Environmental protections failing to keep up: audit

OTTAWA—Federal environmental protections are struggling to keep up with the fast pace of development in the energy industry, leaving Canada exposed to the risks of oil spills, pollution, and damage to fragile habitat, a new audit says.
Scott Vaughan, Canada’s commissioner of the environment and sustainable development, issued his parting words today after five years in the job—taking a close look at how well Ottawa is managing the significant environmental risks associated with its goal of aggressively promoting resource development.

“Considering the central role of natural resources in today’s Canadian economy, it is critical that environmental protections keep pace with economic development,” Vaughan wrote.
Instead, he found regulators were reeling under changing legislation, confusing lines of responsibility and outdated financial requirements to cover off costs in case of disaster or damage to the environment.
“These shortcomings leave me concerned that environmental protection is failing to keep pace with economic development,” Vaughan said in his report, which noted that the government expects to see $650 billion invested in resource exploration and development over the coming decade.
Specifically, the commissioner found the two Atlantic offshore petroleum boards are not ready to respond to major oil spills—despite a complex array of regulations and procedures.
The government asked Vaughan to audit the offshore boards after the 2010 oil spill in the Gulf of Mexico prompted questions about how Canada would handle a similar situation.
Vaughan found jurisdictional confusion that has led to a lack of co-ordination and significant gaps in the way authorities were monitoring the activities of companies.
“They have not established or updated policies and procedures to guide environmental assessments, and they are not systematically tracking measures to prevent or reduce environmental impacts,” Vaughan wrote.
Plus, the boards—and the handful of federal departments they work with—have not yet figured out how to apply the new environmental assessment regime, which was dramatically overhauled last summer in one of the federal government’s budget omnibus bills.
Vaughan raised similar red flags about the government’s methods of mitigating financial risks stemming from environmental damage.
Liability limits for nuclear accidents or oil spills are decades out of date, he said, leaving taxpayers exposed to huge financial risk if something goes wrong.
For example, companies only would have to cover a maximum of $40 million in damages in case of an offshore spill in the Arctic, or $30 million in the Atlantic Ocean—liabilities that have not changed in a quarter-century and are far lower than other countries.
The clean-up of the 2010 spill in the Gulf of Mexico, for instance, cost $40 billion (U.S.)
In the north, Vaughan is especially concerned that officials with Aboriginal Affairs and Northern Development Canada are not inspecting mining operations to make sure companies are living up to their obligations.
Plus, changes to the Fisheries Act included in last summer’s omnibus bill have left regulators unsure about what kind of compensation plans companies should have in place, the report noted.
At the same time, tanker traffic and marine transportation of oil and gas is soaring.
“These findings, when considered with our concerns regarding preparedness to effectively respond to a major oil spill, show clearly that Canadians are exposed to environmental risks and the financial implications that go with them,” Vaughan warned.