Ontario Bar Association Environews 19(3) March, 2010

Supreme Court of Canada Refines Environmental Assessment Law in British Columbia Mining Case

The Supreme Court of Canada’s January 2010 decision in MiningWatch Canada v. Canada (Fisheries and Oceans)(1) has significant implications for federal environmental assessments (“EAs”) and public participatory rights in Canada. In essence, the Court held that federal officials can no longer split projects into small parts and avoid the rigorous EA requirements, including meaningful public consultation, intended by Parliament for the major industrial projects listed on the Comprehensive Study List (“CSL”).

Background: The Red Chris Mine Project

At issue in this important case was a large open-pit copper and gold mine and mill project proposed by Imperial Metals. Known as the Red Chris Mine Project (the “Project”), the mine was proposed to be located in northern British Columbia, 18 kilometres away from the town of Iskut and adjacent to an area called the Sacred Headwaters, which is the birthplace of three wild salmon rivers.

If approved, the Project would have a mill production capacity of 30,000 tonnes per day over a projected mine life of 25 years and be located on a site that covers 110 square kilometres of wilderness area. The Project was the subject of serious environmental concern for a variety of reasons, not the least of which was the proposal to turn Black Lake into a tailings impoundment area (i.e., a dumpsite for mine waste and tailings). A federal EA under the Canadian Environmental Assessment Act (2) (“CEAA”) was triggered by the need for several federal authorizations, including an amendment by the Governor in Council of Schedule II of the Metal Mining Effluent Regulations(3) to convert fish-bearing waters into a tailings impoundment area.

Because the production capacity of the mine would exceed the threshold listed under the Comprehensive Study List Regulations,(4) the CEAA assessment of the Project was commenced as a comprehensive study – a more thorough level of EA for major industrial projects. However, the Department of Fisheries and Oceans announced in December of 2004 that the CEAA assessment of the Project would be downgraded to a screening-level assessment – the least intense level of assessment under CEAA. This announcement followed the release of the Federal Court’s decision in Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans),(5) which involved a CEAA assessment of a proposed oil sands extraction mine. In that case, the Federal Court upheld the federal Responsible Authority’s (“RA”) decision to narrowly scope the project for the purposes of the federal EA as the destruction of a stream that required federal authorization, rather than as the full proposed oil sands extraction mine.

In conjunction with the downgrading of the CEAA assessment of the Project, the RAs’ project-scoping decision excluded the mine and mill, such that only smaller components of the Project – including the tailings facility, water diversion system, and explosives facilities – were assessed during the federal EA process. The RAs also opined that, in light of consultation that occurred during the provincial EA of the Project, there would be no opportunities for public participation during the federal screening process.

Application for Judicial Review and Federal Court of Appeal

In June 2006, an application for judicial review was commenced by MiningWatch Canada – a non-profit group interested in the environmental, social, economic, health and cultural effects of mining; particularly its effects on indigenous people. MiningWatch’s application centred on section 21 of CEAA, which sets out procedures that RAs must follow when a project is listed in the CSL.(6) Among other things, MiningWatch argued that, under this provision, the RAs were obligated to undertake public consultation before making project-scoping determinations.

The Federal Court allowed MiningWatch’s application for judicial review, holding that “in sidestepping statutory requisites mentioned in section 21 of the CEAA as amended in 2003, in the guise of a decision to re-scope the Project, the RAs acted beyond the ambit of their statutory powers.”7 However, in June 2008, the Federal Court of Appeal set aside the decision of the applications judge and dismissed MiningWatch’s application for judicial review.(8)

Supreme Court of Canada Allows MiningWatch’s Judicial Review Application

In allowing MiningWatch’s appeal, Justice Rothstein, writing for the unanimous Supreme Court of Canada, agreed with the statutory interpretation arguments advanced by MiningWatch and environmental groups that intervened in support of its position, that the word “project” in section 21 of CEAA refers to the “project as proposed” by a proponent rather than the “project as scoped.”9 Consequentially, under CEAA and its regulations, the “track” of an EA is generally determined by the nature of the project as proposed by its proponent rather than by the project as scoped by federal RAs. Thus, RAs cannot scope (or split) a project in a manner that downgrades the EA of a project listed on the CSL to a screening-level assessment.

The Court also provided a useful analysis of the limits on “scoping” under section 15 of CEAA. In particular, the Court clarified that the minimum scope of a project for the purposes of a CEAA assessment is the project as proposed by the proponent. In short, RAs cannot utilize their project-scoping discretion to exclude or disregard the core components of a proposal, such as the mine and mill in the Red Chris instance. RAs and the Minister do, however, have discretion to enlarge a project’s scope under appropriate circumstances, and to combine related proposed undertakings into a single project for the purposes of an EA. This discretion could be used to address a proponent’s attempts to project-split by proposing separate parts of a larger project as independent projects to avoid triggering the CEAA requirements associated with comprehensive studies.

Importantly, Justice Rothstein addressed the arguments put forward by the government and corporate respondents, that in order to avoid duplicative EAs of projects subject to both provincial and federal requirements, RAs should enjoy substantial flexibility to scope projects for the purposes of CEAA assessments by focusing on matters of federal jurisdiction and the nature of the federal approvals required. The Court correctly pointed out that mechanisms are set out under CEAA and its regulations that facilitate intergovernmental coordination and the avoidance of unnecessary duplication.(10) Rather than artificially dividing EAs into jurisdictional silos, potentially resulting in neither level of government having enough information to make sound decisions regarding adverse environmental effects, these mechanisms encourage intergovernmental cooperation and coordination that meets the requirements of both governments’ EA statutes. This includes public consultation requirements, which may not be mandatory under certain provincial EA laws.

Some observers and members of the Tahltan First Nation were disappointed with the Court’s discretionary refusal to grant a remedy requiring the completion of a comprehensive study of the Project. Nonetheless, the legal effect of this decision is significant. It effectively overturns other Federal Court of Appeal jurisprudence that had been invoked by RAs as the basis for avoiding comprehensive studies of CSL-listed projects.(11) The Supreme Court of Canada’s decision should also prevent federal officials from taking a “piecemeal” approach to the assessment of major industrial projects listed on the CSL.

Future CEAA Developments

In connection with its 2009 budget, the federal government amended the Navigable Waters Protection Act,(12) the Exclusion List Regulations(13) and created the Infrastructure Projects Environmental Assessment Adaptation Regulations(14) for the express purpose of promoting the stimulation of Canada’s economy by reducing the number of projects to which CEAA applies. These regulatory amendments, inter alia, exempt thousands of projects from facing the scrutiny of legally mandated CEAA assessments over the next two years and grant the Minister of the Environment vast powers to exempt any other projects funded under the Building Code of Canada Fund. A judicial review application has been launched by the Sierra Club of Canada challenging these regulations on the basis that, inter alia, CEAA does not confer power on the Governor in Council to enact them. In light of these regulatory changes and the government’s apparent desire to streamline EA processes, there are fears that the Parliamentary review of CEAA in 2010 may further undermine the CEAA’s scope and application.

Like its seminal decision in Friends of the Oldman River Society v. Canada (Minister of Transport),(15) the Supreme Court of Canada’s decision in MiningWatch Canada v. Canada (Fisheries and Oceans) recognizes that EA requirements under CEAA should be comprehensively applied in a manner that ensures the integration of environmental considerations into planning and decision-making processes. For the sake of current and future generations, it is crucial that the significance of this decision is not undermined or overturned by the Canadian government under the guise of its 2010 CEAA review.

*Kaitlyn Mitchell is Counsel at the Canadian Environmental Law Association, (416) 960-2284, ext. 212.

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1. 2010 SCC No. 2, S.C.J. No. 2.
2. S.C. 1992, c. 37.
3. S.O.R./2002-222.
4. S.O.R./94-638, s. 16.
5. 2004 FC 1265, F.C.J. No. 1518, aff’d 2006 FCA 31, F.C.J. No. 129.
6. Section 21(1) of CEAA states: “Where a project is described in the comprehensive study list, the responsible authority shall ensure public consultation with respect to the proposed scope of the project for the purposes of the environmental assessment, the factors proposed to be considered in its assessment, the proposed scope of those factors and the ability of the comprehensive study to address issues relating to the project;” supra note 2.
7. MiningWatch Canada v. Canada (Minister of Fisheries and Oceans), 2007 FC 955, F.C.J. No. 1249 at para. 295.
8. MiningWatch Canada v. Canada (Minister of Fisheries and Oceans), 2008 FCA 209, F.C.J. No. 209.
9. Supra note 1, at para. 34.
10. See, for example, CEAA, supra note 2 at ss. 12(4), 16.2, 17, 40-42; Regulations Respecting the Coordination by Federal Authorities of Environmental Assessment Procedures and Requirements, S.O.R./97-181; and Canada-British Columbia Agreement for Environmental Assessment Cooperation (2004), online: www.ceaa-acee.gc.ca/default.asp?lang=En&n=04A20DBC-1.
11. See, for example, Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans), supra note 5; and Friends of the West Country Assn. v. Canada (Minister of Fisheries and Oceans), [2000] 2 F.C. 263 (C.A.).
12. R.S.C. 1985, c. N-22.
13. S.O.R./94-639.
14. S.O.R./2009-89.
15. [1992] 1 S.C.R. 3.