Final Report

Submitted To:
The Canadian Environmental Assessment Agency

Submitted By:
RIAS Inc. and Gartner Lee Limited

September 2000

Background and Purpose

It has been five years since the Canadian Environmental Assessment Act (CEAA) was passed into law. Section 72(1) of the Act requires that a comprehensive review of the provisions and operation of the Act be undertaken by the Minister at this time. The five-year review is now underway and the Ministry is required to report to Parliament by January 1, 2001 on the review.

Competitiveness has always been an important consideration in designing the Canadian Environmental Assessment (EA) regime. Canada must compete internationally for investment and Canadian firms must be able to market and sell their products and services internationally. EA regimes, along with the many other elements of a society's policy mix and practical realities, have a role to play in ensuring appropriate competitiveness.

• the impacts of national EA regimes on national competitiveness for industrial investment;
• the effect of national EA regimes on the ability of a country's firms to compete in international bidding and tendering processes; and,
• the impact of national EA regimes on the price of the subsequent product or service.

The results of this analysis will be used in the ongoing work of the Agency and other government departments, and will also contribute to the five-year review of the Act. We point out that this project was intended to compare national EA regimes from the narrow perspective of competitiveness only. Clearly, a nation would consider many other perspectives such as sustainability, social justice and equity and others, in designing its EA regime. Competitiveness is an important perspective, but it is not the only one.

We carried out two tasks to prepare the assessment:

• a comparison of key features of the EA regime of Canada with the EA regimes of eight of its major competitor nations (the US, the UK, Germany, France, Italy, Australia, Japan and Chile); and,
• interviews with representatives of a selected set of multinational firms that are subject to EA regimes in these countries.

Early on in the research, it became evident that Canadian businesses that exported capital goods (power equipment, etc.) using export credit wished to make their views known on the possibility of having to meet new Canadian EA requirements prior to obtaining such credits. These companies had issues that were quite different from the main thrust of this work. The research program was adapted to include a representative set of these firms and the result of that research is presented here also.

Report Format

The remainder of this report contains four sections, as follows.

Section 3. Scope, Definitions and Key Features of Methodology

Summarizes the main scoping decisions that guided our work, technical definitions of terms such as "competitiveness" and the key features of the methodology that we used in each of the two main tasks. This technical material is important to understand the strengths and limitations of the research that we have carried out.

Section 4. The Umbrella Comparison of National EA Regimes

Compares the national EA regimes of the selected countries in terms of a set of 15 key features of approaches to environmental assessments of industrial projects. This comparison highlights the differences and similarities between Canada's EA approach, and the approaches of the selected eight competitor nations. These key features are then used to explain the results of the competitiveness research with the multinational corporations.

Section 5. Research with Multinational Corporations

Presents the results of our interview program with selected multinational corporations in the fields of forestry, mining, energy, chemicals, manufacturing, consulting engineering and others. We identify first the primary decision factors that determine how these corporations make their investments and then discuss the role of EA regimes in the corporations' decisions to invest in the 9 selected countries. We also explore the impacts of national EA regimes on several measures of industry competitiveness, and the extent to which national EA regimes correspond or conflict with normal business practices. The findings on the export credit issue are presented here also.

Section 6. Key Findings and Conclusions

Summarizes the findings and conclusions about the comparative assessment of Canada's national EA regime on both the national competitiveness of Canada for industrial investment, and the post-EA industrial competitiveness of these firms that are subjected to national EAs. The key features of Canada's current EA approach, from the perspectives of these multinationals' representatives, are identified and discussed. We also identify some possible topics for further research.

A set of appendices, bound separately, contains supporting technical material.