Legal Briefing

Supreme Court clarifies scope of regulatory discretion on environmental reviews

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Canada | 01 March 2010

In a unanimous decision released on 21 January 2010, the Supreme Court of Canada clarified the discretion of a federal responsible authority (RA) to make decisions regarding the scoping of projects for purposes of the federal environmental assessment (EA) process. In MiningWatch Canada v Canada (Fisheries and Oceans) [2010], 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.

MiningWatch has been in litigation for over four years, resulting in some confusion to date around the authority of an RA to decide if proposed projects can be ‘scoped’ as subject to either a screening or a comprehensive study. The Supreme Court has definitively stated that the facts about a project as proposed by its proponent determine whether a project is caught by the comprehensive study rules: there is no discretion under the law. In MiningWatch, 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.

BACKGROUND

Red Chris Development Company Ltd and BCMetals Corporation (Red Chris) submitted a project description for a copper and a gold mine to the BC Environmental Assessment Office (BCEAO) in October 2003. 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 that 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) relating to dams for the proposed tailings impoundment area and for a stream crossing. DFO then posted a Notice of Commencement of an EA, 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 (CEAA 1992) 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 1992. 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 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’, available at www.blakes.com.)

SUPREME COURT’S ANALYSIS

The Supreme Court of Canada held that the CEAA 1992 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 1992. 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 1992 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 future discussion the constitutional aspects of carrying out EAs in Canada.

Interestingly, while agreeing with the trial decision regarding 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 non-compliant with the CEAA 1992, Red Chris may proceed with the project nonetheless. This conclusion is influenced by several 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) [2006] and found it difficult to fault the RAs for following a Federal Court decision based on the very matter with which they were dealing. Secondly, MiningWatch clearly stated that their case was purely a test case to determine the federal government’s obligations under CEAA 1992 and it had no proprietary or pecuniary interest in the outcome. Thirdly, 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.

IMPLICATIONS

This decision is not likely to 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 harmonisation will continue. The court stressed that minimising 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.

CEAA 1992 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