On August 6, 2019, the B.C. Court of Appeal (Court) upheld the provincial Minister of Environment’s (Minister) determination that the Jumbo Glacier Resort was not “substantially started” by the deadline set out in its environmental assessment certificate.
This decision will be of interest to the nearly 30 approved projects in British Columbia which have not yet sought a “substantially started” determination from the Minister. The court decision confirms the Minister can focus the inquiry on physical construction and ignore factors that delayed the project, even when those factors are within the government’s control.
Glacier Resorts Ltd. (Glacier) is the proponent of the Jumbo Glacier Resort project (Project), a large year-round ski resort intended to be developed in the East Kootenay region of British Columbia, between Invermere and Nelson. The Project was first proposed in 1991, but has a long and drawn out history.
The Project’s environmental assessment certificate was issued in October 2004 (Certificate). The Certificate and section 18 of the Environmental Assessment Act (Act) required Glacier to “have substantially started construction of the Project” by October 2009. This deadline was later extended to October 2014. The Certificate also required that Glacier obtain a Master Development Agreement (MDA) from the province and attempt to negotiate an impact benefit agreement (IBA) with the Ktunaxa Nation (Ktunaxa). The Project was to proceed in three phases, but completion of the phases was anticipated to take at least 15 years.
The Project faced a host of issues in obtaining approvals and undertaking construction. The Certificate was challenged and upheld by the B.C. Supreme Court in 2007 in R.K. Heli-Ski Panorama Inc. v. Glassman. Then in June 2009, consultation with Ktunaxa broke down, preventing the completion of an IBA. The MDA was not granted until March 2012, though anticipated by 2007, and the Ktunaxa challenged the MDA all the way up to the Supreme Court of Canada — Ktunaxa Nation v. British Columbia (Forests, Lands and Natural Resources Operations) (for more information, see our November 2017 Blakes Bulletin: Supreme Court Rejects First Nation’s Spiritual Objection to Ski Resort). The province did not create a mountain resort municipality until November 2012 and the newly created municipality did not rezone the area until 2013. The province also removed the only bridge access to the Project site without notice to Glacier in 2012 and protesters blocked construction in 2013. Despite these challenges, the initial foundations of the necessary components of the opening phase, including the day lodge, service and lift were completed and in place by October 2014.
In June 2015, the Minister assessed the work that had been undertaken to determine if the Project had been “substantially started”. The Minister measured Glacier’s progress against Phase I of the Project (requiring a gondola, five chairlifts, accommodations, chalets, other structures, and a variety of services). However, the Minister declined to consider the administrative and political hurdles that Glacier had faced in developing the Project. She concluded that the Project had not been substantially started, meaning that the Project’s Certificate expired.
B.C. SUPREME COURT DECISION
On judicial review, the chambers judge concluded the Minister’s decision was unreasonable. First, by failing to consider the hurdles faced by Glacier and second, by comparing the work undertaken against Phase I of the Project. The record showed that Glacier had faced substantial challenges in developing the Project, many of which were directly or indirectly attributed to the province, making it implausible to start many of the Phase I structures by the deadline. The province appealed and Glacier cross-appealed the decision.
B.C. COURT OF APPEAL DECISION
The B.C. Court of Appeal upheld the decision of the Minister, concluding that the Minister’s decision was entitled to deference and was reasonable in the circumstances. The Court focused on the intent of the Act generally and section 18. The majority stated:
The legislation, however, is also mindful of the fact that environmental science progresses. The perceived impact of a proposed project may change over time, not only due to changes in public attitudes, but also due to increasing knowledge of the harm caused by certain types of development. Further, the character of a development site may change substantially over time. Finally, advances in technology may result in more effective mitigation measures becoming available. It would be unwise to allow long-delayed projects to proceed based on reports and conditions that have become outdated.
With this purpose in mind, the majority concluded that the Minister’s focus on actual construction and physical activities was appropriate. The Act does not require an inquiry into the proponent’s efforts to proceed with the project. “The fact is…that proponents may fail to commence a project through no fault of their own.”
Justice Hunter wrote a lengthy dissenting decision, reaching a markedly different conclusion regarding the intent of the “substantially started” requirement. He concluded that section 18 only requires that the proponent start the project in a meaningful way by the deadline in the Certificate. The statute does not limit the Minister’s consideration to physical work only, and no legislative purpose would be served by refusing to consider relevant factors such as the administrative and political hurdles faced by Glacier. This was also not required by the decision of Taku River Tlingit First Nation v. British Columbia (Minister of Environment).
Justice Hunter would have remitted the decision to the Minister for reconsideration.
For Glacier, this decision is the final barrier among the many practical and legal challenges faced by the Project since it was proposed nearly 30 years ago. The Project will need to undergo a new environmental assessment in order to continue, unless the Supreme Court of Canada grants Glacier leave to appeal. However, there is at least some possibility that leave will be granted, given that Canada’s top court has not yet considered the meaning of “substantially started” and the case could potentially have a national impact.
On June 21, 2019, the federal government passed Bill C-69, including the new federal Impact Assessment Act. Once in force, the Impact Assessment Act will require the federal Minister of Environment to impose deadlines by which approved projects must “substantially begin.” In addition, provincial ministers have discretion to include similar deadlines for construction as conditions of project approval. While the federal statute and other provincial statutes may offer more discretion to the federal and provincial ministers than the Act, “substantially started” jurisprudence is likely to be of relevance across Canada in the future.
Interestingly, the “substantially started” requirement is slated for revision when Bill 51 – Environmental Assessment Act comes into force. Projects approved under the new Act will have up to 15 years to substantially start their projects (rather than the current 10-year limit). In addition, the new Act will impose a deadline by which projects must be operational. Projects approved under the former Act will be required to be operational either five years after the new Act comes into force or 20 years after the certificate was issued, whichever is longer. However, no definition of “operational” is provided, which may lead to future challenges.
For further information, please contact:
Roy Millen 604-631-4220
Rochelle Collette 604-631-3379
or any other member of our Environmental Law group.