Environmental, Indigenous and Natural Resources Blog

Introduction

In Fort Nelson First Nation v. British Columbia (Environmental Assessment Office), 2016 BCCA 500, the B.C. Court of Appeal recently considered three issues involving the Reviewable Projects Regulation under B.C.’s Environmental Assessment Act:

1. whether a letter from the Environmental Assessment Office (“EAO”) confirming a proponent’s interpretation of the Regulation is a judicially reviewable “decision”;
2. the interpretation of the threshold to trigger a provincial environmental assessment of  a proposed sand and gravel pit; and
3. whether the EAO’s communication to the proponent could amount to “Crown conduct” that triggers a Crown duty to consult with potentially affected Aboriginal peoples.

Takeaways

1. A confirmation by the EAO that a project does not meet the threshold for environmental assessment is not a decision subject to judicial review. Proponents remain responsible under the Act for knowing whether their project is reviewable.
2. The EAO’s interpretation of the threshold in the Regulation was reasonable — the term “production capacity” does not include waste material. This provides certainty to mining proponents about the actual threshold for environmental assessment.
3. The interpretation of a regulation, standing alone, does not attract the Crown’s duty to consult with Aboriginal peoples. This provides both the Crown and project proponents with certainty, and avoids the tension that would arise if legislation were interpreted and applied differently in different areas of the province as a result of Aboriginal consultation.

Background Facts

The case dealt with whether a proposed frac sand mine near Fort Nelson, B.C. was subject to provincial environmental assessment. The proponent wrote to the EAO providing a description of the project and the applicable environmental assessment trigger, and asked for the EAO’s confirmation that the project was below the trigger threshold. That request specified that the production capacity of the mine would not exceed 240,000 tonnes per year, based on the proponent’s assumption that this production capacity would not include any excavated material to be screened out as “waste.”

Under the Regulation, a sand and gravel pit is a reviewable project if it is:

A new pit facility that will have a production capacity of:

(a)        > 500 000 tonnes/year of excavated sand or gravel or both sand and gravel during at least one year of its operation, or

(b)        over a period of < 4 years of operation, > 1 000 000 tonnes of excavated sand or gravel or both sand and gravel.

The EAO confirmed in a letter (the “Letter”) the proponent’s understanding that the project would not exceed the trigger threshold.  It also confirmed that “[p]roduction capacity does not include that portion of the excavated material which would not be sold or used in the operation.” However, the EAO was clear that “[p]roject proponents are responsible for making their own determination as to whether or not their proposed project falls within the thresholds set out in the [Regulation].”

The Fort Nelson First Nation (the “First Nation”) disagreed – its position was that the project would exceed this threshold.  It brought a petition for judicial review on the grounds that the EAO’s interpretation was unreasonable arguing that all of the excavated material, including waste, should count towards the production capacity. The First Nation further argued that the EAO’s interpretation of the provision and consequent confirmation that the project did not exceed the trigger threshold was Crown conduct that attracted the duty to consult. The First Nation further argued that consultation on these points had been inadequate.

Decision on Judicial Review

On judicial review, the Chambers judge found the EAO’s interpretation unreasonable and set aside the Letter. He held that the threshold criteria are not limited to just the sand and gravel to be sold or used by the proponent. He sent the determination of whether the proposed mine met the threshold back to the EAO for reconsideration.  The judge also found that the Crown had a legal duty to meaningfully consult with the First Nation in good faith and to seek to accommodate the First Nation’s Aboriginal rights under Treaty 8 with respect to the subject matter of the Letter, and declared that the Crown had failed to fulfill this duty to consult.  The Executive Director of the EAO and the project proponent appealed the decision.

The Appeal

Issue 1 – Was there a reviewable decision at all?

The Court of Appeal disposed of the appeal on a key preliminary issue: Was there anything subject to judicial review? The basic premise underlying the Chambers judge’s decision was that the Letter was a decision capable of being reviewed by the courts.

On appeal, the Court held that “judicial review provides for relief…in relation to the exercise of a statutory power of decision conferred by an enactment to make a decision deciding or prescribing (a) the legal rights, powers, privileges, immunities, duties or liabilities of a person, or (b) the eligibility of a person to receive, or to continue to receive, a benefit or licence.” The Court then went on to consider the scheme of the Act to determine whether the Letter was an exercise of a statutory power of decision.

Under the environmental assessment scheme in BC, the onus is on the proponent to determine whether a project is reviewable based on the criteria set out in the Regulation. The legislation contains no mandated decision by the EAO regarding whether a project is reviewable under the Regulation.

The Court of Appeal therefore concluded that the Letter was not a decision by a statutory delegate about whether the project was a reviewable project under the Regulation. The Letter was clear that it was not a “legal opinion” and confirmed that the onus for determining the need for an environmental assessment under the Regulation is on the proponent.  The Court characterized the Letter as a “non-binding opinion” that was not subject to judicial review.

Issue 2 – What is the threshold for triggering environmental assessment?

Despite this preliminary conclusion, the Court went on to consider the merits of the appeal and interpreted the threshold necessary to trigger an environmental assessment for a sand and gravel mine.

The EAO’s interpretation and application of the Regulation was upheld as reasonable. The EAO favoured, as was done in Friends of Davie Bay v. Province of British Columbia, 2012 BCCA 293, an interpretation which creates a “bright-line rule” that can be applied without undue speculation.  Its view was that “production capacity” means the amount of “product” or “output” of something that has value added, and that it would be contrary to the ordinary meaning of production capacity to include “waste material” within its definition. The Court agreed that this interpretation is consistent with the scheme of the Act and the Regulation.  In each of the other project types listed within Table 6 (Mine Projects) of the Regulation, production capacity is defined with respect to the output of the mine.

Importantly, the Court also concluded that the EAO’s articulation of the threshold did not undermine the statutory scheme and objectives. Although the object of the Act is environmental protection, the overall scheme balances the need for environmental protection against encouraging economic development. The thresholds in the Regulation are designed to be easily applied by proponents, while other provisions in the Act function as safeguards, allowing projects to be designated as reviewable by the Minister or, in some circumstances, by the Executive Director.  The Court concluded that the EAO’s interpretation of the threshold criteria was reasonable.

Issue 3 – Was the Crown’s duty to consult engaged?

Finally, the Court considered whether the Crown’s duty to consult had been triggered. One of the key points of disagreement between the parties was whether the EAO’s interpretation and application of the reviewability threshold constituted “Crown contemplated conduct”. Both the proponent and the EAO argued that statutory interpretation is not “Crown conduct” capable of attracting a duty to consult. The First Nation argued that interpreting and applying the reviewability threshold was in fact “Crown contemplated conduct” and, in this case, the adverse impact was that the project would be subject to reduced environmental oversight, and would therefore expose the First Nation to greater potential impacts to its Aboriginal or Treaty rights.

The Court noted that the Supreme Court of Canada jurisprudence in this area is well-established. “A duty to consult arises when: (1) the Crown has knowledge (actual or constructive) of a potential Aboriginal claim or right; (2) the Crown contemplates conduct; and, (3) there is a potential that the contemplated conduct may adversely affect an Aboriginal claim or right.” Crown contemplated conduct which may adversely impact on an Aboriginal claim or right is not confined to government exercises of statutory power, but can also extend to “strategic, higher level decisions.”

The Court dismissed the First Nation’s claim that a duty to consult was triggered by the EAO’s interpretation. The Court grounded its finding in the tension that arises between the purpose of the duty to consult and the uniform nature of statutory interpretation.  The Court held that regulations are rules of general application intended to apply universally throughout the Province. The “general objective behind statutory interpretation…is to provide a uniform answer to the meaning of an enactment that applies universally to all subject to it.” (para. 124) Imposing a duty to consult over the interpretation of the Regulation may lead to different interpretations applying to different projects.

In so finding, the Court rejected the Chambers judge’s finding that the interpretation of the Regulation was a “strategic, high-level decision” that could have potential adverse effects on Aboriginal or Treaty rights. The Court went on to state that the “Crown conduct” that may trigger the duty to consult in such a case is the Crown’s contemplated issuance of the sought permit or other authorization.

In any event, the Court found that had the duty to consult been engaged, the EAO had fulfilled its duty.

With thanks to articling student Rochelle Collette for her assistance.