In mid-February, the Alberta Court of King’s Bench issued its decision in Skibsted v Alberta (Environment and Protected Areas), the latest decision in an ongoing legal battle over the proposed Badlands Motorsports Resort (BMR) near Rosebud, Alberta. This decision was a judicial review of an appeal decision made by the Environmental Appeals Board (EAB/Board) and its recommendations to the Minister of Environment and Protected Areas to uphold approvals issued under the Water Act, allowing disturbance to wetlands. The EAB also recommended that the approvals be amended to include conditions requiring a Wetland Monitoring Program Proposal and a Wetland Avoidance Report.
The Court found the EAB’s decision to be unreasonable for several reasons including a failure to consider evidence related to the Bank Swallow which is a threatened species and migratory bird. In addition, the Court found that the EAB misinterpreted and misapplied the precautionary principle which provides that lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation where there are threats of serious or irreversible damage. The Court also found that the EAB process had resulted in breaches of procedural fairness and a reasonable apprehension of bias.
As a result, the Court quashed the decision of the EAB and the Minister (who had accepted the recommendations of the EAB). The matter has been remitted to the EAB for a new hearing. It is noted that upon rehearing the matter, it is possible that the EAB and Minister will reach a similar conclusion upholding the issuance of the approvals.
The Badlands Motorsports Resort
The BMR is proposed to consist of several motorsport tracks, as well as commercial and residential developments located on 425 acres of private land. While Kneehill County has already approved the area structure plan and zoning (as Bylaw 1597) for the BMR, this is not the only authorization required for such a significant undertaking. Indeed, the Skibsted decision considers – and ultimately quashes – approvals that were issued by Alberta Environment and Protected Areas (EPA) under the Water Act to allow impacts on wetlands.
The proposed location for BMR is within an Environmentally Significant Area identified in a 2010 Kneehill County Report. In addition, the BMR will destroy or otherwise impact wetlands; alter banks or bluffs within the Rosebud River Valley; and impact bird species such as the Bank Swallow which is a migratory bird and species at risk (see Save the Rosebud website).
Background to the Skibsted Decision
Because construction of the BMR requires filling in 2 wetlands (Wetland 2 and 3) and modification of 3 wetlands (Wetland 1, 4 and 5), as well as construction of a stormwater management system, approval under the Water Act is required. In 2020, the designated Director under the Water Act granted approvals allowing these activities. The applicants (a group of individuals and corporations that are adjacent to or in the vicinity of the proposed BMR site) appealed the decision to issue the approvals to the Environmental Appeals Board (EAB).
The EAB upheld the Director’s decision and recommended it be confirmed by the Minister of Environment and Protected Areas (Minister), albeit with different terms and conditions than those imposed by the Director. The EAB decision is here. The Minister accepted the recommendations of the EAB and the approvals were confirmed with amended terms and conditions. The amended terms and conditions include requirements to submit a Wetland Monitoring Program Proposal and to provide an avoidance report prior to disturbing Wetland 2 to document reasons why Wetland 2 cannot be avoided.
The applicants then sought judicial review of the decisions made by the EAB and the Minister. The applicants asked the Court of King’s Bench to quash the decisions and to remit the matter back to the EAB for rehearing. Ultimately, the Court determined that the EAB and Ministerial decisions ought to be quashed and the matter heard again by the EAB. It is noted that upon rehearing the matter, it is possible that the EAB and Minister will reach a similar conclusion upholding the issuance of the approvals.
The Skibsted Decision
Several grounds for judicial review were raised by the applicants:
- The EAB failed to consider relevant evidence related to the Bank Swallow which is a threatened species listed under the federal Species at Risk Act (SARA).
- The EAB misinterpreted and misapplied the precautionary principle.
- The EAB fettered its discretion by failing to consider the economic viability of the project.
- The EAB decision to impose onus on appellants to provide evidence and argument to demonstrate that the Director’s approval should be reversed or varied was unreasonable.
- The EAB applied the wrong standard of proof.
- There is reasonable apprehension of institutional bias or of bias on the facts of this particular case.
- The EAB breached its duty of procedural fairness.
The Court concluded that the EAB had failed to consider relevant evidence related to the Bank Swallow and that this finding alone was sufficient grounds to remit the matter back to the EAB. However, the Court addressed the other grounds for judicial review as well.
Failure to Consider Evidence Related to the Bank Swallow
Although not available at the time of the Director’s decision on issuance of the approvals, the SARA recovery strategy for Bank Swallows was finalized by the time of the EAB hearing. The recovery strategy identified critical habitat as that “within a distance of 5km from known colonies to capture the dynamic nature of nesting habitat and based on between-year dispersal distances of the Bank Swallow” and a 500m radial distance around the shoreline of the waterbodies where colonies occur (para. 51 citing the recovery strategy). The recovery strategy also noted that conversion of natural habitats and farmland for residential and commercial development, as well as wetland and grassland loss, are a threat to Bank Swallow population as this results in loss of foraging habitat near nesting habitat.
The applicants had submitted evidence and argument to the EAB about the designation of wetlands affected by the approvals as being critical habitat for the Bank Swallow. Even though this was identified by the EAB as a key issue for determination, the EAB’s reasons and recommendations to the Minister did not address the issue. The EAB, in its decision, stated that it is not within the Director’s or its jurisdiction to ensure compliance with SARA rather it is used only to identify species that should be considered. The EAB found that the applicants did not provide conclusive evidence that the wetlands impacted by the BMR are the only feeding grounds for the Bank Swallows, that there was insufficient evidence of potential harm to the Bank Swallows and that mitigation measures would be taken during construction. The EAB also noted that a new condition to require a Wetland Monitoring and Reporting program would minimize potential impacts to the Bank Swallows.
The Court found the EAB’s decision unreasonable as it relates to the impacts of the approval on the Bank Swallow for several reasons. As stated by the Court:
[79] … The content of the Recovery Strategy paired with the other evidence filed by the Applicants
was relevant to the issue of the impact of the Approval on wildlife and specifically species at risk.
The Board’s failure to grapple with this evidence rendered its decision unreasonable.
Furthermore, the Court stated that the EAB’s position that it only has jurisdiction to consider SARA as a reference to identify species to be considered is “unintelligible” and the EAB’s “reasons do not provide a rational or coherent explanation for what it means to ‘consider’ a species but only to the extent it is identified in SARA” (para. 68).
The Court addressed the fact that the wetlands affected by the approvals overlap with critical habitat identified in the recovery strategy for the Bank Swallow and its connection to Alberta’s Wetland Policy. The Court stated:
[80] On this application for judicial review, the Director agreed with the Applicants that a critical habitat designation was a relevant consideration for the Director and the Board but argued that it was not a factor determinative of whether to grant an Approval. Thus, it argued, the Board’s failure to consider critical habitat does not warrant a remedy. While it may be that critical habitat designation is not a determinative factor, the Board’s failure to consider this factor at all was unreasonable. Ultimately it is for the Board to decide what to do with the evidence that the wetlands affected by the Approval and the critical habitat identified in the Recovery Strategy overlap, and to provide justified, transparent and intelligible reasons about how this evidence does or does not impact the issues the Board set for itself.
[81] That the designation as critical habitat is a relevant consideration before the Board is also entirely consistent with the Alberta Wetland Policy. The Applicants and the Director agreed that the Alberta Wetland Policy, while not a binding piece of legislation, was a guiding document for the exercise of the Director’s discretion. The Alberta Wetland Policy directs that proponents may be required to avoid or minimize adverse effects on wetlands taking into consideration wetland-dependent threatened species under SARA. The Director’s January 8, 2020 approval statement says that the Director considered the Alberta Wetland Policy. To the extent there must be an express connection between the director’s decision-making authority and SARA, the Wetland Policy provides that connection. {emphasis added}
The Court concluded that the EAB unreasonably disregarded relevant evidence and that alone was sufficient to justify remitting the matter back to the EAB.
| For more on the BMR, Bank Swallows and the federal Species at Risk Act, see: https://elc.ab.ca/post-library/bank-swallows-and-motorsports/ |
Precautionary Principle
Another ground for judicial review was that a failure to consider, interpret and apply the precautionary principle by the EAB made its decision unreasonable. The Court stated that the precautionary principle is “a well-known aspect of environmental regulation” that provides “[w]here there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation” (para. 87).
In its decision on the appeal, the EAB stated that an underlying assumption of the precautionary principle is that development is necessary and desirable, and that the precautionary principle requires a balancing of the interests of development with environmental protection. The Court found these statements to be unreasonable because the EAB offered no justification for these propositions. In fact, the Court stated that “jurisprudence on the precautionary principle neither assumes that ‘development is necessary and desirable’ nor does it require a balancing of interests of development with environmental protection” (para.90). In other words, the EAB’s interpretation of the precautionary principle was unjustified and counter to established jurisprudence.
The Court found that not only did the EAB misstate the precautionary principle, they also applied it incorrectly. The Court noted that the EAB recognized that scientific uncertainty should not excuse delaying protective measures but then dismissed the appeal in part because there was no “conclusive evidence” that Wetlands 1, 4 and 5 were the only feeding ground for Bank Swallows and that the Golden Eagles [RK1] only feed on ducks in the wetlands. The Court stated that this reasoning cannot be reconciled with the precautionary principle and, as such, the decision is unreasonable.
Fettering Discretion
The applicants argued that the EAB fettered its discretion by not considering the economic viability of the BMR project as a whole. In response the Court stated:
The Water Act and the EPEA [Environmental Protection and Enhancement Act]limit the Board’s authority to consider only the effects flowing from what the Approval authorizes. The Approval does not authorize construction and operation of a racetrack. The Approval authorizes Badlands to fill in two wetlands, modify wetlands, and construct, operate and carry out maintenance of a stormwater management system… The Director did not approve the entirety of the project. All the Approval provides is that Badlands will not be in contravention of the Water Act if Badlands fills in wetlands, modifies wetlands, or constructs and maintains a stormwater management system.[1]
The Court concluded that economic viability was not a relevant consideration for the wetland disturbance approvals. In other words, when considering whether or not to issue a wetland disturbance issue, matters related to the project as a whole such as economic viability are not a relevant consideration. Only effects associated with the wetland disturbance itself ought to be considered.
Onus and Standard of Proof
The applicants raised concerns with how onus and the standard of proof was applied by the EAB. In this case, the EAB placed the onus on the applicants to demonstrate that the approvals ought to be reversed or varied. Further, the EAB required the applicants to provide “conclusive proof” regarding the impacts on wildlife such as the Bank Swallows. Ultimately, the Court found the EAB’s decisions with respect to onus and standard of proof were unreasonable.
The Court stated that while the concepts of onus, standard of proof and de novo hearing (i.e. a hearing from scratch rather than a mere review of a decision) are all distinct, they must operate to create a coherent appeal process. The Court acknowledged that who bears the onus will vary depending on the type of appeal being heard by the EAB. For instance, in an appeal of an environmental protection order (EPO), it makes sense to place the burden on the appellant (i.e. the recipient of the EPO) as they possess more information and have a statutory right of appeal (noting that if every EPO had to be justified a second time via appeal, the EPEA process would be compromised). But in this case, the Court found that the particular facts, as well as structure of EPEA, require the EAB to conduct a true de novo hearing in the sense that no deference was owed to the initial decision-maker and the EAB was not limited to reviewing the original decision for error. The Court stated (para. 163):
The Board’s decision on onus is unreasonable because it is internally incoherent and not based on a rational chain of analysis. The Board said it was doing one thing (placing the onus on the appellants to justify a reversal or variance of the approval) and then later did the opposite (placed the onus on Badlands to provide sufficient evidence to justify confirming the approval). The Board’s reasons on onus are not tethered to the statutory scheme and failed to engage with the guidance in Normtek regarding the appropriateness of an onus of proof given the nature of the Board’s poly centric environmental decision making under the EPEA.
The Court also found requiring the applicants to provide “conclusive evidence” that the BMR would impact wildlife to be unreasonable. It was noted that EPEA does not provide for this higher standard and, as such, the EAB should have used the civil standard of proof which is a balance of probabilities (i.e. more likely than not). Further, the Court stated that there is not a different standard of proof for a reversal as compared to a variance although the EAB may require more cogent or stronger evidence to meet the standard.
Institutional Bias and a Reasonable Apprehension of Bias
The applicants also alleged institutional bias, or alternatively, they argued there was a reasonable apprehension of bias in this case. These are two different allegations subject to different legal tests. A reasonable apprehension of bias is determined by considering (para. 170):
what would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude. Would he think that it more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly.[2]
Institutional bias arises where a reasonable apprehension of bias would exist in the mind of a fully informed person in a substantial number of cases. If there is not a substantial number of cases, then apprehension of bias cannot be brought on an institutional level and must be dealt with on a case-by-case basis.
The applicants pointed to several circumstances in support of their grounds relating to institutional bias:
- A briefing note prepared by the EAB’s general counsel that discussed re-appointments to the EAB and referenced the BMR appeal stating that “timely resolution of the appeals before the EAB is important to ensure that these economically important projects can proceed” (para. 183).
- The EAB’s policy of imposing the onus on the appellant to prove that either a reversal or variance should be issued.
- The EAB’s policy of imposing a higher standard of proof to justify a reversal compared to the standard of proof to justify a variance or confirmation of the decision being reviewed.
- The EAB suffers from a lack of funding.
- The EAB general counsel has co-mingled his roles.
The applicants argued that these circumstances, taken together, demonstrate that the independence of the EAB is comprised thereby precluding an impartial and fair hearing. With respect to reasonable apprehension of bias (as opposed to institutional bias), the applicants point to the briefing note, media statements made by the EAB general counsel, a letter regarding additional hearing time, and private telephone conversations between the general counsel and a BMR representative.
While the Court did not find institutional bias, it did find bias in this particular case when looking at the entire context of the briefing note, statements made by general counsel to the media, the letter from the EAB confirming additional hearing time, and the private phone calls. The Court stated that the most significant factor in reaching the conclusion that a reasonable, well-informed person would conclude that the EAB did not decide the appeal fairly is the occurrence of numerous undocumented conversations between the general counsel and the BMR representative during the appeal.
Procedural Fairness and the Right to a Fair Hearing
The last ground for judicial review is that the applicants were denied procedural fairness because (para. 242):
- The Director was granted standing as a party before the EAB (which meant the Director and BMR, who were aligned, had twice as much time to present evidence and argument).
- The EAB granted the applicants additional hearing time only after they had used their initially allotted time which forced them to split their case.
- The EAB sat for unreasonably long hours.
- The EAB provided two additional reports, post-decision, to the Minister without notifying the applicants.
- The EAB failed to consider issues put to it.
- The EAB discounted the applicants’ position because they did not provide site-specific data but the EAB knew the applicants were denied access to the site.
The Court did not consider the first three circumstances to be breaches of procedural fairness. The EAB has discretion to set its own rules and procedures, and while the process was not perfect, it was fair in terms of time and allocation of time.
The Court did find that there was a technical breach of fairness when the EAB provided two additional reports to the Minister without notification to the applicants. However, the Court held that it does not warrant a remedy on its own as the applicants were not entitled to make submissions on how EAB communicates with the Minister anyway.
As previously discussed in the decision, the Court did find there was a failure to consider some of the issues put to it, including the impacts to Bank Swallows. But the Court states that to “the extent this same failure could be further characterized as a breach of procedural fairness, there is no additional remedy beyond what has already been determined” (para. 252).
Finally, the Court found it was a breach of procedural fairness to prefer the evidence of the BMR to the applicants’ evidence on the grounds that the latter was not site-specific. The Court noted that the appellants had made several requests for access to the site in order to collect data and respond to the proponent’s Wetlands Assessment and Impact Report (WAIR) but that this access was denied. As such, the appellants were unable to introduce site-specific evidence to support their assertion that the proponent’s data was inaccurate. The Court concluded that it was procedurally unfair for the EAB to place an onus on the appellants to produce site-specific data for a site to which they were denied access. Furthermore, the Court found that the evidence was that a change in wetland value as set out in the WAIR could have had an impact on the Director’s decision on wetland avoidance.
| For more information on decision-making under the Water Act and the Wetland Policy, keep an eye out for our forthcoming publications and webinar. – Regulatory Evaluation of Alberta’s Wetland Policy Implementation – A Companion to the Environmental Law Centre’s Regulatory Evaluation of Alberta’s Wetland Policy Implementation – Webinar on March 26, 2026 |
THANKS FOR YOUR SUPPORT
Your support is vital for stronger environmental legislation. As Alberta’s leading environmental charity, the Environmental Law Centre has served our community for over 40 years, providing objective guidance on crucial legislative changes. Your contribution helps protect our environment for future generations.
Please support our work: Share, engage and donate to the ELC
[1] Ibid. at para. 104 to 105.
[2] The Court is citing the Supreme Court of Canada’s decision in Committee for Justice and Liberty v National Energy Board (1076), [1978] 1 SCR 369 at 394.