Canada: Divisional Court Overturns Environmental Review Tribunal Decision And Allows Wind Project To Proceed

In an important decision for stakeholders in the Ontario renewable energy industry, the Divisional Court of Ontario overturned the July 2013 decision by the Environmental Review Tribunal (the ERT) in Ostrander Point. In its July 2013 decision, the ERT had, for the first time, revoked a Renewable Energy Approval (REA) issued by the Ontario Ministry of the Environment (MOE) authorizing Ostrander Point GP Inc. (Ostrander) to construct and operate nine wind turbines on a site in Prince Edward County (the Project). The ERT's decision was based solely on its determination that the Project would cause serious and irreversible harm to an endangered species, the Blanding's Turtle, which had been identified in the area. All other grounds of appeal by the Prince Edward County Field Naturalists (PECFN) and the Alliance to Protect Prince Edward County (APPEC), i.e., alleged impacts to human health and to other animal and plant species, had been dismissed.

The ERT's decision was significant in that, of the many appeals to the ERT seeking to overturn the issuance of a REA for a wind farm, it was the first appeal in which a wind project opponent had succeeded in having a REA revoked. The Divisional Court's decision, which overturned the ERT and allowed the REA for the Project to stand, is also significant since it is uncommon for the Divisional Court to weigh in and overturn the ERT given that the ERT is generally seen as an expert body in environmental matters. As such, the ERT is generally granted a high level of deference by courts. In Ostrander Point, the ERT had heard evidence from 31 expert witnesses plus a number of fact witnesses over the course of a 40-day hearing. The ERT's reasons comprised over 120 pages.

Available Appeal Routes from the ERT's REA Decision and the Limited Role of "Fresh Evidence"

Before embarking on deciding the substance of Ostrander's appeal, the Divisional Court first considered and dismissed an application by Ostrander to submit "fresh evidence." Ostrander's proposed fresh evidence dealt with the steps Ostrander had taken, after the ERT's decision, to lease certain property within the Project site from the Ministry of Natural Resources (MNR) in order to allow Ostrander to prohibit public access to the roads in that area. This constituted important evidence, since the ERT's decision revoking Ostrander's REA had been based on the ERT's conclusion that the Project would seriously and irreversibly harm Blanding's Turtles by increasing their mortality rate due to the increased public traffic on Project roads.

In dismissing the application to submit "fresh evidence," the Divisional Court found that Ostrander could have submitted the fresh evidence, with some reasonable diligence, during the ERT hearing;  the issue of the access roads and their possible impact on the Blanding's Turtle had been a live issue before the ERT.

However, the primary reason for dismissing Ostrander's application to submit fresh evidence stemmed from the limited jurisdiction of the Divisional Court on an REA appeal from the ERT. An appellate court, like the Divisional Court in this case, can only receive fresh evidence that is relevant to an issue over which the appellate court has jurisdiction. Once the ERT reaches a decision on an REA, there are two appeal routes set out in s. 145.6 of the Environmental Protection Act: (1) a party may appeal to the Divisional Court "on a question of law"; and/or (2) a party may appeal to the Minister of the Environment "on any matter other than a question of law." As a result, the Divisional Court has no jurisdiction in REA appeals from the ERT to consider questions of fact or questions of mixed fact and law unless they amount to an error of law. Ostrander's evidence of its lease from the MNR was evidence relevant to a question of fact (regarding the public's ability to access the roads on the Project site) over which the Divisional Court had no jurisdiction.

The Divisional Court further commented that Ostrander could not submit new facts that changed the underlying facts behind the ERT's decision, after the ERT's decision had already been made, and then argue that the ERT made a palpable and overriding error in deciding the facts in the way that it did, justifying an appeal.

Ostrander's Appeal – The Test for "Serious and Irreversible Harm" Must Contain a Separate Two-Part Analysis of "Serious" and "Irreversible"

Given that the Project would involve the construction of new roadways within the Project's site, and given the ERT's ruling that road impacts threatened the Blanding's Turtles, the Divisional Court held that it "seems unquestionable from the evidence that was placed before the ERT that there was some risk of serious harm to Blanding's turtle from the Project" and that "it would be difficult to characterize any increase in mortality arising from the Project as anything other than serious."

However, the real issue was "whether that harm was also irreversible." The Project opponent, PECFN, bore the onus of proving that engaging in the Project in accordance with the REA would cause both serious and irreversible harm to plant life, animal life or the natural environment. In this case, the Divisional Court found that PECFN had not proven "irreversible harm" to the Blanding's Turtle.

Specifically, the Divisional Court found that, while the ERT is correct that the test for "serious and irreversible harm" must be interpreted on a case by case basis, this does not excuse the ERT from explaining in its reasons how, in any given case, the test is met or not met. Problematically, the ERT in its decision did not separate out its analysis of the serious harm factor from its analysis of the irreversible harm factor. As a result, the ERT's reasons "do not reveal a separate and intelligible analysis on the issue of irreversible harm" that the Divisional Court could review and the Divisional Court was "left guessing" regarding that analysis.

Ultimately, the Divisional Court found that the ERT was lacking two key pieces of evidence in order to make a finding of "irreversible harm." Firstly, in order to determine whether a species was at risk from the project in question, the ERT needed to know: (1) the population size of the species; and (2) the geographic area that is relevant to that population. In this case, there was no evidence or available data before the ERT as to the size of the population of Blanding's Turtle at the Project site, the general area in which the Project was located or otherwise within Ontario. The Divisional Court commented:  "It is difficult to see how one could make a determination whether an increase in the mortality rate at the Project site, and surrounding landscape, would or would not be significant in terms of irreversibility without knowing the size of the population impacted. Without knowing the magnitude of the mortality rate, it would seem difficult to make a determination that the harm is irreversible."

The Divisional Court found that the ERT can only reach a conclusion of irreversible harm if the ERT "assumes that any increase in the mortality rate is both significant and amounts to irreversible harm" – a conclusion that would run afoul of the ERT's acknowledgement that the test cannot be interpreted in a way that renders it "always met" or "never met." The Divisional Court stressed that the knowledge of population size that is required to arrive at a conclusion of "irreversible harm" does not require "mathematical precision" or "scientific certainty" – it requires simply some level of data by which an assessment of the order of magnitude can be made.

Secondly, the ERT did not have any evidence of the current vehicular traffic at the site, nor any evidence of the increases in vehicular traffic that would result from the Project. The Divisional Court commented that "it is difficult to see how the ERT could make a determination that the Project would cause irreversible harm without any data as to the existing or projected traffic on the site."

The ERT Appeared to Dismiss the Relevance of the ESA Permit

Next, the Divisional Court noted that the ERT appeared to have been "dismissive" of the relevance of Ostrander's MNR permit, obtained under the Ontario Endangered Species Act (the ESA) for the Project. This permit expressly allowed Ostrander to "kill, harm, harass, capture, possess and transport Blanding's Turtle," subject to certain conditions set out  in the permit, including the requirement to set aside 37.65 hectares of property outside of the Project site to provide, restore and actively maintain habitat for the Blanding's Turtle.

The Divisional Court explained that, in order for an ESA permit to be granted, not only must steps be taken to minimize the permitted harm, but also to ensure that actions are taken that will result in an ongoing overall benefit to the species, i.e., that the species is "better off than before the project started."

Since the ESA permit allowed Ostrander to cause the very harm that the ERT was bound to consider in the REA appeal, the Divisional Court held that the ERT should have more carefully evaluated whether the test of "serious and irreversible harm" had been met in those circumstances. In short, the ESA permit was "relevant and significant evidence relating directly to the issue that the ERT had to decide."

Most significantly, the Divisional Court criticized the ERT for failing to implement a basic principle of statutory interpretation "that presumes a harmony, coherence, and consistency between statutes dealing with the same subject matter" so as to ensure that its decision under the EPA was not in conflict with decisions made by the MNR or other arms of the government under the ESA: "when [the ERT] found itself heading towards a conclusion that appeared directly at odds with the conclusion reached by another arm of government on the same issue," that should have given the ERT "pause." This is a result that the ERT "should have striven to avoid and one that it should only have reached if no other viable alternative existed." If a conflicting decision could not be avoided, the ERT "was obliged to explain how" its decision that the Project would cause "irreversible harm" to the Blanding's Turtle "could mesh with" the MNR's conclusion under the ESA that the Project would lead to an overall benefit to the same species.

Appropriate Remedy – Less Extreme Alternatives, other than Revocation, Should First be Considered

The Divisional Court noted that the ERT imposed the "most extreme remedy of the ones available to it" – revoking the REA. Further, the ERT did so without receiving any submissions on the appropriate remedy at the hearing.

Given the practical reality of the multi-pronged challenge by the Project's opponents to Ostrander's REA, the Divisional Court noted that the appropriate remedy can vary depending on the type of harm, if any, found to exist. As a result, as a future practice point, the Court suggested that parties consider bifurcating the substantive issues of harm from the procedural issue of remedy:  "it would have been prudent for the parties to have suggested to the ERT at the outset that it might be advantageous for all concerned to deal with the harm issue first and then return to the ERT to address the issue of remedy once the harms, if any, were found by the ERT."

Regardless, the Divisional Court noted that the ERT could have adjourned the proceeding, inviting the parties to make submissions on the appropriate remedy, but chose not to. While the ERT has the discretion to determine its own procedure, the Court reiterated that "whatever procedure is adopted must provide the necessary degree of procedural fairness." The Court held that the ERT has a duty to provide all parties with "the opportunity to present their case fully and fairly," and that opportunity includes "allowing the parties a chance to make submissions on remedy before any decision [is] made," especially when the remedy could involve revoking the REA and "essentially ending the Project." 

In any event, the Divisional Court ruled that less extreme alternative remedies that focussed on eliminating the increased risk to the Blanding's Turtle were available to the ERT, such as closure of the Project roads to public access. In fact, the express wording of the EPA (s. 145.2.1(4)(c)) authorizes the ERT to "alter the decision of the Director" and/or "substitute its opinion for that of the Director." As a result, the ERT could have overridden the Director's decision not to prohibit public access to the Project roads, rather than revoke the REA as a whole. However, the ERT erroneously ruled that it was "not in a position to alter the decision of the Director, or to substitute its opinion for that of the Director" in this regard, thereby clearly committing an "error of law" that could not stand.

Serious Harm to Human Health – Confirmation of the Unreliability of "Perception Evidence" and Novel Scientific Theories

PECFN and APPEC also cross-appealed to the Divisional Court those aspects of the ERT's decision it lost – i.e., "serious and irreversible harm" to birds and alvar, and also "serious harm" to human health. In dismissing PECFN's cross-appeal relating to birds and alvar, the Court found the ERT's conclusions on these matters to be reasonably supported by the evidence. Most notably, in dismissing APPEC's cross-appeal on human health, the Court recounted that APPEC's fact witnesses, who gave evidence of their perceived effects from exposure to wind turbines, were inherently unreliable – the "subjective recall of individuals regarding health effects has been shown, through scientific studies, generally to be unreliable." In fact, in at least four (4) instances, the "fact witnesses had reported health effects or changes that were clearly demonstrated not to be related to wind turbines despite the witnesses' fervent belief that they were."

Significantly, when it came to APPEC's novel expert evidence on serious harm to human health, the Court concluded that the ERT applied the correct standard of proof in finding this evidence to be unreliable. When relying on a "novel scientific theory, it is "not sufficient" for a fact finder to simply conclude that the theory may be correct or that there may be a causal connection. This does not cross "the threshold of reliability for the purpose of establishing the necessary causal link between the activity in issue and the consequences said to arise from that activity." The fact finder must satisfy itself that the party adducing the novel expert evidence has met the four factors identified by the Supreme Court of Canada in R. v. J.-L.J., [2000] 2 S.C.R. 600 (briefly, whether the theory has been tested, has been subjected to peer review, its known or potential rate of error, and whether the theory has been generally accepted).

Conclusions and Lessons Learned

The Divisional Court's decision in Ostrander Point is significant not simply for overturning the first ERT decision to revoke an REA in Ontario, but also for the guidance it provides to parties and the ERT for future REA hearings. The lessons learned can be extrapolated to other environmental litigation, and include the following:

  • the Divisional Court is constrained in accepting "fresh evidence" on an REA appeal because of its limited jurisdiction to decide only questions of law, not questions of fact and not questions of mixed fact and law. As a result, parties will need to be careful to submit full evidence on all live issues at the ERT hearing;
  • the ERT must give clear and intelligible reasons regarding whether both "serious" and "irreversible" harm is met and, if so, how;
  • the ERT needs to carefully consider permits or authorizations granted by other governmental bodies, and clearly justify or reconcile any decision that may run counter to other authorizations already granted;
  • if the ERT has less extreme remedies other than revoking the REA available to it in the circumstances, those remedies should be chosen to the extent applicable. To be afforded fairness and natural justice, parties must be given the opportunity to make submissions on potential remedies;
  • if the REA appeal deals with various possible allegations of "harm", i.e., to plants, animals and human health, then the parties should consider asking for a bifurcated hearing, allowing the ERT to first decide whether any harm will occur to the various sectors and only then to consider the appropriate remedy; and
  • fact witnesses giving evidence simply of their perceptions of health impacts are "inherently unreliable" and novel scientific theoretical evidence attempting to demonstrate a causal connection between the REA (or any other governmental authorization) and an alleged impact may be hard-pressed to pass the threshold of reliability required of expert evidence.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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