One of the most significant provisions in the federal Fisheries Act is the prohibition in section 36(3) against releasing deleterious substances into waters frequented by fish. This prohibition has been interpreted broadly by the courts and may result in significant penalties even if an activity has been approved by Fisheries and Oceans Canada (DFO) and the applicable provincial regulators. On February 15, 2014, DFO released draft regulations under section 36 of the Fisheries Act to provide a framework for future Ministerial Regulations to permit deposits of deleterious substances in three circumstances:

  • to regulate aquaculture, aquatic pests and aquatic invasive species;
  • to allow for aquatic research; and
  • where the deposits of deleterious substances are already managed by provincial and/or federal regulating authorities.

With respect to the last category, which is of most significance for resource developers, the  Regulations Establishing Conditions for Making Regulations under Subsection 36(5.2) of the Fisheries Act (the Proposed Regulations) allow the Minister of Environment to issue regulations permitting the deposit of deleterious substances if the following conditions are met:

  • the deleterious substance to be deposited, its deposit or the work, undertaking or activity that results in the deposit is authorized under federal or provincial law or is subject to guidelines issued by a federal or provincial government and is subject to an enforcement or compliance regime;
  • the federal or provincial law or guidelines set out conditions that result in a deposit that is not acutely lethal and contains a quantity or concentration of deleterious substance that, when measured in that deposit or in the relevant water frequented by fish, satisfies
    • the recommendations of the Canadian Water Quality Guidelines for the Protection of Aquatic Life that were published in 1999 by the Canadian Council of Ministers of the Environment, as amended from time to time, or the recommendations that were derived from those guidelines on their site-specific application, as amended from time to time, or
    • the recommendations of any peer-reviewed guidelines that are established for the purpose of protecting aquatic life and adopted by a federal or provincial body; and
  • the effects of such a deposit on fish, fish habitat and the use by man of fish have been evaluated in accordance with generally accepted standards of good scientific practice.

In our view, these conditions would apply to many major resource development projects where provincial or federal regulatory authorities ensure that development occurs in a manner that will not result in significant impacts on fish. As a result, if the Proposed Regulations are approved, they will provide for a significant shift in the regulatory regime for managing water quality in Canada. The current regulatory regime involves overlaps and inefficiencies between provincial and federal authorities and creates legal uncertainty for proponents of activities that may result in deposits of deleterious substances. Current jurisprudence regarding the deposit of deleterious substances into water frequented by fish states that impacts to fish in the receiving waters are irrelevant whereas the Proposed Regulations specifically focus on this issue. The Proposed Regulations will allow the federal government to rely on provincial permitting programs to manage industrial developments. This will reduce regulatory overlap and inefficiencies, and will remove a key source of legal risk for major projects. As a result, we believe that these Proposed Regulations, if approved, will be very beneficial for resource developers. Comments on the Proposed Regulations are due on or before March 17, 2014.