MiningWatch Canada v Canada and Multi-jurisdictional Environmental Assessments

On January 21, 2010, the Supreme Court of Canada (“SCC”) released its judgment on MiningWatch Canada v Canada (Fisheries and Oceans), [2010] 1 SCR 6 [MiningWatch]. MiningWatch deals with the level of discretion that federal ministries have in determining the scope of a given project for the purposes of undertaking an environmental assessment. Writing for the unanimous Court, Justice Rothstein held that the federal authorities erred in minimally scoping the project in a manner that required only a fast-tracked “screening” rather than a full-scale “comprehensive review.”

Under the Canadian Environmental Assessment Act, SC 1992, c 37 [CEAA], the nature of the project determines the level of scrutiny required in the environmental assessment process. There are four categories of assessment: screenings, comprehensive assessments, panel reviews, and mediations. The practice of federal authorities prior to the trial decision in this case had been to lower the scope of a project to include only aspects that fell under federal jurisdiction and remove aspects of the project that were provincial responsibilities. The consequence would usually be a comprehensive, thorough review at the provincial level, and a less rigoruous screening at the federal level, which relied heavily on the provincial assessment as part of its screening.

The Court held that the CEAA does not give the government this discretion. Rather, the category threshold must be determined by the entire project as proposed.

Factual Background
Red Chris Development Company, a subsidiary of BCMetals Corporation (now owned by Imperial Metals Corp.), proposed a gold and copper mining project in northwestern British Columbia. The proposed mine is on property owned by Red Chris and is situated within the Tahltan Nation’s traditional territory. The Project is expected to produce 1.85 billion pounds of copper and 1.18 million ounces of gold over 25 years of mining.

The project falls under provincial jurisdiction because it relates to “heads of local works and undertakings, property and civil rights, and matters of a purely local nature.” Federal jurisdiction also applies to the project because of its impact on fisheries, federal public lands, and Indian reserves, among others. Specifically, Red Chris requires federal permits and licences because of the mine’s discharge of hazardous waste into the surrounding waterways and impact on fish habitat (from Department of Fisheries and Oceans Canada), as well as the contemplated use of explosives in open-pit mining (from Natural Resources Canada) (MiningWatch Canada v Canada (Minister of Fisheries and Oceans), 2007 FC 955, paras 18 and 19).

Between 2003 and 2004, Red Chris submitted the necessary paperwork and applications to initiate both the provincial and federal environmental assessment processes. In 2005, the British Columbia Environmental Assessment Office (“BCEAO”) concluded its environmental assessment, approving the project and issuing an environmental assessment certificate. The provincial process was comprehensive, including consultations with First Nations and other stakeholders as well as public comment.

At the federal level, both the Department of Fisheries and Oceans (“DFO”) and Natural Resources Canada (“NRCan”) declared themselves to be a “responsible authority” for the environmental assessment (the “RA” under the CEAA). Initially, the RAs stated that a comprehensive environmental assessment would be required. However, in December 2004, DFO advised the Canadian Environmental Assessment Agency that it had “scoped the project” to exclude the open-pit mine and the copper and gold milling operation. The scope of the “project” in the eyes of the RA was limited to the tailings impoundment area (where the deleterious waste was to be deposited) and the explosive storage area—the aspects of the project that fall under federal jurisdiction. Because of this reduced scope of the project, a comprehensive study would not be necessary and the federal assessment process would proceed by way of screening.

The federal screenings ended in 2006 concluding that the project was not likely to cause significant adverse environmental effects. “The RAs did not seek additional public comment, relying instead on the BC environmental assessment and the public notice and responses under it.” Based on the environmental assessment (screening), the RAs made their decision to allow the project to proceed on May 2, 2006.

Legal Background and Judicial History
In June 2006, MiningWatch Canada (a non-profit environmental coalition) filed an application for judicial review of the decision to conduct a screening rather than a comprehensive study.

The federal practice of downward-scoping projects was upheld twice by both the Federal Court and the Federal Court of Appeal (“FCA”) in Friends of the West Country Assn v Canada (Minister of Fisheries and Oceans), [2000] 2 FCR 263 [Sunpine] and again in Prairie Acid Rain Coalition v Canada (Minister of Fisheries and Oceans), [2006] 3 FCR 610 [Truenorth]. Truenorth was appealed to the SCC but appeal was denied, thereby implicitly giving credence to the FCA decision in that case.

However, at trial in MiningWatch the Federal Court overturned the line of jurisprudence from Sunpine and Truenorth. It held that federal RAs are restricted by the language of the CEAA in reducing the scope of a project from the original proposal. The Federal Court also halted the development of the mine until a comprehensive assessment could be undertaken and the project approved by the federal RAs.

On appeal, the FCA, relying on Sunpine and Truenorth decisions, overturned the lower court’s decision. It dismissed the application for judicial review, holding that federal authorities have the discretion to limit the scope of a proposed project for the purposes of determining the level of scrutiny required in an environmental assessment. The FCA analysis was outlined in detail in a 2008 TheCourt.ca post.

The SCC Decision
The SCC overturned the FCA decision and reinstated the Federal Court’s finding that the RAs did not have the discretion to limit the scope of the project. However, the Court found that further relief halting the development of the Red Chris Mine was not warranted. The practical implication of the decision, as highlighted by many media outlets, is that the Red Chris project can begin development without any further federal assessment requirement.

The issue in MiningWatch turned on the definition of the term “project.” MiningWatch argued that “project” implies “project as proposed,” thereby falling within the Comprehensive Study List Regulations, SOR/94-638 [CSL] and requiring a comprehensive federal environmental assessment. The government argued that “project” means “project as scoped” by the responsible authority, which has discretion under s. 15 of the CEAA to limit the scope of the project to aspects falling under federal jurisdiction.

Justice Rothstein’s reasoning for finding “project” to mean “project as proposed” hinged on a plain reading of the statute. He looked at s. 2 of the CEAA, which provides that a “project means, (a) in relation to a physical work, any proposed construction, operation [etc.]…” and s. 16 of the CSL, which also refers to a project as “the proposed construction, decommissioning, or abandonment…of a mine….” He found that nothing in the CEAA framework provided any room for deviating from this definition of project and concluded that “the determination of whether a project requires a comprehensive study is not within the discretion of the RA. If the project as proposed is listed in the CSL, a comprehensive study is mandatory” (para 34).

He then went on to address the discretion conferred to the Minister or the RA under s. 15 of the CEAA. Section 15(1) states: “The scope of the project in relation to which an environmental assessment is to be conducted shall be determined by (a) the responsible authority; or (b)…the Minister, after consulting with the responsible authority.” Clearly, s. 15 affords some discretion to the RA in determining the scope of the project. At the same time, however, the Act as a whole indicates that the project proposal determines the assessment track to be adopted by the RA.

Justice Rothstein solved this apparent inconsistency by explaining that the tracking and scoping of a project are two distinct steps of CEAA environmental assessment. First, the RA must determine the track under which the project is to be assessed (screening, comprehensive review, etc.). Here, the RA does not have any discretion and must look to the project proposal as a whole in determining the assessment track required. Once this has been determined, then the RA can determine the scope of the project for the purposes of carrying out the environmental assessment. Nonetheless, the RA or Minister cannot reduce the scope of the project from the project proposal. “In other words, the minimum scope is the project as proposed by the proponent, and the RA or Minister has the discretion to enlarge the scope when required by the facts and circumstances of the project…” but does not have the discretion to reduce the scope (para 39).

Implications
MiningWatch represents a welcome intervention by the SCC in the see-saw discourse among Federal Courts on environmental assessments in the last few years. The law on scoping projects for environmental assessments had been murky until now because of the multi-jurisdictional nature of most large-scale development projects, triggering assessments at both levels.

MiningWatch clarifies that large-scale development projects require comprehensive environmental assessments at both the federal and the provincial levels. It should be noted, however, that such a requirement does not necessitate duplication. Existing federal regulatory coordination requirements and provincial-federal harmonization agreements spell out how unnecessary redundancies can be avoided. In the words of Justice Rothstein, federal RAs “can, and should, minimize duplication by using the coordination mechanisms provided for in the Act” [emphasis added] (para 41). The crux of the decision rests on the stakeholder consultations and public comment requirements (under CEAA, s.21), which ought to be carried out at both the provincial and the federal levels.

An interesting footnote to this saga is that both the Sunpine and Truenorth decisions were penned by Rothstein JA (as he then was). No attempt was made in distinguishing those cases. Perhaps Justice Rothstein (speaking for the Court) overturning his own FCA decisions is strong indication that MiningWatch now governs this area of the law.