GCT Canada Limited Partnership v. Vancouver Fraser Port Authority

GCT Canada Limited Partnership v. Vancouver Fraser Port Authority
Court (s) Database
Federal Court Decisions
Date
2022-07-26
Neutral citation
2022 FC 1109
File numbers
T-538-19
Decision Content
Date: 20220726
Docket: T-538-19
Citation: 2022 FC 1109
Ottawa, Ontario, July 26, 2022
PRESENT: The Honourable Mr. Justice Pamel
BETWEEN:
GCT CANADA LIMITED PARTNERSHIP
Applicant
and
VANCOUVER FRASER PORT AUTHORITY and
ATTORNEY GENERAL OF CANADA
Respondent
JUDGMENT AND REASONS
Contents
I. Overview 3
II. The parties 5
III. History of Deltaport terminal expansion prior to the proposed DP4 project 7
IV. The RBT2 and DP4 projects 10
V. The March and September 2019 decisions and the institution of the present proceedings 21
VI. Procedural history 30
VII. Legislative framework 36
VIII. Issues 38
IX. Standard of review 39
X. Analysis 39
A. Preliminary matter: Is the application for judicial review moot and premature? 39
B. Did the VFPA breach the principles of natural justice and procedural fairness by rendering a decision tainted by bias and by breaching GCT’s legitimate expectations regarding the review of its PPE? 43
(1) Has the VFPA demonstrated impermissible bias by closing its mind to the DP4 project? 54
(a) Were the March and September 2019 decisions, the manner in which they were made and the statements made therein, reflective of an actual bias or even a reasonable apprehension of bias on the part of the VFPA? 55
(i) Stated rationale 56
1. The notion of prohibition 56
2. The competition concerns 65
(ii) The tactical way that the March and September 2019 decisions were orchestrated 77
1. The role of the VFPA’s previous law firm in the decision-making process and the paucity of the tribunal record 77
2. The current law firm and the tactical attempt to game the system 84
3. Deliberate avoidance of transparency by the VFPA in an effort to immunize itself from the bias allegation 90
4. Efforts to undermine DP4 to third-party stakeholders 100
(iii) The declaration of preference for RBT2 without a proper evidence-based assessment 114
(b) Failure to respect policy of separation of proponent and regulatory functions 116
(c) Are the VFPA decision makers biased as a result of any financial interest in the development of the RBT2 project? 119
(d) Contradictions in the VFPA’s positions as evidence of bias 123
(e) Final thoughts on the bias issue 125
(2) Has the VFPA breached GCT’s legitimate expectations? 131
C. Mootness and prematurity 149
D. Does this Court have the jurisdiction to grant the relief sought by GCT? 150
XI. Conclusion 151
ANNEX 154
I.
Overview
[1] The Canada Marine Act, SC 1998, c 10 [CMA], invests port authorities with the power to manage the marine transportation of goods and people, as well as related and necessary services, within their ports, the whole as may be permitted under their letters patent and otherwise provided for under the CMA and its regulations. The Vancouver Fraser Port Authority [VFPA] is one such port authority. As operator of the Port of Vancouver, the VFPA is responsible for, amongst other things, the long-term commercial advancement of the port, undertaking commercially and environmentally sustainable development plans consistent with the purpose of the CMA, and following through on those development plans in line with its strategic goals. It can operate the port facilities itself, or act as landlord and lease port property to commercial operators.
[2] Global Container Terminals Canada Limited Partnership [GCT] is one such commercial operator, and operates two container terminals within the jurisdiction of the Port of Vancouver, one of which is at Roberts Bank in Delta, British Columbia [GCT Deltaport], by way of lease with the VFPA; GCT is the tenant. By way of judicial review, GCT challenges two decisions of the VFPA, the first by which the VFPA refused in March 2019 to formally process GCT’s preliminary project enquiry [PPE] for the further expansion of GCT Deltaport [DP4 project] through the VFPA’s Project and Environmental Review Process [PER Process], and the second, a few months later, by which the VFPA purportedly rescinded in September 2019 its earlier decision and advised GCT that the port authority would assess the DP4 project proposal through its PER Process, but on the understanding that the VFPA’s preferred project for achieving capacity expansion at Roberts Bank continued to be a different project [RBT2 project], which was being developed by the VFPA and which was at that time further advanced and undergoing environmental impact assessment; the VFPA advised GCT that its review of the DP4 project would be conducted having regard to, amongst other things, the status of the RBT2 project in meeting the anticipated increased shipping demands of the Port of Vancouver.
[3] GCT claims that the VFPA has, through its conduct, demonstrated an incurable failure to act as an impartial decision maker under its statutory mandate set out in the CMA to consider the DP4 project, and that its executives closed their mind to the DP4 project without even assessing it under the port authority’s very own regulatory decision-making process, thus exhibiting actual bias against the project when the VFPA issued its decision to GCT in March 2019. The second decision in September 2019 purportedly reversing the earlier decision and confirming that the VFPA would assess the DP4 project under the PER Process was, according to GCT, an acknowledgment of such bias and a tactical attempt by the same executives to cover up the reversible error in the VFPA’s earlier decision. GCT now seeks to set aside both decisions, and on account of what it claims to be actual bias on the part of the VFPA’s executives which purportedly taints the entire review process, GCT is asking this Court to order an alternative assessment process—tantamount to an order for mandamus—compelling the Minister of Transport [Minister], or his delegate, such as Transport Canada, to step in and oversee the review process for the DP4 project and, as clarified by GCT during the hearing, to actually conduct certain components of the review process given the lack of process at the VFPA to address any of the issues of concern to GCT, in particular the VFPA’s purported bias. In addition, GCT seeks a series of declarations confirming the existence of such bias.
[4] I am not persuaded by GCT that there is any evidence that the VFPA executives were actually bias against the DP4 project or that what GCT claims to be the indicia of such bias is in any way evidence of a reasonable apprehension of bias on the part of the VFPA executives. Consequently, and as a result of subsequent changes to the governing legislation which affect the environmental assessment process to which the DP4 project would be subject, as well as the VFPA’s eventual decision to actually proceed with a review of the DP4 project under its PER Process, I am dismissing GCT’s application as the issues between the parties have become moot.
[5] I should also state at the outset that, as pleaded, these proceedings were not meant to be, and were not argued before me as, a trial on the governance model and the quality of governance of port authorities under the CMA, and of the VFPA in particular. The principal issue before me was whether the VFPA breached its obligation of procedural fairness by issuing a biased decision by refusing to process GCT’s application for DP4 or because it failed to respect GCT’s legitimate expectations in relation to the VFPA’s own process for regulatory review of large-scale projects within the Port of Vancouver. I leave the issue of optimization of proper and modern port authority governance in the hands of Transport Canada as part of its Ports Modernization Review commenced in 2018.
II. The parties
[6] GCT is an affiliate of GCT Global Container Terminals Inc. and is jointly owned by affiliates of the Ontario Teachers’ Pension Plan Board, British Columbia Investment Management Corporation and Australian-based IFM Investors. In addition to GCT Deltaport, GCT operates three other terminals in North America: GCT Vanterm, which is also within the Port of Vancouver; GCT Bayonne in New Jersey; and GCT New York situated on Staten Island, New York.
[7] The VFPA is a Canadian port authority established through letters patent dated December 22, 2007, issued by the Minister under the authority of section 8 of the CMA and is the result of the amalgamation of the Vancouver Port Authority, the Fraser River Port Authority and the North Fraser Port Authority; supplementary letters patent have been issued since 2007 dealing with specific matters such as acquisitions or dispositions of land. The VFPA is responsible for the management of federal port lands and waters within its jurisdiction in the Port of Vancouver. Its mandate under the CMA includes acting as both proponent and regulator with respect to land and project development under its authority. There is no issue between the parties that the VFPA’s jurisdiction includes the area within which the development of the RBT2 and DP4 projects is intended to be undertaken.
[8] Section 28 of the CMA authorizes the VFPA to operate the port, without any statutory requirement that it do so through an independent terminal operator. Companies seeking to undertake activity within the Port of Vancouver, including the leasing of port land and the activities inherent in building and operating marine terminals, require the authorization of the VFPA (section 23 of the Port Authorities Operations Regulations, SOR/2000-55 [Regulations]). There is no issue between the parties that the VFPA has the authority to develop the RBT2 project on its own or that GCT must seek VFPA authorization to undertake the DP4 project, save that the VFPA has asserted that it has traditionally acted as the proponent of large-scale projects involving the reclaiming of land.
[9] As regards GCT Deltaport, the VFPA acts as landlord in a leasehold concession pursuant to lease and berth corridor agreements with GCT, under which GCT has tenancy obligations including, amongst other things, the payment of rent and obligations in relation to repair and maintenance, permitted use, compliance with laws, and landlord re‑entry rights.
[10] The Attorney General of Canada [AGC] is named as a respondent because GCT seeks, as a possible remedy, that the Minister or another delegate of the Crown oversee the review and assessment process for the DP4 project.
III. History of Deltaport terminal expansion prior to the proposed DP4 project
[11] GCT Deltaport is today a 210-acre, 2.4 million TEU (twenty-foot equivalent unit) container terminal located in the outer harbour of Roberts Bank, constructed on pods of reclaimed land built on the southern end of a man-made causeway running over a shallow bank and connecting the terminal to the British Columbia lower mainland at Delta. It first began operating as a container terminal in 1997. In 2002, the predecessor to the VFPA (which I will refer to simply as the VFPA) embarked on a port expansion strategy in answer to the expected growth of trans-Pacific container shipping, which included, at the time, the development of two separate container terminal projects at Roberts Bank: the first being the Deltaport Third Berth Project [DP3], which was to consist of adding a third berth to the existing terminal, and the second being what was described at the time as the Terminal 2 Project [T2], which was a precursor to RBT2. DP3 would be an extension of the existing Deltaport terminal on its northern side, landward into shallower waters, and running along the eastern side of the causeway. The T2 project was to be developed along both the eastern and western sides of the causeway and also leading north into shallower waters (E1 and W3 options), but included, in addition, a separate extension of the terminal to the southwest, and away from the causeway into deeper waters (W1 and W2 options). Assessment and review of the projects was to be undertaken, and on February 24, 2003, the VFPA, as proponent of the projects, submitted separate letters of intent for the projects to the British Columbia Environmental Assessment Office so as to initiate a pre-application review; meetings with federal and provincial regulators to discuss the two projects took place on March 11, 2003.
[12] As one of the agencies responsible for approving the projects, the Department of Fisheries and Oceans [DFO] reviewed the proposed projects: two letters were sent to the VFPA, the first by DFO on April 1, 2003, and the second by the Minister of Fisheries and Oceans on July 29, 2003 [2003 DFO letters]. The 2003 DFO letters expressed concerns regarding development and the reclaiming of additional land along the eastern side of the causeway on account of the “critical value of the fish habitat in the area”. As regards the DP3 project, DFO stated that it “will not consider issuing a Fisheries Act Section 35(2) authorization for the destruction of this critical fish habitat”. As regards the T2 project, DFO expressed similar concerns regarding the proposed expansion into shallower waters, both on the eastern and western side of the causeway, and thus confirmed that it would not authorize the development as proposed. Just as importantly, DFO suggested that the port authority, as proponent of the terminal expansion projects, focus its efforts on proposals that had less of a damaging impact on the environment, and confirmed that it would be willing to work with the port authority on the development of the separate area of T2 which extended beyond the edge of the causeway to the southwest—seemingly an area to the south of where the W1 and W2 options for T2 were being proposed—“[a]s these options are in deeper water, where construction would likely have less impact on the Estuary’s fish habitat”.
[13] The 2003 DFO letters, amongst other things, caused the VFPA to reassess the projects. Eventually, a scaled down version of the DP3 project (about 30% less land mass on its north side so as to reduce its overall footprint on the landward side and thus accommodate DFO concerns) would move forward; on February 2, 2006, the VFPA advised the British Columbia Environmental Assessment Office that it was withdrawing its letter of intent to initiate a pre-application review request for T2 for the time being. From the point of view of the VFPA, the T2 project was thereby placed “on hold” pending further discussions with various stakeholders, including consultations with First Nations in the area, to address the outstanding environmental and community issues that had been identified during previous discussions. T2 would remain as a possible consideration for future expansion after the completion of DP3.
[14] DFO and Environment Canada jointly published a comprehensive study in July 2006 on the revised DP3 project, acknowledging that the reduced footprint minimized the potential effects on existing fish and fish habitat. The footprint-reduced DP3 project received final approval on December 8, 2006; the project was completed and became operational in January 2010, increasing the GCT Deltaport terminal’s capacity by 600,000 TEUs per year.
[15] In October 2015, the VFPA issued a permit allowing GCT to undertake the Deltaport Terminal, Road and Rail Improvement Project: a series of improvements at GCT Deltaport, mostly involving upgrades to the existing road and rail infrastructure at the container terminal and causeway, resulting in a further increase in container capacity of 600,000 TEUs per year, thereby bringing the terminal’s total capacity to 2.4 million TEUs per year, where it stands today.
IV. The RBT2 and DP4 projects
[16] As a commercial enterprise, the VFPA must undertake long-term planning to accommodate the evolving needs of the industry and the Port of Vancouver. In 2010, the VFPA established the Container Capacity Improvement Program [CCIP] as part of its long-term strategy to meeting the increasing demand for container terminal capacity at the Port of Vancouver; the options that the CCIP was to consider included increasing the capacity and efficiency of existing terminals, possibly converting existing underutilized terminals to handle container traffic, and building new terminals as may be required.
[17] With the DP3 project becoming operational in January 2010, the VFPA turned its mind back to the possible development of a new terminal at Roberts Bank, and in September 2013, engaged the environmental assessment process when it submitted to the Canadian Environmental Assessment Agency its project description for the approval of an updated version of the T2 project (the RBT2 project), in preference to further development in the area to the north of DP3 previously identified as problematic for development; the RBT2 project entailed constructing a new marine terminal area in the waters off Roberts Bank, extending into deeper waters to the southwest of the causeway, and to the west of GCT Deltaport, thus avoiding development and the reclaiming of land to the north—landward side—in shallower waters, which was one of the problematic aspects identified by DFO in 2003 with the initial T2 project. The RBT2 project would provide up to three additional berths and add an estimated additional 2.4 million TEU capacity to the Port of Vancouver. In January 2014, the Minister of the Environment (now the Minister of Environment and Climate Change) referred the environmental assessment of the proposed RBT2 project to a independent review panel [Review Panel] in accordance with section 38 of the then in force Canadian Environmental Assessment Act, SC 2012, c 19, s 52 [CEAA]. In fact, the VFPA’s Land Use Plan adopted in October 2014 specifically provides for the development of RBT2.
[18] In the meantime, GCT was also moving forward with its expansion plans, and in 2014, began plans to further extend GCT Deltaport to add an additional 2 million TEUs of annual capacity [DP4 project]. DP4 would be built within VFPA‑managed federal lands and water and within Tsawwassen First Nation water lots, and part of the project dredging would extend past VFPA-controlled lands into VFPA navigational jurisdictions and provincial seabed. The extension and necessary reclaiming of land would be contiguous to the existing terminal to the north—landward side—of GCT Deltaport, into shallower waters and to the east of the causeway, i.e., in the area of the E1 option for T2 which was identified as problematic for development in 2003 by DFO at the time.
[19] On March 27, 2015, the VFPA submitted its Environmental Impact Statement [EIS] for the RBT2 project, which included an alternatives assessment, for federal review. Eventually, the Review Panel determined that the EIS was sufficient and that the matter may proceed to public hearings on the project; public hearings on the RBT2 project would take place in May and June 2019. At the same time, GCT’s PowerPoint presentation of its proposed expansion project along with the preliminary assessment of the DP4 project by VFPA management, in particular, the financial and environmental considerations were discussed during a March 31, 2015, meeting of the VFPA board of directors.
[20] As part of the planning process for RBT2, the VFPA undertook a procurement process to identify and select a commercial operator for the new RBT2 container terminal; GCT applied in June 2015 to become the terminal operator for RBT2, along with continuing to be the operator of the adjacent Deltaport terminal, but was not successful.
[21] Informal discussions continued between GCT and the VFPA through 2016 when the parties began to discuss the DP4 project in detail, and on January 13, 2017, GCT made its first formal presentation of the proposed DP4 project to the VFPA. Within a few months of the meeting, the VFPA retained Hemmera Envirochem Inc. [Hemmera] to review regulatory changes, advances in scientific understanding and changes to DFO policies since the 2003 DFO letters, when DFO refused to authorize development of the area now being proposed for the DP4 project, and to consider the likelihood of DFO approving further expansion along the east side of the causeway to the landward side of the existing GCT Deltaport terminal. GCT agreed to pay half of the cost for the review.
[22] In November 2017, Hemmera delivered its report to the VFPA [Hemmera Report], which, although not squarely addressing the issue of whether the 2003 DFO letters constituted a prohibition of development in the area at the time, set out a series of sequenced activities (eight tasks) to be undertaken for any proponent looking to pursue future port infrastructure development on the east side of the causeway, landward of GCT Deltaport, in possible answer to the concerns expressed by DFO in 2003. GCT argues that I should read the Hemmera Report as confirming that the 2003 DFO letters did not constitute a prohibition against development of the area now proposed for DP4. However, the Hemmera Report made it clear that Hemmera “draws no conclusions related to the potential likelihood of attaining approvals and authorizations for project(s) along the East Causeway of Deltaport.”
[23] On December 8, 2017, GCT and the VFPA held a meeting during which GCT presented its views on the marketplace and existing competition amongst container terminal operators—issues of concern to the VFPA—and reiterated its intention to develop the DP4 project. In parallel to the discussions it was having with GCT regarding the DP4 project, the VFPA was moving forward with the development of RBT2.
[24] On December 6, 2017, the VFPA sent a briefing note to the then federal Minister of Public Services and Procurement—also the member of Parliament for the riding of Delta at the time [December 2017 Briefing Note]—espousing the benefits of the RBT2 project and the need for its development, and in particular outlining concerns with market concentration within the Port of Vancouver, with emphasis on avoiding dominance by any one single terminal operator within the port. I understand from the record and representations of GCT before me that GCT’s two terminals (GCT Vanterm and GCT Deltaport) together serviced around 78% of the container traffic within the Port of Vancouver at that time.
[25] In line with its procurement process to identify and select an operator for the RBT2 container terminal, the VFPA stated in the December 2017 Briefing Note that, consistent with the approach of maintaining healthy competition within the port, “no concessions or agreements will be granted for the Roberts Bank Terminal 2 [RBT2] Project that would result in an operator having more than 60 per cent of the container handling capacity within the Port of Vancouver.” The VFPA continued by stating that “[o]ngoing control by a single operator of more than 60 per cent of the container capacity within the Port of Vancouver has proven to be detrimental to customers of the gateway.” The briefing note went on to explain that any existing container terminal operator which sought to also operate RBT2 would have to demonstrate that, amongst other things, “its total container handling capacity within the Port of Vancouver would not exceed 60 per cent of the total available capacity.” The selection process seems to be ongoing from what I understand, at least as of the time of the hearing before me.
[26] The record includes similar briefing notes prepared by the VFPA in preparation for meetings with the then federal Minister of Transport and the British Columbia Minister of Transportation and Infrastructure in January and February 2018 to discuss and promote the need for the development of the RBT2 project. As regards the federal Minister of Transport in particular, the issues included that the VFPA’s borrowing limits under its letters patent would have to be increased in order to finance the RBT2 project. In discussing alternatives to the project, the briefing notes made it clear that the VFPA “concluded that the Roberts Bank Terminal 2 Project is the only viable option to ensure that the Port of Vancouver can efficiently handle growing trade in containers when it is required in the mid-2020s, and there are no other suitable alternatives that can reliably meet the need for additional capacity for the long-term” [emphasis added]. Specifically as regards the proposed DP4 project, the VFPA stated:
No other proponent proposal has been formally submitted to the port authority or government, though we are aware one is contemplated by GCT, albeit in the area of Roberts Bank already dismissed by the Minister of Fisheries in 2003. If a proposal were to be submitted, it would likely take at least nine years for approval, based on the experience of the Terminal 2 proposal to date, as it would likely be reviewed by a federal panel.
[Emphasis added.]
[27] There is no issue between the parties that both RBT2 and DP4 are not required concurrently by the Port of Vancouver in order to meet short-and medium-term increases in demand for container space. On February 2, 2018, the VFPA sent a letter to GCT [February 2, 2018 letter] aiming to “provide clarity and transparency in respect of VFPA’s approach” in its consideration of what was expected to be a permitting application for the DP4 project. After stating that it has, over several decades, “given extensive consideration to expansion of port facilities on either side of the causeway, and the decision to proceed with T2 was made having regard to this prior analysis (including environmental concerns associated with further development on the east side)”, the VFPA stated the following in relation to how it would consider any application by GCT for the development of DP4:
Specifically, GCT is at liberty to propose a project and apply to have it reviewed under VFPA’s project and environmental review process. For a project of the nature contemplated by GCT, and having regard to the history of environmental issues associated with the eastern side of the causeway, any proponent of such a project should expect significant environmental assessment requirements. We would encourage GCT to speak with an independent environmental consultant familiar with VFPA’s process and environmental assessment of similar projects to obtain a realistic understanding of the time that would take, the amount of information required, the cost of doing so and the likelihood of the environmental issues being amenable to sufficient mitigation at the end of the day.
It is also important that we be clear that, even if the previously identified environmental issues associated with such a project proved to be mitigable to some extent, those impacts would have to be considered in a cumulative context with T2. Further, given the multifaceted role of VFPA as discussed above, we believe it would be entirely appropriate and indeed incumbent upon VFPA to also consider the impacts of a DP4 project on the overall port operations. VFPA would also consider the issue of timing, recognizing the very significant lead times required for such projects, and the looming need for more near term capacity in the Port of Vancouver.
[Emphasis added. The VFPA’s reference to T2 is actually to the new RBT2 project.]
[28] The VFPA’s concerns regarding container terminal market concentration within the Port of Vancouver and the perceived lengthy and difficult road ahead for DP4 to gain environmental approval were again expressed in the VFPA executive’s briefing note on the status of the RBT2 project prepared for the board of directors meeting of March 21, 2018. The VFPA’s campaign to develop RBT2—and according to GCT, a campaign to undermine the DP4 project—continued throughout April and May 2018 with letters to the then federal Minister of Transport on April 27, 2018, and to the then federal Minister of International Trade on May 5, 2018; both letters provided an update on the status of the RBT2 project and also comments on the reasoning for preferring RBT2 over DP4. The VFPA stated:
We are aware of one other potential container terminal expansion project that has been discussed by an existing container terminal operator in the Vancouver gateway. Its proposed location is not a new idea, having first been mooted as a possible location for Terminal 2 over 15 years ago. It is, however, a highly sensitive location that the Minister of Fisheries stated unequivocally in 2003 would not be permitted. With that direction, we sought to avoid development in the area referred to by the minister to preserve the fragile inter-tidal marine aquatic ecosystems that exist there.
Terminal 2 would introduce a new container terminal operator to the West Coast of Canada, respecting the principles of choice and commercial competition. We believe this will benefit the Canadian economy by ensuring three strong independent container terminal operators are in place to serve Canada’s needs and provide a competitive market place.
[Emphasis added.]
[29] In a May 11, 2018, email entitled “2003 letter ruling out terminal development adjacent to current Deltaport terminal”, the VFPA sent a copy of the July 29, 2003 DFO letter to a government official. In particular, the email stated:
Further to our brief discussion about the idea GCT have been raising around an extension of Deltaport, we looked into this at the start of the RBT2 process and did not pursue it as it was explicitly ruled out by the Liberal Minister of Fisheries Robert Thibault in 2003 (letter attached – options 2 & 3 are in the location GCT suggests).
Even if this could be overturned, which would be a challenge to say the least, it would be impossible to permit and develop a facility to be ready anywhere near in time to meet demand. It would almost certainly be a longer process than RBT2 and we’ve been working on permitting RBT2 (in the deeper location referred to in the letter) for 7 years already and it will likely be another 9 years to get through permitting, construction and commissioning.
[Emphasis added.]
[30] In October 2018, the VFPA published on its website an “Overview and Rationale” setting out the benefit of the RBT2 project and outlining the status of the project and the work that had been undertaken to date for the project as regards consultation with stakeholders, including First Nations communities, an environmental impact review, its terminal operator procurement process, and the actual building of the project. In the section on possible alternatives to the project, the VFPA stated that the expansion of the existing GCT Deltaport facility through the DP4 project was “not an option for two main reasons”: first, DFO had prohibited any further land reclamation inland from Deltaport because of environmental sensitivity and, second, the VFPA wished to prevent one terminal operator from controlling a significant majority of the market for container terminal services.
[31] On October 5, 2018, GCT delivered a further presentation to the VFPA in support of the DP4 project, during which a tour of the terminal and an overview of the proposed expansion was provided; present at the presentation was the majority of the VFPA’s board of directors as well as the VFPA’s senior executives. However, the issues of the environmental challenges to the development of DP4 in the area that proved problematic in 2003 and of terminal operator market dominance within the Port of Vancouver continued to play on the mind of the VFPA—the record before me includes a series of email exchanges dated between October 3 and 15, 2018 between the VFPA and outside consultants retained to review and prepare a report on the issue of market dominance within ports around the world, as well internal emails within the VFPA regarding a review of the Hemmera Report and its conclusions at the time.
[32] At the request of GCT, on January 24, 2019, GCT and the VFPA held a pre-PPE meeting as part of the first procedural requirement for review of capital projects under the VFPA’s PER Process. The agenda for the meeting included a discussion on where engagement of the parties stood on the issue of DP4 as well as the status of the preliminary work undertaken by GCT in line with the three-phase/eight-task process outlined in the Hemmera Report for the advancement of future projects along the east side of the causeway—it would seem that GCT had completed Phase 1 of the eight phases recommended by Hemmera, being the pre-feasibility study. At the conclusion of that meeting, the VFPA suggested that a further pre-PPE meeting would be required. The next day, GCT asked for further clarity regarding such further meeting and although hesitant as to whether it was even necessary, requested that any further pre-PPE meeting take place before the end of the week of February 4, 2019, otherwise GCT was to be “filing the PPE in accordance with all VFPA’s posted guidelines.” The VFPA proposed February 13, 2019, for the next meeting, but as the date was outside GCT’s proposed window, on February 5, 2019, GCT formally submitted its PPE for the DP4 project to the VFPA for review in accordance with its PER Process.
[33] GCT’s PPE was received and distributed internally amongst VFPA management. It would seem that the PER Process for the DP4 project was to begin, as internal VFPA emails state that “staff will be doing an internal review over the comings days/weeks, and no doubt a number of initial meetings with GCT will be required.” In fact, on February 7, 2019, the VFPA confirmed to GCT receipt of its PPE and advised that VFPA staff “will undertake a review of the submission to better understand the project and determine if our submission criteria has been satisfied in order to continue processing. Once this is done, staff will either confirm our February 13 meeting with you or will reschedule a meeting should further information and engagement be necessary to process your submission.” The proposed meeting for February 13, 2019, with GCT was eventually deferred at the suggestion of the VFPA on February 11, 2019, as its staff had not completed their review of the information submitted by GCT; as confirmed during the cross-examination of Mr. Peter Xotta, Vice-President, Planning and Operations for the VFPA, nor had a project lead for the GCT’s proposal been appointed at that time.
[34] The affidavit of Mr. Xotta, filed in August 2021 in replacement of the initial affidavit of Mr. Yeomans who was no longer able to be cross-examined, indicates that he participated in several discussions with other members of the VFPA executive regarding the PPE, and in particular, the port authority’s pending decision whether to accept the PPE—although it had indicated to GCT that it was to undertake a review of the submission so as to better understand it—so as to advance “VFPA’s statutory decision-making process under the [CMA]”. The VFPA executives met on February 13, 2019 (it seems as though all members of the seven-person executive team were in attendance, including Mr. Xotta), with a decision being reached by consensus which was eventually to be communicated to GCT on March 1, 2019. In his cross-examination, Mr. Xotta confirmed that there were no documents that reflected the discussions and decision made by the executives at the time, other than the formal decision that was to be sent to GCT on March 1, 2019. In the meantime, exchanges continued between the parties during the last two weeks of February 2019, with GCT looking for a status report and the VFPA responding only that “senior management is considering the GCT request and the submission materials …”. However, in response to a media request in relation to GCT’s proposed expansion project, on February 26, 2019, the VFPA advised that it was:
reviewing GCT’s submission that was posted on the independent review panel registry, and don’t have any specific comments at this time.
However, what is important is that the Roberts Bank Terminal 2 Project is the only project on the West Coast that is currently in the review process and that could potentially meet the need for container terminal capacity when Canada needs it by the late 2020s.
Should GCT decide to proceed with the Deltaport expansion, they would need many years to do all the planning and environmental work to enter into the federal review process, followed by the environmental review – which has taken already four years for the RBT2 Project – and then by construction. This would make it very difficult for GCT to meet demand that is just a few years away.
V. The March and September 2019 decisions and the institution of the present proceedings
[35] On March 1, 2019 (the letter is incorrectly dated February 29, 2019), the VFPA sent a letter to GCT, reflecting the decision reached by the VFPA executives on February 13, 2019, stating: “we will not be processing your [PPE] through our [PER Process] at this time” (emphasis added) [March 2019 decision]. In its letter, the VFPA noted that DP4 would involve a footprint expansion extending onto the same environmentally sensitive area on which the DFO expressed concerns in 2003 as involving “unacceptable impacts to critical fish habitat”. The March 2019 decision continued by stating:
It was very clear that the reduced footprint was a significant factor in the assessment and ultimate recommendation for approval of the DP3 Project by DFO and Environment Canada, and that the originally proposed footprint of 80 acres would not have been acceptable.
It is notable that your proposed DP4 Project would involve a footprint expansion of 56 hectares (138 acres), extending into and well beyond the footprint on the very same intertidal habitat which was specifically protected by the reduced footprint of the DP3 Project to address the opposition of DFO to impacts on what they regarded as critical intertidal habitat.
[Emphasis added.]
[36] In addition, and underscoring the same two reasons stated in its 2018 “Overview and Rationale” document, i.e., the 2003 DFO letters and market concentration within the port, the VFPA stated that the RBT2 project was its preferred project for expansion of capacity at Roberts Bank:
As you are aware, the VFPA plans for container capacity expansion at Roberts Bank have included additional expansion on the west side of the terminal, in deeper water, as encouraged by the Minister of Fisheries and Oceans in 2003.
…
The RBT2 Project is our preferred project for achieving the expansion of capacity to meet projected increases in demand.
…
You must understand that your DP4 proposal, even if it is able to receive the necessary environmental and regulatory approvals, could only be considered as subsequent and incremental to the RBT2 Project. We note that your proposed development timeline would conflict with the implementation of RBT2 capacity. Taking all of the above factors into consideration, we will not be processing your Enquiry through our project and environmental review process at this time. We would be prepared to review development plans for Deltaport with GCT at a point when we can more accurately project the need for incremental capacity beyond RBT2.
[Emphasis added.]
[37] On March 4, 2019, GCT expressed disagreement with the VFPA’s decision not to process the PPE through the port authority’s PER Process at that time, confirmed that it was nonetheless continuing to advance its environmental and engineering studies, and requested port authorization to access the causeway to undertake the necessary environmental studies.
[38] The record before me also contains a draft of a letter dated March 25, 2019, from the VFPA to the then Deputy Minister of Fisheries and Oceans [March 25, 2019 draft] seeking “clarification from Fisheries and Oceans Canada (DFO) on earlier direction regarding terminal expansion at Roberts Bank, B.C.” and advising that it had “recently had an inquiry from a proponent interested in expanding a Roberts Bank port terminal by reclaiming