Canada: B.C. Court Confirms Limited Jurisdiction of Department of Fisheries and Oceans over Development in Riparian Areas

Last Updated: July 2 2010
Article by Paul Cassidy, Bryan Hicks and Janice Walton

Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Environmental Law, July 2010

In a recent decision of importance to project developers dealing with the Department of Fisheries and Oceans (DFO, now known as Fisheries and Oceans Canada or FOC), the Supreme Court of British Columbia exposed the institutional fiction that the DFO may reject development proposals that do not cause a HADD. In doing so, the Court found that the DFO extended far beyond its legitimate authority in trying to establish a decision-making role for itself in development proposals in riparian areas, in circumstances where no harmful alteration, disruption or destruction to fish habitat (HADD) would result. The Court confirmed that DFO approval is not required for activities that do not cause a HADD and consequently, the DFO has no jurisdiction to deny non-HADD developments. Further, the Court's discussion confirms that the DFO's opinion on how non- HADD developments should be built should not be relied upon by either local governments or the province to deny development approval.

YANKE v. SALMON ARM (CITY )

The Court ruled on a case involving a petitioner's request for a municipal development variance, permitting him to construct a home 15 metres from the average high-water mark in a lake near Salmon Arm, B.C. Upon considering the petitioner's application, which included an opinion from a qualified consultant that no HADD would occur, the City of Salmon Arm supported the variance but made its approval conditional on approval by the DFO and the B.C. Ministry of Environment (MOE). The DFO agreed that the development would not cause a HADD, but expressed its opinion that the project could be designed differently to lessen impact on the riparian area. As a consequence of the DFO's comments, the City withheld its approval of the variance. The petitioner sought a declaration from the Court giving effect to the City's approval.

The City's decision to withhold approval was based upon its interpretation of the provincial Riparian Areas Regulation (RAR). The case was ultimately decided in the petitioner's favour on the grounds that the City's approval had effectively been given through the initial establishment of a restrictive covenant under the RAR's predecessor, the Streamside Protection Regulation; and that because of the transitional provisions of the RAR, approval under it was unnecessary. However, this case is more significant because of the Court's discussion of the DFO's improper involvement with non-HADD development proposals. The Court held that the City's practice to defer to the MOE and the DFO for approval was not consistent with the RAR, which does not mandate that non-HADD developments be approved either by the DFO or the MOE.

REGULATORY SCHEME FOR RIPARIAN AREA DEVELOPMENT APPROVALS IN B.C.

Fisheries Act. The DFO derives its regulatory powers over project development in riparian areas from the Fisheries Act. Section 35(1) of the Act makes it an offence for any person to cause a HADD. Section 35(2) provides that no person contravenes s. 35(1) if the HADD was authorized by the DFO. In this respect, an authorization under s. 35(2) is a statutory defence to causing a HADD and nothing more. It does not create a federal licensing scheme for non-HADD developments. In other words, s. 35 is not engaged by non-HADD developments, and the DFO has no authority to authorize or seek changes to them.

Riparian Areas Regulation. The RAR is a regulation under the B.C. Fish Protection Act. It provides that any proposed development within a riparian assessment area may not proceed without approval from the local government. Section 4 of the RAR sets out the preconditions for obtaining local government approval. As the Court points out in Yanke, the RAR makes a key distinction between proposed developments that would result in a HADD and those which would not.

Development proposals which will not cause a HADD proceed under s. 4(2) of the RAR, which provides that a local government may approve the development once the MOE has confirmed that the MOE and the DFO have been notified of the proposal and have been provided with an opinion by a Qualified Environmental Professional (QEP) that the development would not result in a HADD. The local government cannot give its approval until all notice requirements have been satisfied, but there is no requirement for approval from the DFO or the MOE.

Developments which will cause a HADD are considered under s. 4(3) of the RAR, which provides that a local government may not provide approval unless the HADD has been authorized under the Fisheries Act.

The scheme established under the RAR is consistent with the Fisheries Act, in that the prerequisite of DFO authorization contemplated by the RAR applies only to HADD developments. However, administrative agreements entered into by municipal, provincial and federal agencies (discussed below) for implementation of the RAR, and the MOE's guidance documents, have confused the role of the DFO in project development by implying that DFO authorization is required for all developments in riparian areas, regardless of whether they will cause a HADD. The result is a misconception by local governments that DFO approval is required for non-HADD development proposals, and a consequent over-reliance on the opinion of the DFO on project development. The Court ruling clears up this misconception.

Implementation Guidebook and Intergovernmental Cooperation Agreement

The provincial government argued that its Riparian Areas Regulation Implementation Guidebook (the Guidebook) was authority for the proposition that variances of municipal setbacks must be approved by the DFO. In rejecting this argument, the Court pointed out that the Guidebook does not actually say that, and further, that it does not have the force of law. At the same time, the Court found that the Guidebook confuses the distinction made in the RAR between HADD and non- HADD developments. As an example, the Court cited portions of the Guidebook which state that variance requests shall be considered by the DFO, which will assess whether an authorization is required, and that the RAR sets the direction that can allow development to proceed if approved by the DFO. The Court described this as misleading.

The government also produced evidence of a letter from the City which stated that, in absence of a protocol with the DFO, all variance requests were to be submitted to the DFO prior to filing the RAR report, and the DFO "approval" was required, either through an authorization or a letter of advice (the DFO's standard letter that a HADD is likely to not occur).

In 2008, the DFO, MOE and Union of British Columbia Municipalities entered into the Intergovernmental Cooperation Agreement Respecting the Implementation of British Columbia's Riparian Areas Regulation (the Agreement). The Court in Yanke reviewed the Agreement, and confirmed that it does not constitute a delegation of statutory decision-making power. However, the Court also pointed to several problematic provisions of the Agreement, in particular Annex 2, which sets out the roles and responsibilities of the parties. The Court found that the terms "variances" and "HADD" are used interchangeably in the Annex, leading to the implication that all applications for variances must be submitted to the DFO for review. The Court described this as creating a "troublesome ambiguity". As a consequence, the Court found the DFO and the MOE had gone far beyond the RAR in establishing a decisionmaking role for the DFO in non-HADD developments.

The Court determined that the City had developed a practice of deferring to the MOE and the DFO for approval as a pre-condition of permitting of any type of development in riparian areas, regardless of whether the QEP had determined there was a HADD. The Court stated that the approval of the DFO or the MOE was not a statutory prerequisite to the City permitting the development to proceed and that the notification requirements of the RAR had been complied with in the case. The Court held that the City's deferral of its decision-making authority to the DFO with respect to non-HADD developments was both unnecessary and improper.

COMMENT

The decision in Yanke highlights a problem that has been faced by developers in B.C. for years, that is, the deference paid by local governments to the DFO when approving developments near water bodies.

While the RAR has been carefully crafted not to extend jurisdiction where it does not exist, the scheme it mandates contributes to the problem by requiring notification to the DFO of all development in riparian areas, regardless of whether they are related to fishbearing waters, and regardless of whether a HADD will occur. Further, the B.C. government's efforts to encourage intergovernmental co-operation for riparian developments, as reflected in the Agreement and its guidebooks, has not helped, as these documents confuse both developers and local government into thinking of the DFO as a body which approves all such developments, which it is not.

In 2004 when the RAR was introduced in the B.C. legislature, Blakes had the following comment:

A wide range of concerns have been expressed regarding the RAR. First, it increases the role of the DFO beyond its statutory mandate by effectively involving it in projects which will not result in the harmful alteration of fish habitat. Under the Fisheries Act, the jurisdiction of the DFO flows directly from an assessment that there is a potential for harm to fish habitat. Without such potential, the DFO has no jurisdiction to request information about a project, but will now receive it because of the RAR provincially mandated process. Further, under the RAR, reports are prepared for all streams, without regard to whether they support a fishery. As the federal government only has power to regulate to protect fish habitat that supports a fishery, there is potential for the DFO to become involved in projects for which they cannot issue an authorization (as it would be outside their constitutional jurisdiction).

Second, the prohibition of the approval of a development which will cause harm to fish habitat, unless authorized by the DFO, fetters the discretion of local government officials on the basis of a decision to be made by a federal government entity over which neither the local nor provincial governments have any bureaucratic control. This, in effect, takes the ultimate decision regarding whether development within 30 metres of any watercourses in the affected areas may go ahead, out of the hands of local or provincial government, and into the hands of the federal government. This is particularly problematic as the Fisheries Act does not actually require the DFO to issue authorizations.

Six years later, it is clear that our concern that the RAR would result in the DFO extending its reach into areas beyond its jurisdiction has actually happened. Fortunately, the Court in Yanke has confirmed the DFO's limited role in riparian developments and provides direction to local governments and the province to avoid deferring decision-making to a federal entity with no authority to approve the work.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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