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The Ontario Superior Court of Justice has released a decision which demonstrate that the relationship between environmental assessments and land use planning remains as complex as ever, especially when interjurisdictional issues are involved.

The October 29, 2018 decision in Halton v. CNR, 2018 ONSC 6095, a motion to stay an application, involves a Canadian National Railway (“CN”) proposal to develop an “intermodal rail hub” on a 400 acre parcel of CN lands in Halton Region (an “intermodal rail hub” is a facility where shipping containers are transferred between rail and trucks). As a railway, CN’s proposal is a federal undertaking and therefore subject to federal environmental review under the Canadian Environmental Assessment Act, 2012, S.C. 2012 (“CEAA”). The issue in the application is whether it is also subject to provincial laws and municipal by-laws, including land use planning.

CN’s position is that as a federal undertaking, the development plans are entirely within federal jurisdiction and any provincial (or municipal) law that might otherwise apply is constitutionally inapplicable under the doctrine of interjurisdictional immunity.

Halton Region takes the position that provincial laws of general application (including subordinate land use planning by-laws of a municipality) apply to federal undertakings “unless they impair a vital aspect of the management or control of the federal undertaking”.

Halton brought an application for a ruling on the issue and CN brought a motion to stay the application until the federal Environmental Assessment (“EA”) is complete. For reasons of judicial economy, the Court granted the stay.

While the decision provides a helpfully succinct overview of the federal EA process (see para’s 33 to 49), as a decision on a stay, it does not need to address the central division of powers question. Rather, the Court simply notes that the federal Minister of the Environment had mandated that the EA consider municipal land use concerns and that Halton has made extensive submission in that process. This observation effectively allowed the Court to remain neutral on whether or not consideration of municipal land use planning standards are required in an assessment of “significant adverse environmental effects” under CEAA.

The Court does serve, however, that the decision to stay the application could have been different if the record supported a finding that the federal process was refusing to consider the local land use planning issues raised by Halton.

The Court also appears to signal where it might land on the jurisdictional question when it writes:

Federalism jurisprudence in Canada for the last approximately 30 years, has been marked by a recognition that the sphere of jurisdiction of the federal and provincial governments overlap, and are not water-tight compartments (para. 95).

This node to cooperative federalism is especially relevant with respect to environmental jurisprudence, and one would suspect that it is equally applicable when it comes to issue of the environment and land use planning. However, as the Supreme Court explained in Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23:

(A)lthough co-operative federalism has become a principle that the courts have invoked to provide flexibility for the interpretation and application of the constitutional doctrines relating to the division of powers, such as federal paramountcy and interjurisdictional immunity, it can neither override nor modify the division of powers itself (para. 39).

Should the results of the federal EA process not adequately consider Halton’s land use planning concerns or should CN proceed on the premise that municipal planning instruments are inapplicable, this issue could well be back before the courts. If it is, one can predict that the outcome will largely be driven by whether the relevant land use planning considerations can accommodate CN’s plans for an intermodal hub or whether they prohibit it outright.

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