Judgments

[1993] 3 F.C. 729

A-190-92

Curragh Resources Inc. (Appellant)

v.

Her Majesty the Queen in Right of Canada as represented by the Minister of Justice (Respondent)

and

The Selkirk First Nation and Ross River Dene Council (Intervenors)

Indexed as: Curragh Resources Inc. v. Canada (Minister of Justice) (C.A.)

Court of Appeal, Isaac C.J., Stone J.A. and Craig D.J.—Toronto, May 7; Ottawa, June 29, 1993.

Environment — Appeal from determination of question of law holding Minister of Indian Affairs and Northern Development and/or Minister of Fisheries and Oceans having authority to require appellant to post security additional to that required by Yukon Territory Water Board as condition of water licence — Board not bound to apply EARPGO as not final decision-maker re: licence for open-pit mines in Territory — Board authorized to issue licence only with Minister’s approval — Minister of Indian Affairs and Northern Development final decision-maker — Required to consider environmental effect of proposal on areas of federal responsibility, including wildlife, Indians in Territory — Independent decision-making authority, entitled to rely on EARPGO — Jurisdiction over surface leases not ousted by Northern Inland Waters Act — Minister of Fisheries and Oceans not decision-making authority — Government department exercising decision-making authority only where affirmative regulatory duty — Minister of Fisheries and Oceans exercising legislative power — Outside authority to require additional security.

This was an appeal from a determination of a question of law holding that the Minister of Indian Affairs and Northern Development and/or the Minister of Fisheries and Oceans had authority to require the appellant to post security additional to that required by the Yukon Territory Water Board as a condition of a water licence. The appellant, a mining company, had applied for a water licence in respect of its proposed open-pit mines and waste dumps in the Yukon Territory. Initial assessments requested by both Ministers recommended that adequate financial security be provided prior to issuance of the licence to protect against the adverse effects on water quality and fisheries resources from acid mine drainage. The Water Board was also concerned about long-term acid drainage and the mitigation thereof by requiring additional security. It therefore required the appellant to provide security as a condition of the licence, which was to be effective on the date on which the Minister’s signature was affixed. As a condition of granting his approval, the Minister of Indian Affairs and Northern Development required that the appellant post additional security. The appellant agreed to do so under protest.

Under Northern Inland Waters Act, section 10 the Water Board is responsible for the conservation, development and utilization of the water resources of the Yukon Territory. It has the power to issue licences to use waters in association with the operation of a particular undertaking where it is satisfied that the proposed use will not adversely affect the use of the waters by other licensees. Furthermore, it can attach conditions to a licence and require the furnishing of security, but no licence may be validly issued unless it is approved by the Minister. The powers of the Minister of Indian Affairs and Northern Development under the Department of Indian Affairs and Northern Development Act, section 4 and the Minister of Fisheries and Oceans under the Department of Fisheries and Oceans Act, section 4 extend only to jurisdiction not by law assigned to any other department, board or agency. The appellant argued that the Northern Inland Waters Act and Regulations constituted an exhaustive code governing the terms and conditions under which a water licence could issue and the security the licensee could be required to post. It argued that neither Minister had the power to issue a water licence or impose conditions thereon because that authority was expressly assigned to the Water Board. The Environmental Assessment and Review Process Guidelines Order (EARPGO) provides that an initiating department shall, as early in the planning process as possible, ensure that environmental implications of all proposals for which it is the decision-making authority are fully considered. Duplication in terms of public review is to be avoided. The EARPGO applies to every project on lands administered by the Government of Canada.

The Motions Judge held that the EARPGO applied to the proceedings before the Water Board to assist it in the exercise of its duties. He held that the Minister of Indian Affairs and Northern Development had authority to require the posting of additional security as a condition to approving the licence notwithstanding the powers vested in the Water Board. He also concluded that the Minister of Fisheries and Oceans was obliged to apply the EARPGO, and that in doing so he could require the appellant to post additional security.

The narrow issue was whether the Water Board’s authority over the issuance of a water licence under the Northern Inland Waters Act ousted the authority of either the Minister of Indian Affairs and Northern Development or the Minister of Fisheries and Oceans under the EARPGO to require the posting of additional security. This was broken down into three separate questions: (1) whether the Water Board was bound to apply the EARPGO; (2) whether the Minister of Indian Affairs and Northern Development was an independent federal decision-making authority, entitled to rely on the EARPGO as a basis for requiring the appellant to post additional security as a condition to approving the water licence; (3) whether the Minister of Fisheries and Oceans was an independent federal decision-making authority, entitled to rely on the EARPGO as a basis for requiring the appellant to post security, in addition to that required by the Water Board and the Minister of Indian Affairs and Northern Development, or to delegate his authority to such Minister in exercise of his decision-making authority under the Fisheries Act.

Held, the appeal should be allowed in part. The Minister of Indian Affairs and Northern Development had the authority to impose additional security; the Minister of Fisheries and Oceans did not.

(1) The Water Board was not bound to apply the EARPGO because it was not the final decision-maker in respect of the water licence. The Board’s mandate to issue a licence was subject to “the approval of the Minister” who thereby became the final decision-maker. The Water Board’s principal concern was with the use of waters, the impact of the authorized operation on the licensees and on the quality of water. It did not have any responsibility for determining the impact of the appellant’s undertaking on the intervenors, a responsibility which fell to the Minister as the final decision-maker.

(2) The Minister of Indian Affairs and Northern Development was entitled to rely on the EARPGO in requiring the additional security as a condition to his approval of the water licence. Although Parliament had conferred authority on the Water Board to issue the water licence and to impose conditions thereon, that authority was limited because the licence had to be approved by the Minister. Under EARPGO, sections 3 and 6, the Department of Indian Affairs and Northern Development, as the initiating department, was required to consider whether a proposal may have an environmental effect on an area of federal responsibility. The Project was a proposal that might have an environmental effect on an area of federal responsibility and the Minister was the effective decision-maker re: approval of the licence. EARPGO was triggered. The Minister’s jurisdiction over Indian affairs and the Yukon Territory, its resources and affairs required him to consider the impact of the Project on the Indian people and on wildlife in the Yukon Territory. He was entitled to rely on EARPGO in requiring additional security.

The Minister’s compliance with the EARPGO would not involve a duplication of the environmental impact review because the Project did not progress to a public review, and because the Water Board was not bound to carry out an environmental assessment in accordance therewith.

The Minister’s jurisdiction to decide whether a surface lease should be granted under the Territorial Lands Act and Regulations was not ousted by the Northern Inland Waters Act. This too was a proposal which the Minister, as initiating department under EARPGO, was required to subject to an environmental screening. That screening expressed concern about the Project’s impact on wildlife and recommended that mitigation measures be included in the terms of the lease. The Project was located on lands administered by the Government of Canada under EARPGO. The application for the surface lease again triggered the application of EARPGO. The Minister’s jurisdiction to require additional security was not ousted by the Northern Inland Waters Act.

(3) The Department of Fisheries and Oceans was not the “decision making authority for a proposal” under EARPGO. A government department has a decision-making responsibility under EARPGO only where there is an affirmative regulatory duty, as opposed to exercise of legislative power. The Minister of Fisheries and Oceans, pursuant to subsection 37(2) of the Fisheries Act, exercised a legislative power rather than an affirmative regulatory duty and could not require the additional security.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Department of Fisheries and Oceans Act, R.S.C., 1985, c. F-15, s. 4.

Department of Indian Affairs and Northern Development Act, R.S.C., 1985, c. I-6, s. 4.

Department of the Environment Act, R.S.C., 1985, c. E-10, ss. 4, 6.

Environmental Assessment and Review Process Guidelines Order, SOR/84-467, ss. 2, 3, 5, 6, 8, 10, 12, 13, 14.

Federal Court Rules, C.R.C., c. 663, R. 474.

Fisheries Act, R.S.C., 1985, c. F-14, s. 37.

Navigable Waters Protection Act, R.S.C., 1985, c. N-22.

Northern Inland Waters Act, R.S.C., 1985, c. N-25, ss. 4, 8, 10, 11, 12, 13, 23.

Northern Inland Waters Regulations, C.R.C., c. 1234, s. 13.

Territorial Lands Act, R.S.C., 1985, c. T-7, s. 8.

Territorial Lands Regulations, C.R.C., c. 1525. s. 12.

CASES JUDICIALLY CONSIDERED

APPLIED:

Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3; (1992), 88 D.L.R. (4th) 1; [1992] 2 W.W.R. 193; 84 Alta. L.R. (2d) 129; 3 Admin. L.R. (2d) 1; 7 C.E.L.R. (N.S.) 1; 132 N.R. 321; Angus v. Canada, [1990] 3 F.C. 410; (1990), 72 D.L.R. (4th) 672; 5 C.E.L.R. (N.S.) 157; 111 N.R. 321.

NOT FOLLOWED:

Friends of the Oldman River Society v. Canada (Minister of Transport), [1990] 2 F.C. 18; (1990), 68 D.L.R. (4th) 375; [1991] 1 W.W.R. 352; 76 Alta. L.R. (2d) 289; 5 C.E.L.R. (N.S.) 1; 108 N.R. 241 (C.A.).

CONSIDERED:

Carrier-Sekani Tribal Council v. Canada (Minister of the Environment), [1992] 3 F.C. 316 (C.A.).

APPEAL from determination of a question of law ([1992] 2 F.C. 243; (1992), 87 D.L.R. (4th) 219; 8 C.E.L.R. (N.S.) 94; 51 F.T.R. 45 (T.D.)) holding that the Minister of Indian Affairs and Northern Development and the Minister of Fisheries and Oceans had authority to require the plaintiff (appellant) to post security additional to that required as a condition of a water licence for its open-pit mines and waste dumps issued by the Yukon Territory Water Board. Appeal allowed in part.

COUNSEL:

William V. Sasso and Paul G. MacDonald for appellant.

Donald J. Rennie and Joseph C. de Pencier for respondent.

Arthur Pape and J. Harper for intervenors.

SOLICITORS:

McMillan, Binch, Toronto, for appellant.

Deputy Attorney General of Canada for respondent.

Pape & Salter, Vancouver, for intervenors.

The following are the reasons for judgment rendered in English by

Stone J.A.: This is an appeal from a judgment of the Trial Division rendered January 14, 1992 [[1992] 2 F.C. 243] in an application under Rule 474(1) of the Federal Court Rules [C.R.C., c. 663],[1] whereby the learned Motions Judge answered in the affirmative the following question which was put to him for determination [at page 247]:

Does the Crown in Right of Canada as represented by the Minister of Indian Affairs and Northern Development and/or the Minister of Fisheries and Oceans have authority under the Environmental Assessment and Review Process Guidelines Order, the Northern Inland Waters Act, the Territorial Lands Act and the Fisheries Act, or otherwise at law, to impose mitigative and compensatory measures, including monetary or other security, in respect of the Vangorda Project, a Project being developed by the plaintiff in the Yukon Territory on land owned by the defendant Her Majesty the Queen, in light of the decision of the Yukon Territory Water Board dated September 12, 1990?

The dispute centres upon the appellant’s contention that neither the Minister of Indian Affairs and Northern Development nor the Minister of Fisheries and Oceans possessed legal authority to require the posting of financial security by the appellant in addition to that required to be posted by the Yukon Territory Water Board (the “Water Board”) as a condition of a water licence issued pursuant to its decision of September 12, 1990.

As we shall see, the Water Board is a creature of statute, having been established under the Northern Inland Waters Act, R.S.C., 1985, c. N-25. It is vested with the powers conferred on it by that statute, among which is that of issuing a water licence to use waters in association with the operation of a particular undertaking and in a quantity and at a rate not exceeding that specified in a licence.

The Ministers in question are vested with a variety of statutory powers and responsibilities. In addition to being the Minister responsible in this matter under the Northern Inland Waters Act, the Minister of Indian Affairs and Northern Development possesses certain powers and responsibilities under the Department of Indian Affairs and Northern Development Act, R.S.C., 1985, c. I-6 and, in certain circumstances, under the Environmental Assessment and Review Process Guidelines Order, SOR/84-467 (the “Guidelines Order”) made pursuant to section 6 of the Department of the Environment Act, R.S.C., 1985, c. E-10. The Minister of Fisheries and Oceans under the Department of Fisheries and Oceans Act, R.S.C., 1985, c. F-15 is responsible for the administration of the Fisheries Act, R.S.C., 1985, c. F-14.

BACKGROUND

In December 1989, the appellant, a mining company, made an application to the Water Board for a water licence pursuant to the Northern Inland Waters Act, in respect of its proposed open-pit mines and waste dumps on the Vangorda Plateau near Faro, Yukon Territory (collectively referred to herein as the “Vangorda Project”). The location of the minesite is described in the evidence as follows:

The minesite is located at the centre of the Vangorda watershed, which drains to the Pelly River. The West Fork of Vangorda Creek drains the west half of the watershed and Vangorda Creek, with Dixon and Shrimp tributaries, drains the east. The Grum pit lies on a gently sloping broad plateau which forms a local drainage divide. The south-facing slope of the plateau sheds run-off directly into Vangorda Creek. The North and West slopes drain to the small tributaries. The waste dumps will be located on a westerly tending ridge which drains partially to Vangorda Creek.

The Vangorda pit is located across the present channel of Vangorda Creek and, as the pit develops, flow in the creek will be diverted through a culvert constructed on a perimeter bench within the pit. Upon abandonment the pit will be flooded.[2]

The Vangorda Creek and the upper Pelly River areas are within the traditional territory of the Kaska people of the Ross River Dene Council. The downstream Pelly River area is within the traditional territory of the Selkirk First Nation. Both communities rely on the salmon and other fishery resources of these waters. They have harvesting camps throughout the areas and use the waters for travel to traditional fishing and trapping locations and for drinking water. They are the intervenors in this appeal.

An environmental screening or initial assessment of the Vangorda Project was conducted by a regional environmental review committee under subsection 10(1) of the Guidelines Order at the behest of the Minister of Indian Affairs and Northern Development. This assessment is contained in a screening report of July 20, 1990, in which the Review Committee concluded:

The Regional Environmental Review Committee has concluded that Curragh Resources Inc. has submitted adequate information on which to conclude its review. RERC recommends that the Curragh Resources Vangorda Plateau Development proposal meets the requirements of the Environmental Assessment and Review Process Guidelines Order under Section 12(c) as set out below and that the proposal with mitigations as identified in the Initial Environmental Evaluation and this report now proceed to the regulatory process for issuance of the necessary licences, leases and permits.

Sec. 12.(c) “the potential adverse environmental effects that may be caused by the proposal are insignificant or mitigable with known technology, in which case the case may proceed or proceed with mitigation, as the case may be;”

Pursuant to Section 13 of the Order, the Regional Environmental Review Committee recommends that a public review by an EARP panel is not necessary.

Sec. 13. “Notwithstanding the determination concerning a proposal made pursuant to Section 12, if public concern about the proposal is such that a public review is desirable, the initiating department shall refer the proposal to the Minister for public review by a panel.”

The Report specifically recommended:

8. That adequate financial security be provided by Curragh Resources to the Government of Canada prior to issuance of the water licence and surface lease to ensure that the control measures specified for acid mine drainage mitigation and other identified impacts both during mine operation and after closure are implemented ….

The Department of Fisheries and Oceans also conducted an initial assessment and screening of the Vangorda Project, as a result of which a recommendation was made similar to that contained in the Screening Report of July 20, 1990. The Department was concerned with the impact of the Project on fish and fish habitat, particularly on the salmon and Arctic grayling in the Vangorda Creek and the Pelly River. Based on its assessment, the Department concluded that “without adequate mitigation it is highly likely that the mine will produce acid mine drainage (AMD) containing metals that could adversely affect downstream water quality and fisheries resources” and that additional security should be furnished by the appellant so as to protect against these consequences.

A major concern of the Water Board in considering the water licence application was long-term acid mine drainage (AMD) into the Vangorda Creek and Pelly River and the mitigation thereof by, among other things, requiring the posting of financial security to fund post-closure water treatment. The Board held a public hearing into the matter, at which the two screening reports were filed and other evidence was received. Officers of the Department of Indian Affairs and Northern Development and the Department of Fisheries and Oceans were present and participated at the hearing. On September 12, 1990, the Water Board issued Water Licence IN89-002. By that licence the appellant is permitted to “obtain, store, divert, alter and return a flow of water” in connection with “[t]wo open pit mines, associated waste dumps and water treatment plant” subject to the several conditions attached thereto. The effective date of the licence is stated to be: “The date on which the signature of the Minister of Indian and Northern Affairs Canada is affixed.” The Water Board attached the following condition[3] to the water licence:

3.   Security

In accordance with Section 13 of the Regulations, the Licensee shall provide security in the amount of $943,700.00 … representing ten percent of the capital cost of the work.

The Minister of Indian Affairs and Northern Development granted his approval of the licence on October 25, 1990. As a condition to this approval, the Minister required that the appellant post the additional security. To that end, by a written agreement of September 28, 1990, the appellant undertook to furnish the respondent with additional security in the amount of $4,406,000 by October 5, 1990. Such security was intended to cover general mining reclamation and insure that post-closure water treatment was provided in perpetuity. By the same agreement the appellant undertook to establish a trust fund to be used in perpetuity to cover the cost of post-closure water treatment according to standards established in the water licence. The Minister of Indian Affairs and Northern Development covenanted therein to “approve the water licence … when Curragh has executed this agreement and provided Canada the additional security.” At the time the agreement was signed it was acknowledged that the appellant signed under protest and that it might challenge the respondent’s entitlement to request the additional security.

ISSUE

The narrow issue on this appeal is whether the Motions Judge erred in answering the above recited question as he did, thereby deciding that the authority of the Water Board with respect to the issuance of a water licence under the Northern Inland Waters Act did not oust the authority of either the Minister of Indian Affairs and Northern Development or the Minister of Fisheries and Oceans under the Guidelines Order, to require the posting of the additional security by the appellant.

LEGISLATIVE PROVISIONS

The legislative provisions which are relevant to the issue are set forth in the Northern Inland Waters Act and the regulations thereunder, the Territorial Lands Act [R.S.C., 1985, c. T-7] and the regulations thereunder, the Department of Indian Affairs and Northern Development Act, the Fisheries Act, the Department of Fisheries and Oceans Act, the Department of the Environment Act and the Guidelines Order made pursuant thereto. The specific provisions relied upon in argument are the following:

Northern Inland Waters Act

4. (1) Subject to any rights, powers or privileges granted pursuant to the Dominion Water Power Act or preserved under that Act and to section 5 of this Act, the property in and the right to the use and flow of all waters are for all purposes vested in Her Majesty in right of Canada.

(2) Except as authorized pursuant to the Dominion Water Power Act, and subject to section 5 of this Act, no person shall alter or divert the flow or storage of waters within a water management area or otherwise use waters within any such area except pursuant to a licence held by that person or except as authorized by regulations made pursuant to paragraph 29(g).

(3) Except as specifically provided in this Act or any other Act, no provision of this Act or the regulations, or licence issued pursuant to this Act, authorizes the alteration or diversion of the flow or storage of waters within a water management area or any other use of waters within any such area in contravention of any provision of any other Act or any regulation made pursuant to any other Act.

…

8. (1) There are hereby established two boards, one to be known as the Yukon Territory Water Board and the other as the Northwest Territories Water Board, each consisting of not less than three or more than nine members appointed by the Minister.

…

10. The objects of the boards are to provide for the conservation, development and utilization of the water resources of the Yukon Territory and the Northwest Territories in a manner that will provide the optimum benefit therefrom for all Canadians and for the residents of the Yukon Territory and the Northwest Territories in particular.

11. (1) Subject to subsection (2), a board may, with the approval of the Minister, issue licences, for a term not exceeding twenty-five years, authorizing the applicant for such a licence, on payment of water use fees prescribed pursuant to paragraph 31(1)(a) at the times and in the manner prescribed by the regulations, to use waters, in association with the operation of a particular undertaking described in the licence and in a quantity and at a rate not exceeding that specified in the licence.

(2) Where an application for a licence referred to in subsection (1) is made, the board shall not issue a licence unless it is satisfied that

(a) the proposed use of waters by the applicant will not adversely affect the use of waters within the water management area to which the application relates by any licensee who is entitled to precedence over the applicant pursuant to section 25 or by any applicant who, if a licence were issued to him, would be entitled to precedence over the applicant pursuant to that section;

(b) appropriate compensation has been or will be paid by the applicant to licensees who are authorized to use waters within the water management area to which the application relates for a use that, in relation to that water management area, is of lower priority than the proposed use by the applicant and who will be adversely affected by the proposed use;

(c) any waste that will be produced by the undertaking in association with the operation of which the waters will be used will be treated and disposed of in a manner that is appropriate for the maintenance of water quality standards prescribed pursuant to paragraph 29(e); and

(d) the financial responsibility of the applicant is adequate for the undertaking in association with the operation of which the waters will be used.

12. (1) Subject to subsections (2) and (3), a board may attach to any licence issued by it any conditions that it considers appropriate, including conditions relating to the manner of use of waters authorized to be used under the licence and conditions based on water quality standards prescribed pursuant to paragraph 29(e) relating to the quantity and types of waste that may be deposited in any waters by the licensee and the conditions under which any such waste may be so deposited.

…

13. (1) An application for a licence shall be in such form and shall contain such information as is prescribed by the regulations.

(2) A board shall require an applicant for a licence to provide it with such information and studies concerning the use of waters proposed by the applicant as will enable it to evaluate any qualitative and quantitative effects of the proposed use on the water management area in which the applicant proposes to use the waters.

(3) A board may require an applicant for a licence to furnish security, in a form and on terms and conditions prescribed by regulations, for the protection of licensees and owners and occupiers of property who, in the opinion of the board, are liable to be adversely affected as a result of the issuance of a licence to the applicant.

…

23. Except as provided in this Act, every decision or order of a board is final and conclusive.

Northern Inland Waters Regulations [C.R.C., c. 1234]

13. (1) The board may require an applicant for a licence to furnish security in an amount determined by the board, but in no case shall the amount exceed $100,000 or 10 per cent of the estimated capital cost of the work, whichever is the greater.

Territorial Lands Act

8. Subject to this Act, the Governor in Council may authorize the sale, lease or other disposition of territorial lands and may make regulations authorizing the Minister to sell, lease or otherwise dispose of territorial lands subject to such limitations and conditions as the Governor in Council may prescribe.

Territorial Lands Regulations [C.R.C., c. 1525]

12. Every lease of territorial lands shall contain, in addition to such terms and conditions as the Minister may deem necessary, a reservation of ….

Department of Indian Affairs and Northern Development Act

4. The powers, duties and functions of the Minister extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to

(a) Indian affairs;

(b) The Yukon Territory and the Northwest Territories and their resources and affairs;

Department of Fisheries and Oceans Act

4. (1) The powers, duties and functions of the Minister extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to

(a) sea coast and inland fisheries;

(b) fishing and recreational harbours;

(c) hydrography and marine sciences; and

(d) the coordination of the policies and programs of the Government of Canada respecting oceans.

(2) The powers, duties and functions of the Minister also extend to and include such other matters, relating to oceans and over which Parliament has jurisdiction, as are by law assigned to the Minister.

Fisheries Act

37. (1) Where a person carries on or proposes to carry on any work or undertaking that results or is likely to result in the alteration, disruption or destruction of fish habitat, or in the deposit of a deleterious substance in water frequented by fish or in any place under any conditions where that deleterious substance or any other deleterious substance that results from the deposit of that deleterious substance may enter any such waters, the person shall, on the request of the Minister or without request in the manner and circumstances prescribed by regulations made under paragraph (3)(a), provide the Minister with such plans, specifications, studies, procedures, schedules, analyses, samples or other information relating to the work or undertaking and with such analyses, samples, evaluations, studies or other information relating to the water, place or fish habitat that is or is likely to be affected by the work or undertaking as will enable the Minister to determine

(a) whether the work or undertaking results or is likely to result in any alteration, disruption or destruction of fish habitat that constitutes or would constitute an offence under subsection 40(1) and what measures, if any, would prevent that result or mitigate the effects thereof; or

(b) whether there is or is likely to be a deposit of a deleterious substance by reason of the work or undertaking that constitutes or would constitute an offence under subsection 40(2) and what measures, if any, would prevent that deposit or mitigate the effects thereof.

(2) If, after reviewing any material or information provided under subsection (1) and affording the persons who provided it a reasonable opportunity to make representations, the Minister or a person designated by the Minister is of the opinion that an offence under subsection 40(1) or (2) is being or is likely to be committed, the Minister or a person designated by the Minister may, by order, subject to regulations made pursuant to paragraph 3(b), or, if there are no such regulations in force, with the approval of the Governor in Council,

(a) require such modifications or additions to the work or undertaking or such modifications to any plans, specifications, procedures or schedules relating thereto as the Minister or a person designated by the Minister considers necessary in the circumstances, or

(b) restrict the operation of the work or undertaking,

and, with the approval of the Governor in Council in any case, direct the closing of the work or undertaking for such period as the Minister or a person designated by the Minister considers necessary in the circumstances.

Department of the Environment Act

4. (1) The powers, duties and functions of the Minister extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to

(a) the preservation and enhancement of the quality of the natural environment, including water, air and soil quality;

(b) renewable resources, including migratory birds and other non-domestic flora and fauna;

(c) water;

…

6. For the purposes of carrying out his duties and functions related to environmental quality, the Minister may, by order, with the approval of the Governor in Council, establish guidelines for use by departments, boards and agencies of the Government of Canada and, where appropriate, by corporations named in Schedule III to the Financial Administration Act and regulatory bodies in the exercise of their powers and the carrying out of their duties and functions.

Environmental Assessment and Review Guidelines Order

2. In these Guidelines,

…

“initiating department” means any department that is, on behalf of the Government of Canada, the decision making authority for a proposal;

“Minister” means the Minister of the Environment;

…

“proposal” includes any initiative, undertaking or activity for which the Government of Canada has a decision making responsibility.

3. The Process shall be a self assessment process under which the initiating department shall, as early in the planning process as possible and before irrevocable decisions are taken, ensure that the environmental implications of all proposals for which it is the decision making authority are fully considered and where the implications are significant, refer the proposal to the Minister for public review by a Panel.

…

5. (1) Where a proposal is subject to environmental regulation, independently of the Process, duplication in terms of public reviews is to be avoided.

(2) For the purpose of avoiding the duplication referred to in subsection (1), the initiating department shall use a public review under the Process as a planning tool at the earliest stages of development of the proposal rather than as a regulatory mechanism and make the results of the public review available for use in any regulatory deliberations respecting the proposal.

6. These Guidelines shall apply to any proposal

…

(b) that may have an environmental effect on an area of federal responsibility;

…

(d) that is located on lands, including the offshore, that are administered by the Government of Canada.

…

8. Where a board or agency of the Government of Canada or a regulatory body has a regulatory function in respect of a proposal, these Guidelines shall apply to that board, agency or body only if there is no legal impediment to or duplication resulting from the application of these Guidelines.

…

10. (1) Every initiating department shall ensure that each proposal for which it is the decision making authority shall be subject to an environmental screening or initial assessment to determine whether, and the extent to which, there may be any potentially adverse environmental effects from the proposal.

(2) Any decisions to be made as a result of the environmental screening or initial assessment referred to in subsection (1) shall be made by the initiating department and not delegated to any other body.

…

12. Every initiating department shall screen or assess each proposal for which it is the decision making authority to determine if

…

(c) the potentially adverse environmental effects that may be caused by the proposal are insignificant or mitigable with known technology, in which case the proposal may proceed or proceed with the mitigation, as the case may be;

…

13. Notwithstanding the determination concerning a proposal made pursuant to section 12, if public concern about the proposal is such that a public review is desirable, the initiating department shall refer the proposal to the Minister for public review by a Panel.

14. Where, in any case, the initiating department determines that mitigation or compensation measures could prevent any of the potentially adverse environmental effects of a proposal from becoming significant, the initiating department shall ensure that such measures are implemented.

THE JUDGMENT BELOW

In his analysis, the Motions Judge first addressed the question of whether the Guidelines Order applied to the proceedings before the Water Board under the Northern Inland Waters Act and determined that they did so apply. The Water Board had not found it necessary to decide whether the Guidelines Order applied to its process,[4] although it did express some concern “that there would be duplication between NIWA and EARP if upon the completion of a public hearing as required under Northern Inland Waters Act, there is a further public review by a panel under paragraph 13 of the EARP guidelines.” The Motions Judge was of the view that the application of the Guidelines Order to the Water Board’s process was unaffected by the circumstance that the Water Board was itself vested with authority under section 10 of the Northern Inland Waters Act to “provide for the conservation … of the water resources of the Yukon Territory” and generally to protect and maintain water quality standards. He stated, at pages 275-276:

Given these broad powers the question might not be if the EARP Guidelines apply but how, in practice, do they apply? It may be difficult to see what added benefit the EARP Guidelines Order can provide the Water Board which is already endowed with powers to address water quality. However, given the complexity of the issues, the ever growing public demand for environmental protection and the potentially devastating effects which may result from legislative gaps, I believe it is consistent with the scope and intent of the provisions that the Water Board have all the necessary power to address any problem which may arise. In this light, it can be seen that the EARP Guidelines Order merely assists the Water Board in the exercise of its duties. The degree of assistance provided will depend on the individual issue and it may be that, given the broad powers conferred by the Northern Inland Waters Act, it will not often be of assistance at all. It is however an added safeguard. I would say that, subject to section 8 of the EARP Guidelines Order, the Guidelines Order does apply to the Yukon Territory Water Board.

Section 8 of the EARP Guidelines Order provides that the Guidelines shall apply to a regulatory body which has a regulatory function in respect of a proposal “only if there is no legal impediment to or duplication resulting from the application of these Guidelines”.

On the facts of the present case the Water Board had before it the Screening Reports of the Minister of Indian Affairs and Northern Development and the Minister of Fisheries and Oceans. Both these reports dealt extensively with the environmental impacts related to water use including long term effects to the fish habitat and water quality standards. The reports covered every matter which the Board was mandated to consider. In this context for the Board to require an additional environmental screening would not only have been a waste of time and resources but a very real duplication of process wholly unnecessary under the circumstances.

The Motions Judge was also of the opinion that, having regard to the powers, duties and responsibilities vested in the Minister of Indian Affairs and Northern Development under the Department of Indian Affairs and Northern Development Act, the Northern Inland Waters Act, the Territorial Lands Act and the Guidelines Order, the Minister possessed the authority to require the posting of additional security as a condition to approving the licence, notwithstanding the powers vested in the Water Board under the Northern Inland Waters Act. He stated, at page 278-279:

If, as suggested by the plaintiff, the EARP Guidelines cannot apply to the Water Board and they also cannot apply to the Minister because he is bound by the Water Board’s decision, the result would be that the entire protection of the environment as it relates to water use would rest solely with the Water Board. Given that the Board has limited authority to impose some form of security, there is what might be termed residual or continuing authority in the Minister to impose an additional level of security under the EARP Guidelines. Any other view would create an impasse. If an initiating department’s findings pursuant to section 12(c) are to the effect that additional security should be imposed, the Water Board would be helpless to deal with it.

He also pointed to the limitation laid down in subsection 13(1) of the Northern Inland Waters Regulations, and concluded that this left it open for the Minister to require the additional security as a condition to approving the water licence.

Finally, the Motions Judge concluded that the Minister of Fisheries and Oceans was obliged to apply the Guidelines Order and that, in doing so, he could require the appellant to post additional security. He stated, at page 280:

I will deal briefly with this question. Under subsection 35(1) and specifically subsection 37(1) and paragraphs 37(2)(a) and 37(2)(b) of the Fisheries Act the Minister of Fisheries and Oceans has the legal authority to restrict the operation of a work or undertaking or to require modifications thereto when the work or undertaking results in the harmful alteration, disruption or destruction of fish habitat. This decision-making authority required the Minister to comply with the EARP Guidelines Order. It was therefore another initiating department and pursuant to section 9 of the EARP Guidelines Order DFO and DIAND determined that DIAND would ensure that the required financial security was in place.

DISCUSSION

The issue as it was presented by the appellant may be broken down into three separate questions. First, did the Motions Judge err in determining that the Water Board was bound to apply the Guidelines Order? Secondly, did the Motions Judge err in holding that the Minister of Indian Affairs and Northern Development was an independent federal decision-making authority and was entitled to rely on the Guidelines Order as a basis for requiring the appellant to post additional security as a condition to approving the water licence? Thirdly, did the Motions Judge err in deciding that the Minister of Fisheries and Oceans was also an independent federal decision-making authority who was entitled to rely on the Guidelines Order as a basis for requiring the appellant to post security, in addition to that required by the Water Board and the Minister of Indian Affairs and Northern Development, or to delegate his authority to such Minister in exercise of his decision-making authority under the Fisheries Act?

It is appropriate to observe at this stage that since the judgment which is under attack was rendered, the Supreme Court of Canada has dealt with the legal and constitutional status of the Guidelines Order in Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3. At pages 37-38, La Forest J., speaking for the majority, held that the Order “has been validly enacted … and is mandatory in nature.” At page 37, La Forest J. describes the environment as “a diffuse subject matter” and that, subject to constitutional imperatives, “the potential consequences for a community’s livelihood, health and other social matters from environmental change are integral to decision making on matters affecting environmental quality”.

The Water Board’s authority for issuing licences under the Northern Inland Waters Act appears to be far less embracive than that of the Minister in approving licences. Its principal concern is with the use of waters, the impact of the authorized operation on the licensees of the same and, to an extent, on the quality of water. This mandate would not appear to include any responsibility for determining the impact of the appellant’s undertaking on the intervenors, a responsibility which fell upon the Minister himself as the final decision-maker. The Guidelines Order superadds this responsibility to the power which the Minister otherwise possessed. See Oldman River, supra, per La Forest J., at pages 39-40. The Minister’s power under that subsection is, to my mind, of transcendental importance for, in the final analysis, he is free to grant or refuse his approval of a water licence and in making that determination is in no way fettered by the Water Board’s decision.

I agree, as the appellant pointed out in argument, that the answer to the first question will be rendered “academic” by the answers to the remaining questions. Nevertheless, based on my analysis of the relevant legislative provisions, I would not be prepared to say that, strictly speaking, the Water Board was bound to apply the Guidelines Order. In making its decision of September 12, 1990, the Water Board was required to carry out its own legislative mandate as conferred by the Northern Inland Waters Act. While that statute authorizes the Water Board to issue a licence, it may do so only “with the approval of the Minister” who thereby becomes the final decision-maker. In Oldman River, supra, it was made clear that, once it has been determined that the federal government has a decision-making responsibility for a “proposal”, the “initiating department” is charged with the responsibility of implementing the Guidelines Order. In so deciding, La Forest J., adopted the following analysis of Décary J.A. in Angus v. Canada, [1990] 3 F.C. 410 (C.A.), at page 434:

The emphasis has been put by the learned Trial Judge and by the respondents on the words “initiating department” which relate to the administration of the Guidelines. I would rather put the emphasis on the words “proposal” and “Government of Canada”, which relate to the “application” of the Guidelines. There is no requirement, in the definition of “proposal”, that it be made by an initiating department within the meaning of the Guidelines. The intention of the drafter seems to be that whenever there is an activity that may have an environmental effect on an area of federal responsibility and whoever the decision-maker may be on behalf of the Government of Canada, be it a department, a Minister, the Governor in Council, the Guidelines apply and it then becomes a matter of practical consideration, when the final decision-maker is not a department, to find which department or Minister is the effective original decision-maker or the effective decision-undertaker, for there is always a department or a Minister involved “in the planning process” and “before irrevocable decisions are taken” or in the “direct undertaking” of a proposal.

In my view, the Water Board was not bound to apply the Guidelines Order for the very reason that it was not the final decision-maker in respect of the water licence sought for the Vangorda Project. That decision-maker was the Minister who was the only person charged by statute with the responsibility for approving the licence and without whose approval the licence could not be valid.

Before answering the remaining questions, it will be useful to offer a brief analysis of the Northern Inland Waters Act with respect to the issuance of water licences. The objects of the Water Board, as set forth in section 10, are “to provide for the conservation, development and utilization of the water resources of the Yukon Territory … in a manner that will provide the optimum benefit … for all Canadians and for residents of the Yukon Territory … in particular.” The Water Board is vested with a particular power under subsection 11(1) to issue licences “to use waters, in association with the operation of a particular undertaking described in the licence”; before issuing a licence the Water Board must be satisfied in accordance with subsection 11(2) that the proposed use of waters by an applicant will not adversely affect the use of waters by some other licensees, that appropriate compensation has or will be paid by the applicant to some other licensees, that any waste produced by the proposed undertaking will be treated and disposed of in an appropriate manner and that financial responsibility of the applicant is adequate for the undertaking; the Water Board is empowered pursuant to subsection 12(1) to attach conditions to any licence it may decide to issue; and is further empowered under subsection 13(2) to secure information in respect of “the use of waters”; the Water Board is also authorized [under subsection 13(3)] to require an applicant to “furnish security … for the protection of licensees and owners and occupiers of property who, in the opinion of the board, are liable to be adversely affected as a result of the issuance of a licence”. Under section 23, a decision of the Water Board is final and conclusive “[e]xcept as provided in this Act”. While the Water Board is vested with the primary responsibility for considering an application for a water licence and its powers of investigation are extensive, no licence may be validly issued unless it is approved by the Minister pursuant to subsection 11(1).

I now proceed to the second question. The appellant contends that the Northern Inland Waters Act and its regulations constitute “specific purpose” environmental legislation which sets forth a comprehensive and exhaustive code governing the terms and conditions under which a water licence may issue and the security which the holder of such a licence may be required to post. The powers of the Minister of Indian Affairs and Northern Development under section 4 of the Department of Indian Affairs and Northern Development Act and those of the Minister of Fisheries and Oceans under subsection 4(1) of the Department of Fisheries and Oceans Act, on the other hand, extend only to “jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada”. It is argued from this that neither of the Ministers in question has been assigned the power of issuing a water licence or of imposing conditions thereon because that authority has been expressly assigned to the Water Board under the Northern Inland Waters Act. There was, therefore, no authority in either Minister to require additional security. I am unable to agree. While it is true that Parliament conferred authority on the Water Board to issue the water licence and to impose conditions thereon, that authority is limited in that, in order to be valid, the licence had to be approved by the Minister of Indian Affairs and Northern Development pursuant to subsection 11(1) of this last referred statute.

In my view, this question should be answered in the negative. It seems to me that through a combination of sections 3 and 6 of the Guidelines Order, the Department of Indian Affairs and Northern Development as the “initiating department”, was required to consider whether a proposal “may have an environmental effect on an area of federal responsibility” or “is located on lands … that are administered by the Government of Canada”. Section 2 defines “initiating department” as “any department that is, on behalf of the Government of Canada, the decision making authority for a proposal”. The Vangorda Project was a “proposal” that “may have an environmental effect on an area of federal responsibility” and the Minister of Indian Affairs and Northern Development was the effective decision-maker of whether the water licence should be approved. The application of the Guidelines Order was thereby triggered. Under section 4 of the Department of Indian Affairs and Northern Development Act, this Minister was made responsible for “all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to (a) Indian affairs; (b) the Yukon Territory … and their resources and affairs”. In my view, this required the Minister to consider the impact of the Vangorda Project on the Indian people and on wildlife in the Yukon Territory. It follows that the Minister was entitled to rely on the Guidelines Order in requiring the additional security as a condition to his approval of the water licence.

Nor am I persuaded that the Minister’s compliance with the Guidelines Order would involve a duplication of the environmental impact review. It is true that the Guidelines Order is designed to avoid duplication of environmental assessments in respect of the same proposal. By section 5, duplication in terms of public reviews is to be avoided where “a proposal is subject to environmental regulation, independently of the Process”. By section 8, a board or agency of the Government of Canada or a regulatory body that has a regulatory function in respect of a proposal is required to apply the Guidelines Order “if there is no legal impediment to or duplication resulting from the application of these Guidelines.” In the present case, section 5 can have no application because the Vangorda Project did not progress to a public review under section 3 or 13 of the Guidelines Order. The Minister, it seems, was satisfied under paragraph 12(c) that no public review was required because the environmental effects were either insignificant or were mitigable with known technology. Nor can I see that section 8 can have any application when the Water Board was not bound to carry out an environmental assessment in accordance with the Guidelines Order.

I am also of the view that the jurisdiction of the Minister of Indian Affairs and Northern Development to decide whether a surface lease should be granted under section 8 of the Territorial Lands Act and section 12 of the Territorial Lands Regulations was not ousted by the Northern Inland Waters Act. It seems to me that this too was a “proposal” or, at least, part of the appellant’s proposed undertaking, for without a surface lease the Vangorda Project could simply not proceed. As the “initiating department”[5] under the Guidelines Order, the Minister was required to subject the “proposal” to an environmental screening or initial assessment to determine any potential adverse environmental effects. The Screening Report of July 20, 1990, expressed concern about the proposal’s impact on wildlife, and a recommendation was made that:

When considering the issuance of a surface lease for this project, the mitigation measures relating to land use including those relating to wildlife be included in the terms of the lease.

The Vangorda Project is “located on lands … that are administered by the Government of Canada” under paragraph 6(d) of the Guidelines Order. The application for the surface lease again triggered the application of the Guidelines Order. In my view, because of concern for the wildlife on the affected lands, the Minister’s jurisdiction to require additional security on this ground as well was not ousted by the Northern Inland Waters Act.

I turn finally to the third question. It concerns whether the Minister of Fisheries and Oceans was correct in treating himself as an independent federal decision-maker and entitled to rely on the Guidelines Order as a basis for requiring the appellant to post additional security. That stance might well have been influenced by the views expressed by this Court in Friends of the Oldman River Society v. Canada (Minister of Transport), [1990] 2 F.C. 18, at pages 42-48, that the Minister of Fisheries and Oceans was to be regarded as a “decision making authority” who was dealing with a “proposal” within the meaning of the Guidelines Order in rejecting a request that he seek information under subsection 37(1) of the Fisheries Act.

In Oldman River, supra, the Supreme Court of Canada disagreed with that view. It was there decided, per La Forest J. at page 47, that under the Guidelines Order there must be “an affirmative regulatory duty for a `decision making responsibility’ to exist”. This was made clear by La Forest J., at pages 48-49 where he stated:

There is, however, no equivalent regulatory scheme under the Fisheries Act which is applicable to this project. Section 35 prohibits the carrying on of any work or undertaking that results in the harmful alteration, disruption or destruction of fish habitat, and s. 40 lends its weight to that prohibition by penal sanction. The Minister of Fisheries and Oceans is given a discretion under s. 37(1) to request information from any person who carries on or proposes to carry on any work or undertaking that will or may result in the alteration, disruption or destruction of fish habitat. However, the purpose of making such a request is not to further a regulatory procedure, but is merely to assist the Minister in exercising an ad hoc delegated legislative power granted under s. 37(2) to allow an exemption from the general prohibition.

Later, at pages 49-50, the learned Justice added the following:

In my view a discretionary power to request or not to request information to assist a Minister in the exercise of a legislative function does not constitute a decision-making responsibility within the meaning of the Guidelines Order. Whereas the Minister of Transport is responsible under the terms of the Navigable Waters Protection Act in his capacity as regulator, the Minister of Fisheries and Oceans under s. 37 of the Fisheries Act has been given a limited ad hoc legislative power which does not constitute an affirmative regulatory duty. For that reason, I do not think the application for mandamus to compel the Minister to act is well founded.

La Forest J. draws a distinction between the performance of an affirmative regulatory duty and the exercise of a legislative power. Only in the case of the first of these would a government department be exercising a decision-making responsibility under the Guidelines Order. While in that case it was found that such a duty rested on the Minister of Transport who could grant or refuse a permit for dam construction on navigable waters under the Navigable Waters Protection Act, R.S.C., 1985, c. N-22, no duty of that kind rested on the Minister of Fisheries and Oceans under section 37 of the Fisheries Act. In Carrier-Sekani Tribal Council v. Canada (Minister of the Environment), [1992] 3 F.C. 316, (C.A.), Marceau J.A. made the following observations as to the scope of La Forest J.’s opinion, at page 338:

I do not think that La Forest J. ever had in mind, in discussing the discretion of the Minister of Fisheries and Oceans to request information under section 37, the actual exercise of the powers he has under subsection 37(2) to impose modifications, additions or restrictions to a proposed work or undertaking.

It should be noted that La Forest J. was addressing the Minister’s decision not to request information under subsection 37(1) of the Fisheries Act, a decision which he viewed as wholly discretionary. Nevertheless, it does seem to me that the broad principle which La Forest J. lays down in Oldman River, supra, requires a conclusion that the Minister of Fisheries and Oceans, pursuant to subsection 37(2) of the Fisheries Act, exercised a legislative power rather than an affirmative regulatory duty and, accordingly, in this case he could not require the additional security. The Department of Fisheries and Oceans was not the “decision making authority for a proposal” under the Guidelines Order.

DISPOSITION

I would allow the appeal in part by answering the question put for determination in the affirmative as regards the Crown in right of Canada as represented by the Minister of Indian Affairs and Northern Development and in the negative as regards the Crown in the right of Canada as represented by the Minister of Fisheries and Oceans. As success has been divided, I would make no order as to costs in this appeal or in the Trial Division.

Isaac C.J.: I agree.

Craig D.J.: I agree.

---