How to Restore Public Trust and Credibility at the National Energy Board

In November 2016 Natural Resources Minister Jim Carr struck an expert panel to conduct a public review of the NEB in an effort to “position the NEB as a modern, efficient, and effective energy regulator” to regain the board’s public credibility and trust that has eroded over the past decade. This Commentary looks at whether the NEB is “broken” by evaluating its performance against six recognized attributes of an effective and efficient regulator, including: independence, conflict-of-interest protection, transparent and inclusive processes, performance management and adaptability, capacity, and enabling factors. As a result, the Commentary makes 23 recommendations intended to assist the NEB, as well as the federal government, in improving the effectiveness and efficiency of federal energy regulation in Canada. Among the key recommendations: The federal government should restore the independence of the NEB’s decisionmaking authority for pipeline applications, eliminating political overrides of NEB decisions except via courts. To keep the review process timely, review participants should be limited to those directly affected or have relevant expertise related to the project under review. However, the federal government should rescind the onesize-fits-all time-limit requirements on NEB reviews and instead require each panel to determine the timeline for each review. NEB hearings are also not the appropriate venue for ongoing engagement with local and Aboriginal communities. The government should implement such a mechanism outside of the formal hearing process. To reduce the perception of a conflict of interest, the NEB should review its staff Code of Conduct to ensure it covers all situations potentially creating a conflict of interest. Ottawa should also make sure that the NEB has the capacity to attract the best candidates for its needs and that it transparently evaluates its overarching regulatory goals. Lastly, the government should more clearly articulate how it defines the broader public interest that the NEB strives to achieve in its regulatory process. It is in the shared interest of all Canadians to have trust in institutions whose decisions will shape the next steps in Canada’s energy future. The work of a regulator such as the NEB is difficult, complex and often thankless. Effective and efficient regulatory institutions are a necessary part of a functioning democracy. While regulators are not elected officials, they do the work delegated to them by elected politicians. Ideally, a policy framework should guide their decisions. For the NEB to function as an effective and efficient regulator, its recommendations and decisions need to be guided by a transparent policy framework for energy development that is reconciled with the many other aspects of the public interest. The path to this framework will not be easy and not everyone will agree on the outcomes. However, the work is necessary to re-establish the NEB as a credible, effective and efficient energy regulator.