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Federal Government Responds to Supreme Court of Canada Decision

30-Apr-10

In our article published in the Spring newsletter (online March 19, 2010), we discussed the decision of the Supreme Court of Canada in MiningWatch Canada v. Canada (Fisheries and Oceans), otherwise known as the "Red Chris" decision. This was an important case dealing with the law of federal environmental assessments; and in particular, this case outlined the law applicable to “scoping” projects subject to federal environmental jurisdiction. Scoping is a critical question, because the scope of the project determines the nature and intensity of assessment required.

In Red Chris, the Supreme Court of Canada determined that the primary power to determine the scope of a project which may have an impact on areas of federal jurisdiction (e.g., fisheries or navigable waters) lies with the project proponent. Federal regulators, the Supreme Court found, did not have the discretion to narrow the scope of a project from that as set forth by the proponent. This was a significant decision, because previously federal regulators purported to have the ability to assess only that aspect of a project which directly impacted on federal jurisdiction, and did not consider the project as a whole. The Supreme Court clearly stated that, under the Canadian Environmental Assessment Act (“CEAA”) and its associated regulations, federal regulators were obliged to consider the entirety of the project as proposed by the project proponent. While the regulator could increase the scope of project to be assessed, it could not narrow it.

As a result of the decision, considerable uncertainty arose with the assessment process in Canada and the federal agency responsible for administering CEAA had essentially suspended the review of environmental approval applications while the various federal responsible authorities grappled with the implications of the decision.

However, the federal government has now implemented a significant new change to this whole process. On March 29, 2010, Bill C-9, the Budget Implementation Act was introduced into Parliament. This budget legislation contained over 2,000 sections. However, at Sections 2152 to 2171, the Federal Government included amendments to CEAA. Of particular interest, CEAA is proposed to be specifically amended by the addition of the following provision:

15.1(1) Despite section 15, the Minister may, if the conditions 
that the Minister establishes are met, determine that the scope 
of the project in relation to which an environmental assessment 
is to be conducted is limited to one or more components of that 
project.

In addition, the Minister is also specifically empowered to delegate to a responsible authority, in relation to a project, the powers conferred on the Minister under the legislation in respect of that project. Further amendments to CEAA exempt certain projects funded by federal infrastructure and other government sources from environmental assessment provisions, and provide expanded roles to the National Energy Board and the Canadian Nuclear Safety Commission in carrying out environmental assessments (as opposed to the usual assessment regulator, the Canadian Environmental Assessment Agency).

These changes are of interest for a number of reasons. First, some critics have pointed out that it is unusual for substantive amendments to environmental legislation to be included in a budget bill. Secondly, the substance of the bill appears to reverse or overturn the Court of Canada’s decision in Red Chris. This new amendment to CEAA will specifically provide the Minister with discretion to define the elements of the projects and scope only those elements that relate to the specific areas of federal jurisdiction.

Accordingly, if passed into law, Bill C-9 will amend CEAA in such a way as to effectively reverse the Supreme Court of Canada’s decision in Red Chris in terms of the ability of a federal responsible authority to scope the project. McLennan Ross LLP’s energy, environmental and regulatory law practice group will continue to monitor these developments as they unfold.

For advice on this or any other energy, environmental or regulatory law topic please contact Ron Kruhlak in Edmonton, Gavin Fitch in Calgary, or any member of our Energy, Environmental and Regulatory Practice Group.

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