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Since the Green Energy and Economy Act, 2009 came into force on May 14, 2009, the debate continues about whether municipalities can regulate renewable energy projects. At least three court decisions have now been made which indicate that other possible avenues of municipal regulation of renewable energy projects, and in particular wind turbine developments, will be unsuccessful.

The most recent case is the June 2016 decision of the Ontario Court of Appeal in wpd Sumac Wind Incorporated v. Kawartha Lakes (City), which was an appeal by the City of Kawartha Lakes from Divisional Court’s judicial review decision. The Divisional Court quashed the municipality’s resolution that it would refuse to authorize the use of an unopened road to support wind turbine development. The Court of Appeal upheld the decision.

In the Kawartha Lakes decision, the Court of Appeal considered whether “provincial paramountcy limit[s] a municipality’s authority over one of its unopened municipal road allowances when the province issues a Renewable Energy Approval for a wind turbine project that provides for the use of that same road”. The court concluded that it did.

In reaching its decision, the court recited the many failed efforts made by the wind developer to engage with the municipality regarding its proposed use of the road. While Sumac was making attempts to meet the municipal requests that had been made related to the use of the unopened road, Kawartha Lakes passed a resolution clearly indicating that Sumac’s request, or that of any successor, for use of the unopened portion of Wild Turkey Road for its wind development would be refused. It was this resolution that was the subject of the judicial review and subsequent appeal.

On appeal, Kawartha Lakes argued that the REA granted was a permissive instrument that merely determined the project will not harm the environment. It argued that its resolution could therefore not be frustrating a provincial aim. The Court of Appeal engaged in an in-depth review of the Green Energy and Economy Act, 2009 and the purposes of the EPA. It concluded that the REA is not simply an assessment confirming that the proposed project would not harm the environment. The court concluded that the REA was a positive entitlement with a provincial determination that the project was “in the public interest,” and the municipality could not use its authority over roads to thwart it.

The Court of Appeal concluded that to the extent municipal permits are required, the only concerns a municipality can advance are reasonable considerations such as costs, indemnification, and liability, and only so long as it does so in good faith. Permits cannot be refused simply because a municipality disagrees with the overall project.

The case of East Durham Wind, Inc. v. The Municipality of West Gray engaged similar issues. There, the municipality refused entrance permits or permits for oversized/overweight haulage on the basis that East Durham failed to meet its permitting by-laws. Like Kawartha Lakes, West Gray had passed resolutions to indicate it was not a willing host. In West Gray, the court declined to find bad faith, but concluded that the permitting by-laws prevented the project and so frustrated the purpose of the REA granted. They were held to be “inoperable” to the extent they conflicted with East Durham Wind’s REA. The municipality was ordered to reconsider the applications, in accordance with the court’s reasons.

In 2013, the Superior Court in Wainfleet Wind Energy Inc. v. Township of Wainfleet concluded the Township of Wainfleet’s wind project by-law was void for vagueness. Though it was clear the by-law would block Wainfleet Wind Energy’s project, the court concluded aspects of the by-law were unintelligible.

Municipalities may yet find ways to stop unpopular wind projects, but it is becoming increasingly clear the courts will not pave an easy path to such a goal. In the meantime, municipalities will likely face adverse costs awards, on top expensive costs for their own counsel.

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