Environmental Resource Centre v. Canada (Minister of Environment)

Environmental Resource Centre v. Canada (Minister of Environment)
Court (s) Database
Federal Court Decisions
Date
2001-12-20
Neutral citation
2001 FCT 1423
File numbers
T-274-99
Notes
Digest
Decision Content
Date: 20011220
Dockets: T-274-99
T-1799-99
T-100-00
Neutral Citation: 2001 FCT 1423
BETWEEN:
ENVIRONMENTAL RESOURCE CENTRE, PRAIRIE ACID RAIN COALITION and TOXICS WATCH SOCIETY OF ALBERTA
Applicants
- and -
THE MINISTER OF ENVIRONMENT (CANADA) and THE MINISTER OF FISHERIES AND OCEANS and SUNCOR ENERGY INC.
Respondents
- and -
HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA AS REPRESENTED BY THE MINISTER OF ENVIRONMENT
Intervener
REASONS FOR ORDER
HENEGHAN J.
INTRODUCTION
[1] Environmental Resources Centre, Prairie Acid Rain Coalition and Toxics Watch Society of Alberta (the "Applicants") bring three applications for judicial review relative to a major oil sands project (the "Project") undertaken by Suncor Energy Inc. ("Suncor") in northern Alberta. In T-274-99, the Applicants challenge the legality of a decision made by the Minister of Environment ("MOE") pursuant to the Canadian Environmental Assessment Act, S.C. 1992, c. 37, as amended (the "CEAA"). In T-1799-99 and T-100-00, the Applicants challenge the decisions of the Minister of Fisheries and Oceans ("MFO") to issue authorization to the Fisheries Act, R.S.C. 1985, c. F-14, as amended. The purpose of the authorization is to allow Suncor to alter or destroy fish habitat for the construction and operation of the Project.
FACTS
The Parties
[2] The Applicants are public interest groups who are engaged in promoting protection of the environment and beneficial management of natural resources. Environmental Resource Centre, ("ERC"), formerly known as Save Tomorrow, Stop Pollution ("STOP"), is a federally registered non-profit organization with approximately 200 associate members. Its mandate is to provide public education and research concerning avoidance and reduction of toxic wastes. It has been involved in the review and approval processes for various oil sands developments since 1970.
[3] Toxic Watch Society, ("TW"), is a non-profit provincially registered society based in Edmonton, Alberta and has been involved in review and approval process of every major oil sands development since 1990.
[4] Prairie Acid Rain Coalition ("PARC"), is an unincorporated association in the form of an informal coalition of environmental organizations from the prairie provinces of Manitoba, Alberta and Saskatchewan. The goals of this group include promotion of the review of regulatory processes for air emissions, and public awareness of the environmental effects of acid rain.
[5] ERC and TW are members of the Oil Sands Environmental Coalition ("OSEC"). That group was formed in 1995 as an umbrella group to monitor oil sands developments in Alberta. The group was formed to share resources and because the Alberta Energy and Utility Board ("AEUB") has a policy requiring public interest interveners in proceedings before that Board to form coalitions and make joint submissions. OSEC actively participated in the federal and provincial review processes concerning the Suncor development which is relevant to this application.
[6] The Applicants seek standing to bring these applications since they are not "directly affected" by the decisions in issue.
[7] The MOE and the MFO are the decision-makers whose decisions are under review. Suncor is the owner of the Project and was joined as a Respondent by Order of the Court made on April 19, 1999.
[8] The MOE ("Alberta") was granted leave to participate as an intervener by an Order dated August 18, 1999. The basis for the participation of Alberta is the extensive role played by that department in the overall regulatory process employed by the Province of Alberta in relation to exploitation and development of natural resources in that province, including oil sands development.
The Oil Sands Development Project
[9] The Project, entitled "Project Millennium", involves the expansion and upgrade of an existing oil sand mine operated by Suncor. The existing plant had been in operation since the late 1960's. Its operation was confined to the west side of the Athabasca River until late 1998 when the Steepback Mine was commissioned on the east side of the river. The two operations were connected by a bridge. The Steepback Mine project included a new ore preparation plant and service complex.
[10] The objectives of the Project were to increase production of upgraded crude oil products to a minimum of 210,000 barrels per day by the year 2002.
[11] Over the 30 year life of the plan, the Project is expected to produce and upgrade 2.8 million barrels of bitumen, creating benefits that include 800 new direct jobs, approximately 1,200 indirect positions, as well as sizeable taxes and royalties to the governments of both Canada and Alberta. This $2 billion investment includes the expansion of the Steepbank Mine, the construction of an oil sands extraction plant on the east side of the river, a pipeline linking the existing oil sands extraction plant and the west side of the river, modifications to the existing oil sands extraction plant, utilities and infrastructure to accommodate the increased production level, and an integrated reclamation plan for all of Suncor's mining areas.
The Provincial Environmental Assessment and Regulatory Process
[12] Suncor was required to prepare a formal application for review and approval by Alberta Environment pursuant to the Environmental Protection and Enhancement Act, S.A. 1992, c. E-13.3 ("EPEA") and by the AEUB pursuant to the Oil Sands Conservation Act, S.A. 1983, c. O-55. In accordance with these requirements and existing practice between the AEUB and Alberta Environment, Suncor prepared a single EIA as part of the project application. This required Suncor to prepare terms of reference to be considered by Alberta Environment with the assistance of consultations with the public, other governments, governmental departments and agencies. The EIA was submitted on April 21, 1998 to the two agencies, according to the Affidavit of Mark Shaw.
Suncor's Application Record, page 4.
[13] The AEUB and Alberta Environment identified deficiencies in the EIA and requested further information from Suncor. These were addressed by Supplemental Information Responses, which were provided on several occasions up to November 23, 1988. Once the Director of Alberta Environment is satisfied that the EIA is complete, it is referred to the decision-maker, who determines whether the project is in the public interest.
[14] The EIA is sent to the Minister and to the AEUB, who is authorized as the public interest decision-maker, per section 2.1 of the Energy Resources Conservation Act, R.S.A. 1980, c. E-11. Once a project has been determined to be in the public interest, it may continue through the Alberta regulatory process.
[15] The AEUB, after reviewing all the material submitted, decided that a public hearing into the Project was required. The AEUB conducted a public hearing from January 12 to 15, 1999 in Fort McMurray and in Calgary on February 2, 1999. The Applicants TW and ERC were participants in the hearings as members of OSEC. Representatives from the Department of Fisheries and Oceans (the "DFO") and Environment Canada also participated.
[16] In the present case, an approval was required from Alberta environment before the contemplated activity could be undertaken. That approval is granted pursuant to the EPEA and it cannot be granted prior to a determination by the AEUB that the Project is in the public interest; see section 65 of EPEA. The approval may be granted for no more than 10 years, and may be appealed to the Environmental Appeal Board. Applications to renew the approval engage the same process.
[17] Unforeseen consequences of approved activities may be addressed by flexible responses permitted in the EPEA. Furthermore, the EPEA provides for a range of remedial or enforcement actions should the terms of the approval be breached.
[18] Suncor held two approvals pursuant to the above process. They were issued to it by the AEUB and Alberta Environmental Protection ("AEP") and needed amendment before Suncor could proceed with the Project. Approval number 8101 from the AEUB was in respect of its existing oil sands mine and processing facilities in Fort McMurray. Approval number 94-01-19 for AEP was for initial construction activities for the Project.
[19] The AEUB issued a preliminary decision to amend its prior approval and approved Project Millennium on March 29, 1999. Detailed reasons for its decision and conditions to the approval were released on July 23, 1999. Those reasons referred to certain provincial environmental control initiatives including the Cumulative Environmental Effects Management Initiative ("CEEMI") and the Regional Sustainable Development Strategy ("RSDS"). The AEUB was satisfied that if Suncor and all other companies in the oil sands region continued to participate in RSDS and CEEMI, these initiatives could adequately and effectively address regional cumulative environmental effects.
[20] On February 12, 1999 the AEUB issued a decision in connection with the Shell Muskeg River Mine, also in the Fort McMurray area, wherein it considered CEEMI and RSDS. According to Suncor, the Shell project involved consideration of issues similar to those involved with its project including cumulative environmental effects and appropriate responses by industry and the regulators. The AEUB took these initiatives into account when issuing its approval to Shell.
Suncor's Application Record, page 111
The Federal Environmental Assessment and Regulatory Process
[21] The federal environmental process was invoked because the Project required authorization from DFO for the harmful alteration, destruction or disruption of fish habitat under section 35(2) of the Fisheries Act, supra. Specifically, the Project would affect fish habitat in three creeks, McLean Creek, Wood Creek, Leggett Creek and a small wetlands (Shipyard Lake).
Respondent Minister's Application Record, T-274-99, pages 241-242
[22] Suncor was therefore required to apply to DFO for an authorization to harmfully alter or destroy fish habitat. This application was comprised of the same EIA that was provided to the AEUB, including all Supplemental Information Responses, and additional Supplemental Information Responses that were required by the DFO.
[23] The terms of reference for the EIA were established by AEP following circulation of draft terms of reference after the announcement of the Project in August 1997. The draft terms of reference for the EIA had been provided to DFO in September 1997. In late March 1998, DFO confirmed that the final terms of reference issued by Alberta would satisfy the requirements of the environmental assessment process under the CEAA. On April 3, 1998, Suncor formerly applied for the authorizations pursuant to section 35(2) of the Fisheries Act, supra. The EIA was provided to DFO on April 21, 1998.
[24] On May 1, 1998, DFO wrote to Suncor and set out the scope of the Project and of the environmental assessment. In its letter, DFO described the scope as follows:
...the project shall be defined as the construction, operation, decommissioning and abandonment of the physical works associated with the following project components:
1. Access Corridors (utility and transportation elements)
2. Mine Site (pits and bitumen extraction facilities)
3. Tailings and overburden disposal areas
4. All ancillary facilities related to the mining operations
Respondent Ministers' Application Record, T-274-99, page 346
[25] By letter dated May 4, 1998, DFO acknowledged receipt of Suncor's application and confirmed that since authorizations pursuant to section 35(2) of the Fisheries Act, supra are included in the Law List Regulations, SOR/94-636 under the CEAA, DFO, Habitat Management Division, would act as the federal responsible authority ("RA") for the Project. As such, the RA was required to conduct an environmental assessment in accordance with the Act. Since the mining activity for the proposed Project exceeds the limits provided in Part IV of the Comprehensive Study List Regulations, SOR/94-638, pursuant to the CEAA, the environmental assessment would be in the form of a Comprehensive Study Review ("CSR") which would be conducted in accordance with the requirements of sections 16(1) and (2) of the CEAA.
[26] The CSR required a consideration of the environmental effects of the Project and any cumulative environmental effects that are likely to result in conjunction with other projects that have been or will be carried out. The CSR relied on the EIA which had been prepared by Suncor for the provincial environmental assessment. The EIA considered two development scenarios. The first was a consideration of the cumulative environmental effects of the Project together with oil sands extraction projects that have been carried out and those projects which were in the approval process. The second scenario involved the additional consideration of oil sands extraction projects which were planned but not yet in the approval mode.
Respondent Ministers' Application Record, T-274-99, page 231
[27] DFO communicated with other federal departments having an interest in the Project requesting comments and comments were provided by Indian and Northern Affairs Canada, Canadian Heritage Parks Canada, Health and Welfare Canada, Environment Canada Environmental Protection Prairie and Northern Regions, Department of Fisheries and Oceans Habitat Management Division. As a result of this solicitation of comments from various federal departments, Suncor provided supplemental information and that was circulated in the same manner, again with the request for comments.
[28] DFO was also provided with further supplemental information requested by Alberta Environmental Protection, relative to the provincial assessment process.
[29] In September 1998 and prior to the submission of the CSR to the Minister, Mr. Paul Bernier, Vice President, Program Delivery, of the Canadian Environmental Assessment Agency ("Agency") engaged in discussions with the province of Alberta concerning the need for an adaptive management strategy to govern and mitigate the environmental effects of various oil sands projects in the Fort McMurray region. The correspondence which was exchanged as a result of those discussions was included as an appendix to the CSR.
[30] The terms of reference for the RSDS were not finalized at the time of completion of the CSR. The CSR was completed and submitted in early November 1998. It was a 153 page report comprised of some eleven chapters that addressed, among other things, the different aspects of the environment that would be considered, as well as human health, socio-economic and physical and cultural heritage components. The table of contents for the CSR is attached as Appendix "A". The description of the environmental effects assessment identified the same subjects while also referring to Aboriginal Persons, sustainable use of renewable resources and trans-boundary effects. The CSR also contained several mass charts and tables.
[31] The CSR also contains conclusions and recommendations to the Minister. The recommendations specifically address cumulative environmental effects and mitigation measures. The CSR concluded as follows:
DFO has concluded that, with implementation of the mitigation measures and follow-up requirements, including the industry-led AOSCEI and the AEP RSDS initiative, Project Millennium will not have significant adverse environmental effects. Notwithstanding the above analysis, comments received during the public review of this CSR will be used to verify that stakeholder concerns are being addressed and that the environmental effects of Project Millennium are acceptable.
In support of the above, the following recommendations should be considered in the approval of Project Millennium.
1. Suncor's continued participation in and support of the initiatives it has advanced to address outstanding environmental issues. These initiatives include: RAMP, WBEA, RAQCC, AOSCEI, TEEM and RIWG.
2. Suncor's continued support of stakeholder involvement, as appropriate, in the various initiatives described above.
3. Participation by appropriate federal agencies in the various initiatives described above.
4. Suncor's submission of an annual report to DFO documenting activities and achievements related to proposed research, follow-up programs and initiatives described above. The report is to be made available to all regional stakeholders.
Respondent Ministers' Application Record, T-274-99, page 113
[32] It is clear from the CSR that the RA, as the authors of that report, were acutely aware of initiatives undertaken in Alberta both by the government and industry to address environmental effects of oil sands development. The CSR contains many references to the Alberta initiatives in its consideration of the various effects of the Project.
[33] The CSR was submitted to the Agency on November 4, 1998. On November 6, 1998, the MFO so advised the MOE and requested her advice on an appropriate course of action.
[34] In accordance with the Act, public review and comment on the CSR was solicited for a period of thirty days expiring December 10, 1998.
[35] The responses received from the public were referred to DFO by the Agency and include responses from public interest groups and for the Department of Environment Canada. The Agency also requested DFO and Environment Canada to comment on the public responses and the manner in which Alberta's RSDS and the industry-led CEEMI could mitigate possible adverse cumulative effects to a level of insignificance. A list of the responses received in relation to the CSR is found at Appendix B to these reasons.
[36] On January 8, 1999, legal counsel for the Agency wrote the AEUB, requesting a copy of the terms of reference for the RSDS so that they could be provided to the MOE prior to making her decision on the CSR. The Agency said that the MOE would not be able to make a determination before receipt of the terms of reference. The terms of reference were provided on January 15, 1999 and the MOE made her decision on January 21. By letter of the same day, legal counsel for the Agency advised the AEUB of the decision and that the federal authorities would appear before the AEUB to make their submissions on the Project on February 2, 1999.
[37] The effect of the decision made on January 21, 1999 was to refer the matter back to the RA for action to be taken under section 37 of the Fisheries Act, supra. The ultimate action taken was the issuance of two authorizations, the first on August 17, 1999 to allow exploratory drilling and the second on December 21, 1999, to authorize completion of the Project by Suncor.
[38] According to the Affidavit of Bev Ross filed in T-1799-99, the RA reviewed many documents and studies relating to the Project, together with the CSR. The RA decided to issue a separate authorization for exploratory drilling which Suncor wished to carry out in the Wood Creek Valley and to deal with the balance of the Project pursuant to a further authorization. The August authorization related to the exploratory drilling. In addition to reviewing the CSR and various reports submitted by Suncor, officials from Suncor and the RA met on July 12, 1999 to discuss the creeks affected by the Project and to discuss the issues of mitigation and compensation for the loss of fish habitat resulting.
Respondent Ministers' Application Record, T-1799-99, page 407
[39] The documents taken into account in deciding to issue the August authorization included the final approval given to the Project by the AEUB on June 29, 1999, the draft approval for the Project to be issued by Alberta pursuant to the EPEA, supra and the draft of terms of reference for the RSDS dated July 5, 1999. These documents appear in the certified Tribunal Record at Tabs 5, 12 and 8, respectively.
[40] Among other considerations in deciding to issue the August authorization, the RA took into account a habitat compensation agreement for the Project, as described in the habitat conservation and protection guidelines issued by the RA. Suncor provided a letter of intent to compensate for loss of fish habitat, on August 17, 1999. This was found acceptable to the Department and according to Ms. Ross, after reviewing this letter of intent, the details of the proposed drilling program and its proposed mitigation, she drafted the August authorization. The August authorization refers to mitigation in relation to Wood Creek and says, among other things, that the work should be limited to certain times of year and should minimize disruption to the creek bed and banks.
[41] The final authorization was issued on December 21, 1999 and authorizes the harmful alteration, disruption or destruction of fish habitat in Shipyard Lake, Legett Creek, Wood Creek and McLean Creek.
[42] According to the Affidavit of Mr. Fred Hyntka filed in T-100-00, he worked with Suncor prior to the issuance of this final authorization to develop a final compensation plan for fish habitat and to ensure that mitigation measures, including operative elements, were in effect to monitor and control cumulative effects. As well, he relied on the final authorization issued by the AEUB, Alberta's RSDS strategy and the approvals issued pursuant to the EPEA, supra, and the Water Resources Act, supra, both statutes of Alberta. As well, he sought the opinion of the Agency, Environment Canada and the Department of Indian and Northern Affairs concerning the design and implementation of further mitigation measures and a follow-up plan. He relied on the commitment expressed by Environment Canada in its letter of December 21, 1999, where the department stated that it was relying on various Alberta initiatives including the RSDS and CEEMI, for the management and monitoring of cumulative environmental effects in the oil sands region.
[43] Furthermore, Mr. Hyntka, on behalf of the RA, expressed satisfaction with the RSDS proposed by Alberta as being an effective regulatory framework for controlling and managing cumulative environmental effects on a regional basis.
[44] Although the December authorization refers to an environmental protection plan for the Project, that plan was not completed at the time the authorization was issued. Mr. Hyntka concludes his affidavit by saying that following the issuance of the authorization, he continued to work on the preparation of that plan.
Respondent Ministers' Application Record, T-100-00, page 1333
[45] The MOE made her decision on January 21, 1999. The decision, as it appears in the record, reads as follows:
I am writing to advise you of my decision regarding the Suncor Millennium Oil Sands Project.
On November 6, the Canadian Environmental Assessment Agency (the Agency) and I received the comprehensive study report on the above-mentioned project submitted by you. I am referring the project back to your department for action under subsection 37(1) of the Canadian Environmental Assessment Act (the Act). Having taken into consideration the comprehensive study report and public comments filed pursuant to subsection 22(2) of the Act, I have concluded that the project as described, is not likely to cause significant adverse environmental effects.
...
With respect to informing the public about the federal government's decision in this matter, I ask that your officials issue a public notice outlining the course of action being taken by your department.
Respondent Ministers' Application Record, T-274-99, pages 1-2
[46] The short paragraphs quoted above are the only part of the letter written by the MOE to her colleague, the MFO, that appear on the record. The MOE invoked Cabinet confidence pursuant to section 39 of the Canada Evidence Act, R.S.C. 1985 c.C-5, as amended, in respect of the balance of her letter. No challenge was taken in respect of the assertion of Cabinet confidence by the MOE.
THE APPLICATIONS
[47] In T-274-99, the Applicants seek an order quashing the decision which was made by the Minister of the Environment. Specifically, the Applicants request the following relief:
1) an order or orders:
(i) quashing the decision of the Minister of Environment of January 21, 1999, to refer the project back to the responsible authority for action to be taken under section 37 of CEAA;
(ii) declaring that the essential statutory preliminary steps required by CEAA prior to the issuance of any authorization, namely an environmental assessment review by mediation or review panel, were not followed by the Minister of the Environment constituting failure to comply with CEAA;
(iii) that any authorizations or approvals that may be issued by the Minister of Fisheries and Oceans ("MFO") prior to the hearing of this matter, be quashed or set aside;
(iv) that the MFO and any delegate be prohibited from issuing any authorizations under section 35 of the Fisheries Act, or taking any other action for the purpose of enabling the Project or portion thereof to proceed, until CEAA has complied with;
(v) declaring that the requirements of CEAA must be complied with before the MFO or any delegate issues any authorizations under the Fisheries Act or takes any other action for the purpose of enabling the Project or portion thereof to proceed.
[48] The Applicants seek similar relief in the remaining applications for judicial review. In cause T-1799-99, concerning the authorization issued on August 17, 1999, the prayer for relief is as follows:
1) an order or orders:
a) quashing the decision of the Minister of Fisheries to issue the Authorization to Suncor;
b) declaring that the mandatory statutory steps required by the Canadian Environmental Assessment Act ("CEAA") prior to the issuance of the Authorization, namely the completion of an environmental assessment in compliance with CEAA, were not complied with;
c) declaring that the Minister of Fisheries failed to comply with the mandatory duties imposed by s. 37(1)(a), 37(2) and 38 of the CEAA when issuing the Authorization;
d) quashing or setting aside any further authorizations or approvals that may be issued by the Minister of Fisheries prior to the hearing of this matter;
e) prohibiting the Minister of Fisheries and any delegate from issuing any further authorizations under section 35 of the Fisheries Act, or taking any other action for the purpose of enabling the Project or portion thereof to proceed, until CEAA has been complied with;
f) declaring that the requirements of CEAA must be complied with before the Minister of Fisheries or any delegate issues any authorizations under the Fisheries Act or takes any other action for the purpose of enabling the Project or portion thereof to proceed.
[49] Finally, in cause T-100-00, the Applicants frame the prayer for relief as follows:
1) an order or orders:
a) quashing the decision of the Minister of Fisheries to issue the Authorization to Suncor;
b) declaring that the mandatory statutory steps required by the Canadian Environmental Assessment Act ("CEAA") prior to the issuance of the Authorization, namely the completion of an environmental assessment in compliance with CEAA, were not complied with;
c) declaring that the Minister of Fisheries failed to comply with the mandatory duties imposed by s. 37(1)(a), 37(2) and 38 of CEAA when issuing the Authorization;
d) quashing or setting aside any further authorizations or approvals that may be issued by the Minister of Fisheries prior to the hearing of this matter;
e) prohibiting the Minister of Fisheries and any delegate from issuing any further authorizations under section 35 of the Fisheries Act, or taking any other action for the purpose of enabling the Project or portion thereof to proceed, until CEAA has been complied with;
f) declaring that the requirements of CEAA must be complied with before the Minister of Fisheries or any delegate issues any authorizations under the Fisheries Act or takes any other action for the purpose of enabling the Project or portion thereof to proceed.
ARGUMENTS
Applicants
i) Overview of the Applicants' Argument
[50] The Applicants submit that the decision of the federal MOE to refer the Project back to the MFO for approval, rather than on to a further stage in the assessment process, was an error in law. Specifically, the Applicants allege that the MOE erred in accepting the CSR that was prepared by the Department of Fisheries and Oceans as complying with the CEAA. As well, the Applicants argue that the Minister erred in not referring the Project on for further assessment in light of the uncertainties about the likelihood of the Project causing significant environmental effects.
[51] They argue that the subsequent issuance of authorizations by the MFO was also erroneous, on two grounds. First, the Minister erred in issuing the authorizations when the mandatory provisions of the CEAA had not been met. Second, the Applicants argue that the Minister of Fisheries erred in issuing the authorizations without complying with the mandatory and non-delegable duty imposed by CEAA to ensure that the mitigation measures identified necessary to mitigate environmental effects are implemented.
ii) The Standard of Review
[52] It is submitted that the MOE erred in accepting the CSR as complying with section 4 and 16 of the CEAA. These provisions require that careful consideration be given to the potential significance of the cumulative environmental effects of the Project. The Applicants submit that assessment of the cumulative environmental effects is a mandatory requirement of the CEAA. Failure to comply with a mandatory requirement is an error of law reviewable on the standard of correctness. In this regard, the Applicants rely on Alberta Wilderness Association v. Cardinal River Coals Ltd., [1999] 3 F.C. 425, (1998), 165 F.T.R. 1( F.C.T.D.), pages 440 and 442; Friends of the West County Association v. Canada (Minister of Fisheries and Oceans), [2000] 2 F.C. 263 (F.C.A.), aff'd, [1998] 4 F.C. 340 (F.C.T.D.).
[53] The Applicants submit that the MOE erred in referring the Project back to the DFO for approval pursuant to section 23(a) of the CEAA rather than referring it for further review pursuant to section 23(b). They say this is an error because the duties prescribed by section 23 require that the MOE refer the Project to a mediator or review panel when the environmental effects associated with it are uncertain.
iii) The CSR
[54] The Applicants say that the first step in the cumulative effects assessment is the definition of the scope of that assessment by the RA pursuant to section 16(3) of the CEAA. The determination of the scope is a discretionary decision; see Friends of the West Country, supra.
[55] The second step is an assessment of the cumulative effects of the scoped projects in accordance with the requirements of sections 4 and 16 of the CEAA. Among other things, the study is to assess the significance of environmental effects. The Applicants rely on the decision of this Court in Alberta Wilderness Association v. Cardinal River Coals, supra at page 453 for a description of the process of considering the significance of environmental effects as follows:
...define and describe the environmental effects, and then make a finding respecting the weight to be placed on each effect, or in the words of the provision, to consider the "significance" of each effect.
[56] The Applicants say that the CSR does not comply with sections 4 and 16 of the CEAA because the portion of the CSR dealing with cumulative effects under the heading "Environmental Assessment of Cumulative Effects" provides neither a definition of those effects nor a description of their creation, scope or intensity. The CSR, at page 83, says as follows:
There is a high degree of uncertainty associated with predicted environmental effects of projects that are planned but not approved ...[i]t is therefore not possible to predict with confidence the cumulative effects of existing and approved projects in combination with planned but not approved projects.
[57] The Applicants submit that the failure to address these points in the CSR is not cured by the reference, provided in Appendix 2 of the CSR, to the EIA prepared by Suncor. They argue that the CEAA requires the federal authorities to prepare their own environmental assessment, not simply to rely on work prepared by a proponent of a project. Furthermore, the Applicants say that the EIA was not before the MOE when she made her decision.
[58] The Applicants argue, as well, that the failure to provide an assessment of cumulative environmental effects is compounded by an erroneous interpretation of the requirements of that assessment. They say that the CSR refers to potential cumulative environmental effects that were not fully examined because they fall outside the scope of the regional study area of the Project. These effects include increased acid deposits in Saskatchewan and Northwest Territories, effects on water quality in Great Slave Lake and effects on Canada's ability to meet its international obligations to reduce greenhouse emissions under the Kyoto Protocol to the U.N. Framework Convention on Climate Change, FCCC/CP/1997/7/Add.1.
[59] The Applicants next present the alternative argument that if this Court concludes that the CSR does contain an assessment of cumulative environmental effects, then the conclusion expressed in the CSR that the cumulative environmental effects will be insignificant, is unreasonable.
[60] The Applicants say that the conclusion of insignificance is not supported by any information in the CSR and contradicts the statement in the CSR, at p. 83, that it is "impossible" to confidently predict what the cumulative effects of the Project will be.
[61] The Applicants say that the proposed existence of the RSDS does not change this analysis. They describe the RSDS as a multi-stakeholder process involving all of the companies operating in the region, federal and provincial government agencies, affected municipalities and towns, First Nations and non-governmental groups. Participation in RSDS is voluntary and decisions are made by consensus. This strategy offers an opportunity to study environmental effects. It does not, by itself, render those effects insignificant and does not replace scientific inquiry into the question of significance.
iv) The Section 23, CEAA, Decision
[62] The Applicants submit that the standard of review applicable to the MOE's authority under section 23 is reasonableness simpliciter, as determined by the Federal Court of Appeal decision of Inverhuron & District Ratepayers Assn. v. Canada, 2001 F.C.A. 203, (2001) 273 N.R. 62 (F.C.A.) at paragraphs 39-40. In this decision, it was held that while a degree of deference was owed to the Minister, it was necessary that she reach her decision on a reasonable basis.
[63] The Applicants submit that the MOE erred in sending the Project back for approval instead of referring it on to mediation or panel review. The reasons for her decision are not apparent on the record since she invoked the privilege of cabinet confidence, pursuant to section 39 of the Canada Evidence Act, supra, over a portion of her letter communicating the decision. Nonetheless, the Applicants say that it is clear from the record that the basis for her decision was the existence of the RSDS which was accepted as a mitigation measure within the meaning of the CEAA.
[64] The Applicants submit that the MOE erred in accepting the RSDS process as one that operates to reduce the many uncertainties related to the likelihood of the Project causing significant environmental effects, to a standard of certainty with insignificant environmental effects.
[65] They argue that since nearly every significant environmental effect associated with the Project is uncertain, referring the Project back to the RA for approval was a reviewable error and a misinterpretation of the duties under section 23.
[66] The Applicants submit that the purpose of section 23 is to allow the MOE to review the CSR to determine if it meets the requirements of sections 4 and 16 of the CEAA, and to determine if it contains sufficient information to permit a final decision to be made concerning the Project. The Applicants are concerned only with the latter.
[67] The Applicants say that sections 23(a) and (b) must be read together. These provisions contemplate two alternative situations: certainty and uncertainty. If the CSR identifies uncertainties concerning significant environmental effects, then the MOE has no choice except to refer a project to mediation or a review panel.
[68] The Applicants further submit that the decision made pursuant to section 23 affects the ability of the RA to comply with sections 37(2) and 38 of the CEAA. Section 37(2) requires the RA to ensure that any necessary mitigation measures are implemented. If the CSR is deficient by reason of failing to identify mitigation measures with sufficient certainty, the RA's ability to comply with sections 37(2) and 38 will be compromised.
[69] The Applicants refer to a manual published by the Canadian Environment Assessment Agency entitled "Determining Whether a Project is Likely to Cause Significant Adverse Environmental Effects" (November 1994) (the "Significant Effects Guide"). This Guide is used by RAs and the Canadian Environment Assessment Agency in determining significance. The Applicants say that the CSR identifies adverse environmental effects which may be significant when assessed according to the criteria in this Guide. Those affected areas include ambient air quality, hydrology and transboundary emissions.
[70] The Applicants say that the CSR identifies the RSDS as a mitigation measure. However, the Applicants submit that the MOE had before her only the finalized Terms of Reference of the RSDS, the advice given to her by representatives of her department and from the DFO, and public comments concerning the CSR and RSDS at the time she made her determination.
[71] On the basis of the information before her, the MOE would have been aware that the RSDS is a voluntary, multi-stakeholder, consensus-based planning process involving oil sands production companies, Alberta and federal regulatory agencies, affected towns and municipalities, First Nations, and non-governmental organizations.
[72] The Applicants argue that the RSDS does not constitute a "mitigation measure" within the meaning of the CEAA, as that term is defined in section 2. They submit that the RSDS is not a known means of ensuring the reduction of cumulative environmental effects since its primary function is to identify known effects in the first phase. The Applicants here rely on Union of Nova Scotia Indians, [1997] 1 F.C. 325 (F.C.T.D.); Alberta Wilderness Association v. Express Pipeline Ltd. (1996), 137 D.L.R. (4th) 177 (F.C.A.) and Cantwell v. Canada (Minister of Environment) (1991), 41 F.T.R. 18 (F.C.T.D.).
[73] The Applicants further argue that the RSDS is not amenable to implementation by the RA because all federal regulatory authorities participate in the RSDS merely as stakeholders, not as agents with control over that process.
[74] The Applicants say the adoption of the RSDS as a mitigation measure is an error since it does not meet the definition of a mitigation measure set out in section 2 of the CEAA. The MOE erred in her interpretation of section 23(b)(i) of the CEAA, which creates a mandatory imperative, and which is specifically designed to address identified uncertainties through further assessment.
[75] The Applicants further submit that the decision of the MOE not to refer the Project for mediation is unreasonable because that decision effectively contradicts one of the purposes of the CEAA, that is to ensure a full consideration of environmental effects before an RA exercises its power regarding a project. They rely on Canadian Association of Industrial, Mechanical & Allied Workers, Local 14 v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983, (1989), 62 D.L.R. (4th) 437 in support of this argument.
v) The Issuance of the Authorizations by the DFO
[76] The Applicants rely on their challenges to the decision of the MOE to support their arguments against the issuance of the authorizations by the DFO. They argue that the jurisdiction of the MFO to issue those authorizations depends upon prior compliance with the CEAA in the preparation and review of the CSR; see Alberta Wilderness Association v. Canada (Minister of Fisheries and Oceans, [1999] 1 F.C. 483, at page 493 and Alberta Wilderness Association v. Cardinal River Coals Ltd. (1999), supra at page 464.
[77] The Applicants submit that pursuant to sections 17, 37(1) and 37(2) of the CEAA, the MFO has a non-delegable mandatory duty to ensure the implementation of mitigation measures when issuing the authorizations permitting the Project to proceed. The CSR identifies the RSDS as the mitigation measure.
[78] The Applicants submit that the MFO could have acted in a way to ensure implementation of the mitigation measures identified in the CSR by attaching conditions to the authorizations and his failure to do so effectively removes any means of ensuring that the mitigation measures are implemented. The only conditions attached to the authorizations relate to matters concerning fish habitat, not to the RSDS.
[79] The Applicants argue that as a result, the MFO abandoned his statutory duty. The implementation of the RSDS will depend upon the Alberta provincial regulators, not on the federal government. The federal authorities have assigned the regulation of matters falling within their jurisdiction to the provincial regulators and this is improper; see Friends of the Oldman River Society, [1992] 1 S.C.R. 3 (S.C.C.).
[80] Finally, the Applicants argue that both the MOE and the MFO have abandoned their obligations to follow the intention of the CEAA, as expressed in its preamble:
WHEREAS the Government of Canada is committed to exercising leadership within Canada and internationally in anticipating the degradation of environmental quality and at the same time ensuring that economic development is compatible with the high value Canadians place on environmental quality.
This abandonment amounts to an abrogation of the duties imposed by law and the decision of the MOE and the authorizations issued by the MFO should be set aside.
Respondent Ministers' Submissions
i) The Standard of Review
[81] The Respondent Ministers agree that the standard of review applicable to the interpretation of the CEAA is the standard of correctness; see: Friends of the West Country v. Canada, supra.
[82] However, they argue that the correct interpretation of the CEAA is not the issue in these proceedings. Rather the true issue is the reasonableness of the decisions which were made and the applicable standard of review in those circumstances is either reasonableness or patent unreasonableness; see: Friends of the West Country, supra. The Respondent Ministers argue that the decisions in issue are correct in law and based upon a reasonable exercise of judgment.
[83] The Respondent Ministers refer to the decision of the Supreme Court of Canada in Pushpanathan v. Canada, [1998] 1 S.C.R. 982, (1998), 160 D.L.R. (4th) 193, arguing that the following factors determine that a deferential standard of review is appropriate:
a) The legislative intent of the statute indicates that Parliament intended the decision be left to the Minister;
b) The responsible Ministers and their officers have a high level of expertise in their respective fields;
c) The Ministers' role should be conceived not primarily in terms of establishing rights as between parties, or as entitlements, but rather as a delicate balancing between different constituencies.
[84] The Respondent Ministers also rely on the recent Federal Court of Appeal decision of Inverhuron, supra to support their position that the appropriate standard of review of the section 23 decision by the MOE is reasonableness simpliciter.
ii) The Environmental Assessment Process
[85] The Respondent Ministers submit that the environmental assessment process, here in issue, is essentially a planning tool. It is not intended to act as a strict regulatory instrument; see: Friends of the Oldman River v. Canada, supra, at 71.
[86] They characterize the environmental assessment process under the CEAA as a flexible one, where environmental effects and mitigation measures could be considered together; see Alberta Wilderness Association v. Express Pipeline, supra, at 342 and Grand Council of Crees v. Canada [1994] 1 S.C.R. 159 at 198-199.
[87] The Respondent Ministers go further and submit that the implementation of the environmental process in an adaptive way is sound in law and science, and that adaptive management is an appropriate tool to address the inherent uncertainties in the environmental assessment process. In both their written and oral arguments, the Respondent Ministers promote the idea that adaptive management, as illustrated by the RSDS, was properly relied on in this case.
iii) The CSR
[88] The Respondent Ministers dismiss the arguments raised by the Applicants concerning the conduct of the CSR and its treatment of cumulative environmental effects on the basis that the Applicants have failed to establish a breach of section 16 of the CEAA relative to these matters. They submit that these arguments are directed at the significance of environmental effects, the adequacy and completeness of the evidence that was presented, and the judgments reached by the Department of Environment and the Department of Fisheries and Oceans. They argue that these are matters to be assessed on the standard of reasonableness and do not involve the question of statutory interpretation.
[89] As for the alleged failure of the MOE to comply with section 4 of the Act, the Respondent Ministers say that this section merely establishes the purpose of the CEAA and serves as an interpretative provision. It is not an operational provision that can be breached; alternatively, the evidence shows that the CSR complied with the spirit and letter of section 4.
iv) The Section 23, CEAA, Decision
[90] The Respondent Ministers submit that the CSR was prepared in accordance with the CEAA and the MOE did not commit a reviewable error in concluding that the Project was not likely to cause significant adverse environmental effects, taking into account the implementation of mitigation measures including the RSDS. Indeed, the Respondent Ministers argue that if the RSDS is found to be a mitigation measure, then the Applicants must fail in their challenge to the decision of the MOE.
v) The Issuance of the Authorizations by the DFO
[91] The Respondent Ministers argue that the CEAA only requires the responsible authorities to ensure the implementation of mitigation measures. The CEAA does not detail a particular means of doing so. Section 37(2) gives the RA considerable latitude in ensuring such implementation.
[92] The Respondent Ministers rely on the Affidavit of Bev Ross to show that the DFO took steps to ensure the implementation measures in relation to the first authorization which concerned a drilling program.
[93] Likewise, the Respondent Ministers refer to the Affidavit of Fred Hnytka to show that reasonable efforts were made to ensure the implementation of mitigation measures in relation to the second or final authorization.
[94] The Respondent Ministers submit that the reasonable efforts undertaken by DFO for the implementation of mitigation measures raise a question of reasonableness, not a question of law.
Respondent Suncor's Submissions
i) Standing
[95] The Respondent Suncor challenges the Applicants standing to bring these applications. In this case, the Applicants seek public interest standing because they do not have a direct or personal interest pursuant to the words "directly affected" in section 18(1) of the Federal Court Act, R.S.C. 1985, c. F-7.
[96] Suncor questions whether the Applicants have a genuine interest in the matters in dispute and whether they have shown that there is not a more appropriate party to bring the application. Suncor here relies on the test established by the Supreme Court of Canada in Canadian Council of Churches v. Canada, [1992] 1 S.C.R. 236, (1992), 88 D.L.R. (4th) 183 (S.C.C.).
[97] Suncor points out that ERC and TW were members of OSEC, the coalition which made submissions during the proceedings before the AEUB. The AEUB granted approval for Project Millennium and no challenge was filed in the Alberta Court of Appeal respecting those approvals.
[98] As well, Suncor says that during the hearings before the AEUB, OSEC withdrew its objections to the approval of Project Millennium. ERC and TW, as members of OSEC, have represented that they were satisfied with the submissions made by OSEC. Their current objections are inconsistent with their participation before the AEUB as members of OSEC. According to Suncor, this inconsistency militates against any finding that the Applicants have a "genuine interest" in the matters under review.
[99] Suncor finds support for this argument in the written submissions made by OSEC to the Canadian Environment Assessment Agency and DFO dated January 14, 1999 attaching a copy of the agreement between OSEC and Suncor for the management of SO2 and NOx emissions in the Athabasca oil sands region. That letter provided in part as follows:
Based on the level of agreement reached between OSEC and Suncor, OSEC changed its position regarding the application before the EUB for the Project Millennium [sic]. OSEC considers itself no longer adversely affected by the Project, provided that Suncor follows through on its commitments and that adequate conditions are placed