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Canada: the challenges ahead (part 1)

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World Pipelines,

As Canada’s national energy regulator, the National Energy Board (NEB) is mandated to regulate interprovincial and international pipelines. It is also charged with providing information and advice on energy matters.

The NEB is a lifecycle regulator, overseeing the safety and environmental protection of a pipeline project from the application assessment phase, through to construction, operation and eventual abandonment.

This work places the NEB squarely in the midst of the most important public policy debates in Canada, from pipeline safety, to controversial pipeline projects, to the modernisation of the NEB, to the relationship Canada has with Indigenous Peoples. The NEB does this work so that Canadians can count on and have confidence in how it delivers on its mandate – so that the public is safe and the environment is protected.

Regulating energy infrastructure in the 21st century is increasingly challenging. And today, it is believed that the context of energy regulation is more polarised than it has ever been.

In their insightful 2017 report on the issues facing Canada’s energy system entitled, ‘System under Stress: Energy Decision-making in Canada and the Need for Reform’, Michael Cleland and Monica Gattinger point out that the key challenge facing regulators today is low public confidence.

They attribute this challenge to: social, value and technological change; policy gaps in climate change; reconciliation with Indigenous Peoples; and the cumulative effects of energy development.

In the middle of these issues, they say, is the energy regulatory process, which has been called upon to adjudicate on tough policy issues that actually require processes with explicit political accountability.

At the heart of the NEB’s mandate is public interest, which involves balancing society’s environmental, economic and social interests. While having the flexibility to determine that public interest is important, the Board also recognises improvements to the legal framework surrounding its adjudication processes and other issues of material importance.

To that end, it fully supports the government of Canada’s review to modernise the NEB’s role, structure and mandate, and is committed to helping the Government achieve its objectives.

The challenges Cleland and Gattinger identify are system challenges that a regulator cannot resolve on its own. The reviews that government has underway must provide clarity on these key system-wide issues. That clarity, coupled with changes to the NEB Act and the transformation already being pursued, will position the Board properly for the future.

To inject greater resilience into its activities and build trust in the face of a challenging operating context, the NEB went back to first principles: undertaking an ambitious transformation agenda to drive the outcomes of regulatory and management excellence, with its eyes on rebuilding the public trust.

The transformation included an improved internal governance structure and the institution of robust operating practices to better align its resources and activities. This change has allowed the NEB to more effectively deliver on its core responsibilities of safety and environmental oversight, energy project adjudication, engagement and energy information.

Departmental Results Framework

To be a modern regulator, the NEB must report on its performance transparently. This year, it became an early adopter of the government of Canada’s updated Policy on Results, known as the Departmental Results Framework.

The Results Framework outlines the NEB’s four core responsibilities. It also sets a clear direction for the NEB and illustrates exactly what it does, what it aims to achieve and how it will report its outcomes to Canadians.

This framework is the Board’s blueprint for the way forward and is pioneering its use.

Part 2 coming soon!

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