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Policy, Politics and Regulation - The NEB's Perspective - 7 May 2013 [PDF 1794 KB]

Policy, Politics and Regulation - The NEB's Perspective

From top to bottom: Pipeline, wind turbines, and man in field with laptop computer

Gaétan Caron
Chair and CEO
National Energy Board



Presentation to the Canadian Association of Members
of Public Utility Tribunals



7 May 2013


Slide 1 speaking notes (click to view)

Note: Panelists have been asked to address the following questions:

  1. To what extent do politics play a role in determining policy or the mandate of the regulator?
  2. How should government, regulators and industry navigate through the interaction among policy, politics and regulation?
  3. In this context, what does independence of the regulator really mean?

Key Messages:

  • Thank you for the opportunity to discuss the interaction among policy, politics and regulation. I am offering the perspectives of the National Energy Board, based on our history, our enabling legislation, and our practices.


Achieving Public Interest Outcomes

Environmental, social and economic


Slide 2 speaking notes (click to view)
  • Our legislation requires that we integrate all the relevant social, economic and environmental considerations related to the specific infrastructure project when making a decision or recommendation to the Government. The integration of these three factors is at the heart of achieving public interest outcomes.
  • This is a good opportunity to underscore that the NEB’s role does not stop after the review of a project application is complete. We regulate over the complete life-cycle of a project. When projects are being built, we inspect. When projects are being operated, we audit. And when a project has reached the end of its usefulness, we review abandonment applications so that a pipeline is abandoned in a safe manner.
  • Safety and environmental protection are key aspects of the NEB’s approach. The NEB takes all available actions to protect the environment and the public. We require the oil and gas industry to anticipate, prevent, manage and mitigate potentially dangerous conditions associated with their activities.


Policy and Politics

Parliament building in Ottawa
Parliament building in Ottawa


Slide 3 speaking notes (click to view)
  • Politics, policy and public opinion are part of the environment in which the NEB, and many other regulators, operate. In this environment, it is important to remain true to the Board’s mandate, as set by Parliament, to regulate in the Canadian public interest. In order to do this, the NEB must maintain public confidence in the fairness of its decisions by remaining independent from government, industry and public opinion.
  • NEB regulation is about specific projects, whereas public policy is typically about much broader objectives at the societal level. Since the NEB makes project specific determinations or recommendations, it naturally works in a different sphere than government policy. Given this role, the NEB does not involve itself in telling policy-makers what public policy to adopt.
  • Like other tribunals, what we have is a degree of independence. We do not decide our own budget nor do we appoint our own Board members. We must also follow the laws of the land, such as the Financial Administration Act, and the Public Service Employment Act.
  • The NEB is held to account by Canadian society through parliamentary processes and, as far as NEB administration is concerned, by the Central Agencies of Government.


Policy and Politics (cont.)

Logos: top left: Jobs, Growth and Long-term Prosperity, top right: Responsible Resource Development, bottom left: National Energy Board Coat of Arms, bottom right: Economic Action Plan 2012


Slide 4 speaking notes (click to view)
  • Recent changes approved by Parliament through the Jobs, Growth and Long-term Prosperity Act (also referred to as Bill C-38) help to illustrate the role of the regulator vis-à-vis politics and policy.
  • For example, the changes contained in amendments to Part VI of the National Energy Board Act affecting the NEB’s review of oil and gas export applications change the Board’s role with respect to these reviews. Under the revised legislation, the Board, in reviewing these applications, can now only consider whether the quantity to be exported is surplus to reasonably foreseeable Canadian requirements. Previously, in the context of these reviews, the Board could consider any matter that appeared to the NEB to be relevant.
  • Other changes in C-38 augmented the Board’s powers, for example, by providing the NEB with a new authority to levy Administrative Monetary Penalties (AMPs). AMPs are a new tool in our enforcement “toolkit” to promote safety and help safeguard the environment.
  • Finally, I would be remiss not to point out that under the new legislation, Parliament made it clear that it expects the NEB to undertake its activities effectively and efficiently. The amended NEB Act now puts a 15 month maximum time limit on the review of a facility application.
  • These examples demonstrate that politics and policy do matter, as they are the means by which the mandates and roles of regulators are set.


Industry and Public Opinion

Values and Ethics Code for the Public Sector - Code of Conduct for National Energy Board Employees - January 2009
Evolving public opinion
Evolving public opinion


Slide 5 speaking notes (click to view)
  • In dealing with industry and the public, the Board and its staff must not only be free from bias, but be perceived to be free from bias. This is ensured by an array of explicit conflict of interest requirements, the Code of Conduct for NEB staff, and prohibitions for Board staff to invest or hold shares in energy companies. And in the case of Board members, the provisions of the Conflict of Interest Act and its prohibition to invest or hold shares in any company. In addition, among other things, we have clear guidelines on meetings with external parties, requirements to prepare and make available meeting minutes, and a requirement that decisions or recommendations are based on evidence on the public record of the procedure.
  • A quasi-judicial regulatory body like the NEB must not consider support or opposition with respect to matters before it when they are expressed outside the hearing process. A Board hearing must not become a popularity contest. At the same time, the Board must make its decisions and recommendations in the Canadian public interest. We define the public interest at the NEB, in our Strategic Plan:
    • The public interest is inclusive of all Canadians and refers to a balance of economic, environmental and social considerations that changes as society’s values and preferences evolve over time.
  • The regulator must be aware of society’s values and preferences as they evolve over time. We gain this understanding through our ongoing public engagement activities. We also do that by listening to Canadians when they appear before us in a public hearing. The NEB is an expert tribunal with its own knowledge gained through its ongoing interactions with society. The greatest relevance for the NEB in the context of a hearing is the questions, viewpoints, evidence or submissions we receive, and their persuasiveness.


In Conclusion…

From left to right: NEB personnel next to NEB offices; NEB personnel in meeting; NEB inspectors


Slide 6 speaking notes (click to view)
  • In conclusion,
    • Policy and politics play an important role since it is the policy-development and political processes that result in the mandate and powers of a regulator, and any subsequent updates to them.
    • For regulators, a solid understanding of the organization’s mandate and legal parameters (for example, the acts and regulations under which it operates) is the best way to navigate through the interaction among policy, politics and regulation.
    • A regulator’s independence rests on its ability to resist any attempt to influence its independent judgment in exercising its mandate outside of the proper means, such as public hearings and ongoing public engagement activities.


Thank you

National Energy Board Offices in Calgary

Contact Us:


National Energy Board
444 Seventh Avenue SW
Calgary, AB
T2P 0X8

Toll free 1-800-899-1265


Slide 7 speaking notes (click to view)

Thank you. I look forward to the panel discussion.

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