Amendments to Quebec’s Regulation respecting compensation for adverse effects on wetlands and bodies of water

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. 

Coming into force of the Wetland Conservation Regulation

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:

• projects that result in a loss of the surface area of a wetland or body of water equal to or less than 30 m²;
• work to improve the ecological functions of a wetland or body of water;
• work for the maintenance or stabilization of an outlet or a water withdrawal facility;
• work related to slope stabilization work by means of phytotechnologies carried out on the shore, bank or littoral zone of a lake or watercourse;
• work for beach nourishment to counter the effects of erosion; and
• the establishment and operation of a cranberry or blueberry farm.⁵ 

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: 

• work related to road infrastructure, a bike path, a hiking trail, a water management or treatment facility referred to in section 32 of the EQA or an electric power transmission and distribution network, where the work is carried out by a department, a public body or certain entities provided for in the Wetland Conservation Regulation;
• exploration work referred to in the Regulation respecting mineral substances other than petroleum, natural gas and brine, CQLR c. M-13.1, r.2;
• work for mining mineral substances other than petroleum, natural gas and brine;
• cultivation of a parcel of land for market crops production and the expansion of such a parcel of land; and 
• work carried out in an industrial park, within the meaning of section 32 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations, SQ 2004, c. 29, or as part of the development of such park.⁶

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 

Amendments to the Wetland Conservation Regulation and their impacts

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:

• distinction between wooded wetlands and open wetlands: projects that result in a loss of 300 m² or less of wooded wetlands will be exempted from paying the financial contribution, although the 30 m² limit for seeking exemption from the contribution will continue to apply to open wetlands; 
• work to maintain or re-establish the ecological functions of wetlands and bodies of water, especially work to improve them;
• slope stabilization work on public roads will now benefit from broader exemptions than those initially provided for;
• beach nourishment to counter the effects of erosion will now benefit from broader exemptions than those initially provided for; and
• cranberry or blueberry farms will now benefit from broader exemptions than those initially provided for, but only to include any development of a new parcel of land for the cultivation on non-aquatic plants and mushrooms.¹²

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:

• any new parcel of land for the cultivation of non-aquatic plants and mushrooms;
• all industrial parks instead of only those that meet the definition given to this expression by the Act respecting the exercise of certain municipal powers in certain urban agglomerations;
• silvicultural drainage and other forest development activities carried out in the environments specifically referred to in the draft regulation; and 
• all work on a shore or bank or in the floodplain of a lake or watercourse when carried out by a government department, a public body or an entity having authority over the territory in question.¹³

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.