June 12, 2019 / 5:07 PM / 6 months ago

Canada government rejects effort to ease review of major energy and transport projects

CALGARY, Alberta/MONTREAL (Reuters) - Canada’s Liberal government is pressing ahead with a bill that would impose more stringent reviews on major projects like pipelines and interprovincial highways, to the dismay of the nation’s main crude-producing province and the energy industry.

The government late on Tuesday rejected most of the amendments proposed by Conservative senators to dilute the bill, saying the changes ignored environmental concerns.

Prime Minister Justin Trudeau’s Liberal government says Bill C-69 is needed to restore trust in Canada’s environmental approval process for major resource and transportation projects, pointing to protests by green and aboriginal groups that have stalled the construction of oil pipelines.

But opponents say the proposed measures will deter investment in an energy industry already struggling with transport constraints and kill new projects.

The issue is set to feature heavily in an October election that polls suggest the opposition Conservatives could win.

Last week a committee in the upper Senate chamber voted to approve the legislation with almost 200 amendments such as removing the power of the federal environment minister to veto a project and limiting who can participate in review hearings.

In a motion posted late on Tuesday, the government said it would accept 62 amendments and modify 37. Nearly all the proposals from Conservative senators were rejected.

“The Conservative changes would take us backwards, increase polarization and ironically, make it harder to get good projects built,” Environment Minister Catherine McKenna told reporters on Wednesday.

The Liberal-controlled House of Commons will vote on the revisions later on Wednesday. The legislation will then return to the Senate.

Canada holds the world’s third-largest crude oil reserves but has faced years of regulatory delays in getting new export pipelines built. This has resulted in crude that struggles to reach world markets and which trades at a discount to global oil benchmarks.

Jason Kenney, the conservative premier of energy-rich Alberta, repeated a threat to launch a constitutional challenge unless the bill is changed.

“We will make one last appeal to the federal government to listen to employers ... to provincial and territorial governments, and to the Senate of Canada in adopting those constructive amendments,” he told reporters in Montreal.

The bill has been fiercely criticized by the energy industry and the Canadian Energy Pipeline Association said it was “deeply disappointed” the government was rejecting so many amendments.

“If Bill C-69 passes in its current form, it is difficult to imagine that any major new pipeline projects will be proposed or built in the future,” said CEPA President Chris Bloomer.

Some environmental groups praised the motion for preserving many of the safeguards that Trudeau had promised during the 2015 election campaign that brought him to power.

But Andrew Scheer, leader of the federal Conservatives, said the bill would kill Canada’s natural resource sector.

“This is a terrible piece of legislation that needed a complete overhaul if it were in any way to be workable. And so we’re very concerned here that they are dismissing these very important amendments,” he told reporters.

Reporting by Nia Williams in Calgary, Alberta, and Allison Lampert in Montreal; Additional reporting by Kelsey Johnson and David Ljunggren in Ottawa; Editing by Cynthia Osterman and Matthew Lewis

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