Canada: Federal Court Of Appeal Overturns Lower Court's Revocation Of Darlington Nuclear Project Licence – Nuclear Project Allowed To Proceed

On September 10, 2015, the Federal Court of Appeal (FCA) overturned the decision of the Federal Court of Canada (FCC) in Greenpeace Canada v. Attorney General of Canada, 2014 FC 463, which had (i) revoked the Site Preparation Licence (Licence) issued to Ontario Power Generation (OPG) to construct new nuclear generation units at the existing Darlington nuclear facility, and (ii) ordered that the environmental assessment (EA) under the Canadian Environmental Assessment Act (CEAA 1992)1 be returned to the Joint Review Panel (JRP) for further consideration.

This decision affirms the existing understanding of the role of a JRP tasked with gathering and "considering" the potential environmental effects of a project under sections 16(1)(a) and (b) of CEAA 1992. The FCA applied the well-established standard that the JRP must give "some consideration" to the relevant issues; since the CEAA 1992 does not stipulate how an environmental effect is to be considered, the scope of consideration is in the discretion of the JRP.

The decision also affirms that the standard of review of a JRP's decision is one of reasonableness, requiring reviewing judges to defer to the JRP's expertise and first-hand review of evidence. A reviewing court must not impose its own opinion as to how environmental effects are to be considered. The decision assists in understanding the analytical framework that the Court will apply. The FCA's dissent by Rennie J.A. highlights that even though the framework is simple, judges can and will differ on how that analytical framework is applied.

Finally, this decision highlights the deference that must be granted to JRPs as to their consideration of the environmental effects of a project, and how the JRP manages the evidence before it, in light of: (a) the requirement that EAs must take place as early as practicable in the planning process; and (b) the uncertainty that can arise in predicting environmental effects of certain projects.

For a discussion of the FCC's decision, please refer to our June 18, 2014 Osler Update.

Background

In June 2006, OPG sought approval for the construction of a new nuclear power generation facility at the existing Darlington nuclear site in Clarington, Ontario. The federal Darlington New Nuclear Power Plant Project (the Project), which included the construction, operation, decommissioning and abandonment of nuclear reactors and the management of the associated conventional and radioactive waste, triggered an EA under CEAA 1992 and Law List Regulations. The Project was the first proposed nuclear new build in Canada in over a generation, the first since CEAA 1992 was enacted, and the first to potentially use enriched uranium fuel.

The EA of the Project was referred to a three-member JRP, with a mandate that included: (a) conducting an EA of the Project based on an Environmental Impact Statement (EIS) prepared by OPG; and (b) reviewing OPG's application for the Licence. The EA process engaged the public, the CNSC, and other government agencies and departments, including public hearings and written submissions.

Since OPG had not yet committed to a particular reactor design for the Project, the EIS examined – and the JRP considered – multiple possible reactor designs using the "plant parameter envelope" (PPE) approach,2 which involves examining reactor design and site parameters in a way that strives to consider the greatest potential adverse impact to the environment.

On August 25, 2011, the JRP issued its report (Report), concluding that the Project is not likely to cause significant adverse environmental effects, provided that the JRP's recommendations and OPG's commitments are fulfilled. The Report stated that, if the Project is to go forward, the selected reactor technology "must be demonstrated to conform to the [PPE approach] and regulatory requirements, and must be consistent with the assumptions, conclusions and recommendations" of the EA. If the reactor technology selected "is fundamentally different than those assessed" by the JRP, the Report stated that the EA "does not apply and a new environmental assessment must be conducted." Based in part on the EA, the CNSC issued the ten-year Licence to OPG.

On May 14, 2014, the FCC released its decision in Greenpeace Canada v. Attorney General of Canada, 2014 FC 463. The case, brought by environmental non-governmental organizations, challenged OPG's proposal to construct up to four new nuclear reactors as part of the Project. The decision considered two judicial review applications:

  • a challenge to the adequacy of the federal EA of the Project under CEAA 1992; and
  • a challenge to the Licence based on the failure to comply with the requirements of CEAA 1992 and the Nuclear Safety and Control Act (NSCA).

The FCC disagreed with the Applicants' over-arching argument about the inadequacy of the EA (holding that there is "no one prescriptive method of conducting an EA"), but concluded the EA failed to comply with subsections 16(1)(a) and (b) of CEAA 1992 by failing to "consider" three issues:

  • gaps in the bounding scenario regarding hazardous substance emissions and on-site chemical inventories (the "HSE Issue");
  • consideration of spent nuclear fuels (the "Spent Nuclear Fuel Issue"); and
  • deferral of the analysis of a severe common cause accident (the "Common Cause Accident Issue").

Consequently, the FCC remitted the EA back to the JRP for reconsideration of these three matters, and quashed the licence to prepare the site on the ground that the EA had yet to fully comply with CEAA 1992.

OPG, CNSC and the Attorney General appealed the decision to the FCA.

FCA Decision

The majority reasons for judgment were delivered by Trudel and Ryer JJ.A., with Rennie J.A. delivering dissenting reasons, which set out the analytical framework adopted by the Majority.

The Court was unanimous in its conclusion that the FCC Judge erred in his determinations with respect to the Spent Nuclear Fuel Issue and the Common Cause Accident Issue. Regarding the former, the Court held that the JRP had carefully considered the issue, and the lower court judge erred by substituting his view for that of the JRP. With respect to the latter, the Court held that CEAA 1992 does not require the JRP to consider the environmental effects of all improbable scenarios. Therefore, the JRP's assessment of the probability of an accident, and hence its limited assessment of the environmental effects, was a matter within the scope of its discretion and its conclusion was reasonable in the context of the evidence and issues before it.

However, the Court was split with respect to the FCC's determination of the HSE Issue. Rennie J.A., in dissent, concluded that the issue had not been adequately considered while the Majority concluded that it had.

The Majority framed the appeal issues as:

  1. whether the Judge selected the correct standard of review upon which to review the JRP's consideration of the HSE Issue under CEAA 1992; and
  2. whether the Judge misapplied the standard of review.

On the first question, the Court agreed with the FCC decision that the question must be reviewed on the standard of review of reasonableness.

On the second question, the Majority held that the FCC had misapplied the standard of review and had ultimately imposed its own opinion rather than properly deferring to that of the JRP. In applying the reasonableness standard to the question, the Court "must consider the [JRP's] decision as a whole, in the context of the underlying record, to determine whether the [JRP's] implicit conclusion that it had complied with the consideration requirements is reasonable."

The Majority held that the type and level of consideration that must be given to an environmental effect, such as HSE, under paragraphs 16(1)(a) and (b) of CEAA 1992, is a matter to be determined by the JRP. The Majority quoted Justice Pelletier in Inverhuron & District Ratepayers' Assn. v. Canada (Minister of the Environment),3 where it was determined that the low threshold of "some consideration" of the environmental effect will be sufficient to satisfy the legislative requirement. In the absence of any legislative guidance, the JRP was at "liberty to determine the type and level of consideration that it was required to give to the HSE environmental effects in conducting the EA."

Footnotes

1. CEAA 1992 was replaced by the Canadian Environmental Assessment Act, 2012 (S.C. 2012, c. 19, s. 52) July 6, 2012.

2. Also known as a "bounding approach" or a "bounding scenario."

3. 2000 CanLII 15291 (FC) at para 71, 191 FTR 20, [2000] FCJ No. 682 (QL).

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