the 11th annual blg environment al law update€¦ · recent developments in environmental law. a...

THE 11TH ANNUAL BLG ENVIRONMENTAL LAW UPDATE 2013 – 2014

It Begins with ServiceBorden Ladner Gervais LLP (BLG) is a leading full-service, national law firm focusing on business law, commercial litigation and arbitration, and intellectual property solutions for our clients. We recognize the importance of delivering timely, innovative and relevant advice and information to our clients.

BLG Vancouver is once again pleased to present its annual update of the most recent developments in environmental law. A number of interesting environmental law decisions were released in 2013 and 2014. Among the highlights were a Supreme Court of Canada decision confirming that rock fragments may constitute “contaminants,” a Federal Court ruling that conservation is not the paramount purpose of the Fisheries Act, and a very recent decision by the British Columbia Supreme Court with significant implications for the contaminated sites regime.

The two most significant developments in federal environmental legislation were the coming into force of the fisheries protection provisions of the Fisheries Act, R.S.C., 1985, c. F-14, and the coming into force of the Regulations Designating Physical Activities under the Canadian Environmental Assessment Act, S.C. 1992, c. 37 (“CEAA”).

Both represent a change in emphasis. The Department of Fisheries and Ocean is shifting focus from the protection of habitat protection to protection of fisheries. The Fisheries Act now prohibits serious harm to fish that are part of a commercial, recreational, or aboriginal fishery.

The Regulations Designating Physical Activities specify the types of projects that are potentially subject to an

environmental assessment under CEAA. The stated intent of the regulation is to ensure that projects most likely to cause significant adverse environmental effects are subject to environmental assessment.

Also of note, an emergency order was issued for the first time under the Species at Risk Act, S.C. 2002, c. 29, protecting the Greater Sage-Grouse.

Provincially, British Columbia enacted the Water Sustainability Act, S.B.C. 2014, c. 15. With the coming into force of the Water Sustainability Act, British Columbia has now joined the other provinces of Canada, and indeed most of the world, in regulating groundwater use.

Table of Contents

Vancouver Environmental Law Group .............................................................................................................................1

Group Profiles ................................................................................................................................................................3

Case Law ........................................................................................................................................................................5

1. Contaminated Sites ........................................................................................................................................................5

2. Environmental Prosecutions ..........................................................................................................................................12

3. Judicial Review ............................................................................................................................................................14

4. Miscellaneous Cases ....................................................................................................................................................20

5. Environmental Appeal Board Decisions ..........................................................................................................................21

Legislation ....................................................................................................................................................................25

1. Provincial Legislation ....................................................................................................................................................25

2. Federal Legislation .......................................................................................................................................................26

This publication is not intended to constitute legal advice, a complete statement of the law, or an opinion on any subject. No one should act upon it or refrain from acting without a thorough examination of the law after the facts of a specific situation are considered. You are urged to consult your legal adviser in cases of specific questions or concerns. BLG does not warrant or guarantee the accuracy, currency or completeness of this publication. No part of this publication may be reproduced without prior written permission of Borden Ladner Gervais LLP.

© 2014 Borden Ladner Gervais LLP

Portions of this work were originally published by D. Rossi et al, in “Environmental Law” Annual Review of Law and Practice, the Continuing Legal Education Society of British Columbia (CLE BC) (Vancouver: 2014), at pp. 211-248, republished with permission.

4 | Annual Review of Law & Practice | Environmental Law

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Vancouver Environmental Law Group

Environmental regulation in Canada is a complex, multi-jurisdictional field. at BLG we can help

your business navigate this framework, whether you deal directly in environmental matters, you

need assistance to comply with regulations, you develop environmental management systems,

are considering a major investment, or are completing soil and groundwater remediation

projects. BLG’s environmental Law Group can provide you with advice relating to real estate

development, oil and gas, petrochemicals, pipelines, public and private power projects, water,

natural gas, energy, oil sands, forestry, fisheries, municipal law, land expropriation, emissions,

commercial transactions, resource development and applicable environmental protection and

compliance law.

Our Environmental Law Group has extensive experience in matters relating to:

• complex insurance and civil matters triggered by environmental claims;

• drafting and interpretation of environmental policies;

• obtaining approvals for projects subject to federal and provincial environmental assessment legislation; and

• structuring and management of environmental due diligence exercises.

With the strength of a full-service law firm behind them, lawyers in the Environmental Law Group frequently work with their colleagues in other specialized areas, including energy, real estate, bankruptcy and litigation. Together, we can handle your complex commercial transactions, such as negotiation of brownfields acquisitions, divestitures, leasing, financings and re-development, as well as any litigation over contamination, environmental charges or compliance issues.

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Group Profiles

William McNaughton | 604.640.4120 | [email protected]

Bill McNaughton is co-National Leader of our Environmental, Municipal, Expropriation and Regulatory Group, National Leader of our Environmental Focus Group, and Vancouver Regional Leader for BLG’s Team North®. Ranked as one of the world’s leading environmental lawyers by the foremost legal ratings publications, Bill practises environmental law focusing on civil and commercial litigation, including defence of environmental charges, as well as general and Aboriginal litigation.

Rick Williams | 604.640.4074 | [email protected]

Rick Williams is the Regional Leader of our Environmental, Municipal, Expropriation and Regulatory Group. Rick represents and advises clients on all forms of dispute resolution including regulatory proceedings, corporate/commercial litigation and arbitration, with a particular focus on the areas of oil and gas, expropriation, environmental law and transportation. He was selected by peers for inclusion in the 2015 edition of The Best Lawyers in Canada® (Environmental Law, Oil & Gas Law), recognized in the 2014 edition of The Canadian Legal Lexpert® Directory (Oil and Gas) and received a peer review rating by a Martindale-Hubbell® AV® Preeminent™ 4.8 out of 5.

Deborah Overholt | 604.640.4164 | [email protected]

Deborah Overholt practises in the areas of environmental law, energy-related transactions, procurement, and general commercial transactions. In the environmental area, she represents various industrial and commercial enterprises, including forest companies, mining companies, manufacturers, transportation entities and financial institutions, in due diligence investigations, the negotiation and drafting of environmental provisions in transaction documents, environmental compliance issues, developing environmental management systems, environmental impact assessment and permit issues, and contaminated site issues.

Graham Walker | 604.640.4045 | [email protected]

Graham Walker is the Regional Leader of both our Maritime Group and our Insurance and Tort Law Group in Vancouver. Graham practises transportation law (with a focus on Maritime law, rail and trucking), environmental law, insurance and tort law, and general commercial litigation. He has been recognized as a “Litigation Star in British Columbia” in the 2014 edition of Benchmark Canada – The Definitive Guide to Canada’s Leading Litigation Firms and Lawyers (Insurance, Maritime).

Dionysios Rossi | 604.640.4110 | [email protected]

Dionysios Rossi practices in the areas of transportation law, oil and gas law, and environmental law. He frequently speaks and publishes on environmental law matters, and is the author of the Environmental Law chapter of the Continuing Legal Education Society Annual Review of Law and Practice. Dionysios has represented clients before the Federal Court and the Federal Court of Appeal, all levels of court in British Columbia, and a number of administrative tribunals. He is currently the Vice-President (Communications) and a Director of the Environmental Managers Association.

Evan Cooke | 604.640.4107 | [email protected]

Evan Cooke focuses his practice on expropriation negotiations and litigation, municipal law, commercial leasing litigation and general civil litigation. He regularly acts for private land owners advancing expropriation compensation claims, acts for Crown Corporations at their project-planning stages, assists landlords and tenants with commercial leasing disputes, and advises developers and property owners regarding development process and municipal law more generally.

Luke Dineley | 604.640.4219 | [email protected]

Luke Dineley focuses his practice on civil litigation, with an emphasis on environmental law, insurance and tort law and transportation law. In the area of environmental law, Luke’s experience includes representing and advising clients on a wide variety of contaminated site issues relating to both commercial and residential properties – including cost-recovery actions on behalf of plaintiffs and defendants. Luke’s transportation law work includes assisting clients with matters involving ocean carriers, trucking companies, airlines, marine terminals, warehouses, and automobile manufacturers.

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Case Law

1. Contaminated Sites

(a) Recent British Columbia Supreme Court Decision Shakes Up the Contaminated Sites Regime

In J.I. Properties Inc. v. PPG Architectural Coatings Canada Inc., 2014 BCSC 1619, the owner of James Island, JI Properties Inc. (“JIP”), sought recovery of costs spent cleaning up contamination under the statutory cause of action created by s. 47(5) of the Environmental Management Act, S.B.C. 2003, c. 53 (the “EMA”), against PPG Architectural Coatings Canada Inc. (referred to as “ICI”), a previous owner of the property.

The island hosted explosives manufacturing and storage until at least 1985. ICI owned the island until 1988 and from 1986 to 1988, undertook remediation. No legislative standard existed in BC at the time, so ICI and the BC Ministry of Environment and Parks (the “Ministry”) agreed upon criteria. In 1987, the Ministry stated the following in a letter:

…the agreed-to clean-up criteria are applicable to a specified land-use, i.e. airport, golf course or similar activity. Provided the use of the land remains as such, the designated clean-up criteria will not change. I see no reason at this time for us to impose different or more restrictive criteria on [ICI] to accommodate future changes to the special waste legislation or the adoption of provincial clean-up criteria.

If, however, the proposed land-use changes (either under [ICI] or another land owner) then different and/or more restrictive criteria might apply. It would be the responsibility of the land owner at the time to meet the designated clean-up criteria.

ICI undertook remediation following the guidelines established with the Ministry and submitted several reports detailing its efforts. The Ministry advised that the Deed of Title should identify historic use and development restrictions. A restrictive covenant was registered and the Ministry provided a letter (the “comfort letter”) to ICI:

…we concur that the clean-up has been undertaken to meet the established criteria for total lead, total mercury, dinitrotoluene and trinitrotoluene…criteria was based on the proposed restricted use of this rehabilitated industrial area. We note that the restrictive covenant on the property identifies areas and restricted land use. Accordingly, we do not perceive any further environmental concerns.

The restrictive covenant explicitly gave notice to successors in title that the land was previously used for manufacturing explosives and batching chemicals, and carried a risk of contamination. It stated that no residential premises were to be erected upon areas previously used for industrial purposes, and that building non-residential structures required prior written consent from the Crown.

In 1988, ICI sold James Island. The restrictive covenant formed part of the Offer to Purchase.

In 1994, James Island was sold to Eagle River Inc. The Purchase and Sale Agreement (the “Agreement”) mentioned the restrictive covenant and contained a condition precedent dictating the purchaser’s obligation to satisfy itself as to the feasibility of developing and utilizing the property for its intended use, including reviewing environmental conditions and relevant regulatory requirements. This condition was waived and the purchase completed. Shortly thereafter, Eagle River Inc. assigned the Agreement to JIP, owned by the same person. Prior to JIP taking ownership, it reviewed a memorandum from an environmental consultant indicating that he had reviewed at least part of the restrictive covenant and some of ICI’s reports delivered to the Ministry from its remediation project.

After purchasing James Island, JIP undertook further remediation from 2004 to 2006. By this time there were detailed standards set by government. Following remediation, JIP applied for and received a certificate of compliance pursuant to the EMA.

The first issue considered by the court was the applicable limitation period. As the remediation was carried out in 2004-2006 and the action was initiated in 2009, this issue was governed by the old Limitation Act, R.S.B.C. 1996, c. 266. Noting that the EMA is a remedial statue, the court found that the limitation period started to run when the last remediation cost was incurred, rather than separate causes of action accruing every time a remediation cost was incurred. As JIP continued to incur remediation costs after March 12, 2007 (i.e. two


years before it commenced its action on March 12, 2009), all prior costs were aggregated and recoverable. Anticipating the possibility of indeterminate liability for ‘responsible persons’ based upon this result, the court suggested such persons can immunize themselves against liability through certificates of compliance. The court stated that exposure without a certificate is consistent with “the ‘polluter pays’ and retroactivity principles that are the primary drivers behind the cost recovery regime set out in the Act.”

In the event that its conclusion regarding the date the cause of action arose was incorrect, the court went on to consider whether a two- or six-year limitation period applied. The court concluded that a six-year limitation period applied, as a cost recovery action under the EMA is not based on contract, tort, or statutory duty. The court found that the two-year limitation period set out in section 3(2)(a) of the Limitation Act for “injury to property” did not apply, because this refers to property damaged by extrinsic acts and not defects to property.

The second issue considered by the court was whether ICI or JIP qualified for an exemption under section 46 of the EMA. Section 46 exempts from liability for remediation costs holders of a certificate of compliance to a property that another person subsequently proposes or undertakes to change the use of. There is no prescribed form the certificate should take. ICI argued that, as its remediation efforts predated the province’s contaminated sites regime, the “comfort letter” the Ministry provided in 1988 should be considered a certificate of compliance.

The court agreed that the comfort letter likely met the definition of a certificate of compliance under the 1995 Contaminated Sites Fees Regulation. However, the letter did not meet the current definition, nor was the site remediated to current standards. Furthermore, the court noted that if the legislature had intended for such letters to be ‘grandfathered’ into the regime, it could have done so. The court concluded that the legislature did not intend to grant immunity to historical polluters “even though such persons may have attempted to clean up the property in good faith and with input and approval from the relevant Ministry officials at the time”. Accordingly, ICI did not qualify for the exception.

Section 46 also exempts “innocent acquirers” from liability for remediation. The court found that this exemption did not apply to JIP as JIP clearly had reason to suspect the existence of contamination when it purchased James Island.

The third issue considered by the court was the reasonableness of the remediation costs incurred. The court confirmed that the voluntary nature of remediation has little impact on its reasonableness, subsequent landowners’ motives for remediation “are largely irrelevant.” Both methods and costs must be reasonable.

The court gave great deference to the decisions made by consultants. ICI challenged the standards used by JIP’s consultant. The court, however, stated that “it is entirely reasonable for a landowner in the position of JIP to rely upon a highly qualified expert consultant…to assist with the difficult technical issues and thereafter to follow the consultant’s determinations and recommendations respecting the presence and remediation of contaminants.” While a consultant will not necessarily immunize a landowner from criticism, “the selection and use of an appropriately qualified expert is a factor which bestows reasonableness upon the ensuing approach to remediation and the costs associated with same.”

Furthermore, the court held that residential development could be considered a reasonable future use of James Island. It was therefore reasonable to undertake whatever remediation was necessary to secure a certificate of compliance with the Ministry, remove the covenant on title, and seek approval for any rezoning of the land necessary to permit or facilitate residential development. This assessment, in addition to the fact that when JIP purchased James Island much of the southern area of the island was already zoned as residential, militated in favour of a residential and urban parkland “primary use” determination and standards for remediation.

The court, though, did find that JIP’s approach to the remediation of the TNT manufacturing area and trench had been unreasonable, accepting ICI’s position that the approach adopted by JIP was “wrongheaded”. Further emphasizing the importance of consulting experts in remediation projects, the court stated:

Just as I accept the reasonableness of the West Beach Berm remediation because it was recommended by a qualified expert, I conclude it was unreasonable for JIP not to seek the input of an explosives remediation expert when unexploded ordnance and other crystalline substances were unearthed.

Finally, the court considered the question of quantum and allocation of damages. ICI criticized the invoices supplied by JIP as evidence of remediation costs and demonstrated several deficiencies with them. ICI submitted that the claim should be dismissed in its entirety due to JIP’s failure to meet its burden to prove actual costs, but the court rejected this argument, instead applying “a perhaps rough but fair discount to the total amounts claimed to account for the frailties in question.”

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As JIP was “a sophisticated entity and had no motive for incurring costs that were not necessary nor for paying for work that was not carried out”, the court determined that discounts for “gray areas” in arithmetic and accounting, and for the flawed “remediation by detonation” approach, would ensure fairness.

The court emphasized that reasonableness informs “not only the approach to remediation but also whether the associated costs were themselves objectively reasonable” and highlighted the fact that ICI criticized the methodologies employed by JIP, but not the reasonableness of the amounts charged by consultants, contractors, and others.

The court noted that JIP was “very much an innocent party”, as it had not contributed to the contamination of James Island. The court accepted in principle the argument that if the increased value of a remediated property exceeds the cost of remediation an award of remediation costs constitutes a windfall that should be considered in allocation. In this case, however, the court found that there was a “complete lack of proof” that the property had increased in value due to remediation. Therefore no evidentiary basis existed for allocating any portion of the reasonably incurred remediation costs to JIP beyond the aforementioned discounts. As a result, ICI was found to be fully responsible for reimbursing JIP its reasonably incurred remediation costs minus discounts for “gray areas” and remediation by detonation.

(b) “Owner Pay” Principle Trumps “Polluter Pay” Principle: Ontario Court of Appeal

Regular readers of the Annual Review of Law & Practice will be familiar with Kawartha Lakes (City) v. Ontario (Director, Ministry of the Environment). The case was heard by the Ontario Court of Appeal this year (2013 ONCA 310). The City of Kawartha Lakes appealed the Ontario Environmental Review Tribunal’s (the “ERT”) confirmation of a remediation order issued by the Director. The Director issued the remediation order in response to the release of several hundred litres of oil from the basement of a private property. The oil leaked into City storm drains, creating a risk of contamination to a nearby lake. The Director had initially ordered the landowners to remediate the damage, but they had limited financial means and their insurance coverage ran out before remediation of the City’s property was complete. The Director then ordered the City to remediate the remaining damage and prevent further discharge, even though the City had played no role in the original leak.

Before the ERT, the City argued that, as an innocent property owner, it was unfair and unreasonable that it should have to pay the costs of remediation, and that this violated the “polluter pay” principle, which is one of the principles governing an order under the Ontario Environmental Protection Act (the “EPA”). The City also sought to introduce evidence and an argument relating to fault for the spill.

The ERT found that the Director had exercised his discretion in a manner consistent with what it found to be the fundamental purpose of the EPA: the protection of the environment. No other party could have remediated the problem or, more particularly, could have prevented further contamination. The ERT also found that the statutory regime specifically contemplated making innocent owners pay for the initial cleanup and to prevent further contamination. As the question of fault was not a relevant issue, the ERT ruled the City’s evidence on this point to be inadmissible.

The City raised the same arguments on appeal to the Divisional Court in 2012, and again sought to adduce evidence going to fault. The court, however, upheld the ERT’s decision, confirming that the operating principle under section 157 of the EPA is not that the polluter pays, but that the owner pays. Accordingly, evidence of fault is not relevant in this process, other than in “rare” circumstances that were not present in this case.

Before the Court of Appeal, the City once again raised the polluter pay principle and argued that the ERT’s order excluding evidence that others were at fault for the spill denied it natural justice. The court rejected these arguments and upheld the rulings below that the order was a no fault order and that the legislative objective of protecting the environment trumped the polluter pay principle.

(c) Smith v. Inco Cost Reduction Upheld Because of Novelty of Case

Both the 2012 and 2013 editions of this chapter also included discussion of Smith v. Inco Ltd., 2011 ONCA 628. At trial, the court awarded $36 million in damages to the plaintiff class of Ontario residents living in the vicinity of a nickel mine operated by the defendant Inco Limited for the decade-long release of nickel particle emissions. The Court of Appeal, however, reversed the decision of the trial court, finding that: (1) the claimants had failed to establish Inco’s liability under either private nuisance or the rule in Rylands v. Fletcher; and (2) even if the elements of either or both causes of action were made out, the claimants had failed to establish any damages. The Supreme Court of Canada refused leave to appeal, in reasons indexed at [2011] S.C.C.A. No. 539.

This year, the case again came before the Ontario Court of Appeal on the issue of costs (2013 ONCA 724). The court had remitted the issue of costs back to the trial judge after its 2011 decision. The trial judge ordered costs of $1,766,000; a substantial reduction from Inco’s claimed costs. One of the reasons given by the trial judge for the reduction was the fact that the case was Canada’s first environmental


action to be certified as a class proceeding, and the first such action to proceed to trial. When a court exercises its discretion in awarding costs, section 31(1) of the Class Proceedings Act, 1992, permits the court to consider whether the case raised a novel point of law.

Inco appealed the cost award, claiming that the trial judge erred in holding that the case raised novel points of law. The Court of Appeal disagreed, upholding the trial judge’s decision to reduce the costs award.

Although the court upheld the trial judge’s reduction of costs based on the novelty of the case, the Court of Appeal pointed to one other Canadian environmental class action that had been certified and proceeded to trial: St. Lawrence Cement Inc. v. Barrette, 2008 SCC 64. However, Barrette was decided under the Civil Code of Quebec. The issues in Smith v. Inco dealt with private nuisance and the rule in Rylands v. Fletcher, both of which are specific to the common law and were thus not relevant to Barrette. Therefore, although the trial judge erred in stating that this case was the first environmental action to be certified as a class proceeding and proceed to trial, the Court of Appeal agreed that the case was novel.

(d) NSCA Decertifies Sydney Tar Ponds Class Action

In Canada (Attorney General) v. MacQueen, 2013 NSCA 143, the Nova Scotia Court of Appeal overturned a class proceeding certification in the Sydney Tar Ponds litigation, which arose after the closure of the steel-making industry on Cape Breton. The defendants, including the Attorneys General of both Canada and Nova Scotia and Sydney Steel Corporation, had appealed the certification decision.

The appellants argued that the statement of claim did not disclose valid causes of action for Rylands v. Fletcher liability, trespass, battery, or nuisance. Further, the appellants claimed that the certification judge erred in his analysis of whether the issues were really common between the members of the class.

The court held that the authorized release of contaminants by industry does not constitute an “escape,” within the meaning of the rule in Rylands v. Fletcher. Rather, the release of substances in the ordinary course of manufacturing is an intentional and continuous escape.

The court also held that the pleadings did not meet the requirements for a claim in trespass. Trespass requires that an intrusion be a direc interference. The pleadings alleged that contaminants were “deposited” on, and “migrated” to, lands owned or occupied by the plaintiffs in the class. However, the migration of contaminants is not sufficient to constitute a direct interference. The alleged deposit was also not sufficient to constitute a direct interference, as the deposit was not made directly onto lands owned or occupied by the plaintiffs.

Similarly, directness is a requirement for the tort of battery, and directness was not included in the pleadings. Accordingly, the court held that the claim in battery should also not have been certified.

The only claim sustained by the pleadings was in nuisance.

On this point, however, the court held that the certification judge erred by certifying all the common issues without conducting a separate analysis to determine whether the issues were common with respect to each cause of action. Although the issue of whether the contaminants were emitted by the steel company was common to the class, the class should not have been certified on the basis of that issue alone.

Because the court identified only one common issue, there would be no improvement in judicial economy by allowing the proceeding to continue as a class action. The individual nature of nuisance would require claimants to pursue their own claims. Certification would also not significantly mitigate the cost to each claimant of proving nuisance. Lastly, the court considered the potential for behaviour modification. The court concluded that this factor was not applicable to the facts of the case, as the steel plant and coke ovens had been closed since 2000. As a result, the court set aside the class certification order.

(e) Ontario Court to Consider Enforcement of $9.5 Billion Ecuadorian Judgment Against Chevron

In Yaiguaje v. Chevron Corp., 2013 ONCA 758, residents of rural Ecuador appealed a decision of the Ontario Superior Court declining to enforce a US$9.5 billion judgment against Chevron for environmental damage. The Ontario Court of Appeal allowed the appeal.

The Ecuadorian Court of Cassation had granted final judgment against Chevron in the amount of US$9.5 billion for harm caused by environmental pollution over the course of 18 years. The Ecuadorian plaintiffs commenced an action in Ontario in an attempt to enforce the judgment against Chevron’s Canadian subsidiary after Chevron failed to satisfy the Ecuadorian judgment. Chevron brought a motion to stay the Ontario action for lack of jurisdiction. The motion judge granted the stay and found that the courts of Ontario did have jurisdiction, but issued a discretionary stay on his own motion because he considered that the plaintiffs’ had no hope of successfully piercing the corporate veil of Chevron Canada.

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The court agreed with the motions judge that Ontario courts had jurisdiction to enforce the Ecuadorian judgment. The court held that in recognition and enforcement actions relating to foreign judgments, the real and substantial connection test should focus exclusively on the foreign jurisdiction. A court should not conduct a secondary inquiry into the relationship between the dispute in the foreign country and the Canadian court. A real and substantial connection between the enforcing court and the subject matter of the litigation is not necessary.

However, the court held that the motions judge erred in granting a discretionary stay of proceedings. The court held that a discretionary stay will only be justified in extraordinary circumstances that were not present in this case.

Finally, the Court of Appeal disagreed with the motion judge’s characterization of the enforcement action as an “academic exercise” that would be “an utter and unnecessary waste of valuable judicial resources.” The court held that the Ecuadorian plaintiffs should be given an opportunity to enforce the judgment in a court where Chevron would be required to respond on the merits. The possibility that the plaintiffs may not ultimately succeed should not be considered in determining whether to grant a discretionary stay before the defendants have attorned to the jurisdiction of the Ontario court.

The court concluded that “[t]his case cries out for assistance, not unsolicited and premature barriers…After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction. At this juncture, Ontario is that jurisdiction.”

(f) Certainty and Timing are Key Factors in Obtaining a Stay of a Remediation Order in CCAA Proceedings

In Nortel Networks Corp. (Re), 2013 ONCA 599, the Ontario Court of Appeal allowed an appeal by the Ministry of Environment (“MoE”), from the lower court’s stay of MoE remediation orders. The remediation orders were stayed pursuant to a Companies’ Creditors Arrangement Act (the “CCAA”) proceeding. This was the first decision of the court applying the landmark Supreme Court of Canada (“SCC”) decision in Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67.

Nortel had owned contaminated properties in Belleville, Brampton, Brockville, Kingston, and London. Prior to filing for CCAA protection, Nortel disposed of the properties, but retained a minor interest in the London property. Critically, at the time of the CCAA filing, the MoE had not issued any remediation orders. The MoE only issued such orders following Nortel’s CCAA filing. Nortel estimated it would cost $18 million to comply with the orders.

In finding the remediation orders were not stayed by operation of the CCAA, the court cited three requirements from the CCAA and the Bankruptcy and Insolvency Act:

1. there must be a debt, liability or obligation to a creditor;

2. the claim must be founded on an obligation falling within the time limit for CCAA claims; and

3. it must be possible to attach a monetary value to the obligation, based on substance as opposed to form.

The court held that ongoing environmental remediation obligations may be stayed as CCAA monetary claims apply only where the province has performed remediation work and advanced a claim for reimbursement or the obligation may properly be considered a contingent or future claim because it is sufficiently certain the province will do the work and seek reimbursement. In this case, other unrelated parties named in the remediation orders were jointly and severally liable with Nortel for compliance costs, including the current owners of the properies. The MoE could also make future orders against subsequent owners. Accordingly, the court held that the MoE would not necessarily be forced to undertake remediation of four of the Nortel properties.

The court made an exception with respect to the London property, holding that it was sufficiently certain that the MoE would undertake Nortel’s cleanup obligations and seek reimbursement. Nortel still retained some ownership and no other entity existed following Nortel’s insolvency. The property had no value and was abandoned. Therefore, the MoE order for the London site could not be compromised as a claim under the CCAA process, shifting costs to taxpayers.

The court’s decision seeks to balance multiple stakeholder interests in the CCAA process, including that of the general public. Not all remediation orders will be provable claims. In brief, MoE remediation orders will only be subject to a CCAA stay if it is reasonably certain that the provincial regulator “will ultimately perform remediation work.”

Northstar Aerospace Inc. (Re), 2013 ONCA 600, was heard by the same division of the Court of Appeal that heard Nortel. Unlike in Nortel, the MoE had issued orders against Northstar before the company filed for CCAA protection. Northstar sold all of its assets except for a property in Cambridge, Ontario, which had extensive trichloroethylene contamination. Unsurprisingly, no willing purchaser stepped forward to buy the contaminated property. Northstar indicated its intention to stop remediation and abandon it.


On these facts, the court agreed with the lower court that the remediation order sought to enforce, in practical terms, a payment obligation. The MoE had no realistic alternative but to remediate the Cambridge property. No subsequent purchaser was available to become subject to MoE orders. As with Nortel’s London property, the remediation order was a provable claim within the meaning of the CCAA, as it was sufficiently certain that the MoE would end up remediating the Cambridge site and would seek reimbursement from Northstar.

Read together, the Nortel and Northstar decisions indicate that the relative timing of CCAA protection and environmental remediation orders will likely be determinative in future cases. The regulator’s stated intention and the liquidity of other parties named in a remediation order will also be important considerations.

(g) Remediation Orders are Interlocutory, not Final

In Baker v. Ministry of the Environment, 2013 ONSC 4142, the former directors and officers of Northstar were ordered by the MoE to remediate several contaminated properties. The MoE issued remediation orders against the former directors and officers after Northstar filed for CCAA protection. The former directors and officers appealed the director’s order, and applied for a stay pending the appeal. The ERT heard and dismissed the motion to stay the proceedings.

The former directors and officers sought judicial review of the ERT’s decision. At issue was whether the decision was a final or an interlocutory order, whether Ontario’s EPA provides a right to appeal interlocutory orders, and whether the judicial review proceeding was premature.

The court held that the ERT’s decision not to stay the proceedings was an interlocutory order. The order did not finally dispose of the appellants’ rights, no final findings or dispositions were made, and the decision dealt with a collateral issue to the litigation.

The court went on to rule that the EPA does not provide a right to appeal interlocutory decisions. Section 145.6(1) of the EPA states:

Any party to a hearing before the Tribunal under this Part may appeal from its decision or order on a question of law to the Divisional Court in accordance with the rules of the court.

The court concluded that an order made pursuant to an application for a stay is not an order made “under this Part.”

Judicial review is only available for decisions or orders that are final in nature. As the former directors and officers had not yet exhausted all available remedies in the administrative process, the court held that the application for judicial review was premature. The appellants could request that the ERT review the order. They could also bring a new motion to stay the director’s order in light of new evidence and arguments that were not put forward on the first motion. The court noted that, in exceptional circumstances, a court can consider a judicial review application while administrative proceedings are ongoing. There was no authority before the court, however, to suggest that an order requiring the expenditure of money constitutes an exceptional circumstance. Even if the ERT committed an error of law in dismissing the application for a stay of the proceedings, that decision was not an exceptional circumstance.

Further, the court noted that the Tribunal does not have the jurisdiction to order a stay of a director’s order pending an appeal. Prior to 1990, a director’s order was automatically stayed pending an appeal. However, in response to a major fire at a tire facility, the legislature repealed the automatic stay pending appeals of ERT decisions. The legislature also limited the availability of stays. Consequently, persons who are subject to a director’s order may be required to incur the costs of interim compliance. The court concluded that this was consistent with the purpose of the EPA, which is “to provide for the protection and conservation of the natural environment.”

(h) Remediation “in a Timely Fashion” Does Not Mean as Quickly as Possible

In Western Forest Products Inc. v. New Westminster (City), 2013 BCSC 1001, a summary trial proceeding, the vendor plaintiff, Western Forest Products, sued the defendant, the City of New Westminster, for breach of contract concerning the sale of a contaminated former sawmill property. The contract permitted the City to withhold part of the purchase price to cover the costs of remediation. Once the remediation was complete, the City was required to remit the balance of the purchase price, minus the costs of remediation.

At the time of the trial, ten years had passed since the contract was signed, yet the remediation was still only partially complete. The vendor claimed that the City had not made reasonable efforts to complete the remediation diligently and in a timely fashion, and was therefore in breach of the contract. The City claimed that it had been reasonably diligent, and relied on the fact that there was no stipulation as to the allowable time for remediation in the contract. The language of the contract only required the City and its contractors “to take reasonable efforts to commence and complete the remediation of the Lands diligently and in a timely fashion.”

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The court held that although the City could have taken some steps more quickly, the contract did not require the City to proceed with the remediation as quickly as possible. The City was therefore not in breach of the contract. The court also noted that the fundamental reality underlying the contract was that the plaintiff had contaminated the property and it needed to be remediated before the City could use it. The plaintiff could have chosen other mechanisms to ensure the property was remediated in a timely fashion (e.g. by remediating the property itself). Because it did not do so, and because the contract did not specify that remediation had to occur as quickly as possible, or within a specific period of time, the plaintiff’s claim was dismissed.

(i) Contaminated Site Class Action Partially Dismissed

In Windsor v. Canadian Pacific Railway Ltd., 2014 ABCA 108, the court considered an appeal from an order partially granting a summary dismissal application related to a class action proceeding. The appeal was brought by the defendant, CP, who sought to have additional claims dismissed.

Since the early 1900s, CP has operated a locomotive repair facility in Calgary known as the Ogden shops. In 1999, it was discovered that Trichloroethylene (“TCE”), a degreasing solvent, had leaked into the groundwater flowing beneath the Ogden shops from a settling pond on the lands and had migrated onto numerous surrounding residential properties. The affected properties could be divided into roughly two categories: (i) properties where measurable quantities of TCE exceeded Health Canada thresholds; and (ii) properties where TCE levels were below Health Canada thresholds without any remediation. CP installed sub-slab depressurization systems under the former category (approximately 70 properties), which effectively reduced their TCE concentrations below Health Canada thresholds.

Local landowners, the Windsors, brought an action for diminution in property values and loss of rental income allegedly caused by the presence of TCE in the groundwater. The action was based on negligence, nuisance, trespass, and the doctrine in Rylands v. Fletcher. The action was subsequently certified as a class proceeding.

CP applied to summarily dismiss the Rylands v. Fletcher and nuisance claims.

The case management judge dismissed the nuisance claim by the class members without sub-slab pressurization systems in place, but declined to dismiss the other claims.

Applying the test most recently set out in Smith v. Inco Ltd., 2011 ONCA 628, the court allowed the appeal with respect to the Ryland v. Fletcher claims. The test for liability under the doctrine in Rylands v. Fletcher has four requirements: (i) an extraordinary, special, or extra-hazardous use of the land; (ii) a substance brought onto the land that is likely to do mischief if it escapes (which entails at least some element of foreseeability); (iii) an escape; and (iv) damage to the plaintiff’s property as a result of the escape. The court held that there was no genuine issue with respect to the first three requirements, and that it was accordingly not necessary to consider the fourth requirement except with respect to the nuisance claims.

First, there was nothing unusual about CP’s use of its lands. The Ogden shops were at all times zoned for industrial use and “every railway obviously needs to have a facility to repair its rolling stock”. There was also nothing “special” or “extra-hazardous” about the repair of locomotives or the use of TCE in this process.

Second, it was uncontradicted that the TCE had been used in accordance with the best practices available at the time, and that its use was not known to possess the harmful qualities that later emerged. Once the risk was understood, in 1982, its use was discontinued.

Third, the migration of the TCE was not an “escape” or the result of any sort of “accident or misadventure”. While CP’s conduct did not meet modern environmental standards, the discharge of the TCE into the settling pond and the resultant migration of the TCE into the surrounding groundwater was the result of deliberate conduct that was part of the repair process.

However, the court dismissed the appeal regarding the nuisance claims by landowners with sub-slab pressurization systems in place. The court held that not only was there evidence that the landowners ability to use, occupy, and enjoy their lands had been impaired by the effects of the TCE, but the very need to constantly mitigate those effects through sub-slab depressurization systems was itself a measurable form of non-trivial damage.


2. Environmental Prosecutions

(a) Light Reflecting from Office Windows can be “Radiation” (at least in Ontario)

In Podolsky v. Cadillac Fairview Corp., 2013 ONCJ 65, the court considered whether bird deaths caused by the birds flying into the highly reflective glass windows at an office tower complex constituted a regulatory or public welfare offence under the Ontario Society for the Prevention of Cruelty to Animals Act (the “OSPCAA”), the Ontario EPA, or the Species at Risk Act (“SARA”). The case proceeded by way of a private prosecution brought by Ecojustice, an environmental advocacy group.

Ecojustice alleged that the defendants were guilty of the following strict liability offences:

1. under the OSPCAA, for causing animals to be in distress by having or using highly reflective glass that caused death or injury to birds;

2. under the EPA, for discharging a contaminant, namely radiation (light) from reflective glass, that caused or was likely to cause an adverse effect; and

3. under SARA, for killing or harming threatened species of birds.

The defendants argued that their conduct fell outside of any reasonable interpretation of the above-noted offence provisions. The defendants also argued that, in any event, they had exercised all reasonable care under the circumstances. Indeed, the evidence showed that the defendants were among a small minority of commercial property owners in the Greater Toronto Area who had taken some remedial action to reduce bird deaths.

The court found that OSPCAA did not apply as its offence provisions only concerned animals in captivity, not wildlife.

The court disagreed, however, with the defendants’ assertion that there was anything “manifestly absurd” about the alleged offences under the EPA and SARA, concluding that both were to be given a generous and purposive interpretation. Specifically, the court held that “radiation” could not be reduced to “radioactivity.” It was an expansive term that could capture a wide variety of natural phenomenon, including light reflecting from a window. As a result, the court held that “accidental, careless or involuntary killing” falls within the scope of SARA.

Accordingly, the court held that the actus reus for the offences under both the EPA and SARA had been established.

The court then considered whether the defendants had taken reasonable care in the circumstances. Noting, inter alia, that the defendants had complied with municipal building and industry standards, that only a handful of buildings in the Greater Toronto Area had adopted a more aggressive strategy for deterring birdstrikes, that the defendants had implemented and maintained a policy to respond to nocturnal light pollution, and that they had cooperated with the “Fatal Light Awareness Program,” the court concluded that the defendants had met their onus and found them not guilty of all charges.

While the defendants were ultimately acquitted, this decision highlights the importance of harm reduction efforts and due diligence on the part of businesses to avoid committing environmental offences.

(b) Rock Fragments May Constitute “Contaminants”

In Castonguay Blasting Ltd. v. Ontario (Environment), 2013 SCC 52, the Supreme Court of Canada finally settled the issue of whether rock fragments from blasting constitute a “contaminant” with adverse effects on the environment.

Castonguay had been conducting blasting operations as part of a highway-widening project. One of the blasts sent rock debris approximately 90 m, damaging a private residence and a vehicle. Castonguay followed the reporting procedures stipulated in its contract, but did not report the incident to the Ontario MoE. Subsection 14(1) of the Ontario EPA required that the MoE be notified if the discharge of a “contaminant” caused or was likely to cause an “adverse effect.”

The trial judge agreed with Castonguay that it was “inconceivable that the EPA would be interpreted so broadly as to consider that this was an ‘environmental’ event.” However, both the Ontario Superior Court of Justice and Court of Appeal disagreed.

The Court of Appeal held that there did not need to be a risk to the natural environment for there to be a potential adverse effect under the EPA and that the flying rock debris was therefore a contaminant within the meaning of the EPA. This conclusion was supported by the plain meaning of the relevant provisions of the EPA, the EPA’s broad purpose - identified as including regulation of uses of the environment that cause harm to people, animals, and property - and the decision of the Supreme Court of Canada in Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031, and the decision of the Ontario Court of Appeal in R. v. Dow Chemical Canada Inc. (2000), 47 O.R. (3d) 577.

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The Supreme Court of Canada largely adopted the reasoning of the majority of the Court of Appeal, emphasizing the broad goals of environmental protection statutes and the concomitant generous interpretation given to their provisions. Rock fragments could fit within the definition of “contaminant,” broadly interpreted, and the physical damage to the house and car were a more than trivial adverse impact. The Supreme Court also held that, given the statutory definition, there was no requirement that an “adverse effect” had to include impairment of the quality of the natural environment. Non-trivial damage to property was sufficient, and in this case there was no question that the damage to the house and car was more than trivial.

The Supreme Court emphasized that environmental reporting provisions are not intended to leave the discretion to the potential polluter. If there is any doubt, the incident should be reported so that the MoE can investigate and determine whether any pollution has in fact occurred and what, if any, remedial steps are required.

(c) No Defence of Due Diligence for Reasonably Discoverable Defect

In R. v. Regional District of North Okanagan, 2013 BCPC 271, the District was charged with four strict liability offences for failing to provide potable drinking water, as required by the Water Act, and the Drinking Water Protection Act. The offences arose from an incident in January 2010, in which massive quantities of manure contaminated the District’s drinking water system.

Three artesian wells had historically produced high quality drinking water for the District: a shallow well, a deep well, and a discontinued culvert well. At the time of the incident giving rise to these charges, the shallow well and the deep well were in use. The District was aware of seasonal bacterial contamination in the shallow well and excess magnesium content in the deep well. Typically, the shallow well water would be used until bacterial contamination presented a problem, at which point the District would begin using the deep water well, while working to remove the bacterial contamination from the shallow well. In order to detect bacterial contamination, the District implemented a chlorine monitoring system. A drainage system was also present to prevent surface water from entering the shallow well.

Over the course of the previous decade, the District was made aware of a cross connection between the shallow well and the drainage system, which created a risk that surface water could contaminate the shallow well. Reports and inspections were conducted, and it was recommended that the District cease use of the shallow well water for drinking. The District, however, disregarded these suggestions.

In January 2010, a farmer spread cow manure on top of the snowpack on fields adjacent to the well heads. Shortly thereafter, warm weather caused significant thawing and the resulting runoff carried effluent onto the well property and into the aquifer. The contaminated water was pumped into the distribution system and delivered to residents of the area.

The District argued that it had been duly diligent, but the court rejected this defence. The court found that the effluent most likely entered the well through a pipe that was discovered on the eve of trial. Although the District was not previously aware of this pipe, the court held that it would have been easily discoverable with a reasonable inspection. In any event, the District had been aware of the risk of contamination for over a decade and had done nothing to mitigate these risks.

Accordingly, the court found the District guilty on all four charges.

(d) Culpability a Dominant Factor in Sentencing on Environmental Offences

The 2012 edition of this chapter included a discussion of R. v. Mission Western Developments Ltd., 2011 BCSC 1378. In that case, the B.C. Supreme Court overturned a voir dire decision excluding evidence obtained from a search of the defendant’s property. The case was sent back to trial, and the court found the accused corporation and director guilty of carrying on a work or undertaking that resulted in the harmful alteration, disruption or destruction of fish habitat contrary to section 35(1) of the Fisheries Act (2013 BCPC 92). The corporation and its director had retained an environmental consultant to advise on compliance with environmental laws, but then neglected to heed the recommendations of the consultant’s report. The court concluded that their actions resulted in the harmful alteration, disruption, or destruction of a creek running through their property.

A separate sentencing hearing was conducted several months after the trial (with reasons indexed at 2013 BCPC 309). The court first considered whether the Kineapple principle, which prevents an accused from being convicted multiple times for the same act, applied to limit the number of offences of which the defendants could be convicted. The defendants had been convicted on two counts under section 35(1) of the Fisheries Act. The first count related to harm caused to the creek, and the second count related to harm caused to the “riparian vegetation located along the banks” of the creek. The court concluded the Kineapple principle did apply, and the Crown entered a stay with respect to the first count.


The court then reviewed the five factors from R. v. Terroco Industries Ltd., 2005 ABCA 141, which are to be considered in sentencing for environmental offences. These factors are culpability, prior record, acceptance of responsibility and remorse, damage and harm caused, and deterrence. The court found that the defendants demonstrated a significant degree of culpability, and that culpability should be the dominant factor in sentencing. The court also found that the harm caused in this case was very significant, though it was mitigated by the defendants’ donation of part of their property to an environmental conservancy.

Ultimately, the court ordered the corporate defendant to pay $26,540 to the conservancy for the restoration of the property and the director to pay a fine of $20,000.

3. Judicial Review

(a) “Recreational Values” Should Not Be Construed Narrowly

In Society of the Friends of Strathcona Park v. British Columbia (Environment), 2013 BCSC 1105, the Society brought an application for judicial review of the Minister’s decision to issue a Park Use Permit (the “Permit”). The Permit allowed Clayoquot Wilderness Resort (the “Resort”) to take guided horse tours into a wilderness conservation zone of Strathcona Provincial Park, the oldest provincial park in B.C. The Society appealed the Minister’s decision.

The court first addressed the question of standard of review. The Society argued that correctness was the appropriate standard because the question was a true jurisdictional one. The court, however, cited Dunsmuir v. New Brunswick, 2008 SCC 9, and Alberta (Information and Privacy Commissioner) v. Alberta Teacher’s Association, 2011 SCC 61, for the principle that the category of true jurisdictional questions should now be narrowly interpreted. Further, the court noted that the Minister’s decision involved factual as well as legal considerations. Accordingly, the court held that the standard of review was reasonableness.

The court then considered whether the Minister’s decision was in fact reasonable. The Society argued that hiking in a pristine valley was the only relevant recreational value to consider and the Minister’s decision was unreasonable because the Minister had considered horse use as a recreational value and had considered recreational values in the context of upgrades to the trails by the applicant. The Society also argued that section 9.1 of the Park Act, which had been cited by the Minister, did not apply as its application was limited to the construction or development of a tourism facility.

The court did not agree with these restrictive arguments. The court noted that the Minister reviewed a significant amount of material in coming to his decision, including policy created by Parks B.C., historical and current reports about the park, and community consultation submissions from Ahousaht First Nations, the Society, and the Strathcona Park Public Advisory Committee. All community groups (except the society) supported the issuing of the Permit, and that the Resort had updated its permit application to reflect the recommendations made in the most recent report prepared for Strathcona Park. In addition, the court disagreed that hiking was the only relevant “recreational value.” The court held that section 9.1 is not limited to the construction or development of a tourism facility, but rather allows the Minister to issue a permit if the activity “complements the recreational values of the park involved.”

Finally, the court commented negatively on the Society’s attempts to admit extrinsic evidence in the judicial review proceeding. The court reaffirmed that a judicial review does not allow a case to be reheard; rather, it constitutes an assessment of the record to determine whether the challenged decision was reasonable.

(b) Aboriginal Title Claims and Judicial Reviews are Distinct Processes

In Canadian Forest Products Ltd. v. Sam, 2013 BCCA 58, the court considered a dispute between Canfor and the Kelah group (a House of the Wet’suwet’en First Nation) over a tract of forested land in north central British Columbia. The Ministry of Forests had issued a cutting permit to Canfor to harvest timber in the area. The Kelah group commenced an action seeking injunctive relief preventing the logging and making claims of Aboriginal rights and title. The trial judge granted an injunction preventing logging.

One of the factual circumstances that “could not be overlooked” was the fact that the area in question was affected by pine beetles and there was a short window of time in which that timber could be harvested.

The court found that the action commenced by the Kelah group “savours of abuse of process.” While there was no reason such a claim could not proceed, combining such claims with litigation concerning the validity of the cutting permit was inappropriate. As the court noted, if the permit was validly issued, Canfor “ought to be able to proceed under it without let or hindrance.” If the permit’s issuance was rendered

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defective for some other reason, such as lack of consultation, then that should have been declared. Disputes over the validity of the cutting should have been pursued via judicial review.

The court suspended the operation of its order for two months to allow the Kelah group time to convert their litigation into a judicial review. The Supreme Court of Canada denied leave to appeal in July 2013, in Hagwilneghl v. Canadian Forest Products Ltd., [2013] S.C.C.A. No. 146.

(c) Judicial Review of EA Decision Premature if Brought Before EA Process Ends

In Conseil des Innus de Ekuanitshit c. Canada, 2013 FC 418, the Federal Court dismissed an application for judicial review of an Order in Council approving the federal government’s response to a joint review panel report concerning the Lower Churchill Hydroelectric Generation Project (the “Project”). The federal government had concluded that although the Project would likely cause significant adverse effects on a local caribou herd, those effects were justified in the circumstances.

The applicant band participated in the environmental assessment (“EA”) process related to the Project. The proponent of the Project was Nalcor, a Crown corporation wholly owned by the Government of Newfoundland and Labrador. The Project involved the construction and operation of two hydroelectric generating facilities on the Lower Churchill River in Labrador. The size and impact of the Project mandated a joint review panel, the most comprehensive assessment available in the federal EA process.

The main issues identified by the court were: (1) whether the applicant’s challenge of the scoping decision was statute barred; (2) whether the government respondents properly considered the factors identified in section 16 of the Canadian Environmental Assessment Act (the “CEAA”); and (3) whether the applicant was properly consulted and accommodated in relation to the Project.

With respect to the scope issue, the court concluded that the applicant’s challenge was statute-barred pursuant to section 18.1(2) of the CEAA, which imposes a 30-day limitation period on challenges to decisions or federal boards or tribunals. The applicant’s challenge came more than two years after the scope decision and the applicant did not offer any reasonable explanation for this delay or petition for an extension of time. The court also went on to find that the Minister’s decision to maintain the scope of the Project as proposed by Nalcor was reasonable.

With respect to the section 16 issue, the court held that the government respondents had properly considered the relevant factors. The court confirmed that the positive, as well as negative, effects of prior and future related projects should be taken into account by a joint review panel.

Finally, the court found that the applicant’s consultation and accommodation arguments were premature, as they were brought before the completion of the final stage of the five-stage federal EA process (regulatory permitting). The applicant had argued that consultation and accommodation must not only be evaluated when final permits are issued, but also when the Crown makes “strategic, higher level decisions” that may impact Aboriginal claims and rights. The court, however, agreed with the government respondents that such decisions trigger the duty to consult, not the duty to evaluate the consultation process, and held that the consultation process should not be judged until it is completed.

(d) Cumulative Impact of a Project’s Constituent Parts Does Not Trigger an Environmental Assessment

In David Suzuki Foundation v. British Columbia (Ministry of Environment), 2013 BCSC 874, the court considered whether Holmes Hydro Inc.’s plan to build eleven run-of-river hydroelectric plants on tributaries of the Holmes River required an environmental assessment. Under the statutory scheme (the B.C. Environmental Assessment Act, and the Reviewable Projects Regulation), such assessments were only required if the hydroelectric “project” included a new facility with a rated capacity of greater than or equal to 50MW of electricity.

The Environmental Assessment Office (the “EAO”) had advised Holmes Hydro that no assessment was required, since each plant had a generating capacity less than the threshold for an assessment. Several non-profit societies appealed this decision on the basis that the project as a whole exceeded the applicable threshold.

The court upheld the decision of the EAO, finding that the legislation was intended to be proponent-driven and that the hydroelectric plans – while economically interdependent – were functionally independent and it was reasonable for the EAO to consider them individually.

The court went on to state that even if it had found the EAO’s decision to be unreasonable, it would still not have granted the relief sought. Citing Mining Watch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2, the court noted that relief can be denied were the project


proponent has done nothing wrong and would be prejudiced by further delay and costs if the assessment process had to be redone. This would certainly have applied to Holmes Hydro, since it had spent $2 million over several years in reliance upon the EAO’s decision and would have faced significant additional costs for conducting an environmental assessment and reapplying for water licences and land tenure.

(e) No Limits on Director’s Jurisdiction to Make Recommendations

In Pacific Booker Minerals Inc. v. British Columbia (Minister of the Environment), 2013 BCSC 2258, the court heard a petition for judicial review of a recommendation made by the executive director of the Environmental Assessment Office (the “Director”) not to issue an environmental assessment certificate. The applicant mining company challenged the Director’s recommendation as ultra vires the statutory scheme in the EAA. Pacific also claimed that it had not been afforded procedural fairness.

Pacific claimed that the Director exceeded his jurisdiction to make recommendations regarding environmental assessments. The court disagreed, holding that the language of subsection 17(2) of the B.C. Environmental Assessment Act (the “EAA”) does not limit the authority of the Director to make recommendations. That subsection requires a report and allows the Director to make recommendations. If the Director makes recommendations, reasons for those recommendations must be given. The court found nothing in the section precluding the Director from making recommendations that are inconsistent with the report. Because the Director was interpreting his home statute, the court reviewed the Director’s decision with deference.

The court went on to consider the five factors set out by the Supreme Court of Canada in Baker v. Canada (Minister of Citizen and Immigration), [1999] 2 S.C.R. 817. The court ruled that the Director’s recommendation not to issue the certificate of environmental assessment failed to meet the requirements for procedural fairness. Of the five Baker factors, four pointed to a higher level of procedural fairness: the statutory scheme of the EAA included a long and expensive process, which mandated greater procedural fairness; the decision would have a significant impact on the petitioner’s interests; the petitioner could legitimately expect to have an opportunity to be heard considering the serious concerns that were being expressed by others about the project; and the process would not have been harmed had the petitioner been allowed to submit a written response to the Director’s concerns. The court concluded that the petitioner should have been afforded this opportunity.

Because the Director’s recommendation resulted in the Minister of Environment and the Minister of Energy, Mines and Natural Gas refusing to issue the environmental assessment certificate, the court made an order in the nature of certiorari quashing and setting aside the Ministers’ decision.

(f) Failure to Consider All Possible Cumulative Environmental Effects Does Not Constitute an Error of Law

In Fort McKay First Nation v. Alberta Energy Regulator, 2013 ABCA 355, the court canvassed, inter alia, the jurisdiction of the Regulator to consider cumulative environmental effects when making decisions. The First Nation opposed the development of a steam-assisted gravity drainage oil-sands project, which, if approved, would abut the First Nation’s reserve in Northeastern Alberta. The First Nation sough a buffer zone around the reserve. The Regulator approved the project without the buffer zone, and the First Nation brought an application for judicial review of that decision.

The First Nation alleged that the Regulator erred in law by narrowly construing both its inquiry jurisdiction and its remedial jurisdiction with respect to the issue of cumulative environmental impact. The court declined to grant leave to appeal on this ground, finding that the Regulator had, in fact, properly considered the cumulative effects of the proposed development on the surrounding environment.

Part of the First Nation’s argument was based on a paragraph of the Regulator’s decision indicating that Alberta Environment and Sustainable Resource Development (“AESRD”) had jurisdiction to consider broader cumulative effects, including the designation of protected areas. The court disagreed with the First Nation’s contention that this paragraph indicated that the Regulator had not sufficiently considered cumulative environmental effects. Instead, the court found that the Regulator had considered some of the cumulative environmental effects, but properly left others to be considered by AESRD. While the Regulator’s decision is open to criticism regarding the balancing of factors it considered, this did not constitute an error of law.

(g) Minister’s Refusals to Implement Emergency Orders are not Immune to Review

Alberta Wilderness Association v. Canada (Attorney General), 2013 FCA 190, came before the Federal Court of Appeal on the issue of document production and cabinet confidentiality. Four environmental organizations commenced proceedings seeking an order in the nature of mandamus requiring the federal Minister of the Environment to issue an emergency order to implement a Recovery Strategy for the endangered Greater Sage-Grouse.

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During the document production stage of the proceedings, the appellant societies had demanded that the Minister produce materials before him regarding the emergency order application for the protection of the Sage-grouse. The societies had also demanded that the record of the Minster’s decision regarding the emergency order application be produced, if any decision had been made to recommend protection or to refuse to identify further critical habitat for the Sage-Grouse.

The Minister invoked cabinet privilege over the documents, providing a declaration by the Clerk of the Privy Council declaring that the documents the appellant societies sought contained confidences of the Queen’s Privy Council.

The appellants brought a motion for an order requiring the Minister to produce the documents outlining the information upon which his decision would be or had been based, and the decision itself, if it had already been made. The motion judge dismissed the motion, and the appellants appealed.

The court held that the appellants could not seek document production in relation to the Minister’s failure to make a decision, because documents before the Minister were irrelevant if he did not rely on them and had not yet made a decision. As a result, the court dismissed the appellants’ request for document production in relation to the order mandamus.

However, the court also cited Roncarelli v. Duplessis, [1959] S.C.R. 121, holding that the Minister’s discretion to decline to make a recommendation to Cabinet must be exercised within the legal framework provided by the legislation, and that it cannot have been the legislative intention to shelter from review every refusal to make a recommendation for an emergency order. Accordingly, the court returned the issue to the case management judge or prothonotary on the understanding that the Minister would unequivocally state his position.

(h) Decisions of Environment Canada Investigators May Be Subject to Judicial Review

The Federal Court of Appeal was faced with a judicial review application regarding a decision made by a peace officer in 876947 Ontario Ltd. (c.o.b. RPR Environmental) v. Canada (Attorney General), 2013 FCA 156. The proceedings arose out of an investigation carried out by the Environmental Enforcement Directorate (“EED”), the enforcement arm of Environment Canada. The EED was responding to a complaint filed pursuant to section 17 of the Canadian Environmental Protection Act (“CEPA”). Section 17 allows any adult Canadian resident to request the Minister to investigate an alleged offence under CEPA. The appellant company, RPR Environmental, asserted, inter alia, that the EED had no valid basis on which to commence and continue the investigation.

The respondent Attorney General brought an application to strike out portions of RPR’s notice of application on two grounds, one of which warrants discussion. The Attorney General contended that EED investigators are effectively peace officers who exercise broad enforcement powers. As such, the Attorney General contended that this type of investigation is criminal and the Federal Court lacked the jurisdiction to review the EED decision. A prothonotary heard the motion, and struck portions of the appellant’s fresh as amended notice of application relating to the improper commencement and continuation of the investigation. The issue on appeal was whether the Federal Court erred in upholding the prothonotary’s order.

The Federal Court of Appeal concluded that it was not plain and obvious that the EED investigator was acting as an enforcement officer, as opposed to a federal decision-maker. Thus, the court dismissed the motion to strike portions of the notice of application. A final determination on the merits will be necessary to resolve the ambiguity.

(i) Conservation is Not the Paramount Purpose of the Fisheries Act

In Sandy Pond Alliance to Protect Canadian Waters Inc. v. Canada, the Federal Court considered an application for judicial review seeking a declaration that the regulatory scheme set out in sections 5 and 27.1 and Schedule 2 of the Metal Mining Effluent Regulations (the “Regulations”), was ultra vires the regulation-making powers granted to the Governor in Council pursuant to the Fisheries Act.

The applicant was a non-profit, activist group based in Newfoundland. Vale Inco Ltd., the Mining Association of Canada, and the Mining Association of British Columbia all intervened on the side of the Crown.

The applicant argued that recent amendments to the Regulations were ultra vires the Governor in Council because, in permitting the discharge of effluent without treatment, the amendments were a significant change that required specific authorization under the Fisheries Act and, in any event, were contrary to the conservation purposes anticipated by the Act. The Crown and the intervenors relied on section 36(5) of the Act, which had been referred to in the amendments and, they argued, contemplated the deposit of deleterious substances in fish-bearing waters.


The court agreed with the Crown and the intervenors that section 36(5) of the Fisheries Act, particularly when read in conjunction with subsection 36(3) and paragraph 36(4)(b), clearly authorized the impugned amendments to the Regulations. The court also held that conservation is not the paramount purpose of the Fisheries Act, which contains no purpose section, and concluded by stating that “[t]he fact that regulations enacted pursuant to the Act may have negative environmental consequences does not per se, render those regulations invalid.”

(j) Evidence of the Size of the Impacted Population must be Presented if an Argument of Serious and Irreversible Harm to an Animal Population is to Succeed

In Ostander Point GP Inc. v. Prince Edward County Field Naturalists, 2014 ONSC 974, the Divisional Court of the Ontario Superior Court of Justice considered three appeals from a decision of the Environmental Review Tribunal (the “Tribunal”) revoking the Director’s decision to authorize Ostrander to construct and operate nine wind turbines on a parcel of Crown land in Prince Edward County (the “Project”). The Tribunal had revoked the authorization as it had found that the Project would cause “serious and irreversible harm” to an animal species, namely, Blanding’s turtle.

The appeal that warrants discussion was brought by Ostrander and the Director, who challenged the Tribunal’s finding regarding serious and irreversible harm. They argued that the Tribunal had failed to keep these distinct requirements separate and that, while there was a risk of serious harm to the local population of Blanding’s turtles, the risk was not irreversible.

The court agreed that the Tribunal had failed to make a distinction between the two elements of the statutory test. The court was particularly concerned that the evidence before the Tribunal had failed to establish the size of the population of Blanding’s turtles at risk, whether at the Project site, in Prince Edward County, or in Ontario. The court stated that, “[i]t is difficult to see how one could make a legal determination whether an increase in the mortality rate at the Project site, and surrounding landscape, would or would not be significant in terms of irreversibility without knowing the size of the population impacted.” By implicitly assuming that any increase in mortality was both significant and amounted to irreversible harm, the Tribunal had erred; it had adopted an interpretation of the statutory test that would always be met. “Scientific certainty” of irreversible harm was not required, but there did have to be “some level of data” allowing at least an order of magnitude to be calculated before a proper finding of irreversible harm could be found.

Similarly, in reaching its decision the Tribunal had placed great emphasis on the issue of road mortality (Blanding’s turtles like to breed in the gravel beside roadways) and the effect of the Project on road mortality, but again did so without any evidence regarding the increase in traffic that would result from the Project.

Further, as part of the Project, Ostander had been required to, and had, obtained a permit under the Ontario Endangered Species Act (the “ESA Permit”). The ESA Permit expressly permitted Ostander to “kill, harass, capture, possess and transport Blanding’s Turtle”, subject to certain conditions. In order to obtain the ESA Permit, Ostander had had to satisfy the Minister that “an overall benefit to the species will be achieved within a reasonable time through requirements imposed by conditions of the permit”.

The Tribunal had been dismissive of the relevance of the ESA Permit to its analysis. However, while the court agreed that the ESA Permit should not have been determinative of the issue before the Tribunal, the court found that the Tribunal ought to have accepted the ESA Permit at face value and considered the impact of the ESA Permit on the issue of irreversible harm. This the Tribunal failed to do.

As a result of these errors by the Tribunal, the appeal of Ostander and the Director was allowed, and the Project’s renewable energy approval restored.

The decision has been appealed and, in reasons indexed at 2014 ONCA 227, the Ontario Court of Appeal granted a stay of the Divisional Court’s order until the appeal is decided. Despite recognizing that Ostrander had a limited window prior to mid-autumn when it can perform any work (in order to protect Blanding’s turtles, the renewable energy approval prohibits construction between May and October), the Court of Appeal accepted the Field Naturalists argument that irreparable harm would result and any appeal from the order of the Divisional Court would be rendered moot if the stay was not granted.

(k) Court Clarifies Evidentiary Standards for Compensation under the Oil and Gas Regime

In Progress Energy Canada Ltd. v. Salustro, 2014 BCSC 960. the court considered Progress’s application for judicial review of the Surface Rights Board’s (the “Board”) decision to increase the rents payable by Progress to Salustro (the “Decision”), a landowner in northeastern British Columbia on whose land Progress operated oil and gas facilities (wellheads, access roads, and valve or riser sites). Progress alleged that the Board had misstated the applicable evidentiary onus and erred by awarding compensation that exceeded Salustro’s loss and in the absence of evidence that Salustro intended to farm the land in question.

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Salustro did not appear and the Board only provided submissions on the applicable standard of review.

Until the Decision, Progress had paid Salustro an annual rent of $10,750 for access to his lands under five surface leases. This amount had been negotiated between Progress and Salustro.

In the Decision, the Board considered the factors set out in section 154(1) of the Petroleum and Natural Gas Act 1 (in particular (c), (e), (f), and (i)), and increased the annual rent payable by Progress to $20,618.

With respect to the preliminary issue standard of review, the court confirmed that the standard of review for Board decisions is that set out in section 59 of the Administrative Tribunals Act 2: correctness for all questions except those respecting the exercise of discretion, findings of fact, and the application of the common law rules of natural justice and procedural fairness; factual findings must not be set aside unless there is no evidence to support the finding or, in light of all the evidence, it is otherwise unreasonable and discretionary decisions must not be set aside unless they are patently unreasonable. The court also held that the common law jurisprudence on judicial review, including Dunsmuir v. New Brunswick, is generally not applicable to decisions of the Board. Where the issue is one of mixed fact and law, the two-part test set out by the Court of Appeal in Morgan-Hung v. British Columbia (Human Rights Tribunal),3 applies to determine the standard of review.

With respect to the evidentiary onus, the court confirmed that the party bringing an application for rent review, in this case Salustro, bears the onus of proof. However, the court dismissed Progress’s claim that the Board had reversed the onus of proof in the Decision.

The court held, though, that the Board’s conclusion that it was reasonably probable and foreseeable that Salustro would farm the lands in the future was unreasonable in light of all the evidence. The only evidence before the Board on this point had been that there was “no market for hay” either in 1997 or in 2013, that the lands were not currently being farmed, and that Salustro did not live on the lands. None of which provided any support for the Board’s conclusion.

The court also held that the Board’s conclusion that there would be compensable tangible impacts on the lands to be an error of fact: “what tangible impacts could there be for farming that is foreseeable but not actually taking place?” The Board’s findings regarding intangible impacts, however, were upheld, though seemingly only because the issue had been conceded by Progress before the Board.

Accordingly, the court referred the issues of the probability of farming and tangible impacts back to the Board for reconsideration, along with the issue of global compensation if the Board considers that it is appropriate.

(l) Municipal By-Laws Cannot Frustrate the Purpose of Provincial Environmental Statutes

In East Durham Wind, Inc. v. The Municipality of West Grey, 2014 ONSC 4669, the applicant, a wind energy company, applied for judicial review of two municipal by-laws that, in design and application, prevented it from proceeding with construction of a wind energy project in the Municipality of West Grey. East Durham held a Renewable Energy Approval (“REA”) from the province under the Environmental Protection Act, R.S.O. 1990, c. E.19.

The by-laws in question governed “entrance permits”, required to connect access roads on private lands where the turbines were to be located to public highways in the Municipality, and “oversize/overweight haulage permits”, required for the conveyance of large and heavy project materials by truck along public highways.

East Durham had applied for entrance permits on three occasions and been denied each time. The Municipality had also passed an amended by-law after East Durham’s third application effectively removing the possibility of a successful application in the future.

East Durham applied for eight haulage permits, after unsuccessfully trying to negotiate a comprehensive “Road Use Agreement” with the Municipality. After more than a month, the Municipality announced that before the applications could be considered a security contract would need to be negotiated with East Durham. The mayor speculated that negotiations could take 6-8 months.

East Durham argued that the by-laws were in direct conflict with the provincial regime for REAs and, accordingly, were inoperative to the extent of the conflict.

The Municipality argued that its authority to control entrances from private land onto public highways in its jurisdiction and to permit the travel of oversize/overweight vehicles on its roads was unfettered. The Municipality also argued that the by-laws did not conflict with the

1 R.S.B.C. 1996, c. 361.2 S.B.C. 2004, c. 45.3 2011 BCCA 122.


REA because: (1) they related only to the use of municipal, not private property; (2) they were enacted long before East Durham’s turbine project and were not designed to thwart wind turbines; and (3) they had no specific application to wind turbines. Further, the Municipality argued that East Durham had not positively shown that it could not construct the project without the permits (e.g. by using the existing entrances to the private lands and breaking the materials into smaller loads).

The court rejected the first argument, holding that the test is whether the by-laws frustrate the purpose of the REA, regardless of how.

The court then applied the two-pronged test for determining whether conflict exists between federal and provincial laws set out in Croplife Canada v. Toronto (City) (2005), 75 O.R. (3d) 357 (C.A.). Under this test, a by-law can be ultra vires for: (1) operational conflict; or (2) frustration of the purpose of a provincial legislative instrument. The court’s analysis focused on the second-prong.

The court determined that the purpose of the clean energy regime in Ontario was to encourage and facilitate the development of renewable energy projects, including wind energy projects. The provincial regime was intended to be a complete regime, and the ability of municipalities to restrict renewable energy development through various powers under the Planning Act and Municipal Act had been curtailed.

The court also rejected the Municipality’s argument that East Durham had failed to establish that the permits were necessary, holding that it was clear from the record that this had never previously been disputed.

Accordingly, the court held that both by-laws were inoperative to the extent that they frustrated the purpose of the REA, i.e. the building of the wind turbine project. The court expressly noted that this did not affect the parties’ ability to engage in good faith negotiations around reasonable conditions, including financial security, regarding East Durham’s proposed use of the public highways. The Municipality was ordered to reconsider East Durham’s applications in light of the directions provided in the decision.

4. Miscellaneous Cases

(a) Res Judicata Finding Requires Property Owners to Cease Construction and Rehabilitate Property

In Denman Island Local Trust Committee v. Stoneman, 2013 BCSC 218, the Denman Island Local Trust Committee applied by petition for a declaration that the Stonemans had altered land they owned without a development permit, contrary to certain sections of the Local Government Act. The Stonemans argued that the bylaw was invalid.

The Stonemans had purchased the land in question from Mr. Ellis while Mr. Ellis was engaged in litigation regarding trees he cut in an established buffer zone. That litigation was decided by a B.C. Supreme Court decision in 2005, in which the court upheld the bylaws in question as valid and found that Mr. Ellis had violated them (reasons indexed at 2005 BCSC 1238, upheld on appeal, 2007 BCCA 536). Despite being aware of this decision, the Stonemans started construction on the same property without a permit in October 2006, building a house, outbuildings, and a staircase down a bluff that was supposed to be protected from erosion.

The court was dismissive of the Stonemans’ arguments, and held that the issue had already been decided in the previous litigation, in which the Stonemans were involved, and that the issue was res judicata. As a result, the court ordered that the Stonemans cease construction and undertake rehabilitation of the property at their cost, including removal of any structures for which they are unable to obtain a permit.

(b) Energy Regulator Does Not Owe a Private Duty of Care to Citizens

In Ernst v. EnCana Corp, 2013 ABQB 537, Ms. Ernst sued EnCana, the Energy Resources Conservation Board (the “ERCB”),4 and the Province of Alberta for $33 million for alleged contamination of the Ernst water well by nearby hydraulic fracturing operations.

Ms. Ernst also claimed against the ERCB for personal damages under the Canadian Charter of Rights and Freedoms (the “Charter”), alleging the ERCB had violated her free speech rights by barring her from communicating with it through public communication channels, and ignoring her until she agreed to communicate with it directly.

Alberta and the ERCB both brought applications for orders striking paragraphs from Ms. Ernst’s pleadings. In the alternative, the ERCB sought summary judgment in its favour.

The court refused Alberta’s application to strike paragraphs from Ms. Ernst’s claim, finding that while the pleadings could have been improved, this was not enough to render them “frivolous.”

4 In 2012, before this decision was written but after the case was heard by the court, the Responsible Energy Development Act, S.A. 2012, c. R-17.3, came into force, replacing the ERCB with the Alberta Energy Regulator. However, the decision refers to the ERCB.

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However, the court granted the ERCB’s request for summary judgment. In relation to Ms. Ernst’s tort claims, the court held that the ERCB did not owe Ms. Ernst a private law duty of care. Although it owed Ms. Ernst public duties, the relationship of proximity necessary to found a private duty of care did not exist. The court analogized Ms. Ernst’s relationship with the ERCB to the relationship between the plaintiffs and regulators in Cooper v. Hobart, 2001 SCC 79, and Edwards v. Law Society of Upper Canada, 2001 SCC 80. In both Cooper and Edwards, as well as in the case at bar, the regulator had no direct regulatory authority over the member of the public. The court held that the mere fact that Ernst communicated directly with the ERCB did not found a private law duty of care. In any event, the court was of the view that Ms. Ernst’s claims against the ECRB were in any event barred by section 43 of the Energy Resources Conservation Act (the “ERCA”), which precludes actions against the ERCB for anything done in pursuance of the ERCA.

In relation to Ms. Ernst’s Charter claim, the court noted that it was novel, but refused to strike it on this ground, stating “because a cause of action may be novel, it is not necessarily ‘doomed to fail’ by reason of novelty alone.” However, the court again held that Ms. Ernst’s claim was barred by the statutory immunity conferred on the ERCB by section 43 of the ERCA. The court wrestled with the issue of whether statutory immunity clauses could bar claims for Charter damages, but concluded that they could do so in relation to personal Charter remedies for the same reason that limitation periods apply to such claims and on the policy basis that to hold otherwise would encourage frivolous Charter claims brought solely to circumvent statutory immunity provisions.

(c) Federal Government does not have a Legal Duty to Protect Burns Bog

In Burns Bog Conservation Society v. Canada (Attorney General), 2014 FCA 170, the defendants sought a summary judgment dismissing the plaintiff’s claim that they had a legal duty to protect a peat bog located in Metro Vancouver. The plaintiff, Burns Bog Conservation Society, was a non-profit society dedicated to preserving the peat bog. The defendants were federal ministers associated with the Pacific Gateway Strategy, an infrastructure program intended to improve Canada’s maritime access to markets around the Pacific and Indian Oceans. The plaintiff felt that a road running adjacent to the peat bog, approved as part of the Pacific Gateway Strategy, would negatively impact the hydrology of the peat bog.

The federal government had contributed funds towards the purchase of the peat bog, was party to a management agreement respecting the peat bog, and had been granted a conservation covenant over the peat bog, but did not have title over any part of the peat bog.

The plaintiff alleged that the defendants owed the Canadian public a trust, fiduciary, or other legal duty to protect the peat bog. The plaintiff also claimed that the defendants were obliged to protect the peat bog under the FA, the SARA, the Migratory Birds Convention Act, S.C. 1994, c. 22, and the Canadian Environmental Protection Act, S.C. 1999, c. 33.

The court allowed the defendants’ motion, finding that there was no genuine issue for trial. The court held that none of the various above-noted agreements imposed any positive obligation on Canada respecting the protection of the peat bog. The court also held that the federal government did not owe any trust obligations respecting the peat bog, because it did not own the peat bog and there was no basis in law or equity to impose a “public trust” duty in this case. Further, the court held that fiduciary obligations could not be owed to a geographical location or the public at large, and that the federal government had not assumed any fiduciary obligation to the plaintiff. Finally, the court held that none of the statutes cited by the plaintiff imposed upon the federal government any obligations with respect to the peat bog.

On appeal, the plaintiff argued that the trial judge had erred in law by requiring it to put forward evidence of harm to Burns Bog and failing to conclude that the various agreements provided a legal basis for its action.

The Court of Appeal gave these arguments short shrift, holding that the trial judge was correct to find that the plaintiff’s case was bound to fail. The Court of Appeal held that, rather than basing his decision on a “lack of evidence”, the trial judge had concluded that there was no genuine issue for trial because there was no legal basis to find that the defendants owed a legal duty to protect Burns Bog. With respect to the plaintiff’s second argument, the Court of Appeal agreed that the plaintiff had failed to establish the essential elements of a trust or fiduciary relationship. Novelty alone was not a sufficient answer in and of itself to allow an action to proceed and to refuse to grant summary judgment.

5. Environmental Appeal Board Decisions

(a) “Person Aggrieved” Has More Than a “Genuine Interest” in a Decision

In Lynda Gagne; Emily Toews; Charles Henry Claus; Pamela Vollrath; Elisabeth Stannus; Skeena Wild Conservation Trust; Lakelse Watershed Stewards Society v. Director, Environmental Management Act, (31 October, 2013), 2013-EMA-005(a) and 2013-EMA-007(a) to 2013-EMA-012(a) EAB, the appellants sought judicial review of a decision of the Director to issue a permit to Rio Tinto Alcan Inc., authorizing the company to increase the effluent discharged from its smelter in Kitimat. This hearing dealt with the preliminary issue of jurisdiction. At issue was whether the appellants were “persons aggrieved” within the meaning of section 100 of the Environmental Management Act (the “EMA”).


The appellants submitted that the test for standing under the EMA should be informed by the test for public interest standing set out by the Supreme Court of Canada in Downtown Eastside Sex Workers United Against Violence Society v. Canada (Attorney General), 2012 SCC 45. Rio Tinto submitted that the appellants did not fall into the category of “persons aggrieved” within the meaning of section 100, and that the test for public interest standing has no bearing on this appeal. The Director took the position that the Environmental Appeal Board (the “EAB”) had no jurisdiction to grant public interest standing.

In previous decisions, the EAB had queried whether a person “has a genuine grievance because an order has been made which prejudicially affects his interests.”

The EAB concluded that it did not have jurisdiction to grant public interest standing. The EAB’s jurisdiction is derived from its enabling statutes, including the EMA. Thus, the EAB applied the principles of statutory interpretation to determine the meaning of “persons aggrieved,” ultimately concluding that the meaning was not ambiguous. According to the EAB, a person aggrieved is one whose “rights or interests are, or may be, harmed, injured or adversely effected by that decision.” The EAB explicitly rejected the contention that a “person aggrieved” is one with a “genuine interest” in the outcome of the appeal. To interpret the statute in this way would be to give no effect to the word “aggrieved.” The EAB concluded that the appropriate test for standing under section 100 of the EMA is:

Whether the person has disclosed sufficient information to allow the Board to reasonably conclude that the appealed decision will, or may, prejudicially affect the person’s interests.

The EAB granted standing to Ms. Toews and Ms. Stannus, as both appellants provided sufficient information to establish that their personal interests could be affected.

(d) Nestlé’s Proposed Settlement Agreement Not in the Public Interest

In 2012, Nestlé applied for a permit to bottle groundwater. Nestlé requested that the permit be amended to allow higher daily extractions, as long as the average daily taking in each month remained the same. The Ontario MoE granted the permit on these terms. However, Nestlé objected to the inclusion of a “drought clause,” which would have limited taking of groundwater in drought conditions.

Prior to the Ontario ERT hearing, the MoE and Nestlé gave notice of a settlement reached by the parties. The notice indicated the parties had agreed that the drought conditions clauses were unnecessary. Wellington Water Watchers and the Council of Canadians applied for and were granted party status to contest the settlement. The issue became whether the proposed settlement agreement should be accepted by the ERT.

At the hearing, the ERT considered its jurisdiction and duty as set out in Rule 200 of the ERT’s Rules of Practice. Rule 200 requires the ERT to assess whether the proposed withdrawal is consistent with the purpose and provisions of the relevant legislation and whether the proposed withdrawal is in the public interest. The ERT concluded that the drought conditions were necessary in order to comply with the purpose and provisions of the Ontario Water Resources Act (the “OWRA”).

Although the ERT made its decision based on the purpose and provisions of the OWRA, it went on to comment on the parties’ submissions regarding the public trust doctrine:

To the extent that public trusts presently exist in Canadian common law, the rights they produce are rights of access… These rights of access do not prevent the Crown from establishing regulatory regimes over the resources or from governing the resources in accordance with those regimes.

The Director had not restricted access to the aquifer; rather, the provisions of the OWRA had done so. Accordingly, the ERT found that the doctrine of public trust had no bearing on the matters at hand and declined to place obligations on the Director to exercise his authority under the OWRA in a particular way. Any extension of the public trust doctrine was left for another decision maker, on another day.

As the settlement agreement was not in the public interest, the ERT ruled that the appeal should proceed to a full hearing. Nestlé subsequently abandoned its appeal.

(e) Water Sustainability Act 5

On April 29, 2014, Bill 18, the Water Sustainability Act (the “Act”), passed Third Reading in the Legislative Assembly of British Columbia. The Act has significant implications for all domestic, recreational, and industrial water users in British Columbia.

5 This article originally appeared in the June 20, 2014 issue of The Lawyers Weekly published by LexisNexis Canada Inc.

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The Act replaces the previous Water Act, which had been in force for over a century (since 1909) and had long been criticized as an impediment to adequate water protection and management in British Columbia. Accordingly, the stated objective of the new Act is to address the competing demands for and scarcity of water, while implementing an area-based approach to water management throughout the province.

Importantly, the new Act collapses the distinction between surface water use (which was regulated under the Water Act) and groundwater use (which was previously unregulated). As a result, British Columbia is now the last province in Canada, and one of the last jurisdictions in the world, to regulate groundwater use.

In recent years, water use has become an increasingly controversial issue in British Columbia. This has been primarily due to public concern about the use of water for large-scale industrial purposes. In the northeastern part of British Columbia, the use of water for hydraulic fracturing (or “fracking”) by the oil and gas industry has received much media attention. While the industry is making efforts to reduce its water use (in part, by recycling the water used in fracking operations), 406 wells were hydraulically fractured using 7.05 million cubic metres of water in 2012, the last year for which numbers are available. In another widely reported case, Nestlé Canada’s operation of a large-scale bottled water facility near Hope, British Columbia, has resulted in the company bottling and selling a reported 319.5 million litres of water sourced from the surrounding area, on an annual basis, for free.

Under the new Act, non-domestic users of groundwater (such as oil and gas companies and Nestlé) will be required to pay an application fee and an annual rental, in the same way that surface water users did under the Water Act, and will continue to do. The applicable fees remain to be determined by regulation. The province has indicated that costs for both surface and groundwater will be increasing, and that the rate structure may change as well.

In the legislative proposals that preceded the Act there was discussion of a potential exemption from licensing requirements for oil and gas wells that used water from deep saline sources, rather than freshwater. While no such exemption exists in the current text of the Act, one could still be implemented in future regulations.

The Act confirms that short-term water approvals (for periods of less than 24 months) may still be granted without the need for a full licence application. Such approvals are commonly used in the oil and gas industry to obtain water for fracking operations. Under the Water Act it had been unclear as to whether the issuance of repeated short-term approvals for the same purpose was authorized. The Oil and Gas Commission regularly engaged in this practice, which gave rise to a judicial review proceeding launched by the Western Canada Wilderness Committee and the Sierra Club of B.C. The impugned practice is expressly authorized under the new Act.

With respect to environmental concerns, the Act expands the protection of fish and aquatic environments. The Act requires decision makers to consider the needs of the environment when issuing licenses or making future allocation decisions. It also confers upon decision makers the authority to issue temporary protection orders to maintain sufficient quantities of water to sustain fish and aquatic ecosystems during water shortages.

On a related note, the Act also increases the government’s ability to regulate water use during times of scarcity. The Act establishes a hierarchy of water uses to ensure that sufficient water continues to be available during periods of drought for prioritized uses, such as essential household uses and agriculture. Groundwater use will generally be prioritized on a “first in time, first in right” basis, subject to certain exceptions, including a super-priority for “essential household uses” (that is also applicable to surface water use). “Essential household use” is defined as the use by the occupants of a private dwelling of not more than 250 litres of water per day for drinking water, food preparation, sanitation, and animal and pet purposes.

The Act is intended to improve water security, efficiency and conservation through a number of tools designed to tailor water management to regional needs. For example, water objectives are introduced that require local land use and resource development activities to meet quality and quantity benchmarks for a particular water source. The Act also establishes a comprehensive framework for water governance by expanding both the means of governance and the opportunity for citizen involvement. In addition, the Act reconfigures the Water Act ’s “water management plans” into “water sustainability plans”, which have greater regulatory authority. Regulations under the Act now also have the ability to be adjusted regionally or for single sources of water.

Taken together, these long-overdue reforms to water management in British Columbia appear to constitute a comprehensive attempt to balance the competing interests of various domestic, recreational and industrial stakeholders. As always, however, much will depend on the content of the future regulations envisioned by the Act and exactly how they will be interpreted.

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Legislation1. Provincial Legislation

(a) Environmental Management Act

(i) Contaminated Sites Regulation

On January 24, 2013, amendments to the Contaminated Sites Regulation came into force. The amendments included changes to Schedules 6 and 10 (Generic Numerical Water Standards for iron and manganese) and the establishment of a new Schedule 5 (Matrix Numerical Soil Standards).

These changes were intended to provide relief from responsibility for naturally occurring contamination caused by substances that exceed natural background (ie. non-human influenced) levels.

(ii) Environmental Data Quality Assurance Regulation

On September 27, 2013, amendments to the Environmental Data Quality Assurance Regulation came into force. The amendments updated the sampling, analytical, quality control, and reporting procedures for environmental monitoring data and modified the requirements for becoming and remaining a laboratory qualified to test samples.

(iii) Mushroom Compost Facilities Regulation

On November 27, 2013, the Minister of Environment ordered the amending of the Mushroom Composting Facilities Regulation. This amendment changed the name of the regulation from the previous Mushroom Composting Pollution Prevention Regulation to the current Mushroom Compost Facilities Regulation, and amended the sections concerning active aeration and goody water. The regulation now also requires that the design and construction of a mushroom compost facility to be supervised and approved by a professional engineer.

(b) Drinking Water Protection Act

(i) Drinking Water Protection Regulation

On March 19, 2013, section 3.1 of the Drinking Water Protection Regulation was repealed and replaced. The new version of section 3.1 alters certain exemptions in section 6 (Water Supply Systems Must Provide Potable Water) of the Drinking Water Protection Act.

The amended section clarifies that certain water supply systems are exempt from the potable water requirements in section 6. A small system is exempt if each recipient of water from that system has a point of entry or point of use treatment system, and the non-potable water discharge and non-potable water piping are clearly marked. A water supply system (including a small system), is exempt if the system does not provide water for consumption or food preparation purposes, it is not connected to another system that provides water for consumption or food preparation purposes, and the location of non-potable water discharge and non-potable water piping are clearly marked.

(c) Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act

(i) Renewable and Low Carbon Fuel Requirements Regulation

On July 1, 2013, amendments to the Renewable Fuel Requirements Regulation came into force. These amendments altered the prescription of renewable fuel in section 5 (Renewable Fuel) as well as the prescribed formulas for low carbon fuel requirements in section 10 (Supplementary Part 2 Compliance Report) and 11.02 (Low Carbon Fuel Requirement). The amendments also changed certain conditions to be followed by fuel suppliers as prescribed in section 7.2 (Exemption from “Part 2 Fuel Supplier”) and added section 7.21 (Application to be a Part 2 Fuel Supplier) and section 11.023 (Application to be a Part 3 Fuel Supplier).


(d) Clean Energy Act

(i) Greenhouse Gas Reduction (Clean Energy) Regulation

On November 28, 2013, amendments to the Greenhouse Gas Reduction (Clean Energy) Regulation came into force. The amendments changed the definition of “eligible vehicle” in the regulation. They also expanded part (b) of the definition of eligible vehicle to include mine haul trucks and locomotives. The amendments also clarified the scope of public utilities’ undertakings with respect to section 18 of the Clean Energy Act.

Significantly, section 3 of the regulation, which established that the regulation would be repealed on April 1, 2017, was itself repealed. No new date for the repeal of regulation was set.

2. Federal Legislation

(a) Canadian Environmental Assessment Act

(i) Regulations Designating Physical Activities

On October 24, 2013, amendments to the Regulations Designating Physical Activities came into force. As the name suggests, this regulation prescribes the activities that constitute a “designated project” under CEAA. The Regulations Designating Physical Activities were originally brought into force along with the recent changes to CEAA. It sets out a description of each type of project potentially subject to an environmental assessment and the relevant triggering requirement for such an assessment.

The government indicated that the amendments were intended to ensure that the activities subject to review under the regulation appropriately reflected the types of projects that have the greatest potential to cause significant adverse environmental effects in areas of federal jurisdiction.

The amendments included:

• adding the following types of projects to the list of designated projects: (1) diamond mines; (2) apatite mines; (3) railway yards; (4) international and interprovincial bridges and tunnels; (5) the first offshore exploratory wells in Exploration Licence areas; and (6) expansions to oil sands mines;

• deleting the following types of projects from the list of designated projects: (1) groundwater extraction facilities; (2) heavy oil sands processing facilities; (3) pipelines and electrical transmission lines not regulated by the National Energy Board; (4) potash mines and other industrial mineral mines; and (5) industrial facilities;

• deleting the separate entry for offshore metal mines and instead regulating such mines under the general entry for metal mines;

• linking the threshold for an environmental assessment for mine expansions to the increase in the area of disturbance, rather than just to production capacity;

• adopting a consistent approach for all expansions designating the threshold as an increase of 50% or more in the size of the facility and that the resulting facility must meet or exceed the threshold size for a new facility of that type; and

• reducing the threshold for environmental assessment for pipelines regulated by the National Energy Board from 75 km on a new right-of-way to 40 km of new pipe whether or not it is laid on a new right-of-way.

The amendments also included a transitional provision, exempting existing projects and those for which approval has already been obtained or an assessment by another jurisdiction has already begun, on the day the amendments came into force.

Despite the extent of the changes, the amendments are not expected to materially affect the total number of projects that are subject to federal environmental assessments annually.

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(b) Canadian Environmental Protection Act, 1999

(i) On-Road Vehicle and Engine Emission Regulations

On January 31, 2013, amendments to the On-Road Vehicle and Engine Emission Regulations came into force. These amendments were intended to bring Canadian requirements into line with new, more stringent on-board diagnostic requirements in the United States.

The amendments introduced two principal changes: (1) a requirement that heavy-duty engines of the 2014 or later model year used or intended to be used in heavy-duty vehicles that have a gross vehicle weight rating of more than 6,350 kg be equipped with an on-board diagnostic system; and (2) measures intended to reduce the administrative burden of complying with the regulations.

(ii) Renewable Fuels Regulation

On October 25, 2013, amendments to the Renewable Fuels Regulation came into force. The amendments introduced a permanent nationwide exemption from the requirement for an average of 2% renewable content in heating distillate oil (i.e. home heating oil).

The exemption is intended to mitigate cost increases for Canadians that use oil to heat their homes. The amendments are expected to result in financial savings for the consumers, at the cost of foregone reductions in greenhouse gas emissions.

(iii) Disposal at Sea Regulations

On April 27, 2013, the Governor-in-Council published proposed amendments to the Disposal at Sea Regulations. The proposed amendments are intended to increase certainty in the permitting process for disposal at sea and reduce the administrative burden on stakeholders.

The proposed amendments would require, with some exceptions, that decisions on new permit applications be made within 90 days. A new renewal process for low-risk, routine projects that do not vary from year-to-year would also be introduced. Decisions on renewal applications would be required to be made with 45 days.

(iv) Orders Adding Substances

Numerous orders adding and deleted substances to the Domestic Substances List and Schedules 1 and 3 of the Canadian Environmental Protection Act, 1999 were made this year. Interested readers should keep in mind that these lists are regularly updated and remember to check them whenever a relevant issue arises, rather than relying on past research.

(c) Fisheries Act

(i) Fisheries Protection Provisions Now in Force

On November 25, 2013, the long-awaited and controversial amendments to the fisheries protection provisions of the Fisheries Act came into force. These amendments are regarded as representing a significant shift in the federal government’s approach to fisheries regulation and environmental protection in general.

The most significant change brought about by the amendments is the change in focus from “habitat” protection to “fisheries” protection.

The Act previously stated that “no person shall carry on any work or undertaking that results in the harmful alteration, disruption or destruction of fish habitat.”

The Act now states that “no person shall carry on any work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery.” (Emphasis added).

The key concept is “serious harm to fish,” which is defined as the death of fish or any permanent alteration to, or destruction of, fish habitat. The new Fisheries Protection Policy Statement published by the Department of Fisheries and Oceans Canada states that it will interpret serious harm to fish as including any one of the following:

• the death of fish;

• a permanent alteration to fish habitat of a spatial scale, duration or intensity that limits or diminishes the ability of fish to use such habitats as spawning grounds, or as nursery, rearing, or food supply areas, or as a migration corridor, or any other area in order to carry out one or more of their life processes; or


• the destruction of fish habitat of a spatial scale, duration or intensity that fish can no longer rely upon such habitats for use as spawning grounds, or as nursery, rearing, or food supply areas, or as a migration corridor, or any other area in order to carry out one or more of their life processes.

The prohibition against serious harm to fish only applies, however, to fish that are part of one of the three protected classifications of fishery or to fish that “support” fish in these protected fisheries (often, but not exclusively, as prey species). The definition of “fishery” remains unchanged under the amendments, and is essentially any area or place where fish are caught. The three protected classifications are defined as follows:

• Commercial – fish harvested under the authority of a licence for the purpose of sale, trade, or barter;

• Recreational – fish harvested under the authority of a licence for personal use or sport; and

• Aboriginal – fish harvested by an Aboriginal organization or any of its members for the purposes of using the fish as food, for social or ceremonial purposes, or for purposes set out in a land claims agreement.

Notably, in discussing the scope of the prohibition against serious harm to fish, the Fisheries Protection Policy Statement states that “[i]n Canada, most water bodies contain fish, or their habitat, that are part of or support commercial, recreational or Aboriginal fisheries and are therefore subject to the prohibition against serious harm to fish.” It appears that water bodies not subject to the prohibition will be the exception, as the policy goes on to state that exempt water bodies will have to be determined on a case-by-case basis.

The pollution protection provisions of the Act remain largely unchanged. However, the Minister has been given new, discretionary regulation-making powers to authorize the deposit of deleterious substances of certain classes into particular waters and places, or arising from particular classes of works, undertakings, or activities, and the power to establish conditions regarding the quantity or concentrations of these substances that can be deposited.

Under the amendments, the requirement under the Fisheries Act to provide plans and specifications only applies where a project will result in serious harm to fish that are part of one of the three protected fisheries. There will, however, be special treatment for any projects that impact an “ecologically significant area.” These areas will be established by regulation. Projects in ecologically significant areas will be required to provide information on request or as set out by the regulation.

Earlier amendments expanded authorizations to impact fish habitat under the Fisheries Act to allow for three different categories of work, undertaking, or activity: (i) those prescribed by regulation; (ii) those authorized by the Minister; and (iii) those authorized by another prescribed person or entity who has been set up to allow authorizations under the regulations. It remains unclear which option will become the most common route for projects.

The minister must consider new statutory factors when determining whether to approve projects:

• the contribution of the relevant fish to the ongoing productivity of commercial, recreational, or Aboriginal fisheries;

• fisheries management objectives;

• whether there are measures to avoid, mitigate, or offset serious harm to fish that are part of the protected fisheries; and

• the public interest.

The purpose of these factors is to provide for the “sustainability and ongoing productivity of commercial, recreational and Aboriginal fisheries.” With regard to the third factor, the Policy sets out a hierarchy of measures: avoidance is most important, followed by mitigation, and then offsetting. Proponents are now required to submit an offsetting plan to demonstrate that the measures and standards will be fully applied to first avoid, then mitigate, and finally offset any residual serious harm to fish that are part of, or support, commercial, recreational or Aboriginal fisheries. Proponents must now demonstrate that the offsetting measures will maintain or improve the productivity of fisheries.

Existing authorizations will remain valid when the amendments are in force. However, after February 24, 2014, the new offence provision relating to failure to comply with a condition of an authorization will apply to all authorizations, including grandfathered authorizations. Holders of existing authorizations have until that date to request a review to determine whether their authorization should remain unchanged, be amended, or is no longer required.

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Despite the controversy that has surrounded these amendments since they were introduced back in June 2012 as part of Bill C-38, it appears from the Policy that fisheries protection will remain relatively comprehensive. There has been a change in emphasis, but the substantive effect of this change remains to be seen. Much depends on the approach adopted by Ministry operational personnel and the detailed regulations that are yet to come. Accordingly, future developments in this area deserve close attention.

(ii) Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations

The Applications for Authorization under Paragraph 35(2)(b) of the Fisheries Act Regulations came into force also came into force on November 25, 2013.

This new regulation outlines the specific information that must be included as part of any application for an authorization under section 35(2). In addition, it requires that an irrevocable letter of credit issued by a recognized Canadian financial institution sufficient to cover the costs of implementing the required “offsetting plan” be provided.

The regulation also sets out timelines for responses by the Minister. In most circumstances, the Minister has 60 days to determine the completeness of an application and another 90 days to either issue or refuse the authorization.

(iii) Gear Tag Amendments

On March 7, 2013, the Atlantic Fishery Regulations, 1985, the Fishery (General Regulations), and the Pacific Fishery Regulations, 1993, were amended to eliminate regulatory provisions requiring the Minister of Fisheries and Oceans or the Department to supply gear tags for the purpose of ongoing commercial fisheries in Canada.

Specifically, the amendments repealed sections 56 and 62 of the Atlantic Fishery Regulations, 1985, which required that fish harvesters display tags issued by the Minister on lobster and crab traps. The amendments also repealed the definition of “validation tabs” in the Fishery (General Regulations) and the Pacific Fishery Regulations, 1993 that described how validation tabs must be displayed. These sections were repealed as validation tabs are no longer required.

The stated purpose of the amendments is to address two issues. First, that the current practice, whereby the federal government pays for and supplies tags in only some fisheries, is neither equitable nor consistent with the principle that business participants should supply the equipment to carry out their business. Second, that as a result of advances in computer and information technology, enforcement officers in the Pacific region no longer need to rely on validation tabs to determine whether fishing vessels or roe herring fishing gear are being operated under a valid licence. Therefore, the regulatory requirements for validation tabs are an unnecessary burden on fish harvesters that can be removed. These amendments are intended to provide a fair and consistent approach regarding the supply of marking devices for fishing gear, aligned with the principle that business participants should supply the equipment to carry out their business, by repealing the regulatory requirement to display lobster and crab trap tags supplied by the government.

Overall, the commercial fishing industry and First Nations oppose the elimination of the gear tag requirements for the lobster and crab fisheries, especially for lobster, where limits imposed on the number of authorized traps remain a key conservation measure. Most lobster harvesters view the current tagging program as essential in minimizing gear conflict and ensuring that everyone abides by the set trap limits. The decision was seen as inconsistent with sustainability and orderly management of these fisheries. In response, Fisheries and Oceans Canada explained that in a separate process to these proposed regulatory amendments, a similar requirement to display gear tags would be implemented through licence conditions in those fisheries where industry decides that such tags would be required, and where trap limits need to be controlled.

(iv) Notice of Intent with Respect to Amending the Pacific Aquaculture Regulations to Include Aquaculture Licence Fees

On November 16, 2013, Fisheries and Oceans Canada published a notice stating that it intends to charge licence fees for all federally licensed aquaculture operations in British Columbia, with the exception of salmon enhancement facilities. The licence fees would be implemented through an amendment to the Pacific Aquaculture Regulations. This process is also subject to the provisions of the User Fees Act, which requires that the fee proposal be tabled in Parliament before it is finalized.


(d) Species at Risk Act

(i) Orders Amending Schedule 1 to the Species at Risk Act

On March 7, 2013 Schedule 1 of the Species at Risk Act, S.C. 2002, c. 29 was amended. Seven species were added: (1) Westslope Cutthroat Trout (Alberta population); (2) Spring Cisco; (3) Brook Floater; (4) Mapleleaf Mussel (Great Lakes-Western St. Lawrence and Saskatchewan-Nelson populations); (5) Eastern Pondmussel; and (6) Rainbow Mussel.

The addition of species to Schedule 1 invokes prohibitions against killing, harming, harassing, capturing, taking, possessing, collecting, buying, selling, or trading individuals of these species and against the damage or destruction of the residence of one or more of such individuals.

The following five species were considered, but not added: (1) Beluga Whale; (2) Humpback Whale; (3) Euchalon; (4) Striped Bass; and (5) Cusk.

(ii) Permits Authorizing an Activity Affecting Listed Wildlife Species Regulations

On June 19, 2013, the Permits Authorizing an Activity Affecting Listed Wildlife Species Regulation came into force. This regulation provides that any person applying for a permit under section 73 of the Species at Risk Act in relation to an activity affecting a listed wildlife species, any part of its critical habitat, or the residences of its individuals must submit an application to the competent minister in a form and manner that is satisfactory to that minister. The applicant must include information demonstrating that all reasonable alternatives to the activity that would reduce the impact on the species, its critical habitat, or the residences of its individuals, and describing any changes that the activity may cause to the listed wildlife species, its critical habitat or the residences of its individuals, the possible effects of those changes and the significance of those effects.

(v) Emergency Order for the Protection of the Greater Sage-Grouse

On November 20, 2013, the Emergency Order for the Protection of the Greater Sage-Grouse was registered. This is the first time such an order has been issued. This action was spurred by two successful lawsuits by Ecojustice, an environmental advocacy group.

The Greater Sage-Grouse was identified as endangered on Schedule 1 of the Species at Risk Act when the Act was proclaimed in 2003. A recovery strategy for the Greater Sage-Grouse was produced in 2008 and the known critical habitat was identified in 2009. Between 1988 and 2012, the Greater Sage-Grouse experienced a 98% decline in population as a result of loss or degradation of habitat, predation, and disease. It is this rapid decline that led the Minister of Environment to determine that the Greater Sage-Grouse is facing an imminent threat.

The emergency order only applies to Crown land. Pursuant to its terms, the acts of killing or moving sagebrush plants, native grasses or forbs, installing or constructing fences or structures producing noise exceeding 45 dB(A) for daily durations of 60 minutes within 10 months of the year or that is greater than 1.2 m in height or increasing the height of a previously existing structure (other than a fence), and constructing or widening roads in the delineated habitat areas are prohibited in areas necessary for the survival and recovery of the Greater Sage-Grouse. Collectively, the prohibited activities apply to approximately 1,200 km2 of Crown land in Saskatchewan and Alberta.

The emergency order has faced criticism from both environmental groups and members of the oil and gas industry.

Environmental groups have expressed concern that the emergency order does not go far enough to prevent the extirpation of the Greater Sage-Grouse. In contrast, representatives of the oil and gas industry have expressed concerns about the impact of the prohibitions in the emergency order on oil and gas facilities’ maintenance oil and gas production. The City of Medicine Hat and LGX Oil & Gas Inc. have announced that they have filed an application with the Federal Court of Canada for judicial review of the order.

The wrangling over this landmark order and its success or failure in saving the Greater Sage-Grouse bears watching.

(e) Migratory Birds Convention Act, 1994

(i) Notice with Respect to Temporary Possession of Migratory Birds

On August 28, 2013, the Canadian Minister of the Environment issued a notice under s. 36 of the Migratory Birds Regulations to vary the application of paragraph 6(b) of the Migratory Bird Regulations to allow for ‘swift deliver’ of found dead migratory birds.

A person is permitted to temporarily possess dead migratory birds to allow for ‘swift delivery’ of such birds to provincial or territorial authorities for analysis. In all other circumstances, a prohibition against possessing the carcass of a migratory bird remains in effect. This notice will remain in force for a period of one year.

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(f) Energy Efficiency Act

(i) Energy Efficiency Regulations

In response to comments from consumers and industry, the federal government is proposing to amend the minimum energy performance standards (“MEPs”) for commonly used light bulbs under the Energy Efficiency Regulations to permit a form of incandescent halogen bulb, available in the United States, to also be available in Canada. Currently, the MEPs in Canada are slightly higher than the equivalent requirements in the United States. The proposed amendments will align Canada’s MEPs for commonly used light bulbs with those in the United States

(h) Proposed Legislation

(i) An Act to Amend the Coastal Fisheries Protection Act

The Coastal Fisheries Protection Act, R.S.C. 1985, c. C-33 regulates foreign fishing vessels fishing in Canadian fisheries waters and harvesting sedentary species on the continental shelf of Canada beyond Canadian fisheries waters. The proposed act (Bill S-13) would amend the Coastal Fisheries Protection Act to implement the United Nations Food and Agriculture Organization’s 2009 Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing, as well as add prohibitions relating to importing illegally acquired fish and marine plants, while providing clarity on the Coastal Fisheries Protection Act’s administration and enforcement penalties.

The proposed act passed third reading in the Senate on December 9, 2013.


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