The Regulation respecting compensation for adverse effects on wetlands and bodies of water (Regulation) came into force on September 20, 2018. The Regulation clarifies the regulatory framework and parameters for determining the financial contribution now required from proponents who wish to carry out projects in wetlands and bodies of water in Quebec.

BACKGROUND

The Regulation is part of the overhaul of the legal framework for wetlands and bodies of water put forward by the Government of Quebec in April 2017, when it published Bill 132 – An Act respecting the conservation of wetlands and bodies of water. Among other things, Bill 132 amends the Environment Quality Act (EQA) and the authorization scheme for projects in wetlands and bodies of water, in particular, by requiring a financial contribution in certain situations.

NEW AUTHORIZATION SCHEME FOR WETLANDS AND BODIES OF WATER

The amendments to the EQA set out in Bill 132 came into force on March 23, 2018, i.e., at the same time as significant changes to the environmental authorization regime were implemented with the passing of Bill 102. For more information, please see our March 2018 Blakes Bulletin: Implementing the Environment Quality Act Quebec Government Publishes 24 Draft Regulations.

Since March 23, 2018, those applying for an authorization for a project in a wetland or body of water (terms that are now defined broadly in the EQA) must:

  • Provide a characterization study of the wetland and bodies of water that are the subject of the application signed by a professional.
  • Demonstrate that they cannot avoid adversely affecting the wetland or bodies of water.
  • Propose measures to minimize the anticipated effects of the activity or project.

In addition, the Minister of Sustainable Development, the Environment and the Fight Against Climate Change (Minister) now has discretion to refuse to issue an authorization in certain situations, which include if:

  • The Applicant has not demonstrated to the Minister’s satisfaction that the project cannot avoid adversely affecting the wetlands and bodies of water.
  • The Minister believes that the measures proposed would not reduce the project’s impacts on the wetlands and bodies of water to a minimum.
  • The Minister believes that the project would have adverse effects on the ecological functions and biodiversity of the wetlands and bodies of water.

FINANCIAL CONTRIBUTION SCHEME

Previously, the loss of wetlands and bodies of water usually had to be compensated by restoring, creating, protecting or ecologically enhancing a wetland, a body of water or a parcel of land near a wetland or a body of water. The EQA now provides that, as a general rule, a financial contribution will be payable to compensate for adverse effects on wetlands and bodies of water, subject to the exceptions provided for in the Regulation. It should be noted that the financial contribution must be paid in full before an authorization is issued; otherwise, the authorization may be refused.

The Regulation sets out the terms of payment for a financial contribution and specifies in particular: (i) activities exempt from the requirement to compensate, (ii) the formula for calculating the amount of financial compensation, and (iii) the situations where financial compensation may be replaced by carrying out work.

Activities Exempt from Compensation

The Regulation sets out 13 types of activities for which no compensation will be required. Among the exempt activities are projects that:

  • Result in a minimal loss of surface area of a wetland or body of water (equal to, or less than, 30 m2)
  • Improve the ecological functions of a wetland or body of water
  • Are urgent in order to repair damage caused by a disaster within the meaning of the Civil Protection Act or to prevent any damage that may be caused by an imminent disaster.

Compensation Calculation

The amount of the financial compensation payable is determined based on the surface area of the portion of the wetland or body of water affected by the project.

This amount is determined based on two factors. The first factor is the cost for the creation or restoration of a wetland or body of water and is set at C$20/m2 (adjusted each year and weighted based on the adverse effects on the wetland or body of water and the area in which the adverse effect occurs). The second factor is the value of the land, which is determined based on the average value of land in the Regional County Municipality concerned.

Replacing Financial Compensation with Carrying Out Work

Finally, the Regulation provides for five situations in which all (or part of the payment) of a financial contribution may be replaced by work to restore or create wetlands or bodies of water.

Among those situations are mineral exploration work, mining of mineral substances, the cultivation (or expansion) of a parcel of land for market crops production and work carried out in an industrial park or as part of the development of such park.

The Regulation will be assessed two years after it comes into force and every five years thereafter. Businesses will, therefore, have the opportunity to comment on the practical concerns experienced in the application of the Regulation. It is to be expected that industrial associations will continue their efforts to try to convince the government to widen the scope of the situations in which the financial contribution may be replaced by work carried out to restore or to create wetlands and bodies of water.