major projects and not just pipelines. I think we’re on an announcement train of power lines, nuclear power plants. So it’s just really great to get your perspectives on how the system works in terms of the approvals because it’s so vital. As they say time is money. And to shorten the processes and get things built to build Canada strong again, I think is really fundamentally important. So thanks for joining us.
Gitane De Silva:
Thank you so much for having me on.
Jackie Forrest:
Yeah. Thanks for adding some clarity to a difficult topic or a little challenging to understand. And thanks to our listeners. If you enjoyed this podcast, please rate us on the app that you listen to and tell someone else about us.
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