On May 17, 2013 the Supreme Court of British Columbia released its decision in David Suzuki Foundation v. British Columbia (Ministry of Environment), 2013 BCSC 874. The case concerned Holmes Hydro Inc.’s plans to build hydroelectric plants on 10 tributaries of the Holmes River. The issue was whether the plan required environmental assessment under section 5 of the Environmental Assessment Act, S.B.C. 2002, c. 43 (the “Act”).
Under the Reviewable Projects Regulation, B.C. Reg. 370/2002, a power plant that has a generating capacity of 50 megawatts or more is subject to the environmental assessment process under the Act. In a letter to the Environmental Assessment Office (the “EAO”), Holmes Hydro described its proposal to build 11 small hydro plants (later reduced to 10), and asked whether assessment under the Act was necessary. The EAO replied that, as each individual plant was to have a generating capacity of less than 15 megawatts, assessment was unnecessary. The petitioners, consisting of the David Suzuki Foundation and the Watershed Watch Salmon Society, challenged this decision on the basis that the proposal required assessment as a single project, based on a total capacity of 76.5 megawatts.
The court had two main concerns in making its decision. First, whether the EAO’s reply to Holmes Hydro was reasonable, and second, if it was unreasonable, whether the water licenses and other approvals issued for the project should be set aside.
In addressing the first concern, Mr. Justice N. Smith first considered whether the proposal involved “project splitting”, which was criticized in the Supreme Court of Canada’s recent decision in MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2. The petitioners argued that the 10 individual plants were really one “facility” (as defined in the Reviewable Projects Regulation) and thus project splitting had taken place.
Justice Smith held that MiningWatch was not comparable because it involved environmental assessment under federal legislation and applies to situations where an assessment is required, yet portions of the project are not being assessed. Here, because the Reviewable Projects Regulation refers to the production capacity of a “new facility” that is a hydroelectric power plant, the EAO’s determination that no assessment was required because each individual facility had a capacity of less than 50MW was reasonable. Accordingly, based on the wording of the Act and the Reviewable Projects Regulation, the court held that project splitting had not taken place.
The court went on to say that, even if the EAO’s decision was unreasonable, considering the prejudice to each party that would be brought by a finding of unreasonableness, the balance of convenience favoured Holmes Hydro and no relief would have been granted in any event. This decision was based mainly on the fact that Holmes Hydro had relied on the EAO’s advice, EAO’s advice was given five years ago, and Holmes Hydro would incur a heavy financial burden were there to be an EAO assessment.
The case gives us the court’s interpretation of the words “facility” and “project” from the Act and its regulations. The court held that the EAO’s determination that the 10 proposed plants are all separate “facilities” as they are functionally, though not economically, independent. The case confirms that the court will defer to the discretion of the EAO in relation to assessments so long as their discretion has been exercised reasonably (click here for a related post on this topic). To proponents that have received confirmation from the EAO that an assessment is unnecessary, this should provide some peace of mind.
Lawson Lundell's Project Law Blog focuses on updating proponents on issues emerging in the law and policy that applies to the development of major projects in Canada. The focus of the blog is on matters relating to environmental assessment and compliance, regulatory matters and Indigenous consultation.