In this decision the Supreme Court of Canada ("SCC") ruled that a mining project located in territory covered by the James Bay and Northern Quebec Agreement (the "James Bay Agreement") must be reviewed under the Canadian Environmental Assessment Act ("CEAA") before Fisheries and Oceans Canada (DFO) can issue an authorization for the destruction of fish habitat under s. 35(2) of the federal Fisheries Act.
The subject of the appeal was a proposed vanadium mine in the vicinity of Chibougamau, Quebec (the Project). The Project will involve disruptions to watercourses and lakes in the area, as well as construction of tailings ponds, all of which will result in the harmful alteration of fish habitat. Accordingly, the Project required a permit under the Fisheries Act before it could proceed. The issue on appeal was whether such a permit would be issued by DFO automatically, following a provincial environmental review process mandated under the James Bay Agreement, or whether a separate federal CEAA process would be required
The SCC, in a 5 to 4 decision, held that a separate CEAA process was required and the James Bay Agreement does not override the CEAA.
The majority held that the terms of the James Bay Agreement are lengthy, precise and must be interpreted like a modern contract among parties of equal sophistication. The James Bay Agreement contemplated an environmental review process leading up to the decision of the provincial administrator, as well as federal approvals where necessary. Further, the majority held that, under the James Bay Agreement, the federal government did not give up its constitutional jurisdiction in respect of fisheries in favour of the provincial process, particularly given the Quebec Cabinet's veto power over that process. As such, the majority saw no inconsistency in having the CEAA review process follow the review process set out in the Agreement. This result was consistent with the fact that the federal government has no input on the assessment process mandated by the James Bay Agreement.
The majority acknowledged that co-ordination of the federal and provincial assessments would be preferable, as long as the requirements of each process could be met. Here, the provincial assessment mandated by the James Bay Agreement was much less comprehensive (as to fisheries matters) than that which the CEAA requires, supporting the majority's decision.
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