The Federal Court has now delivered two recent decisions concerning the federal Species at Risk Act, S.C. 2002, c. 29 (SARA) and the identification of critical habitat for species at risk listed in Schedule I of SARA (i.e., a listed species). On July 9, 2009, the Federal Court quashed the Final Recovery Strategy posted by the federal Minister of the Environment for the Greater Sage-Grouse in Alberta Wilderness Association v. Minister of Environment, 2009 FC 710, because the Final Recovery Strategy identified insufficient critical habitat. On September 10, 2009, the Federal Court also quashed the Final Recovery Strategy for the Nooksack Dace by the federal Minister of Fisheries and Oceans (MFO) in Environmental Defence Canada v. Minister of Fisheries and Oceans, 2009 FC 878 for similar reasons. The decisions demonstrate that ENGOs are fully prepared to enforce the SARA in court, which will have important implications for project proponents.

1. SARA and Critical Habitat

Species listed on Schedule I of the SARA have been identified as facing imminent extirpation (i.e., no longer existing in the wild in Canada, but existing elsewhere in the wild) or extinction. Section 37 of the SARA provides that the competent Minister must prepare a recovery strategy for species on Schedule I of the SARA. The SARA prescribes a two-step recovery planning process for endangered species. The first step is the preparation and posting of a recovery strategy and the second step is the development and posting of an action plan to implement the recovery strategy.

Section 41 of the SARA sets out the content of a recovery strategy and depends on whether the Minister has determined that the recovery of the listed species is feasible or not. Paragraph 41(1)(c) of the SARA provides that a recovery strategy must include “an identification of the species’ critical habitat, to the extent possible, based on the best available information, including the information provided by COSEWIC, and examples of activities that are likely to result in its destruction.” “Critical habitat” is given a separate meaning from “habitat” under the SARA and is defined to mean “the habitat that is necessary for the survival or recovery of a listed wildlife species and that is identified as the species’ critical habitat in the recovery strategy or in an action plan for the species.”

2. Alberta Wilderness Association v. Minister of Environment

In this case the applicants argued that the Recovery Strategy failed to identify the Greater Sage-Grouse’s critical habitat as mandated by the SARA. While the recovery strategy did not identify critical habitat, it did include a schedule of activities to be completed in order to identify critical habitat for the Greater Sage-Grouse. The applicants argued that the best available information was such that the MOE could have identified some critical habitat for the Greater Sage-Grouse, but instead the MOE chose to identify none. The MOE argued that the applicants confused “habitat” with “critical habitat” and that even if some Greater Sage-Grouse habitat is known, it does not follow that the known habitat is critical habitat for the purpose of the SARA.

The Court held that the standard of review for the MOE’s decision not to identify critical habitat in the Greater Sage-Grouse recovery strategy was one of reasonableness. The Court allowed the application for judicial review to the extent that the MOE’s failure to identify critical habitat for the Greater-Sage Grouse was unreasonable. In coming to its decision the Court ruled that the MOE cannot exercise any discretion in identifying critical habitat under the SARA. Paragraph 41(1)(c) requires that the MOE identify in a recovery strategy document as much critical habitat as it is possible to identify at that time, even if all of it cannot be identified, and to do so based on the best information then available. The Court also noted that this perspective was consistent with the precautionary principle that “where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.”

The Recovery Strategy identified four habitat requirements essential to the Greater Sage-Grouse: (i) breeding habitat, (ii) nesting habitat, (iii) brood-rearing habitat, and (iv) winter habitat. The MOE had concluded that it could identify no critical habitat for any of the four. The Court disagreed and held that, while there was not enough information to support the identification of winter habitat as critical habitat, the available information could have supported the identification of critical habitat for the other three habitat types. In particular, the Court noted that the MOE appeared to be seeking precision rather than using “best available information” in identifying critical habitat. While that information may change over time, the identification of critical habitat cannot be postponed for that reason alone.

The Court took the preliminary view that the critical habitat section of the Recovery Strategy should be struck and redrafted by the MOE in a manner consistent with its decision. The parties were given an opportunity to make submissions as to the appropriate remedy, and on September 9, 2009, the Court required that the Recovery Strategy be redrafted to identify as critical habitat all known active leks in Alberta and Saskatchewan, and known "source habitat" within the "Manyberries area."

3. Environmental Defence Canada v. Minister of Fisheries and Oceans

In this case the applicants argued that the MFO had failed to meet the requirements of paragraph 41(1)(c) of the SARA regarding the Final Recovery Strategy for the Nooksack Dace, a small stream-dwelling minnow listed in Schedule I of the SARA. The Recovery Team that prepared the Final Recovery Strategy identified the geospatial locations of critical habitat, but the MFO ultimately decided to remove that information from the Final Recovery Strategy and provide it in a separate document, available upon request. A significant qualitative description of what critical habitat would consist of (“attributes”) remained in the Final Recovery Strategy. The rationale for the severing step was that the second document could then be scientifically peer-reviewed, according to department policy, and be used in an action planning process which would include socio-economic analysis as well as consultation with affected interests (the initial Final Recovery Strategy document identified all known Nooksack Dace habitat as critical habitat). The applicants argued that the decision to postpone identification of critical habitat was contrary to law, and the Court agreed – as in the Alberta Wilderness case, paragraph 41(1)(c) is mandatory and there is no ministerial discretion provided for in identifying critical habitat.

In arriving at its decision the Court observed that socio-economic considerations could not be considered in developing a recovery strategy, only in developing an action plan. This is because recovery strategies are to provide baseline biology and ecology information about a species, and a broad strategy to address conservation threat. In contrast, action plans are intended to describe discrete measures to be taken to achieve a species’ survival and recovery, including evaluation of the socio-economic costs and benefits of such measures. As a result, the language in the Recovery Strategy suggesting that a quantity of proposed critical habitat sufficient to ensure the survival and recovery of Nooksack dace will be designated through the action planning process, which will include socioeconomic analysis and consultation with affected interests, was wrong at law.

The Court also discussed at length the question of what constituted critical habitat. The Court held that the answer to the question lies in the correct interpretation of the term “habitat,” of which “critical habitat” is a sub-set. The Court concluded that habitat focuses on a location with special identifiable features and essential attributes. In the case of the Nooksack Dace, this concerned “riffles” (shallow turbulent water moving over rocky substrate). Thus, as a practical matter, the habitat and critical habitat for the Nooksack Dace must legally identify the riffles feature, without regard for the broader implications of identifying particular riffles features as critical habitat.

4. Implications for Proponents

As discussed in an earlier Osler Update (see “Federal Regulatory Gaps Stall Project”, February 2, 2009), a failure on the part of federal regulators to fulfill their mandatory legislative requirements under SARA can have significant implications for project proponents. Companies making investment decisions in Canada have to carefully consider the potential delay risk associated with unfulfilled obligations under the SARA, and potentially under all federal legislation that affect land and resource use in Canada. As a result of the two decisions above, the first to consider critical habitat, the issuance of recovery strategies may be delayed to allow for the identification of some critical habitat. In addition, the extent of critical habitat identified may be conservatively broad to avoid further litigation, and will not take costs or socio-economic impacts into account. Accordingly, proponents with projects that have the potential to be affected by the presence of SARA species should be prepared to make application under section 72 of the SARA for permits to allow projects to proceed within critical habitat. However, the preconditions for obtaining such permits are steep: all “reasonable alternatives” to the project activity must have been considered, all “feasible measures” must be taken to minimize project impacts on the listed species, and the activity must not “jeopardize the survival or recovery of the [listed] species.” Further, no application process has been developed.