EA Approved, SARA Permit Denied? Minding The "SARA Gap” For Major Projects

Federal Court of Appeal decision raises strategic implications for developers designing environmental and impact assessments for major projects.

Overview

Canadian Nuclear Laboratories Ltd. v. Canada (AG), 2026 FCA 106 (“CNL”) is the first appellate decision to apply the Vavilov reasonableness review framework to a permit issued under the Species at Risk Act, S.C. 2002, c. 29 (“SARA”). The case raises three main points:

• First, applying the “reasons first” framework from Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the Court of Appeal found the court below had wrongly constructed its own interpretation of SARA and measured the administrative decision under challenge against it, rather than the decision-maker’s reasons.¹
• Second, and relatedly, where a decision-maker provides no analytical framework for the statutory provision it is applying, meaningful judicial review is frustrated, making the decision unreasonable and requiring administrative redetermination.²
• Third, the Court of Appeal left open whether and how a project’s prior environmental assessment (“EA”) may inform a Minister’s determination of “reasonable alternatives” for the purposes of SARA.³ While this case addressed an EA conducted under Canadian Environmental Assessment Act, 2012, the decision and commentary are relevant for parties involved in future Impact Assessments (“IA”) under the Impact Assessment Act.

Practical implications for project proponents:

The third point of the decision identifies a potential regulatory gap: a project could obtain necessary EA (or IA) approval yet still be blocked or delayed if a section 73 SARA permit is later denied or successfully set aside on judicial review. Until the extent of overlap between EA/IA and SARA is clarified, proponents may wish to scope EA/IA alternatives assessments early to integrate species-at-risk considerations, potentially allowing the record to better support a later SARA “reasonable alternatives” analysis.

Factual background

Canadian Nuclear Laboratories Ltd. (“CNL”) manages Chalk River Laboratories, a nuclear research facility in Ontario, owned by Atomic Energy of Canada Ltd. (“AECL”), a Crown corporation.⁴ CNL sought to construct a facility at the site for the long-term storage of low-level radioactive waste. Because construction would affect three listed species at risk,⁵ CNL required a permit from the Minister of Environment and Climate Change Canada (the “Minister”) under section 73 of SARA.⁶

Section 73 authorizes the Minister to permit activities affecting listed species only if certain preconditions are met. Section 73(3)(a) requires the Minister to be of the opinion that “all reasonable alternatives to the activity that would reduce the impact on the species have been considered and the best solution has been adopted.”⁷ The Minister issued the permit on the basis that the impacts on species at risk were incidental to the construction activities.⁸ The permit was successfully challenged on judicial review before the Federal Court, and CNL appealed.

“All reasonable alternatives”

The Court below interpreted section 73(3)(a) to mean that “ecological considerations must drive the first requirement of that section, the identification of “all reasonable alternatives” and found the Minister’s acceptance of CNL’s site selection process unreasonable because it “categorically exclud[ed]” non-AECL-owned sites without conservation-based justification.⁹ CNL argued before both courts that there were sound reasons for limiting site selection to AECL properties, including well-characterized geology, existing nuclear licences, and avoiding contaminating a new site.¹⁰

The Court of Appeal found the Court below’s approach “out of step” with Vavilov: a reviewing court must not supply its own preferred statutory interpretation and measure the administrative decision under review against it.¹¹ The Court of Appeal still found the Minister’s decision unreasonable, but for a more basic reason: the Minister’s reasons contained no analytical framework explaining how “reasonable alternatives” were identified, leaving the court with no “dots to connect.”¹²

“Best solution”

On the “best solution” requirement, the Court below relied on a different aspect of Vavilov: an unexplained departure from a longstanding institutional interpretation can itself be unreasonable.¹³ The Court below observed that in the past, Environment and Climate Change Canada (“ECCC”) had consistently interpreted “best solution” as the alternative that best advances species conservation. The Court below found the Minister’s shift to a more pragmatic balancing of ecological and economic factors was left unexplained.¹⁴

The Court of Appeal did not resolve this issue in detail because it identified the more direct problem: that the Minister’s reasons did not allow the Court to follow the chain of analysis. A reviewing court may “connect the dots on the page”; it must not step in and draw the picture itself.¹⁵

Here, both parties could plausibly read the science review underpinning the decision to support their competing positions, CNL saw a choice between two Chalk River sites, while the respondents saw a choice among on-site and off-site locations.¹⁶ The Minister therefore had failed to identify which sites were “reasonable alternatives” that would reduce impacts on species and why the selected site was the “best solution” among them.

The environmental assessment and SARA

The key issue for project proponents is how far an earlier assessment for a project can satisfy, or shape, SARA’s “all reasonable alternatives” inquiry. The two processes are in sequence: no SARA permit could issue until a favourable EA was made.¹⁷ Here, much of the evidence submitted during the multi-year EA, including the “alternative means” for site selection, was also submitted for the SARA application.¹⁸ The Canadian Nuclear Safety Commission also examined impacts on listed species as part of the EA.¹⁹

The parties disagreed about the significance of that overlap. CNL argued that the CNSC’s prior examination formed part of the “factual matrix” for the SARA decision, effectively narrowing the pool of “reasonable alternatives” under section 73(3)(a).²⁰ The Court below had disagreed, finding the EA to be of limited relevance because it engaged statutory objectives different from SARA’s species-conservation focus.²¹

The Court of Appeal took a middle path: it commented that the EA could not, in and of itself, replace the Minister’s independent SARA obligations.²² But determinations from an earlier EA (or by extension, IA) are not necessarily irrelevant, and may be relevant factual constraints that inform “the limits and the contours of the space in which the [Minister] may act.”²³ The Court of Appeal left two questions unanswered:

1. When considering reasonable alternatives and best solutions for the purposes of section 73(3)(a) of SARA, must the Minister revisit the “alternative means” assessment already completed during the EA?
2. Is the EA’s consideration of impacts on listed species relevant to the SARA permit or was the approval of the Chalk River location the “starting line” for the SARA process, leaving only two on-site alternatives to consider for the purposes of section 73(3)(a)?²⁴

These questions matter to project proponents. For example, in Georgia Strait Alliance v. Canada (Environment and Climate Change), 2025 FC 54, the Federal Court held that EA approval does not amount to, or pre-determine the outcome of, any request for a SARA section 73 permit required by the project.²⁵ That permit will only be issued if the Minister is independently satisfied that section 73’s preconditions are met.²⁶

The potential gap arises because EA/IA legislation and SARA ask different questions. It should be noted that an “alternative means” assessment generally considers technically and economically feasible options through a multi-criteria lens that weighs environmental, technical, economic, and social factors together. A proponent therefore might select a location that reduces cost and uses existing infrastructure, even if another location may better protect species at risk.

That choice may survive EA/IA scrutiny, which asks whether adverse effects are acceptable on balance in light of broader economic and societal goals. A later SARA permit application asks a narrower question under section 73(3)(a): whether “all reasonable alternatives to the activity that would reduce the impact on the species have been considered and the best solution adopted.”

Can this inquiry include factors considered in an earlier EA (or IA)? If an EA excluded or dismissed alternatives that were unattractive on cost, but superior for species-protection, the Minister may have to effectively revisit the EA alternative means analysis before issuing the SARA permit. In that scenario, a fully EA-approved project could still be blocked or delayed at the SARA stage.

Whether scoping an EA/IA to integrate species conservation considerations early on can avoid this result is an open question. Both the Federal Court and Court of Appeal also agreed that while SARA’s top priority is species at risk protection, “Parliament has also recognized the potential need to harmonize conservation with societal and economic realities stemming from human activities” not unlike the objectives of EA/IA legislation.²⁷

Here, the Court of Appeal left it to the Minister to grapple with this issue on redetermination.²⁸

This circumstance could also raise a standard of review issue. If the boundary between EA/IA and SARA were framed as a jurisdictional line between statutory regimes (i.e., where the EA/IA process ends and the independent SARA inquiry begins) correctness rather than reasonableness review may apply, because questions regarding the interplay between administrative bodies engage the rule of law.²⁹ The Minister did not provide reasons on this point, and the issue was not determined by the Court of Appeal. It seems possible this relationship may therefore ultimately require judicial resolution rather than reasonable Ministerial interpretation and judgment.

Given the current uncertainty, project proponents may wish to scope project EA/IAs to integrate the record and analysis on alternative means to be capable of accommodating both the familiar, broad balancing test applicable under EA/IA legislation, and SARA’s species-focused inquiry.

Conclusion

The Court of Appeal dismissed the appeal and remitted the matter to the Minister for redetermination.³⁰ On redetermination, the Minister is not bound by the Court below’s interpretation of section 73(3)(a) and may adopt a different framework for both the “all reasonable alternatives” and “best solution” inquiries, provided the reasons are transparent, intelligible, and justified within the meaning of Vavilov.³¹

For questions about this decision and its implications for major projects, environmental assessments, Indigenous rights and regulatory approvals, please contact the authors, who are members of Gowling WLG’s Environment & Climate Change and Indigenous Law teams.

Footnotes

1. Canadian Nuclear Laboratories Ltd. v Canada (Attorney General), 2026 FCA 106 CNL. at para 53; see also Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 Vavilov. at paras 83-86.

2. CNL at paras 44-45; citing Vavilov at para 86.

3. CNL at paras 55-58.

4. CNL at para 1.

5. The three species at issue are the Blanding’s Turtle, the Little Brown Myotis bat and the Northern Myotis bat (CNL at para 15).

6. CNL at paras 1, 24.

7. CNL at paras 2, 9.

8. CNL at para 1.

9. Kebaowek First Nation v Canada (Attorney General), 2025 FC 472 Kebaowek. at paras 48, 52.

10. CNL at para 50.

11. CNL at para 52; Vavilov at paras 83-86.

12. CNL at paras 44-46, 53; citing Komolafe v. Canada (Citizenship and Immigration), 2013 FC 431 at para. 11.

13. Vavilov at paras 130-31.

14. Kebaowek at paras 56-61.

15. Vavilov at paras 86, 97; citing Komolafe v. Canada (Citizenship and Immigration), 2013 FC 431 at para. 11.

16. CNL at paras 70-71.

17. CNL at para 57; see also Canadian Environmental Assessment Act, 2012, S.C. 2012, c. 19, s. 52, s 7.

18. CNL at paras 17, 57.

19. CNL at para 57; citing Species at Risk Act, S.C. 2002, c. 29, s 79.

20. CNL at para 51.

21. Kebaowek at para 51; CNL at para 49.

22. CNL at para 56.

23. CNL at para 56; citing Vavilov at para 90.

24. CNL at para 58.

25. Georgia Strait Alliance v Canada (Environment and Climate Change), 2025 FC 54 Georgia Strait Alliance. at paras 118, 165.

26. Georgia Strait Alliance at paras 165-66.

27. CNL at para 8; Kebaowek at para 36.

28. CNL at para 56.

29. See Northern Regional Health Authority v. Horrocks, 2021 SCC 42 (“d. ecisions concerning the jurisdictional lines between two or more administrative bodies must be correct” at para 7).

30. CNL at para 81.

31. CNL at paras 52, 81.

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