Letter to the Office of the Commissioner of the Environment and Sustainable Development - December 12, 2016

Julie Gelfand                                                                                                                                            
Commissioner of the Environment and Sustainable Development                                                                
Office of the Auditor General of Canada                                                                                                               
240 Sparks Street                                                                                                                                                
Ottawa, Ontario                                                                                                                                                        
K1A 0G6

Dear Ms. Gelfand:

The National Energy Board (NEB) has made significant and meaningful strides toward transformation since the Office of the Commissioner of the Environment and Sustainable Development (CESD) issued its fall 2015 Audit of Pipeline Oversight.

We wish to notify you, as well as all Canadians, that the NEB will have completed all 22 audit recommendations as of 31 December 2016, less than 12 months after your report was tabled in Parliament. Further details can be found in the attached Tracking Table.

On 29 November 2016, the Auditor General, Michael Ferguson, tabled several reports where he noted government agencies are not listening to feedback from audits and failing to modernize and improve the delivery of their programs to Canadians.  We trust he will be pleased to find out that the NEB has gone beyond the commitments it made in its Corrective Action Plan (CAP), and has made significant and meaningful strides towards transformation since the CESD issued its fall 2015 Audit of Pipeline Oversight.  We have taken significant and meaningful actions to directly enhance the delivery of energy information to Canadians.

Corrective Action Plan Completed

As you know, oversight of company compliance with conditions following project approval, and overall monitoring of pipeline regulatory compliance, are a cornerstone of the NEB’s mandate. We take these responsibilities seriously and have updated our processes for monitoring, tracking and systematically documenting company compliance with conditions.

The Audit spoke to the need for making information on condition compliance and on pipeline regulatory compliance available to Canadians in a user-friendly manner.  We agreed, and much of our recent work has focused on making this a reality.  Below are some highlights of our efforts:

  • A table of company conditions and their respective status was posted on our website less than one month after the Audit report was tabled. In September 2016 this table was updated to include a ‘search’ function to assist Canadians with finding specific information.
  • A gap analysis of documents related to conditions in our table was conducted, and we have updated the information in our electronic system.
  • We have increased public access to non-compliances found by our field inspectors, and we are posting inspection reports and associated non-compliances on-line.  NEB Inspection Reports have been publicly available online in both official languages since September 2015. 
  • We launched a new system, and equipped our inspectors with new technology to better enable collection, extraction and reporting of information on our website more efficiently.
  • We have developed a plan for an extensive overhaul of our electronic systems related to condition compliance oversight work that will facilitate efficient collection, analysis and external reporting of a wide range of condition compliance information.
  • We updated our Strategic Emergency Management Plan (SEMP), and consolidated our risk assessment activities to prepare for implementation of the Pipeline Safety Act (June 2016). This was reviewed and well received by Public Safety Canada.
  • We hired 18 additional technical staff and will continue to recruit and train more technical staff in the coming year. 
  • Your auditors noted that our online regulatory document index was very complex and difficult to navigate.  As of 31 December 2016, we will have completed a project to greatly simplify and improve Canadians’ ability to find regulatory documents for each project proposal that we assess, including detailed filings related to the status of the project conditions and compliance.

Additional improvements of the NEB’s service to Canadians that extend beyond the audit observations include:

We were not satisfied with simply implementing the commitments in our CAP.  The NEB considered the spirit and intent of the audit and chose to go above and beyond the recommendations you made in the Audit has completed a series of complex change initiatives to enhance regulatory practices in exceedance of our CAP commitments. For example, in April the NEB issued Board Order MO-006-2016 that required NEB-regulated pipeline companies to publish emergency procedures manuals online for public viewing by September 30, 2016. This initiative is unprecedented in North America.

  • As of 31 December 2016 all company emergency procedures manuals will have been reviewed by the NEB.
  • We have simplified and clarified access for whistleblowers to contact the NEB by developing a world-class Confidential Disclosure program and policy.
  • We have launched a leading edge online visualization tool; clarifying complex energy supply and demand information and making it easy to understand.
  • We have introduced a number of updates to our website www.neb-one.gc.ca to improve how we share data and information with Canadians. These updates include enhanced lifecycle project information pages, a new Emergency Management section, a new Safety Information Portal, a new Resource Centre, and a new Data Hub.
  • The NEB has internally re-organized: to provide centralized support for the construction compliance phase of both the Line 3 and TMX projects, as well as to focus on our Departmental Results Framework via company and system-wide data trending and analysis that will drive greater transparency and assurance for Canadians that the NEB delivers on its results and performance.
  •  The NEB has listened to the feedback received from the open comment process it held on compelling companies to post their emergency management program information online and will consider taking additional measures on this matter in 2017. These measures would be in addition to the company emergency procedures manuals which were posted online by 30 September 2016.

As a learning organization, our transformational efforts are ongoing.  The NEB will continue to strive toward regulatory excellence in everything we do.  We trust that this letter and the attached Tracking Table will close the audit, and that any questions you receive in the future on the NEB “doing its job”, as it relates to this audit, will acknowledge the progress we have made.

Yours sincerely,

C. Peter Watson, P.Eng., FCAE
Chair and CEO 

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