Canada: Making An Impact: Recent Developments In Environmental Assessment

Last Updated: February 22 2008
Article by BLG'S Environmental Law Group

Most Read Contributor in Canada, September 2016

In recent years many key environmental assessment cases have addressed the relationship between environmental assessment processes and the Crown's obligations to aboriginal groups. This edition of BLG's Environmental Law News highlights recent developments and decisions with respect to federal and provincial environmental assessment processes unrelated to the Crown's aboriginal consultation obligations. This edition also introduces a new regular feature: The Climate Change Corner

Major Projects Management Office

On October 1, 2007 the federal Minister of Natural Resources announced the creation of the Major Projects Management Office ("MPMO"). The MPMO will provide a single point of entry into the federal project approval process for major resource projects located south of 60o parallel. "Major resource projects" are those that require a comprehensive study, a panel review or a complex or multi-jurisdictional screening level assessment.

The MPMO will develop project-specific agreements to coordinate, review and permit processes among federal departments and agencies and to establish time lines and service standards. It will integrate Crown consultation requirements with aboriginal groups through a consultation plan to be included in each project agreement. The MPMO will also track major resource projects from the environmental assessment stage, to regulatory permitting, through to follow-up and monitoring.

The key objectives of the MPMO include significantly reducing time lines associated with federal project approval processes and better coordination and consistency among federal agencies. Participating departments and agencies include the Canadian Environmental Assessment Agency, Natural Resources Canada, Indian and Northern Affairs Canada, the Canadian Nuclear Safety Commission and the National Energy Board. The MPMO will report to Cabinet through the Ministry of Natural Resources and is expected to be operating in early 2008.

Joint Review Panel Denies Kemess North Copper-Gold Mine Project Approval

On September 17, 2007 the joint federal/provincial review panel for the Kemess North Project submitted its report to the federal and British Columbia Ministers of the Environment. The panel concluded that the project in its current form is not in the public interest and should not be approved. This type of recommendation is extremely rare. The Kemess North project involved the proposed creation of a second open pit six kilometres north of the existing Kemess South copper-gold mine, located approximately 425 kilometres northwest of Prince George. The project proponent, Northgate Minerals Corp., estimated that the project would extend the life of the existing mine by 11 years. The project plan contemplated the disposal of waste rock and tailings in nearby Duncan (Amazay) Lake. Local First Nations groups opposed the tailings disposal plan on the grounds that Duncan Lake has important spiritual values.

The review panel concluded that the economic and social benefits of the project were outweighed by the risk of significant adverse environmental, social and cultural effects arising from the destruction of Duncan Lake and the risks associated with the long-term environmental management requirements following mine closure to protect down-stream water quality. The panel concluded that these impacts and risks were not justified by an additional 11 years of operation, particularly in light of the panel's conclusion that the project lacked "economic robustness".

In reaching its conclusion, the panel noted that all government agencies participating in the review had advised that the project could be implemented in a manner consistent with the agencies' program and regulatory objectives. However, the panel stated that meeting government requirements does not mean that a project would not cause adverse effects or is in the public interest. The panel concluded that the role of a review panel is to look at a project holistically and to integrate public values into the review process.

The panel accepted that aboriginal use of Duncan Lake and the surrounding area was not intensive – "moderate at most". However, the panel accepted that the lake had spiritual significance for First Nations and that the destruction of the lake would be culturally and socially detrimental. The panel considered that effect to be significant. The panel noted that the project proponent had offered a benefits package to First Nations that included a payment of $1,000,000 in each year of the mine's operation. However, the panel accepted the First Nations position before the review panel that no amount of money could compensate for the destruction of the lake.

The panel's other principal concern related to the long-term post-closure environmental management requirements. The panel accepted that the proposed post-closure management measures would be effective to ensure that all applicable receiving water standards would be met. However, the panel noted that these postclosure requirements might continue for several hundred years and was not satisfied that reasonable assurances could be put in place to ensure compliance over that period of time. The panel recommended that if the federal and provincial governments decided to approve the project despite the panel's recommendation, regulatory authorities should require reclamation security to be posted in the full amount before project start-up and the amount of that security should cover all long-term liabilities and be "highly protective of the public interest". Both levels of government are studying the panel report and have yet to respond. Northgate Minerals recently announced that the project has been "taken off its books".

Project Scoping Decisions Under The Canadian Environmental Assessment Act

Project scoping decisions under the Canadian Environmental Assessment Act ("CEAA") have been subject to considerable judicial scrutiny in recent years. Some federal authorities, particularly the Department of Fisheries and Oceans (the "DFO"), have adopted a practice of "scoping to triggers". For example, if a CEAA assessment is triggered by an application under subsection 35(2) of the Fisheries Act, the DFO will often limit the project scope, and therefore its CEAA assessment, to those aspects of the project that impact fish and fish habitat. This generally results in the project being subject to a screening rather than a comprehensive study review under the CEAA.

This approach was accepted by the Federal Court of Appeal in Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans) (2006). In that case, the Court upheld a decision by the DFO to limit its CEAA assessment of an oil sands project to those aspects of the project having an impact on fish and fish habitat and therefore to conduct a screening rather than a comprehensive study. The Court held that subsection 15(1) of the CEAA authorizes a responsible authority to determine the scope of a project and that nothing in the legislation required the DFO to scope the project as the entire oil sands project. The courts will not interfere with a reasonable exercise by a responsible authority of its discretion under subsection 15(1). The Court further held that the application of the Comprehensive Study List Regulations depends on how the project is scoped by the responsible authority under section 15(1). In this case the Court accepted that the scoping decision occurs before the review track decision. Leave to appeal to the Supreme Court of Canada was denied.

The Federal Court Trial Division appears to have adopted a different approach to this issue in the recent decision, MiningWatch Canada v. Minister of Fisheries and Oceans (2007). This case involves the Red Chris copper-gold mine project in northwest B.C. The project was subject to review under both the provincial and federal environmental assessment processes. The project received an environmental assessment certificate from the Province in August 2005. In May 2004, the project proponent submitted applications to the DFO for authorizations under section 35(2) of the Fisheries Act for the mine's tailings dams and stream crossings. The DFO concluded that CEAA was triggered and initially posted a notice in the CEAA registry indicating that a comprehensive study would be required based on the mine's estimated ore production levels. The DFO subsequently reduced the project scope to those aspects that would impact fish and fish habitat and, based on the revised project scope, conducted a screening rather than a comprehensive study. The DFO concluded that public involvement in the screening was not required given the public consultation undertaken as part of the provincial environmental assessment process.

Miningwatch applied for judicial review of the DFO's decision that the project would cause no significant adverse effects, arguing that the DFO had not followed the public consultation requirements in section 21 of the CEAA applicable to projects listed in the Comprehensive Study List Regulations. The court agreed with Miningwatch and set aside the DFO's decision and prohibited issuance of further federal approvals for the project until a comprehensive study is conducted. The Court distinguished the Prairie Acid Rain (2004) case on the grounds that case was decided prior to enactment of the Bill C-9 amendments to the CEAA which introduced additional public consultation requirements for comprehensive study projects, including a requirement to undertake public consultation with respect to the proposed project scope. The Court concluded that based on the wording of section 21, responsible authorities must first determine the review track for a project based on the proponent's project description and the project descriptions in the Comprehensive Study List Regulations. Once a "tracking decision" is made based on that information, the responsible authority can then proceed to scope the project under subsection 15(1). However, the responsible authority cannot "rescope" the project under subsection 15(1) to avoid the public consultation obligations under section 21.

This decision is under appeal. If upheld, federal departments will likely be forced to abandon the practice of scoping to triggers to determine the review track. This in turn will result in more comprehensive studies and greater overlap with provincial environmental assessment processes. It is worth noting that in the Prairie Acid Rain case, the Federal Court of Appeal stated: "it is sensible that undertakings with potential adverse environmental effects be subject to only one environmental assessment".

Indemnity Agreements Required By The BC Environmental Assessment Office

A number of environmental assessment certificates recently issued recently by the British Columbia Environmental Assessment Office have contained a condition requiring the project proponent to enter into an indemnity agreement in favour of the provincial government, to indemnify the government against any claims that might be made against it arising out of the issuance of the environmental assessment certificate and other project approvals. Project proponents should be cautious about the scope of these indemnity agreements, particularly as the indemnity request often arises late in the review process when the project proponent is very anxious to proceed with project development.

Amendments To An Act Respecting The Régie De L'Énergie

On November 9, 2007, the Government of Quebec amended An Act respecting the Régie de l'énergie to add provisions to introduce a Green Fund aimed at the reduction of greenhouse gas emissions and facilitate adaptation to climate changes. Taking into account the objectives and the overall financial investment, distributors will be required to pay annual duties on the basis of carbon dioxide (CO2) emissions generated by the combustion of natural gas and fuel.

The annual duty for the Green Fund applies to natural gas distributors, legal persons or partnerships bringing fuel into Québec for a purpose other than resale. It will also apply to fuel distributors.

Distributors must file a statement with the Régie de l'énergie (the "Régie") specifying, for the period covered by its preceding fiscal year, the volume of natural gas it distributed, the volume of fuel it brought into Québec, the volume of fuel intended for consumption in Québec that was sold and refined in Québec or brought into Québec, where applicable, the volume it exchanged with a person and any other information the Régie deems necessary. On the basis of the filed form, the Régie will establish the amount each distributor must pay under the regulation and give notice to the distributor and to the Minister of Sustainable Development, Environment and Parks.

The regulation to fix the carbon tax - A Regulation respecting the annual duty payable to the Green Fund - came into force on December 14, 2007. It establishes the rate and method of calculation of the annual duty payable to the Green Fund by a distributor. The first payment, required by the Regulation is due on December 31st for the period from October 1 to September 2008.

The New BC Greenhouse Gas Reduction Targets Act

British Columbia's new Greenhouse Gas Reduction Targets Act (the "Act"), was given Royal Assent on November 29, 2007. The Act, and the new BC Energy Plan (the "Energy Plan"), seek to achieve greenhouse gas ("GHG") reductions through two objectives: general emission reduction targets, and carbon neutral targets for the public sector.

The Act uses 2007 GHG emission rates, which have not yet been published, as baselines. The Act aims for a 33% emission rate reduction below 2007 levels by 2020, with the ultimate goal of at least an 80% reduction below 2007 levels by 2050. Interim reduction targets for 2012 and 2016 must be set by December 31, 2008.

The provincial government and the public sector are required to achieve carbon neutral status by 2010. Prior to 2010, the Act also requires government to achieve carbon neutral status in regards to business travel by public officials, starting in 2008.

Implementation of measures to achieve the reduction targets set out in the Act will follow from policy recommendations made by an expert committee dubbed the "Climate Change Action Team". Recommendations of the committee will be subject to public comment before being enacted.


Ontario's Regulaory Modernization Act, 2007

On May 17, 2007 the Government of Ontario passed legislation, that took effect in early 2008, which provides for broad information-sharing between various ministries. The legislation is meant to create regulatory efficiency in a number of ways, ranging from verification of accuracy of records to making available information that would assist in determining whether an organization may be entitled to an approval.

The Regulations Modernization Act permits field staff to notify other ministries of issues that are likely to be relevant to a statute administered or enforced by that ministry. It allows ministries to share in use-specific compliance-related information for specified regulatory compliance purposes under a designated legislation and enables ministers responsible for designated legislation to create special teams of field staff from different ministries to work together on specific compliance projects such as targeting serious repeat offenders. As well, the legislation provides ministers with the power to publish information under designated legislation about an organization's compliance record as a deterrent to future violations, broaden the scope for consideration of other offences by authorizing prosecutors to request that a court consider relevant prior convictions under any Provincial law in sentencing of a defendant, and require courts to provide reasons when prior convictions raised by prosecutors are not found to justify more severe penalties.

The legislation also provides for sharing of information respecting public complaints, regardless of whether the complaint was proven, dissemination of inspection and audit information, and compliance histories. The information will also be available for consideration in issuing licences, permits and certificates; and to assist in planning and conducting examinations, tests, inspections or audits.

The Regulations Modernization Act is expected to be the first in a broader scheme meant to "modernize" business compliance in Ontario by which the government intends to facilitate enforcement of approximately eighty-five statutes and almost six hundred regulations across the Province.

The Energy Plan establishes a $25 million Innovative Clean Energy Fund to support the development of clean power and energy efficiency technologies in the electricity, alternative energy, transportation and oil and gas sectors. Public comment by the Minister indicates that investment in, and use of, alternative technology will form the backbone of the Energy Plan.

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