Approval Granted for Springbank Offstream Reservoir Project

On October 6, 2021, the Lieutenant Governor in Council (provincial Cabinet) authorized the Natural Resources Conservation Board (“NRCB” or “Board”) to grant approval to Alberta Transportation and Alberta Environment and Parks to construct and operate the Springbank Offstream Reservoir Project (“SR1” or “Project”), located approximately 15 kilometres west of Calgary. The Board had issued a Decision Report on June 22 in which it found that the Project was in the public interest, having regard for social, economic, and environmental effects. However, the NRCB can only approve a project it has reviewed with prior authorization of Cabinet. With Cabinet authorization and NRCB approval, construction of the Project—which is intended to provide flood mitigation on the Elbow River to Calgary and other downstream communities—is expected to commence in February 2022.

In 2016 Alberta Transportation applied to Alberta Environment and Parks (“AEP”) for an approval under the Water Act for SR1. In addition to requiring approvals under the Water Act and also the Public Lands Act, the NRCB is mandated under the Natural Resources Conservation Board Act, RSA 2000, c N-4 (“NRCBA”) to review “water management” projects. Alberta Transportation prepared an Environmental Impact Assessment (“EIA”) which formed the basis for the NRCB’s review of the Project. Finally, because of the potential for the Project to impact fish and fish habitat, as well as Indigenous persons and First Nations, SR1 was designated as a project for review by the Impact Assessment Agency of Canada (“IAAC”) under the federal Canadian Environmental Assessment Act, 2012.

After several rounds of information requests from the provincial and federal regulators, the NRCB held an 11-day hearing in late March and early April 2021. The Board’s decision comes after an eleven-day hearing held between March 22 and April 7, 2021. Shortly after the NRCB decision was issued in June, federal Environment Minister approved the Project based on a report issued by IAAC.

The Project

The purpose of the Project is to divert water from the Elbow River during flood events to an off-stream reservoir, where retained flood water would then be released in a controlled manner after peak flows have subsided. The Project is designed to work in tandem with the existing Glenmore Reservoir, with a total combined storage capacity of 87,771,000 m³, which exceeds the amount of water that overtopped the Glenmore Dam during the 2013 flood.

The Project was one of the provincial government’s primary responses to the devastating flooding in 2013 in southern Alberta and the City of Calgary which resulted in approximately $5 billion in damages. Following an extensive review of various flood mitigation options, the Government selected SR1 as the preferred option.

The Law

Pursuant to s. 2 of the NRCBA, the Board was required to review the Project to determine whether, in the Board’s opinion, the proposed Project is in the public interest, having regard to the social and economic effects of the Project and its effects on the environment. As stated by the Board in its decision, there is no fixed objective test to determine whether a review-able project is in the public interest. Instead, the Board makes its determination by balancing the economic, environmental and social interests in the context and time period in which they arise.

Under the NRCBA, the Board may grant an approval on any terms and conditions that it considers appropriate. However, unlike other regulatory bodies in Alberta, the Board does not have an ongoing role in the regulation of the Project. This means the ongoing review and enforcement of conditions included in an NRCB approval are normally delegated to a provincial department that has an ongoing regulatory function.

The Project is in the Public Interest

An overview of the NRCB’s public interest determination is set out at page 174 to 180 of the Board’s decision. These pages summarily describe the concerns with the Project raised by many of the hearing participants and Alberta Transportation’s response to these concerns. Alberta Transportation’s overall position was that the Project would be in the public interest because of the positive social and economic impacts and that the adverse environmental impacts would not be significant after taking into account their mitigation measures. Generally speaking, the Board agreed with Alberta Transportation and concluded the Project’s considerable positive social and economic benefits of mitigating flood events downstream of the Project and, in particular, on the City of Calgary, outweighed the adverse economic, social and environmental effects. It was the Board’s opinion that the conditions in the approval, together with Alberta Transportation’s commitments, would mitigate any material environmental effects associated with the Project.

Justifiable Need for and Design of the Project

The Board’s decision makes it clear that the need to mitigate future flood events on the Elbow River was key in its determination that the Project is in the public interest. This point is made by the Board throughout the decision in its reference to the significant benefits resulting from the Project’s design reducing the risk to human life and financial losses from damages to residential, commercial and public buildings and infrastructure, as well as direct and indirect economic losses from the disruption of businesses.

Damage avoidance outweighs costs of construction

At the hearing, the Board heard extensive argument surrounding the escalating costs of the Project and the benefit-cost analyses and resulting ratios. While the Board acknowledged the costs for the Project had increased since the initial estimates in 2015, it concluded that the Project was still expected to deliver a positive economic return. The Board’s conclusion was based on the benefit-cost ratios presented by Alberta Transportation. The benefit-cost ratios demonstrated the Project benefits, measured in damage avoidance to private and public infrastructure and business interruption costs, were greater than the cost of constructing the Project, including land acquisition costs.

Social Effects

The Board concluded there were no unacceptable social impacts associated with the Project. However, it is worth briefly discussing three of the more prominent concerns expressed by interveners opposing the Project: dam safety, future land use and impacts on Indigenous groups and First Nations.

Dam safety

Project opponents argued that the Project as a whole was the first of its kind in the world and therefore put public safety at risk. In response, Alberta Transportation presented extensive evidence around the Project design, operating plan and emergency preparedness plan. As pointed out by Alberta Transportation, the Project is designated as an extreme consequence facility pursuant to the Canadian Dam Association Safety Guidelines and Alberta’s Dam and Canal Safety Directive and therefore must be designed to the highest level of safety due to its location in proximity to local population centers. Further, the design of SR1 must ultimately be approved by AEP’s Director of Dam Safety.

The Board agreed with Alberta Transportation’s argument and rejected the notion that the Project design was radical or somehow put public safety at risk. In doing so, the Board not only accepted Alberta Transportation’s evidence, but also relied on the fact that further protection against a dam breach or failure would be provided under the Canadian Dam Association safety guidelines.

Land Use

The off-stream reservoir will be located on land that is privately-owned, mainly by local ranching families. Therefore, Alberta Transportation is required to acquire the land, which will then become provincial Crown land. The Board heard from landowners who will be displaced by the Project and community members concerned about future land use. While the Board was sympathetic to these landowners, its decision made it clear that these adverse social effects were outweighed by the benefits of the Project to the public at large.

Specific concerns were raised about hunting and firearms use, access, parking and the continued use of the Project area for grazing. To address some of these concerns, the Board imposed as a condition of approval that Alberta Transportation (or AEP) must consult with Indigenous groups and community members to finalize a Land Use Plan for the Project Development area and form a Joint Land Use Advisory Committee consisting of representatives of Indigenous groups and members of the local community.

Indigenous Concerns

Alberta Transportation stated that it extensively consulted with 13 Indigenous groups and First Nations. Only one of them—the Stoney Nakoda Nations—participated in the hearing. The Board concluded Alberta Transportation had largely addressed the concerns of affected Indigenous communities about impacts to their rights through various mitigation or accommodation strategies. One of the main mitigation strategies proposed by Alberta Transportation was its draft Land Use Plan, which gives priority access to and use of the project area, during non-flood periods, to Indigenous groups. The final Land Use Plan for the Project area will be developed with participation and input from Indigenous peoples through the First Nations Land Use Advisory Committee.

Environmental Effects

The Board found most environmental effects were low to negligible and any adverse environmental effects would likely be reduced to acceptable levels with proposed mitigation strategies. The Board’s decision assessed a number of impact categories, however, it found the potential adverse effects and conclusions on hydrology and air quality were of particular importance.

Hydrology

The purpose of the Project is to mitigate high flow events in the Elbow River associated with floods. As a result, the Project’s adverse effects on hydrology are unavoidable. However, as noted by the Board, except during relatively infrequent flood events, the Project design allows the Elbow River to remain close to its natural riverine state. Only during flood events will flows exceeding 160 cubic meters per second be diverted from the Elbow River into the reservoir. The Board found these point-in-time effects as necessary to achieve the objective of the Project: flood mitigation and damage avoidance.

Air Quality

Alberta Transportation’s assessment of air quality impacts resulting from the mobilization of sediments deposited in the reservoir during flood events and its proposed mitigation measures were discussed by nearly all other hearing participants who expressed concern with the Project. However, the Board was satisfied with Alberta Transportation’s proposed mitigation measures, which included the timely use of tackifiers, cover crops and revegetation to stabilize sediment, in conjunction with extensive air quality monitoring.

Conclusion on Environmental Effects

At the hearing, many interveners expressed an interest in monitoring of environmental effects and the need for public access to those results. The Board agreed that a transparent approach to monitoring and reporting on environmental effects was important and included as a condition of approval that AEP as operator of the Project must make monitoring results accessible to the public.

Conclusion

This decision demonstrates how the NRCB weighs evidence of the various effects, some positive and some negative, resulting from a proposed Project, and balances those effects in forming its overall opinion as to the public interest. Specifically, this decision highlights a situation where the Board was convinced a project was in the public interest on the basis of the considerable social and economic effects outweighing any adverse economic, social and environmental effects.