FACTS:
The Bay du Nord Development Project is a proposed offshore oil and gas project located about 500 kilometers east of St. John’s, Newfoundland. The respondent, Equinor Canada Ltd., holds a 65% interest in the Project, which is expected to produce approximately 300 million barrels of crude oil over 30 years.
The Impact Assessment Agency of Canada conducted an environmental assessment under the Canadian Environmental Assessment Act, 2012 (“CEAA”) and coordinated the Crown consultation process concerning the Project’s potential effects on Indigenous peoples.
Following technical studies, meetings, consultations, and submissions, the Agency prepared an environmental assessment report recommending that the Project proceed subject to conditions. The Minister of Environment and Climate Change considered the report and decided that the Project was not likely to cause significant adverse environmental effects within the meaning of the CEAA. The Minister also found that the consultation process was consistent with the honour of the Crown and appropriately accommodated the concerns of Indigenous groups.
The appellants, Sierra Club Canada Foundation and Mi’gmawe’l Tplu’taqnn Inc. (“MTI”) sought judicial review of the Minister’s decision in the Federal Court. They argued that the decision was unreasonable because the Agency’s report did not adequately assess downstream GHG emissions or marine shipping from the Project, and that the Crown had failed to consult and accommodate MTI adequately.
The Federal Court rejected both arguments and dismissed the judicial review. Sierra Club and MTI appealed to the Federal Court of Appeal (FCA).
DECISION:
Appeal dismissed (Stratas J.A., Mactavish and Roussel JJ.A. concurring)
On the reasonableness of the Minister’s decision, the Court made two main points.
First, the Court held that binding FCA authority under analogous legislation foreclosed the argument that the CEAA required consideration of downstream project impacts on GHG emissions and climate change, citing Forest Ethics Advocacy Association v. Canada (National Energy Board).[1] The Court also accepted the Federal Court’s practical concern that the future locations and uses of the crude oil, and the origin and destination of tankers, were unknown. Assessing those downstream effects would have required unnecessary speculation.
Second, on the issue of the marine shipping impact of the decision, the Court distinguished this case from Tsleil-Waututh Nation.[2] In that case, marine shipment was closely connected to the project and took place in Canadian coastal waters. Here, the waters in issue were well beyond the territorial jurisdiction of Parliament and there was uncertainty about the destination of the oil. This made it impossible to assess marine shipping.
On the issue of Indigenous consultation, the Court agreed with the Federal Court that the duty to consult existed, fell at the low end of the spectrum, and was discharged in this case. MTI’s member communities hold rights to fish for food, social, and ceremonial purposes and treaty rights to fish for a moderate livelihood, but the Project was 640 to 2,000 kilometers away from those communities and their traditional and treaty territories. The Agency found a low likelihood of interaction between the Project and Atlantic salmon and minimal predicted effects on fishing rights of MTI-represented communities. Although only low-level consultation was required, the Agency provided a process that resembled deeper consultation.
The Court also addressed the timeliness of the appellant’s concerns on the issues of marine transshipment and GHG emissions. Equinor argued that these concerns were raised too late in the environmental assessment process and that the Federal Court should have dismissed the judicial review on that basis.
The FCA rejected this argument. The Court first stressed that while relief on judicial review is discretionary, that discretion cannot be exercised in an arbitrary and unconstrained way. Drawing on the equitable “clean hands” doctrine, it then set out criteria for when the conduct of a party may lead a court to exercise its discretion and withhold relief on judicial review. The threshold is high: the conduct itself must be immoral, fraudulent, or beyond the pale. The conduct in this case was far from that threshold.
However, the Court accepted that delay in raising concerns before a decision-maker may affect the reasonableness analysis. In a statutory scheme that requires environmental assessments to be completed in a timely manner, parties with concerns must raise them meaningfully and promptly. Late or fleeting objections may signal that an issue was not important enough to render the ultimate decision unreasonable.
COMMENTARY:
The Court’s treatment of the reasonableness and duty-to-consult issues was relatively straightforward given the factual context of the case. On a record where the Project was located several hundred kilometers offshore, and where the impacts on climate, marine shipping, and Indigenous rights were speculative or diffuse, the Court was unlikely to find the Minister’s decision unreasonable or the consultation process inadequate. That conclusion was also unsurprising given the statutory and legal context. The CEAA did not expressly require consideration of downstream GHG emissions or broader climate-change effects, and FCA authority under analogous legislation had already held that such broader climate considerations need not be assessed absent a specific statutory requirement.
However, the FCA did allude to the fact that under the Impact Assessment Act, the successor legislation to the now-repealed CEAA, decision-makers may need to consider the impacts of their decisions on climate change. The preamble of the Act recognizes the importance of an impact assessment process that contributes to Canada’s ability to meet its commitments in respect of climate change. Thus, we are likely to see such arguments arise on judicial review applications in the future. The success of such arguments will depend on how the federal courts interpret the Impact Assessment Act going forward.
The most significant part of the decision is its commentary on the impact that delay in raising an issue may have on judicial review applications and the impact of equitable doctrines on the courts’ discretion to entertain judicial review applications. Justice Stratas is clear that the discretionary nature of judicial review does not give the courts broad powers to dismiss a judicial review application for minor misconduct on the part of the applicant. The courts must exercise their discretion according to established doctrines. It is a high bar for a court to refuse to hear an application. Delays in raising issues before the decision maker are unlikely to meet this high bar for dismissing an application based on the clean hands doctrine.
However, even where delay does not engage the clean hands doctrine, it may be a factor for courts to consider in a reasonableness analysis. It is therefore imperative that parties make timely submissions on key issues to decision makers. The importance of this is heightened where the timeliness of project assessments is enshrined in the enabling statute (as was the case with the CEAA).
Exactly how, and to what extent, timeliness should affect the reasonableness analysis requires further clarification. According to the reasons-first conception of reasonableness review advanced in Vavilov, a decision-maker must still justify its decision in light of the relevant legal and factual constraints, and delay by a participant does not eliminate that obligation.[3] That said, the submissions a party actually makes to the decision maker are relevant factual constraints under Vavilov.[4] If a party’s submission is fleeting or delayed, it may be plausible to infer, as the FCA suggests, that the issue it raises was not important. However, that inference should be drawn cautiously. In complex environmental assessments, public-interest groups and Indigenous communities may need time and resources to process and study draft reports to determine whether they are reasonable and constitutionally compliant. Late-raised concerns may reflect that complexity rather than tactical delay. The issue for courts going forward will be distinguishing between delay that fairly reduces the weight of an issue, and delay that reflects the practical difficulty of participating in a complex regulatory process.
[1] Forest Ethics Advocacy Association v. Canada (National Energy Board), 2014 FCA 245, at para. 69.
[2] Tsleil-Waututh Nation v. Canada (Attorney General), 2018 FCA 153.
[3] Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65.