environmental telephone: facsimile: appeal board po box ...[11] revolution’s compost facility was...

Environmental Appeal Board

Fourth Floor 747 Fort Street Victoria British Columbia V8W 3E9 Telephone: (250) 387-3464 Facsimile: (250) 356-9923 Mailing Address: PO Box 9425 Stn Prov Govt Victoria BC V8W 9V1 Website: www.eab.gov.bc.ca E-mail: [email protected]

DECISION NO. 2017-EMA-004(b)

In the matter of an appeal under section 100 of the Environmental Management Act, S.B.C. 2003, c. 53.

BETWEEN: Revolution Organics, Limited Partnership APPELLANT/APPLICANT

AND: Director, Environmental Management Act RESPONDENT

BEFORE: A Panel of the Environmental Appeal Board Brenda L. Edwards, Panel Chair

DATE: Conducted by way of written submissions concluding on June 2, 2017

APPEARING: For the Appellant/Applicant: For the Respondent:

Robert J.C. Deane, Counsel Stephen E. King, Counsel Fernando de Lima, Counsel

STAY APPLICATION

PROCEDURAL BACKGROUND

[1] Revolution Organics, Limited Partnership (“Revolution”), filed an appeal against a letter dated February 14, 2017 from Cindy Meays, Acting Deputy Director (the “Director”), Regional Operations Branch, Ministry of Environment (the “Ministry”). The letter addresses the notice requirements in relation to Revolution’s permit application. At the same time, Revolution applied for an interim stay of the Director’s decision letter (the “Decision”).

[2] As a preliminary matter, the Board sought submissions from the Parties on a question of jurisdiction before accepting Revolution’s Notice of Appeal.

[3] On February 23, 2017, and with the consent of the Parties, the Board ordered a stay of certain provisions in the Decision until March 31, 2017 or until the Board issued its decision on the preliminary issue of jurisdiction.

[4] By letter dated March 29, 2017, the Director consented to a further stay of the Decision until seven days after the Board issued its decision on the preliminary issue of jurisdiction. The Board issued its decision on the issue of jurisdiction on April 13, 2017.

[5] On April 19, 2017, the Director consented to the interim stay remaining in place until the Board issues its final decision on the merits or August 31, 2017, whichever occurs first.

mailto:[email protected]


[6] The hearing of the appeal on the merits is presently set for four days commencing on October 23, 2017.

[7] As the hearing of the appeal is not going to occur prior to August 31, 2017, the stay that the Director consented to will expire on that date, and Revolution wishes to proceed with having its application for an interim stay determined.

FACTUAL BACKGROUND

[8] Revolution owns and operates an organic composting facility located in the Botanie Valley, approximately eight kilometres north of Lytton, BC. The compost facility is integrated with a 700 acre certified organic farm (McKay Ranch).

[9] Based on the information before the Board, the facility was established sometime in or around 2011.1 It composts organic material such as wood chips, tree cuttings, grass clippings, “separated food stuffs”, and compostable paper products.

[10] Compost facilities are regulated under the Environmental Management Act (the “Act”) and the Organic Matter Recycling Regulation, B.C. Reg. 18/2002 (the “OMRR”), made under the authority of the Act. Section 2 of the OMRR, titled “general application”, states as follows:

2(1) For the purposes of the Act, compostable materials and recyclable materials continue to be a waste until dealt with in accordance with this regulation.2

(2) A person who produces or uses biosolids or compost is exempt from section 6 (2) and (3) of the Act [prohibiting the introduction of waste into the environment] if the person produces and uses the biosolids or compost only in accordance with this regulation.

(3) This regulation applies in British Columbia to

(a) the construction and operation of composting facilities, and

(b) the production, distribution, storage, sale and use or land application of biosolids and compost.

[11] Revolution’s compost facility was originally developed to produce up to 19,000 tonnes of Class A compost, with all of the compost being used in Revolution’s organic farming operations. In October 2012, Revolution sought to increase the capacity of the facility to up to 125,000 tonnes per year.3

[12] According to section 23(2) of the OMRR, if the annual production capacity of a facility will exceed 20,000 tonnes, the discharger must submit an environmental

1 Exhibit A to the affidavit of Cindy Meays: letter dated June 29, 2016 from counsel for Revolution to the Ministry, page 7. 2 “Waste” is defined in section 1 of the Act to include: air contaminants, litter, effluent, refuse, biomedical waste, hazardous waste, and any other substance prescribed by the Lieutenant Governor in Council, whether or not the type of waste has any commercial value or is capable of being used for a useful purpose. 3 At this time, it appears that the operator’s name was Northwest Organics Soil Farm.


impact study and accompanying report, prepared by a qualified professional, “that is acceptable to a director”.

[13] Revolution’s qualified professional submitted an environmental impact study to the Ministry on October 31, 2012. Jason Bourgeois, Delegate for the Director, Environmental Management Act, reviewed that study and concluded that it did not meet the requirements of section 23(2) of the OMRR. A revised environmental impact study was submitted on December 18 and 19, 2012 (the “EIS”). In an email dated December 19, 2012, Mr. Bourgeois advised that his previous concerns had been addressed in the amended EIS, and that the company “has satisfied the requirements of section 23(2) of OMRR and has provided an environmental impact study report acceptable to a director.” Mr. Bourgeois imposed some conditions and other requirements, including asking for “as built” drawings once the expansion was completed. At this time, the OMRR did not require the owner of a compost facility to hold a permit.

The permit application

[14] On June 9, 2016, the OMRR was amended by B.C. Reg. 132/2016. Section 3.1 was added to require an owner of a composting facility that meets certain requirements to obtain a permit for the facility. Section 3.1 provides as follows:

Permit required

3.1(1) Section 2(2) [exemption from section 6(2) and (3) of the Act] applies to a discharger in relation to a composting facility that processes food waste or biosolids and has a design production capacity of 5 000 tonnes or more of compost per year only if the discharger holds a permit for the composting facility, unless the discharger holds an approval or operational certificate for that composting facility.

…

[Emphasis added]

[15] Section 33 of the OMRR sets out how the new permit requirements in section 3.1 apply to a composting facility already in operation as of the date of the amendment. It states:

Transition — permit requirement under section 3.1

33(1) A discharger that is required under section 3.1(1) to hold a permit in relation to a composting facility that is operating on the date this section comes into force must apply to a director for a permit within 60 days after that date. [i.e., August 8, 2016]

(2) If a discharger described in subsection (1) fails to apply for a permit within the 60 day period referred to in that subsection, section 2(2) [exemption from section 6(2) and (3) of the Act] does not apply to the discharger until the application is submitted to the director.

(3) The director may specify a time by which a discharger that submits an application under subsection (1) must,


(a) under section 3 of the Public Notification Regulation, provide information respecting the application,

(b) under section 4 (1), (2) or (3) of the Public Notification Regulation, give notice of the application,

(c) under section 5 (4) of the Public Notification Regulation, post the application on a billboard,

(d) under section 6 (3) of the Public Notification Regulation, publish the application, or

(e) under section 6 (5) of the Public Notification Regulation, post the application in a post office.

(4) Section 2(2) [exemption] does not apply to a discharger described in subsection (1) until the requirement is met if the discharger fails to

(a) meet a requirement referred to in subsection (3) by the time specified by the director, or

(b) meet a requirement under the Public Notification Regulation by the time specified in that regulation.

(5) A discharger to which subsection (1) applies is exempt from section 3.1(1) until the date the director makes a decision in relation to the discharger's application under subsection (1) of this section.

[Emphasis added]

[16] Following the June 9th amendment to the OMRR, legal counsel for Revolution wrote to the Ministry to explain why Revolution’s facility does not require a permit under section 3.1. Counsel advised the Ministry that the facility does not discharge waste and, in any event, it already holds a “prior approval” from the Ministry for the facility. Regarding the latter, Revolution maintains that the December 19, 2012 email from Mr. Bourgeois accepting Revolution’s environmental impact study constitutes an “approval” for the facility under the Act.

[17] In a letter dated July 19, 2016, the Ministry responded. It advised that the OMRR amendment applies to Revolution’s facility, and that Revolution does not hold an “approval” in respect of the facility; therefore, the Ministry advised that it “expects” to receive an application for a permit prior to August 8, 2016.

[18] On August 4, 2016, Revolution submitted a permit application under protest. It used the Ministry’s six-page permit application form which asks for certain information under standard headings. Under the heading “purpose of the application”, Revolution states that the application is submitted pursuant to the amendment to the OMRR, and that it is “submitted on a without prejudice basis as set forth in the letters from … [its lawyers] to the Ministry of Environment …. This facility does not discharge any waste.”

[19] The headings related to “discharge” were left blank.

[20] In November and December of 2016, the Director requested additional information in relation to the application pursuant to her authority under the Public Notification Regulation, B.C. Reg. 202/94 (the “PNR”). Revolution responded to


these requests, always adding that it already has an approval, does not require a permit under the OMRR, and is complying with the Ministry’s requests under protest.

[21] In a letter dated January 18, 2017, the Director wrote to Revolution advising that its permit application was complete, and the next step involves public and First Nations’ consultation. The Director addressed public notification of the application in a follow-up letter.

Public notification of the application

[22] In a letter dated January 19, 2017, the Director set out Revolution’s requirements to give notice of the permit application under the PNR, and imposed timelines for the notice requirements pursuant to her authority under section 33(3) of the OMRR. The Director also attached an “Environmental Protection Notice template” which she advised could be used “as the ‘application’ for the purpose of the PNR”.

[23] Revolution requested a teleconference to address notice and other matters.

[24] A teleconference was held on February 3, 2017. In it, the parties agreed that, for the purposes of the trigger dates in the PNR regarding public notice, February 3, 2017 would be the accepted date of the permit application. However, the parties disagreed on the content of the notice that would be posted and published in accordance with the PNR. The Director advised Revolution that she would consider reasonable revisions to the Environmental Protection Notice template that she had provided.

[25] Between February 6th and 10th, there were various letter and email exchanges between the parties regarding the Environmental Protection Notice and the revisions.

[26] In an email dated February 10th, Revolution set out its position on the acceptable content for giving notice under the PNR. First, Revolution notes that the PNR requires that the “application” be published and, therefore, Revolution could publish its August 4, 2016 permit application in order to fully satisfy the requirements of the PNR. However, Revolution then states that, if it uses the Director’s Environmental Protection Notice template to give notice, then it cannot be required to say things in that notice that are not accurate or that are damaging to Revolution. Revolution provided a revised Environmental Protection Notice with acceptable language. That notice states that Revolution has an existing approval for the facility, and does not refer to the anticipated annual input of 125,000 wet tonnes of compostable material – it only refers to the 32,784 tonnes of compost that will be produced from the facility. Revolution argues that the annual input is neither relevant nor appropriate to the notice.

[27] The Director responded by letter dated February 14, 2017, which is the subject of Revolution’s appeal.

The February 14, 2017 letter

[28] The letter states in full as follows:


Re: Revolution Organics LP (“Revolution”) Permit Application 108529; job # 352284 X Reference 104217

I write further to my letter of January 19, 2017 and Revolution’s response of February 6 and 10, 2017 and our recent discussions and correspondence regarding public notification requirements in relation to this matter.

Application and Environmental Protection Notice

I have reviewed the Environmental Protection Notice (“EPN”) that Revolution has submitted attached to your email to Mr. Van Hinte on February 10, 2017. The EPN that Revolution has submitted is not acceptable for the following reasons:

− The EPN as revised by Revolution contains a reference in the second paragraph to Revolution having “already received an approval” for the facility. This is not accurate. While the ministry acknowledges that Revolution takes the position that it has an “approval” for the facility, the ministry’s position, as it has stated previously, is that the acceptance of an environmental impact study report under section 23(2) of the Organic Matter Recycling Regulation (“OMRR”) is not an “approval” for the purpose of the Environmental Management Act. The reference to Revolution’s position of having already received an approval for the facility does not belong in the EPN and the ministry does not consider the EPN provided by Revolution to be an acceptable application for the purpose of the Public Notification Regulation (“PNR”).

− The EPN as revised by Revolution does not adequately reference the description, characteristics and volume of waste in accordance with PNR sections 2(1)(e), (f) and (g). The ministry’s position is that the EPN must reference the waste discharge of up to 125,000 wet tonnes of compostable materials per year. The discharge information must be included in the EPN in order to meet the requirements of section 2(1) of the PNR.

I have attached an EPN that addresses the above items and is acceptable to the ministry for the purpose of complying with the PNR and section 33 of the OMRR.

In addition, please be aware that the ministry continues to review Revolution’s permit application, and any permit that is issued will be based on all waste discharges (e.g. compostable materials, air contamination, effluent) that are applicable.

In your February 10 correspondence, you have also taken issue with the form of the EPN in that it is not the “actual application” form completed by Revolution which was submitted to the ministry on a “without prejudice” basis in August 2016. For practical reasons, the ministry accepts the one-page EPN for the purpose of providing public notification, as opposed to the six-page long application form.


However, if Revolution wishes to use the six-page long application form for the purpose of providing public notification, this would be acceptable to the ministry provided that the application contains the information required by section 2(1) of the PNR. The application submitted by Revolution to the ministry on August 4, 2016 (and dated August 8, 2016) on a “without prejudice” basis does not meet the requirements of section 2(1) of the PNR. In particular:

− Revolution states on page 1 of the application that the facility does not discharge any waste, which is inaccurate and would need to be removed; and

− There is no information provided on page 4 under the headings “discharge source and associated details”, “rate of discharge” and “contaminants or parameters in the discharge”, which must be filled in.

Therefore, for the purpose of complying with the PNR and section 33 of the OMRR, the ministry would accept the attached EPN, or the six-page application form with the information properly completed in accordance with the above.

Timelines

In my letter of January 19, 2017, there were timelines included for compliance with public notification requirements. Revolution requested an extension of 10-14 days on February 1, 2017. In addition, Revolution subsequently confirmed the date of application of February 3, 2017, which I will accept as the date for the purpose of calculating timelines under the PNR and section 33 of OMRR.

As such, taking this information into account, I have agreed to recalculate the timelines in my January 19, 2017 letter in accordance with the following (using the numbering in my January 19 letter):

− Section A(1) – Revolution must give notice of the application as set out in this section of the letter by February 24, 2017. Proof must be provided to a director within 30 days after the date the application was mailed or delivered.

− Section A(2) – Revolution must post the application on site no later than February 18, 2017, and provide a statement in writing to the director by March 3, 2017.

− Section A(2) – Revolution must post a copy of the application at the Canada Post Lytton office no later than February 24, 2017 and provide a statement in writing to the director by March 10, 2017.

− Section A(3) – Revolution must publish the application in the Ashcroft-Cache Creek Journal and the Bridge River Lillooet News by March 3, 2017, and provide the director with a full


page tear sheet within 30 days of the date of publication as proof that the application was published.

All other requirements in my January 19, 2017 letter are unchanged and remain in force. Failure to comply with the requirements of the PNR and section 33 of the OMRR may result in compliance and enforcement action by the ministry.

The Appeal

[29] On February 16, 2017, Revolution appealed the Director’s letter. Revolution identifies various errors of law and/or fact in the February 14th letter; specifically, that the Director erred by:

• determining that the facility does, or would, discharge waste for the purposes of the Act and the OMRR;

• determining that Revolution does not hold an “approval” in respect of the facility;

• determining that Revolution’s posting or publication of its application would not satisfy the posting, publication and notice requirements in sections 5 and 6 of the PNR;

• directing that Revolution:

i. may not post or publish the application it submitted for the purposes of the PNR;

ii. may not refer to the past “approval” in the posting or publication for the purposes of the PNR;

iii. must include an estimate of the volume of wet tonnes of compostable materials;

• requiring the posting or publication to contain information that Revolution considers to be false or misleading in a material respect;

• directing that Revolution post or publish a notice within deadlines that are unreasonable and impractical; and

• determining that Revolution’s failure or refusal to comply with the February 14th letter may result in compliance and enforcement action.

The Board’s decision on the jurisdictional issue

[30] As stated above, the Board issued its decision on the issue of jurisdiction on April 13, 2017 (Decision No. 2017-EMA-004(a)).

[31] The Board determined that while it is not clear that the Director has the jurisdiction to specify the form and content of notice, it is apparent that she believes that she does, and has imposed certain requirements on the content of the appropriate notice. The Board also determined that unless it is clear that the disputed portions of the February 14th letter are not decisions under section 99, the Board should not refuse to hear the subject matter of the appeal for lack of jurisdiction.


[32] Further the Board found that, in the present case, there is no dispute that the timelines established by the Director under section 33(3) of the OMRR are appealable. Those timelines are as follows:

− Section A(1) – Revolution must give notice of the application as set out in this section of the letter by February 24, 2017. Proof must be provided to a director within 30 days after the date the application was mailed or delivered.

− Section A(2) – Revolution must post a copy of the application at the Canada Post Lytton office no later than February 24, 2017 and provide a statement in writing to the director by March 10, 2017.

− Section A(3) – Revolution must publish the application in the Ashcroft-Cache Creek Journal and the Bridge River Lillooet News by March 3, 2017, and provide the director with a full page tear sheet within 30 days of the date of publication as proof that the application was published.

[33] In these paragraphs, the Director imposed requirements under subsections 33(3)(b),(d) and (e) of the OMRR and section 6(5) of the PNR.

[34] However, the Board also found that the timelines set for Revolution to “post the application on site no later than February 18, 2017, and provide a statement in writing to the director by March 3, 2017” (set out in the first “A2” in the letter), are not appealable decisions. These timelines are required by section 5(1)(a) of the PNR. It is a legislated requirement and the Director is simply providing the calculation for Revolution as a courtesy. Section 5(1) of the PNR states:

Posting requirements

5(1) If Schedule A requires that an application be posted, the applicant must do all of the following:

(a) within 15 days after the date of the application [in this case the agreed date of the application was February 3, 2017], post a readable copy of the application in a conspicuous place at all main road entrances to the property;

(b) keep the copy posted for a period of not less than 30 days;

(c) state in writing to a director the date the copy of the application was posted.

[Emphasis added]

[35] Accordingly, with the exception of the timelines set by section 5(1)(a) of the PNR, the Board found that the Director’s decision to impose timelines under section 33(3) of the OMRR, and her decision to specify the form and content of the notice under the PNR, are appealable decisions.

Revolution’s application for a stay of the Director’s Decision

[36] Revolution submits that a stay should be granted in the circumstances. It submits that denying a stay of the Director’s Decision, pending the Board’s decision


on the merits of the appeal, will cause it to suffer irreparable harm to its business and financial interests. In addition, Revolution submits that the balance of convenience favours granting a stay, because the harm that Revolution will suffer if a stay is denied outweighs any harm that the Director’s interests may suffer if a stay is granted.

[37] The Director opposes the application for a stay. The Director argues that there is no evidence that Revolution will suffer irreparable harm if a stay is denied. Moreover, the Director maintains that the balance of convenience favours denying a stay, because public interest considerations far outweigh any potential for harm to Revolution.

[38] Both parties provided affidavit evidence in support of their submissions.

ISSUE

[39] The Board has addressed the following issue in this preliminary decision:

1. Whether the Director’s Decision ought to be stayed on an interim basis until the Board issues a final decision on the merits of the appeal.

RELEVANT LEGISLATION AND CASE LAW

[40] Section 25 of the Administrative Tribunals Act, which applies to the Board under section 93.1 of the Act, empowers the Board to order stays:

Appeal does not operate as stay

25 The commencement of an appeal does not operate as a stay or suspend the operation of the decision being appealed unless the tribunal orders otherwise.

[41] In North Fraser Harbor Commission et al. v. Deputy Director of Waste Management (Environmental Appeal Board, Appeal No. 97-WAS-05(a), June 5, 1997), [1997] B.C.E.A. No. 42 (Q.L.), the Board concluded that the test set out in RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.); 1 S.C.R. 311 [RJR MacDonald] applies to applications for stays before the Board. That test requires an applicant for a stay to demonstrate the following:

1. there is a serious issue to be tried;

2. irreparable harm will result if the stay is not granted; and

3. the balance of convenience favors granting the stay.

[42] The onus is on Revolution, as the applicant for a stay, to demonstrate good and sufficient reasons why a stay should be granted.

Whether the Director’s Decision ought to be stayed on an interim basis until the Board issues a final decision on the merits of the appeal.

a) Serious Issue to be Determined in the Appeal

Revolution’s submissions


[43] Revolution submits that in RJR-MacDonald, the Supreme Court of Canada held that the threshold to satisfy the first stage of the test, i.e. whether there is a serious issue to be tried, is a low one and unless the case is frivolous or vexatious, or is a pure question of law, the inquiry should proceed to the next stage of the test4.

[44] Revolution submits that there are a number of serious questions to be determined in the appeal as set out in its grounds for appeal, which are listed in paragraph 30, above. Revolution argues that the appeal is neither frivolous nor vexatious, and it has satisfied the first requirement of the RJR-MacDonald test.

Director’s submissions

[45] The Director concedes that the appeal raises serious questions to be determined.

The Panel’s Findings

[46] Revolution’s Notice of Appeal raises serious issues to be determined in the appeal; the appeal is neither frivolous nor vexatious, and does not deal solely with a pure question of law. The Panel finds that there are serious issues to be determined by the Board.

[47] The Panel is satisfied that Revolution has met the low threshold at the first stage of the RJR-MacDonald test. Consequently, the Panel will proceed to consider the next stage of the RJR MacDonald test.

b) Irreparable Harm


[48] Revolution submits that the RJR-MacDonald test provides that at the second stage of the analysis, there is only one issue to be decided. As stated in RJR-MacDonald at p. 405 (paras. 63 - 64):

At this stage the only issue to be decided is whether a refusal to grant relief could so adversely affect the [applicant’s] own interest that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application.

“Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court’s decision …; where one party will suffer permanent market loss or irrevocable damage to its business reputation… or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined. …

[49] Revolution submits that if the Director’s Decision is not stayed pending the appeal, and it is required to comply with Director’s directions, the appeal will 4 RJR-MacDonald, supra at p. 337 (para. 55).


become moot as it will have already communicated facts that it considers to be untrue and the appeal will serve little or no purpose. This would put Revolution in an “intolerable situation” such that the damage could not be undone.

[50] Specifically, Revolution objects to the Director’s decision that it is not permitted to set out its position that it already holds an approval in respect of the Facility, and requires it to communicate to the public that it will discharge a specified number of wet tonnes of compostable materials per year.

[51] Revolution further submits that if it does not comply with the Director’s Decision, it may face compliance and enforcement action by the Ministry, and the Ministry may seek to have Revolution cease operating its composting facility. If it is forced to cease operating, Revolution will be forced to lay off the majority of its workforce, and its employees may relocate. A large percentage of the organic material produced in the Lower Mainland will have nowhere to go if Revolution ceases to operate.

[52] Revolution submits that the Board has granted a stay of a decision where the failure to grant the stay would render the appeal moot: Canadian Pacific Railway Company v. Engineer under the Water Act, 2010-WAT-014(a) [CP Railway]. The Board also granted a stay where the appellant faced a risk of harm to its business interests and reputation in the absence of a stay: Worthington Mackenzie Inc. and Daniel White v. Director, 2009-EMA-009(b) [Worthington Mackenzie Inc.].

[53] Revolution notes that the BC Supreme Court enjoined a bylaw that would prevent Revolution from accessing its facility. The Court found that interfering with Revolution’s access would result in its business being irreparably harmed: Revolution Infrastructure Inc. v. Lytton First Nation, 2016 BCSC 1562 [Revolution v. Lytton First Nation].

[54] Revolution submits that, even if it is successful in the appeal on the merits, it will have suffered a loss to its business reputation, business, goodwill and workforce, for which it will have no prospect of recovery if the Director’s Decision is not stayed pending the outcome of the appeal.

[55] In support of its submissions. Revolution provided two affidavits sworn by Ralph D. McRae, Chairman and Chief Executive Officer of both Revolution and Revolution Infrastructure Inc. Among other things, he attests to the consequences for Revolution if a stay is denied.

[56] Revolution objects to the Ministry’s submission which appends a printout from Revolution’s website as of May 18, 2017. This is discussed further below.


[57] The Director submits that Revolution will suffer no irreparable harm if the Board refuses to grant a stay of the Director’s Decision.

[58] The Director submits that for a stay to be ordered, the evidence demonstrating harm of an irreparable nature must be clear and not speculative: RBC Dominion Securities Inc. v. MacDonald, 2013 BCSC 992 [RBC Dominion Securities], at para. 26.


[59] The Director submits that there is no evidence in support of Revolution’s assertion that compliance, or refusal to comply, with the Director’s Decision will cause losses to its reputation, business, goodwill or workforce. The Director notes that there are only two phrases in dispute as it relates to the form of the EPN at issue:

i. Revolution wants to add to the EPN the phrase “despite having already received an approval”; and

ii. Revolution does not wish to include in the EPN the sentence “(t)he maximum amount of compostable materials accepted at the facility is up to 125, 000 wet tonnes of organic matter per year”.

[60] The Director submits that the omission of the reference to a purported prior approval in the EPN is logically incapable of causing reputational harm or loss of goodwill in relation to a facility that is applying for a permit, and is likely to confuse those who read the notice. Further, the information about the design capacity for intake of compostable materials at Revolution’s facility is part of the information that Revolution provided to the Director in support of the permit application, and is (or was as of May 18, 2017) publicly available on Revolution’s website. Indeed, all of the information contained in the EPN that the Director suggested would be acceptable came from Revolution as part of its application for a permit under the OMRR.

[61] It is important to note, the Director submits, that Revolution is suggesting that any reference to the capacity of the facility to accept organic matter would be untruthful and harmful to its reputation, business interests and goodwill.

[62] The Director submits that even if a stay is not granted, and Revolution fails to comply with the Director’s Decision, there are a number of steps in the “chain of causation” before any demise of Revolution’s facility might occur. If Revolution fails to publish the suggested EPN, it is likely that the permitting process would come to an end, and if Revolution continues its operations at the ranch without complying with section 33 of the OMRR, compliance and enforcement action may include:

i. The Ministry may confirm whether Revolution introduces or causes or allows waste to be introduced into the environment as provided for in sections 6(2) and (3) of the Act;

ii. If confirmed, the Director may impose an administrative penalty under section 115 of the Act;

iii. Revolution may appeal the administrative penalty to the Board;

iv. The Board will have the issue of whether Revolution is required to have a permit under OMRR, and whether it has a prior approval before it, for determination;

v. Revolution may seek a stay of the administrative penalty and, if granted by the Board, Revolution’s operations will continue; if refused, then Revolution may seek a judicial review of the refusal;

vi. If the court refuses to grant a stay of the decision, enforcement action may continue;


vii. Only then, may Revolution’s business operations possibly sustain the harm alleged.

[63] The Director submits that it requires a leap that is not supported by the evidence to suggest that Revolution’s failure to publish the suggested EPN will lead to the demise of its operations.

[64] The Director submits that in CP Railway, a stay of a remediation order was sought from the Board, and the Board found that failure to grant the stay would render the appeal moot because the appellant would have already been required to complete the works and spend money before the appeal could be heard. In this case, there is no remediation order at issue, and the Decision does not require any works to be completed. Also, the appeal will not be moot if Revolution refuses to publish the suggested EPN.

[65] The Director submits that in this case, unlike Worthington Mackenzie Inc., there is no evidence that Revolution faces risk of harm to its business interests and reputation if the stay is not granted.

[66] The Director also submits that Revolution v. Lytton First Nation is distinguishable. In that case, Revolution sought an injunction to prevent the First Nation from interfering with the only suitable road for truck traffic into and out of Revolution’s facility. In this case, neither the publication nor the failure to publish the suggested EPN will prevent Revolution from operating its facility at McKay Ranch.

[67] In support of those submissions, the Director provided affidavits sworn by Dr. Cindy Meays, who is the Director, and Jennifer Maguire, the Executive Director of Regional Operations Branch of the Ministry’s Environmental Protection Division.

The Panel’s findings

[68] The Panel finds that the evidence shows that Revolution carried out extensive public consultation in 2010 and 2011 with the Lytton First Nation, the Village of Lytton, and the Botanie Valley community during the planning and development that preceded its operation at its composting facility at the McKay Ranch5. Revolution worked closely with the Ministry and with the Ministries of Aboriginal Relations, Transport and Infrastructure and Economic Development. The facility was originally designed to produce up to 19,000 tonnes of Class A compost.

[69] Revolution has not suggested that the public consultation that it undertook in 2010 and 2011 caused it to suffer “a loss to its business reputation, business, goodwill and workforce for which it will have no prospect of recovery” or, indeed, any loss at all.

[70] The Panel finds that, after the original public consultation by Revolution in 2010 and 2011, Revolution sought to increase the facility’s capacity from 19,000 tonnes to 125,000 tonnes per year. In that regard, Mr. McRae’s affidavit evidence states, in part, as follows:

5 McRae Affidavit sworn February 17, 2017, para. 5.


The Facility was originally developed to produce up to 19,000 tonnes of Class A compost, with all of the compost being used in Revolution’s organic farming operations. In October 2012, Revolution sought to increase the capacity of the Facility to up to 125,000 tonnes per year and, in keeping with s. 23(2) of OMRR, obtained and provided to the Ministry with an Environmental Impact Study prepared by a qualified professional. …6

[Emphasis added]

[71] The Panel finds that the OMRR was subsequently amended on June 9, 2016 to require composting facilities that process food waste or biosolids and have a design production capacity of 5,000 tonnes or more of compost per year to have a permit unless the facility already holds an approval or operational certificate for that composting facility. Section 3.1 of the OMRR states:

3.1 Section 2(2) applies to a discharger in relation to a composting facility that processes food waste or biosolids and has a design production capacity of 5000 tonnes or more of compost per year only if the discharger holds a permit for the composting facility, unless the discharger holds an approval or operational certificate for that composting facility.

[72] The Panel finds that Revolution was notified by the Ministry that if its facility met the criteria in section 3.1 of the OMRR, it would be required to apply for a permit by August 8, 20167 and would need to comply with the requirements of the PNR under the Act. Revolution applied for a permit, albeit under protest.

[73] Although Revolution submitted its permit application under protest and continues to challenge whether the facility needs a permit, Revolution did file a permit application, and the public notice requirements in sections 4(1) and 5(1) of the PNR are triggered once a permit application is filed. While some aspects of the public notification and consultation process are at the director’s discretion under that regulation, some are not. The Board has already found that the timelines for posting in section 5(1) of the PNR are a legislated requirement and are not appealable to the Board (see paras. 85 to 87 of Decision No. 2017-EMA-004(a)). In that regard, Revolution’s permit application triggered certain notice requirements that the Board has no authority to stay. The Panel finds that this weakens Revolution’s claim that a stay would prevent it from suffering harm arising from complying with the aspects of public notification that were required by the Director.

[74] The Panel finds that there is no evidence before it to support Revolution’s assertion that if it complies with the Director’s Decision and posts a public notice that identifies the increased capacity that Revolution sought for the facility, as opposed to the facility’s current capacity, it will suffer irreparable harm.

[75] The Panel finds that while Revolution might not agree with the necessity of including the statement regarding the maximum tonnage of acceptable organic matter at the facility (i.e. its input), the evidence before the Panel is that the factual basis for the statement is derived directly from information provided by

6 McRae Affidavit sworn February 17, 2017, para. 13. 7 Exhibit “A” to Affidavit of Cindy Meays sworn May 18, 2017.


Revolution to the Ministry and to this Panel8. The Panel further finds that Revolution’s public website included, at least until very recently9, a statement that:

We are presently constructed to receive and process about 120,000 tonnes per year.

[76] In its reply submissions, Revolution maintains that this statement was erroneous and was removed from its website at least as of May 20, 2017, if not earlier. In his affidavit sworn on May 25, 2017, Mr. McRae states that the facility is not currently constructed to receive and process 120,000 tonnes of organic material per year. Yet, Mr. McRae’s February 17, 2017 affidavit includes an exhibit copy of a January 9, 2017 letter from Revolution’s legal counsel to the Director which states, at page 5, “… Revolution has received all necessary approvals to operate its Facility to 125,000 tonnes per year.” This maximum potential operating capacity is also consistent with Mr. McRae’s February 17, 2017 affidavit where he stated that Revolution sought to increase the facility’s capacity to “up to” 125,000 tonnes per year.

[77] While the Board will not reach a final conclusion about the proper number to be included in the notice until after hearing the merits of the appeal, the Panel finds that the EPN at issue, which is appended to the Decision, requires that Revolution disclose to the public that “The maximum amount of compostable materials accepted at the facility is up to 125,000 wet tonnes of organic matter per year” [underlining added], and the maximum amount of Class A compost that will be produced from the facility is 32,784 tonnes per year. There is no evidence before the Panel that notifying the public of this information, which is derived from information provided to the Director by Revolution, will cause any harm to Revolution, let alone irreparable harm.

[78] Specifically, the Panel finds that Revolution has failed to provide any evidence to support its claim that posting the EPN in the language acceptable to the Director would cause harm to Revolution’s reputation. Neither is there any evidence that Revolution would suffer any business loss if the notice were posted. For example, Revolution has not identified any contracts which will be lost or business obligations which it will be unable to meet if the EPN is posted in the language acceptable to the Director.

[79] The Panel also finds that Revolution’s appeal will not be rendered moot if Revolution publishes the EPN in the terms agreeable to the Director. The Decision required Revolution to post the notice at the facility and the Canada Post office in Lytton in late February, and publish it in two local newspapers in early March 2017. Those timelines have lapsed, and even if a stay is denied, posting and publication would not occur until sometime after the voluntary stay ends on August 31, 2017. After posting and publication, the next step in the consultation process is that the public would have 30 days to send comments to the Ministry. The Director advises that Revolution would also have to prepare a consultation report, and engage with First Nations, although consultation with First Nations is not part of the appealed

8 See McRae Affidavit, sworn February 17, 2017. 9 See printout of Revolution’s website http://aforceofnature.ca/facilities/lytton as at May 18, 2017 at 6:50 a.m.

http://aforceofnature.ca/facilities/lytton%20as%20at%20May%2018


Decision. Meanwhile, if the Board ultimately concludes that the facility needs a permit but the Director made errors regarding the notice requirements, some or all of the public consultation process may need to be re-done. Alternatively, if the Board concludes that Revolution’s facility does not require a permit, Revolution would simply continue to operate as it has. In either scenario, Revolution would have incurred costs from engaging in consultation, but there is no evidence that the act of engaging in consultation, or the cost of doing so, is likely to irreparably harm Revolution’s operations, finances, or business interests.

[80] Conversely, there is no evidence before the Panel that if Revolution refuses to post the EPN in the terms agreeable to the Director, during the period from August 31, 2017 until the Board issues a decision on the merits of the appeal, it is likely that she will take enforcement action against Revolution and seek to have Revolution cease its composting operation leading to loss of goodwill, workforce layoffs, loss of its skilled employees, economic harm to the community of Lytton, and the loss of a necessary public service – i.e., diverting organic material from disposal.

[81] The Panel also finds that, even if the Director chose to pursue compliance and enforcement action before the appeal is heard and determined, the Director would need to confirm that Revolution’s operations were not in compliance with the Act by introducing or causing or allowing waste to be impermissibly introduced into the environment, and only then could the Director impose an administrative penalty. Revolution could appeal the imposition of such a penalty, and the Board would then have to determine whether Revolution requires a permit under the OMRR or whether it is exempted from that requirement because of a prior approval. This potential series of events would not even begin until after the voluntary stay ends on August 31, 2017, and would likely take many months to unfold, such that the present appeal might be decided before any Ministry action that may impact Revolution’s operations. As the Board noted in its decision on the preliminary issue of jurisdiction:

It is apparent from the correspondence before the Panel, and highlighted in Revolution’s Notice of Appeal, that the real question that it seeks to have decided is whether it requires a permit at all.10

[82] The Panel further finds that if Revolution is subject to an administrative penalty before its appeal of the Decision is concluded, Revolution has a right to appeal the penalty, and the penalty would not be due until after the conclusion of that appeal, pursuant to section 8(c) of the Administrative Penalties (Environmental Management Act) Regulation.

[83] For all of these reasons, the Panel finds that the harm alleged by Revolution is entirely speculative. The Court in RBC Dominion Securities held at para. 26 that it is not sufficient for an applicant to simply assert that it will suffer irreparable harm without clear evidence to support those assertions:

10 Revolution Organics, Limited Partnership v. Director (Environmental Management Act) 2017-EMA-004(a), at para. 71.


The term “irreparable harm” refers to the nature of the harm at issue and not to its magnitude. For an interlocutory injunction to be ordered, the evidence demonstrating harm of an irreparable nature must be clear and not speculative: RJR-MacDonald Inc.

[84] In short, there is no evidence that Revolution’s operation is in jeopardy of shutting down in the near future, or that its appeal would be rendered moot, if a stay is denied. It follows that there is no evidence that Revolution will suffer any reasonably foreseeable and irreparable harm if the stay is denied.

[85] The Panel finds that Revolution has failed to satisfy the second stage of the RJR-MacDonald test.

c) Balance of convenience


[86] Revolution submits that the Board stated in Worthington Mackenzie Inc. that this part of the test requires the Panel to determine which party will suffer the greatest harm from the granting or denial of the stay sought. Revolution submits that it will suffer greater harm if a stay is denied than will the Ministry if the stay is granted. The Ministry will not suffer any prejudice if there is a delay in the application process while this appeal is being heard and determined.

[87] If a stay is not granted, Revolution submits that it will suffer significant harm including serious reputational harm and the possibility of compliance or enforcement action that could result in financial losses to Revolution and its employees.

[88] Revolution submits that in CP Railway, the Board found that the mootness of an appeal is a factor that weighed the balance of convenience in the applicant’s favour. Granting a stay is the only way to facilitate a meaningful right of appeal.

[89] Revolution further submits that there is no prejudice to the Director’s ability to exercise her regulatory oversight of the composting facility such that the public interest will suffer, as Revolution has already provided, and the Director’s staff have approved, an Operations Plan and the EIS, and Revolution is not aware of any other requirement that could impose a higher obligation on composting operators than Revolution has already undertaken. Ministry staff have inspected the facility as recently as January 2017 and were satisfied with the operation11.

[90] Revolution asserts that the facility has not produced more than 19,000 tonnes of compost and will not do so in 2017, and therefore, the OMRR has not yet been triggered12. Further, the Ministry’s concerns about recommendations in the EIS are unfounded; the Geo-Membrane was inspected in March 2017 and the liner is intact and performing properly13. The vast majority of the complaints that the Ministry has received relating to the facility are not credible and were generated by

11 See, McRae affidavit, sworn May 25, 2017 at para. 30. 12 See, McRae affidavit, sworn May 25, 2017 at para. 32. 13 See, McRae affidavit, sworn May 25, 2017 at para. 36.


a campaign which encourages individuals to use a complaint telephone line. Revolution has an Odour Management Plan in place and it follows that plan.

[91] Revolution submits that it has spent hundreds of thousands of dollars in public and First Nations consultation – well beyond what is required, and as late as Fall 2016 was continuing to attempt to engage with the Lytton First Nation.

[92] Finally, Revolution submits that extending the current stay will not give Revolution an unfair advantage over its competitors, as it has been in compliance throughout its operating term, has engaged with the public and First Nations extensively, and it is only seeking an extension of “a few short weeks” to a stay that has been in place by consent since February. It is not the Director’s role to regulate competition in the industry.


[93] The Director submits that in RJR-MacDonald at para. 76, the court described the proof required to satisfy this stage of the inquiry.

… In the case of a public authority, the onus of demonstrating irreparable harm to the public interest is less than that of a private applicant. This is partly a function of the nature of the public authority and partly a function of the action sought to be enjoined. The test will nearly always be satisfied simply upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation, or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm would result from the restraint of that action.

[94] The Director further submits that when both parties allege that inconvenience will be suffered, either party may “tip the scales of convenience in its favour by demonstrating to the court a compelling public interest in the granting or refusal of the relief sought: RJR-MacDonald at para. 71.

[95] The public interest in the timely processing of permit applications allows for potential site-specific requirements to reduce environmental impacts, address and reduce impacts from odour, improve compliance monitoring, and increase transparency and address concerns regarding public notification14.

[96] The Director submits that delay in processing Revolution’s permit application prejudices the Ministry’s ability to exercise its oversight responsibilities under the Act and the OMRR in the public interest. Those oversight responsibilities may include site-specific requirements in any permit to improve compliance monitoring including: schedules for inspection and maintenance of works to ensure leachate is not being discharged into the environment; odour management requirements; environmental monitoring conditions for ground water, surface water and air; reporting requirements to increase transparency and address public concerns, and requirements to keep plans current and notify the director of changes to plans.

14 See Meays affidavit, sworn May 18, 2017 at para. 33.


[97] The Director has identified particular concerns about Revolution’s operation that she submits give rise to a public interest in the timely adjudication of Revolution’s permit application. For example, the EIS notes that there could be environmental impacts from leachate water discharge during the feedstock receiving/storage, and composting activities could affect surface and groundwater quality and groundwater quality; nutrient leaching in storage areas could also affect groundwater quality.

[98] In the EIS, Revolution’s qualified professional (the “QP”) recommended that Revolution install two groundwater monitoring wells and two surface water sampling locations to monitor water quality – in particular for nitrogen, phosphorous and fecal coliform - prior to annual production exceeding 19,000 tonnes. In correspondence to the Ministry dated November 10, 2016, Revolution stated that it has not installed the monitoring wells and surface water sampling sites as it has not, as yet, produced 19,000 tonnes of compost annually. The Director submits that Revolution’s website stated (as of May 18, 2017) that it is presently constructed to receive and process about 120,000 tonnes per year.

[99] The Director submits that, if a permit is issued, she could consider implementing specific conditions for monitoring and reporting to the Ministry on the impact of groundwater and surface water by Revolution’s operations at the facility.

[100] The Director further submits that Revolution’s Surface Water and Groundwater Features and Potential Impact Monitoring document indicates all leachate will be contained by a facility-wide, continuously seam-welded 40 millimetre HDPE (high density polyethylene) geo-membrane and a bio-swale, backed by a berm, which will provide further run-off containment assurance. Revolution’s EIS recommended that the geo-membrane be inspected every five years, but as of November 10, 2016, Revolution indicated that no formal inspections of the membrane had been conducted. The Director submits that a delay in the permitting process could delay inspections if Revolution does not voluntarily conduct them.

[101] The Director submits that she has particular concerns over odour emissions at Revolution’s composting facility, as the Ministry has received over 1,000 complaints about the facility since 2014, and most of those complaints were regarding odour generated by the facility.

[102] The Director submits that the Site Plan for Revolution’s facility shows a leachate ditch around three sides of the compost pad, with a leachate ditch emptying into one of two leachate ponds. Revolution’s Operations Plan contains a Leachate Management Plan intended to minimize the leachate generated by the composting facility and manage it such that there are no significant or long-lasting impacts to the surrounding environment15.

[103] The Director submits that, if a permit is issued, she could:

• establish an inspection schedule for the geo-membrane and impermeable surfaces and could consider setting requirements for inspection and maintenance of works at the facility;

15 See Meay’s affidavit sworn May 18, 2017, at para. 41


• stipulate site-specific requirements for leachate management, and

• set site-specific requirements for odour management which would be enforceable and which would mitigate the public’s concerns in relation to Revolution’s composting facility16.

[104] Finally, the Director submits that as part of the permitting process, proponents such as Revolution are required to prepare a public consultation report (detailing contact and input received) and a report outlining any First Nations engagement that they have undertaken with respect to the permit application. The Ministry depends on public notification and input received from the consultation report so that the Director can consider public interests when adjudicating permit applications and overseeing the operation of the facilities under the Act. Delay in publicizing Revolution’s information and beginning consultation with First Nations, as part of the application process, prevents the public from playing a meaningful part in the process and providing timely feedback to the Ministry.

[105] The Director submits that delay in publishing the EPN and proceeding with consultation allows Revolution to operate in a “less-than-ideal” regulatory environment than provided for in the OMRR, and gives Revolution an advantage over its competitors who have adhered to the permitting process. Other composting facilities that are following the process are incurring costs for the public consultation and First Nations engagement in addition to costs to comply with permit conditions.

[106] The Director submits that for all the above reasons, the balance of convenience militates against granting a stay in this instance.

The Panel’s findings

[107] The Panel finds that evidence of irreparable harm is relevant to the inquiry regarding the balance of convenience, as is the issue of mootness: CP Railway at para. 46. That said, in this instance, the Panel has already found that there is no evidence that Revolution will suffer any significant harm, let alone irreparable harm, if the stay is not granted. Revolution has provided no evidence to support its submission that it will suffer significant harm including serious reputational harm if the stay is denied. Further, the best evidence before the Panel is that the possibility of compliance or enforcement action that could result in financial losses to Revolution and its employees is remote. Even if an administrative penalty was levied against Revolution, it could appeal the penalty which would delay any requirement to pay the penalty until after that appeal was decided. There is no reasonable likelihood that Revolution will suffer any of the harms alleged before the appeal on the merits is heard and determined. Similarly, the Panel has found that Revolution’s appeal will not be moot if the stay is not granted.

[108] The Panel finds that delaying the completion of the public notification requirements in the Decision would hamper the Director in her exercise of her oversight responsibilities under the Act and the OMRR in the public interest. Any inconvenience or harm to the Director is, in this instance, an inconvenience or harm

16 See Meay’s affidavit sworn May 18, 2017, at para. 45


to the public interest, as there is public interest in ensuring that proponents comply with the permitting process in a timely fashion.

[109] The weight accorded to public interest concerns is partly a function of the nature of the specific legislation under attack: RJR-MacDonald Inc. at p. 351 (para. 76). The OMRR, which is central to this appeal and was a basis for the Director’s Decision, was adopted to address public concern regarding composting facilities and their potential impact on the surrounding environment and the public. The Panel finds that the public has a strong interest in ensuring that composting facilities, whose operations have the potential to discharge waste into the environment, are subject to regulatory oversight so that there are no significant or long-lasting impacts on the surrounding environment.

[110] The Panel finds that the Director has reason to be concerned, on behalf of the public, about the potential impact on the environment of Revolution’s composting facility, given that the EIS has identified the potential for leachate water discharge during the feedstock receiving/storage and composting activities to affect surface water and, further, given the potential for leachate water discharge and nutrient leaching affecting groundwater quality. The Panel finds that the Director’s concern is justifiable given that Revolution’s QP recommended groundwater monitoring and surface water sampling for parameters of concern to monitor water quality prior to annual production exceeding 19,000 tonnes, but those recommendations have not been acted upon.

[111] The Panel also finds that the public interest in managing odour emissions from the facility has been demonstrated by the number of complaints that the Ministry has received.

[112] In addition, the Panel finds that the public has a real interest in ensuring that works at Revolution’s facility are properly maintained and regularly inspected to reduce the likelihood of any harmful impact on the environment brought about by a failure in the liner or other works.

[113] However, the Panel cautions that these findings are made solely for the purpose of deciding this preliminary stay application, and have no bearing on the merits of the appeal, which will be decided after a full hearing of the parties’ evidence and submissions.

[114] The Panel finds that an interim stay until the appeal is determined would not be for “a few short weeks” as suggested by the Director. The Board’s experience is that appeals of this nature may raise complex issues of law and fact, and it may take several months after the voluntary stay ends on August 31, 2017 before a decision on the merits is rendered.

[115] However, the Panel finds that the public interest in denying a stay and ensuring that the completion of the public notification requirements in the Decision in a timely manner, in this instance, outweighs any inconvenience to Revolution even if its appeal is ultimately successful. The Panel finds that the balance of convenience tips in favour of the public interest in ensuring that public notification of Revolution’s permit application proceeds in a timely fashion.


DECISION

[116] The Panel has considered all the submissions and arguments made, whether or not they have been specifically referenced herein.

[117] For the reasons provided above, the application for a stay of the Director’s Decision pending the determination of the appeal is denied. However, for further certainty, the Board orders that the voluntary stay that the Director agreed to until August 31, 2017, remains in place until that date.

“Brenda L. Edwards”

Brenda L. Edwards, Panel Chair Environmental Appeal Board June 20, 2017

environmental telephone: facsimile: appeal board po box ...[11] revolution’s compost facility was...

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