10/28/2011 01:08 EDT | Updated 12/28/2011 05:12 EST

Sugar shacks vs oilsands: environmental agency's role under review

OTTAWA - It has the power to investigate the environmental implications of a sugar-bush expansion or an addition to a parking lot. But rarely can it look at the impact of oilsands operations.

The Canadian Environmental Assessment Agency is the government body tasked with making sure Canada controls any development that would threaten the air, water or earth, or jeopardize plants and animals.

But it is swamped with small projects that eat up precious time and resources, agency president Elaine Feldman said this week.

And its mandate prevents it from assessing the cumulative impact of large projects, or even scratching the surface of much of the work going on in the oilsands.

Now it is being handed more responsibility due to legislative amendments and cost-cutting in other departments.

Its own budget is not growing, and may even shrink unless the government moves to extend programming due to sunset next year.

As it goes through a mandatory review of its role this month and next, there's a push to make it less intrusive in the fast-expanding and profitable world of natural-resource exploitation.

And there's a growing fear that the government's ability to keep an eye on the environment will be compromised in the name of budget cuts and economic development.

"What's happening is that there is a huge upsurge in development projects around the country that require environmental assessment," said Stephen Hazell, a lawyer with a long history of expertise in environmental assessment.

"I think there is a need to re-orient priorities."

But as Parliament considers updating the Environmental Assessment Agency, the rest of government involved in environmental policy is going through a major churn.

Both Environment Canada and Fisheries and Oceans are laying off workers and trimming and redesigning programs — even before the major cost-cutting exercises in store for next year come into effect.

Many of the policy areas taken on by the departments in recent years are being sidelined in favour of a focus on "core" programs.

In a recent memo to employees at the Department of Fisheries and Oceans, for instance, the deputy minister pointed to an off-loading of many of its environmental assessment responsibilities as a way to find savings and meet government-imposed targets for cuts.

"Fisheries and Oceans Canada will improve program management and make better use of technology to improve program delivery, efficiency and effectiveness," deputy minister Claire Dansereau says in a note to staff, pointing to the shift in responsibilities for environmental assessments.

Indeed, while "screenings" of low-risk projects are still mainly done by 40 different government departments and bodies involved in the projects, legislative changes in 2010 made the agency responsible for all higher-risk projects that require "comprehensive studies."

The agency's budget was beefed up in 2007, but Feldman says she does not know how she will be able to keep up with an expected onslaught of work.

She told a parliamentary committee that she expects to be facing new projects worth half-a-billion dollars in the coming years.

"What we're seeing now is the environmental assessment agency does not have the in-house capacity to do the kinds of studies that the experts in the other departments had," said John Bennett, executive director of the Sierra Club of Canada.

He suspects the agency will need to turn to consultants to fill in the knowledge gaps, or just back away from rigorous assessments altogether.

"In the end, it's going to cost lots of money."

At the same time, the agency doesn't have the scope to look at major developments in the oilsands, or to take into account the cumulative impact of development as it examines new projects.

That's because a federal environmental assessment is only triggered if federal money or lands are involved, or if fish habitat is at risk.

The legislation defining the agency is "quaint, arcane, unwieldy ... and a little out of date," says corporate lawyer Paul Cassidy, who deals frequently with the environmental assessment agency, and is frustrated with complexity and lack of resources.

"It needs some serious reworking."

While changes were made in 2009 and again in 2010 to streamline and speed its approvals, the agency is still overloaded with insignificant busywork, Feldman agreed.

Part of the solution is to alleviate the workload and change the Canadian Environmental Assessment Act so the agency can ignore the sugar shacks and focus on major environmental challenges such as climate change, experts say.

"We should be spending more time on federal priorities," Hazell said.