



COURT OF APPEAL FOR ONTARIO

CITATION: wpd Sumac Ridge Wind Incorporated v. Kawartha Lakes
    (City), 2016 ONCA 496

DATE: 20160622

DOCKET: C61634

Rouleau, Epstein and Benotto JJ.A.

BETWEEN

wpd Sumac Ridge Wind Incorporated

Applicant (Respondent)

and

Corporation of the City of Kawartha Lakes

Respondent (Appellant)

Clifford I. Cole and Konstantine Stavrakos, for the
    appellant

Andrew Faith, Andrew Max and Emma Carver, for the
    respondent

Heard: May 2, 2016

On appeal from the order of the Divisional Court
    (Justices Harriet E. Sachs, Alison Harvison Young and Douglas K. Gray), dated
    August 13, 2015, with reasons reported at 2015 ONSC 4164, 43 M.P.L.R. (5th) 91,
    quashing Resolution CR2014-279 and directing the Corporation of the City of
    Kawartha Lakes to consider and decide wpd Sumac Ridge Wind IncorporatedÕs
    applications in good faith.

Rouleau J.A.:

A.

Overview

[1]

This appeal concerns the interaction of municipal jurisdiction over
    roads, Renewable Energy Approvals under the
Environmental Protection Act
,
    R.S.O. 1990, c. E.19, and provincial paramountcy over municipal legislative
    enactments, codified in s. 14 of the
Municipal Act, 2001
, S.O. 2001,
    c. 25. Namely, does provincial paramountcy limit a municipalityÕs authority
    over one of its unopened municipal road allowances when the province issues a
    Renewable Energy Approval for a wind turbine project that provides for the use
    of that same road?

[2]

The appellant, the Corporation of the City of Kawartha Lakes (the
    ÒCityÓ), argues that the Divisional Court erred in concluding that it does. It
    submits that its resolution to refuse any requests by the respondent, wpd Sumac
    Ridge Wind Incorporated (ÒSumac RidgeÓ), to use an unopened municipal road
    allowance within its jurisdiction did not frustrate the purpose of the
    Renewable Energy Approval obtained by Sumac Ridge for a wind turbine project
    that provided for use of that same road. It also argues that the Divisional Court
    erred in ordering mandamus, and made palpable and overriding errors in finding,
    based on its past conduct with the respondent, that it passed the resolution in
    bad faith.

[3]

For the reasons that follow, I would dismiss the appeal.

B.

facts

[4]

Sumac Ridge initiated a renewable energy project to build, operate and
    retire five industrial wind turbines in the City. As required by the
Environmental
    Protection Act
, it applied to the Ministry of the Environment, now the
    Ministry of the Environment and Climate Change, for a Renewable Energy Approval
    authorizing the project.

[5]

Sumac RidgeÕs application for a Renewable Energy Approval consisted of
    comprehensive plans and studies required by the
Environmental Protection
    Act
and regulations made under that act. The application included maps of
    the project setting out necessary roads for construction and operation of the
    turbines at their exact sites. Sumac Ridge proposed to locate the facility on
    privately owned lands, but planned to build its main access road on an unopened
    municipal road allowance, Wild Turkey Road.

[6]

The proposal contemplated widening an unopened portion of Wild Turkey
    Road by about one metre and levelling its surface to allow for the delivery of
    the wind turbines. Sumac Ridge undertook to pay for the upgrading, operation,
    and retiring of the road.

[7]

The regulation governing the approval of renewable energy projects,
    O. Reg. 359.09, requires the preparation of several reports. Those reports
    include a design and operations report, a consultation report, a project
    description report, a construction plan report, and a decommissioning plan
    report.

[8]

Two of these reports are of particular relevance to the issues raised in
    this appeal. The first is the consultation report, which summarizes, among
    other things, the applicant's communications with the public and the local
    municipality and how any concerns of the municipality have been considered. The
    second is the design and operations report, which sets out a site plan of the
    project, including maps of roads, utility corridors and rights of way situated
    within 300 metres of the facility. Those reports demonstrate the extent to
    which the Ministry takes into account all aspects of the proposed project Ð including
    municipal concerns and the placement of access routes Ð when issuing a
    Renewable Energy Approval.

[9]

Beyond the consultation required by the regulation, Sumac Ridge
    undertook early attempts to engage the City in the approval process for Wild
    Turkey Road.

[10]

It first approached the City about access routes, including Wild Turkey
    Road, in March 2011. Sumac Ridge was seeking a meeting to undertake the steps
    required to Òobtain the required municipal approvalsÓ. The City voiced no
    concerns about Wild Turkey Road or any of the proposed access routes. Rather
    than agree to an informal consultation about the needed municipal approvals,
    the City responded that it would not engage with Sumac Ridge outside of the
    formal Renewable Energy Approval process.

[11]

In January 2012, Sumac Ridge again sought a meeting with the City to
    discuss various reports that it had provided to the City. In its response, the
    City questioned the purpose of the proposed meeting given that it was not
    Òprescribed in the REA process, and not required prior to scheduling your
    public open house.Ó The City indicated that, instead, it would follow the
    Renewable Energy Approval regimeÕs prescribed municipal consultation process.

[12]

On March 14, 2012, Sumac Ridge repeated its request for a meeting with
    the City before completing its final layout of the project and before the final
    public meeting. As Sumac Ridge explained, the meeting was to address the permit
    process and assist in finalizing the projectÕs layout. It sought to discuss
    road upgrades, including the documents required for necessary approvals. It
    advised that the meeting would help it to decide if any amendments to the
    project application were warranted.

[13]

The City ultimately agreed to schedule a meeting for June 7, 2012. This
    was only 12 days before the final public meeting after which Sumac Ridge could
    not amend its proposal. At that meeting, the City simply advised that the use and
    upgrading of Wild Turkey Road would require the CityÕs approval, something
    Sumac Ridge already knew. The City, however, did not raise any specific
    objection to the use or upgrading of the road.

[14]

The final public meeting was held on June 19, 2012. On June 28, 2012,
    Sumac Ridge submitted its application for a Renewable Energy Approval, to be
    determined by a Director appointed under the
Environmental Protection Act
,
    s. 5.

[15]

On March 11, 2013, the City provided its response to the project as part
    of the municipal consultation process required by the regulation. The response
    contained no objection to the use or upgrading of Wild Turkey Road, despite the
    express invitation in the municipal consultation form, Part B, s. 5.2, to do so.

[16]

Outside of the prescribed Renewable Energy Approval process, however,
    the City was making it clear that it opposed wind turbine projects, including
    the Sumac Ridge project. On March 26, 2013, the City passed resolutions stating
    that it was not a Òwilling hostÓ for wind projects and seeking recommendations
    for legal options if the Province approved the Sumac Ridge project. This
    followed two earlier resolutions expressing the CityÕs objection and concern:
    the first, in February 2012, in which it asked the provincial government to
    impose a moratorium on approvals of industrial wind turbines pending further
    study on their impact on human health; and the second, in February 2013, in
    which it called on the provincial government to reject the Sumac Ridge project.

[17]

On May 31, 2013, while still awaiting the ProvinceÕs approval of its
    proposal, Sumac Ridge wrote to the City to request the formal commencement of
    the application process for Wild Turkey Road. In response, the City passed a
    resolution that read in part:

THAT council confirms the application from WPDÉ for permits
    relating to Gray Road and Wild Turkey RoadÉ are premature and directs the CityÕs
    legal counsel to advise the applicant accordingly; and

THAT that staff be directed to advise WPDÉ that any action not
    authorized by the municipality on Gray Road and Wild Turkey Road shall be seen
    as trespassing under the Trespass to Property Act and authorities will be
    contacted to enforce.

[18]

The City also advised Sumac Ridge that a Municipal Class Environmental
    Assessment, a planning study not mandated by the Renewable Energy Approval
    process, would have to be prepared for the proposed use of Wild Turkey Road.
    Sumac Ridge agreed to undertake the study at its own expense in order to comply
    with the CityÕs request.

[19]

The Director issued a Renewable Energy Approval to Sumac Ridge (the
    ÒSumac Ridge ApprovalÓ) on December 11, 2013. That approval was for five wind
    turbines to be placed at specific coordinates and for Òon-site access roadsÓ.
    The Sumac Ridge Approval set out the following:

[Sumac Ridge] shall construct, install, use, operate, maintain
    and retire the Facility in accordance with the terms and conditions of this
    Approval and the Application and in accordance with the following schedules
    attached hereto:

Schedule A - Facility Description

Schedule B - Coordinates of the Equipment and Noise
    Specifications

[20]

The project therefore had to be built as approved. The Sumac Ridge
    Approval covers all access roads, including Wild Turkey Road. No alternate
    placement of access roads is provided for. The City acknowledges that if Sumac
    Ridge cannot use Wild Turkey Road, the project cannot be built without
    reengaging in the Renewable Energy Approval process.

[21]

Third parties appealed the DirectorÕs decision to issue the Sumac Ridge
    Approval to the Environmental Review Tribunal. That appeal was ultimately
    dismissed.

[22]

On March 25, 2014, before Sumac Ridge had even completed the Municipal
    Class Environmental Assessment report requested by the City, City council
    passed resolution CR2014-279, which is the resolution subject to the
    frustration of purpose claim. It resolved the following:

THAT any request by [Sumac Ridge] and/or future successors for
    use of the unopened portion of Wild Turkey Road for property access and/or
    vehicular traffic to support proposed wind turbine development be refused.

[23]

In September 2014, Sumac Ridge completed its Municipal Class
    Environmental Assessment studies. The final report contained a detailed
    analysis of existing environmental conditions at the project location. It
    evaluated the proposed upgrades to Wild Turkey Road by comparing it to seven
    other options, including the option of not constructing the project. The option
    of using Wild Turkey Road as approved by the Sumac Ridge Approval received the
    best overall score.

[24]

The City did not alter its position after receiving the Municipal Class
    Environmental Assessment. The City discarded it on the basis that it provided
    no information of any value for councilÕs consideration. The CityÕs expert
    witness described the Municipal Class Environmental Assessment as biased and
    the worst one he had ever seen.

[25]

Through November and December 2014, Sumac Ridge and the City exchanged
    correspondence. Sumac Ridge sought to negotiate terms of an agreement to allow
    Wild Turkey Road to be upgraded as provided in the Sumac Ridge Approval. It
    offered to pay for the construction, operation, and retiring of the road. In
    January 2015, the City responded that it remained opposed to Sumac RidgeÕs use
    of the road. No vehicular access and entrance to unopened and unassumed
    portions of Wild Turkey Road would be granted, nor would the City grant any
    approvals to upgrade it.

[26]

Sumac Ridge then brought an application for judicial review to the Divisional
    Court, which was heard on April 23, 2015.

C.

the decision of the divisional court

[27]

The Divisional Court granted the application. It quashed the CityÕs
    resolution barring access to Wild Turkey Road and ordered the City to consider
    and decide Sumac RidgeÕs applications in good faith.

[28]

At paras. 41 and 43, it described the nature and purpose of Renewable
    Energy Approvals as follows:

[T]he particular purpose of the [Sumac Ridge Approval] is to
    authorize the Òconstruction, installation, operation, use and retiring of [the]
    Class 4Ó Sumac Ridge Wind Project. This approval furthers the overall
    policy goals underlying the [
Green Energy Act
] regime, as described in
East Durham Wind
at para. 37:

The [
Green Energy Act
] provides a complete regime
    for carrying out the governmentÕs policy in this regard. It features an
    economic incentive for project developers (the [Feed-in Tariff] program); a
    comprehensive approval process to scrutinize the potential effects of each
    project on the health of humans, plants and animals and to identify any
    conditions that might be necessary to account for local conditions (the [Renewable
    Energy Approval]); and an appeal process for [Renewable Energy Approvals] that
    utilizes a specialized tribunal (the [Environmental Review Tribunal]) and the
    oversight of the courts on questions of law. To maintain this streamlined
    system the ability of municipalities to restrict renewable energy development
    through various powers under the
Planning Act
and the
Municipal
    Act
has been curtailed.

É

The [Sumac Ridge Approval] approves the project as it was presented
    in [Sumac RidgeÕs] application. It is not merely an abstract approval in principle.
    It is a detailed and specific approval granted after an extensive and
    comprehensive process including consultation with the City. The [Sumac Ridge
    Approval] approves five [industrial wind turbines] at specified coordinates, as
    well as Òon-site access roadsÓ in accordance with the Application submitted by
    the company.

[29]

It then went on to conclude, at para. 52, that Òbecause the [Sumac Ridge
    Approval] contemplated the use of [Wild Turkey Road] as the artery of the
    project, the resolution purporting to refuse [Sumac Ridge] any use of [Wild
    Turkey Road] frustrates the purpose of the [Sumac Ridge Approval] and must be
    quashed.Ó
[1]


[30]

The Divisional Court also held that the CityÕs decision to refuse to
    allow Sumac RidgeÕs use of Wild Turkey Road was made in bad faith. The
    Divisional Court was of the view that, in making its decision, the City Òwas
    not exercising or attempting to exercise any legitimate jurisdiction over the
    use of the roads.Ó Rather, it was seeking Òto accomplish indirectly that which
    the City had been unable to achieve directly through the [Renewable Energy
    Approval] process: to stop the Sumac Ridge [industrial wind turbine] project.Ó

[31]

The Divisional Court inferred this intention based on, among other
    things, the way the City dealt with Sumac RidgeÕs request to access and upgrade
    Wild Turkey Road, and its failure to raise any concern regarding Sumac RidgeÕs
    proposed use of Wild Turkey Road until after the Renewable Energy Approval
    process had been completed.

[32]

The Divisional Court concluded that the appropriate remedy was to quash
    the CityÕs resolution and require the City to do the following:

1)       Consider and decide in
    good faith [Sumac Ridge]Õs applications to allow for the upgrading and use of [Wild
    Turkey Road]; and

2)       Consider and decide in
    good faith [Sumac Ridge]Õs applications for any municipal permits necessary for
    the expeditious construction and operation of [Sumac RidgeÕs] project.

D.

issues

[33]

The City raises three grounds of appeal, arguing that the Divisional
    Court erred as follows:

i)

By finding that the CityÕs resolution frustrated the legislative purpose
    of the Sumac Ridge Approval;

ii)

In making an order in the nature of mandamus requiring the City to
    consider and grant Sumac RidgeÕs application without applying the test for
    mandamus; and

iii)

By finding that the CityÕs resolution was made in bad faith.

E.

Analysis

(1)

Did the Divisional Court err in finding that
    the CityÕs resolution frustrated the legislative purpose of the
Sumac
    Ridge
Approval?

[34]

The City argues that a Renewable Energy Approval is simply a permissive
    instrument intended to secure environmental compliance if a renewable energy
    project is built. It submits that it is not a positive entitlement. It does
    not, as suggested by the Divisional Court, authorize the project and constitute
    a finding that the project furthers the policy goals underlying the
Green
    Energy and Green Economy Act
,
2009
, S.O. 2009, c. 12. Nor does it
    provide that the project can proceed without regard to municipal concerns.

[35]

In the CityÕs submission, the Divisional Court erred in attributing a
    broader purpose to the Renewable Energy Approval process. This led to its
    erroneous conclusion that the municipalityÕs exercise of its exclusive
    jurisdiction over roads to restrict access to Wild Turkey Road frustrated the
    purpose of the Sumac Ridge Approval. There is, in the CityÕs view, no conflict
    Ð in this case, the principles of paramountcy cannot be applied to prevent the
    municipality from exercising its exclusive jurisdiction over its roads.

[36]

For the reasons that follow, I would not give effect to this ground of
    appeal. I will first set out the doctrine of paramountcy and the governing test
    for frustration of purpose. Then I will review the evidence and statutory
    provisions to determine the purpose of Renewable Energy Approvals. Finally, I
    will explain why the CityÕs resolution preventing Sumac RidgeÕs access to Wild
    Turkey Road frustrates the purpose of the Sumac Ridge Approval.

(a)

The doctrine of paramountcy and the governing
    test for frustration of purpose

[37]

A cardinal rule of municipal law is that Òall by-laws are subject to the
    general law of the realm and are subordinate to itÓ, and that Òany by-laws
    which are repugnant to or inconsistent with general provincial legislation are
    void and of no effect, or else superseded to the extent that the legislature
    has actedÓ: Ian MacF. Rogers, Q.C.,
The Law of Canadian Municipal
    Corporations
, loose-leaf (2014-Rel. 5), 2d ed. (Toronto: Carswell, 1988),
    at para. 63.16 (citations omitted).

[38]

This principle has been codified in s. 14 of the
Municipal Act
,
    which provides as follows:

14. (1)
A by-law is
    without effect to the extent of any conflict with,

(a) a provincial or federal Act or a regulation
    made under such an Act; or

(b) an instrument of a legislative nature,
    including an order, licence or approval, made or issued under a provincial or
    federal Act or regulation.

Same

(2)
Without restricting
    the generality of subsection (1), there is a conflict between a by-law of a
    municipality and an Act, regulation or instrument described in that subsection
    if the by-law frustrates the purpose of the Act, regulation or instrument.

[39]

To determine whether municipal and provincial legislative enactments
    conflict, this court has endorsed applying the paramountcy doctrine governing conflicts
    between federal and provincial legislation:
Croplife Canada v. Toronto
    (City)
(2005), 75 O.R. (3d) 357, at para. 63;
Cash Converters Canada
    Inc. v. Oshawa (City)
, 2007 ONCA 502, 86 O.R. (3d) 401, at para. 32.

[40]

Whether a true conflict exists between federal and provincial legislative
    enactments has been the subject of considerable jurisprudence. It was most
    recently discussed in
Alberta (Attorney General) v. Moloney
, 2015 SCC
    51, [2015] 3 S.C.R. 327.

[41]

In that case, the Supreme Court of Canada set out the following
    analytical framework:

i)

As a preliminary question, it must be determined
    whether both laws are validly enacted. If one is invalid, then no conflict can
    exist:
Moloney,
at para. 17; see also
Rogers
    Communications Inc. v. Chteauguay (City)
, 2016 SCC 23,

at paras. 34-39.

ii)

If both laws are independently valid, the court must
    then examine whether the lawsÕ concurrent operation results in a conflict under
    either branch of the paramountcy test.
The two branches are (1)
    operational conflict Ð Òthere is an operational conflict because it is
    impossible to comply with both lawsÓ; or (2) frustration of purpose Ð
    when, Òalthough it is possible to comply with both laws, the operation of the
    provincial law frustrates the purpose of the federal enactmentÓ:
Moloney
,
    at para. 18.

iii)

If conflict is found, the inferior law
    remains in force but is inoperative to the extent it conflicts with the
    superior law:
Moloney
, at para. 29.

[42]

The party alleging the conflict bears the burden
    of proving conflict:
Moloney
, at para. 27.
    When examining conflict, it is the effect of the inferior law, and not its
    purpose that is the focus of the paramountcy analysis:
Moloney
, at para. 28;
Husky Oil Operations Ltd. v. Minister of
    National Revenue
, [1995] 3 S.C.R. 453, at para. 39. That
    being said, an intention to interfere with the superior governmentÕs purpose
    may call into question the legitimacy of the inferior law:
Moloney
, at para. 28;
Husky Oil
, at paras.
    39, 44-45.

[43]

In this case, the parties went straight to the second branch of the
    paramountcy test Ð frustration of purpose Ð which the Divisional Court applied
    to conclude that the CityÕs resolution was in conflict with the Sumac Ridge
    Approval and, therefore, invalid. Although the application could have been
    disposed of on the basis of the courtÕs finding of bad faith, given the nature
    of this dispute, it was, and is, in the interests of justice to determine
    whether the resolution frustrated the purpose of the Sumac Ridge Approval.

[44]

In
Moloney
, the court cautioned that the standard for
    establishing frustration of purpose is high. It identified, at para. 26, that
    the following situations would generally not lead to a conflict: ÒFor instance,
    duplicative federal and provincial provisions will generally not conflict. Nor
    will a conflict arise where a provincial law is more restrictive than a federal
    lawÓ (citations omitted).

[45]

The court went on to explain that Ò[t]he application of a more
    restrictive provincial law may, however, frustrate the federal purpose if the
    federal law, instead of being merely permissive, provides for a positive
    entitlementÒ (citations omitted).

[46]

The Supreme Court cited
Law Society (British Columbia) v. Mangat
,
    2001 SCC 67, [2001] 3 S.C.R. 113, as providing an example of a federal law that
    created a positive entitlement, rather than being merely permissive, and which
    was thus frustrated by a more restrictive provincial law.

[47]

In
Mangat
, the issue was whether provincial legislation
    preventing non-lawyers from charging a fee to represent persons at Immigration
    Review Board hearings conflicted with federal legislation: namely, ss. 30 and
    69(1) of the
Immigration Act
, R.S.C. 1985, c. I-2. Section 30 provided
    that every person before the adjudication tribunal had the right to retain and
    be represented by Òa barrister or solicitor or other counselÓ and was to be
    given a reasonable opportunity to Òobtain such counsel at the personÕs own
    expenseÓ. Section 69(1) provided that before the Refugee division the person Òmay,
    at that personÕs own expense, be represented by a barrister or solicitor or
    other counsel.Ó

[48]

In finding that the provincial legislation conflicted with those federal
    legislative provisions, the Supreme Court applied the modern approach to
    statutory interpretation to determine the federal purpose. It looked beyond the
    specific provisions at issue and considered the legislative scheme as a whole,
    how similar and related acts governed representatives before federal tribunals,
    and reviewed an Ontario legislative report that highlighted the benefits of
    non-lawyer representatives.

[49]

Ultimately, and relying heavily on ss. 68(2) and 80.1(4) of the
Immigration
    Act
Ð which called for proceedings to be as informal and expeditious as
    the circumstances and fairness permit Ð the court found that in enacting the
    provisions at issue, Parliament Òwas pursuing the legitimate objective of
    establishing an informal, accessible (in financial, cultural and linguistic
    terms), and expeditious processÓ:
Mangat
, at para. 72. The provisions
    were not simply permissive. They provided a positive entitlement for
    non-lawyers to represent participants at hearings. Provincial legislation
    forbidding non-lawyers from charging a fee at the Adjudicative and Refugee
    divisions was accordingly held to be of no effect.

(b)

The purpose of the Renewable Energy Approval

[50]

A Renewable Energy Approval is an Òinstrument of a legislative natureÓ
    as contemplated by s. 14(1)(b) of the
Municipal Act
. As a result,
    if the CityÕs by-law Òfrustrates the purpose of the É instrumentÓ the by-law is
    without effect:
Municipal Act,
s. 14(2).

[51]

The correct characterization of the Renewable Energy ApprovalÕs purpose
    is, therefore, central to the appeal. Is the Renewable Energy Approval simply
    permissive Ð a determination that the project would not harm the environment,
    as argued by the City? Or is it, as Sumac Ridge maintains, a positive
    entitlement Ð the product of an extensive regulatory process aimed at
    facilitating and encouraging the development of green energy projects?

[52]

The CityÕs submissions on this point focused on ss. 3(1) and 47.2(1) of
    the
Environmental Protection Act
. Subsection 3(1) of the
Environmental
    Protection Act
establishes the purpose of the act: ÒThe purpose of this
    Act is to provide for the protection and conservation of the natural
    environment.Ó Further, Part V.0.1 of the
Environmental Protection Act
,
    which created and governs the Renewable Energy Approval process, reaffirms that
    purpose, at s. 47.2(1): ÒThe purpose of this Part is to provide for the protection
    and conservation of the environment.Ó

[53]

In other words, the City submits that the issuance of a Renewable Energy
    Approval is akin to an environmental clearance certificate, which confirms that
    proceeding with the project will not harm the environment. It does not, as the
    Divisional Court found, ÒauthorizeÓ or ÒapproveÓ the project as presented.

[54]

The City also points out that provincial documentation explaining the
    Renewable Energy Approval process specifically provides for applicantsÕ having
    to obtain necessary permits and authorizations, such as a road use agreement.

[55]

If municipal permits for road use were contemplated by the legislative
    framework, then, in the CityÕs submission, the issuance of a Renewable Energy
    Approval does not limit the CityÕs ability to assess Sumac RidgeÕs request to
    access Wild Turkey Road as it would any other request. If, acting in good
    faith, the City concluded that the project was not in its interest, it could
    refuse to allow access to the road.

[56]

This lends further support to their position that a municipality is at
    liberty to exercise its jurisdiction over its roads without it being found to
    be interfering or conflicting with the legislative purpose of the Renewable
    Energy Approval. Had the Divisional Court properly understood the purpose of
    the Renewable Energy Approval, the City submits, it would have found that no
    conflict exists between the approval and the municipalityÕs decision to
    exercise its statutory authority over its roads.

[57]

Such an interpretation, the City argues, is consistent with the Supreme
    Court of CanadaÕs admonition in
Moloney
, at para. 27, to apply the
    doctrine of paramountcy with restraint. As the court explained, ÒIt is presumed
    that Parliament intends its laws to coexist with provincial laws. Absent a genuine
    inconsistency, courts will favour an interpretation of the federal legislation
    that allows the concurrent operation of both laws.Ó

[58]

I disagree with the CityÕs submissions. The overall purpose of ÒPart
    V.0.1 Ð Renewable EnergyÓ of the
Environmental Protection Act
Ð Òto
    provide for the protection and conservation of the environmentÓ Ð is a broad
    one. That purpose is not limited to preventing projects that may harm the
    environment. Understood in its greater legislative context, the Renewable
    Energy Approval is a part of a larger scheme that aims to promote that purpose
    by encouraging and facilitating renewable energy projects.

[59]

That larger scheme was put in place by the
Green Energy and Green
    Economy Act
. That act enacted the
Green Energy Act
,
2009
,
    S.O. 2009, c. 12, Sched. A, and amended several statutes, which included adding
    Part V.0.1 to the
Environmental Protection Act
, and establishing an
    economic incentive for renewable energy project developers, the feed-in tariff
    program.

[60]

During the first reading of the bill that ultimately became the
Green
    Energy and Green Economy Act
, the Minister of Energy and Infrastructure
    highlighted the objectives of the act: Ontario, Legislative Assembly,
Official
    Report of Debates (Hansard)
, 39th Parl., 1st Sess., No. 112 (23 February
    2009) at 4951-52. There, he explained the following:

[The act] has two equally important thrusts: first, making it
    easier to bring renewable energy projects to life, and secondly, creating a
    culture of conservation, one where we go about our daily lives using less
    energy

...

If passed, the Act would ensure that new green power doesnÕt
    get tripped up in all kinds of red tape, but instead that new renewable
    generation would be built and flowing into the system faster, complete with
    service-time guarantees on our processes.

...

[S]o long as all necessary documentation is successfully
    completed, permits would be issued within a six-month service window. My
    ministry would emerge with new capabilities and new leadership to support the
    facilitation of renewable energy projects.

[61]

The MinisterÕs statements are reflected in the preamble of the
Green
    Energy Act
. That preamble provides that the government Òis committed to
    fostering the growth of renewable energy projects, which use cleaner sources of
    energy, and to removing barriers to and promoting opportunities for renewable
    energy projectsÓ.

[62]

The purpose of the
Green Energy and Green Economy Act
,
    therefore, was to encourage and actively facilitate the development of
    renewable energy projects, including wind projects. It created a framework for
    the provinceÕs approval of these projects.

[63]

As noted earlier, the Renewable Energy Approval is the product of the
    regime that the
Green Energy and Green Economy Act
put in place. It
    cannot, as a result, be interpreted as nothing more than a clearance certificate
    or finding that the project will not harm the environment.

[64]

Even a cursory review of the comprehensive regulation enacted under the
Environmental
    Protection Act
demonstrates that a Renewable Energy Approval is much more
    than this. That regulation, O. Reg. 359/09, puts in place a much broader
    process to assess the desirability of the project, including consultation with
    the public, municipalities, local authorities and Aboriginal communities.

[65]

The Sumac Ridge Approval itself imposes terms and conditions on noise,
    water management, monitoring natural heritage, traffic management planning,
    archaeological resources, establishing a community liaison committee, operations
    and maintenance, record keeping, notification of complaints, changes of
    ownership, and Aboriginal consultation.

[66]

Municipal concerns are clearly addressed as part of the process. The
    regulation requires the preparation of reports that outline the project and the
    impact on the public and the municipality, including roads surrounding the
    project. These reports are provided to the local municipality as part of the
    consultation. They explicitly seek municipal input on the proposed projectÕs
    impact on municipal roads and infrastructure.

[67]

Significantly, the project is only approved if, after consideration of
    all of the relevant factors, including municipal concerns, the Director is of
    the opinion that the project is Òin the public interestÓ:
Environmental
    Protection Act
, s. 47.5(1).

[68]

Therefore, the issuance of a Renewable Energy Approval is not simply an
    assessment that the project would not harm the environment. With the object of
    the
Green Energy and Green Economy Act
in mind, a Renewable Energy
    Approval is the authorization and approval of a project consistent with the
    legislativeÕs objective of encouraging the development of green energy, which
    in turn contributes towards the objectives of protecting and conserving the
    environment. It is a positive entitlement, and not merely permissive.

[69]

In addition, the legislative scheme demonstrates the legislatureÕs
    intention to put the decision as to whether a renewable energy project is in
    the public interest in the hands of the Director. It is not open to a
    municipality to conclude otherwise.

[70]

Section 14 of the
Municipal Act
applies, therefore, to prevent
    a municipality from using its authority over roads to prevent an approved project
    from going ahead for being against its interests and, in effect, thwarting the
    provincial purpose.

[71]

To the extent that municipal permits are required, the only concerns a
    municipality can advance are reasonable considerations such as costs,
    indemnification, and liability, and only so long as it does so in good faith.
    Permits may not be refused simply because the municipality disagrees with the
    overall project.

(c)

Did the CityÕs resolution frustrate the purpose
    of the
Sumac Ridge
Approval?

[72]

The CityÕs resolution prevents Sumac Ridge from using or accessing Wild
    Turkey Road. No alternatives to using that road were provided for in Sumac
    RidgeÕs application and none are specified in the Sumac Ridge Approval. The
    City concedes that without the ability to use Wild Turkey Road, the project, as
    contemplated by the Sumac Ridge Approval, cannot be built or operated.

[73]

Because the project cannot be built, as approved, without the ability to
    use Wild Turkey Road, the CityÕs resolution blocking Sumac RidgeÕs access to that
    road makes compliance with its approval impossible.

[74]

The purpose of that approval Ð to authorize a renewable energy project
    of the type fostered by the
Green Energy Green Economy Act
, and to
    place the decision as to whether it is in the public interest in the hands of
    the Director Ð has been frustrated by the CityÕs purported exercise of its
    jurisdiction over roads.

(2)

Mandamus

[75]

The City submits that the Divisional CourtÕs order Ð directing the City
    to reconsider in good faith the upgrading and use of Wild Turkey Road Ð is an
    order in the nature of mandamus. Before making such an order, it argues, the
    Divisional Court ought to have applied the test for mandamus. The City goes on
    to explain that the Divisional CourtÕs order does more than direct reconsideration;
    it directs the result of what is a municipalityÕs discretionary decision-making
    power. That is because, it claims, the Divisional Court found that the City
    could not refuse Sumac RidgeÕs request.

[76]

According to the City, the relevant aspects of that test, set out in
Apotex
    Inc. v. Canada (Attorney General)
, [1994] 1 F.C. 742 (C.A.), at pp. 766-67,
    affÕd by [1994] 3 S.C.R. 1100, are as follows:

i)

there must be a public legal duty to act;

ii)

the duty must be owed to the applicant;

iii)

there must be a clear right to the performance of that duty; and

iv)

if the decision is discretionary, mandamus is unavailable where the
    decision-making power is unqualified, absolute, permissive or unfettered.

[77]

The City maintains that, had the Divisional Court applied the test, it
    would have concluded that it could not be satisfied in this case. That is
    because

i)

the City was under no public legal duty to alter Wild Turkey Road;

ii)

the City did not owe such a duty to Sumac Ridge;

iii)

Sumac Ridge did not have a clear right to the performance of such a
    duty; and

iv)

the CityÕs decision-making authority is discretionary, unqualified,
    permissive and unfettered.

[78]

The Divisional CourtÕs order, it therefore concludes, ought not to have
    been made.

[79]

I would not give effect to this submission. The Divisional CourtÕs order
    is not an order of mandamus directing the result of a municipalityÕs
    discretionary decision-making power.

[80]

There was no finding that the City could not refuse Sumac RidgeÕs
    request. To the contrary, the Divisional CourtÕs reasons explained that the
    City retains jurisdiction to negotiate over legitimate considerations such as
    indemnity, liability and decommissioning costs, so long as it does so in good
    faith.

[81]

The order does not require the City to alter or open Wild Turkey Road.
    The orderÕs effect is to merely prohibit the City from continuing to frustrate
    the Sumac Ridge Approval and act in bad faith. Requiring the City to act in
    good faith is not mandamus, but rather a statement of an established principle
    of law.

[82]

The CityÕs resolution prohibiting Sumac Ridge from using Wild Turkey
    Road was invalidated by the Divisional CourtÕs order for frustrating the
    purpose of the Sumac Ridge Approval. It follows then that Sumac Ridge can once
    again apply to use Wild Turkey Road. Clearly, a refusal to even consider such
    an application would equally frustrate the Sumac Ridge Approval. In these
    circumstances, the City cannot reasonably take the position that, in exercising
    its jurisdiction over roads, it is permitted to refuse to even consider
    applications.

(3)

Did the Divisional Court err in finding that
    the CityÕs resolution was made in bad faith?

[83]

The City submits that, in finding that the City acted in bad faith, the
    Divisional Court committed palpable and overriding errors. Specifically, the
    City argues that it made three errors:

i)

It failed to show deference to the CityÕs decision;

ii)

It ignored unchallenged City evidence that it did not intend to thwart
    the project, but rather was concerned with traffic network policy; and

iii)

It improperly concluded that the City could not consider whether the
    project was for a purpose in the municipalityÕs interest when deciding whether
    to grant a public municipal asset for a commercial projectÕs private use
    without compensation.

[84]

In the CityÕs submission, the Divisional Court improperly inferred bad
    faith, despite the fact that municipalities have broad discretion in exercising
    their regulatory powers. When such broad discretion exists, the City argues
    that courts should not find bad faith unless there is no other rational
    conclusion. As there was evidence in the record from which the court could
    conclude that the CityÕs actions were motivated for reasons other than bad
    faith, the Divisional Court committed a palpable and overriding error.

[85]

In my view, the Divisional Court did not err in concluding that the City
    had acted in bad faith.

[86]

In
Grosvenor v. East Luther Grand Valley (Township)
,
    2007 ONCA 55, 84 O.R. (3d) 346, this court considered what constitutes bad
    faith on the part of a municipality. It endorsed the following statement of
    Robins J. in
HG Winton Ltd. v. North York
(1978), 20 O.R. (2d) 737
    (Div. Ct.):

To say that Council acted in what is characterized in law as
    Òbad faithÓ is not to imply or suggest any wrongdoing or personal advantage on
    the part of any of its members. But it is to say, in the factual situation of
    this case, that
Council acted unreasonably and
    arbitrarily and without the degree of fairness, openness, and impartiality
    required of a municipal government
. [Emphasis in original, citation
    omitted.]

[87]

The Divisional Court found that the City had acted in bad faith by exercising
    its jurisdiction over roads for an improper purpose; that is, to frustrate the Sumac
    Ridge Approval and prevent wind energy projects from being constructed within
    its jurisdiction. This was an inference it was entitled to draw based on the
    record before it, including the following evidence:

á

The
    City rebuffed Sumac RidgeÕs efforts to discuss Wild Turkey Road.

á

The
    City did not express any objections to the use and upgrading of Wild Turkey
    Road before the completion of the Renewable Energy Approval process.

á

The
    CityÕs arguments for refusing to allow the use of Wild Turkey Road changed.

á

City
    staffÕs report to Council, which formed the basis for the resolution, supports
    the inference that the City was motivated by its opposition to the project.

á

The
    City passed the impugned resolution before the Municipal Class Environmental
    Assessment Ð which it had explicitly promised to consider in making its
    decision Ð was complete.

á

The
    City only chose to object to the use of Wild Turkey Road after the window for
    addressing these purported concerns had passed and Sumac Ridge was locked into
    its Renewable Energy Approval that depended on the use of Wild Turkey Road.

[88]

Contrary to the CityÕs submission, the Divisional Court did not commit
    any reviewable error. It carefully examined the totality of the evidence before
    it and its conclusion is entitled to deference.

F.

conclusion

[89]

In my view, the appeal ought to be dismissed.

[90]

As per the agreement of counsel, Sumac Ridge, as the successful party,
    is entitled to its costs fixed in the amount of $30,000, inclusive of
    applicable taxes and disbursements.

Released:
ÒPRÓ June 22, 2016

ÒPaul Rouleau J.A.Ó

ÒI agree G.J. Epstein
    J.A.Ó

ÒI agree M.L. Benotto
    J.A.Ó





[1]
As I will set out later, and as provided under the
Municipal
    Act,
s. 14, the proper remedy for frustration of purpose is to declare that
    the inferior law is of no force or effect to the extent of the conflict. Given
    the Divisional CourtÕs conclusion on bad faith, however, quashing the
    resolution was
an
appropriate
remedy
.


