Canada: Municipal Anti-Wind By-Laws Inoperative

Last Updated: September 10 2014
Article by Jennifer Kalnins Temple and Dianne Saxe

Another Ontario municipality's attempts to block wind energy development have been thrown out by the courts. Municipalities cannot use anti-wind by-laws to frustrate Renewable Energy Approvals (REA), under the Green Energy Act, S.O. 2009, c. 12 ("Green Energy Act").

East Durham Wind Inc., a wholly owned subsidiary of NextEra Energy Canada ULC, ("East Durham") holds a provincial REA, under the Green Energy Act, to build a 14-turbine wind farm in the Municipality of West Grey.   West Grey adopted two municipal by-laws that required wind projects to obtain permits, and refused to give East Durham those permits. East Durham successfully applied for judicial review of the two by-laws.

The case raised the question of "when and how a municipal by-law or policy may frustrate the purpose of a provincial legislative instrument." In its decision issued August 14, 2014, the Ontario Superior Court of Justice found that the two municipal by-laws in question frustrated the purpose of the Green Energy Act, which is to "streamline" the process for developing green energy in Ontario.  East Durham Wind, Inc. v. The Municipality of West Grey, 2014 ONSC 4669, at paras. 1, 37.

The Court noted that the complex Renewable Energy Approval application process was created through detailed regulations under the Green Energy Act, intended to create an "all-in-one provincial approval process."  Before the Act, an energy provider had to apply to various agencies and levels of government prior to being able to connect to the grid.  The Court noted, "[w]here a municipal government is opposed to wind energy projects generally, the potential for conflict is obvious."

The municipal permits at issue included "entrance permits" to connect access roads on private lands, and "oversize/overweight haulage permits" to allow for the conveyance of large and heavy project materials along public highways.  East Durham was denied the permits by the municipality for various technical reasons, allegedly as part of West Grey's "pattern of opposition to the development of any wind energy projects in its jurisdiction, and in particular [this] project."  East Durham pointed to an October 12, 2012, municipal council resolution declaring that West Grey "is not a willing host for any further industrial wind turbines."

The Court held that the test for conflict between a municipal by-law and a provincial legislative instrument is set out in section 14 of the Municipal Act, which holds that a by-law is without effect to the extent of any conflict with an instrument of a legislative nature, including an order, licence or approval, made or issued under a provincial or federal law.  The section also states that there is a conflict where the by-law frustrates the purpose of that Act, regulation or instrument.

These by-laws could not be used to prevent the building of the wind farm:

[47] We find both by-laws inoperative to the extent that they frustrate the purpose of East Durham Wind's REA, which is to authorize the building of the project in furtherance of the province's goal of increasing renewable energy generation. The entrance permit by-law cannot de facto  prohibit the access required to build renewable energy projects on private lands in the Municipality's jurisdiction. Similarly, the oversize/overweight haulage permit by-law cannot de facto  prohibit the hauls necessary to get construction materials to these private lands via the public highways. As noted, this conclusion does not affect the parties' abilities to engage in good faith negotiations around reasonable conditions, including sufficient financial security, regarding East Durham Wind's proposed use of the public highways.

Was the Municipality acting in bad faith?  The Court said, not yet:

[45]....we reject East Durham Wind's argument that the Municipality has acted in bad faith. The Municipality is a democratic body accountable to its constituents. It has a broad legislative discretion to enact by-laws governing issues that regulate daily life and the built infrastructure within its jurisdiction....Council's call for a moratorium on wind energy projects in Ontario and its declaration that it is an "unwilling host" for such projects are not acts that, in and of themselves, support a finding of bad faith. Moreover, a finding of bad faith is not required to ground our conclusion that the by-laws frustrate the purpose of East Durham Wind's REA.

However, in quashing the decisions of the municipality rejecting the two approval applications, the Court warned the municipality to get on with its permits:

[49]  While the Municipality has not acted in bad faith up to this point, the failure to reasonably consider and determine any future applications (or resubmitted applications) by East Durham Wind for entrance permits or oversize/overweight haulage permits according to by-laws that do not frustrate the purpose of East Durham Wind's REA could be grounds for a finding of bad faith. In order not to continue to frustrate the applicants REA and in order to comply with the decision of this court we expect that the Municipality will see fit to interpret or modify the relevant by-laws which impede the issuance of permits as expeditiously as possible as since the applicant is subject to monetary penalties for not proceeding with the project.

[50] .... Thus, any attempt to determine future permit applications by East Durham Wind according to unchanged versions of the permitting by-laws, which have been found to frustrate its REA, would be in bad faith. Additionally, any alteration of the permitting by-laws that amounts to an attempt to circumvent the effect of this Court's order would also constitute bad faith: Chippewas of Saugeen First Nation v. Keppel (Township) 1994 CanLII 7508 (ON SC), (1994), 117 D.L.R. (4th) 419 (Ont. Gen. Div.), aff'd 1998 CanLII 17658 (ON CA), (1998), 164 D.L.R. (4th) 511 (Ont. C.A.); Markham v. Sandwich South (Township) 1998 CanLII 5312 (ON CA), (1998), 160 D.L.R. (4th) 497 (Ont. C.A.).

Despite ongoing challenges to wind farm projects seeking approvals under the Green Energy Act, many Ontario wind projects have now been approved, are being built or have started operation. We hear from folks on the ground that, once projects start running, many neighbours have privately expressed pleasant surprise that the turbines cause them no difficulty and are easy to get used to. Nocebo effects only happen if people believe in them.

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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Jennifer Kalnins Temple
Dianne Saxe
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