The Supreme Court of Canada, in a unanimous decision, significantly limited the discretion of federal "responsible authorities" under the Canadian Environmental Assessment Act (CEAA) to determine the scope of project subject to federal environmental assessment. In MiningWatch Canada v. Canada (Fisheries and Oceans), a proponent was proposing to construct and operate a copper and gold open pit mine in British Columbia. The entire project was subject to the provincial environmental assessment regime. Some components of the proposed project, including a tailings impoundment area, water diversion system and explosives storage and manufacturing area, required federally issued permits or authorizations. The federal Department of Fisheries and Oceans (DFO) determined that the scope of project for the purposes of federal assessment under CEAA was limited to these facilities.

The Supreme Court determined that the DFO had erred in adopting a narrow scope of project that did not include the entire proposed open pit mine. Pursuant to CEAA, the Comprehensive Study List Regulations (CSL) prescribes those projects that should be subject to more rigorous forms of environmental assessment under CEAA, including comprehensive study and review panels. The Court reasoned that because the copper and gold open pit mine as proposed by the proponent was one of the types of mines described in the CSL, the entire project as proposed should have been assessed under CEAA. By focusing on the CSL, the Supreme Court was able to avoid addressing the complicated constitutional issues which arise with respect to the overlapping provincial and federal spheres of power and jurisdiction as they relate to the environment. In rendering this decision, the Court has overruled the reasoning of the Federal Court of Appeal in Friends of the West Country Assn. v. Canada (Minister of Fisheries and Oceans) ("Sunpine"), and Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans) ("TrueNorth").

While the Supreme Court recognized that a requirement to scope projects as broadly as described in the CSL might result in regulatory duplication and inefficiency, the Supreme Court relied on the ability of the federal assessment to be coordinated with the provincial assessment to address this issue. However, experience demonstrates that this coordination does not significantly reduce duplication and, in fact, often increases the legal risk associated with approval of a given project.

Impact of the decision

The Supreme Court's decision in this case will inevitably create inconsistency and uncertainty for project proponents. For example, if two proposed mines subject to a provincial environmental assessment regime are exactly the same except that one mine will result in the diversion of a small fish-bearing stream and the other mine has no elements to bring it under CEAA jurisdiction, both will be subject to the same level of provincial environmental assessment but the former will also be subject to a rigorous federal environmental assessment whereas the latter will not be subject to any federal environmental assessment. Project proponents will now need to carefully consider the timing and sequence of publicly disclosing their projects. To the extent proponents take a piece-meal approach in project disclosure to avoid the result noted above, it is likely to result in future legal challenges related to project-splitting. This results, at least partly, from the Supreme Court's decision to focus on the CSL instead of the pertinent constitutional issues that were discussed in Friends of the Oldman River Society v. Canada (Minister of Transport), Sunpine and to some degree, TrueNorth.