On July 3, 2013, the Environmental Review Tribunal (the “Tribunal”) released a landmark decision under Ontario’s renewable energy approval regime. In Alliance to Protect Prince Edward County v. Director, Ministry of the Environment, the Tribunal made the unprecedented decision of allowing an appeal and revoking a renewable energy approval issued by the Director to the Ostrander Point wind energy facility (“Ostrander Point”). This proposed facility was to be located on Crown land in Prince Edward County.

Two other aspects of the decision are also without precedent and make it important reading for a number of audiences:

  • the basis for the revocation was a finding that the project was likely to cause serious and irreparable harm to animal life, namely, harm to the Blanding’s turtle, a species designated as “Threatened” under Ontario’s Endangered Species Act, 2007 (ESA); and
  • the Tribunal finding of serious and irreparable harm arose in a circumstance where the permit holder had obtained a permit under the ESA to authorize such harm, thus highlighting legal differences between the Tribunal’s test for decision-making on a renewable energy approval (REA) appeal and the test for obtaining an ESA permit.

Both aspects of this decision have broad implications for other renewable energy projects, such as solar energy facilities, not just wind farms. The decision also provides advice on the Ministry of Natural Resources (MNR) framework for access to and use of Crown lands. These findings will also be important for a wide range of energy projects on Crown lands, and not just the renewable energy project before this Tribunal.

Lastly, the decision has implications for existing power purchase agreements with the Ontario Power Authority (OPA). Behind the permit holder’s REA is its power purchase agreement with the OPA. The Tribunal decision raises important questions about next steps under this agreement, particularly in relation to its terms regarding “force majeure.” Whatever this decision triggers there is likely to be an additional important precedent.

There is no indication yet whether the permit holder or province will seek to appeal this decision. Such an appeal must focus on errors of law. On this point, it is notable that both tribunal members are lawyers, the decision provides 121 pages of reasons plus ten appendices that include reasons on interim rulings, and the decision pays explicit regard to the legal tests defining the Tribunal mandate on appeal. Nevertheless, given the immediate implications of this decision, the importance of the precedents established by it, and the range of legal issues in play, it should not be surprising if this decision is appealed to court very shortly.

New Precedents

(1) Tribunal Revoking An REA

Since its establishment in 2009, the right of appeal has been a key aspect of the renewable energy approvals framework inserted as Part V.0.1 into Ontario’s Environmental Protection Act (EPA). It is a novel right. It is available to any person; it does not involve the preliminary step of seeking leave to appeal; and it focuses exclusively on harm, not the merits or reasonableness of the Ministry of the Environment (MOE) decision maker. These three points make the REA right of appeal unlike the existing right set out in the Environmental Bill of Rights, 1993 (EBR) that applies to other major environmental approvals issued by the MOE.

The concluding aspect of the REA appeal framework is not unusual, however. Where the Tribunal finds that the appellant has established harm in the degree required, then the EPA provides the Tribunal with three alternative remedies: (a) revoke the decision by the MOE Director; (b) order the Director to take such action as the Tribunal considers necessary under this REA framework; or (c) alter the decision of the Director, such as the conditions of approval issued by the Director.

Here, the Tribunal identified no alternatives to the remedy of revoking the REA. Indeed, the Tribunal advised that it received no submissions on how the project could proceed in a way that would not cause the serious and irreversible harm identified by the Tribunal, namely increased road mortality to an endangered species.

This is unusual: most parties within a lengthy hearing do contemplate the range of possible outcomes and offer submissions on each. A key reason why this practice was not followed here is evident in the Tribunal finding that “All experts agreed that the entire Site is a patchwork of suitable Blanding’s turtle habitat” (¶337). This point provides the Tribunal with a major point of departure from the recent Nelson Aggregate (Ontario Joint Board, 2012) decision on endangered species where there was significant disagreement on the extent of endangered species habitat. This point also has major implications for the options available to the Tribunal and the instrument holder: if the habitat clearly exists across the entire site, then all proposed turbines would depend on the access roads in question, and there would be no alternative access routes capable of avoiding this habitat.

For this reason, it seems likely that the instrument holder and the Director had no option to advancing an “all or nothing” approach to the remedies available to the Tribunal.

It is also important to highlight that, legally, an REA proponent is in a different position than many instrument holders before the Tribunal. An REA proponent has limited flexibility on proceeding with only part of its project since behind an REA is usually a power purchase agreement (PPA) with the OPA. A fundamental change to the area available for a project is likely to reduce the power that may be delivered and thus affect the signed PPA.

(2) Tribunal Finding Of Serious And Irreversible Harm To Animal Life

The EPA sets out a two-branch test for an REA appeal. The appellant must establish that a project is likely to cause:

  • Serious harm to human health; or

  • Serious and irreversible harm to plant life, animal life, or the natural environment.

Prior to Ostrander Point, most REA appeals have concentrated on the first branch of the appeal and examined whether a project is likely to cause “serious harm to human health.” The leading decision on this human health test is the 2011 Erickson decision. This lengthy 228-page decision concluded the Tribunal’s first appeal under the new legislation and focused exclusively on harm to human health.

Notably, the Tribunal in Erickson concluded that the evidence before it did not meet the onus of establishing, on a balance of probabilities, that the wind energy project before the Tribunal would cause serious harm to human health.

In Ostrander Point, one of the two appellants continued this human health focus, seeking to build on Erickson with new evidence. This line of appeal was unsuccessful. It will be relevant to future appeals on the human health issue to determine what new evidence the Tribunal in Ostrander Point considered on top of the existing Erickson evidence, but these points will not be examined here.

The successful appeal argument in Ostrander Point established that the project would cause serious and irreversible harm to “plant life, animal life or the natural environment.” This appeal argument has broader significance than the human health argument which derives from the noise emitted by wind energy facilities. In particular, this test for granting an appeal has relevance to solar energy facilities as, depending on location, these facilities also involve a new use of land and therefore have potential to cause serious and irreparable harm to animal habitat, including the habitat of endangered species.

In other circumstances, a reference to plant life, animal life, and the natural environment may be grouped together as the “biophysical environment”; however, an important feature of the Ostrander Point decision is that the Tribunal did not group these terms; instead, it expressly distinguished among harm to “plant life,” “animal life,” and the “natural environment.” Its reasons examine the evidence on each of these three topics. Further, its conclusions apply the appeal test to each of these three topics.

Based on this approach, the Tribunal found that only one component of these three categories of features met the appeal test of serious and irreversible harm. The Tribunal found that the evidence established serious and irreversible harm to animal life only.

Equally, within its review of harm to animal life, the Tribunal examined the evidence of harm to birds, bats, and butterflies, not just the Blanding’s turtle. The Tribunal also reached specific conclusions on each of these topics. For each category of “animal” other than the Blanding’s turtle, the Tribunal concluded that the evidence before the Tribunal did not meet the appeal test.

Turning to the single topic that did meet the test, the Tribunal reasons begin with legal analysis. Two important conclusions from this analysis are:

  • The appropriate scale of analysis for harm was the “ecosystem”; and

  • Where an ecosystem feature was identified as “at risk,” factors of “considerable weight” when considering the legal test of harm would be (i) evidence showing a decline in that species’ population or habitat, or (ii) evidence showing the alteration or destruction of that species’ habitat.

Where endangered species are present at a site, these two conclusions are very significant: they provide the framework for future appeal hearings on the second branch of the REA appeal test.

(3) Tribunal Finding Serious and Irreversible Harm To Animal Life Despite Permit Authorizing Harm Under Ontario’s Endangered Species Act

The starting point for the Tribunal’s approach to this topic was the following comment:

The Approval Holder was required to consider potential impacts on species at risk pursuant to the Endangered Species Act (“ESA”). This process is completely separate from the renewable energy approval process and falls outside of the MOE’s jurisdiction (¶265).

This is a defining point for the Tribunal: it highlights how the Tribunal understands the relationship between the REA appeal and the prior REA application, process, and decision-making. In Ostrander Point, the Tribunal has followed the earlier Erickson decision in contending that an REA appeal is about legal tests and topics that are distinct from the detailed requirements set out in O.Reg.359/09 (“Reg.359”) to obtain an REA.

This position is not only unusual within regulatory law, it also has very significant consequences for REA applicants. By this reasoning, REA applicants must first go through a regulatory process that contains more detailed and rigorous requirements than virtually any other similar approval. Then, following approval, they are subject to an appeal as of right on topics not part of the approval process.

In these circumstances, it is useful to review how the Tribunal got to this position.

Consistent with Erickson, the Tribunal in Ostrander Point has taken the position that, as concerns harm to plant life, animal life, and the natural environment, there is no legal continuity between the process and decision leading to the REA and the REA appeal.

In support of this position, the Tribunal made the following observation about the REA monitoring requirements:

While the Environmental Effects Monitoring Plan (“EEMP”) requires the Approval Holder to notify the MNR of any and all mortality of species at risk within 24 hours of observation or the next business day, there are no requirements specific to Blanding’s Turtle in the EEMP (¶266).

This point about the EEMP highlights an important point about the legal scope of the EEMP. As noted above, the EEMP requirement was added to legal requirements for an REA applicant in 2010. Importantly, however, it is a limited requirement. In the first place, it applies to wind facilities only, not all REA facilities. Secondly, it is limited because it applies to birds and bats only, not all types of animal. Thus, as concerns EEMP monitoring, the REA process and conditions of approval are clearly narrower in scope than an REA appeal.

However, other aspects of the REA process merit consideration in assessing whether the ESA and the ESA permit process are “completely separate” from the REA process. In particular, Reg.359 contains the novel requirement (within Ontario environmental approvals) that an applicant cannot apply to the MOE for an REA unless and until the MNR provides the applicant and the MOE with a sign-off on natural features.

Since Reg.359 defines a “natural feature” to include “wildlife habitat,” it seems beyond doubt that turtle habitat is a natural feature under the REA process. This suggests that the REA process would be legally incomplete if the MOE Director made a decision without the MNR sign-off on wildlife habitat. Further, in the present case, the ESA permit was issued months before the REA so that the Director’s decision on the REA built upon the terms of the ESA permit.

On the other hand, the Tribunal provides several legal points in support of its position that the ESA process is distinct from the ESA permit:

First, the Tribunal compared the context for the ESA assessment against that of the REA. Regarding the ESA, the Tribunal cited an MNR witness that the assessment of harm used for the ESA permit was that of “the species as a whole in Ontario” (¶269); this approach under the ESA contrasts with the approach taken by the applicant in the REA process whose consultant focused on the “local population” (¶355); it also contrasts with the Tribunal’s conclusion that an REA appeal must focus on harm at an ecosystem level which it considered to be the “Site and the surrounding landscape” (¶204, ¶343).

Second, the Tribunal compared the role of ESA conditions against the REA test. It concluded that compliance with ESA conditions is not itself an answer to the REA appeal question of whether a project will cause serious and irreversible harm to an endangered species (¶304).

Third, the Tribunal examined the role of compensation under the ESA and REA test. It noted that the ESA permit allowed the permit holder to address the loss of habitat and/or negative impacts by proposing new habitat as compensation for the loss (¶338–339); however, as concerns the REA test, the Tribunal concluded that this approach to compensation would not prevent serious and irreversible harm to the population of Blanding’s turtle at the site and surrounding area (¶359).

The Tribunal also addressed many factual issues in detail. Key factual issues and conclusions concerned:

  • The extent of habitat protected: the Tribunal concluded that certain mitigation measures such as setbacks applied only partially to all relevant habitat (¶309);

  • The timeframe for habitat protection: the Tribunal concluded that many mitigation measures applied to the construction period only, not the active years post-construction (¶317); and

  • The enforceability of protection measures: the Tribunal concluded that measures such as speed reduction could not be enforced by the Permit Holder and found no requirements that others provide such enforcement (¶323).

These legal and factual findings provide detailed guidelines to future applicants requiring such approvals and facing a potential REA appeal.

 (4) Approach to new access to Crown lands

The Ostrander Point decision is also important for its review of issues related to the use of Crown lands.

A key issue for the Tribunal was the development of roads used to access the wind project site. A facility definition in regulation passed under the Electricity Act, 1998 regime makes it important to review the use of roads needed to establish the new renewable energy facility. The Tribunal carried out this review by examining a work permit provided by the MNR to the REA permit holder. This work permit advised that the proposed roads would be “multipurpose” and would allow “greater access to the Crown land resource for hunting and trapping and other passive recreational activities” (¶639). The only restrictions would be to those roads at each turbine location and the transformer station that were subject to a Crown lease.

In its summary of findings, the Tribunal set out serious concern with this approach on access to Crown lands, as follows:

In the Tribunal’s view, the current REA indicates the MNR is trying to have it both ways; to allow an increased level of public use, while at the same time allowing a wind energy project. Although such a result would be a “win-win”, in the Tribunal’s view it will cause serious and irreversible harm to Blanding’s turtle at the Project Site and in the surrounding habitat areas (¶640).

This MNR approach to road access was under permits not within the jurisdiction of the Tribunal to alter. It thus provided the Tribunal with further reason to conclude that there was no alternative project design available to it that “avoids the road mortality issue” identified by the Tribunal regarding the Blanding’s turtle (¶637).

Conclusions

The precedents established by this decision have many audiences. 

Despite the details provided by the Tribunal in its lengthy reasons, there are many legal issues arising from the decision that remain to be answered.

Given the implications of this decision on the Province and on the instrument holder, an appeal to court may be the next step in this lengthy REA process.

1. The author was co-counsel for the REA holder in the Erickson decision discussed in this article and for the City of Burlington (along with Konstantine Stavrakos and Blake Hurley) in the Nelson Aggregate decision also discussed.