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Chapter 5
Procedures to Apply the No Net Loss Principle

The guiding principle of no net loss signals a renewed effort by the Department of Fisheries and Oceans to ensure that the social and economic benefits, generated for Canadians by the productive capacity of fish habitats and the fisheries resources they support, are maintained over time. Application of the guiding principle would not mean that all proposed works and undertakings in or near water would have to be stopped, or that unreasonable demands would be imposed on their design, construction and operation. For example, liquid wastes would continue to be discharged into Canada's fisheries waters after suitable treatment to control harmful effects; marinas and port developments would proceed using acceptable locations and designs; and mineral exploitation and many land and water use practices would take place under environmental controls designed to protect fish habitats. As a matter of good practice however, each development, whether major or minor, will be evaluated in the planning phase, using an existing process when possible, to determine if its impact on fish habitat would reduce the capability of that habitat to sustain fisheries resources. Should it be determined that the proposed development would result in a loss of productive fish habitat, the Department would review the measures required to achieve no net loss, pursuant to the hierarchy of preferences as follows.

5.1 Hierarchy of Preferences

Fisheries management objectives and plans, where available, will be a major consideration for the Department in deciding where to apply this guiding principle and what offsetting proposals would be acceptable to achieve no net loss. For example, in some circumstances it may be possible for the Department to meet its management objectives by applying the principle on a fish stock-specific basis. The preferences that follow refer to those circumstances. In other cases, such as for the management of species that are resident in lakes, the principle may be applied on the basis of achieving no net loss within a geographic area, as described in paragraph five of Section 2.2.1.

When the fishery resource and its supporting habitat are put at risk by a proposed development project or activity, the Department will be guided by the following hierarchy of preferences to achieve no net loss of productive capacity.

1. For the application of the no net loss principle, the first preference of the Department will be to maintain without disruption the natural productive capacity of the habitat(s) in question by avoiding any loss or harmful alteration at the site of the proposed project or activity. This will be especially important where local communities rely on specific fisheries stocks. It may be achieved by encouraging the proponent to redesign the project, to select an alternate site, or to mitigate potential damages using other reliable techniques, such as by installing adequate pollution control equipment.
2. Only after it proves impossible or impractical to maintain the same level of habitat productive capacity using the approaches outlined above would the Department accede to the exploration of compensatory options. First of all, the possibilities for like-for-like compensation should be assessed; that is replacing natural habitat at or near the site. Should this not be feasible, then secondly it might be possible to consider either moving off-site with the replacement habitat, or increasing the productivity of existing habitat for the affected stock, if reliable techniques are available. Compensation options will not be possible as a means of dealing with chemical pollution and contamination problems; reliable control techniques must be installed and operated to mitigate such problems from the outset.
3. In those rare cases where it is not technically feasible to avoid potential damage to habitats, or to compensate for the habitat itself, the Department would consider proposals to compensate in the form of artificial production to supplement the fishery resource, provided the following conditions are met:
   1. such a solution will be in accordance with the objectives established in the local fisheries management plan, assuming one is available;
   2. genetic and other biological factors are satisfied; and,
   3. practical and proven techniques are available.
4. The costs associated with providing facilities or undertaking measures to mitigate and compensate for potential damages to the fisheries resource will be the responsibility of proponents, as will the costs to operate and maintain such facilities.

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5.2 Procedural Steps for No Net Loss

To apply the no net loss guiding principle and achieve the habitat conservation goal, the Department will, through inter-agency cooperative arrangements, use established project referral systems and environmental and energy assessment and review procedures, wherever possible. The Department will generally conduct its reviews in accordance with the following six steps (Figure 2), recognizing that more time and effort will be required to complete Steps II, III and V for larger projects.

Step I - Notification:

Information and requests for departmental approval of works or undertakings in or near the water will come to the attention of the Department in the following ways: (a) through established interagency referral systems, (b) inquiries from the proponent, (c) inquiries from concerned citizens, (d) public announcement of the project and (e) in response to requests from the Department of Fisheries and Oceans to proponents for information about their projects. The majority of notifications come to the Department's attention through inter- agency referral mechanisms. These mechanisms have proved to be very effective in the past and the Department intends to continue using them.

Step II - Examination:

Once information on a proposal is received, the Department undertakes an examination of the potential implications of the work or undertaking to the fisheries resource. For chemical hazards, information is needed on the physico-chemical properties of the suspect chemical and its by-products, its toxicity and pathology to fish, and the routes and rates of entry into the natural environment. For minor projects involving physical activities (e.g., salmon stream crossings) which disrupt important fish habitat, Fishery Officers and fish habitat management staff will assist operators to the extent feasible in identifying the biological impacts of the work or undertaking and will make a biological assessment of the requirements necessary to meet fisheries operational objectives. For major projects, obtaining and presenting relevant information on the project or the chemical compounds involved, and on the fish habitat that is likely to be affected, is the responsibility of the proponent under Section 37(l) of the Act. This step will take varying amounts of time to complete, depending on the size of the project, and it will be in the interest of proponents to provide assessments on a timely basis. Staff of the Department will assess the information obtained and if necessary visit the site and undertake studies to complete their assessments. As part of the examination step, the hierarchy of preferences (outlined in Section 5.1 of this chapter) will be used to guide both the Department and proponents; the amount of detail and time required will depend again on the size of the work or undertaking, and its potential impact on fish habitats.

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Step III - Public Consultation:

The Department recognizes the need to provide opportunities for public review and input to decisions on developments that have broad social, economic or environmental implications. More information on the Department's approach to public consultation may be found in Section 4.4 of this policy.

In the case of major development projects, where avoidance of habitat loss or damage is not feasible, and where mitigation and compensation measures cannot be implemented to fully avoid losses to the productive capacity of habitats, and particularly where special regulations to allow the project to proceed are contemplated under the Fisheries Act, no decision to proceed with the project in question will be taken by the Minister of Fisheries and Oceans without public consultation and a thorough review and assessment of all factors.

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Step IV - Decision:

Following its examination of the proposed work or undertaking and the results of any public consultation, the Department will decide whether the project is likely to result in a net loss of productive habitat capacity. If a loss is likely, the Department will then have to decide if the proponent's plans to mitigate and compensate are acceptable. In cases involving chemical hazards, adverse effects must be controlled by mitigation measures to avoid potential damage to the productive capacity of fish habitats. For those cases, compensation in-kind is not an acceptable option.

The Department will give due consideration to the economic benefits and costs associated with the development of alternative solutions to achieve no net loss of productive capacity.

Depending on the outcome of the Department's deliberations, it could decide directly, or through a recommendation to the Minister in cases involving major development projects; as follows:

1. to permit the proposal to proceed as proposed (no harm expected to the productive capacity of fish habitat);
2. to permit the proposal to proceed with fixed conditions (often with respect to schedule, methods, equipment, environmental control and mitigation measures, compensation, follow-up monitoring, possible need for corrective adjustments by proponent after start-up, the training of company personnel, and other conditions); or
3. to reject the proposal (potential losses to the fisheries judged unacceptable).

Any changes to the original conditions of approval will be negotiated between the Department and the proponent.

In cases where the Department has to advise a proponent that the work or undertaking is unacceptable, the Department will present information to support the following conclusions:

1. that despite the best efforts to control adverse effects, unacceptable net loss of habitat will take place if the project proceeds;
2. that this potential loss of habitat will cause demonstrable harm to fisheries resources; or
3. that there is an unacceptable level of uncertainty involved in forecasting the potential effects on fish habitats and the fisheries resources.

Appeals:

1. Should any person feel aggrieved by a habitat related decision made by departmental staff, that person may at any time request a review of the decision by senior management levels within the Department, including Regional Directors-General, the Deputy Minister or by the Minister of Fisheries and Oceans.
2. Should any proponent or interested party feel aggrieved by the decision-making process an appeal may be made to senior management levels within the Department or to the Minister.
3. In the event of an unresolved dispute regarding a major development project, the Minister may agree to refer the project to an independent body or panel for study and recommendations.

Step V - Audit:

As explained in Section 4.8 of this policy, compliance monitoring and effectiveness evaluation are important components of habitat management policy.

Step VI - Enforcement:

The Department will enforce the legislation for which the Minister of Fisheries and Oceans is accountable, using trained personnel, as explained in Section 4.1.

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