T-3478-90
Curragh Resources Inc. (Plaintiff)
v.
Her Majesty the Queen in Right of Canada as
represented by the Minister of Justice (Defendant)
INDEXED AS.' CURRACH RESOURCES INC. V. CANADA
(MINISTER OF JUSTICE) (F.D.)
Trial Division, Joyal J.—Toronto, November 21,
1991; Ottawa, January 14, 1992.
Environment — Plaintiff undertaking open pit mining pro
ject in Yukon Territory on lands owned by Government of
Canada and administered by Minister of Indian Affairs and
Northern Development and by Government of Yukon Territory
— Water licence issued by Yukon Territory Water Board on
conditions re posting of security — Amount of security found
inadequate by Department of Fisheries and Oceans and
DIAND — Additional security imposed by latter through
agreement — Whether Crown entitled to impose mitigative and
compensatory measures — Relevant legislation and case law
on EARPGO reviewed — EARPGO applicable to Water Board
as law of general application related to environmental quality
— Also applicable to Minister of DIAND and to Minister of
Fisheries and Oceans as initiating departments.
This was an application under Rule 474 of the Federal
Court Rules to determine whether the Crown has statutory or
other authority to impose mitigative and compensatory mea
sures with respect to the Vangorda Project undertaken by the
plaintiff in the Yukon Territory. The Project, which consists in
developing lead-zinc deposits on lands owned by the Govern
ment of Canada, will have a number of adverse environmental
effects on federal areas of responsibility, the most significant
one resulting from the addition of metals, particularly zinc, to
the waters of the Vangorda Creek and the Pelly River. If the
on-going and post-abandonment mitigation measures are not
undertaken, there will be significant adverse impacts, both
immediate and long term, on the water quality, the fish habitat
and the fisheries resources of both water courses, as well as
social impacts related to these effects on water and fish.
From March 1987 to September 1990, various environmen
tal proceedings took place under the Environmental Assess
ment and Review Process Guidelines Order (EARPGO). In the
meantime, plaintiff applied for a water use licence under the
provisions of the Northern Inland Waters Act. Following pub
lic hearings held before the Yukon Territory Water Board in
June 1990, the latter granted plaintiff a water licence, subject
to certain conditions, namely the posting of security represent
ing 10% of the cost of the work as well as an annual amount of
$560,000 to cover post-abandonment costs. Both the Depart
ment of Indian Affairs and Northern Development (DIAND)
and the Department of Fisheries and Oceans (DFO) decided
that the security conditions imposed by the Water Board were
clearly inadequate. Plaintiff and DIAND entered into an agree
ment whereby an additional security of $4,406,000 would be
posted by plaintiff to ensure that post-closure water treatment
would be provided in perpetuity. On signing the agreement,
however, plaintiff questioned the right of the Minister to
impose a requirement for additional security.
Held, the question should be answered in the affirmative.
In resolving this issue, it was useful to review the case law
concerning the application of EARPGO in conjunction with
other relevant legislation on environmental matters. In Friends
of the Oldman River Society v. Canada (Minister of Transport),
for example, the Federal Court of Appeal held that the Guide
lines Order was intended to bind the Minister of the Environ
ment in the performance of his duties and functions and cre
ated a duty which is superadded to the exercise of any other
statutory power residing in him. This decision can be taken as
standing for the proposition that EARPGO can act indepen
dently of other legislative requirements to impose upon a gov
ernment or agency a requirement to review an environmental
effect upon an area of federal responsibility.
The first question which had to be addressed was whether
EARPGO applies to the Yukon Territory Water Board in its
proceedings under the Northern Inland Waters Act. The power
assigned by section 6 of the Department of the Environment
Act is expressly granted to the Minister of the Environment,
and not to any other Government body. EARPGO is a law of
general application related to environmental quality. In propos
ing that a strict interpretation be given to the words "not by
law assigned to any other department, board or agency of the
Government of Canada" found in section 4 of the Department
of the Environment Act, the plaintiff would considerably
restrict the scope of that general application. If the Guidelines
Order could never apply to matters which by law were
assigned to another department, board or agency, much of its
purpose would be defeated. The Guidelines are intended pre
cisely to apply to departments, boards and agencies which,
within their existing mandates, have at times to make decisions
on matters which could have environmental consequences and
are within the jurisdiction of the Government of Canada. With
respect to the Yukon Territory Water Board's mandate under
the Northern Inland Waters Act, there can be no doubt that the
matter of the environmental consequences to the water is
within its jurisdiction. Given the complexity of the issues, the
ever growing public demand for environmental protection and
the potentially devastating effects which may result from legis
lative gaps, it is consistent with the scope and intent of that Act
that the Water Board have all the necessary power to address
any problem which may arise. EARPGO merely assists the
Water Board in the exercise of its duties; it is an added safe
guard. Subject to section 8 of EARPGO, which bars the appli
cation of the Guidelines Order where there is a "legal impedi
ment", the latter does apply to the Yukon Territory Water
Board. EARPGO creates superadded responsibilities. It does
not and cannot displace the express duties and responsibilities
granted and imposed by other legislation.
The second issue was whether EARPGO applies to the Min
ister of Indian Affairs and Northern Development. Under sec
tion 11 of the Northern Inland Waters Act, the Minister of that
Department had to approve the issuance by the Board of a
water use licence for plaintiff to undertake the Vangorda Pro
ject. And because the decision-making responsibility lay with
him, his Department was the initiating department. Quite apart
from other statutes, EARPGO itself constitutes a source for the
Minister's responsibility to address environmental concerns in
areas of federal jurisdiction and creates a positive duty to com
ply with it. The plaintiff's position, that the Yukon Territory
Water Board has exclusive authority to require security as a
condition to a water use permit, was untenable. It was clear to
the Minister that the security imposed by the Water Board was
insufficient to address the environmental impacts discussed in
its Screening Report. It was on the authority of EARPGO that
the Minister imposed a requirement for additional security
before issuing the licence and not pursuant to the Northern
Inland Waters Act. In the absence of adequate security, the
finding that the impacts had been mitigated would be untena
ble and the Project might have to be abandoned, the environ
mental impacts being unacceptable. The decision-making
authority of the Minister to authorize the issuance of a licence
imposed upon him the positive duty to comply with the Guide
lines Order and that is what he did. There was neither usurpa
tion of the Water Board's duties nor duplication in process. In
waiting for the Water Board's decision, the Minister could
assess what additional security would be needed to ensure that
the potentially adverse environmental effects of the proposal
would be insignificant.
Finally, as to whether EARPGO applies to the Minister of
Fisheries and Oceans, the Fisheries Act gives the Minister the
legal authority to restrict the operation of a work or undertak
ing or to require modifications thereto when the work or
undertaking results in the harmful alteration, disruption or
destruction of fish habitat. This decision-making authority
required the Minister to comply with EARPGO and his
Department was therefore another initiating department.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Department of Fisheries and Oceans Act, R.S.C., 1985, c.
F-15, s. 4(1),(2).
Department of Indian Affairs and Northern Development
Act, R.S.C., 1985, c. 1-6, ss. 4, 5, 6.
Department of the Environment Act, R.S.C., 1985, c.
E-10, ss. 4(1),(2), 6.
Environmental Assessment and Review Process Guide
lines Order, SOR/84-467, ss. 2, 3, 6, 8, 9(1), 10(1),(2),
11, 12, 13, 14, 19.
Federal Court Rules, C.R.C., c. 663, R. 474 [as am. by
SOR/79-57, s. 14).
Fisheries Act, R.S.C., 1985, c. F-14, ss. 34(1), 35(1),
37(1 )(a),(2)(a),(b).
International River Improvements Act, R.S.C., 1985, c.
I-20.
Navigable Waters Protection Act, R.S.C., 1985, c. N-22, s.
5(1).
Northern Inland Waters Act, R.S.C., 1985, c. N-25, ss.
2(1), 7(1), 8(1), 10, 11(1),(2).
Northern Inland Waters Regulations, C.R.C., c. 1234, ss.
3 ( 2 ), 4, 7(1), 13 ( 1 ),(3),( 4 ).
Territorial Land Use Regulations, C.R.C., c. 1524, ss. 3,
36(1),(5) (as am. by SOR/88-169, s. 5), (6) (as am.
idem), (7) (as enacted idem).
Territorial Lands Act, R.S.C., 1985, c. T-7, ss. 4, 5.
CASES JUDICIALLY CONSIDERED
APPLIED:
Canadian Wildlife Federation Inc. v. Canada (Minister of
the Environment), [1989] 3 F.C. 309; [1989] 4 W.W.R.
526; (1989), 37 Admin. L.R. 39; 3 C.E.L.R. (N.S.) 287;
26 F.T.R. 245 (T.D.); affd [1990] 2 W.W.R. 69; (1989),
99 N.R. 72 (F.C.A.); Friends of the Oldman River Society
v. Canada (Minister of Transport), [1990] 2 F.C. 18;
(1990), 68 D.L.R. (4th) 375 (C.A.); Canadian Wildlife
Federation Inc. v. Canada (Minister of the Environment),
[1991] 1 F.C. 641; (1990), 6 C.E.L.R. (N.S.) 89; 4 F.T.R.
318 (note); 121 N.R. 385 (C.A.).
AUTHORS CITED
Willis, Bruce L. and Daniell Shier. "Environmental Con
trols Affecting Exploration and Development of Min
eral Resources in the Yukon", (1990), 3 C.J.A.L.P. 243.
COUNSEL:
William V. Sasso and Paul G. MacDonald for
plaintiff.
Donald J. Rennie for defendant.
SOLICITORS:
McMillan Binch, Toronto, for plaintiff.
Deputy Attorney General of Canada for defen
dant.
The following are the reasons for judgment ren
dered in English by
JOYAL J.: This is an application pursuant to Rule
474 of the Federal Court Rules, C.R.C., c. 663 [as
am. by SOR/79-57, s. 14] that the following question
of law be determined:
Does the Crown in Right of Canada as represented by the Min
ister of Indian Affairs and Northern Development and/or the
Minister of Fisheries and Oceans have authority under the
Environmental Assessment and Review Process Guidelines
Order, the Northern Inland Waters Act, the Territorial Lands
Act, and the Fisheries Act, or otherwise at law, to impose miti-
gative and compensatory measures, including monetary or
other security, in respect of the Vangorda Project, a Project
being developed by the plaintiff in the Yukon Territory on land
owned by the defendant Her Majesty the Queen, in light of the
decision of the Yukon Territory Water Board dated September
12, 1990?
Rule 474 of the Federal Court Rules provides as
follows:
Preliminary Determination of Question of
Law or of Admissibility
Rule 474. (1) The Court may, upon application, if it deems it
expedient so to do,
(a) determine any question of law that may be relevant to
the decision of a matter, or
(b) determine any question as to the admissibility of any evi
dence (including any document or other exhibit),
and any such determination shall be final and conclusive for
the purposes of the action subject to being varied upon appeal.
(2) Upon an application for an order that a question be deter
mined under paragraph (1), the Court shall, if it orders that the
question be so determined,
(a) give directions as to the case upon which the question
shall be argued,
(b) give directions as to whether or not memoranda shall be
filed and served by the parties and, if they are to be filed and
served, fix time limits for the filing and service of the mem
oranda of the respective parties, and
(c) subject to section 15(2) of the Act, fix a time and place
for argument of the question.
The application under Rule 474 was heard by the
Associate Chief Justice on June 17, 1991 and on Sep-
tember 20, 1991 he ordered that the aforementioned
question be determined by this Court and fixed the
time for the hearing of the matter for November 21,
1991 in Toronto. He further ordered that an agreed
statement of facts and agreed list of documents be
submitted.
When the matter came on to be heard, there was
perfunctory challenge by the defendant Crown that
the conditions under Rule 474 had not been met but
this challenge was not actively pursued. Conse
quently, the hearing proceeded on its merits.
BACKGROUND
The plaintiff Curragh Resources Inc. (hereinafter
Curragh) is in the process of developing the
Vangorda and Grum lead-zinc deposits located on the
Vangorda Plateau in the Yukon Territory (the
Vangorda Project). This Project is located on lands
which are wholly owned by the Government of
Canada and which are administered in part by the
Minister of Indian Affairs and Northern Develop
ment and in part by the Government of the Yukon
Territory.
The Vangorda Project involves the construction by
Curragh of two open pits for mining (one for the
Vangorda deposit, the other for the Grum deposit),
together with waste dumps, roads and water treat
ment facilities. The Project is situated at the centre of
the Vangorda Creek drainage basin, which drains into
the Pelly River.
The Vangorda deposit is located under the natural
channel of Vangorda Creek. As the Vangorda pit is
developed, the flow of water in Vangorda Creek will
be diverted through a culvert constructed on the
perimeter of the pit. When fully developed, the
Vangorda pit will be 900 meters long, 200 to 300
meters wide and 100 meters deep. After mining, the
diversion structures will be removed and Vangorda
Creek will flow into the pit, thereby flooding that
portion of the pit below the elevation of the creek.
The Grum pit is located on a sloping plateau which
forms the local drainage divide. The south facing
slope of this plateau sheds run-off directly into
Vangorda Creek. The north and west slopes drain to
small tributaries of Vangorda Creek. When fully
developed, the Grum pit will be 1,100 meters long,
800 meters wide and 300 meters deep. The Grum pit
will be allowed to fill with water upon abandonment.
The development and operation of the Vangorda
Project will produce approximately 158 million ton
nes of waste rock. The waste rock will be deposited
in dumps on various sites, all of which drain to
Vangorda Creek or to the tributaries of Vangorda
Creek.
Curragh anticipates that the proven reserves of the
Vangorda and Grum deposits are sufficient for a thir-
teen-year project life.
Both Vangorda Creek and the Pelly River, into
which the Creek flows, contain a fish habitat and
fisheries resources. The quantity of water flow of the
Pelly River is 200 to 300 times larger than that of
Vangorda Creek. Were the Vangorda Project to pro
ceed without mitigation measures being undertaken,
overwintering juvenile Chinook salmon would be
present in the Vangorda Creek during the period of
maximum toxicant concentration.
The Pelly River is an important fish producing sys
tem which supports chinook salmon and various resi
dent fish species. The fisheries resources of Vangorda
Creek and the Pelly River support commercial,
domestic and sport fisheries.
The Kaska Dena people from the Ross River and
Selkirk Bands regularly use water and harvest fish
from the Vangorda Creek and the Pelly River. The
Vangorda Creek and the Pelly River area forms part
of the traditional land base of the Kaska Dena people
and contains base and outpost camps and a travel
route network for access to subsistence use areas.
The area is used by members of the Ross River Band
as a fishing, trapping, hunting and gathering area.
The Selkirk Indian Band's traditional lands are
located further downstream on the Pelly River. The
Band relies in part on salmon produced in the upper
Pelly River for its Indian food fishery.
The Vangorda Project will have a number of envi
ronmental effects on federal areas of responsibility.
Some of these environmental effects will be signifi
cant adverse ones, and it has long been understood
that measures would be required to mitigate them.
The most significant adverse environmental effect
of the Vangorda Project will result from the addition
of metals, particularly zinc, to the waters of the
Vangorda Creek and consequently the Pelly River.
These metals will be added to the water through acid
mine drainage primarily from the Vangorda pit walls,
the Vangorda waste rock dump and the Grum
sulphide waste rock dump. Sulphuric acid will be
generated from the reaction of oxygen and water with
sulphur in the rock in the pit walls and waste dumps.
The acid generated by this reaction will then dissolve
metals in these rocks and the metal-enriched drainage
will enter ground water and surface water. The acid
drainage will be neutralized through contact with the
alkaline receiving environment and diluted with
ground water, precipitation and surface flow; how
ever, metals (primarily zinc) will remain in the water.
Acid generation and the consequent release of heavy
metals to water drainage at the mine sites, will occur
during the operation of the mine and will continue
following abandonment of the project until such time
as all available sulphur in exposed acid-generating
rock has been oxidized, a process that could take cen
turies.
If the on-going and post-abandonment mitigation
measures in respect of the Vangorda Project are not
undertaken, the degradation of water quality caused
by acid mine drainage from the project will be such
that there will be significant adverse impacts, both
immediate and long term, on the water quality, the
fish habitat, and the fisheries resources of both
Vangorda Creek and the Pelly River in the area
downstream of Vangorda Creek, and in social
impacts related to these effects on water and fish.
The Vangorda pit is being mined first and has the
greatest potential to generate acid mine drainage with
the consequent release of metals into Vangorda
Creek. Whether or not mining at the Vangorda pro
ject continues until both the Vangorda deposit and the
Grum deposit have been fully exploited, mitigation
measures, in particular water treatment, are required
from the outset so as to prevent the significant
adverse environmental effects being caused by acid
mine drainage from the Vangorda waste rock dump
and pit walls. Such measures may be required in
perpetuity.
ENVIRONMENTAL ASSESSMENT PROCEED
INGS
From March 9, 1987 to late September 1990, vari
ous environmental proceedings took place under the
aegis of the Environmental Assessment and Review
Process Guidelines Order, SOR/84-467 (EARPGO).
Environmental impact studies were made by both
the Department of Indian Affairs and Northern
Development (DIAND) and by the Department of
Fisheries and Oceans (DFO). Ultimately these two
authorities zeroed in on one important aspect of envi
ronmental impact, namely the issue of maintaining
mitigation measures with respect to Vangorda Creek
waters well beyond the expected thirteen-year life of
the project. Such measures would require Curragh to
post security to provide for post-abandonment miti
gation costs.
On that basis the authorities agreed that the
Vangorda Project proposal met the requirements of
paragraph l2(c) of EARPGO.
THE YUKON TERRITORY WATER BOARD
LICENCE
While the foregoing proceedings were being con
ducted between the several parties, Curragh applied
for a water use licence under the provisions of the
Northern Inland Waters Act, R.S.C., 1985, c. N-25,
(NIWA). This was a specific statutory requirement as
the waters of the Vangorda Creek were required for
the project.
Public hearings before the Yukon Territory Water
Board (hereinafter the Water Board) were held from
June 28 to June 30, 1990. All the parties were in
attendance including Curragh, the Department of the
Environment, DFO, DIAND, the affected Indian
Bands, the Yukon Territory authorities, the Yukon
Conservation Society and other parties as well.
On September 12, 1990, the Water Board rendered
its decision. It issued a water licence which, under the
Act, is subject to approval by the Minister of Indian
Affairs and Northern Development. It also imposed
certain conditions on the licence, namely the posting
of security in the amount of $943,700 representing
ten percent (10%) of the cost of the work according
to Water Board criteria as well as an annual amount
of $560,000 into a trust fund to cover post-abandon
ment costs.
By this time, of course, the main issue between the
parties was whether or not the downside effects could
be mitigated by continuing environmental controls
stretching far into the future. Especially with respect
to the future costs of these controls was the matter of
financial security of paramount importance. This was
of special significance to DFO which had found
unacceptable Curragh's proposal to pay monetary
compensation as damages for loss of fish habitat.
Also of concern to both DFO and DIAND was that
only by way of continuing mitigation could the envi
ronmental impact of acid mine water and other efflu
ents be controlled so that "significant" adverse effects
could be mitigated for an indeterminate period of
time, meaning of course well beyond the expected
thirteen-year life of the project. In that light, both
authorities decided that the security conditions
imposed by the Water Board were clearly inadequate.
On September 28, 1990, Curragh and DIAND
entered into an agreement whereby additional secur
ity would be posted by Curragh in an amount that
would ensure that post-closure water treatment would
be provided in perpetuity. Both parties estimated the
value of this additional security at $4,406,000. With
that agreement in place, the Minister of Indian
Affairs and Northern Development would approve
the water use licence granted earlier by the Water
Board.
On signing the agreement, however, Curragh ques
tioned the right of the Minister to impose this addi
tional security and it was acknowledged by the
Crown that Curragh would be at liberty to test the
issue before the Court. The issue is now before me.
DECISION OF THE YUKON TERRITORY
WATER BOARD
I should first of all review the reasons of the Water
Board as they relate to EARPGO. The Water Board
made a number of findings which are of importance
in regards to the question with which this Court is
seized. Firstly, the Water Board expressed its opinion
on the statutory nature of EARPGO as follows:
The environmental assessment review process guidelines were
passed pursuant to Section 6 of the Government Organization
Act now Section 6 of the Department of the Environment Act
R.S.C. 1985 [ ...1
The EARP guidelines are subordinate legislation. They cannot
create wider responsibilities then those granted by empowering
legislation ...
The following must be considered in determining the applica
tion of EARP to the Board in its jurisdiction under NIWA:
(a) pursuant to section 4(1) of the Department of the Environ
ment Act, the minister of the environment's powers (including
the powers related to passing subordinate legislation like
EARP) do not include jurisdiction over areas assigned to other
Boards or agencies of the Government of Canada;
(b) pursuant to Section 4(2), Parliament has not assigned juris
diction over the issuance of water licences to the Minister of
the Environment.
(c) therefore, the Minister of the Environment does not have
the power to make EARP apply to an area over which he does
not have jurisdiction.
(d) Section 6 of the Department of the Environment Act under
which EARP was passed, does not expand the powers of the
Minister beyond Section 4 of the Act.
The Water Board also referred to Cullen J.'s deci
sion in Canadian Wildlife Federation Inc. v. Canada
(Minister of the Environment), [1989] 3 F.C. 309
(T.D.); affirmed by [1990] 2 W.W.R. 69 (F.C.A.) and
made the following comments:
The decision of Mr. Justice Cullen, in Canadian Wildlife Inc.,
April 10, 1989 and affirmed by the Federal Court of Appeal on
June 22, 1989 does not discuss Section 4 of the Department of
the Environment Act. Further, the Minister of the Environment
in that case had clear jurisdiction over the interprovincial,
international Souris River pursuant to the International River
Improvement Act ("IRIA"). It was apparently not necessary
therefore for the Court to consider Section 4 of the Department
of the Environment Act in the decision. However, the Court in
the Canadian Wildlife decision made the following comments:
(a) Section 6 of EARP "specifically provides that these guide
lines shall apply to any proposal that may have an environmen
tal effect on an area of Federal responsibility". He then goes on
to list areas of Federal responsibility affected without any con
sideration of the powers of the Minister of the Environment. In
other words, the subordinate legislation, according to Judge
Cullen, applies to all areas of Federal responsibility.
(b) The legislation (EARP) establishes a condition precedent
that must be adhered to before a licence is issued.
The Federal Court of Appeal decision restricts the question
before it by asking:
"Is the Minister of the Environment in issuing a licence under
the IRIA bound to follow EARP?"
The answer is yes. However, the Court goes on to say that
EARP is of general application and shall bind all to whom the
guidelines are addressed.
To date there has been no decision or guidelines of the defini
tion of duplication under paragraph 8 of the EARP guidelines.
The Board presumes that duplication would refer to activities
of agencies such as the National Energy Board and the Board
under NIWA that incorporates comprehensive public hearing
procedures into their normal process.
Paragraph 13 of the EARP guidelines requires referral of a pro
posal as defined in the guidelines to the Minister of the Envi
ronment for public review by a panel if public concern is such
that a public review is desirable. The Board is concerned that
there would be duplication between NIWA and EARP if upon
the completion of a public hearing as required under NIWA,
there is a further public review by a panel under paragraph 13
of the EARP guidelines.
Finally, the Water Board made the following
remarks with respect to its position on the Guidelines
Order:
The Board has reviewed, in detail, all of the submissions made
before it on the question of EARP and its application to the
Board under NIWA. Under EARP, DIAND is the initiating
department for projects undertaken on Federal lands in the
Yukon and the Regional Environmental Review Committee
has been established to screen any proposed project or activity
on or likely to affect Federal Crown land in the Yukon. The
Board clearly recognizes the importance of the EARP guide
lines in preserving the Yukon's environment. The Board also
considered the definition of department and initiating depart
ment in Section 2 of the EARP guidelines. Department means
subject to Section 7 and 8 of the EARP guidelines, any depart
ment, board or agency of the Government of Canada. Initiating
department means any department that is, on behalf of the
Government of Canada, the decision making authority for a
proposal.
In Yukon Conservation Society v. Yukon Territory Water Board,
(1982) 11 C.E.L.R. page 99, the Federal Court held that the
Board in hearing applications for licence is performing a
quasi-judicial function and must govern itself accordingly.
A right of appeal lies from a Board decision to the Federal
Court of Canada on either a question of law or question of
jurisdiction. This right of appeal is consistent with the status of
the Board as an independent quasi-judicial tribunal.
The Board finds that it is not an initiating department within
the meaning of the EARP guidelines since it is not a depart
ment that on behalf of the Government of Canada is the deci
sion making authority for a proposal. The Board recognizes
that it is DIAND that is in fact the initiating department with
respect to the EARP screening report.
Notwithstanding the above, the Board is of the opinion that the
substantive EARP recommendations as they pertain to the
Board's mandate have been appropriately addressed in this
licence and therefore the issue of whether or not EARP applies
does not have to be answered in these reasons.
POSITION OF THE PARTIES
The plaintiff's position
The plaintiff argues that the power to issue water
licences, including the power to impose conditions
with respect to those licences has been assigned by
the Parliament of Canada to the exclusive jurisdiction
of the Water Board. As a result, neither the Fisheries
Minister nor the DIAND Minister has authority to
require Curragh to post security, in addition to that
required by the Water Board, as a condition of the
water licence. It is argued that NIWA and its regula
tions constitute a "specific purpose" legislation which
sets forth a comprehensive and exhaustive code gov
erning the terms and conditions under which a water
licence may be issued and the form, substance and
maximum amount of the security which a licensee
may be required to post.
The plaintiff submits that the participation by the
various Ministers in the proceedings before the Water
Board and the fact that they chose not to appeal the
Board's decision estop them from arguing for addi
tional security since the issue of the quantum of
security was an issue determined by the Board.
The plaintiff also argues that Parliament has not
assigned to any of the Ministers either the function of
granting water licences or the power to impose condi
tions thereon, including the posting of security, these
powers having been specifically assigned to the
Water Board.
The plaintiff further says that the EARP Guidelines
do not confer any authority or jurisdiction on any of
the Ministers to require Curragh to post security in
addition to that ordered by the Water Board. In the
alternative, plaintiff submits that in the present case it
would result in duplication between the provisions of
NIWA and the EARP Guidelines. In addition, section
8 of the EARP Guidelines creates a legal impediment
to the application of EARP in matters entrusted to the
Water Board.
The defendant's position
The defendant argues that federal legislation with
respect to environmental matters is many facetted.
The Guidelines Order binds the Ministers in the per
formance of their duties and functions. It creates a
duty which is superadded to the power residing in the
Minister. The source of the Minister's jurisdiction
and responsibility to address environmental questions
in areas of federal responsibility springs from the
Guidelines Order itself, not from statute law.
The defendant submits that the Government of
Canada, as represented by the Minister of Indian
Affairs and Northern Development, has decision-
making authority with respect to two statutory provi
sions: whether to approve a water licence under the
Northern Inland Waters Act and whether to grant a
surface lease to Curragh under the Territorial Lands
Act [R.S.C., 1985, c. T-7].
Furthermore, quite apart from the specific deci-
sion-making powers arising from statutes, the Guide
lines Order is engaged by a request on the part of an
individual for specific action falling within the Min
ister's responsibilities under a statute which he is
charged with administering on behalf of the Govern
ment of Canada, in this case, the Minister of Fisher
ies and Oceans administering the Department of
Fisheries and Oceans Act [R.S.C., 1985, c. F-15].
The defendant finds that there is no inconsistency
or duplication in applying the two provisions which
equally authorize the posting of financial security.
Supplementary and complementary authority does
not equate with inconsistency.
The defendant contends that the NIWA cannot be
read as wholly exhausting and limiting the authority
of the Government of Canada to impose conditions
which it is authorized by law to impose and are
admittedly necessary for the preservation and protec
tion of the environment.
In addition, it cannot be said that the otherwise
independent powers and authority of the Minister of
Fisheries and Oceans can be fettered by assignment
of a limited jurisdiction pertaining to water use to a
Board reporting to a different Minister.
RELEVANT LEGISLATION
The Environmental Assessment and Review Pro
cess Guidelines Order.
2....
"initiating department" means any department that is, on
behalf of the Government of Canada, the decision
making authority for a proposal;
"Minister" means the Minister of the Environment;
"proposal" includes any initiative, undertaking or activity for
which the Government of Canada has a decision
making responsibility.
Scope
3. The process shall be a self assessment process under
which the initiating department shall, as early in the planning
process as possible and before irrevocable decisions are taken,
ensure that the environmental implications of all proposals for
which it is the decision making authority are fully considered
and where the implications are significant, refer the proposal to
the Minister for public review by a Panel.
Application
6. These Guidelines shall apply to any proposal
(a) that is to be undertaken directly by an initiating depart
ment;
(b) that may have an environmental effect on an area of fed
eral responsibility;
(c) for which the Government of Canada makes a financial
commitment; or
(d) that is located on lands, including the offshore, that are
administered by the Government of Canada.
8. Where a board or an agency of the Government of
Canada or a regulatory body has a regulatory function in
respect of a proposal, these Guidelines shall apply to that
board, agency or body only if there is no legal impediment to
or duplication resulting from the application of these Guide
lines.
9. (1) Where, in respect of a proposal, there are two or more
initiating departments, the initiating departments shall deter
mine which of the responsibilities, duties and functions of an
initiating department under these Guidelines shall apply to
each of them.
INITIAL ASSESSMENT
Initiating Department
10. (1) Every initiating department shall ensure that each
proposal for which it is the decision making authority shall be
subject to an environmental screening or initial assessment to
determine whether, and the extent to which, there may be any
potentially adverse environmental effects from the proposal.
(2) Any decisions to be made as a result of the environmen
tal screening or initial assessment referred to in subsection (1)
shall be made by the initiating department and not delegated to
any other body.
11. For the purposes of the environmental screening and ini
tial assessment referred to in subsection 10(1), the initiating
department shall develop, in cooperation with the Office,
(a) a list identifying the types of proposals that would not
produce any adverse environmental effects and that would,
as a result, be automatically excluded from the Process; and
(b) a list identifying the types of proposals that would pro
duce significant adverse environmental effects and that
would be automatically referred to the Minister for public
review by a Panel.
12. Every initiating department shall screen or assess each
proposal for which it is the decision making authority to deter
mine if
(a) the proposal is of a type identified by the list described
under paragraph 11(a), in which case the proposal may auto
matically proceed;
(b) the proposal is of a type identified by the list described
under paragraph 11(b), in which case the proposal shall be
referred to the Minister for public review by a Panel;
(c) the potentially adverse environmental effects that may be
caused by the proposal are insignificant or mitigable with
known technology, in which case the proposal may proceed
or proceed with the mitigation, as the case may be;
(d) the potentially adverse environmental effects that may be
caused by the proposal are unknown, in which case the pro
posal shall either require further study and subsequent
rescreening or reassessment or be referred to the Minister
for public review by a Panel;
(e) the potentially adverse effects that may be caused by the
proposal are significant, as determined in accordance with
criteria developed by the Office in cooperation with the ini-
tiating department, in which case the proposal shall be
referred to the Minister for public review by a Panel; or
W the potentially adverse environmental effects that may be
caused by the proposal are unacceptable, in which case the
proposal shall either be modified and subsequently
rescreened or reassessed or be abandoned.
13. Notwithstanding the determination concerning a propo
sal made pursuant to section 12, if public concern about the
proposal is such that a public review is desirable, the initiating
department shall refer the proposal to the Minister for public
review by a Panel.
14. Where, in any case, the initiating department determines
that mitigation or compensation measures could prevent any of
the potentially adverse environmental effects of a proposal
from becoming significant, the initiating department shall
ensure that such measures are implemented.
Other Departments
19. It is the role of every department that has specialist
knowledge or responsibilities relevant to a proposal to
(a) provide to the initiating department any available data,
information or advice that the initiating department may
request concerning
(i) any regulatory requirements related to the project, and
(ii) the environmental effects and the directly related
social impact of those effects; and
(b) as appropriate, advocate the protection of the interests
for which it is responsible.
Department of Indian Affairs and Northern Devel
opment Act, R.S.C., 1985, c. I-6.
POWERS, DUTIES AND FUNCTIONS OF
THE MINISTER
4. The powers, duties and functions of the Minister extend
to and include all matters over which Parliament has jurisdic
tion, not by law assigned to any other department, board or
agency of the Government of Canada, relating to
(a) Indian Affairs;
(b) the Yukon Territory and the Northwest Territories and
their resources and affairs; and
(c) Inuit affairs.
5. The Minister shall be responsible for
(a) coordinating the activities in the Yukon Territory ... of
the several departments, boards and agencies of the Govern
ment of Canada;
(b) undertaking, promoting and recommending policies and
programs for the further economic and political develop
ment of the Yukon Territory ....
6. The Minister has the management, charge and direction of
all lands situated in the Yukon Territory ... belonging to Her
Majesty in right of Canada except ....
The Department of the Environment Act, R.S.C.,
1985, c. E-10.
POWERS, DUTIES AND FUNCTIONS OF
THE MINISTER
4. (1) The powers, duties and functions of the Minister
extend to and include all matters over which Parliament has
jurisdiction, not by law assigned to any other department,
board or agency of the Government of Canada, relating to
(a) the preservation and enhancement of the quality of the
natural environment, including water, air and soil quality;
(b) renewable resources, including migratory birds and other
non-domestic flora and fauna;
(c) water;
(2) The powers, duties, and functions of the Minister also
extend to and include such other matters, relating to the envi
ronment and over which Parliament has the jurisdiction, as are
by law assigned to the Minister.
GUIDELINES BY ORDER
6. For the purposes of carrying out his duties and functions
related to the environmental quality, the Minister may, by
order, with the approval of the Governor in Council, establish
guidelines for use by departments, boards and agencies of the
Government of Canada and, where appropriate, by corpora
tions named in Schedule Ill to the Financial Administration
Act and regulatory bodies in the exercise of their powers and
the carrying out of their duties and functions.
The Department of Fisheries and Oceans Act,
R.S.C., 1985, c. F-15.
POWERS, DUTIES AND FUNCTIONS OF
THE MINISTER
4. (1) The powers, duties and functions of the Minister
extend to and include all matters over which Parliament has
jurisdiction, not by law assigned to any other department,
board or agency of the Government of Canada, relating to
(a) sea coast and inland fisheries;
(b) fishing and recreational harbours;
(c) hydrography and marine sciences; and
(d) the coordination of the policies and programs of the
Government of Canada respecting oceans.
(2) These powers, duties and functions of the Minister also
extend to and include such other matters, relating to oceans
and over which Parliament has jurisdiction, as are by law
assigned to the Minister.
The Fisheries Act, R.S.C., 1985, c. F - 14.
FISH HABITAT PROTECTION AND POLLUTION
PREVENTION
34. (1) For the purposes of sections 35 to 43,
"deleterious substance" means
(a) any substance that, if added to any water, would degrade
or alter or form part of a process of degradation or alteration
of the quality of that water so that it is rendered or is likely
to be rendered deleterious to fish or fish habitat or to the use
by man of fish that frequent that water ....
35. (1) No person shall carry on any work or undertaking
that results in the harmful alteration, disruption or destruction
of fish habitat.
37. (1) Where a person carries on or proposes to carry on
any work or undertaking that results or is likely to result in the
alteration, disruption or destruction of fish habitat, or in the
deposit of a deleterious substance in water frequented by fish
or in any place under any conditions where that deleterious
substance or any other deleterious substance that results from
the deposit of that deleterious substance may enter such waters,
the person shall, on the request of the Minister or without
request in the manner and circumstances prescribed by regula
tions made under paragraph (3)(a), provide the Minister with
such plans, specifications, studies, procedures, schedules, anal
yses, samples or other information relating to the work or
undertaking and with such analyses, samples, evaluations,
studies or other information relating to the water, place or fish
habitat that is or is likely to be affected by the work or under
taking as will enable the Minister to determine
(a) whether the work or undertaking results or is likely to
result in any alteration, disruption or destruction of fish
habitat that constitutes or would constitute an offence under
subsection 40(1) and what measures, if any, would prevent
that result or mitigate the effects thereof;
(2) If, after reviewing any material or information provided
under subsection (1) and affording the persons who provided it
a reasonable opportunity to make representations, the Minister
or a person designated by the Minister is of the opinion that an
offence under subsection 40(1) or (2) is being or is likely to be
committed, the Minister or a person designated by the Minister
may, by order, subject to regulations made pursuant to para
graph (3)(b), or, if there are no such regulations in force, with
the approval of the Governor in Council,
(a) require such modifications or additions to the work or
undertaking or such modifications to any plans, specifica
tions, procedures or schedules relating thereto as the Minis
ter or a person designated by the Minister considers neces
sary in the circumstances, or
(b) restrict the operation of the work or undertaking ....
The Northern Inland Waters Act, R.S.C., 1985, c.
N-25.
2. (1)...
"board" means, in relation to
(a) the Yukon Territory, the Yukon Territory Water
Board....
"licence" means a licence for the use of waters issued pursu
ant to section 11;
"Minister" means the Minister of Indian Affairs and Northern
Development ....
DEPOSIT OF WASTE IN WATER
7. (1) Except in accordance with the conditions of a licence
or as authorized by the regulations, no person shall deposit or
permit the deposit of waste of any type in any waters or in any
place under any conditions where the waste or any other waste
that results from the deposit of the waste may enter any waters.
WATER BOARDS FOR TERRITORIES
8. (1) There are hereby established two boards, one to be
known as the Yukon Territory Water Board ... consisting of
not less than three or more than nine members appointed by
the Minister.
OBJECTS AND POWERS OF THE BOARDS
10. The objects of the boards are to provide for the conser
vation, development and utilization of the water resources of
the Yukon Territory ... in a manner that will provide the opti
mum benefit therefrom for all Canadians and residents of the
Yukon Territory ... .
11. (1) Subject to subsection (2), a board may, with the
approval of the Minister, issue licences, for a term not exceed
ing twenty-five years, authorizing the applicant for such a
licence, on payment of water use fees prescribed pursuant to
paragraph 31(1)(a) at the times and in the manner prescribed
by the regulations, to use waters, in association with the opera
tion of a particular undertaking described in the licence and in
a quantity and at a rate not exceeding that specified in the
licence.
(2) Where an application for a licence referred to in subsec
tion (1) is made, the board shall not issue a licence unless it is
satisfied that
(a) the proposed use of waters by the applicant will not
adversely affect the use of waters within the water manage
ment area to which the application relates by any licensee
who is entitled to precedence over the applicant pursuant to
section 25 or by any applicant who, if a licence were issued
to him, would be entitled to precedence over the applicant
pursuant to that section;
(b) appropriate compensation has been or will be paid by the
applicant to licensees who are authorized to use waters
within the water management area to which the application
relates for a use that, in relation to that water management
area, is of lower priority than the proposed use by the appli
cant and who will be adversely affected by the proposed use;
(c) any waste that will be produced by the undertaking in
association with the operation of which the waters will be
used will be treated and disposed of in a manner that is
appropriate for the maintenance of water quality standards
prescribed pursuant to paragraph 29(e); and
(d) the financial responsibility of the applicant is adequate
for the undertaking in association with the operation of
which the waters will be used.
Northern Inland Waters Regulations,
C.R.C., c. 1234.
3....
(2) The following geographical areas in the Yukon Territory
are established on the recommendation of the Minister and the
Yukon Territory Water Board as water management areas:
(b) effective April 1, 1973,
(i) ... the Peel River and its tributaries and all the river
basins of the Peel River and its tributaries,
4. This Part applies to the water management areas estab
lished by section 3.
Licences
7. (1) An application for a licence or for the amendment or
renewal of a licence shall be filed with the appropriate board
together with the fee prescribed for that application by section
9.
Security
13. (1) The board may require an applicant for a licence to
furnish security in an amount determined by the board, but in
no case shall the amount exceed $ 100, 000 or 10 per cent of
the estimated capital cost of the work, whichever is the greater.
[Underlining mine.]
(3) The security referred to in subsection (1) shall be
refunded when the board is satisfied that the licensee has com
pleted or discontinued the work appurtenant to his licence and
has complied with the terms and conditions of his licence and
these Regulations.
(4) Where the licensee has not complied with all the terms
and conditions of his licence or these Regulations, the board
may refund such part of the security as, in the opinion of the
board, the circumstances justify.
The Territorial Lands Act, R.S.C., 1985, c. T - 7.
LAND MANAGEMENT ZONES
4. Subject to section 6, the Governor in Council may, where
he deems it necessary for the protection of the ecological bal
ance or physical characteristics of any area in the Yukon Terri
tory or the Northwest Territories, set apart and appropriate any
territorial lands in that area as a land management zone.
5. Subject to section 6, the Governor in Council may make
regulations respecting
(a) the protection, control and use of the surface of land in a
land management zone set apart and appropriated under sec
tion 4; and
(b) the issue of permits for the use of the surface of land in a
land management zone, the terms and conditions of those
permits and the fees therefor.
Territorial Land Use Regulations, C.R.C., c. 1524
as amended SOR/88-169.
Establishment of Land Management Zones
3. The Yukon Territory and the Northwest Territories are
hereby set apart and appropriated as land management zones.
Security Deposit
36. (1) In order to ensure that a permittee complies with the
terms and conditions of his permit and with these Regulations,
the Engineer may include in the permit a condition that the
permittee deposit with the Minister a security deposit not
exceeding $100,000.
(5) Where a permittee has not complied with all the terms
and conditions of his permit or with these Regulations and the
land use operation of the permittee results in damage to the
lands, the Minister may retain the whole of the security deposit
or such portion of the security deposit as is required to restore
the lands to their former condition.
(6) Where the Minister retains a portion of a security deposit
pursuant to subsection (5), the Minister shall return the remain
der of the security deposit to the permittee.
(7) Where the whole of a security deposit retained by the
Minister pursuant to subsection (5) is insufficient to cover the
cost of restoring the lands to their former condition, the defi
ciency shall be collectable as a debt due to the Crown.
RELEVANT CASE LAW CONCERNING THE
ENVIRONMENTAL ASSESSMENT AND
REVIEW PROCESS GUIDELINES ORDER
The first case to be considered is Canadian Wild
life Federation Inc. v. Canada (Minister of the Envi
ronment) (supra), decided by this Court in 1989.
In that case, the Souris Basin Development
Authority, a Saskatchewan Crown Corporation, had
been established to develop the Rafferty-Alameda
Dams on the Souris River System on behalf of the
Saskatchewan Water Corporation, another Saskatche-
wan Crown corporation. As part of its preparatory
work for the project the Souris Basin Development
Authority had submitted to the Minister of the Envi
ronment for Saskatchewan an environmental impact
statement. As the Souris River is an international
river the Saskatchewan Water Power Corporation
applied to the Federal Minister of the Environment
for a licence to build the necessary dams on the Sou-
ris River System.
Acting under the International River Improvements
Act [R.S.C., 1985, c. I-20] and regulations, the fed
eral Minister of the Environment granted a licence
for the project to the Saskatchewan Water Corpora
tion. However, the Minister did so without requiring
an environmental assessment and review as provided
for in the EARP guidelines.
The Canadian Wildlife Federation applied to the
Federal Court for certiorari to quash the issuance of a
licence and mandamus requiring the Minister to fol
low the EARP guidelines.
The Minister contended that he was not obliged to
comply with the EARP guidelines when considering
the issuance of a licence under the International
River Improvements Act. It was submitted that the
EARP guidelines applied only to proposals under
taken by a federal agency, funded by the federal gov
ernment, located on federal land; or having an envi
ronmental effect on an area of federal responsibility,
and, moreover, compliance was not required when
the process would involve duplication.
Cullen J. rejected the Minister's argument,
quashed the licence and ordered the Minister to com
ply with the EARP guidelines. The Court first looked
at the Minister's duties in regards to the issuance of
licences under the Act and then considered the statu
tory nature of the Guidelines [at pages 321-322]:
After reviewing the above-noted provisions, it is clear that a
person must hold a valid licence in order to construct, operate
or maintain an international river improvement. The issuance
of a licence relates directly to the fact that the construction will
have some effect or interfere with an international river. The
Minister of the Environment has the discretion to issue the
licence, upon compliance with certain requirements set out in
the regulations. There is no doubt that the Project falls within
the definition of an "international river improvement" and that
the Souris River is an "international river".
It is also clear that the Minister of the Environment, for the
purpose of carrying out his duties and functions ... may by
order, with the approval of the Governor in Council, establish
guidelines for use by departments, boards and agencies of the
government of Canada, and I agree that the EARP Guidelines
Order is an enactment or regulation as defined in section 2 of
the Interpretation Act, i.e.:
"enactment" means an Act or regulation or any portion of an
Act or regulation;
"regulation" includes an order, regulation, rule, rule of court,
form, tariff of costs or fees, letters patent, commission, war
rant, proclamation, by-law, resolution or other instrument
issued, made or established
(a) in the execution of a power conferred by or under the
authority of an Act, or
(b) by or under the authority of the Governor in Council;
Therefore, EARP Guidelines Order is not a mere description of
a policy or program; it may create rights which may be
enforceable by way of mandamus
In dealing with whether the Minister was required
to comply with the provisions of the EARP Guide
lines Order when issuing the licence the Court stated
[at pages 322-327]:
At first glance it appears that the EARP guidelines are for use
only by departments, boards, agencies of the Government of
Canada ... and there is some merit to the respondent Minis
ter's position that the project is a provincial undertaking sub
ject only to provincial regulations and guidelines. However,
section 6 of the EARP Guidelines Order specifically provides
that these guidelines shall apply to any proposal that may have
an environmental effect on an area of federal responsibility.
Proposal includes any initiative, undertaking or activity for
which the Government of Canada has a decision making
responsibility. Issuing a licence under the International River
Improvements Act for the project constitutes a "decision mak
ing authority".
As I indicated earlier, it is my opinion that the Minister of
the Environment is required, before issuing a licence under the
International River Improvements Act, to comply with EARP
Guidelines Order. By not applying the provisions of the Order,
the Minister has failed to comply with a statutory duty, has
exceeded his jurisdiction, and, therefore, the applicants are
entitled to their order for certiorari.
Finally, the Court addressed the respondent's argu
ment that the application of the EARP Guidelines
Order in a case such as this one where an environ
mental impact statement had already been prepared
would result in a duplication of process. The Court
held that a number of federal concerns were not
addressed in the provincial report [at pages 325-326]:
I agree that unwarranted duplication should be avoided but it
seems to me that a number of federal concerns were not dealt
with by the provincial Environment Impact Statement, includ
ing a review of the impact of the Project in North Dakota and
Manitoba. As such, I do not think that applying the EARP
Guidelines Order would result in unwarranted duplication but
would fill in necessary gaps.
I can agree that how the Department of the Environment or
the Federal Government finds jurisdiction to secure the neces
sary environmental protection in a case such as this one may
be difficult but certainly the legislation establishes conditions
precedent that must be adhered to before a licence is issued.
This decision by Cullen J. was appealed to the
Federal Court of Appeal. The Court of Appeal dis
missed the appeal and affirmed the decision of the
Trial Division.
Before the Appeal Court, the Saskatchewan Water
Corporation argued that the International River
Improvements Act and its regulations, formed a com
plete code for the issuance of licences. The Court
held that if the Guidelines Order was mandatory then
the Minister was obliged to follow it just as he would
any other law of general application. The Court con
cluded that section 6 of the Department of the Envi
ronment Act was capable of supporting the power
necessary to make binding subordinate legislation
and as a result, the EARP Guidelines Order was bind
ing on all those to whom they are addressed.
The next case to consider is Friends of the Oldman
River Society v. Canada (Minister of Transport),
[1990] 2 F.C. 18 (C.A.); leave to appeal to the
Supreme Court of Canada granted.
In March, 1986, the Alberta Department of the
Environment approached the federal Minister of
Transport for approval, under section 5 of the Navi
gable Waters Protection Act [R.S.C., 1985, c. N-22],
for the construction of a dam on the Oldman River.
The approval was granted without subjecting the pro
ject to any environmental screening or initial assess
ment under the Environmental Assessment and
Review Process Guidelines Order. Nor was it referred
to the federal Minister of the Environment for public
review under that Order.
In 1987, the Minister of Fisheries and Oceans and
the Minister of the Environment were asked to inter
vene to ensure that the project would be reviewed
under the Guidelines Order. They both declined, say-
ing that Alberta would take care of any problem asso
ciated with the dam.
The Federal Court Trial Division held that the
Guidelines Order did not apply to an application to
the Minister of Transport for an approval pursuant to
subsection 5(1) of the Navigable Waters Protection
Act. The Court also held that the Guidelines Order
did not apply to the decision of the Minister of Fish
eries and Oceans in the circumstances of this case
and finally the Court held that it was not an appropri
ate case to grant certiorari or mandamus.
The Court of Appeal allowed the appeal, over
turned the trial decision, quashed the approval given
by the Minister of Transport and directed the Minis
ter of Transport to comply with the Guidelines Order.
The Court considered the fact that a project of this
type may have an environmental effect on various
areas of federal responsibility. The Court saw at least
three such areas as being fisheries, Indians and Indian
lands. Later, the Court addressed the issue of
whether, in granting such an approval under the Nav
igable Waters Protection Act, the Minister of Trans
port was bound to consider only those factors affect
ing marine navigation [at pages 39-40]:
With respect, I am unable to agree that, in deciding whether
to grant the approval, the Minister of Transport was restricted
to considering factors affecting marine navigation only and
that he was without authority to require environmental review.
Such conclusions appear to be quite at odds with the true and,
indeed, very far-reaching import of the Guidelines Order. The
dam project to which the approval related fell squarely within
the purview of paragraph 6(b) of the Guidelines Order as a
"proposal ... that may have an environmental effect on an area
of federal responsibility". This "proposal" resulted in the
Department of Transport becoming the "initiating department"
responsible as the "decision making authority". The environ
mental effect of granting the application on any area of federal
responsibility needed to be examined in accordance with the
provisions of the Guidelines Order. That Order was engaged in
all of its detail.
The respondents argue for a much narrower reading of the
Guidelines Order. They say it is not applicable to a case where
the provisions of a specialized statute require consideration of
statutory criteria not directly related to environmental concerns
and that such is the case here because the language of the Navi
gable Waters Protection Act restricts the Minister to consider
ing "navigation" only. In my view, to accept this contention
would require us to ignore the true nature of the Guidelines
Order which, as was held in Canadian Wildlife, is a law of gen
eral application. By virtue of section 6 of the Department of
the Environment Act, any guidelines established are to be used
"by departments ... in the exercise of their powers and the car
rying out of their duties and functions" in furtherance of those
duties and functions of the Minister of the Environment
(Canada) himself which are "related to environmental quality".
I conclude that the Guidelines Order was intended to bind the
Minister in the performance of his duties and functions. It cre
ated a duty which is superadded to the exercise of any other
statutory power residing in him. The source of the Minister's
jurisdiction and responsibility to address environmental ques
tions in areas of federal responsibility springs not from that
statutory law but from the Guidelines Order itself. The Minis
ter had a positive duty to comply with it. [Underlining mine.]
It was also raised in argument that the Guidelines
Order should not apply as there is a clear inconsis
tency and conflict with the approval scheme set up
under the Navigable Waters Protection Act. The
Court rejected this argument and stated that there was
nothing in either Act which would prevent the Minis
ter from complying with the terms of the other to the
fullest extent possible. Therefore, no inconsistency or
conflict between the two provisions arise.
The Court also considered whether the Minister of
Fisheries and Oceans was also bound by the Guide
lines Order. It was argued that unless an application
was made directly to the Minister he was not required
to comply with the Guidelines Order. The Court
found that all that was needed, was for the Minister
to become aware of an "initiative, undertaking or
activity" for which he had a decision-making author
ity. The Court found that the Minister had been spe
cifically requested to intervene to protect the fish
habitat under the provisions of sections 35 and 37 of
the Fisheries Act. It was up to the Minister to decide
whether or not to invoke those provisions. Conse
quently, the Minister fell under the obligations of an
"initiating department" as the "decision-making
authority" and was therefore subject to the EARP
Guidelines Order.
This decision can be taken as standing for the pro
position that the EARP Guidelines Order can act
independently of other legislative requirements in
order to impose upon a government or agency a
requirement to review an environmental effect upon
an area of federal responsibility.
In Canadian Wildlife Federation Inc. v. Canada
(Minister of the Environment), [1991] 1 F.C. 641
(C.A.), the Federal Court of Appeal was again seized
with a question arising from the Rafferty-Alameda
Project. This was an appeal from the Trial Court's
decision to order, by way of mandamus, the Minister
of the Environment to appoint an Environmental
Assessment Panel under the EARP Guidelines Order
to conduct a public review of certain environmental
effects of the Project. The Trial Judge further stated
that if this appointment were not made within a cer
tain prescribed time the licence granted by the Minis
ter would be quashed.
The Appeal Court upheld the Trial decision. The
Court reviewed the EARP Guidelines Order and
made the following comments [at pages 656-657]:
The EARPGO contemplates two possible stages of review.
The first is an environmental screening or initial assessment
that must be undertaken by the initiating department to deter
mine whether and to what extent there may be potentially
adverse environmental effects from the proposal. The second
stage is a public review process by an independently estab
lished Environmental Assessment Panel that can be triggered
by (i) the Minister so deciding where public concern indicates
a public review is desirable, (ii) the proposal being of a type
that is on a list that calls for automatic referral to the Minister
for public review by a Panel, and (iii) the initial assessment
revealing prescribed circumstances that call for public review
by a Panel. Where none of these categories applies, the propo
sal can proceed without any public review by a Panel.
If the initial assessment procedure reveals that the potentially
adverse environmental effects that may be caused by the pro
posal "are insignificant or mitigable with known technology"
the proposal ... may proceed or proceed with mitigation, as
the case may be.
In its cross-appeal the Saskatchewan Water Corpo
ration raised an argument to the effect that paragraph
12(c) of the EARP Guidelines Order must be read in
conjunction with section 14 thereof. The Court of
Appeal however, rejected this argument [at pages
658-659]:
According to Sask Water, paragraph 12(c), which permits a
proposal to proceed without public review by a Panel if the
potentially adverse environmental effects are "insignificant or
mitigable with known technology", must be read in conjunc
tion with the only other EARPGO provision dealing with miti
gation, namely section 14. Sask Water says section 14 specifies
the standard to be applied under paragraph 12(c) in determin
ing whether the potentially adverse environmental effects of a
proposal are "mitigable with known technology". Under this
argument section 14 provides that adverse effects are "mitiga-
ble" if "mitigation or compensation measures could prevent
any of the potentially adverse environmental effects of a pro
posal from becoming significant". It is clear therefore from
section 14 that the mitigation measures do not have to elimi
nate any potentially adverse effects to qualify under paragraph
12(c). It is sufficient if the Minister determines that the mitiga
tion or compensation measures could prevent the adverse
effects from becoming significant.
I do not agree with this argument. Section 14 puts an obliga
tion on initiating departments to ensure that mitigation and
compensation measures are applied to prevent potentially
adverse environmental effects from becoming significant. As
will be discussed below, there are two kinds of adverse envi
ronmental effects in the Panel provisions of the EARPGO: sig
nificant or insignificant. Consequently I interpret "effects from
becoming significant" in section 14 as another way of saying
that mitigation and compensation measures must be taken to
make the adverse effects "insignificant".
It follows that if a mitigation measure, needed to
make the adverse effect "insignificant", is, for one
reason or another, unable to be implemented, the
adverse effect will be significant and there will be no
other option but to submit the Project to full review
or even, as is the case under paragraph 12(f), to possi
ble abandonment. When the adverse effect is signifi
cant the project cannot proceed without modification
or public review by a Panel.
ANALYSIS
EARPGO'S APPLICATION TO THE YUKON
TERRITORY WATER BOARD
The first question which we must determine is
whether the Environmental Assessment and Review
Process Guidelines Order applies to the Yukon Terri
tory Water Board in its proceedings under the North
ern Inland Waters Act.
Much of the argument on this point has had to do
with the Minister of the Environment's power. The
argument made out by the plaintiff and which also
seems to find favour with the Water Board is that
pursuant to subsection 4(1) of the Department of the
Environment Act, the Minister's powers to enact
guidelines pursuant to section 6 cannot extend to
matters assigned by law to any other department,
board or agency of the Government of Canada. Con
sequently, the matter of the issuance of water licences
having been assigned to the Yukon Territory Water
Board, the EARP Guidelines Order passed pursuant
to section 6, cannot, as a result of subsection 4(1),
apply to the Water Board.
With respect, I disagree. The Parliament of Canada
has jurisdiction over environmental issues, the Minis
ter of the Environment's "powers, duties and func
tions extend to and include all matters over which
Parliament has jurisdiction, not by law assigned to
any other department, board or agency of the Gov
ernment of Canada". These powers, duties and func
tions also include "such other matters, relating to the
environment and over which Parliament has the juris
diction, as are by law assigned to the Minister". Sec
tion 6 of the Department of the Environment Act
assigns to the Minister the power to establish guide
lines for use by "departments, boards and agencies of
the Government of Canada" and, where appropriate,
by regulatory bodies in the "exercise of their powers
and the carrying out of their duties and functions".
This power is expressly granted to the Minister, it is
not a power conferred to any other Government body.
The EARP Guidelines Order is a law of general
application (Canadian Wildlife case) related to envi
ronmental quality. In giving a strict interpretation of
the words "not by law assigned to any other depart-
ment, board or agency of the Government of Canada"
as those words are used in section 4 of the Depart
ment of the Environment Act, the plaintiff is consider
ably watering down the scope of that general applica
tion. In fact, if the Guidelines Order could never
apply to matters which by law were assigned to
another department, board or agency I should think
that much of its purpose would be defeated.
The Guidelines are intended precisely to apply to
departments, boards and agencies who, in their
existing mandates, have at times to make decisions
on matters which could have environmental conse
quences and are within the jurisdiction of the Gov
ernment of Canada.
If these departments, boards and agencies are
excluded merely because they are assigned some
matters to which environmental concerns apply, the
Minister of the Environment would not be able to
deal effectively with the wide range of environmental
issues with which he is faced.
With respect to the Yukon Territory Water Board's
mandate under the Northern Inland Waters Act there
can be no doubt that the matter of the environmental
consequences to the water is within its jurisdiction.
The Water Board is to provide for the "conservation,
development and utilization of the water resources of
the Yukon Territory ... in a manner that will provide
the optimum benefit therefrom for all Canadians and
residents of the Yukon Territory". In addition, the
Water Board has powers which allow it to protect and
maintain water quality standards and there is a public
hearings procedure that allows the Water Board to
hear representations by various interested parties.
Given these broad powers the question might not
be if the EARP Guidelines apply but how, in prac
tice, do they apply? It may be difficult to see what
added benefit the EARP Guidelines Order can pro
vide the Water Board which is already endowed with
powers to address water quality. However, given the
complexity of the issues, the ever growing public
demand for environmental protection and the poten
tially devastating effects which may result from legis-
lative gaps, I believe it is consistent with the scope
and intent of the provisions that the Water Board
have all the necessary power to address any problem
which may arise. In this light, it can be seen that the
EARP Guidelines Order merely assists the Water
Board in the exercise of its duties. The degree of
assistance provided will depend on the individual
issue and it may be that, given the broad powers con
ferred by the Northern Inland Waters Act, it will not
often be of assistance at all. It is however an added
safeguard. I would say that, subject to section 8 of the
EARP Guidelines Order, the Guidelines Order does
apply to the Yukon Territory Water Board.
Section 8 of the EARP Guidelines Order provides
that the Guidelines shall apply to a regulatory body
which has a regulatory function in respect of a propo
sal "only if there is no legal impediment to or dupli
cation resulting from the application of these Guide
lines".
On the facts of the present case the Water Board
had before it the Screening Reports of the Minister of
Indian Affairs and Northern Development and the
Minister of Fisheries and Oceans. Both these reports
dealt extensively with the environmental impacts
related to water use including long term effects to the
fish habitat and water quality standards. The reports
covered every matter which the Board was mandated
to consider. In this context for the Board to require an
additional environmental screening would not only
have been a waste of time and resources but a very
real duplication of process wholly unnecessary under
the circumstances.
Before leaving this point I would like to address
the qualification in section 8 which bars the applica
tion of the Guidelines Order where there is a "legal
impediment". Supposing in this case the Water Board
did not have any Environmental Screening Report
before it, then it could, on the authority of the EARP
Guidelines Order, require such a report to be made.
If, as was concluded in the DIAND and DFO reports,
the Water Board found that financial security was
needed in order to mitigate the potentially adverse
effects, it would, however, be limited in imposing
that security to either $100,000 or ten percent (10%)
of the capital costs even though section 14 of the
EARP Guidelines might allow for a greater amount.
There is, as a result of the enabling statute and specif
ically subsection 13(1) of the Regulations, to which I
have referred, a legal impediment to the imposition of
financial security over and above the amount pro
vided therein. The EARP Guidelines Order creates
superadded responsibilities. It does not and cannot
displace the express duties and responsibilities
granted and imposed by other legislation.
EARPGO'S APPLICATION TO THE MINISTER
OF INDIAN AFFAIRS AND NORTHERN DEVEL
OPMENT
DIAND has the responsibility through the
Regional Environmental Review Committee to assess
or screen any proposed project or activity on, or
likely to affect, Crown land in the Yukon Territory
and any proposal which may have an environmental
effect on an area of federal responsibility, and any
project that it funds. (See Willis and Shier, "Environ-
mental Controls Affecting Exploration and Develop
ment of Mineral Resources in the Yukon" (1990), 3
C.J.A.L.P. 243, at page 281.
DIAND's responsibility with respect to matters in
the Yukon Territory can be found in several statutes.
The first such statute is the Department of Indian
Affairs and Northern Development Act, paragraphs
4(1)(b), 5(a), (b) and section 6. Another area of
responsibility can be found in various provisions of
the Northern Inland Waters Act and also in the Terri
torial Lands Act.
Under section 11 of the Northern Inland Waters
Act a board may, with the approval of the Minister,
issue licences. Under this provision, the Minister of
Indian Affairs and Northern Development has a deci
sion to make with respect to licences i.e. either to
approve or to deny the issuance of that licence. It is
clear that in order to carry on the proposed Vangorda
Project the plaintiff was required to hold such a water
use licence. Therefore, the Vangorda Project is an
"initiative, undertaking, or activity for which the
Government of Canada has a decision making
responsibility". Given that in this context the deci-
sion-making responsibility lies with the Minister of
Indian Affairs and Northern Development, his depart
ment is the initiating department.
The EARP Guidelines Order will apply to any pro
posal that may have an environmental effect on an
area of federal responsibility and to a proposal that is
located on lands that are administered by the Govern
ment of Canada.
On the authority of Cullen J's decision in Cana-
dian Wildlife Federation Inc. v. Canada (Minister of
the Environment) it was the Minister's duty to com
ply with the EARP Guidelines Order. Failure to do so
could form the basis for an order for mandamus. But
also, quite apart from other statutes the EARP Guide
lines Order itself constitutes a source for the Minis
ter's jurisdiction and responsibility to address envi
ronmental concerns in areas of federal jurisdiction
and creates a positive duty to comply (Friends of
Oldman River case).
The plaintiff's view is that the Yukon Territory
Water Board has exclusive authority to require secur
ity as a condition to a water use permit. I cannot
agree with that view.
The issuance of the licence is only with the
approval of the Minister. In this case, the Minister
was bound by the EARP Guidelines which creates a
"superadded duty" upon him. Therefore, when exer
cising his decision-making authority with respect to
the issuance of the licence the Minister appropriately
considered the conclusions of its own Screening
Report. It was clear to him that the security imposed
by the Water Board was insufficient to address the
environmental impacts discussed in the report. It is
on the authority of the EARP Guidelines that the
Minister imposed additional security before issuing
the licence and not pursuant to the Northern Inland
Waters Act.
If, as suggested by the plaintiff, the EARP Guide
lines cannot apply to the Water Board and they also
cannot apply to the Minister because he is bound by
the Water Board's decision, the result would be that
the entire protection of the environment as it relates
to water use would rest solely with the Water Board.
Given that the Board has limited authority to impose
some form of security, there is what might be termed
residual or continuing authority in the Minister to
impose an additional level of security under the
EARP Guidelines. Any other view would create an
impasse. If an initiating department's findings pursu
ant to paragraph 12(c) are to the effect that additional
security should be imposed, the Water Board would
be helpless to deal with it.
In the present case for example, in the absence of
financial security the finding that the measures are
mitigated or insignificant would no longer be tenable.
As a result the Project would either have to be modi
fied, abandoned or submitted to public review by a
Panel.
Given the strong and uncontradicted evidence that,
in the absence of financial security, the environmen
tal impacts would be unacceptable it might very well
be that the Project would be abandoned.
The decision-making authority of the Minister of
Indian Affairs and Northern Development to author
ize the issuance of a licence imposed upon him the
positive duty to comply with the Guidelines Order
and that is precisely what he did.
There was no usurpation of the Water Board's
duties and there was no duplication in process. On
the contrary, the Minister quite appropriately waited
for the results of the Water Board's decision. The
Minister already knew, as a result of its Screening
Report and that of the Minister of Fisheries and
Oceans, the extent of the possible environmental
impacts and the amount of money it would take to
mitigate the effects of those impacts. It would not
have been prudent at that time to have required the
security as the Minister did not know what amount of
security would be needed. In waiting for the Water
Board's decision the Minister could assess what addi
tional security would be needed in order to ensure
that the potentially adverse environmental effects of
the proposal would be insignificant.
I would add only one caveat to the foregoing and
that is if the measures imposed by the Water Board
had been sufficient to deal with all the environmental
concerns, then there would have been a legal impedi
ment to the Minister in applying additional security.
That however is not the case here.
This complementary or superadded characteristic
of the EARP Guidelines would also apply to the Min
ister of Indian Affairs and Northern Development's
decision-making authority under the Territorial
Lands Act to grant surface leases.
EARPGO'S APPLICATION TO THE MINISTER
OF FISHERIES AND OCEANS
I will deal briefly with this question. Under subsec
tion 35(1) and specifically subsection 37(1) and
paragraphs 37(2)(a) and 37(2)(b) of the Fisheries Act
the Minister of Fisheries and Oceans has the legal
authority to restrict the operation of a work or under
taking or to require modifications thereto when the
work or undertaking results in the harmful alteration,
disruption or destruction of fish habitat. This deci-
sion-making authority required the Minister to com
ply with the EARP Guidelines Order. It was therefore
another initiating department and pursuant to section
9 of the EARP Guidelines Order DFO and DIAND
determined that DIAND would ensure that the
required financial security was in place.
CONCLUSION
In light of the foregoing this Court finds that the
question:
Does the Crown in right of Canada as represented by the Min
ister of Indian Affairs and Northern Development and/or the
Minister of Fisheries and Oceans have the authority under the
Environmental Assessment and Review Process Guidelines
Order, the Northern Inland Waters Act, the Territorial Lands
Act, and the Fisheries Act, or otherwise at law, to impose miti-
gative and compensatory measures, including monetary or
other security, in respect of the Vangorda Project, a Project
being developed by the plaintiff in the Yukon Territory on land
owned by the defendant Her Majesty the Queen, in light of the
decision of the Yukon Territory Water Board dated September
12, 1990?
must be answered in the affirmative.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.