Copyright 2010, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Environmental Law, January 2010
In a unanimous decision released on January 21, 2010, the Supreme Court of Canada clarified the discretion of a federal responsible authority (RA) to make decisions with respect to the scoping of projects for purposes of the federal environmental assessment (EA) process. In MiningWatch Canada v. Canada (Fisheries and Oceans), the court overturned a Federal Court of Appeal decision that granted RAs discretion to scope a project to determine the type of EA process or "track" that will apply. The track determines the level of the intensity of the EA review.
For over four years, the case has been in litigation, resulting in some confusion around the authority of an RA to decide if proposed projects can be "scoped" as either subject to a screening or a comprehensive study as the EA process that applies. The Supreme Court has definitively stated that the facts about a project as proposed by a project proponent determine whether a project is caught by the comprehensive study rules – there is no discretion under the law. In this case, the project's ore production resulted in a mandatory conclusion under the legislation that it be subject to a comprehensive study. However, the court's remedy was simply to declare this; not to order a comprehensive study at this time.
Red Chris Development Company and BCMetals Corporation (Red Chris) submitted a project description to the BC Environmental Assessment Office (BCEAO) in October 2003 for a copper and a gold mine. The BCEAO determined that the Red Chris project required a provincial EA certificate. The project received approval from the BCEAO in August 2005, after extensive review and comment by a working group, which included provincial and federal agencies, and local First Nations, as well as public consultation. The Supreme Court comments that this process "proceeded smoothly" and at no time did MiningWatch Canada (MiningWatch) object to the provincial EA process or certificate.
In 2004, Red Chris also triggered the federal EA process through applications to Fisheries and Oceans Canada (DFO) related to dams for the proposed tailings impoundment area and for a stream crossing. DFO then posted a Notice of Commencement of an Environmental Assessment, announcing that a comprehensive study would ensue. The Notice of Commencement described the project as proposed by the proponent, and stated that the scope of the project would be added once it became available.
The decision to proceed with the EA by way of a comprehensive study was based on the proposed project production as described by the proponent: ore production capacity of up to 50,000 tonnes per day. This exceeded the allowable 600 tonnes per day provided for under the Canadian Environmental Assessment Act's (CEAA) Comprehensive Study List Regulations (the CSL). The CSL outlines the triggers for when a project is subject to a comprehensive study.
DFO then re-scoped the project more narrowly on the basis that it should only consider those aspects of the project that were within its jurisdiction and responsibility flowing from the CEAA. As a result, DFO determined that the project was not within the CSL as originally contemplated and put the project through the screening process.
The trial court held that, based on the fact that the mine's proposed ore production capacity exceeded the threshold set out in the CSL, DFO had a legal responsibility to put the project through a comprehensive study and resulting public consultation. It was not within an RA's discretion to scope a project more narrowly in order to avoid the CSL. The Federal Court of Appeal reversed this decision and held that it is entirely appropriate for an RA to only consider the aspects of the project that are relevant to its jurisdiction and conclude that a project "as scoped" does not fall within the CSL. (See our July 2008 Blakes Bulletin on Environmental Law: Federal Court of Appeal Reaffirms Government Discretion in Scoping of Federal Environmental Assessments.) (http://www.blakes.com/english/view.asp?ID=2421)
Supreme Court's Analysis
The Supreme Court of Canada held that the CEAA and its regulations require that the EA process or "track" be determined according to the project as proposed and that it is generally not open to the RA to change the level of assessment. The court found this interpretation to be consistent with Parliament's intent as found within the respective roles of the RA and the Minister in conducting EAs under the CEAA. Tracking and scoping are two distinct steps under the EA process. Once a project has been tracked in accordance with its description as proposed, it is then open to the RA to scope the project for purposes of the EA process. However, the minimum scope is how the project was proposed by the proponent.
The Supreme Court looked at the four corners of CEAA only. Its analysis did not consider the provincial/federal constitutional division of jurisdiction over the environment and, as such, the court has left open for another day the constitutional aspects of carrying out EAs in Canada.
Interestingly, while agreeing with the trial decision with respect to an RA's scoping discretion, the court disagreed with its remedy: requiring Red Chris to complete a comprehensive study. There had not been any challenge to the decision to grant a permit for the project, only the process through which this was decided. Thus, although the court found the method of permitting to be out of compliance with the CEAA, Red Chris may proceed with the project nonetheless. This conclusion is influenced by a number of factors. First, the court noted that the RA had re-scoped the project only after the Federal Court decision in Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans) and found it difficult to fault the RAs for following a Federal Court decision based on the very matter with which they were dealing. Second, MiningWatch clearly stated that this case was purely a test case to determine the federal government's obligations under the CEAA and it had no proprietary or pecuniary interest in the outcome. Third, little would be gained by requiring Red Chris to proceed through the EA process over again. It had already gone through an extensive public consultation process and had, in fact, not done anything wrong to warrant the additional time and expense.
This decision will likely not have a significant impact on the scoping of future proposed projects. By requiring projects to be tracked in accordance with how they are proposed, proponents will have certainty around the regulatory process and, most importantly, provincial-federal harmonization will continue. The court stressed that minimizing duplication through governmental co-ordination was valuable for managing the federal EA requirements. While this decision may appear to be a hollow victory, at its heart it is about requiring governments to adhere to the powers that are set forth within legislation.
The CEAA is currently undergoing a seven-year review period as mandated within that statute. The resulting policy changes that may be on the horizon from this review are likely to have a more profound impact on the nature of the federal EA process and its scope and content than this decision.