May 14, 2015

Slow and Steady Wins the Race? Another Chapter in Ontario’s Ostrander Point Wind Farm Challenge

Prince Edward County Field Naturalists v. Ostrander Point GP Inc., 2015 ONCA 269 (CanLII)

Originally published May 4, 2015

In an important development in the ongoing saga of judicial challenges to wind farm developments in the province, the Ontario Court of Appeal (“ONCA”) has restored the finding of the Environmental Review Tribunal (“ERT”) that the proposed Ostrander Point wind farm would cause serious and irreversible harm to the Blanding’s turtle. However, the parties will have to return to the ERT to argue its remedial jurisdiction in this case and the appropriate remedy, as the ERT’s original decision to revoke the project’s Renewable Energy Approval (“REA”) was made without the benefit of submissions from the parties.

The divided outcome in Prince Edward County Field Naturalists v Ostrander Point GP Inc. means there is good and bad news for all parties involved. The ONCA’s decision may be considered a victory for opponents of wind farm development, who have had limited success in Ontario courts beyond this case. Proponents of wind energy projects, on the other hand, should be quick to note the limited scope of the case, which the ONCA emphasized relates to a specific species in a specific area. Interested parties on all sides of the issue will be watching closely as the ERT reconsiders the appropriate remedy after hearing from the parties, though a decision is not expected until much later in 2015.

The ONCA’s decision presents six major implications which we discuss in detail in this bulletin. We also provide a background on the project and the lower court decisions.

The Ostrander Point Wind Project

The proposed project is a nine-turbine, 22.5 megawatt wind farm on Crown land in Prince Edward County, on the shores of Lake Ontario. The Ministry of the Environment granted the project proponent, Ostrander Point GP (“Ostrander”), a REA in December 2012, though construction has not yet commenced. In addition to the construction of the turbines, the project would involve construction of over five kilometers of gravel roads. The project area is a provincially significant wetland, and contains habitat for resident and migratory species. A number of local groups, including PECFN, opposed the development and filed a statutory appeal in the ERT.

The Lower Decisions

In July 2013, after a 40-day hearing featuring 31 experts, the ERT concluded that the proposed wind development would cause “serious and irreversible harm” to local populations of Blanding’s turtle, a threatened species. As a result, the ERT revoked the REA. We discussed the ERT’s decision at more length when it was released.

Both Ostrander and PECFN appealed to the Divisional Court. In its February 2014 decision, the Divisional Court set aside the ERT’s findings as unreasonable. Specifically, the Divisional Court concluded that the ERT had: improperly applied and explained the test for “serious and irreversible harm,” not weighed certain factors appropriately, and made errors of law relating to its decision that the REA should be revoked, rather than amended or substituted. The Divisional Court refused to hear fresh evidence from Ostrander about certain mitigation efforts it had taken.

PECFN appealed and Ostrander cross-appealed. The central question for the ONCA was whether the Divisional Court identified and correctly applied the appropriate standard of review.

The “Serious and Irreversible Harm” Test

An appeal of an REA is governed by s. 145.2.1 of the Environmental Protection Act (“EPA”), which requires the ERT to consider whether a renewable energy project “will cause (a) serious harm to human health; or (b) serious and irreversible harm to plant life, animal life or the natural environment.”

One of the questions at issue was whether an intelligible application of this statutory test requires the ERT to turn its attention separately to the seriousness of the harm and its irreversibility. The Divisional Court thought so and the ONCA seems to agree. However, the higher court upheld the ERT decision on the basis that the seriousness of the harm “required no analysis” in this case and the focus of the ERT’s analysis was whether the harm was irreversible.

The ONCA also held that precise quantitative data is not required, even where populations are small. Expert testimony in this case focused on estimated magnitudes rather than numerical population studies, suggesting that road access threatened a very small population of turtles with extinction. While the Divisional Court took issue with the quality of the data, the ONCA deferred to the ERT’s determination that the evidence was sufficient to support its conclusions.

The ONCA’s comments in this regard are notable in light of previous REA appeals at the ERT, such as Bovaird v MOE (13-070), where limited availability of data with respect to the project’s impact on a local population of endangered Little Brown Bats played an important part in not allowing the appeal. After hearing the ONCA’s view on data requirements, the ERT may adopt a more accommodating approach. However, proponents and opponents alike should not expect a significant deviation as the ONCA was ultimately deferring to the ERT’s discretion to determine for itself the sufficiency of the evidence.

Finally, the ONCA also affirmed that regulatory approvals from other ministries are not binding on the ERT. The Divisional Court raised concerns about the disconnect between the ERT’s decision and the Ministry of Natural Resources having granted the project an exemption under the Endangered Species Act (“ESA”). The ERT was entitled to review the conditions of the ESA permit and conclude that “the evidentiary value of the permit was outweighed by the expert evidence introduced.”

ERT to Determine the Appropriate Remedy

After concluding that the ERT was entitled to have reached the conclusion it did regarding serious and irreversible harm, the ONCA sent the case back to the ERT to reconsider the appropriate remedy for two reasons. First, the parties had not been given an opportunity to make submissions on the appropriate remedy at the ERT. Second, it accepted fresh evidence that the proponent had taken a number of steps to mitigate the risk to Blanding’s turtles by closing public access to the roads, which arguably could affect the ERT’s assessment.

The ONCA identified a number of errors with the ERT’s approach to remedy in this case. The ERT did not hear from the parties on what the appropriate remedy would be were it to conclude there was serious and irreversible harm. Additionally, it declined to exercise its power to alter the REA decision or substitute its own because the ERT viewed Crown land management as a value judgment outside of its purview. As a result, the only remaining remedy was to revoke the REA. The ONCA dismissed this approach as unreasonable and tasked it with reconsidering its jurisdiction and disposition in this case.

After the ERT decision was released, the proponent took steps to mitigate the impact of the project, and then unsuccessfully sought to have fresh evidence introduced at Divisional Court. The ONCA allowed the fresh evidence, but refused to exercise its jurisdiction to substitute its own decision for that of the ERT. The parties will now have to return to the ERT to be heard with respect to the Tribunal’s remedial jurisdiction in this case, and the appropriate remedy.

Three Commercial Conclusions to be Drawn from the Decision

  1. The success of the Prince Edward County Field Naturalists (“PECFN”) at the Court of Appeal underscores that the litigation risk for renewable energy developers has not gone away, despite some recent decisions and studies going against wind farm opponents.
  2. Community engagement, now a more significant component of the FIT process generally, and thoughtful mitigation planning remains pivotal. Ostrander’s experience demonstrates the importance of working with local groups to understand the issues and putting your best mitigation plan forward.
  3. This decision is not a province-wide win for opponents. The scope of the ERT’s decision was always limited to the Ostrander site and the Blanding’s turtles that inhabit it. The ONCA specifically noted the narrow geographic scope of the decision. Moreover, the question of remedy remains unresolved: the project may yet go ahead in light of the mitigation measures Ostrander has undertaken.

Three Regulatory Ramifications of the Case

  1. Harm must be both “serious” and “irreversible,” but quantitative data may not be necessary. The ONCA decision does not provide clear guidance on the specific detail required, but endorses the ERT’s discretion to accept qualitative data regarding the impact a project is expected to have.
  2. Parties have to argue for relief. To some extent, the recent stages of this case may have been avoided had the ERT heard submissions from the parties regarding appropriate amendments to the REA. The challenge is how this would work in practice. The ONCA noted that “Ostrander could not reasonably have been expected to address the appropriate remedy in relation to each of the many different attacks mounted” (para 83). The logical result of this decision would be to hold ERT hearings in phases: the first to address harm and the second to address remedy, if harm is proved. It is not clear, however, how such phasing could occur within the tight six month statutory timeframe within which the ERT must release its decision.
  3. Fresh evidence of mitigation efforts will likely be relevant on appeal. Phased hearings might address this issue but in their absence, proponents of projects found to present serious and irreversible harm should undertake mitigation efforts promptly. The ONCA has made clear that such evidence can relevant on appeal and can be considered by the Divisional Court with respect to issues of law when assessing the appropriate remedy.

Renewable Energy Players Await Next ERT Decision

Overall, the ONCA’s decision is likely to be of greatest consequence to the parties involved. Though it is an important affirmation from Ontario’s highest court that the rigorous “serious and irreversible harm” test can be met, the specific circumstances of the Ostrander Point project mean that broad inferences are difficult to make. Regardless, the unresolved remedy question means renewable energy proponents and opponents will need to keep an eye out for the next chapter in this lengthy proceedings.