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Global rules on foreign direct investment (FDI)
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Canada | Publication | August 10, 2021
Quebec’s Ministry of the Environment and the Fight Against Climate Change (MELCC) recently published a draft regulation amending the Regulation respecting compensation for adverse effects on wetlands and bodies of water (the Wetland Conservation Regulation) in the Gazette officielle du Québec.1 This legal update summarizes this regulation and the anticipated amendments to it.
On September 20, 2018, the Wetland Conservation Regulation came into force in Quebec. It was incorporated into the new legal and regulatory framework implemented by the MELCC further to the modernization of the Environment Quality Act (EQA) and the adoption of the Act respecting the conservation of wetlands and bodies of water. The new framework is applicable to work carried out in wetlands and bodies of water to ensure their conservation and the achievement of the MELCC’s no net loss goal.2
In practical terms, the Wetland Conservation Regulation sets forth the rules applying to the compensation regime provided for in the Environment Quality Act (EQA) for adverse effects on wetlands and bodies of water. The EQA stipulates that any work to be carried out in wetlands and bodies of water, unless it is exempt by regulation, must be authorized by the minister, subject to paying a financial contribution. The purpose of these rules is to foster better management of wetlands and bodies of water so as to either prevent the loss of (or minimize the impacts on) these environments or require compensation measures in cases where it is not possible to prevent adverse effects on these environments.3
The Wetland Conservation Regulation prescribes the formula for calculating the financial contribution payable for any work previously authorized by the minister. This calculation takes into account various factors and variables, such as the cost of creating or restoring a wetland or body of water, the area of the project under consideration, the value of the land, the level of impact and the type of activity.4
Activities exempt from the payment of a financial contribution
The Wetland Conservation Regulation exempts some activities from the payment of a financial contribution, including:
The Wetland Conservation Regulation also specifies the activities for which project proponents may make a financial contribution payment instead of carrying out work to restore or create wetlands and bodies of water. The activities explicitly prescribed in the Wetland Conservation Regulation are:
To replace the prescribed financial contribution, the project proponent must submit a plan of the work to restore or create wetlands or bodies of water.7
The draft regulation amending the Wetland Conservation Regulation stems from the obligation prescribed in the regulation that it be assessed two years after it comes into force and every five years thereafter based on the progress in the applicable scientific and technical knowledge on that matter.8 The draft regulation’s declared objective9 is to promote the foreseeability, fairness and coherence of the oversight of wetlands and bodies of water and, more specifically, it proposes some relief for ministries, public bodies or municipalities.
The Wetland Conservation Regulation chief objective remains to finance work to restore or create wetlands and bodies of water for the purposes of compensating the losses caused by projects carried out in these environments. The calculation of the financial contribution is slightly modified to better represent the concerns and regional context of regional county municipalities (RCMs). The main changes to the Wetland Conservation Regulation are the addition of exemptions from the financial contribution and the inclusion of new activities that can now be replaced by a financial contribution.10
Activities exempt from the payment of a financial contribution
The proposed amendments to the Wetland Conservation Regulation that seek to respond to the concerns raised by various interested parties (notably municipalities and the agricultural community)11 include a revision of the activities exempt from paying a financial contribution, such as:
Eligibility for replacement of the financial contribution
The draft regulation amending the Wetland Conservation Regulation also proposes expanding the eligibility for replacing the financial contribution by work to restore or create wetlands and bodies of water. This eligibility is notably expanded to include:
The draft regulation creates a new procedure as regards eligibility to the replacement of the financial contribution. An applicant looking to benefit from this replacement will now be required to file an application with the minister for that purpose, accompanied by a plan of the work to restore or create wetlands or bodies of water, and demonstrating that this work meets the objectives identified in the regulation. The application to the minister must also contain an assessment of the relevance of the site or sites selected to carry out the work.14
Amendment to the financial contribution’s calculation
Finally, the draft regulation amends two variables of the financial contribution’s calculation: factor “R,” which represents the level of anthropogenic pressure; and factor “VL,” which represents the value of the land, per m2, which is calculated using the average value of the vacant parcels of land within the territory of the RCM in question.15
These changes to the financial contribution formula are proposed to eliminate discrepancies among municipalities in the same RCM and to reduce compensation costs in those areas where development pressures are weaker, such as in municipalities located outside the St. Lawrence lowlands or that have an abundance of wetlands. However, few of the changes made to the financial contribution calculation method will reduce the cost of this financial contribution should it be payable.16
Generally speaking, some of the relieving provisions proposed in the draft regulation should be favourably received, especially by agricultural, municipal and government actors. The public consultation period for this draft regulation ended August 20, 2021.
The author wishes to thank Arvin Khodayari and Chanel Provost, summer students, for their assistance in preparing this legal update.
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