Court of Appeal Decision of the Week

What Does “Substantially Started” Mean? Are Practical Impediments to be Weighed?

Case: Glacier Resorts Ltd v British Columbia (Minister of Environment), 2019 BCCA 289 (CanLII)

Keywords: Environmental Assessment Act; Construction; “substantially start”; Jumbo Glacier Resort

Synopsis:

The Respondent, Glacier Resorts Ltd, receives a certificate under the B.C. Environmental Assessment Act, S.B.C. 2002, c. 43, requiring the company to “substantially start” the Jumbo Glacier Resort Project within ten years. By the certificate’s deadline, limited construction has commenced. The Appellant, the Minister of Environment for British Columbia, determines the certificate has expired. Glacier Resorts seeks judicial review of the Minister’s determination, asking for a mandamus order compelling the Minister to reverse her decision.

The Chambers Judge finds the Minister’s determination to be unreasonable due to the presence of significant mitigating and limiting factors the Minister did not consider (see para. 4). Rather than compel the Minister to reverse her determination, the Chambers Judge instead orders the Minister to reconsider. The Minister appeals this decision, while Glacier Resorts cross-appeals the Chambers Judge’s refusal to compel the Minister.

A Majority of the Court of Appeal finds the Chambers Judge erred in finding the Minister’s determination to be unreasonable, allows the appeal, and dismisses the judicial review petition. (see paras 25, 46, 49, and 64-65).

Importance:

Glacier Resorts first proposed the Jumbo Glacier Resort Project in 1991 (see para. 9). Due to a significant number of administrative and political challenges, including those litigated in Ktunaxa Nation v British Columbia (Forests, Lands and Natural Resource Operations), 2017 SCC 54, [2017] 2 S.C.R. 386, construction could not proceed for the first five years following the issuance of the certificate. An extension of a further five years was ordered by the Minister (see para. 17). By the new deadline, Glacier Resorts had laid foundation slabs and anchors for several buildings and constructed a number of temporary bridges (see para. 18).

The Environmental Assessment Act does not define the phrase “substantially started” (see para. 48). The Minister elected to focus on physical construction, while also considering the planning, design, and regulatory approvals processes (see para. 27). She determined that the “substantially started” standard did not require buildings to be completed or fully constructed; however, the overall project must “obviously be more than merely started” (see para. 25). Ultimately, she concluded that Glacier Resorts had not substantially started the first phase of the resort’s construction (see para. 31).

Glacier Resorts relied heavily upon external factors that delayed development (see paras. 32-41). In 2007, the Regional District of East Kootenay requested that Jumbo Glacier Resort be designated a Mountain Resort Municipality, complicating the municipal rezoning process necessary to commence construction. Rezoning was only approved in August 2014 (see para. 37). In July 2009, negotiations with the Ktunaxa Nation Council broke down, resulting in a delay in reaching a Master Development Agreement. The Province also closed a Forest Service Road and removed a bridge providing access to the construction site without warning in 2012.

Three separate legal challenges were brought against the project, relating to the issuance of the environmental assessment certificate, the Master Development Agreement, and the provincial authority to create the Jumbo Glacier Mountain Resort Municipality (see R K Heli-Ski Panorama v Glassman, 2005 BCSC 1622; Ktunaxa Nation v British Columbia (Forests, Lands and Natural Resource Operations), supra; West Kootenay Community Ecosociety v British Columbia, 2015 BCSC 2061). While all three challenges were unsuccessful, they “undoubtedly added a measure of uncertainty to the project” (see para. 38). Glacier Resorts stated that, due to these combined difficulties, construction could not practically have commenced before 2014 — ten years after the certificate was issued (see para. 40). The Minister found that these considerations, while significant, were not relevant to the determination of whether or not the project was “substantially started” (see para. 41).

The Chambers Judge disagreed with the Minister’s determination that these factors were irrelevant to the “substantial start” threshold:

[T]he Mitigating/Limiting Factors are sufficiently relevant to a “substantial start” that it was unreasonable for the Minister to ignore them. […] [B]y ignoring them the Minister failed to reconcile, to the greatest extent possible, the proponent’s development desires with environmental protection and preservation (see para. 44).

The Court of Appeal dismissed the Chambers Judge’s approach. It drew a distinction between whether or not a proponent has made reasonable efforts to proceed with a project, and whether it has made a substantial start to the project (see para. 55). Glacier Resorts may well have made a reasonable effort to proceed, stymied by a number of challenges, but it did not make a substantial start to physical construction.

Should the presence of significant mitigating factors be ignored when determining of whether or not a project has substantially started? If practical and legal challenges effectively prevent a project’s construction, as they likely did in this case, should these challenges be weighed in determining whether or not a proponent has substantially started a project? The Chambers Judge, joined by Hunter J.A., believes that they should be weighed, while the majority of the Court of Appeal views these considerations as irrelevant to the determination. While both perspectives agree that physical construction ought to be the focus of the Minister’s analysis, the consideration of practical hurdles is contested. Given the significant impacts such practical challenges represent to development projects, greater clarification may be warranted.

Counsel for the Respondent: Gregory J. Tucker, Q.C. (Owen Bird Law Corp, Vancouver)

Counsel for the Appellant: David G. Cowie (Attorney General (BC), Victoria) and A.A. Caron

Discuss on CanLii Connects

Posted: Tuesday, August 13, 2019