July 27, 2016 The Right Honourable Justin Trudeau, P.C., M.P., Prime Minister of Canada, Ottawa Dear Mr. Trudeau, Canada must do its fair share to limit the global temperature increase to 1.5° and at all costs remain well below a 2°C temperature increase as committed in the Paris Agreement. To do this Canada must evaluate the climate risks of all energy infrastructure projects. There is no doubt this will be the foundation of much of the work to modernize the National Energy Board Act (NEBA) and the Canadian Environmental Assessment Act (CEAA). In the meantime, before the new legislation is created and implemented, we request that a interim climate test be applied to all energy infrastructure including pipelines to ensure that Canada meets or exceeds its current Intended Nationally Determined Contribution (INDC). This letter outlines how best to do this using existing policies and process for two of the pipeline projects currently under review. The Climate Test A credible climate test for infrastructure must contain three critical pieces. Demand Scenarios - The climate test must evaluate and deploy global and domestic economic models based on demand scenarios that are consistent with the world’s transition away from fossil fuels. To consider any other scenario would mean Canada is assuming the Paris Agreement will fail. To be a climate leader Canada must plan for success and assume all countries will strive to implement the Paris Agreement and therefore demand will go down as we decarbonize. Upstream Greenhouse Gas (GHG) Assessment - In assessing a project’s upstream and direct greenhouse gas emissions under the interim measures for pipeline review, decision-makers should evaluate the greenhouse gas emissions associated with a pipeline, as well as the impact of those emissions on national and international efforts to decarbonize. The government should be able to show how they plan to meet their targets in the medium and long term given energy infrastructure decisions made today.

Downstream Economic Assessment - The long-term economic viability of a new project must be established within the context of global energy scenarios that are consistent with international climate goals limiting temperature change to 1.5° and at all costs remain well below a 2°C temperature increase as committed in the Paris Agreement. This will ensure that Canada is taking responsibility for downstream GHGs by ensuring the energy infrastructure is in line with a declining demand. Applying the climate test The time to apply the climate test is now. Your government has committed to restoring credibility to the environmental assessment process. Comprehensive reforms to Canada’s environmental assessment regimes are now underway, however Ministers Carr and McKenna announced in January an interim process for projects currently going through an environmental assessment. The Government of Canada must use existing policies and assessment tools to apply an effective interim climate test to pipeline projects going through this transition process. As laid out in the transition process, Environment and Climate Change Canada (ECCC) has developed an upstream GHG analysis methodology. Many environmental law and policy organizations have filed commentary on the proposed upstream methodology with ECCC – but have yet to be informed how this advice might be integrated into future applications of the upstream GHG test. Until the upstream GHG methodology is improved, the below signed ENGOs believe the upstream GHG principle is incomplete. Paramount to this is ensuring that the upstream GHG analysis is based on global demand scenarios that are consistent with international climate commitments. Meanwhile, the NEB is required to provide a report to Cabinet that takes into account the present and future public convenience and necessity of the project under review, including the economic need for a project. The NEBA provides the opportunity for the NEB to look at a wide range of issues in review, including (but not limited to): 1. the availability of oil, gas or any other commodity to the pipeline; 2. the existence of markets, actual or potential; 3. the economic feasibility of the pipeline. The NEB should be mandated to include in its economic needs assessment a climate test that reflects Canada and the rest of the world committing to effectively decarbonize by 2050. This means modeling whether the project is

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economically viable in a world that is moving away from oil in the next 34 years, especially when the business plan for a pipeline considers a 50-60 year life expectancy. The importance of this long-term obligation is underscored by wording of the NEBA that requires consideration of not only the present, but also the future public convenience and necessity. In that context, it is critical that a meaningful climate test / GHG assessment be undertaken that consider the urgent need for real emissions reductions both now and in the future. Using both the upstream GHG analysis mandated in the Transition Process and updated to reflect methodological changes recommended by expert commenters, and the need and necessity requirements of the NEB legislation, a rigorous climate test could be applied immediately and provide Cabinet with the information it needs to make an informed decision on the approval of energy infrastructure while meeting Canada’s international climate agreements. Based on the climate test we recommend the following: Kinder Morgan Trans Mountain Expansion The upstream GHG analysis of this pipeline has been completed and while this is a good first step, the analysis has some substantial flaws including: • Fails to limit the economic assessment of the project to fossil fuel demand scenarios in which Paris climate commitments are achieved. • Without sufficient evidence, decouples increased pipeline capacity from tar sands expansion, assuming that expansion will happen with or without increased pipeline capacity. • Presents a series of GHG scenarios without any definitive analysis for consideration by the Minister. Further, does not provide criteria for Cabinet consideration when rendering their final decision on the project. Most of the NEB assessment was completed before the Paris Agreement was signed and as such the NEB assessment did not reflect a demand scenario in which Canada and the rest of the world are committing to effectively decarbonize by 2050. As a result the current NEB report is incomplete and does not provide Cabinet with the information they need to make an informed decision on this project. Based on this we recommend the following actions be taken: • Cabinet be provided with clear direction on how to consider the upstream GHG analysis through the lens of the global economic transition away from high-carbon fossil fuels.

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Exclude from the final report to Cabinet those portions of the upstream GHG analysis that assume the global demand for oil will not decline and the Paris Agreement will not be met. Immediately commission an external analysis that examines the economic viability of the Kinder Morgan pipeline in the context of global energy supply and demand scenarios consistent with international climate goals. This analysis must be submitted to Cabinet and be considered along with the NEB report, the upstream GHG analysis (revised to reflect only global supply and demand scenarios consistent with international climate goals), and the report from the Panel on the public engagement process.

Trans Canada Energy East Pipeline The GHG analysis for Energy East is currently being done by ECCC. However it is unclear if the concerns with the methodology have been addressed. Failure to adequately respond to the feedback provided on the methodology will result in a lack of confidence in the results. The NEB has not indicated that they will request an economic analysis of the project in a climate-constrained economy. The review process is just getting underway and the Hearing Order has recently been released publically. With the review process still in its early stages, there is time to bring it into line with Canada’s international commitments. Based on this we recommend the following actions be taken: • The Government of Canada should ensure that ECCC address the deficiencies in the upstream GHG analysis. • The Government of Canada should inform the NEB that they require a needs assessment that determines the economic viability of the project in a world striving to limit the global temperature increase to 1.5°. • If the NEB fails to produce this economic viability analysis, the Government of Canada should commission their own analysis that should be provided to Cabinet along with the upstream GHG analysis and the NEB final report. The review processes on the Energy East and Kinder Morgan pipelines are moving very quickly and we are very concerned that Cabinet will be ill equipped to make decisions that ensure Canada is the climate leader we are positioned to be. Can you please let us know if you will apply the recommendations laid out in this letter to ensure a real and effective climate test is applied on current pipeline proposals? Please let us know what steps you will take to ensure Canada is taking action to ensure energy infrastructure approvals are in line with Canada’s commitments in the Paris Agreement.

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In conclusion, the recommendations above are a hybrid solution to a real and significant problem – aligning the review of energy infrastructure with Canada’s domestic and international climate commitments. The current review of the Canadian Environmental Assessment Act and the National Energy Board Act provides the means and the opportunity for the government to hardwire a climate test into Canada’s environmental assessment process that is more rigorous and more easily administered than the recommendations above. This is an essential step to ensure Canada is evaluating projects that support decarbonizing the economy by 2050, and ultimately meeting the Paris Agreement goals. We look forward to the opportunity to engage in designing new environmental assessment legislation that reflects the new carbon constrained world in which we are living. Sincerely, Aurore Fauret, 350.org Marie Durand , Alerte Pétrole Rive Sud Andre Belisle , AQLPA Ruth Walmsley, BROKE-Burnaby Residents Opposing Kinder Morgan Expansion Karine Peloffy, Centre Quebecois du Droit de l'Environment Réal Bergeron, Coalition Vigilance Oléoducs Abdul Piran, Council of Canadians, Montreal Chapter D. Cayley-Daoust, Council of Canadians Martine Chatelain, Eau Secours Stephan Thomas, Ecology Action Centre Graham Saul, Ecology Ottawa Tim Grey, Environmental Defence Catherine Gauthier, ENvironnement JEUnesse Steven Guilbeault, Equiterre Katie Harrison, Force of Nature Alexandra Woodsworth, Georgia Strait Alliance Keith Stewart, Greenpeace Rodrigo Samayoa, Leadnow Karen Wristen, Living Oceans Society Alex Paterson , Manitoba Energy Justice Coalition Martin Poirier, NON à une marée noire dans le Saint-Laurent Janice Edmonds, NOPE -North Shore No Pipeline Expansion Anthony Swift, NRDC Andrée Chartier, Regroupement citoyen contre les bitumineux et pour le développement durable

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Carole Dupuis, Regroupement vigilance hydrocarbures Québec (RVHQ) Caitlyn Vernon, Sierra Club BC Sven Biggs, Stand Anne-Céline Guyon, Stop Oleoduc Ben West, Tanker Free BC Teika Newton, Transition Initaitive Kenora Blaise Rémillard, Villeray en transition Andrew Gage, West Coast Environmental Law Association Peter McCartney, Wilderness Committee Please address your response to: Teika Newton Transition Initiative Kenora Site 155 C32 RR1 Kenora, ON P9N 3W7 Cc The Honourable Catherine McKenna, Minister, Environment and Climate Change The Honourable Jim Carr, Minister, Natural Resources Canada



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