2015 Year in Review: Top 10 Legislative, Regulatory and Policy
Changes of Import to the Canadian Oil and Gas Industry
In 2015 politics drove policy. With new federal and Alberta governments, last year ushered in unprecedented changes for the Canadian oil and gas industry. There is more to come. Greenhouse gas regulation and a revised royalty regime are poised to be two of the sector's leading business challenges in 2016 – along with stubbornly low price – as energy companies determine the impact to their bottom lines.

There are significant transitions happening to Canada's energy economy. Pipelines remain elusive. M&A activity is nascent and waiting for further price and policy clarity. International oil supply, buoyed by an end of year U.S. policy shift to permit crude exports, continues to be robust. Green energy and renewable sources will play a larger role in the country's energy mix. As the year progresses, companies with strong balance sheets and a low cost of capital are likely to be some of the biggest winners in 2016.

Canada's oil and gas sector looks ahead to not only the implementation of provincial carbon initiatives, but also the federal government pursuing its own climate change agenda. Read the full article by Alan Ross, Michael A. Marion, Michael G. Massicotte, Karen A. Salmon, Rick Williams and Lorelle Binnion of Borden Ladner Gervais LLP. 

Proposed BC Mine Plans to Reduce Water Content in
Waste but Still Use Tailings Dams
KGHM International's proposed Ajax copper and gold project will be one of the first tests of the BC government's approval of waste storage for large open pit mines after the Mount Polley mine dam failure in 2014.

The company, whose parent is Polish company KGHM Polska Miedz SA, plans to submit its project application early this month for review by the BC government. It will kick off an 180-day environmental assessment.

The $795-million project is controversial and has met with community resistance, in part, because of its proximity to Kamloops.

KGHM proposes to reduce water quantities in its mine-waste facility – and entirely buttress the large dams with rock – to increase safety at the planned mine.

However, it will not be using the dry-stacking technique to store mine waste as planned in its initial design. That method recommended by an engineering panel appointed by the BC government to investigate the Mount Polley failure. Read The Vancouver Sun article. 

BC Takes Action on Chief Inspector of Mines' Recommendations
Source: Canadian Occupational Safety Magazine
In response to the findings and recommendations of the chief inspector of mines' investigation into the tailings storage facility at Mount Polley Mine in August 2014, the British Columbia government is introducing new regulations and requirements for tailings storage facilities.

"We've learned from this investigation that in the case of Mount Polley, the allowable margin of risk around the design, construction and management of the tailings storage facility was too narrow to allow for an unknown factor, the layer of unstable soils below the dam embankment," said Energy and Mines Minister Bill Bennett. "We've also learned that weak practices on the mine site increased the risk of dam failure and exacerbated environmental consequences from the breach. This is unacceptable."

The report found, as did the Independent Expert Panel in January 2015, that the dam failed because the strength and location of a layer of clay underneath the dam was not taken into account in the design or in subsequent dam raises. The chief inspector also found other factors including the slope of the perimeter embankment, inadequate water management, insufficient beaches and a sub-excavation at the outside toe of the dam exacerbated the collapse of the dam and the ensuing environmental damage.

While the breach would not have occurred had it not been for the undetected glaciolaucustrine layer of soils, the consequences of the breach were made worse by the other factors, said the government. Although operations on the mine site were not in contravention of any regulation, the chief inspector found the mine failed to operate using best available practices.

The chief inspector of mines investigation team conducted approximately 100 interviews and reviewed over 100,000 pages of documents going back to 1989. This is the largest and most-complex investigation and analysis ever done in BC. Read the Canadian Occupational Safety Magazine article.

BC Mulls Rescue as Miners Struggle
Energy and Mines Minister Bill Bennett rang in 2016 with thoughts of a potential rescue package for BC's beleaguered mining industry on his mind to ward off potential shutdowns.

Options for assistance to mining companies struggling with low commodity prices could include deferrals on payment of power bills and delayed payments on mineral taxes, Bennett said in an interview. There are real potential consequences if the province can't offer any help.

"There's urgency to this," Bennett said. "If we don't find something to do that will help in early January, then by mid-January, I think you're going to see some mining companies go down. You're not going to see bankruptcies, but you're going to see closures, and we're talking about thousands of jobs."

BC mines in 2014 directly employed 9,954 British Columbians, according to the latest industry survey by accounting and consulting firm PwC, down from 10,720 a year earlier. See more here. 

Good Faith Efforts to Understand – Supporting a Balanced Approach to Constitutional and
Procedural Fairness Obligations in Environmental Assessment in British Columbia
From CLEBC website – Practice Points: This paper, authored by Becky Black with the Ministry of Justice reviews the purposes of the environmental assessment ("EA") process and surveys the legal requirements that frame the relationship between the Crown and proponents and the Crown and First Nations. Click here to view a PDF version of the paper.

BC Lumber Trade Delegation to Asia
Encouraged by Response
Climate-change policies could steer China and Japan toward use of more value-added wood products
It sounds a bit contradictory to call the province's recent forestry trade mission to Japan and China a success when British Columbia's lumber shipments into the region are on the slide.

For industry officials, however, the trip at the end of November was about maintaining their presence, even during a slowdown in those countries, and to "move up the value chain" in those markets toward higher-value forest products and away from plain lumber, said industry representative Rick Jeffrey.

In that sense, "it was quite a successful mission," he said. Read The Vancouver Sun article. 

Greater Community Consultation = Better Forestry Decisions
Is your community troubled by mill closures, lay-offs or forest stewardship plans that don't clearly articulate what is actually happening on the ground in your area? If yes, then the UBCM's Community Economic Development (CED) Committee wants to hear from you. Please provide feedback by completing UBCM's Forestry Survey.

At the November CED meeting, Councillor Brian Frenkel, UBCM's appointment to the Minister's Forests and Range Practices Advisory Council, advised that the Council is interested in hearing from communities on forest policy matters. Specifically, the Council would like communities to identify what specific policy decisions would be better served by greater community consultation.

Acknowledging that communities are more than just stakeholders, Councillor Frenkel has been advocating to his Advisory Council colleagues for greater community consultation prior to forestry decisions being made. By undertaking the forestry survey, UBCM is seeking to provide Councillor Frenkel with the quantitative and qualitative information necessary to encourage the Advisory Council to respond to local government concerns. Read the UBCM article.

Legal Case Study: The Latest Word from the BC Court of
Appeal on Cost Recovery under the EMA
On November 20, 2015, the British Columbia Court of Appeal issued reasons for judgment in the much-anticipated decision of J.I. Properties Inc. v. PPG Architectural Coatings Canada Ltd., 2015 BCCA 472, the latest major case dealing with key aspects of the cost recovery regime under the Environmental Management Act, S.B.C. 2003, c. 53 (the "EMA"). The plaintiff, J.I. Properties Inc. ("JIP"), obtained judgment against the defendant, PPG Architectural Coatings Canada ("PPG"), in the amount of $4,750.000, respecting the reasonable costs of remediation incurred by JIP in investigating and remediating James Island (the "Property"), located between the Saanich Peninsula and Sidney Island, BC. A detailed summary of the reasons of the trial judge can be found in [the] previous article here. PPG, formerly known as ICI Canada Inc. ("ICI"), owned the Property from 1954 to 1988 and undertook remediation of part of the Property from 1968 to 1988. At the time when ICI undertook its remediation efforts, there were no legislated standards for contaminants in BC. As such, in conjunction with the BC Ministry of Environment (the "Ministry"), ICI and the Ministry collectively agreed on the criteria to apply to its remediation. Following a completion of remediation, ICI obtained a letter from the Ministry confirming that it had remediated to the standards agreed and that no further environmental concerns existed, based on the existing land use (commercial and industrial) (the "Comfort Letter"). A restrictive covenant was registered on title that gave notice to successors in title that portions of the Property were previously used for manufacturing explosives and batching chemicals, and that there was a risk of contamination. Read the full article by Adam Way, Harper Grey LLP and published on the BCEIA website. 

BC Forestry Watchdog Finds Timber Companies
Have Too Much Power
Change recommended so public interest can be protected by district managers
The BC government has given away so much power to timber companies that district forest managers no longer have the authority to stop suspect harvesting practices in the public good, a Forest Practices Board report reveals.

The independent provincial watchdog says that in recent years it has seen "situations arise where forestry development was putting local environmental and community values at risk, yet district managers could do little to affect the development and protect the public interest."

The board adds that "conflicts between resource users could have been avoided if district managers had the authority to intervene to ensure operations would meet local management objectives and respect tenured interests." Read The Vancouver Sun article. 

Environmental Appeal Board Decisions
There were two Environmental Appeal Board decisions released in the month of December:

Environmental Management Act

• Emily Toews; Elisabeth Stannus v. Director, Environmental Management Act [Final Decision – Appeal Dismissed]

Water Act

• Harrison Hydro Project Inc.; Fire Creek Project Limited Partnership; Lamont Creek Project Limited Partnership; Stokke Creek Project Limited Partnership; Tipella Creek Project Limited Partnership; Upper Stave Project Limited Partnership v. Comptroller of Water Rights [Final Decision – Appeals Dismissed]

Visit the Environmental Appeal Board website for more information.