Ontario intermodal hub project defeats court challenge
The decision reverses a 2024 Federal Court judgment that had halted CN’s plans.
Key Takeaways:
- The Federal Court of Appeal ruled in favour of CN, overturning a previous Federal Court decision and allowing the Milton intermodal logistics hub to move forward. The court found that the government’s decisions approving the project, despite its environmental effects, were reasonable.
- The project faced opposition due to its potential impact on local air quality and human health. However, the court determined that both the Minister and the Governor in Council had properly considered these concerns and that the adverse effects were justified in light of mitigation measures.
- The project will proceed under 325 conditions designed to mitigate its environmental and health impacts, including limits on truck traffic and air quality controls. CN must adhere to these conditions to operate the hub.
The Whole Story:
The Canadian National Railway Company (CN) has won a major legal victory, securing approval for its proposed intermodal logistics hub in Milton, Ontario. The Federal Court of Appeal has ruled that prior government decisions approving the project, despite concerns over environmental and public health impacts, were reasonable.
This decision reverses a 2024 Federal Court judgment that had halted CN’s plans, citing the need for more thorough consideration of the adverse effects the project would have on local air quality and human health.
Background
CN’s project, designed to facilitate the transfer of shipping containers between trucks and trains, is intended to ease traffic congestion and reduce greenhouse gas emissions in the Greater Toronto and Hamilton Area. The 160-hectare facility would see around 800 trucks enter and exit daily. However, the project faced opposition from Halton Region and local residents, citing potential harm to air quality and public health.
The project underwent an environmental assessment under the now-repealed Canadian Environmental Assessment Act, 2012 (CEAA 2012). In 2020, a federal review panel concluded that the project would likely cause “significant adverse environmental effects on air quality and on human health as it relates to air quality” and “significant adverse cumulative environmental effects on air quality, human health, wildlife habitat, and the availability of agricultural land.”
The Minister of the Environment and Climate Change agreed with the panel’s findings but referred the project’s approval to the Governor in Council, who ultimately decided that these effects were “justified in the circumstances.” The project was then approved with 325 conditions aimed at mitigating its environmental impact.
Legal Challenge
Halton Region sought judicial review, arguing that the Minister’s and the Governor in Council’s decisions were unreasonable because they failed to adequately consider the “direct” significant adverse effects (SAEEs) of the project on human health, particularly air quality. In 2024, the Federal Court ruled in their favor, setting aside the project’s approval.
However, the Federal Court of Appeal disagreed with the lower court’s conclusions, stating that “the Federal Court erred” in its assessment. The appellate court found that “the decisions were reasonable and would accordingly allow the appeals.”
Court’s Reasoning
The Federal Court of Appeal determined that the Federal Court had taken an overly rigid approach in its review, focusing too much on whether the Minister explicitly addressed a “direct” SAEE on human health. The court clarified that, while the Federal Court criticized the omission of certain references, it was important to “review the reasons with sensitivity to the institutional setting, in light of the record, holistically and contextually.” The court emphasized that “any shortcomings and flaws must be ‘sufficiently central or significant’ to render the decision unreasonable.”
Additionally, the appellate court ruled that the Minister’s decision “takes into account the full substance of the review panel’s findings on the adverse effects on human health related to air quality, both project-specific and cumulative.” It rejected the Federal Court’s assertion that the Minister had failed to consider the protection of human health, noting that the Minister “exercised their powers in a manner that protects human health in accordance with the requirements in the CEAA 2012.”
Moving Forward
CN praised the decision, reaffirming its commitment to comply with the project’s stringent environmental conditions. The company has maintained that the Milton hub is critical for reducing congestion and facilitating the efficient movement of goods in southern Ontario.
Local opponents, however, remain concerned about the long-term health impacts on the community, with Halton Region having argued that the project will “contribute to exceedances of health-based exposure standards” due to emissions from diesel trucks and trains.
The decision may not mark the end of the legal challenges, as Halton Region could appeal to the Supreme Court of Canada.