Consultation Paper: Approach to a key regulation under the proposed fish and fish habitat provisions of the Fisheries Act

July 6, 2018

Purpose

Fisheries and Oceans Canada (DFO) is committed to developing regulations, policies, and other program instruments through engagement and early discussions with Canadians. This discussion paper builds on the feedback received through ongoing engagement with provinces, territories, Indigenous peoples, partners, stakeholders and other Canadians, which began in 2016. In addition to this discussion paper, DFO intends to release other papers to seek further feedback on policy and regulatory instruments and concepts related to the administration of the proposed fish and fish habitat protection provisions of an amended Fisheries Act.

The purpose of this paper is to begin to engage with provinces, territories, Indigenous peoples, partners, stakeholders and other Canadians on a proposal to amend the existing Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations (hereafter the Applications for Authorization Regulations).

Context

As part of the Government of Canada’s Review of Environmental and Regulatory Processes, the Minister of Fisheries, Oceans and the Canadian Coast Guard was mandated in 2015 to review the changes made in 2012 to the Fisheries Act, to restore lost protections and incorporate modern safeguards. Because of this review, amendments proposed through the Bill C-68, An Act to Amend the Fisheries Act and other Acts in Consequence would provide better certainty for industry, ensure the long-term sustainability of marine resources, and make sure that the Fisheries Act provides strong and meaningful protection of fish and fish habitat.

Canadians were engaged in this review by appearing before, or providing submissions to Parliament’s Standing Committee on Fisheries and Oceans. To support this work, DFO engaged directly with Indigenous groups, provinces and territories, and also engaged all interested Canadians through an open online consultation and ideas forum.

What’s new

On February 6, 2018, the Government of Canada introduced Bill C-68, An Act to Amend the Fisheries Act and other Acts in Consequence.

Proposed changes include:

The effects of these changes will include increased oversight of development activities and the conservation and protection of fish and fish habitat including:

The scope of application of the fish and fish habitat protection provisions in Bill C-68 would be applied in Canadian fisheries waters for the conservation and protection of fish and fish habitat.

We want your views

Working together to protect fish and fish habitat

Provinces, territories, Indigenous peoples, commercial and recreational fishers and stakeholders play a vital role in the conservation and protection of Canada’s fish, fish habitat and fisheries resources.

Your answers to the questions included in this document will help to shape the policy behind the development of the amended Applications for Authorization Regulations, which will proceed according to the Cabinet Directive on Regulatory Management.

Once draft regulations have been developed, they will be subject to the formal consultation process for regulation that follows publication in the Canada Gazette Part 1, which could happen as early as December 2018.

Amending the Applications for Authorization Regulations

A proposal to make regulations to amend the Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations.

The way Applications for Authorization Regulations work

Under the current Fisheries Act, subsection 35(1) prohibits the carrying out of a work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery or to fish that support such a fishery. However, under Paragraph 35(2)(b) of the Fisheries Act, the Minister of Fisheries and Oceans (the Minister) may issue an authorization setting out the conditions under which the proposed work, undertaking or activity that may result in serious harm to fish can be carried out.

The Applications for Authorization Regulations detail the information and documentation that must be submitted by an applicant requesting such an authorization. The requirements differ, depending on whether the application is made under normal circumstances, or in response to an emergency circumstance—for example, a situation in which there’s a risk to public health or safety, or to the environment or property.

Sections 5 through 8 of the Applications for Authorizations Regulations establish the procedures and time limits for the Minister to process applications in normal circumstances, detailed in Figure 1 and Annex 1.

Figure 1
Figure 1: Process for the Review of an Application under the Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations (Normal Circumstances).

Figure 1 illustrates the process of issuing or refusing an authorization under the Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations.

  • Step 1. A 60/90-day time limit may cease and resume depending upon: changes to the work, undertaking or activity, or offsetting plan; request by applicant; additional information requirements; Indigenous consultation; and other federal statutory requirements.
    NOTE: Regulations require the Minister to notify the applicant when the time limit cease and resume.
  • Step 2. Application for authorization is received.
    NOTE: Regulations require the Minister to notify the applicant.
  • Step 3. Is the application complete?
    • No: Proceed to Step 4 
    • Yes: Proceed to Step 5
  • Step 4. Information Gap
    NOTE: Regulations require the Minister to notify the applicant. Applicants submit required information. Return to Step 1.
  • Step 5. Consideration of application.
  • Step 6. Should the Minister authorize work, undertaking or activity?
  • Step 7. Authorization issued with conditions.
    NOTE: Regulations require the Minister to notify the applicant.
  • Step 8. Authorization refused with reasons.
    NOTE: Regulations require the Minister to notify the applicant.

Under the regulations, the Minister has 60 days to review the application for authorization and notify the applicant if the application is complete or incomplete. If the application is determined to be incomplete, the Minister is required to include in the notification a list of information or documentation that is missing. Once the applicant has submitted the missing information, the Minister has another 60 days to review the application and notify the applicant if the application is complete.

Once an applicant is notified that an application is complete, the Minister has 90 days from the date the applicant was notified either to issue an authorization with conditions, or to advise the applicant that the authorization has been refused. The 60 and 90-day time limits can be ceased and re-resumed for a number of reasons. The Minister is required to notify the applicant when a time limit has been put on hold or has resumed.

What we’re proposing

Amendments are being considered to align both the Applications for Authorization Regulations with the new provisions in the Bill C-68 and to reflect the lessons learned from implementation of the current regulations. These proposed amendments fall into the six areas listed below and then explained in more detail.

1. Reflecting new and amended provisions that would be part of the Fisheries Act

…the Applications for Authorization Regulations need to be amended to align with the amended Fisheries Act.

These proposed amendments to the Applications for Authorization Regulations are basically housekeeping measures to reflect the proposed changes in Bill C-68.

In the current Fisheries Act, there is a key prohibition under the fisheries protection provisions: “No person shall carry on any work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery.” Under Bill C-68, this would be amended to restore the previous language in the prohibition against “harmful alteration, disruption or destruction of fish habitat”, otherwise known as HADD. Also, Bill C-68 would return to a prohibition against causing “death of fish” by means other than fishing.

Another example of change is that the sentence, “fish that are part of a commercial, recreational or Aboriginal fishery, or on fish that support such a fishery” would be removed anywhere it appears in the Applications for Authorization Regulations as this language is being repealed from the Fisheries Act.

Question 1: Do you have any suggestions on the amendments related to the proposed changes to the Fisheries Act contained in Bill C-68?

2. Amending, suspending or cancelling authorizations

Bill C-68 would amend the Fisheries Act to include a power for the Minister to amend, suspend or cancel authorizations. The amendments also include new authorities that would enable regulations that set out a clear process for project proponents to keep their authorizations up to date. The proposed amendments to the Applications for Authorization Regulations would set out the manner and circumstances by which a project proponent may request to amend, suspend or cancel an authorization. They would also set out the process to be followed should the Minister propose to amend, suspend or cancel an authorization.

These proposed amendments to the Fisheries Act recognize the fact that, on occasion, a project can evolve in unexpected ways. For example, extreme weather events may delay a proponent’s construction schedule, requiring a change in the time period and other terms and conditions of an authorization. Setting out criteria and process in regulation clarifies how the Minister could proceed with changes to an authorization or how a proponent could request a change in an authorization.

Applications for Authorization Regulations would set out the process, including timelines, for the Minister to review and issue a decision on a request to amend, suspend or cancel the authorization. Any request of this kind would be subject to the thorough review that is applied to the initial application, as appropriate.

An authorization will not be amended, suspended or cancel by the Minister if this modification is contrary to applicable laws and policies.

In approving an amended authorization, the Minister would set out the new conditions in the notification to the project proponent. For a suspended authorization, the Minister’s approval could include the date work is to resume, or state that the authorization is suspended until the applicant submits a request to amend. In the case of an authorization cancellation, the authorization cannot be re-instated. Any continuance of the project would require a new application and new authorization.

It is important to note that the process to amend, suspend or cancel an authorization could be initiated by the Minister as well as by the holder of the authorization and Figure 2 illustrates this situation.

Figure 1
Figure 2: Proposed framework for the Review to Amend, Suspend or Cancel an Authorization

Figure 2 describes the suspension, amendment and cancellation process requested by the authorization holder or the Minister. No request will be approved if it goes against policies or laws.

Suspension: The authorization is suspended until a determined date or until a request is made to lift the suspension.

Amendment: An amended authorization could be approved after DFO conducts a thorough review equivalent to what is done in case of an initial application.

Cancellation: The authorization is cancelled with no possibility for reinstatement; a new authorization would require a new application.

When and why would the Minister initiate the amendment, suspension or cancelation of an authorization?

This could happen in the case where there is non-compliance that causes damage to fish and fish habitat. In such a case, the Minister would have the authority to amend, suspend or cancel an authorization. This could also happen in a case where extreme changes in the environment, for example flood or drought, or new information not presented with the application indicate that the damage to fish or fish habitat could be well in excess of what was authorized. The scheme would clarify opportunity for an authorization holder to make representations in the event the Minister proposes to amend, suspend or cancel their authorization.

Why would the Minister reject a request or refuse to amend, suspend or cancel an authorization?

A variety of factors are considered in reviewing initial applications for authorizations. The considerations that are applied to the initial application would be taken into account as appropriate, in reviewing a request to amend, suspend, or cancel an authorization. The scheme would clarify opportunity for an authorization holder to make representations in the event the Minister does not agree to the requested change to their authorization.

Question 2: Do you have any suggestions on amendment, suspension or cancellation of an authorization by the minister, including timelines?

3. Using certified habitat credits in the place of, or in addition to offsetting plan

Bill C-68 would amend the Fisheries Act to provide the Minister with the authority to administer the current proponent-led habitat banking practices and the use of certified habitat credits as possible means to offset anticipated adverse effects on fish and fish habitat. The amendments would also provide the authority to establish regulations for the administration of the proponent-led banking regime.

An offsetting measure is an action undertaken by a proponent that counterbalances the negative impacts of a project on fish and fish habitat. Currently, when proponents apply for an authorization, they are required to include an offsetting plan that includes measures to offset any anticipated residual serious harm to fish—that is, any harm that may occur after measures to avoid and mitigate serious harm to fish have been implemented. This requirement will be retained in amended Applications for Authorization Regulations —proponents would still have to have an offsetting plan, including offsetting measures, in their applications for an authorization.

Proponent-led habitat banking is a type of offsetting measure to create, restore or enhance fish habitat under the authority of a fish habitat bank arrangement with DFO in advance of a project being developed. Project proponents may then draw from their certified habitat credits to offset future development impacts. Proponent-led habitat banking is currently supported by policy guidance and is in practice across Canada. Though the proponent-led habitat banking scheme can function in the absence of a legislative framework, amendments to the Fisheries Act proposed in Bill C-68 would embed these practices.

Since proponent-led habitat banking would be formalized under Bill C-68, the Applications for Authorization Regulations would be amended to reflect these changes. This amendment would allow for the acceptance of certified habitat credits in the place of or in addition to the offsetting plan required by the regulation.

Why does habitat banking represent a positive innovation?

…certified habitat credits may be used as offsetting measures to counterbalance the anticipated residual impact on fish and fish habitat when an application for authorization is submitted.

Proponent-led habitat banks may be useful where a large number of impacts, each affecting a small geographic area, arise from a single large project, or where harm to fish and fish habitat may result from a number of small projects. For example, a single large offset for a highway development that involves multiple crossings may provide better outcomes for fisheries than undertaking a small offset for each crossing.

Other benefits of proponent-led habitat banks include: avoiding lost productivity due to time lags between offsets and project impacts; allowing large-scale improvements to fish and fish habitat; and increasing efficiency in the regulatory process, as only a single offsetting plan would be required for multiple development projects.

How does it work?

Proponent-led habitat banks may be established by proponents, which may be a government agency, corporation, non-profit organization, and individual or other entity under an arrangement with DFO. There are several steps involved in the administration and management of a proponent-led habitat bank arrangement. Figure 3 describes the key steps.

Figure 1
Figure 3: Key steps involved in the administration and management of a proponent-led habitat bank arrangement

Figure 3 highlights the process of proposing a proponent-led habitat bank arrangement, including the possible arrangement annexes.

  • Step 1. Proposal for a proponent-led habitat bank arrangement. This agreement is composed of annexes that are described at Step 6
  • Step 2. Negotiate the terms of the arrangement.
  • Step 3. Proponent-led habitat bank arrangement.
  • Step 4. Monitoring and reporting on progress of the arrangement.
  • Step 5. Renewal or termination of the arrangement.
  • Step 6. The arrangement mentioned in Step 1 to 6 has annexes.
    • An annex about the Habitat bank description and principles of management
    • An annex about the: Conservation project proposal, Conservation project approval, followed by the Conservation project plan.
    • An annex about the: Habitat Credit Ledger.
    • An annex about: the Arrangement progress reports, followed by the Conservation project performance reports.

How would DFO make sure the proponent-led habitat bank is well managed and fair?

Proponent-led habitat banks will be created through formal arrangements signed by DFO and the proponent before any work is initiated. The arrangement would set the terms and conditions for the creation and management of the habitat bank, including defining the relationship between the participants and establishing a transparent process for managing the proponent-led habitat bank.

Question 3: Do you have any views about the use of certified habitat credits?

4. Expanding ways to request financial security

Financial securities are common tools used to manage compliance with the conditions of an authorization with environmental risks. In the current Applications for Authorization Regulations, an irrevocable letter of credit issued by a recognized Canadian financial institution to cover the costs of implementing the offsetting plan is required at the time of the application. A letter of credit must be sufficient to cover the cost for implementing all elements of the offsetting plan, including monitoring measures.

DFO uses a letter of credit to provide a financial assurance mechanism in the event that an offsetting plan is not completed. This allows DFO to access funds to ensure the implementation of the offsetting plan or elements of the plan which have not been implemented by the applicant in the timeframe provided for in their authorization.

DFO is exploring whether additional forms of financial security would meet our policy objective while expanding options for proponents. One example of a financial security being considered is performance bonds.

A performance bond would have three parties, the Crown, the surety agent and the proponent. The purpose of a performance bond is to ensure that the offset is completed as required by the proponent. In the event the proponent cannot complete the work, the surety agent is required to fulfill the bond and complete the work.

Question 4: Do you have any suggestioins or comments on various approaches to financial securities required for an offsetting plan?

5. Requiring geographic coordinates of proposed offsetting measures

Currently an application for an authorization to carry on a proposed work, undertaking or activity must contain the geographical coordinates of this project. The amendment proposed here would require the same precision in describing the location of the offsetting measures the proponent is proposing.

Question 5: do you support the proposal to require geographical coordinates in the description of offsetting measures?

6. Notifying Indigenous communities

The Government of Canada is committed to a renewed, nation-to-nation, Inuit–Crown, and government-to-government relationship with Indigenous peoples based on the recognition of rights, respect, co-operation and partnership.

An application for authorization may result in the Minister issuing an authorization that would provide permission for the applicant (i.e., proponent) to carry on a work, undertaking or activity that may result in the death of fish (other than by fishing) or the harmful alteration, disruption or destruction of fish habitat. With the proposed amendment to the Applications for Authorization Regulations, once an application is received the Minister would be required to notify any Indigenous community located within the vicinity of the proposal about the received application.

First Nations, Inuit and Métis communities have indicated that they want to be notified about projects that may affect their communities or that are located in their traditional territories. The proposed notification process is not intended to replace the Crown’s common law duty to consult—DFO will continue meet its duty to consult and uphold the honour of the Crown in relation to decisions that have the potential to cause adverse impacts on Aboriginal or Treaty rights. At the same time, notifying Indigenous communities in the vicinity of a proposed project offers another opportunity for these communities to contribute to the Minister’s review of the application, including by providing Indigenous knowledge and information about their potential impacts on them to the Minister.

This proposed amendment to the Application for Authorization Regulations is just one way that DFO is working to help advance reconciliation with Indigenous peoples, under the Fisheries Act and through other mechanisms.

How could the notification of Indigenous communities work?

Once an application for an authorization has been submitted, the Minister will be required to notify any Indigenous community located in the vicinity of the project about the application as early as possible. As noted above, this notification step is in no way meant to replace the process for consultation in relation to potential adverse impacts on Aboriginal or Treaty rights as the result of an authorization decision but may contribute to that process. Figure 4 illustrates where this notice would fit within the process under amended regulations. Note that this notification would occur before a review of the application is undertaken to determine whether it is complete or not.

Figure 1
Figure 4: Process for the Review of an Application under the Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations (Normal Circumstances). Illustration of where the proposed amendment (in green) would fit in the current process.

Figure 4 illustrates where is the proposed amendment in the process of issuing or refusing an authorization under the Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations.

  • Step 1. A 60/90-day time limit may cease and resume depending upon: changes to the work, undertaking or activity, or offsetting plan; request by applicant; additional information requirements; Indigenous consultation; and other federal statutory requirements.
    NOTE: Regulations require the Minister to notify the applicant when the time limit cease and resume.
  • Step 2. Application for authorization is received.
    NOTE: Regulations require the Minister to notify the applicant.
  • Step 3. Notify relevant Indigenous communities.
    NOTE: Regulations could be amended so the Minister would have to notify Indigenous communities.
  • Step 4. Is the application complete?
    • No: Proceed to Step 5
    • Yes: Proceed to Step 6
  • Step 5. Information Gap
    NOTE: Regulations require the Minister to notify the applicant. Applicants submit required information. Return to Step 1.
  • Step 6. Consideration of application.
  • Step 7. Should the Minister authorize work, undertaking or activity?
  • Step 8. Authorization issued with conditions.
    NOTE: Regulations require the Minister to notify the applicant.
  • Step 9. Authorization refused with reasons.
    NOTE: Regulations require the Minister to notify the applicant.

Question 6: Do you have any suggestions regarding this proposed requirement for communication with indigenous communities about an application for authorization?

What’s next

DFO will review the comments received as part of this consultation and propose specific amendments to the Applications for Authorization Regulations. The proposed amendments will be pre-published in Part I of the Canada Gazette as draft regulations for public comments. The subsequent steps are the enactment of the Regulations by the Governor in Council, their registration and the publication in the Part II of the Canada Gazette.

Bill C-68 will come into force in two phases. Many amendments will come into force on Royal Assent of the Bill. Other amendments, including the new fish and fish habitat amendments will come into force on a day to be fixed by the Governor in Council. The Applications for Authorization Regulations will need to be in force at the same time as the coming into force of the new fish and fish habitat protection prohibitions proposed in Bill C-68.

Over the next year, engagement with provinces, territories, Indigenous peoples, partners, stakeholders and other Canadians on these amendments and others will continue in order to ensure that the proposed fish and fish habitat protection provisions of an amended Fisheries Act achieve the right balance.

Question 7: Are there any other changes to the applications for authorization regulations that you would suggest?

Tell us what you think

We look forward to hearing your thoughts on the topics presented in this discussion paper and your responses to the questions asked.

You may submit your comments anytime, until September 21, 2018.

We will consider all comments received to refine the proposed amendments to the Applications for Authorization Regulations.

Annex 1: Summary of the current Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations

The current Fisheries Act, subsection 35(1) prohibits the carrying on of a work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery or to fish that support such a fishery. However, under Paragraph 35(2)(b) of the Fisheries Act, the Minister of Fisheries and Oceans (the Minister) may issue an authorization allowing the carrying out of work, undertaking or activity that may result in serious harm to fish with conditions.

The Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations (2013) (the Regulations) set out the information and documentation that must be included in an application for authorization submitted by an applicant requesting such an authorization in two circumstances:

  1. Applications to carry on a proposed work, undertaking or activity causing serious harm to fish in normal circumstances (Section 3, and Schedule 1 of the regulations).
  2. Applications to carry on a proposed work, undertaking or activity causing serious harm to fish to be carried out without delay in response to an emergency circumstance (Section 4, and Schedule 2 of the regulations).

The Regulations also establish the procedures and time limits within which the Minister must process applications in normal circumstances (Sections 5 through 8).

Information requirements under normal circumstances

The Regulations set out the information and documentation that must be included in an application for authorization. The information required is set out in Schedule 1 of the Regulations. In summary, the following types of information are set out in the proposed Schedule:

In addition, an application must include an irrevocable letter of credit as financial security to ensure the implementation of the offsetting plan, and an indication of the steps that the applicant intends to follow to obtain permission to obtain access to lands or waters required for the plan’s implementation. These two requirements do not apply when the applicant is the federal, provincial or territorial Crown.

Procedures and time limits

The Regulations set out procedures applicable to the Minister and the applicant. It also establishes time limits applicable to the processing of an application for authorization.

Upon receipt of an application, the Minister must send a confirmation to the applicant indicating the date the application was received. The Minister would then have 60 days from the date of receipt of the application to notify the applicant if the application is complete or incomplete. Should the application be found to be incomplete (i.e., the application does not contain the information and documentation required to meet the requirements set out in the Regulations), the Minister must include in the notification a list of the information or documentation that must still be provided to complete the application.

Upon receipt of any information or documentation that was identified in the notification as outstanding, the Minister is required to send a confirmation to the applicant indicating the date of receipt of the new information or documentation. The Minister then has 60 days from the date of receipt of this outstanding information or documentation to review the application with the information provided, and notify the applicant if the application, as a whole, is complete or incomplete. If the application is incomplete, the Minister is again required to identify a list of information or documents necessary to complete the application. This procedural step may be repeated as often as necessary until the application is determined to be complete.

When the application is complete, the Minister must notify the applicant accordingly. The Minister has 90 days from the date of the notification of a complete application either to either issue the authorization, or notify the applicant of a refusal to issue the authorization.

As set out in the Regulations, the 60 and 90-day time limits will cease to apply under the following circumstances:

  1. when the applicant proposes changes to the work, undertaking or activity, or the offsetting plan
  2. if the applicant requests that the application be suspended
  3. when circumstances arise that require information or documents (for example, where information resulting from an approval process required by a province has been received by Fisheries and Oceans Canada that requires further consideration of the application for authorization under paragraph 35(2)(b) of the Fisheries Act, or documentation such as the Canada Gazette, Part II publication listing a water body in Schedule 2 of the Metal Mining Effluent Regulations) other than those identified in the Regulations be obtained, or when the information or documents submitted be amended before the authorization is issued or refused
  4. when consultation (including consultation with Indigenous peoples) is required
  5. when an Act of Parliament, a regulation made under an Act of Parliament or a land claims agreement provides that a decision be made or that conditions be met before an authorization is issued or refused. (For example, obligations under the Canadian Environmental Assessment Act, 2012; Nunavut Land Claims Agreement; Yukon Environmental and Socio-Economic Assessment Act; Species at Risk Act).

When a time limit ceases to apply, the Minister must notify the applicant in writing and, where applicable, of the circumstance and information or documentation that must be submitted.

When the applicable conditions to resume with the processing of an application are met, the Minister must notify the applicant of the date on which the processing of their application is resumed. The 60-day or 90-day time limits apply starting on the date the application process resumed.

Information Requirements and time limit for emergency circumstances

Emergency circumstances under the Regulations pertain to proposed works, undertaking or activity that need to be carried on, without delay, in response to:

  1. a matter of national security
  2. a national emergency for which special temporary measures are taken under the Emergencies Act
  3. an emergency, that poses a risk to public health or safety or to the environment or property

In summary, the information requirements that must be included in an application for works, undertakings or activities to be carried out in emergency circumstances are:

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