AgriLaw: Petition Drains – Who Pays the Environmental Assessment Costs?

October 2016

Landowners desiring to improve agricultural drainage are authorized under Ontario’s Drainage Act to petition area municipalities for design and construction of a municipal drain with related costs to be assessed against all lands and roads within the drainage area.  The regulatory process for petition drains under the Drainage Act requires the municipality to notify the regional conservation authority of the proposed municipal drain and either the conservation authority or the municipality may, if considered necessary, request an “environmental appraisal” with the cost to be born “by the party that requested it”.  However, the parallel provincial regulatory regime governing the operations of conservation authorities under the Conservation Authorities Act authorizes conservation authorities to impose requirements in response to development permit applications affecting a water course or wetland including an “environmental impact study”.  Where a conservation authority requests such an environmental assessment in connection with a proposed municipal drain, can petitioning landowners properly be assessed this cost?

In a recent decision of the Agricultural, Food and Rural Affairs Appeal Tribunal, the Tribunal considered an appeal by an assessed landowner for the costs of an “environmental impact study” required by a conservation authority in response to a petition by area landowners for a municipal drain. The Tribunal provided the following outline of the facts underlying this appeal:

“Colloquially speaking, this matter concerns a full time farmer who wanted to drain his cleared, worked agricultural land through a low, wet bush and a cattle-tramped low run (a man-made version is called a ditch) that contained some 28 minnows. The petitioning landowner was assessed as part of the assessment schedule in the Engineer’s report, a rateable bill for $49,944 for an ‘environmental impact study’ allegedly required for a permit the landowner neither applied for nor sought.

“The problem is that the farmer initiated the process under the Drainage Act … which expressly states that should a conservation authority or government request an ‘environmental appraisal’ for a new drain, the requestor has to pay for it.

“As noted, the farmer never applied to the CA for any permits. Nonetheless, the CA took over jurisdiction, admittedly ignorant of certain parts of the Drainage Act. The CA prosecuted its own CA mandate over the farmer and his drain request with great earnestness, if not zealously.

“The CA was indifferent to the ‘appeals’, actually supplications, of the farmer concerning the $49,944.00, as was the municipality to which the petition for drainage was properly submitted under the Act.  The farmer appealed to the Tribunal.”

In allowing the appeal and directing that the municipality be required to pay the costs of the environmental impact study, the Tribunal determined that the conservation authority’s request for an “environmental impact study” under its regulatory regime was in fact a request by the conservation authority for an “environmental appraisal” under the Drainage Act.  However, a majority of the Tribunal determined that it did not have jurisdiction under the Drainage Act to require the conservation authority to pay these costs.  It concluded:

 “What the Tribunal has ascertained under law (rather than equity) is that there are two parallel regulatory schemes. Neither is inconsistent with the other.  Technically phrased:  obedience to one does not necessitate disobedience to the other.  The CA has the right to request an environmental appraisal under the Drainage Act or its own regulatory scheme.  There is no overt or even nuance conflict between the regulatory regimes.  Even though the CA dithered regarding the petition process under the Drainage Act, it could still invoke the processes under the Conservation Authorities Act.”

In imposing the costs of the environmental impact study on the municipality, the Tribunal stated:

“A somewhat forgotten party here is the Municipality. The Municipality failed to monitor, supervise or identify problems with the process followed or actions taken or not taken by the engineer.  There was no request for a preliminary report.  The Municipality also was indifferent to the role, action and involvement of the CA in a petition drain context.  Alertness could have foreclosed the misunderstandings and identified that the CA was acting through ignorance or an assumed paramountcy of its regulations.  The Municipality should bear the consequences of that inaction, not the farmer/landowner who at this point, has been assessed most of costs of the environmental impact study, without any notice of quantum or the right to abandon the process.”

A dissenting member of the Tribunal would have imposed the disputed costs on the conservation authority. In support of this conclusion, the dissenting member stated:

“The CA claims that the Engineer was preparing the EA under the Conservation Authorities Act, but the entire project was authorized under the Drainage Act and the studies are one and the same in content; therefore, the environmental study was a Drainage Act EA and not an EA under the CA regulations …

“The interpretation by the CA and my colleagues could result in conservation authorities being able to circumvent the Drainage Act process by waiting more than 30 days to request an EA. An Act that specifically addresses the cost allocation of an EA should not be thwarted by the dithering of a public body.  The fact that the CA did not request the study within 30 days, by this argument, compounds the problems associated with the excessive cost of this EA, as the Drainage Act process is ordered in such a way as to allow petitioners and other owners to know of possible environmental costs early in the process, with an opportunity to withdraw from the petition being provided before the Engineer’s report is prepared.  Allowing additional significant costs to be incurred late in the process, after the specific appeal and withdrawal opportunities have occurred, or should have occurred, alters the carefully constructed scheme of the Drainage Act.”

Petition drains are authorized under the Drainage Act to improve agricultural drainage.  While both municipalities and conservation authorities may request environmental assessment as part of the approval process, the costs of the environmental assessment are to be borne by the conservation authority or municipality requesting the environmental assessment.  Benefiting landowners cannot be assessed these costs as part of their proportionate cost of the petition drain.

Author

Paul practises mainly in the areas of environmental law, energy law, and commercial litigation. He is author of "Civil Procedure in Practice" and a regular contributor of articles to various journals. Paul is certified by the Law Society as a Specialist in Civil Litigation. More →