Wetland Projects: The Legality of Certain MDDEFP Requirements is Confirmed

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On October 18, 2013, the Court of Appeal of Quebec1 reversed the Superior Court of Quebec’s decision2 in the Atocas de l’érable inc. case, quashing directive no. 06-01, used by the ministre du Développement durable, de l’Environnement, de la Faune et des Parcs (Minister of Sustainable Development, Environment, Wildlife and Parks) (the “MDDEFP“) requiring promoters to compensate for the loss of wetlands as a condition for the issuance of a certificate of authorization under the Environment Quality Act (“EQA“).

In its decision, the Court of Appeal deemed that the directive is legal with respect to its “avoid“ and “minimize“ components, and that the MDDEFP may require a promoter to (1) justify the impossibility of carrying out its project elsewhere than on a wetland; and (2) minimize the impacts on the environment if the project must nevertheless be carried out in such a place.

Much has been said and written since 2012 regarding the question of wetland compensations:

  • In March 2012, in the first instance of the case, whereby the cranberry producer, Atocas de l’érable inc., requested that the MDDEFP be compelled to grant a certificate of authorization for the enlargement of a cranberry farm, the Superior Court of Quebec quashed the entire directive no. 06-01 used by the MDDEFP. In particular, the Superior Court deemed that the requirement of compensation measures under this directive constitutes a violation of property rights that had no legal basis since it was not provided under the EQA. This decision was appealed by the MDDEFP.
  • In response to this ruling, the Act respecting compensation measures for the carrying out of projects affecting wetlands or bodies of water3(the “2012 Act“) was adopted in May 2012 to specifically grant the MDDEFP the power to require from the person applying for an authorization pursuant to sections 22 or 32 of the EQA measures to compensate for the effects of any project affecting wetlands or bodies of water. However, in accordance with this Act, this power shall cease to have effect in 2015, or earlier, if new rules are adopted.
  • Finally, in July 2012, the MDDEFP published a new guide entitled “Les milieux humides et l’autorisation environ­nementale” (Wetlands and environmental authorization) proposing a transitional approach to ensure the consideration of ecological and water features of wetlands in the analysis of projects submitted to the MDDEFP and this, pending legislation providing specific rules regarding the preservation and sustainable management of wetlands.

The Court of Appeal’s Decision

The Court of Appeal rendered a divided decision made in the context where the issue of the “compensate“ component of the directive was no longer contested because the 2012 Act now provides the MDDEFP the authority to require compensation measures without indemnity. Thus, the majority ruled only on the validity of the “avoid” and “minimize” components of this directive and not the requirement, through a directive, that a promoter must offset impacts on wetlands, by assigning a portion of its property, for example.

In its judgment, the Court of Appeal reiterates the rules surrounding the use of a directive in the context of the exercise of the MDDEFP’s discretion to issue a certificate of authorization.

Justice Bouchard, writing for the majority, first restates that a directive shall not be binding, as otherwise there would not be a true exercise of discretion by the MDDEFP.

In the case of directive no. 06-01, the majority deemed it no more than a guide that allows the MDDEFP to analyze, on a case-by-case basis, applications for authorization of projects involving wetlands, all in accordance with the law and regulations, and to make an assessment on their environmental acceptability. Contrary to the Superior Court judge, the majority does not perceive the application of the directive as a discretionary power of the MDDEFP.

The majority of the Court of Appeal also dismissed the application for mandamus from Les Atocas de l’érable to grant a certificate of authorization by the MDDEFP. Their counsel have announced that the case may be brought to the Supreme Court of Canada.

However, in the meantime, an act providing specific rules on the preservation and sustainable management of wetlands could be adopted. Although the outcome of this case will not be known for months or even years, the 2012 Act still empowers the MDDEFP to require compensation measures from promoters for impacts on wetlands. Similarly, the decision of the Court of Appeal reinforces the importance of the sequential obligations to “avoid“ and “minimize“, to curtail damage.

Given the rapid changes with the rules regarding the management of project impacts in wetlands, it is important for promoters to stay up to date to fully understand the rules that apply to their project at the moment they request a certificate of authorization. Indeed, the application of such rules can have a significant impact on the schedule and costs of a project.

  1. Québec (Procureur général) c. Atocas de l’érable inc., 2013 QCCA 1794.
  2. Atocas de l’érable inc. c. Québec (Procureur général) (Ministère du Développement durable, de l’Environnement et des Parcs), 2012 QCCS 912; In March 2012, we published a nota bene regarding this decision.
  3. S.Q. 2012, c. 14; In June 2012, we published a nota bene regarding this new Act.