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An arial view of the South Island Aggregates site where tonnes of contaminated soil is dumped every day near a sensitive watershed, in the distance is Shawnigan Lake, B.C., Jan. 6, 2016.CHAD HIPOLITO/The Globe and Mail

The provincial government has cancelled a waste-discharge permit for a company that runs a contaminated soil-disposal site near Shawnigan Lake, delighting community activists who have spent years fighting the project.

The decision – announced Thursday by B.C. Environment Minister Mary Polak – follows a permit suspension last month and is the latest twist for a project that galvanized a community and triggered several court proceedings.

"Ecstatic – I'm ecstatic," Sonia Fursteneau said on Thursday. "The whole community is ecstatic right now."

Ms. Fursteneau, Shawnigan Lake area director with the Cowichan Valley Regional District (CVRD), has been a vocal opponent of the contaminated-soil project and was acclaimed as Green Party candidate for the Cowichan Valley riding last October.

She and other community members objected to the project even before it was granted a permit to operate in 2013, saying it made no sense to put a facility that handles potentially toxic material close to Shawnigan Lake, which provides drinking water to thousands of people in the region.

Cobble Hill Holdings had a permit under B.C.'s Environmental Management Act to receive and process up to 100,000 tonnes a year of contaminated soil at the site, about 25 kilometres north of Victoria.

On Thursday, Ms. Polak cancelled that permit, saying Cobble Hill had failed to comply with its terms, including providing updated security in the form of an irrevocable letter of credit.

The Environment Ministry had suspended the permit last month.

In a statement, Ms. Polak said the company was given 15 business days to provide three documents, including an irrevocable letter of credit, but only two of the documents were provided.

In a letter to the company, Ms. Polak said the permit-holder "has demonstrated a pattern of making minimal or no effort to come into compliance until threatened with actions, such as permit cancellation."

The contentious facility became the subject of a review by the Environmental Appeal Board – which in 2015 upheld its permit – and several legal actions.

In January, a Supreme Court of B.C. judge ruled in favour of the Shawnigan Residents Association and said the EAB's decision should be set aside.

Opponents rang up about $2-million in legal costs and spent countless hours fighting the project, Ms. Fursteneau said.

With the permit cancelled, the focus will now shift to ensuring contaminated soil is removed, she said. At least one court action remains under way.

In January, the CVRD filed an application for leave with the Supreme Court of Canada to review a November, 2016 B.C. Court of Appeal decision. That decision reversed a lower-court order that found a contaminated-soil facility was not a permitted use under the CVRD's zoning bylaw.

The CVRD had hoped to use its zoning laws to stop the contaminated-soil site from operating.

The application to the Supreme Court of Canada is still under way, CVRD chief administrative officer Brian Carruthers said.

"We had serious concerns with the B.C. Court of Appeal decision – and not only the implications for the [Shawnigan Lake] facility but for other similar facilities and activities in the future," Mr. Carruthers said. "The minister's decision does address one of the [CVRD's] goals – which was to not have this facility operating," he added. "But now that we have this outstanding decision of the B.C. Court of Appeal that has significant implications not only for us, but for other jurisdictions, in terms of that becoming case law … it could lead the way to similar facilities, similar quarries, being turned into contaminated-soil facilities without local governments having the ability to influence that." The Supreme Court of Canada is expected to decide within a few months whether to hear the case.

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