2017 Harvest

2017 Harvest

Monday, November 10, 2014

Divisional Court tells Municipality of West Grey to change by-laws and grant permits required for local wind farm

The applicant wind farm developer (NextEra Energy Canada ULC) sought judicial review of two municipal permitting by-laws that prevented it from proceeding with the construction of a project; in order to complete the development, the applicant said that it required permits from the Municipality of West Grey.  The Divisional Court hearing the application noted: "The application raises the question of when and how a municipal by-law or policy may frustrate the purpose of a provincial legislative instrument.  The factual backdrop for this legal question is the ongoing renewable energy revolution in Ontario that was ushered in by the Green Energy Act, S.O. 2009, c. 12.  This revolution has spawned much litigation, particularly around wind energy projects."
 
The applicant received the Renewable Energy Approval (REA) from the Ontario Ministry of the Environment for its 14-turbine project in January, 2014.  However, the applicant would also need "entrance permits" to connect access roads on private lands to the public highways within the municipality, as well as "oversize/overweight haulage permits" to allow for the conveyance of large and heavy project materials by truck along public highways.  The municipality declined to grant the required permits, in part on the basis of changes it had made to its by-laws.
 
The applicant argued to the Divisional Court that it holds a valid REA from the province and that, since the municpal by-laws are in direct conflict with the REA, the by-laws are inoperative to the extent of the conflict (under Section 14(1) of the Municipal Act, 2001).  The Court noted that a municipality can only exercise its powers by by-law, and the Municipal Act, 2001 provides that a by-law cannot frustrate the purpose of a provincial or federal Act, regulation or instrument. 
 
Based on the Court's interpretation of the REA, it found that the municipality's permitting by-laws did prevent the project from being built.  Therefore, the by-laws frustrated the purpose of the REA and must be held inoperable, but only to the extent of the conflict with the REA. 
 
However, the Divisional Court did not accept the applicant's alternative argument that the municipality had acted in bad faith in refusing to grant the required permits.  As the Court stated, "The Municipality is a democratic body accountable to its constituents.  It has a broad legislative discretion to enact by-laws governing issues that regulate daily life and the built infrastructure within its jurisdiction ... Council's call for a moratorium on wind energy projects in Ontario and its declaration that it is an "unwilling host" for such projects are not acts that, in and of themselves, support a finding of bad faith."