Canada requires a massive transformation of its electricity systems to reach net zero electricity generation by 2035 and economy-wide net zero by 2050. Current forecasts show that more than 10 gigawatts of new zero-emission electricity will need to be added to the grid each and every year from now to 2050.
Meeting this target requires a dramatic acceleration in the permitting, construction, and integration of clean electricity facilities – generation, transmission, distribution, and storage. This paper focuses on permitting. It proposes a two-track permitting framework for implementation by governments at every level. The first track would be the existing approvals track, which would remain in place for major facilities or facilities involving unproven technologies or large zones of impact. The new, second track would be an expedited permitting process for proven, small-scale, zero-emission facilities.
This paper sets out the policy framework for the new second track of expedited electricity facility approvals, encompassing eligible technologies, location, and timelines.
All five orders of government authority in Canada—federal, provincial, territorial, municipal, and Indigenous—could implement this framework for expediting permitting. Based on this conclusion, this paper recommends that the most locally rooted authorities—municipal and Indigenous—have the opportunity to lead the fast-track approvals. This paper also recommends that Canada, the provinces, and perhaps the territorial governments, work together to develop a common framework for fast-track permitting, including acceptable technologies, permitting criteria, and timelines. Appendix B provides a preliminary framework for consideration.
Canada’s electricity system will require major reform to achieve the targets of net zero generation by 2035 and economy-wide net zero greenhouse gas emissions by 2050 (Kanduth and Dion 2022; Lee et al. 2022). The further challenge is increasing the generation, storage, and transmission of clean electricity without adverse local impacts.
Annual new build required to achieve the 2050 net zero target
A credible estimate is that, for every year from now to 2050, Canada will need to build over 10 gigawatts (10,000 megawatts) of new zero emission electricity generation facilities (Thomas and Green 2022). In concrete terms, this means Canada’s electricity generation capacity needs to grow up to six times faster than it did over the last decade (Lee al. 2022). This pace of growth makes clear the breadth and urgency of the challenge. The focus of this paper is on fast-tracking permitting for new clean electricity generation, transmission, distribution, and storage facilities.
Beyond expedited permitting, other related challenges include ensuring that new facilities are financed speedily so that construction can proceed as soon as possible after permitting, and eliminating hurdles to the integration of the facility into the grid. Other nations, particularly Germany, have provided powerful examples of governments using novel regulatory tools to mobilize the private sector in financing massive construction of clean energy facilities. In particular, Germany provided an example of how feed-in tariffs can help accelerate the build-out of wind and solar facilities to contribute to major energy systems (Futurepolicy.org 2023). In 2010, Ontario adapted this international experience to implement its Green Energy Act reforms and a feed-in-tariff program. The essence of this program was to provide a rules-based approach for applicants to obtain a long-term electricity supply contract: if an applicant met the rules, it obtained a government contract to buy its clean energy at an agreed-upon rate for a 20-year period. Holding a long-term energy supply contract, applicants could obtain private financing to build and operate new clean energy generation facilities. Box 1, below, summarizes this very broad reform.
Direct funding by governments can also help drive the construction of new electricity facilities and mobilize private capital. Federal policies and instruments like the Canada Infrastructure Bank, new federal investment tax credits, and the newly established Canada Growth Fund are designed to mobilize private capital for development of clean energy facilities and technologies (Beck et al. 2023). Some of these federal programs include financing support specifically for Indigenous governments to develop clean energy facilities. Provincial supports include Ontario’s Aboriginal Loan Guarantee Program and Alberta’s Indigenous Opportunities Corporation. While the permitting reforms proposed in this paper focus on reducing the constraints to permitting new facilities, both permitting and financing reforms are essential to drive the actions required to hit Canada’s net zero targets.
Given the scale of the required build-out for new facilities, every month saved or added to the time required to permit and build new facilities counts.
Types of required facilities
Canada’s clean energy transition cannot be achieved without major reforms to how we approve permitting for all core aspects of our electricity systems—generation, transmission, distribution, and storage.
Expediting permitting for zero-emission generation of electricity is by far the greatest requirement. It is also the greatest challenge.
Expediting permitting for electricity transmission systems is also necessary to advance Canada’s transition to clean energy. Improved intra-provincial transmission is essential to serve remote areas and connect areas with renewable energy potential to demand centres. In particular, connecting isolated Indigenous communities to the electricity grid will meet at least two needs: it will allow these communities to replace diesel generation with zero-emission electricity generation; and it will also potentially allow high-value wind energy sites in remote areas to connect to the grid—benefitting any nearby community and contributing to the national target (Natural Resources Canada 2023). An interprovincial electricity system is not strictly necessary to meet the target—Canada could meet the national target by the required timeline without expanding its interprovincial transmission lines. However, it will be a significant advantage and likely less costly to have greater interprovincial connections to move electricity around and realize complementarities between systems (Dolter and Rivers 2018).
Expediting permitting for energy storage facilities is required to support zero emission energy generation. For wind and solar facilities, natural forces beyond human control determine the time and duration of daily wind and solar inputs. These do not always overlap with the time and duration of community energy needs. To avoid losing electricity generated during off-peak hours, there is a need for facilities that store generated electricity. Electricity storage technologies are now viable. In particular, short duration, lithium-ion batteries are now a viable storage option (Lee et al. 2022). Over time, availability of viable storage technologies is expected to increase.
Existing law and policy to permit new clean energy facilities
Every order of government in Canada has laws that govern the permitting of new electricity generation, transmission, distribution, and storage facilities (see Appendix C). The federal Impact Assessment Act addresses the permitting of major projects listed as designated projects as well as a wide range of projects on federal lands. While a decision by the Supreme Court of Canada in October 2023 will likely narrow the scope of designated projects that are subject to assessments under the Act (Langen et al. 2023), it has upheld its application to projects on federal lands (ss.81-91) and does not likely imperil its application to designated offshore clean energy projects (Reference re Impact Assessment Act, 2023 SCC 23). Federal laws also include sector-specific laws and effects-based federal approvals that govern or restrict the permitting of projects.
Provincial governments, meanwhile, have laws governing the permitting of facilities on private lands and other laws for facilities on Crown lands. Indigenous governments have laws ranging from broad land claim agreements, particularly in northern Canada, and Land Laws under the First Nations Land Management Act or bylaws under the Indian Act. Municipalities address permitting through zoning bylaws.
Most of these laws have broad application. This breadth reflects the longstanding intent of most jurisdictions to subject energy generation projects to the same legal framework as other facilities in other sectors that may have environmental effects. As such, existing laws address a broad array of circumstances, including major and minor facilities, new and existing technologies, narrow and broad effects, limited and extensive affected areas, and general and sensitive locations.
Many governments have also made efforts to set timelines for their approval processes. However, most of these timelines are partial, not comprehensive. No existing timelines encompass the time required to move from facility planning through permitting and construction to facility operation.
In Canada, Ontario has recent experience with clean energy reforms that linked shortened timelines with an innovative approach to permitting and financing new facilities.
|Box 1: Ontario’s Green Energy Program (2009-2014)
|In Canada, for the years 2010 to 2014, the Province of Ontario implemented the largest program of clean energy development in Canadian history under the Green Energy Act, 2009. This program illustrates the importance of providing an integrated approach to developing clean energy. The Ontario program had three main components:
-A 20-year feed-in-tariff contract from the Ontario Power Authority (OPA) gave private sector investors security for financing;
-A Renewable Energy Approval from the Ministry of the Environment and Climate Change gave proponents a single, consolidated approval and approval process; and
-A Grid Access Approval from the Ontario Electricity System Operator gave proponents access to Ontario’s transmission and distribution system.
The Green Energy Act also included provincial funding and a requests-for-proposals approach to expand Ontario’s transmission system.
In other ways, the Green Energy Act reform illustrates the challenges of seeking to implement major reform across a large jurisdiction. The feed-in-tariff provided above-market pricing of wind and solar facilities, and was later criticized for this cost to the public. In addition, the Renewable Energy Approval process took more time than anticipated because provincial efforts to consolidate approvals resulted in municipal and neighbourhood resistance. The Grid Access Approval process was complicated by the absence of adequate transmission capacity in many parts of Ontario, thereby delaying construction and implementation of new facilities. Furthermore, the Green Energy Act reform to exclude municipal decision-making for permitting approvals triggered a backlash against clean energy projects in rural Ontario that led, ultimately, to the repeal of this Act by a new provincial government in 2019. Despite this repeal, the policy has provided valuable information and experience to other jurisdictions.
Building on Ontario’s experience, there is room to further expedite timelines to approve, build and operate new energy generation facilities where the facilities use proven technologies and have a limited zone and number of off-site effects.
Proposed framework to reform facility permitting
The framework to establish a new fast-track permitting process for selected facilities has three components: technology, location, and timeline.
A suitable technology for fast-track facility permitting should have five attributes:
- It is a proven technology, not an experimental one;
- It has demonstrably few off-site environmental effects and no human health effects;
- It has a demonstrably limited zone of off-site environmental effects;
- It is readily available to be procured for construction; and
- It has a demonstrably rapid path to construction and operation.
At this time, wind and solar facilities are obvious candidates for fast-track permitting for electricity generation. Electricity transmission and distribution facilities are also obvious candidates for fast-track permitting. There are also viable energy storage options, for example, short duration lithium-ion batteries (Lee et al. 2022) Over time, perhaps quickly, other technologies will come to have these five attributes.
Zero emission technologies are evolving rapidly; however, a proven technology should be easier to approve than an experimental technology. Right now, no permitting regime recognizes this distinction, but, all else being equal, an unknown technology will involve more uncertainty about the range of effects and therefore require greater study and regulatory and public review than a well-established, proven technology. Thus, the preferred technology is one that is well established and commercially viable.
Demonstrably few environmental effects and no human health effects
To be eligible for fast-track permitting, a given technology must of course generate or transmit electricity without emitting greenhouse gases. Yet one must also consider all other potential adverse effects, like other forms of pollution, harm to ecosystems, or the opportunity costs for land use (e.g., agriculture). To be considered for fast-track approval, the technology should have no serious effects on air, water, soil quality, or biodiversity.
Demonstrably limited zone of off-site environmental effects
Where technology is well understood, it is possible to readily assess the zone of influence of possible off-site effects (that is, how far facility effects extend onto neighbouring properties). The smaller the zone of off-site effects, the less impact there will be on residents or wildlife. Thus, the preferred technology will have either no off-site effects or only a limited zone of off-site effects. Noise from a facility, for example, may not extend beyond the boundary of a site, or may only extend beyond a site boundary at low levels. This preference contrasts with technologies that may have adverse effects far from the site—for example, technologies emitting fine particulate matter.
Notably, the smaller the zone of off-site effects, the greater the number of potentially available sites.
Ready availability for construction
The preferred technology will be readily available for procurement and construction. All orders of governments certainly have the authority to assess the availability of a needed technology, but this challenge would also benefit from coordination among all or most orders of government and the private sector. Although some aspects of supply are beyond Canada’s control, a delay in technology delivery at the end of a permitting process is just as problematic as delay at the start of the process.
Demonstrably rapid path to construction and operation
The technology must enable rapid construction. Construction times are as important as approval timelines. Months gained or lost in construction are significant. Eligible technologies will be those that use an easily replicable design, and few site-specific accommodations.
Canada’s current permitting processes are inclusive: they apply to a broad range of possible facilities. For example, in the energy sector, legislation and regulations within each major jurisdiction in Canada prescribe that jurisdiction’s permitting processes, such as environmental or impact assessment. These existing permitting processes have general application across the jurisdiction and are designed to respond to every type and scale of facility that provides energy—including the full range of possible energy generation technologies. For instance, the 2019 federal Impact Assessment Act provides a clear example of a broadly applicable assessment process, as illustrated through the list of “designated projects” set out in its Physical Activities Regulations (Physical Activities Regulations 2019). Notably, this aspect of this Act was not considered unconstitutional in the recent 2023 decision of the Supreme Court of Canada.
The inclusive nature of current permitting processes means that they are complex and lengthy. Each time they are triggered, there must be time, expertise, and resources available to understand initial facility details, and the type and range of effects, and then craft a facility-specific regulatory process. For example, current permitting processes under the Impact Assessment Act include an early scoping component to identify and assess the full range of effects (s.18(1)). While early scoping is intended to narrow issues and therefore shorten the overall process and render it more predictable, scoping itself adds time and unpredictability to the front-end of the approvals process. Similarly, where a proposed facility uses an unproven technology, the permitting process requires additional time for government and participant experts to fully understand and evaluate the innovations, and the range of possible effects on and off the facility site. All of these location-specific issues are necessary in existing processes to fully address the type and geographic extent of potential effects on air and water quality, sensitive ecological features, human health, and community well-being.
Some zero emission technologies may still cause serious adverse environmental effects related to their location. These technologies should remain subject to existing provisions for environmental or impact assessment.
Existing permitting processes also give rise to further location-specific issues by using different criteria to guide the location-specific effects that must be studied compared to the location-specific effects that govern decision making. For example, considering existing environmental assessment processes, the model of environmental assessment that has prevailed in Ontario for almost 50 years under its Environmental Assessment Act has required the study of alternatives and relied on criteria to first screen out and then evaluate alternatives, but its decision-making test makes no reference to alternatives (see sections 6.1 and 9). Similarly, the federal Impact Assessment Act requires study of 19 factors as part of information gathering for the impact assessment of a designated project (s.22), but identifies only five factors to consider in the decision about whether a project is in the public interest and should therefore be approved (Impact Assessment Act 2019, s.63). Importantly, the Supreme Court of Canada’s recent Reference Decision on the Impact Assessment Act distinguishes between these two different sets of factors. The Court did not criticize the factors within information gathering (i.e., s.19), but did criticize the factors within decision making (s.63). Needless to say, use of different criteria and broad discretion for information-gathering and decision-making does not provide an efficient process or predictable results.
An innovative approach to permitting is to be focused, not inclusive. The first point of focus was addressed above: facilities that propose use of eligible technologies—those technologies that satisfy the five criteria set out above—should trigger the fast-track permitting process. Notably, several attributes of eligible technologies directly limit the type and geographic extent of adverse effects. This should enable a second point of focus – these facilities should require only a focused study of their location effects.
Here, focus can enable streamlining. Streamlining occurs at the front end of the fast-track permitting process by focusing on eligible technologies. Additional streamlining may also occur throughout the permitting process because the eligible technologies will have limited location effects.
In particular, where a proposed facility uses an eligible technology, the location of this facility can be guided by a limited number of clear and binding criteria. These criteria should meet three demands:
- Binding rules: Every criterion to be applied should be set out as a binding rule.
- Yes/no answers: The rules must be yes/no rules. No discretion1.
- Objective application: The rules must have objective application. No subjective standards.
If a facility meets all the rules, it gets approved. Permitting approval alone may not be sufficient to start construction, but this would be desirable; regardless, meeting all permitting criteria must be necessary—universally.
Here are examples of good and bad permitting criteria:
Good: Noise level must be lower than 40 dBA at property line.
Bad: Noise levels must avoid adverse impacts on neighbours.
The number of required criteria should also be limited. Based on the location issues eliminated or narrowed by the attributes of eligible technologies, it should be possible to simplify the number of required permitting criteria to address three core questions:
- Community impact: Does the facility have the support of local government?
- On-site impacts: Does the facility avoid harm to key ecological features?
- Off-site impacts: Does the facility avoid adverse impact on nearby uncompensated residents?
1. Community impact: Does the facility have the support of local government?
Current permitting regimes for new energy facilities assign a lead role to federal or provincial approvals. The framework outlined in this paper for a new fast-track approach to projects does not propose to amend existing permitting regimes. These would remain in place for clean energy projects that do not meet the fast-track criteria.
For proposed facilities to be subject to fast-track approval, however, local municipal and Indigenous governments would play crucial roles. In particular, local governments will need to champion clean energy facilities.
The need for new clean electricity facilities applies to virtually every community across Canada. This paper recommends that fast-track permitting focus on communities where there is local government support. Recent experience shows that new facilities that lack local government support give rise to long-term problems, including public backlash and litigation (Cleland et al. 2016). Stated bluntly, Canada will not meet the net zero challenge where, for example, approvals create or foment a rural-urban divide or violate Indigenous treaty and inherent rights. Empowering and resourcing supportive local and Indigenous governments to meet the net zero challenge is ultimately the best remedy for softening or sidestepping local resistance.
Basic support from municipal and Indigenous governments not only presents the greatest opportunity for long-term clean electricity benefits, it present similar long-term benefits for local democracy and promotion of Indigenous rights.
For many municipal governments, the powers and processes to approve new facilities are generally well-established in municipal laws. Here, the reforms to provide fast-track permitting may not be significant, but there must be clear attention paid to achieving local support—locality by locality. Each local government may require different reforms to attract and maintain support.
Indigenous governments may in some cases have well-established laws and procedures to support and provide fast-track permitting; however, many such governments may not have established laws or permitting processes. Respect for Indigenous traditions and rights is an essential starting point for any of the permitting reforms proposed in this paper. There may also be some benefit to communities and Indigenous organizations getting together and strategizing about sharing and building upon best practices that align with community and cultural values.
The scale of what is required means that many if not most local governments engaged in this net zero challenge will be very active, processing multiple applications year after year. This will require new dedicated staffing and expertise to apply the fast-tracking criteria consistently across the local territory.
Supportive local governments will also require additional resources to set and administer the appropriate array of (a) incentives to maximize direct employment in construction and maintenance and indirect spinoff employment, and (b) compensation to affected but non-participating landowners through, for example, discounts in electricity rates and/or property taxes. Within every community, there will be overall benefit if these aspects of approval are standardized, not individually negotiated. Otherwise, there are likely to be bottlenecks at the approvals process. Every facility proponent will hold up approval processes to seek the best deal for their facility. Among different local authorities, there should be some authority to vary some measures, but there should be care taken to ensure that any variance is applied consistently.
The importance of community engagement cannot be overstated, but facilities that meet the fast-track criteria outlined here should be able to earn community support. The use of the right technology should allow all members of a community to accept that the new facility involves no serious adverse effects on the environment or human health. The use of clear and binding permitting criteria should allow a community to understand the limited impacts the facility will entail. Where the local government also provides clear terms for local benefits to support community acceptance, facilities that meet these terms should be readily approved at the local level.
There is a role for every jurisdiction to develop and apply its own specific criteria so long as the criteria are consistent with the general framework. For example, there may be a certain ecological feature or species of flora and fauna that merits explicit attention because of its rarity and/or cultural importance. So long as the local jurisdiction ensures that every facility is subject to the same decision-making criteria, this kind of adaptation should increase, not diminish community support.
Taken together, the fast-track permitting reforms to address eligible technologies and facility siting should allow community engagement on a specific facility to be uncontroversial. For every facility, there must be clear notice to any affected resident and provision for notice to any interested resident. There must also be opportunity for the public to provide additional information that challenges the application of any permitting criteria. However, such challenges should be rare and easily resolved: if the additional information is relevant to applying any of the criteria, it should be used and the criteria applied anew to ensure that decision making is consistent with all criteria.
2. On-site impacts: Does the facility avoid harm to key ecological features?
This criterion addresses the facility site. Its purpose is to identify the ideal on-site conditions. Ideally, establishing a new zero emission facility will have no serious negative impacts on-site and only trigger a limited number of negative physical changes.
Based on recent experience, the most important topic to consider for on-site impacts is natural heritage. In Ontario, wind farms and solar farms triggered issues with on-site endangered species (Semeniuk and Stueck 2023). Many orders of government have authority over endangered species and/or their habitat, led by different provincial and federal laws that apply according to ownership or jurisdiction over the lands where species are located (Kauffman 2023). The climate crisis is no excuse to worsen the biodiversity crisis. Canada’s natural heritage needs greater protection, not increasing harm.
Many jurisdictions currently protect natural heritage by avoiding harm to key ecological features. The proposed fast-track criterion for this topic is to require explicit consideration and protection of natural heritage features and functions. The focus will be on key ecological features as some features and impacts have greater ecological significance than others. Thus, for example, highest priority must be given to avoiding harm to endangered species and their critical habitat.
Ontario’s Green Energy Act reform illustrates the problem with allowing endangered species issues to be regulated separately from renewable energy facility approvals. Although Ontario sought to make its renewable energy approval a consolidated approval, it failed to consolidate endangered species issues into this approval. The Renewable Energy Approval process mandated more than one dozen reports, but none required express avoidance or even consideration of endangered species habitat. However, in decision-making, Ontario provided that statutory appeals to a tribunal would be successful if an opponent established “serious and irreversible harm to plant life, animal life or the natural environment” (Environmental Protection Act 1990, s.145.2.1). This test did not reference, but clearly encompassed endangered species issues. Thus, Ontario had a disconnect between the information required to obtain approval and the impacts that could overturn an approval. This disconnect became prominent in wind farm litigation that involved an endangered species—the Blanding’s Turtle—and its habitat (Prince Edward County Field Naturalists v. Ostrander Point GP Inc. 2015 ONCA 269). The result was a tribunal overturning a Renewable Energy Approval on appeal and, after court litigation, the Court upholding the Tribunal result. Ultimately, the Approval was remanded to the Tribunal for a further hearing where the Tribunal affirmed its initial conclusion to set aside the Approval.
Overall, serious efforts should be undertaken by each order of government that implements expedited permitting to make clear where and how to site new facilities to avoid key natural heritage features, particularly endangered species and habitat.
Current experience also suggests that the term key ecological feature should have specific definition and application. For example, Ontario’s Greenbelt Plan (2017) identifies 12 types of key natural heritage features and 4 types of key hydrologic features: (Government of Ontario 2017). There should be provision for some variation in the types of key features. This provision would provide room to reflect provincial or local circumstances. On the other hand, there should be a core list of key features that cannot be ignored, i.e., the critical habitat of endangered species.
Additionally, there must be regulatory checks to ensure that the information on this habitat remains current. Current experience shows a patchwork of largely unsatisfactory efforts to ensure that current natural heritage information is readily available. For its Renewable Energy Approvals under the Green Energy Act reforms, Ontario sought to address an existing patchwork of inconsistent information by requiring that facility proponents carry out site-specific investigations to identify existing information and supplement this information as required. This approach is expensive and time-consuming. It would be preferable for local authorities to have the resources to gather most of the required information and then map and make available such information in electronic form. This preferred approach will likely require financial and/or technical support from federal or provincial governments to local governments to ensure that all participating orders of government have the most current information relevant to assessing key ecological features.
3. Off-site impacts: Does the facility avoid adverse impact on nearby uncompensated residents?
This criterion would not apply to every proposed facility. The ideal facility location will have no residents within the zone of off-site impacts or, alternatively, no residents within the zone of off-site impacts who do not support the facility. Indeed, many or most of the technologies suitable for fast-tracking produce little to no off-site impacts.
Thus, this criterion would apply only where there are residents within the zone of off-site impacts for a proposed facility and the impacted residents do not support the facility.
Where it does apply, this third criterion has three required components. These arise from recent experience with clean energy facilities. This experience highlights the importance of addressing social impacts. Problems with long-term community support arise where neighbours have impacts imposed on them without any identified benefit. This problem was particularly apparent regarding wind farms where a patchwork of turbine locations created a patchwork of participating and non-participating landowners. In this context, a participating landowner was a landowner that received some economic benefit from the facility and thus supported it—usually, the economic benefit arose from having a component of a proposed facility on that landowner’s land. This patchwork created neighbourhood conflict as the non-participating landowners believed they were burdened with one or more impacts (e.g., noise, visual) without any benefit (Comeau et al. 2022).
The first required component of this criterion is to define an impact zone around a facility or a specific component of a facility (e.g., a wind turbine). The size of the zone will vary according to the technology involved. Different sizes of wind turbine, for example, will have different zones of impact. Based on existing experience, it is essential to provide clear guidance on this topic for all permitting decisions. The requirements that govern applicable technologies should mean that impact zones can be defined for each relevant typeof technology and scale of facility.
The second required component is to address negative impacts according to their intensity. For example, it should be possible to require that no facility will produce noise at the property line for any residential neighbour that is greater than 40 dBA or existing levels. The basis for this precise technical standard of a 40dBA limit is an international World Health Organization standard for night-time noise.
Once there is information on the applicable zone of impact and the intensity of the impact, it should also be straightforward to determine whether the third component applies to a given facility. Where compensation for adverse impacts is warranted, this will involve a government—any order of government—or a proponent providing some monetary benefit to any landowner within the zone of impact who is not leasing land or otherwise benefiting from the facility.
These community benefits can be shared in multiple ways. One way is for local municipal governments to reduce assessed local property taxes or utility bill rebates for a non-participating but affected landowner (Comeau et al., p. 36). Recent regulatory reforms in New York State and California, for example, require all new renewable energy facilities to provide a benefit package for the host community of the facility, which can include utility bill credits (Arnold and Beck 2023). A second way is the availability of a renewable energy credit for sale to local residents only (Comeau et al., p. 20). A third is to distribute a portion of annual revenues to the local community for re-investment (Comeau et al., p.29). Here again, reforms in New York State and California show how Canadian jurisdictions can include these types of provisions within community benefit packages.
Whatever the details of these components, this third criterion on off-site impacts must adhere to the three tests for criteria set out above, namely a binding rule, in yes/no terms, that has objective application.
Appendix A provides examples of proposed permitting criteria.
To reach Canada’s net zero goal by 2020, each clean energy facility that meets the fast-track criteria should have an expedited timeline for permitting and getting the facility constructed and operating.
Coupling a commitment to new energy output with an expedited timeline is not new. Within established permitting processes, such as federal and provincial environmental assessments, there is a well-recognized trade-off between the size of a facility and the time required for approvals: the larger the facility, the longer the timeline. Unfortunately, despite best efforts, the existence of a regulatory timeline does not guarantee a predictable date of facility operation. Canada has several on-going examples of major energy generation projects exceeding their predicted timelines significantly—by factors, not percentages. For example, the actual timelines of major hydroelectric dam projects in British Columbia (Site C) and Labrador (Lower Churchill) were more than double the predicted time frame (BC Hydro 2023). Furthermore, time is money: these timeframe exceedances have also resulted in major budget overruns (CBC News 2022). These examples point to the importance of limiting the types of technologies and scales of facility that are suitable for rapid permitting.
It may also be appropriate to include time limits for each crucial step in facility development. Every month counts. Examples of crucial steps include: (1) the time from initial notice of interest from a proponent to filing of a complete application; (2) the time for all regulators to review and decide whether or not to approve the application; (3) the time from facility approval to the commencement of facility construction; (4) the time required to complete all facility construction; (5) the time from the completion of construction to facility operation; and (6) the time from facility approval to grid connection.
There are many means to make a time limit enforceable. They can be made enforceable by governments against proponents and also by proponents against governments and third-party suppliers and contractors. For example, in Ontario, overall timelines were set out under the feed-in-tariff terms and conditions (see, for example, Ontario’s Feed-In-Tariff FIT 2.0 released in August 2012). These set out a required date for commencement of operations that was binding absent a specific waiver agreement. Similarly, the reforms in New York State now establish statutory time limits for issuing building permits, ranging from a maximum of six months for projects located on pre-approved brownfield sites to one year for all other projects (Arnold and Beck 2023).
Who can do what to implement the proposed reforms
Canada’s Constitution and legal framework gives rise to five orders of government authority with jurisdiction to pass laws governing facility permitting: federal, provincial, territorial, municipal, and Indigenous. When looking at what each authority can do to achieve net zero emissions, there are two sources of legal authority: (1) existing laws, and (2) legal and constitutional powers to amend existing laws or pass new laws.
Appendix C examines each of these five orders of government authority to assess their jurisdiction and opportunity to implement reforms to permit new clean energy facilities. It concludes that all orders of government—federal, provincial, territorial, municipal and Indigenous—could implement all aspects of expedited facility approvals.
Building on this legal conclusion that all orders of government could implement all aspects of the fast-track permitting proposed in this paper, this paper advances two policy recommendations.
First, this paper recommends that the most locally rooted authorities—municipal and Indigenous—lead project decisions for fast-track approvals.
Second, this paper recommends that the Federal Government and the provinces work with other orders of government to develop a common framework to implement fast track approvals. This common framework should specify eligible technologies, permitting criteria, qualifications for local reviewers, and timelines. Appendix B describes this common framework.
Imagining the future—permitting reforms in action
To assist understanding, this paper provides two hypothetical examples of how proponents and local governments could act to advance clean energy facilities if the proposed reforms were implemented.
Example 1: Solar farm in rural municipality
Saul R. Plexis owns a 100-hectare parcel of farmland in rural Ontario and is interested in using some of that land to generate electricity as a new income stream. Saul was aware that his local municipality had taken an active role in promoting solar farms. His town council did so to seek the annual rate subsidy available to its local utility for all ratepayers, gain new tax revenues from constructing and operating the new facility, and obtain the complete rebate available to local governments who had developed a long-term energy plan setting out annual targets for constructing new facilities by 2035 and 2050.
Using a model program developed by the province, municipal staff had loaded their existing GPS information on a new website and quickly retained a local consultant to address a small number of gaps in the local data. On completion, the website enabled any interested landowner to determine immediately if their land was eligible for consideration as a future solar farm of between 1 and 15 megawatts. This determination would involve review of the three criteria on facility location and consideration of where the site fits under the local utility’s connection capacity across the municipality, as set out in the municipality’s long-term energy plan.
Saul went on the municipal website and quickly determined that a 30-hectare parcel on his lands met the three permitting criteria and was within the 5-year capacity of the energy plan for utility connection. He then went onto the municipal register to place his lands in the first tier of the public queue for immediate consideration by the municipality. As a first-tier site, the municipality and local utility would act in the next 30 days to visit his site to verify permitting criteria and connection capacity, commission a survey, and move it up to the second tier in the municipal register—which would be visible on public-facing elements of the municipal site and trigger municipal notice to all property owners abutting Saul’s site or within 120 metres along road access. The utility would also send to Saul a feed-in-tariff contract and construction agreement and schedule. As soon as Saul completed these contracts, his site would be listed on the third and final tier in the municipal register. This would complete the planning phase of the facility. The municipal register also contained further listings to identify completion of construction and utility connection. Once the facility was built and operating, the municipality would update its energy plan on its annual and long-term targets.
Example 2: Wind farm on Reserve Lands
A First Nation in a remote area of western Canada relies on diesel generators for its electricity. Recently, seeking energy independence from costly diesel fuel imports, the Council of this First Nation completed the steps to allow it to pass laws, lease lands and enter contracts under the Framework Agreement on First Nation Land ManagementAct redressing the constraints of the Indian Act.
The Band Council identified that its current and future energy needs could be met by a two-megawatt, zero-emission electricity generating facility. Recognizing that the Reserve includes highlands of barren Canadian Shield, the Band Council created a new staff position to explore wind energy options. Band staff then retained consultants to take wind measurements and assess the area’s wind energy potential. This work identified that the area had potential to generate up to 100 megawatts of wind energy. This led Band staff to go to the Canadian Energy Regulator website to identify potential energy options. The site informed the Band about the option to develop a long-term energy plan setting out annual targets for constructing new facilities and connecting to the electricity grid.
To develop an energy plan for new generation facilities, Band staff used a model program developed by the province with Indigenous government input. Band staff trained on use of GPS technology downloaded available digital mapping information to apply the newly established Canada-wide permitting criteria to identify the best possible turbine locations and configurations. Band staff identified gaps in the existing information, but took advantage of the new Canadian Energy Regulator program to fund the required GPS work. Staff retained a team of Band members who had obtained the required training. Band staff also created a new dedicated web site so that all members of the First Nation could access existing information and add their local and traditional knowledge. Staff quickly determined that at least three blocks of Reserve lands met the three permitting criteria. Under its new program, the Canadian Energy Regulator provided guidance on passing a land law that would incorporate the permitting criteria into a Band Council approval process that included community-wide consultation. Once Band Council approved its land law and confirmed that Band staff had completed the initial steps of required consultation, Band Council authorized staff to go onto the Canadian Energy Regulator register to place all three blocks in the first tier of the queue for immediate consideration by this Regulator.
To address connection issues required for the long-term energy plan, Band staff went to the Canadian Energy Regulator web site to obtain required information on the proximity of each site to the nearest transmission line. Using GPS tools and digital mapping, Band staff identified that their Reserve was more than 100 kilometres from the nearest transmission line. Plugging this information into the Canadian Energy Regulator website, Band staff saw that the Canadian Energy Regulator made provision to approve new transmission lines to remote communities in two circumstances—where the energy generated could produce energy for the grid greater than 10 megawatts per 20 kilometre distance or where a new line might connect more than one remote community that was on diesel fuel. The Band Council liked both options and reached out to two other remote communities to identify possible interest in making a joint application to the Canadian Energy Regulator.
For each first-tier site in a remote Indigenous community that completed the transmission line information, the Canadian Energy Regulator would act in the next 30 days to visit each site to verify permitting criteria, commission a survey, and move each verified block up to the second tier in its register—which would be visible on public-facing elements of the federal website and trigger public notice. The Canadian Energy Regulator also required that the Band confirm issuance of community notice to all residents of the Reserve.
The next step required the Canadian Energy Regulator to work with the Band and any other identified community to address a transmission line connection plan including the proposed location of the on-Reserve portion of the transmission line and the proposed location of the off-Reserve portion of the line. Within 60 days of Band sites obtaining second-tier status, the Canadian Energy Regulator completed a transmission line plan.
By the terms of the Regulator’s mandate, the completion of a transmission plan required further actions by the Band Council. First, the Band Council confirmed that its staff had completed required community consultation on the transmission line plan. Next, the Band Council passed a second Land Law that acknowledged the completion of its long-term energy plan and accepted the location and timing details of the Canadian Energy Regulator transmission line plan. This Land Law approved the plan to connect the community to the grid within two years for the first site for 10 megawatts and committed the Band to support future development of the other two sites that would add 40 megawatts to the grid within five years.
This scoping paper sets out a framework to reform Canada’s permitting processes by establishing a two-track framework including a new fast track permitting process to provide expedited approval for new clean energy facilities. There is opportunity for participation by all Canadian jurisdictions—federal, Indigenous, provincial, territorial, and municipal—and all residents of local communities, however urban or remote.
The scale of this needed build-out has no precedent. This need is long-term—from now to 2050. Short-term reforms will not be sufficient. Reforms must be sustainable financially and able to be implemented in communities across Canada.
Appendix A: Applying the proposed permitting criteria
1. Electricity generation facilities
Applying the three location criteria set out in the Paper:
Support by the local government. The basic standard may be stated as follows:
- Facility location is supported by the Council of the local municipal or Indigenous government.
Avoid harm to key natural heritage features. The basic standard may be stated as follows:
- Facility will avoid key natural heritage features.
Provide no uncompensated impact on nearby residences. The basic standard will need to include several components, as set out in the following:
- Facility will provide no uncompensated impact on nearby residents by
- Clearly identifying the designated zone of impact of the facility;
- Providing monetary benefit (tax rebate, rate rebate) to all non-participating property owners within the designated zone of impact; and
- Ensuring that no existing residence is subject to noise emissions above background levels or recognized standard.
2. Electricity transmission lines
The permitting criteria that apply to electricity transmission should be very similar to the general criteria. Two of three permitting criteria are relevant:
- Facility will avoid key natural heritage features.
- Facility will provide no uncompensated impact on nearby residences.
The third criterion, local council support, can be applicable where the transmission line is entirely within the boundary of a local municipality or the lands of a single Indigenous government; however, this situation seems unlikely for most transmission lines that cross provincial boundaries. The long-term nature of what is required means that precedents should move beyond constitutional authority to proceed unilaterally and instead make every effort to obtain the support of local governments.
Regarding the situation of multiple local governments—which seems likely in the case of transmission lines—it may better promote cooperation to relate the scale of benefits to the scale of local impact. As such, a local municipal or Indigenous government affected by 50 kilometres of proposed facility gets greater recognition than a local government affected by 2 kilometres. Also, the benefits identified above as part of obtaining local support appear relevant here—e.g., employment (construction, maintenance, spin-off) and financial (electricity rates, taxes).
- Transmission line will provide no uncompensated impact on affected local governments.
3. Electricity storage facilities
There are now viable electricity storage technologies, and the number of suitable storage technologies is clearly going to increase.
Consistent with the overall clean energy transition, there needs to be a focused effort to ensure that any electricity storage facility meets the requirements for available technologies.
For such facilities, the three criteria set out in the paper for energy generation facilities should be applicable:
Support by the local government. The basic standard may be stated as follows:
- Facility location is supported by the Council of the local government.
Avoid harm to key natural heritage features. The basic standard may be stated as follows:
- Facility will avoid key natural heritage features.
Provide no uncompensated impact on nearby residences. Depending on the technology, it seems likely that future zero emission storage facilities will have zero or only a minimal number of off-site effects and zero or small zones of off-site impact. This may allow easy application of this third criterion:
- Facility will provide overall benefit, not negative/adverse impact, on nearby residents by
- Clearly identifying the designated zone of impact of the facility;
- Providing monetary benefit (tax rebate, rate rebate) to all non-participating property owners within the designated zone of impact; and
- Ensuring that no existing residence is subject to noise emissions above background levels or recognized standard.
Appendix B: Role of each jurisdiction to implement the fast-track approvals regime
1. Federal government role
(1) Federal government implements the new Clean Electricity System Act, having six components:
- Part 1 setting out the federal Program to meet Canada’s zero-emission electricity targets, including
- Requirements for the Minister of Environment and Climate Change to prepare for submission to Parliament (a) a science-based summary of current climate crisis threats to rights protected under Canada’s Charter of Rights and Freedoms, (b) a summary of Canada’s current international commitments to address the climate crisis and measurable indicators of Canada’s progress in meeting these commitments, and (c) Canada’s progress in meeting its zero-emission electricity generation commitments;
- Requirement that the Parliamentary Budget Office prepare a summary of the requirement for federal funding, from the present to the year 2050, and
- Minimum national standards for Feed-In Tariff contracts, Zero Emission Approvals, and Connecting Transmission Line Approvals.
- Part 2 containing amendments to Part 4 of the Canadian Energy Regulator Act to give the Canadian Energy Regulator exclusive authority over
(A) (i) Class 1 transmission lines connecting one or more provinces, and
(ii) Class 2 transmission lines connecting transmission lines connecting zero emissions facilities on federal lands to existing transmission systems; and
(B) administration of a new Federal Connecting Transmission Line Approval (CTLA) regime that
(i) distinguishes between two classes of lines on the basis of voltage, including for each class (a) permitting criteria, (b) information required to address permitting criteria, and (c) a test for approval based on meeting permitting criteria; and
(ii) declares all CTLA Class 1 transmission lines to be works for the general advantage of Canada; and
(iii) authorizes the implementation of tolls and tariffs for all electricity transmission lines subject to the CTLA.
- Part 3 adding a new Part 4.1 to the Canadian Energy Regulator Act to address Zero Emission Electricity Generation Facilities that covers wind and solar facilities and other designated facilities, including
(A) provision for the Canadian Energy Regulator to administer a new Federal Zero Emission Approval regime, distinguishing between two classes of facility on the basis of required hectares, including for each class (a) permitting criteria, (b) information required to address permitting criteria, and (c) a test for approval based on meeting permitting criteria; and
(B) a declaration that all facilities subject to a Zero Emission Approval are works for the general advantage of Canada.
- Part 4 adding a new Part 4.2 to the Canadian Energy Regulator Act to:
(A) authorize the Canadian Energy Regulator to recognize regimes of other jurisdictions to address one of more requirements of Parts 4 and 4.1 of the Canadian Energy Regulator Act;
(B) authorize the Canadian Energy Regulator to recognize plans of other jurisdictions that address that jurisdiction’s implementation of zero emission targets;
(C) require that the Canadian Energy Regulator prepare an annual report of the effectiveness of the reforms provided by this new regime to provide the required facilities to address the climate crisis by (i) 2035, and (ii) 2050; and
(D) provide the Canadian Energy Regulator with powers to gather information and redress any shortcomings with providing needed facilities, including shortcomings by other jurisdictions to implement their 5-year plans.
- Part 5 amending the federal Impact Assessment Act to exempt from this Act any facility that is subject to the Canadian Energy Regulator Act, Parts 4 or 4.1.
- Part 6 amending the Framework Agreement on First Nation Land Management Act or the Framework Agreement on First Nation Land Management to authorize participating First Nations to pass Land Laws addressing the location and approval of new zero emission electricity generation facilities and on-Reserve transmission and distribution lines for all Reserve needs.
(2) Consultation with Indigenous governments on all relevant aspects of the new Act, particularly regarding the means to facilitate the participation of Indigenous Peoples and future approval of zero emission electricity generation facilities on Indigenous lands and the connection of remote communities to the electricity grid.
(3) Consultation with all interested jurisdictions in all relevant aspects of the new Act, particularly regarding the components of minimum national standards for Feed-In Tariff contracts, Zero Emission Approvals, and Connecting Transmission Line Approvals.
2. Indigenous government role
(1) Indigenous Government Council passes a new Land Law pursuant to the Framework Agreement on First Nation Land Management Act to implement the First Nation Zero Emission Response to the climate crisis, having three components:
- Part 1 to approve Zero Emission Electricity Generation Facilities to include wind and solar facilities and other designated facilities, including for each class of facility
(a) permitting criteria,
(b) information required to address permitting criteria, and
(c) a test for approval based on meeting permitting criteria.
- Part 2 to approve new transmission and distribution lines on the Reserve, including for both types of line
(a) permitting criteria,
(b) information required to address permitting criteria, and
(c) a test for approval based on meeting permitting criteria.
- Part 3 to require staff to prepare for submission to Council an annual summary of progress under the Land Law to meeting First Nation targets for zero-emission facilities on the Reserve.
3. Provincial government role
(1) Province implements a new Provincial Zero Emissions Electricity System Act, having five components:
- Part 1 to provide for the provincial electricity regulator or utility to (a) administer a provincial feed-in-tariff contract for all new wind and solar energy facilities located in the province, and (b) prepare a summary of requirements and options for provincial and/or utility funding, from the present to the year 2050.
- Part 2 to require the appropriate Minister to administer a new Provincial Zero Emission Approval regime, distinguishing between two classes of facility on the basis of required hectares, including for each class (i) permitting criteria, (ii) information required to address permitting criteria, and (iii) a test for approval based on meeting permitting criteria.
- Part 3 to amend the existing Municipal Act or equivalent legislation to enable municipal governments to establish local approvals for new zero emission facilities.
- Part 4 to amend the existing provincial laws for electricity subsidies and/or utility rate-setting to make provision for a new program for zero emission electricity generation facilities and/or transmission lines related to bringing net zero facilities into the electricity grid.
- Part 5 to require the appropriate Minister to prepare for annual submission to the Legislature a detailed summary of the province’s progress in meeting the Zero Emission Targets for that province.
(2) Consultation with Indigenous and municipal governments on all relevant aspects of the new Act, particularly the distribution of benefits to affected landowners.
4. Municipal government role
- Municipal Council passes new Bylaw to Implement the Municipal Zero Emission Response to the climate crisis, having two components:
- Part 1 to approve Zero Emission Electricity Generation Facilities that covers wind and solar facilities and other designated facilities, including for each class of facility
(a) permitting criteria,
(b) information required to address permitting criteria, and
(c) a test for approval based on meeting permitting criteria.
- Part 2 to require staff to prepare for submission to Council an annual summary of progress under the Bylaw to meeting municipal targets for zero-emission facilities in the municipality.
Appendix C: Legal authority to carry out fast-track permitting across Canada
Canada’s federal Constitution divides the power to pass laws between the federal and provincial governments (Constitution Act 1867). These powers govern every law passed by Parliament and provincial legislatures, although land claim agreements rely on a more complex constitutional structure involving Parliament and Indigenous Peoples.
These powers also govern the laws passed by all local governments, such as the laws and by-laws passed by elected territorial, municipal, and band councils.
This framework provides the starting point to examine the law-making powers that have the potential to provide fast track permitting. This Appendix focuses upon the constitutional authority of each order of government to expand existing laws or pass new laws that are within these powers. It pays particular attention to existing constitutional powers that are currently unappreciated or underused, such that they may authorize expanded laws or new laws required to meet net zero.
It then examines existing laws for their potential authority to implement reforms required to achieve net zero emissions. Across all orders of government—federal, provincial, territorial, municipal and Indigenous—there are examples of existing laws that provide some authority to advance the building of clean energy facilities. Nationally, for example, the 2019 Impact Assessment Act provides authority to authorize the location and construction of clean energy facilities on federal lands (Impact Assessment Act ss.82, 88), and major wind farms on Canada’s marine lands offshore (see Physical Activities Regulations, SOR/2019-285, and its Schedule at sections 44 and 45).
Existing laws often also contain powers for cabinets and ministers to pass regulations relevant to achieving net zero emissions. Across Canada, there are many examples of existing provincial laws and regulations that support the location and construction of clean electricity generation, transmission, distribution, and storage facilities.
Nevertheless, existing laws do not establish the scope of legal jurisdiction to implement legal reforms such as those required to achieve net zero emissions. It is also essential to examine Canada’s constitutional framework.
To address this challenge, this Appendix concludes that all orders of government could implement all key aspects of fast-track approvals for clean energy facilities.
1. Federal powers to act—including underused, unappreciated federal powers
Parliament has multiple constitutional powers relevant to expediting approval of clean energy facilities, including: (1) federal lands, (2) federal spending, (3) interprovincial works and undertakings, (4) declared works for the general advantage of Canada, (5) “Lands reserved for Indians,” (6) peace, order and good government, (7) trade and commerce, (8) fisheries, and (9) interprovincial or international effects.
These different constitutional powers apply to different aspects of the clean energy challenge. For example, the power over federal lands is particularly relevant to determining where clean electricity generation facilities could be located, while the power over interprovincial works and undertakings is particularly relevant to expanding inter-provincial electricity transmission facilities, and the power to declare works for the general advantage of Canada is particularly relevant to connecting remote areas to the electricity grid.
(i) Federal power to approve and regulate projects on federal lands
Parliament has exclusive authority to pass legislation governing the use of federal Crown land. Federal Crown land includes ports, airports, national parks, ports, Indian reserves, lands in northern Canada (i.e., outside any province), and lands on Canada’s continental shelf in three oceans (Arctic, Atlantic and Pacific).
Federal Crown lands are subject to at least two laws of general application relevant to permitting clean energy facilities. The federal Species at Risk Act applies to any facility on federal lands that may affect endangered species, the residences of individual species, or the species’ critical habitat (Species at Risk Act (SARA), sections 73). The Act has application beyond federal lands through, for example, agreements and permits under other federal acts (sections 74-77) and project reviews (section 79). The Impact Assessment Act applies broadly to any project proposed on federal lands (Impact Assessment Act ss.81-91). This Act also provides options to exempt physical activities on federal lands from its requirements, including projects on Indian reserves and subject to land claims.
This power to regulate federal property provides a range of options for permitting new clean energy facilities, including the marine offshore, federal lands assigned to Indigenous Peoples, airports, and defence bases.
(ii) Federal power to spend money and provide tax breaks to expedite approval and operation of clean energy facilities
The federal power to spend money has no legal limits. However, the spending power is now subject to political limits where the federal government seeks to spend money in matters managed by the provinces, such as health care and education.
The federal spending power provides a range of options and incentives to support local decision-making—such as employment and financial benefits. Employment benefits can include training and hiring incentives, while financial benefits can include tax incentives, connection subsidies, and electricity rate reductions (where they are federally regulated). The spending power may also support the financing of required distribution lines to remote communities.
(iii) Federal power to regulate interprovincial works and undertakings and declare local works to be for the general advantage of Canada
Canada regulates interprovincial works and undertakings in the energy sector through the Canadian Energy Regulator Act (CERA) and the Impact Assessment Act.
This constitutional power is underused by existing laws. In particular, the CERA sets out a very different and much broader approach to regulating oil and gas pipelines in comparison to electricity transmission lines. The federal regulation of interprovincial oil and gas pipelines is broad and exclusive, and includes the setting of tariffs. By contrast, the federal regulation of interprovincial transmission lines is narrow, subject to provincial regulation, and does not include tariffs. There is no constitutional basis for the different breadth.
Achieving net zero goals is likely to require the establishment of new interprovincial electricity transmission lines. As such, the Canadian Energy Regulator Act could be amended to make the federal regime for transmission lines similar to the longstanding federal regime for pipelines (i.e., a regime that facilitates the building and financing of new interprovincial electricity transmission lines).
Similarly, though regulating different energy markets, the Canadian Energy Regulator has provided decades of experience with national regulation of the long-term supply of oil and gas across Canada and demonstrated that there is capacity for a Canadian regulator to play a significant role in expediting and sustaining new energy facilities across Canada. Thus, the Canadian Energy Regulator Act is a potential legislative source for all federal aspects of the energy permitting reforms, including national standards for generation, transmission, distribution, and storage.
A further constitutional power that has existed since Confederation is the federal power to declare a specific work or class of a work that is, factually, local or provincial to be for the general advantage of Canada (Constitution Act 1867). This power exists today and applies to works such as grain elevators and silos under the Canada Grain Act and facilities using nuclear energy under the Nuclear Safety and Control Act.
The purpose of this power is to specify that one or many “local” works is declared to be “federal.” Such a declaration has two major implications. First, it means that the specified works are removed from their legal status as local works. This changes the laws applicable to such works from principally being local laws to expressly engage federal laws applicable to federal works. Second, by virtue of having federal legal status, the declared works that are subject to federal regulation will be able to rely on federal paramountcy in the event of conflict with any provincial or local laws.
Importantly, a federal s.92(10(c) declaration applies to the works, but provides no blanket exemption from local regulation, particularly local regulation of adverse effects from the works. A majority of the Supreme Court of Canada has never endorsed the federal “enclave” theory whereby federal lands or works are subject to complete exemption from local control (R. v. Francis 1988).
Though sometimes controversial, this declaratory power is relevant to the clean energy challenge. It could allow the federal government to directly enable timely construction of a particularly important new facility—energy generation, transmission, distribution, or storage. One example could be a new transmission line to connect new, small-scale, clean electricity generation facilities in remote areas to the existing electricity grid.
Use of this declaratory power could be carried out by adding one or more new provisions to the Canadian Energy Regulator Act.
(iv) Federal power to regulate interprovincial and international trade and commerce
The federal government has power to regulate national and international trade and commerce. This power is subject to longstanding limits, but it may be possible to rely on this federal power to set national standards to govern the suitable technologies and permitting criteria for clean energy facilities.
The Canadian Energy Regulator Act is a potential legislative source for all federal aspects of the energy permitting reforms, including the setting of national standards for all required facilities—generation, transmission, distribution, and storage.
Importantly, there are longstanding examples of Canada-wide standards established cooperatively with provincial governments. A cooperative way to proceed with Canada’s net zero targets seems both possible and preferable.
(v) Federal power to regulate Indigenous reserve lands
The Constitution provides Indigenous governments with law-making powers under unique Land Claim Agreements and the power to enact laws respecting “Indians and lands reserved for Indians” (Constitution Act 1867).
This Appendix addresses this topic more fully under Section 2, Indigenous Powers to Act.
(v) Federal power to pass laws for peace, order and good government
The federal government’s power to pass laws for the peace, order and good government of Canada is a collection of federal powers to address emergencies, residual matters not assigned to either senior order of government, and matters of national concern. Different tests apply to each type of power.
The most recent example of a federal law relying on the national concern power arose in relation to federal pricing for greenhouse gas emissions. In 2021, the Supreme Court of Canada upheld the federal Greenhouse Gas Pollution Pricing Act 2021 under this power (References re Greenhouse Gas Pollution Pricing Act 2021 SCC 11). To qualify, (1) the matter must be of sufficient concern to the country as a whole to warrant consideration as a national concern; (2) the matter must have a singleness, distinctiveness and indivisibility; and (3) the proposed impact on provincial jurisdiction must be reconcilable with the division of powers.
The current test to invoke this power for any future matter has three parts. First, the federal government must establish that the matter is of sufficient concern to the country as a whole to be a matter of national concern. Second, the matter must have a singleness, distinctiveness and indivisibility from other matters. Third, the matter must have a scale of impact on provincial jurisdiction that is reconcilable with the division of powers. Overall, the purpose of the national concern test is to identify matters which, by their nature, transcend the provinces.
Given the scale of legal controversy over the use of this power respecting the federal Greenhouse Gas Pollution Pricing Act, it does not seem advisable at this time to rely on this power to address the zero-emission electricity challenge.
(vi) Federal power to regulate fisheries, fish, and fish habitat
The federal power over fisheries is broad, including powers to conserve fish and fish habitat, and most recently, aquatic endangered species in Canada’s internal or marine waters. These powers are relevant to permitting new clean energy facilities as they can prohibit or delay construction wherever they apply. It is therefore prudent to locate new clean energy facilities in places that avoid fisheries issues.
(vii) Federal power to regulate interprovincial and international effects
The federal power to address interprovincial and international effects is not stated in the Constitution Act, 1867, but arises through multiple cases, led by the 1976 Supreme Court of Canada case of Interprovincial Co-operatives v. The Queen  1 SCR 477. The majority of the Court in this case concluded that the matter of regulating “interprovincial effects”—in this case, effects of water pollution—was within exclusive federal authority through the Constitution’s assignment to it of residual power over matters not specifically allocated to either federal or provincial authority. This federal power may also regulate international effects, such as the protection of migratory birds. The federal Migratory Birds Convention Act, 1994 has broad application to migratory birds. To date, this Act prohibits harm to migratory birds and their nests; however, this Act does not regulate the habitat of migratory birds.
Both aspects of this federal power are relevant to permitting clean energy facilities. It is prudent to address the location of clean energy facilities to avoid locations near any interprovincial or international border. It is also prudent to locate clean energy facilities in places that avoid or minimize effects on migratory birds or their nests.
2. Indigenous powers to act
Among Canada’s hundreds of Indigenous governments, many are already pursuing the development of zero-emission electricity generation on their lands. Furthermore, given the scale of the net zero challenge, there is obvious national benefit to supporting interested Indigenous governments to site new clean energy facilities on their lands.
For most Indigenous lands, federal laws are broadly applicable as Canadian federalism imposes some constraints on the applicability of provincial or municipal laws to Indigenous Reserve lands (Surrey v. Peace Arch Enterprises Ltd. (1970), 74 WWR (ns) 380 (BCCA).
There are now many categories of lands held by Indigenous governments. There are of course lands set out in modern land claims agreements and ratified in federal laws. Under these laws, Indigenous governments have a large if not lead role over many facilities on their lands. Indigenous lands set out in a land claims agreement would be well-suited to reforms that implement fast track permitting; however, some of these lands are extremely remote and may thereby be isolated for the near term until there is transmission line access.
By statute, the federal government provides Indigenous governments with two Canada-wide sources of legal authority to pass laws governing federal Indigenous Reserves. Under the Indian Act, band councils have narrow authority to pass laws governing the use of reserve lands, and no authority to pass laws on or even agree to lease reserve lands. Thus, absent reform of the Act, this regime seems an unlikely source of authority for Indigenous governments to approve new clean energy facilities on reserve lands, though it may be possible to advance aspects of this reform through new regulations under this Act.
The federal regime best positioned to address fast track permitting is the Framework Agreement on First Nation Land Management Act, S.C. 2022, c.19, s.121 (the “Framework Agreement Act“). It applies to any First Nation government on a Reserve anywhere in Canada that reaches agreement with the federal government to meet this Act’s required terms. This Act currently applies to several dozen First Nation governments in close proximity to existing electricity grids. Further, this Act provides First Nation governments with the independent power to pass laws, make decisions, and implement energy facilities on their lands. These law-making powers for First Nation governments contrast fundamentally with the Indian Act whereby all band leases require federal approval.
As set out in Box 2 below, an earlier version of the Framework Agreement Act authorized the Henvey Inlet First Nation to pass laws to govern Ontario’s largest wind farm—a 300 megawatt wind farm on Henvey Inlet First Nation Reserve lands on the shore of Georgian Bay north of Parry Sound.
This power in the Framework Agreement Act is relevant to applying the clean energy permitting reforms to lands reserved for Indigenous peoples across Canada. The fast track permitting reform should thus engage forthwith those Indigenous governments that have independent law-making and contractual powers through the Framework Agreement Act. On the other hand, there should be regulatory reforms to exempt from the new federal Impact Assessment Act any small-scale energy generation facility governed by laws established by a First Nation under the Framework Agreement Act.
|Box 2: Henvey Inlet First Nation Wind Farm
|Under Ontario’s Green Energy Act reforms described above, the Henvey Inlet First Nation obtained a Feed-In-Tariff contract to establish Ontario’s largest wind farm on a remote Reserve that required a significant transmission line to connect to the Ontario electricity grid. Initially, the First Nation Council sought to establish the wind farm using a lease under the Indian Act; however, after progress was slow in this approach, Council elected to follow the lead of dozens of other First Nations across Canada and sign the Framework Agreement to trigger the application of the First Nations Lands Management Act, S.C. 1999, c.24. Following the process set out under this Act, the First Nation Council obtained law-making powers over environmental assessment, protection and management on its Reserve lands.
The Band Council then passed a number of laws to address its legal needs. These laws included:An Environmental Assessment and Permitting Land Law; An Environmental Protection Land Law; and An Environmental Permit Land Law.
On-site, further approval was required to address the federal Species at Risk Act, as SARA applies to federal lands such as First Nation Reserves.
Off-site, further approvals were required to provide the required transmission line connection to Ontario’s electricity grid. The extensive 104 kilometre distance required for this connection crosses the Reserve lands of the Magnetawan and Shawinaga First Nations. Both of these First Nation Reserves also relied on the 1999 First Nations Land Management Act to pass laws regulating the transmission line. Ultimately, the Project was constructed and became operational in 2019.
Under these new federal regimes, Indigenous governments may have the lead role over many if not all facilites on their lands.
Notably, the present paper focuses on small facilities, not the major project enacted by the Henvey Inlet First Nation. However, as the Henvey Project involved 90 major turbines and a lengthy 104-kilometre transmission line, it should be readily possible to use the Framework Agreement Act to establish the smaller clean electricity facilities addressed in the present paper.
3. Provincial powers to act
The Constitution provides provincial governments with at least five powers relevant to permitting clean energy facilities: (1) public lands and property, (2) local works and undertakings, (3) property and civil rights; (4) municipal institutions; and (5) matters of a local or private nature.
(i) Provincial power to establish fast track approvals for clean energy facilities on public and private lands
Provinces have broad authority over lands within their boundaries, including provincial Crown lands, municipal lands, and private lands.
Additionally, the Constitution presumes that all works and undertakings in a province are local except those located on federal lands (described above) or connect with another province or another country (Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters 2009 SCC 53).
Therefore, every Province has broad regulatory authority to establish fast-track permitting for clean energy facilities across its boundaries, on public and private lands (though not on federal lands).
Public lands and property
Provinces have broad authority over their property, with property including provincial financial resources. Thus, provinces have broad power to spend all monies they raise by taxes or otherwise receive through transfers from the federal government.
As described above, Ontario provides an important example of provincial spending in support of energy facilities through its 2009 Green Energy Act reform and feed-in tariffs program.
(ii) Provincial power to fund clean energy facilities
Every province has broad power to set laws regarding property and civil rights. Thus, a province may set the terms of property division and sale, and contracts, including contractual terms and conditions. Property in this context also includes financial resources. Provinces have broad power to spend all monies they raise by taxes or otherwise receive through transfers from the federal government.
(iii) Provincial power to regulate private property and civil rights
Every province has broad power to set laws regarding property and civil rights. Thus, a province may set the terms of property division and sale, and contracts, including contractual terms and conditions.
This power can authorize the development of any required contracts and property rights to implement required zero-emission facilities, including for example a future feed-in-tariff program such as the program described above that was implemented by Ontario under the Green Energy Act.
(iv) Provincial power over municipalities
Provinces have constitutional authority over municipal institutions and governments. Additionally, every province has broad constitutional authority over all local works and property and civil rights. These general powers allow a province to establish the broader terms of municipal laws over any kind of facility. For some time, provinces have assigned law-making powers to municipalities through laws that authorize municipal councils to pass local by-laws.
Municipal powers to act are reviewed in greater detail in Part 4, below.
(v) Provincial powers over local or private matters
This provincial power is aligned with several other provincial powers (e.g., local works and undertakings). It authorizes a province to address local matters beyond local works and undertakings.
4. Municipal powers to act
Provinces assign law-making powers to municipalities through legislation that authorizes municipal bylaws. Using the example of Ontario, this Province authorizes municipalities to pass a broad range of bylaws through numerous statutes, principally the Municipal Act, 2001 S.O. 2001, c.25 (“Municipal Act”) and the Planning Act. Ontario modernized the Municipal Act in several stages from 2001 to 2006. The result is a Municipal Act that provides municipal councils with broad powers to pass bylaws through both general “spheres of jurisdiction” and specific provisions (Municipal Act, ss.10, 11). The Planning Act is a specialized statute to address proposed changes to existing land use, including the broad power of municipalities to restrict or permit specific uses of property through zoning bylaws (Planning Act R.S.O. 1990, c.P.13, s.34).
Since 2001, the scope of municipal authority to pass laws relevant to facility approvals has been guided by the decision of the Supreme Court of Canada in 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town)  2 SCR 241. This decision modernized the judicial review of municipal bylaws. The decision focused on a municipal bylaw passed under other municipal legislation that restricted the use of pesticides for a local facility. This case established that a municipal bylaw can be valid and enforceable even where there are applicable provincial or federal laws and even approvals, so long as the bylaw does not conflict with the other laws. The Court also read the text of conflict narrowly, consistent with modern principles of federalism governing federal-provincial conflict set out in the 1982 case of Multiple Access Ltd. v. McCutcheon  2 SCR 161. Thus, there is conflict where it is not possible to comply with all applicable laws at the same time—noting that a more restrictive law does not create conflict as it is possible to comply with the less restrictive and the more restrictive law by meeting the requirements of the more restrictive law. There is also conflict where a law frustrates the purpose of another law, but courts have set out parameters that make this a difficult test to meet.
(i) Municipal zoning powers to locate and approve clean energy facilities
Fast-track permitting reform is likely to be available to municipalities in one of two ways. First, in provinces such as Ontario where municipalities have broad authority to pass bylaws so long as the bylaw is within at least one sphere of municipal jurisdiction, a municipality is likely to have broad powers to implement fast track permitting solely on its own initiative or on the basis of implementing provincial (and/or national) guidance on permitting criteria for new clean energy facilities.
Second, in provinces where municipal law-making powers are limited to more traditional approaches, municipalities will have some power to implement fast track permitting through zoning or similar land use bylaws. Today, municipal zoning bylaws in some form or another regulate the vast majority of land uses within a municipality. The general approach of zoning bylaws is to prohibit all uses except those that are expressly permitted. Nevertheless, a municipality may choose different ways to make lands available for clean energy facilities. For example, a zoning bylaw could make provision for clean energy facilities in several specific zones and then also provide setback requirements from key natural heritage features and/or residential property lines.
Contrary to broad municipal authority, there are also examples of a province choosing to take overarching control over specific classes of facilities subject to municipal zoning. However, the recent example of Ontario’s Green Energy Act reforms illustrates two of the many problems that arise where a province seeks to apply its overarching authority to restrict municipal authority over zoning. In this example, one problem arose from Ontario amending provincial laws to exempt green energy facilities from municipal bylaws, including zoning bylaws. This aspect of the Ontario reforms created broad rural backlash and triggered the opposition of Councils of numerous municipalities. This opposition led to extensive municipal council efforts to get around these restrictions and extensive litigation over the bylaws passed by municipal council (Suncor Energy Products v. Town of Plympton-Wyoming, 2014 ONSC 2934).
The second problem that arose with this Ontario reform is that this Province sought but failed to be comprehensive in prescribing the effects to be studied. Though the reform covered the vast majority of effects, it failed to encompass effects on endangered species, requiring that endangered species issues be regulated separately from the broad, renewable energy facility approval. Thus, the Renewable Energy Approval (REA) process mandated more than one dozen reports, but none required avoidance or even consideration of endangered species habitat. Yet Ontario created a statutory test for appeals to a tribunal that such appeals would be successful if an opponent established “serious and irreversible harm to plant life, animal life or the natural environment” (Environmental Protection Act s.142.1(3)). One opponent then relied on this disconnect between what was studied and the test on appeal to successfully appeal an approval that failed to consider endangered species issues (Prince Edward County Field Naturalists v. Ostrander Point GP Inc., 2015 ONCA 269).
Ultimately, within a decade, this generally successful but flawed provincial approach resulted in a new Ontario government repealing the core of the Green Energy Act and restoring municipal powers.
Learning from this experience in Ontario, it is clearly desirable to consider all reasonable reforms that are likely to provide communities with long-term benefits or incentives to site clean energy facilities so that there is local support, not opposition. A provincial override of local decision-making should thus occur only exceptionally, not as a general policy.
(ii) Municipal power to regulate local effects
There are many reasons why a local municipality may be expected to support new clean energy facilities according to the criteria set out in this paper. Municipalities may standardize their approach to facility support by passing municipal bylaws that address the conditions of support—financial or otherwise—that the neighbours of such facilities share the municipal view of overall benefit to burden.
On the other hand, municipalities may wish to ensure that all clean energy facilities in their territory avoid local features of special significance in the municipality. This paper suggests that municipalities may do this by expanding the meaning of key environmental features within the municipality; however, as noted above in this section, it is essential that any bylaw seeking to depart from broadly applicable national or provincial criteria not frustrate the purpose of a fast track permitting by significantly restricting the locations of clean energy facilities in that municipality.
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