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Commemorating the National Day of Remembrance and Action on Violence Against Women

Tue, 12/06/2016 - 9:45am

Matter Commented on: National Day of Remembrance and Action on Violence Against Women

December 6 is the National Day of Remembrance and Action on Violence Against Women in Canada. This date marks the anniversary of the murders of fourteen women at the École Polytechnique massacre in Montreal. A memorial service is being held at the University today, and people may also wish to visit the moving sculpture by artist Teresa Posyniak, Lest We Forget, in the Faculty of Law across from the law library.

ABlawg has published several posts on gender-based violence this year, which we have gathered below. These posts analyze the treatment of gender-based violence by the courts and legislatures, in criminal, constitutional and other contexts, drawing to attention those bodies’ varying levels of understanding of and commitment to preventing violence. It is worth noting that the Inquiry Committee of the Canadian Judicial Council into the conduct of Justice Robin Camp recently stated as follows with respect to the role of judges in cases involving gender-based violence:

The Intervener Coalition submitted that, conceptually, the reasonable person “must include the perspective of survivors of sexual assault, and marginalized women generally, as they are entitled to a judiciary that rejects sexual myths and stereotypes and understands and respects equality.” We agree. A judge performs a unique role in society and his or her capacity to continue in the execution of that role cannot be judged without regard to the perspective of those who would most likely be affected by the Judge remaining in office.  That is not to say that such a perspective is the sole or the dominant one in evaluating public confidence, but it is one that should be included, and must be understood. (at para 252)

With that in mind, we encourage our readers to reflect on the various approaches to gender-based violence captured here:

Erin Sheley, The Constitutional Limits of the Sex Offender Registry

Drew Yewchuk, Myths, Stereotypes, and Credibility in Sexual Offence Trials

Stephen Armstrong, Taking Proportionality Seriously in Charter Adjudication: R v KRJ

Drew Yewchuk, Ostensible Consent: Reality and Legal Reality Case

Jennifer Koshan, Excluding Mere Intimate Relationships: The Alberta Court of Appeal Interprets the Protection Against Family Violence Act

Joshua Sealy-Harrington, Mastery or Misogyny? The Ghomeshi Judgment and Sexual Assault Reform

Alice Woolley, What Ought Crown Counsel to do in Prosecuting Sexual Assault Charges? Some Post-Ghomeshi Reflections

Jennifer Koshan, Costs Not Appropriate in Protection Against Family Violence Act Litigation

Alysia Wright, Access to Legal Services in Women’s Shelters

Jennifer Koshan, Reflections on Week One of the Ghomeshi Trial

Jennifer Koshan, Sexual Assault and Choking – Making Sense of the Legal Consequences (No subject)

No Offence, But I Hate You: American Freedom Defence Initiative v Edmonton (City)

Mon, 12/05/2016 - 10:00am

By: Ola Malik, Jeff Watson and Holly Wong 

PDF Version: No Offence, But I Hate You: American Freedom Defence Initiative v Edmonton (City)

Case Commented On: American Freedom Defence Initiative v Edmonton (City), 2016 ABQB 555 (Can LII )

Our Canadian courts are jealous guardians of the freedom of expression, which the Canadian Charter protects in section 2(b). The rationale for protecting freedom of expression is that society should be free to discuss and decide what is true, what is right and what is good. As with most things Canadian, we have accepted that the way in which we speak to one another should be politely regulated. Our courts have accepted that for expression to be truly valued, our public square must provide everyone with the opportunity to speak as equals, where no one is made to feel marginalized or devalued. How very Canadian, indeed! To a large extent, how we speak to one another is as important as what we say, and that, in our view, is a good thing. Defining the limits of appropriate speech isn’t just an exercise in legal abstractions, nor does it just involve lawyers. Rather, it goes to the heart of how all of us live together in a peaceful community with our neighbours and what we, together as a community, aspire to be.

Those of us who practice municipal law and who are interested in freedom of expression issues have been eagerly awaiting the case of American Freedom Defence Initiative v Edmonton (City), 2016 ABQB 555 (AFDI). Indeed, we were so intrigued by the issues this case raises that we commented on them long before trial, here, and in a companion piece titled “Controversial Advertising on City Buses – Are Municipalities Ready for What’s To Come?” (2015) 7:5 DMPL (2d) 1-6.

The Facts

The American Freedom Defense Initiative (AFDI) applied for a declaration that the City of Edmonton’s removal of an ad from the exterior of Edmonton buses constituted an infringement on its freedom of expression and further, sought an order enjoining the City of Edmonton from violating its freedom of expression in the future. Initially, AFDI had been approved by Edmonton Transit to post an ad which read:

Girls Honor Killed by Their Families. Is your Family Threatening You?
Is Your Life in Danger? We Can Help: Go to FightforFreedom.us

AFDI subsequently submitted a revised ad, which contained photos of seven Muslim women who were murdered as a result of honour killings along with the following caption:

Muslim Girls Honor Killed by their Families.
Is Your Family Threatening You? Is There A Fatwa on You Head?
We can help: go to Fightforfreedom.us
Paid for by the American Freedom Defense Initiative

The ad included the logo for the American Freedom Defense Initiative and the logo for an organization called “SIOA” which stands for “Stop Islamization of America”.

Pattison Outdoor Group (Pattison), the agency contracted by the City of Edmonton to manage all of Edmonton Transit’s advertising, notified AFDI that this second ad had been approved for posting but that Edmonton Transit reserved the right to remove the ad if it received public complaints. Within the first week or so of the ad appearing, a manager for Edmonton Transit received a call from a city councillor advising that he had received numerous complaints regarding the ad. Edmonton Transit conducted an internal review and, after meeting with several people who had been offended by the AFDI ad, ordered that it be removed.

At trial before Justice J.J. Gill of the Alberta Court of Queen’s Bench, AFDI argued that its freedom of expression under section 2(b) of the Charter had been infringed and could not be saved by section 1 of the Charter because this infringement (1) was not a limit “prescribed by law”; and because the infringement (2) was not a demonstrably justified limit in a free and democratic society.

At trial, the City of Edmonton conceded that its decision to pull the ad infringed upon AFDI’s freedom of expression. Arguably, this was an appropriate concession to make given Justice Deschamps’ decision in Greater Vancouver Transportation Authority v Canadian Federation of Students, 2009 SCC 31 (CanLII) (GVTA), that advertising space on municipal buses was a type of public space which attracted the protection of section 2(b) (at paras 37-47). Consequently, in the AFDI case, the analysis moved to whether the infringement was saved by section 1.

In this post, we quickly summarize the first issue, whether removal of the ad was “prescribed by law”, and move to the second, more interesting issue, whether the City of Edmonton’s infringement upon AFDI’s freedom of expression was a demonstrably justified limit in a free and democratic society.

The Applicable Contractual Provisions and the Canadian Code of Advertising Standards

Edmonton Transit, like most other large municipalities, does not engage directly with advertising customers; rather it contracts this service out to third parties, in this case, Pattison. The agreement between the City of Edmonton and Pattison with respect to advertising services contains two important contractual conditions which regulate advertisement:

Clause 16.1     Any advertisement to be placed in or on the Buses … shall be of a moral and reputable character and the Contractor agrees that it will forthwith remove from any…Bus…any advertisement which the City…determines is contrary to this Clause.

Clause 16.3     The contents of advertising material shall comply with the Advertising Standards Council of the Canadian Advertising Advisory Board [emphasis added].

There are also agreements which are entered into between Pattison and its advertising customers. The Production Agreement provides as follows:

Pattison reserves the right to not display any advertising which is considered to be in violation of the Canadian Code of Advertising Standards or which Pattison deems may be offensive to the moral standard of the community, or which Pattison believes negatively reflects on the character, integrity or standing of any organization or individual [emphasis added].

A clause in the Pattison Transit Advertisement Agreement stipulates that:

Pattison reserves the right to reject or remove any Advertising Material which does not… in Pattison’s sole opinion, comply with the standards set by the Canadian Advertising Foundation or the applicable Transit Authority…[emphasis added]

The Canadian Code of Advertising Standards (Code) sets out the criteria for advertising standards. It was created and is administered by Advertising Standards Canada, a self-regulating group of private advertisers and other various media agencies. Provision 14 of the Code addresses “Unacceptable Depictions and Portrayals” and is worth reproducing here in full:

Clause 14:         It is recognized that advertisements may be distasteful without necessarily conflicting with the provisions of this Clause 14; and the fact that a particular product or service may be offensive to some people is not sufficient grounds for objecting to an advertisement for that product or service. Advertisements shall not:

a) Condone any form of personal discrimination, including that based upon race, national origin, religion, sex or age;

b) Appear in a realistic manner to exploit, condone or incite violence; nor appear to condone, or directly encourage, bullying; nor directly encourage, or exhibit obvious indifference to, unlawful behaviour;

c) Demean, denigrate or disparage one or more identifiable persons, group of persons, firms, organizations, industrial or commercial activities, professions, entities, products or services, or attempt to bring it or them into public contempt or ridicule;

d) Undermine human dignity; or display obvious indifference to, or encourage, gratuitously and without merit, conduct or attitudes that offend the standards of public decency prevailing among a significant segment of the population.

Was the Infringement Prescribed by Law?

In the AFDI decision (at para 59), Justice Gill reproduced the rationale behind requiring that government limits on rights and freedoms be prescribed by law, which Justice Deschamps had set out in GVTA:

…The requirement that a limit on rights be prescribed by law reflects two values basic to constitutionalism or the rule of law: 1) in order to preclude arbitrary or discriminatory action by government officials, all official action in derogation of rights must be authorized by law; 2) citizens must have a reasonable opportunity to know what is prohibited so that they can act accordingly.

Justice Gill held that the criteria for determining whether an ad would be permitted to be posted on Edmonton Transit property were limits prescribed by law (at paras 71-73):

…the City in this case exercised its discretion to prohibit advertising which it found to be of an immoral or irreputable character, offensive to the moral standards of the community, or which it believed negatively reflected on the character, integrity or standing of any organization or individual. I note that these bases for the City’s discretion, described in different ways in the contractual documents, are in keeping with various standards contained in the Code, most notably s. 14.

Pattison in turn communicated to prospective advertising clients that it would abide by the standards referred to in the contractual documents…Those wishing to advertise are the only ones who might experience a restriction of their freedom of expression in this context. They were apprised of this information. Clients choosing to advertise signed agreements recognizing that Pattison would apply these standards.

In my view, those potentially or actually affected by the restrictions were given a reasonable opportunity to know the standards which would apply and could act accordingly.

In the result, Justice Gill found that the City of Edmonton’s advertising policies and criteria were limits prescribed by law which satisfied the first step of the section 1 analysis. We agree in all respects with Justice Gill’s decision on this point.

Was the Infringement Reasonable and Demonstrably Justified?

Justice Gill held that the City of Edmonton’s objective for its advertising policies – to provide a safe and welcoming public transit system – was a sufficiently important objective to warrant placing a limit on AFDI’s freedom of expression (at paras 83-86) (as Justice Deschamps had similarly held in GVTA). Of importance was Justice Gill’s observation that the section 2(b) freedom must be interpreted consistently with the preservation and enhancement of multiculturalism values, as protected in section 27 of the Charter (at para 90).

Justice Gill also held that a rational connection existed between the City of Edmonton’s decision to restrict advertising which it felt was offensive to the moral standards of the community, or which negatively reflected on the character, integrity or standing of any organization or individual, and its objective of providing a safe, welcoming public transit system (at para 88). This is very similar to the conclusions in the GVTA decision, where the Court held (at para 76) that:

…It is not the political nature of an advertisement that creates a dangerous or hostile environment. Rather, it is only if the advertisement is offensive in that, for example, its content is discriminatory or it advocates violence or terrorism – regardless of whether it is commercial or political in nature – that the objective of providing a safe and welcoming transit system will be undermined.

With respect to the question of minimal impairment, Justice Gill concluded (at para 94) that the AFDI ad was not intended to provide help for victims of religious extremism but rather, was designed to:

…bring the Muslim population of Edmonton, including Muslim/Islamic Faith in general into public contempt or ridicule. This purpose is clear from a review of the AFDI website as well as the SIOA’s website. The aim is to encourage Muslim individuals to leave Islam and convert from their Muslim faith, or alternatively to advocate special treatment of Muslims and their exclusion from non-majority Muslim countries.

Justice Gill described the purpose of the ad as follows (at paras 95 and 100):

If one reads the advertisement in a light most favourable to AFDI, it simply encourages possible victims of religious extremism to self-report victimization. However, the logos of AFDI and SIOA are a significant and prominent part of the advertisement. The incorporation of the logos is a promotion of the AFDI and its SIOA initiative. The invitation in the advertisement to “go to FightforFreedom.us” directs the audience to further content. It suggests that there is more information to be shared beyond the words and images that appear on the advertisement. In my opinion, such things as logos, website addresses and the websites referred to are properly considered by the City in applying its policy. To find otherwise would be to allow form to triumph over substance. It would allow advertisers to incorporate references to draw the audience, without impunity, to discriminatory or otherwise unacceptable content.

……….

In fact, the AFDI’s advertisement might reasonably be viewed as a ruse to further what appears to be one of its true objectives, which is to target Muslims. The phrase “dog whistle politics” comes to mind, whereby coded messaging is understood by a portion of the population who might support the objectives of the advertiser, in this case AFDI and SIOA.

Consequently, Justice Gill had no difficulty concluding that the City of Edmonton’s restrictions minimally impaired AFDI’s section 2(b) freedom of speech (at para 107).

Finally, Justice Gill held that the City’s objective of providing a safe and welcoming transit system far outweighed the deleterious effects of its refusal to permit the posting of offensive or discriminatory ads on its buses. (at paras 110-114). Justice Gill ultimately concluded that the infringement upon AFDI’s freedom of expression was in all respects justified under section 1 of the Charter and dismissed AFDI’s applications against the City of Edmonton (at paras 115-117).

Commentary

How Do You Judge a Message?

In our earlier blog post here, we examined the background of the AFDI organization and its blatantly xenophobic, anti-Muslim views. If you go to the SIOA, AFDI and FightforFreedom.us websites here, here, and here, you can you see for yourself what the true policy objectives of these organizations are.

This raises an interesting question. How far should a court go to determine the contextual meaning or intent of a controversial advertisement or advocacy message? Read textually, (without referring to these websites), the AFDI ad could be interpreted as a concerned, public service announcement. However, the City of Edmonton was rightly concerned about the impact upon its citizens of allowing an arguably hateful organization to promote what was in substance an anti-Muslim advocacy message. We believe that the City was absolutely correct to peer beyond the literal meaning of the AFDI ad and consider its true intent as reasonably inferred from the clearly troubling advocacy positions of the AFDI, SIOA and FightforFreedom organizations. Justice Gill’s decision sends a clear message that the underlying intent and purpose of a message is as important to consider as its plain textual meaning. Excluding organizations which promote discrimination, hate, and xenophobia under the guise of innocent advocacy from our public squares is a good thing and is consistent with the values which underlie a free and democratic society under section 1 of the Charter.

Should We Apply a Community Moral Standard Test to Controversial Messaging?

Justice Gill found that the City of Edmonton properly exercised its discretion to pull the AFDI ad pursuant to the various contractual advertising agreements and Code provisions which did not permit the posting of an advertisement if it was “offensive to the moral standards of the community”, “negatively reflects on the character, integrity, or standing of any organization or individual”, or was not of a “moral and reputable character”.  While we don’t quibble with the ultimate outcome of Justice Gill’s decision, we have concerns about whether these evaluative criteria, agreed to by Pattison and the City of Edmonton, can appropriately be applied to controversial advocacy messaging.

Firstly, criteria which evaluate a message based on whether it: (1) offends the moral standards of a community; (2) negatively reflects on a person; or, (3) is of an immoral or irreputable character, are unhelpfully vague and subjective. This is especially so when the criteria are applied to controversial advocacy messaging, where the person evaluating the message in accordance with these criteria is going to have to make the judgment call, based on their own prejudices and biases. In short, these criteria are very difficult (if not impossible) to apply in any objective, consistently reliable way and the danger is that they yield highly unpredictable results from one case to the next, depending on the particular issue.

We do not believe that any of these criteria were necessary given the values and principles which underlie a section 1 analysis. In R. v Oakes, [1986] 1 SCR 103, 1986 CanLII 46 (SCC), Dickson C.J. discussed the contextual assessment to be given to a section 1 analysis and noted that the core values and principles which form part of a free and democratic society include:

…respect for the inherent dignity of the human person, commitment to social justice and equality, accommodation of a wide variety of beliefs, respect for cultural and group identity, and faith in social and political institutions which enhance the participation of individuals and groups in society.

These criteria are much easier to define and understand than concepts that reference morality, character, reputation and community acceptance. They are also consistent with the values which underlie the protection of expressive activity, which Justice McLachlin (as she then was) identified in Irwin Toy Ltd. v Quebec (Attorney General), [1989] 1 SCR 927, 1989 CanLII 87 (SCC) (at para 243):

(1) seeking and attaining the truth is an inherently good activity; (2) participation in social and political decision-making is to be fostered and encouraged; and (3) the diversity in forms of individual self-fulfilment and human flourishing ought to be cultivated in an essentially tolerant, indeed welcoming, environment not only for the sake of those who convey a meaning, but also for the sake of those to whom it is conveyed.

Secondly, it was in the GVTA case that Justice Deschamps opened the door to a community standard test for advertisements, albeit with a very important caveat (at para 77):

…While a community standard of tolerance may constitute a reasonable limit on offensive advertisements, excluding advertisements which “create controversy” is unnecessarily broad. Citizens, including bus riders, are expected to put up with some controversy in a free and democratic society. [Emphasis added]

It is likely that Justice Deschamps raised the community standard test because the advertising policy being considered in GVTA prohibited any advertisement which was “…likely, in the light of prevailing community standards, to cause offence to any person or group of persons or create controversy” (at para 74, GVTA). Justice Deschamps spent no more time discussing this test and we wonder whether these comments were intended to have further broader application.

The Supreme Court of Canada has for some time been gradually moving away from a community standard of tolerance test to a harms-based test in the context of obscenity and indecency law in cases such as R. v Butler, [1992] 1 SCR 452, 1992 CanLII 124 (SCC); R. v Mara, [1997] 2 SCR 630, 1997 CanLII 363 (SCC); and Little Sisters Book & Art Emporium v Canada (Minister of Justice) [2000] 2 SCR 1120, 2000 SCC 69 (CanLII). A strict application of the community standard of tolerance test as applied in this context had come under increasing criticism for imposing a majoritarian sexual morality on minority sexual norms and for failing to recognize changing societal mores and a growing acceptance of what were once considered deviant sexual conduct and behavior.

The critique of the community standard of tolerance test was acknowledged by a majority of the Supreme Court of Canada in R. v Labaye, [2005] 3 SCR 728, 2005 SCC 80 (CanLII), which adopted a harms-based test for determining whether conduct (in this case, a sex club in Montreal which permitted people to meet each other for group sex) could be described as indecent pursuant to the Criminal Code. Writing for the majority, McLachlin CJC stated as follows with respect to the community standard of tolerance test (at para 18):

How does one determine what the “community” would tolerate were it aware of the conduct or material?  In a diverse, pluralistic society whose members hold divergent views, who is the “community”?  And how can one objectively determine what the community, if one could define it, would tolerate, in the absence of evidence that community knew of and considered the conduct at issue?…

For the majority in Labaye, the new test (which we won’t discuss at length here) focused on the nature of harm of the impugned behavior and whether the risk of harm from engaging in that behavior was so great that it was incompatible with the proper functioning of society (at paras 33 and 56):

…The inquiry is not based on individual notions of harm, nor on the teachings of a particular ideology, but on what society, through its fundamental laws, has recognized as essential…Unlike the community standard of tolerance test, the requirement of formal recognition inspires confidence that the values upheld by judges and jurors are truly those of Canadian society.  Autonomy, liberty, equality and human dignity are among these values.

……….

Incompatibility with the proper functioning of society is more than a test of tolerance.  The question is not what individuals or the community think about the conduct, but whether permitting it engages a harm that threatens the basic functioning of our society.  This ensures in part that the harm be related to a formally recognized value, at step one.  But beyond this it must be clear beyond a reasonable doubt that the conduct, not only by its nature but also in degree, rises to the level of threatening the proper functioning of our society.

If you’re employed with a municipality and have an application before you from an advertiser which may raise objections or cause controversy, how can you reasonably be expected to decide, with any consistency, whether the ad is “offensive to the moral standards of a community”, as required by the agreement between the City of Edmonton and Pattison? Can your community have several, or even competing, community standards – and if so, how do you choose? Which criteria do you use – public complaints? And if so, how many public complaints does it take to decide that a message offends a community’s moral standard?

Evaluating controversial advocacy messaging in accordance with a community standard of tolerance test which incorporates notions of morality, reputation, or character, rather than harm in the sense described in Labaye, is inherently subjective and creates the spectre of patchwork application. Minority interests may be over-represented through paternalism or under-represented because they lack a political voice, rather than having a uniform application of Charter principles. While there are sure to be small, rural or isolated communities in Canada which require special considerations, aren’t major metropolises representative of our world’s cultures, religions, and all the challenges these bring with them?

Should Advertising on Municipal Property be Considered Differently?

As we’ve discussed, the Supreme Court majority in Labaye overlooked the community standard of tolerance test in favor of an objective, harm-based assessment. Of interest is whether a controversial advocacy message placed on municipal advertising space requires a different assessment of harm than other forms of expressive activity. Here are some reasons why controversial messaging advertised on municipal property raises unique concerns:

  • Messages placed in public spaces such as existing advertising signs or billboards located on municipal infrastructure, buildings, buses, are likely to be viewed by a large number of people given their privileged location.
  • Anyone reading these messages may believe that these advertisements are condoned by their public officials and reflect a municipality’s official views.
  • Victims of these messages may be made to feel inadequate, shameful, and vulnerable and will likely feel powerless or marginalized. Supporters of the messages will feel vindicated in their views and will likely be emboldened to perpetuate the messages through thoughts and acts.

There is a very high threshold before speech is found to be discriminatory and hateful under human rights legislation. In the case of Saskatchewan (Human Rights Commission) v Whatcott 2013 SCC 11 (Can LII), Mr. Whatcott was found to have contravened the Saskatchewan Human Rights Code by distributing homophobic flyers that exposed LGBTQ persons to hatred and ridicule. He argued that the Code’s hate speech provisions infringed his freedom of expression.

The unanimous Supreme Court of Canada upheld the Code’s ban on hateful expression, but significantly narrowed the scope of the provision. According to the Court, only the most extreme expression that objectively exposed persons to hatred or contempt fell within the constitutionally protected ambit of the Code (at para 109). The Court set out a stringent and high threshold for what constitutes hate speech:

  • The speech must objectively expose a protected group to hatred. Subjective individual feelings are not the focus (at para 56).
  • The words “hatred” and “contempt” must be restricted to those most extreme forms of emotion described as “detestation” and “vilification”. Prohibiting language that was merely offensive, humiliating, impugned individual dignity or caused hurt feelings was impermissibly overbroad and fell outside the objectives of human rights legislation (at paras 47 and 57).
  • The focus of a hate speech inquiry must target the likely effect of the speech. To qualify as hate speech, it must be likely to actually expose a person or groups to hatred by others (at paras 52, 54 and 58).
  • Only the most extreme language of hatred that targeted marginalized groups was minimally impairing. Prohibiting language that is merely offensive, causes hurt feelings, or which might expose a person to ridicule was impermissibly overbroad and could not be upheld (at paras 92 and 108).

It’s important to note that in Whatcott, the Supreme Court of Canada was asked to rule on the constitutionality of the Saskatchewan Human Rights Code’s provisions as they pertained to Mr. Whatcott’s freedom to express himself, as well as whether imposing restrictions on Mr. Whatcott’s speech was justified by section 1 of the Charter. What is striking about the Whatcott decision is the high threshold required to prove hateful speech.

Contrast the high threshold found in Whatcott with the much lower test required to find “Unacceptable Depictions and Portrayals” in Clause 14 of the Code, which focuses on advertisements that condone discrimination or violence, lead to public contempt or ridicule, or undermine human dignity. While we’ve expressed our doubts regarding the applicability of the Code to controversial advocacy messaging here, we wonder whether Clause 14 might be appropriate to the unique context of controversial advocacy messaging on municipal advertising space.

The important point here is that an assessment of harm necessarily depends on context. While it would likely be very difficult to restrict someone’s freedom to pass out flyers criticizing a political party or religious belief, it may be easier to restrict someone’s freedom to post an image on city property depicting the image of a bloody aborted fetus. Should we make it easier, not harder, for municipalities to restrict the rights of advertisers to post controversial advocacy messaging on municipal property? Are the psychological assaults caused by offensive advocacy messaging on a city bus or on the side of a city building more deleterious to the proper functioning of society? We think so. And we think that Justice Gill’s decision helps us.

This post may be cited as: Ola Malik, Jeff Watson & Holly Wong “No Offence, But I Hate You: American Freedom Defence Initiative v. Edmonton (City)” (5 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_OM_etal_AFDI.pdf

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Arbitrations Added to the PPA Soup

Fri, 12/02/2016 - 10:00am

By: Nigel Bankes

PDF Version: Arbitrations Added to the PPA Soup

Case Commented On: TransCanada Energy Ltd v Balancing Pool, 2016 ABQB 658 (CanLII)

The power purchase arrangements (PPA) dispute in the Province continues to evolve along a number of different tracks. As noted in a previous post, the negotiation track seems to be producing some positive results with a number of tentative settlements announced. As a second track, ENMAX has its application to determine the effective date of termination of the Battle River PPA (this application is discussed at para 5 of the current decision). This application had been adjourned sine die but ENMAX has recently applied to have the application set down for a hearing. As a third track, the Province, through the Attorney General (AG), continues to maintain its judicial review application. The decision that is the subject of this post reveals a fourth track, that of arbitration actions commenced by some of the PPA buyers (although perhaps some of these arbitrations might be withdrawn under the terms of the tentative settlements referenced above). This decision of Chief Justice Neil Wittmann deals with whether or not the arbitrations were properly commenced (i.e. had a dispute crystallized?) and the interaction between the judicial and arbitral tracks.

TransCanada Energy (TCE) and the ASTC Power Partnership (ASTC) are buyers under various PPAs: TCE for Sundance A, Units 1 and 2 and Sheerness, and ASTC for Sundance B Units 3 & 4. On March 7, 2016 both parties advised the Balancing Pool that they had determined that they were entitled to terminate and were terminating their respective PPAs pursuant to the change of law clause in these arrangements and its notorious Errata (i.e. the addition of the “or more unprofitable” language, see discussion here) and on account of the increased charges that fall on generators under the Specified Gas Emitter Regulation, Alta Reg 139/2007 and that was passed on to them as buyers under the terms of the PPAs. The Balancing Pool (BP) advised TCE and ASTC that it would conduct an investigation under sections 2(1)(g) and (h) of the Balancing Pool Regulation, Alta Reg 158/2003. These provisions contemplate that in the event of a claimed “extraordinary event” (defined to include “termination” in accordance with the terms of a PPA) the BP shall investigate the matter, participate in any dispute resolution pertaining to the matter and commence making payments as if the PPA were terminated pending resolution. The BP’s response triggered a further notice from TCE and ASTC to the effect that there was now a deemed dispute between the parties under Article 19 of the PPA (the dispute resolution procedure) which ultimately led TCE and ASTC to refer the matter to arbitration in July. TCE and ASTC consider that there is both a dispute and a deemed dispute in their relations with the BP. The dispute relates to the timing or termination; the deemed dispute relates to the question of whether or not TCE and ASTC were in a position to terminate.

Given that there were a number of PPAs at issue, TCE and ASTC commenced no less than three arbitrations and appointed their three nominees: Marshall Rothstein and Ian Binnie (both former judges of the Supreme Court of Canada) and Clifton O’Brien (a former judge of the Court of Appeal of Alberta). The BP failed to make any of its appointments to the panels and accordingly TCE and ASTC were bringing this application to have the Court make the appointments. The BP contested the application and also, in the alternative, brought a cross-application to have the arbitration stayed pending the outcome of the AG’s application. The AG was granted leave to file argument in support of the BP’s cross-application.

The BP’s argument on the merits was effectively that the issue was premature and had not yet ripened into a dispute since it still had the matter under active consideration. The BP’s argument on the stay was that the matters at issue in the AG’s application go to the heart of the issues that the arbitration panels would have to determine.

Chief Justice Wittmann granted the applications of TCE and ASTC and denied the BP’s cross-application. He found (with no further assessment of the record) that there was a deemed dispute. He denied the application for a stay because he simply disagreed with the BP’s assertion that (at para 67) “it would be manifestly unfair to the BP to require it to participate in arbitration while the AG Application is outstanding.” Chief Justice Wittmann reasoned as follows (at para 67):

There are sufficient built-in mechanisms within the PPAs’ dispute resolution process – specifically section 19.4(i) – for the question of law to be referred to the court. Section 19.4(i) of the PPAs allows either party to “refer a question of law to a court of competent jurisdiction for final and binding determination notwithstanding that it may be part of a dispute before the board of arbitrators.” Very able arbitrators have been appointed. The arbitration panels may or may not decide the Errata question of law is necessary for their decision. The Errata question of law can be decided by the arbitrators if they see fit. But in any event, a party may refer the Errata question of law to this Court.

Clause 19.4(i) of the PPAs referenced in this quotation reads as follows: “either Party may refer a question of law to a court of competent jurisdiction for final and binding determination notwithstanding that it may be part of a dispute before the board or arbitrators.” Counsel for the BP had indicated to Chief Justice Wittmann while his decision was under reserve that the BP would take advantage of this provision were the arbitrations to proceed. The availability of this course of action seems to have been important to the Chief Justice. However, there may be more uncertainty here. Reference to a court under cl.19.4(i) will not work an automatic stay of the arbitrations and Chief Justice Wittmann certainly seems to think that the panels may have to consider the Errata question. In the face of parallel proceedings, section7 of the Arbitration Act, RSA 2000, c. A-43 clearly favours staying the court proceeding so as to allow the arbitration to continue and it is not clear to me how this presumption will interact with cl.19.4(i) of the PPAs. Certainly the matter would be much cleaner were the arbitral proceedings to be stayed pending the outcome of the AG’s application.

If the arbitrations do proceed they will proceed as three separate arbitrations with the result that we may get conflicting decisions. This has happened before with PPA arbitrations (see the discussions in Transalta Generation Partnership v Capital Power PPA Management Inc, 2015 ABQB 793 (CanLII) and Enmax Energy Corporation v TransAlta Generation Partnership, 2015 ABCA 383 (CanLII)) and points to the difficulty if not absurdity of allowing and even favouring arbitration in these sorts of circumstances (standard form contracts/statutory arrangements imbued with a public interest). Section 8(4) of the Arbitration Act authorizes consolidation of arbitrations but only on the application of all of the parties. So again we have inconsistent arbitral awards as well as a decision. In international law this is referred to as the problem of fragmentation (see the Fragmentation Report of the International Law Commission). It is perhaps an inevitable part of international law given its horizontal nature. The hierarchical nature of domestic law allows us to minimise or avoid the problem; but in the case of the PPAs we have deliberately re-introduced the problem.

Given the history of PPA arbitrations, the one thing that I looked at first in the draft term sheet for the contracts for difference arrangements to be developed by the AESO under Bill 27, the Renewable Energy Act (see post here), was the dispute settlement clause. I am happy to report that it contemplates resolution of disputes by the courts and not by way of arbitration. Clause 33 provides as follows:

In the event of a dispute, the parties’ representatives will attempt to resolve the dispute within 10 days after a request by either party, failing which either party may commence litigation.

I hope that it survives in this or a similar form. It is in the public interest that we have consistent and authoritative interpretations of these standard form contractual arrangements.

This post may be cited as: Nigel Bankes “Arbitrations Added to the PPA Soup” (2 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_NB_PPA_Arbitrations.pdf

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Bill S-3: A rushed response to Descheneaux

Thu, 12/01/2016 - 10:00am

By: Elysa Hogg

PDF Version: Bill S-3: A rushed response to Descheneaux

Matters Commented On: Bill S-3 “An Act to amend the Indian Act (elimination of sex-based inequities in registration); Descheneaux c Canada (Procureur General), 2015 QCCS 3555 (CanLII)

*Note on terminology: “Indian” is used to describe a person defined as such under the Indian Act, and is not intended to carry any derogatory connotations.

In the early days after the 2015 election, Prime Minister Trudeau was honoured by the Tsuut’ina First Nation with a traditional headdress and an indigenous name which translates to “the one that keeps trying.” Trudeau and the Liberals will have to keep trying, as they made an extraordinary commitment to address First Nations issues during the campaign, and set multiple deadlines for action within the next few years. One of the first deadlines to come due is an amendment of the Indian Act, RSC, 1985 c. I-5 necessitated by a recent Quebec Superior Court ruling.

In Descheneaux c Canada (Procureur General), 2015 QCCS 3555 (CanLII) (Descheneaux) the court held that several provisions of the Indian Act surrounding who is considered a ‘Status Indian’ violated the principles of equality protected by Section 15 of the Charter of Rights and Freedoms.

After withdrawing an appeal of the decision in February 2016, the federal government has commenced a two-stage response to this ruling. Stage one is Bill S-3 “An Act to amend the Indian Act (elimination of sex-based inequities in registration)”, while stage two is a collaborative process between the government and First Nations leadership to identify and implement further reforms.

This post will briefly summarize the issues and findings in Descheneaux, and assess how these are impacted by Bill S-3. It will also examine some of the testimony given at the Senate’s Standing Committee on Aboriginal Peoples meetings held last week on these issues. Finally, it will briefly look at how Deschaneaux fits into the Liberal government’s progress on implementing the many campaign promises it made to First Nations’ people.

Background – Status and the Indian Act

Section 6 of the Indian Act RSC 1985, c I-5 sets out rules for entitlement to Indian registration (Status), based on an individual’s descent from a person registered or eligible to be registered as a ‘Status Indian’.

Whether or not a Canadian is granted Status, a concept based on 19th century ideas of racial essentialism (and, many would argue, white supremacy), dictates who can be recognized as an Indian person by the Canadian government. This finding has enormous implications for the individual involved, from their ability to live on reserve, to their access to government programs. Being denied Status can block indigenous peoples from participating in important aspects of indigenous life and exclude them from various rights and forms of government support offered to Status Indians (see helpful descriptions of these issues here, here, and here). Despite its problematic implications, Status is often seen as a necessity if one wishes to access any of the government funded programs for First Nations people and participate fully in reserve or band life.

Section 6(1) v Section 6(2)

Within the broader category of Status Indians, there is a further distinction between persons who have Status under section 6(1) of the Indian Act, and those who have Status under 6(2). While this is a gross over-simplification, the main distinctions between the two are:

  1. That both parents of a 6(1) Indian had Status, while 6(2) Indians only had one parent with Status; and
  2. 6(1) Indians can marry a non-Status person and still pass on Status to their children. If 6(2) Indians marry a non-Status person, Status is not passed onto their children.

A person’s 6(1) or 6(2) Status is in many cases affected by whether their mother or grandmother was denied Status based on their gender, a historically common occurrence.

Gender and Status

Historically several provisions of the Indian Act worked to exclude women from various rights by terminating their Status, or ‘enfranchising’ them. Originally, the Indian Act held that a Status Indian woman who married a non-Indian man would cease to be an Indian. She would lose her Status and all associated rights. Conversely, if an Indian man married a non-Status woman, he would maintain his Status, and it would be conferred on his wife.

After extensive litigation, the most overtly discriminatory provisions of the Indian Act were amended in 1985 and 2010. These amendments allowed women who had lost their Status by marrying non-Status men to regain it. However, as Jennifer Koshan summarized here, these legislative changes have left many residual problems, as illustrated by the plaintiffs in Descheneaux.

Descheneaux c Canada (Procureur General)

In Descheneaux the Plaintiffs, Stephane Descheneaux and Susan and Tammy Yantha, claimed that section 6 of the Indian Act violates the equality guaranteed in 15(1) of the Canadian Charter of Rights and Freedoms by creating discriminatory and differential treatment in regards to who is or is not a Status Indian. These claims of discrimination arose from two factually specific contexts:

Stephane Descheneaux

Stephane Descheneaux maintains that he is deprived of 6(1) status because of sex discrimination (at para 55). Mr. Descheneaux’s grandmother lost her status in 1935 after marrying a non-Status Indian. This meant that under the version of the Indian Act in force at the time that her child, Mr. Descheneaux’s mother, had no Status at birth. Mr. Descheneaux’s mother also married a non-Indian and then gave birth to Mr. Descheneaux, who was thus deprived of status due to his grandmother and mother’s marriages (at para 56). The amendments to the Indian Act passed in 1985 and 2010 allowed both his grandmother and mother to regain Status. However, as the child of a Status Indian and non-Status Indian, Mr. Descheneaux’s mother held 6(2) Status. As discussed above, this meant that by marrying a non-Status Indian she could not pass her Status onto her child Mr. Descheneaux.

If it had been Mr. Descheneaux’s grandfather who married a non-Status Indian on the other hand, both of Mr. Deschaneux’s mother’s parents would have held Status, and Mr. Deschaneux’s mother would have been a 6(1) Indian from birth, meaning that she would have passed Status onto Mr. Descheneaux.

He alleges that the distinction based on the sex of an Indian grandparent is discriminatory in that it:

…perpetuates a stereotype whereby the Indian identity of women and their descendants are less worthy of consideration or have less value than that of Indian men and their descendants, and by having the effect that Stéphane Descheneaux’s children cannot have Indian status passed down to them or enjoy certain attendant benefits… (at para 59)

Susan & Tammy Yantha

The version of the Indian Act in force in 1954 held that illegitimate daughters of Status Indian men and non-Status Indian women would not have Status, while illegitimate sons would have 6(1) Status. Susan Yantha was born in 1954 as the illegitimate daughter of an Indian man and a non-Indian woman. In 1972, she had a child, Tammy Yantha, with a non-Indian man. After the 1985 amendments, Susan obtained 6(2) status (at para 62) since only one of her parents had Status. Tammy is prevented from obtaining Status due to her mother’s 6(2) classification and her father not holding Status.

Susan was denied status at birth based purely on her sex. If she had been a male, she would have held 6(1) Indian from birth and her daughter Tammy would have 6(2) Status.

Susan and Tammy argue that the distinctions in terms of registration based on Susan’s sex are discriminatory because they:

“perpetuate a stereotype whereby the Indian identity of women and their descendants does not have the same value or importance as that of Indian men and their descendants.” (at para 65)

Findings by the Court

The Court declared that sections 6(1)(a),(c), and (f) and subsection 6(2) of the Indian Act unjustifiably infringe section 15 of the Canadian Charter Rights and Freedoms and are inoperative (at para 244). The Court suspended the effect of the judgment for eighteen months, providing a deadline of February 3, 2017 for Parliament to remedy the provisions (at para 244). In obiter, the court instructed Parliament to go beyond the facts in Descheneaux in their drafting of legislation to consider all sex discrimination arising out of the Indian Act (at para 143).

The Government’s Response Stage I – Bill S-3

To comply with the Descheneaux ruling, the government introduced Bill S-3, which addresses three discreet issues of sexism in the Indian Act:

  • Cousins Issue: Address the differential treatment of first cousins whose grandmother lost Status due to marriage with a non-Indian, when that marriage occurred before April 17, 1985 (see Annex A).
  • Siblings Issue: Address the differential treatment of women who were born out of wedlock of Indian fathers between September 4, 1951 and April 17, 1985 (See Annex B).
  • Issue of Omitted Minors: Address the differential treatment of minor children, compared to their adult or married siblings, who were born of Indian parents or of an Indian mother, but lost entitlement to Indian Status because their mother married a non-Indian after their birth September 4, 1951 and April 17, 1985 (See Annex C).

The government claimed that consultation of the bill would be inclusive of First Nations, beginning in Summer 2016 and ending in the Senate committees in Fall of 2016.

The Government’s Response Stage II – A Collaborative Process to Examine the Broader Issues Relating to Indian Registration and Band Membership (2017-2018)

Stage II is meant to build upon the submissions of First Nations and other indigenous groups from the 2011-2012 study “Exploratory Process on Indian Registration, Band Membership and Citizenship”. By working collaboratively with aboriginal groups, the government aims to create a jointly designed process for identifying areas for future reform, and the processes that such reform will require.

Response to Bill S-3 and its Potential Impacts

In two meetings last week*, the Senate Committee on Aboriginal Peoples solicited feedback from the Descheneaux Plaintiffs, representatives of the Minister of Indigenous and Northern Affairs Canada (INAC) office and various First Nations and First Nations’ organizations from across the country.

There were several common themes amongst the submissions:

  1. Disappointment at the Minister’s decision to continue to use the framework of the Indian Act as the legislation that determines who is and is not an indigenous person in Canada;
  2. The government’s failure to solicit fulsome consultation on Bill S-3;
  3. Going forward, a desire for the government to look for solutions outside of the Indian Act in dealing with band membership and other issues facing indigenous peoples in Canada.

Chief Perry Bellagarde of the Assembly of First Nations (AFN) requested that Minister Bennett apply to the Superior Court of Quebec for an extension to the February 3, 2017 deadline in order to more fully engage in consultation in order to assess the effects of section 6.

President of the Native Women’s Association Canada (NWAC), Francyne Joe, stated that her organization was provided with only half a day to review the proposed bill and a short two-hour window with representatives from the Minister’s office to address the bill. Francyne urged more fulsome consultation that would respect the struggles that NWAC’s membership has endured with regards to citizenship.

Drew Lafond, a representative of the Indigenous Bar Association (IBA), stated that the IBA was disappointed to be “participating in a dialogue which is ultimately premised on tinkering with a formula that is used to determine who is or who is not an Indian under the Indian Act.” Lafond argued for an alternative ‘nation to nation’ approach in which First Nations across Canada could take control of band citizenship outside of the archaic constructs found in the Indian Act. The IBA was particularly concerned with the inequitable treatment of the illegitimate children of women versus men, as highlighted by the Yantha Plaintiffs in Descheneaux.

Impacts

On its website, INAC sets out what it believes to be the immediate effects if Bill S-3 is passed:

  • An increase in the population entitled to Indian registration will result in a corresponding increase in costs in respect of health and post-secondary education benefits;
  • First Nations that operate under section 11 of the Indian Act (in which the Indian registrar manages their band lists), will be impacted by the proposed legislative amendments, as newly entitled individuals who register and are descendants of these First Nations will be added to their register; and
  • First Nations that are self-governing or are controlling their own membership (under section 10 of the Indian Act) may choose to amend their laws to incorporate newly entitled registered individuals to their membership lists but are not required to do so.

While not surprising that a Ministry would use an occasion such as this to argue that it requires more funding, it is clear that any increase in the number of Status Indians in the wake of Bill S-3 will require additional resources for INAC.

Keeping Promises?

The completion of the government’s two-stage response to Descheneaux gives it yet another First Nations related deadline to meet within the next few years. It joins:

  1. The Inquiry into Missing and Murdered Aboriginal Women (completing its mandate by August 2018);
  2. The promise to swiftly act on all 94 recommendations from the Truth and Reconciliation Commission;
  3. The order of Canada’s Human Rights Tribunal requiring the government to immediately overhaul and increase funding for First Nation child welfare; and
  4. The upcoming human rights tribunal case of Sloan and Marvin, twins on the Mississaugas of New First Credit First Nation who have submitted a human rights complaint regarding the government’s refusal to provide them with special education funding (last discussed on Ablawg here).

Each of these commitments is going to require increased funding and a great deal of time and effort. It is thus far unclear whether the Trudeau government is willing to make these commitments.

Conclusion

Descheneaux revealed that despite decades of litigation and several amendments to the Indian Act, residual issues of sexism continue to effect the question of who is a Status Indian. Bill S3 will help with some of the people who have fallen through the cracks of past reforms. The reaction of many First Nations groups though is that continued tinkering with the Indian Act, a document many people find inherently racist, is a waste of time. What is needed in their view (and this author’s) is a full scale reinvention of the relationship between First Nations people and the Canadian government. This relationship would be based on ideas of equality, as opposed to being based on an Act imposed on First Nations people without their consent nearly 150 years ago.

There are encouraging signs that the government wants such a relationship, as borne out by its many promises to First Nations people. Whether or not it is willing to make the commitments of time, money and political capital necessary to achieve it remains to be seen. It is gratifying to see the Deschaneaux Plaintiffs and other like them granted justice, but enactments like Bill S-3 are like fixing cracks in a foundation that badly needs replacing.

*The Senate Committee meetings can be watched here and here.

This post may be cited as: Elysa Hogg “Bill S-3: A rushed response to Descheneaux” (1 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_EH_BillS3Descheneaux.pdf

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The Constitutional Limits of the Sex Offender Registry

Wed, 11/30/2016 - 10:00am

By: Erin Sheley

PDF Version: The Constitutional Limits of the Sex Offender Registry

Case Commented On: R v Ndhlovu, 2016 ABQB 595 (CanLII)

It has become conventional wisdom in public discourse that sex offenders are uniquely likely to repeat their crimes. This assumption, combined with the heinous nature of sex offences (particularly those involving child victims), has motivated law enforcement and legislators to adopt unique measures to solve and prevent sex offences. In the United States the FBI maintains a searchable sex offender database compiled from the data of the various state jurisdictions. A user may conduct a geographic search to quickly access the name, photograph, and rap sheet of any sex offender living in their neighborhood. (Eligibility for the database varies substantially by state, both in terms of seriousness of the triggering offence (in some states public urination qualifies), duration of time on the database (in many jurisdictions it is for life), and existence of judicial discretion to require registration (in most jurisdictions it is automatic upon conviction for a triggering offence)).

Canada’s approach has been somewhat more moderate. Under the original incarnation of the Sex Offender Information Registration Act, SC 2004, c 10 (SOIRA), sex offenders subject to a judicial order were required to report within 15 days of the order and provide information for collection in a database, intended to “help police investigate crimes of a sexual nature.” Unlike the publicly available FBI database, SOIRA only authorized specific law enforcement personnel to access this information for use in their investigations. In its original form, adopted in 2004, SOIRA allowed the Crown to make an application for such an order, which the sentencing judge had discretion to deny in cases where its effects on the offender’s privacy or liberty interests would be grossly disproportionate to the public interest in protecting society. In 2011, amendments to the Criminal Code tightened up the application of SOIRA. (See Protecting Victims from Sex Offenders Act, SC 2010, c 17 (the Amending Act)).

In the first place, the Amending Act removed judicial discretion to refuse an order, rendering registration mandatory upon conviction. Second, it expanded the purposes for which authorized personnel could consult the database, from “investigating” to “preventing or investigating” sex crimes. Third, it imposed additional reporting requirements, including the requirement that offenders must report changes to contact information for their employer within 7 days, rather than the 15 days stipulated by the 2004 act. Finally, the Amending Act required offenders with more than one sexual offence to remain on the registry for their lifetimes (subject to an application process the offender may initiate at the 20 year mark). The forward-looking purpose to the Amending Act suggests that Parliament intended to move closer to the American approach to sex offender registration. Indeed, the U.S. Supreme Court has upheld the sex offender registry on the theory that it does not constitute punishment at all but, rather, serves an administrative public safety function, similar to involuntary commitment of the dangerously mentally ill. See, e.g., Smith v Doe, 538 U.S. 84 (2003).

The assumption that most sex offenders are recidivists, however, may be overly simplistic. In one meta-analysis conducted for Public Safety Canada, Andrew J.R. Harris and R. Karl Hanson found recidivism rates among sex offenders to be about 24% -rather less than the overall recidivism rate of 37.1%, calculated by Correctional Service Canada for all criminals. That said, Harris and Hanson report that their 24% figure contains alarming sub-categories of offenders. While rapists repeat offend at an average rate of 24%, child molesters with male victims repeat at a rate of 35%. Considering the seriousness of these sorts of offences, and the lessened relevance of obvious structural economic factors motivating the property and drug crimes included in the overall figure for crimes generally, these numbers are indeed disturbing. Harris and Hanson also observed that recidivism rates decreased as the age of the offender increased, and that prior offences were predictive of future recidivism.

These data show that, on the one hand, we should indeed be concerned about repeat sex offenders, particularly taking into account that empirical studies necessarily omit unreported and unsolved offences. Yet they also suggest that we risk being overly punitive in adopting a one-size-fits-all approach to sex offender databases. In R v Ndhlovu, the Alberta Court of Queen’s Bench found that, for these reasons, the current incarnation of SOIRA runs afoul of the Charter.

Eugene Ndhlovu was a 19-year-old attending a Jersey Shore-themed party thrown by a friend. After drinking with the two victims and other party goers for many hours, Mr. Ndhlovu groped one of them on the thighs and rear end (at para 17). The other victim, RD, woke up in the middle of the night, to find Mr. Ndhlovu penetrating her with his fingers (at para 18). After she told him to stop he tried again, telling her it would “feel good.” When she pushed him away the second time he left (at para 18).

Mr. Ndhlovu, who has no other criminal history, plead guilty to one count of sexual assault against each victim, testified that he was so intoxicated he had no memory of the night’s events, and expressed remorse during sentencing. He was sentenced to six months in jail, three years of probation and, according to SOIRA, ought to have automatically been placed on the sex offender registry (at para 20). Mr. Ndhlovu moved that SOIRA’s application to his case violated his rights under sections 7 and 12 of the Charter.

In considering the accused’s section 7 claim, the Court first determined that the reporting requirements of SOIRA do constitute a deprivation of liberty (at para 44). Given the amount of information required by the registry, the in-person reporting requirements, the requirement that the registrant report trips of seven days or more, and the fact that the registrant is subject to random follow-up visits from law enforcement, this conclusion is fairly unsurprising. In arriving at this conclusion the court also noted that the 2011 revisions had increased the registry’s impact on an offender’s liberty interest by expanding its potential access by law enforcement beyond the original sphere of cases where the state has “reasonable grounds to suspect that the crime being investigated is of a sexual nature” (at para 60).

One issue of significant debate between the parties on appeal was whether the registry itself affected his liberty interests in a psychological manner, by creating “a stigma in his own mind constantly reminding him of his status as a sex offender” (at para 73). The Crown’s argument, which the Court rejected, was that any stigma in the accused’s mind arises not from the registry but from the original conviction.

The more complicated question before the Court was the second part of the section 7 analysis, which was whether the deprivation of Mr. Ndhlovu’s liberty interest was contrary to the principles of fundamental justice. Based upon the language of SOIRA and its Amending Act and the associated Parliamentary debates, the Court defined the state’s legislative objective as protecting “vulnerable people, including children, in society, by allowing police quick access to current information on convicted sex offenders” (at para 87). To determine whether the current incarnation of the Act violates section 7 the Court considered whether mandatory SOIRA orders are arbitrary, overbroad, or grossly disproportionate relative to that objective.

As to the question of arbitrariness the Court does not come to a clear conclusion. It notes that there is a connection between providing police with up-to-date information on prior offenders and the goal of investigating and preventing sex offences (at para 92). Without getting into the empirical data it also notes that “[t]here is, no doubt, a statistical probability that a sex offender will offend again” (at para 92). On this point it concludes that “statistical probabilities cannot protect individuals who will not probably find themselves on that statistical curve ever again,” yet stops short of holding that SOIRA is constitutionally arbitrary.

As to the claims of overbreadth and gross disproportionality, however, the Court is very clear. As to overbreadth it cites the SCC in Carter v Canada for the proposition that “a law that is drawn broadly to target conduct that ‘bears no relation to its purpose’ in order to make enforcement more practical may therefore be overbroad” (at para 94, citing 2015 SCC 5 (CanLII) at para 85). The Crown attempted to argue that mandatory inclusion for all sex offenders was connected to SOIRA’s purpose because “there is no way to reliably know in advance which offenders will reoffend and which ones will not” (at para 105). Relying on precedent, the Court held that such concerns about practical distinction are appropriate to a section 1 analysis of whether a section 7 violation is justifiable, but not relevant to the determination of whether the law is overbroad as a matter of fundamental justice. Therefore, it did not consider those arguments in concluding that the current SOIRA regime is overbroad insofar as it captures offenders (such as Mr. Ndhlovu) who are unlikely to reoffend in the first place.

In considering whether the SOIRA regime is grossly disproportionate, the Court cited the test announced by the SCC in Bedford, which balanced “the negative effect on the individual against the purpose of the law, not against societal benefit that might flow from the law” (at para 121, citing Bedford v Canada (Attorney General), 2013 SCC 72 (CanLII) at para 121). The court notes the significant effect on a registrant of SOIRA’s random compliance checks, including, in particular, the possibility that law enforcement could inadvertently disclose the registrant’s status to unauthorized third parties during such checks (at para 124). (As an example, the Court cites Mr. Ndhlovu’s ongoing concern that officers could come to perform such a check at his church (at para 122).)

The Court therefore concluded that “the law as it stands will now place Mr. Ndhlovu on police radar for the rest of his life anytime a sexual offence is committed by a black man of average height in his neighborhood” (at para 132). It relied on its own factual findings at sentencing that Mr. Ndhlovu was a low-risk offender due to his lack of criminal history, his remorse, and his testimony that he no longer drank alcohol after the incident in question. Therefore, it concluded that the mandatory reporting regime currently prescribed by Section 490.012 of the Criminal Code unjustifiably infringes section 7 of the Charter, allowing the Crown to proceed with a section 1 hearing to determine whether the infringement can be justified and the provisions saved. (Having resolved the appeal under section 7, the Court did not address Mr. Ndholovu’s section 12 argument (at para 131)).

This holding is consistent with the SCC’s approach in other areas of criminal procedure, which have shown that section 7 issues of overbreadth can be resolved where the trial court has discretion to determine on a case-by-case basis whether a procedural requirement violates a specific defendant’s Charter rights. For example, in R v Corbett, [1988] 1 SCR 670 (CanLII) the SCC read trial court discretion into section 12 of the Canada Evidence Act, which allows the Crown to introduce an accused’s prior criminal history as impeachment evidence where the accused takes the stand. While the Court does not cite the empirical literature on recidivism, its holding implicitly acknowledges the reality that not all sex offenders fit the repeat offender model. While its reasons make it seem unlikely that the Court will find that SOIRA is saved by section 1, the hearing will present an important opportunity for the parties to make submissions that will educate courts and Parliament about what we actually know about sexual offender recidivism. To the extent that SOIRA should be amended to reintroduce discretion, trial courts will benefit from information about how best to wield it in a way that balances victim protection against the liberty of the accused.

It is worth noting, however, that despite the constitutional—and practical—benefits to the ABQB’s approach in Ndhlovu, its reasons for judgment raise some concerns about the fact-finding at trial. First off, in its statement of facts the Court notes that the victim “personally insisted on Mr. Ndholovu’s attendance at her party” which was “‘advertised’ on [her] Facebook page as a highly sexualized Jersey Shore DTF (down to fuck) party and was to have a stripper pole available” (at paras 14-15). While these observations hardly rise to the level of Justice Camp’s now-famous commentary, their seeming irrelevance to the accused’s undisputed conduct in manually raping the hostess calls into question the court’s conclusion that Mr. Ndhlovu is an unlikely repeat offender. (One would assume that a party-goer should be on notice that an invitation to a Jersey Shore party does not constitute consent by the hostess to every party-goer who stumbles upon her while asleep). Indeed, Mr. Ndhlovu’s conduct—manual penetration of an unconscious woman after both had been drinking together at a party—is identical to that of Brock Turner’s, whose light sentence by a California court has become emblematic of inappropriate use of sentencing discretion by trial courts in sexual assault cases.

Second, the Court seems to place a fair amount of emphasis on the fact that Mr. Ndhlovu’s “offences related to alcohol consumption and he testified that he had since stopped drinking” (at para 133). While it is certainly relevant to the risk of re-offence that an accused who offends while drinking has stopped drinking, it does not sound as though the Court conducted any fact-finding on that question. In the absence of such fact-finding, the trivializing of sexual offences committed while drunk undermines the policy of section 273.2 of the Criminal Code, which prevents an accused from arguing mistaken belief in consent where it arose from self-induced intoxication. In amending the law in this manner Parliament sought to protect victims from the moral hazard of sexual assailants being able to rely on exactly the circumstances in which sexual assaults are most likely to occur. In minimizing the role of alcohol in this case for SOIRA, the ABQB seems to be making a bit of an end-run around this policy.

In other words, appropriate constitutional scrutiny of sex offender databases is a double-edged sword. In the United States, the legal fiction that such databases do not constitute “punishment” has shielded them from scrutiny under the Eighth Amendment prohibition on cruel and unusual punishment, and eased their defence under the Due Process clauses. If Canadian courts are, as they should, going to require a more nuanced analysis on a case-by-case basis, that analysis should not run afoul of existing principles in the substantive law of sexual assault. Judicial discretion is only constitutionally valuable if it is wielded appropriately.

This post may be cited as: Erin Sheley “The Constitutional Limits of the Sex Offender Registry”(30 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_ES_NDhlovu.pdf

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Finally, a Plan (albeit drip-by-drip) to Phase Out Coal and Keep the Lights On

Tue, 11/29/2016 - 10:00am

By: Nigel Bankes

PDF Version: Finally, a Plan (albeit drip-by-drip) to Phase Out Coal and Keep the Lights On

Documents and press releases commented on:
(1) Press Release, Electricity Price Protection, November 22, 2016;
(2) AESO, Alberta’s Wholesale Electricity Market Transmission Recommendation, dated October 3, 2016, released November 23, 2106, accepted by the Province;
(3) Press Release: Alberta Announces Coal Transition Action, November 24, 2016 and related letter from Terry Boston to the Premier of Alberta (dated September 30, 2016, released November 24, 2016).

The week of November 21, 2016 will go down as a significant week in the evolution of Alberta’s electricity market. Having introduced Bill 27, the Renewable Electricity Act on November 3, 2016 (see post here) the provincial government followed that up this last week with a number of significant initiatives.

First there was the announcement on Tuesday November 22 that the province was going to cap electricity prices in the retail market. Second, on Wednesday November 23, the province announced that it planned to accept the recommendations of the Alberta Electric System Operator (AESO) to introduce a capacity market in Alberta to supplement the existing energy only market and then, third, on Thursday November 24 there was the announcement that the province had reached a settlement with the owners of the six coal generating facilities with useful lives beyond 2030 who will be required to cease burning coal at those facilities by then. And later that same day, the province announced tentative settlements with most of the parties affected by the province’s efforts to question the ability of the buyers under power purchase arrangements (PPAs) to turn responsibility for those arrangements over to the Balancing Pool. “Black” Friday was almost quiet, except for the morning’s announcement that, as of January 1, 2017, the province would “prohibit unsolicited door-to-door selling of energy products to protect people from misleading high-pressure sales tactics.”

This is a very positive package of measures. It offers comfort to consumers that they will be protected at least in the short term from excessive price volatility on the upside. It offers a realistic strategy for obtaining the investment that the province needs to build combined cycle gas generation to replace the coal fleet and thus addresses potentially very serious energy security concerns. It offers comfort to coal generators that they are being treated fairly in relation to stranded assets and gives them both the wherewithal and reason to invest in the construction of new generation. And finally it splits the difference between the province and the PPA buyers in their dispute on the terms of the PPAs. This was an important package to put together. Without it the transition from coal would be more risky (in energy security terms) and likely more expensive (increased cost of capital). While a significant change in market structure such as this is not without its own risks (a perception of continuing change will deter investors) most agreed that an energy only market was not going to deliver on the energy security front.

While just about everybody is a winner in this brave new world there will be some losers; topping that list will likely be electricity retailers but also incumbent renewable generators; and there may still be a spoiler. As of the time of writing, Enmax had not joined its fellow PPA buyers in settling with the province in the province’s bid to strike out the “more unprofitable” language from the PPAs. Finally, in most cases, the details of the above initiatives have yet to be worked out. But now at least we have something that look like a plan. It might have been dribbled out over the course of a few days, if not weeks, but this looks like a coherent plan for getting off coal and keeping the lights on. This is a significant achievement.

Capping Electricity Prices

The cap on electricity prices for consumers will be implemented using the Regulated Rate Option (RRO). While Alberta has competition at both the wholesale level (implemented through the power pool operated by AESO) and the retail level (through competition between retailers), Albertans do not have to participate in the retail market by signing a contract with a retailer. Instead, the default is the so-called regulated rate option which must be offered by the distributor or its designate (see Regulated Rate Option Regulation, Alta Reg 262/2005). The RRO is only available to certain customers including residential, farm and irrigation customers. The RRO has been much criticized as inconsistent with the ethos of market based approaches to pricing electricity (see Power for the People Report) but even a string of conservative governments committed to market pricing proved to be unwilling to take the political risk of forcing consumers to make their own contracts for electricity and natural gas. Apparently we can choose our contract providers for pretty much anything else but not electricity or natural gas (and here I confess that my household is on the RRO – inertia being the principal reason!).

The main consequence of using the RRO as the vehicle for delivering the price cap is that RRO customers are the only parties that will benefit from the price cap. The price cap will not affect generators. Generators will continue to receive the pool price. Neither will the cap affect the RRO provider. The government is committed to keeping the RRO provider whole. The parties that will most likely be adversely affected are the retailers offering a competitive service. Their offerings will not be subject to a cap. Hence, if customers perceive a risk that contract prices will exceed the RRO cap then we can expect these customers to migrate en masse back to the RRO. While the risk of this should be present in the minds of customers holding contracts over the longer term, in the shorter term there is little risk of getting anywhere close to the cap with the present oversupply forecast to continue for a number of years and current prices far below the 6.8 cents\kwh of the cap. But still there must be a chilling effect on switching away from the RRO and it is hard to imagine new retailers entering the competitive market in these circumstances.

Compensating the Coal Fired Generators

Three companies, TransAlta, Capital Power and ATCO Power, will each receive compensation based on the operating lives of assets which had predicted end-of-life dates between 2036 and 2061. The payments have an overall value of $1.1 billion (2016) and will be made over a period of up to 14 years.

Facility Owner End-of-life Keephills 3 Capital Power & TransAlta 2061 Genesee 1 Capital Power 2044 Genesee 2 Capital Power 2039 Genesee 3 Capital Power & TransAlta 2055 Sheerness 1 Atco Power and TransAlta 2040 Sheerness 2 Atco Power and TransAlta 2036

The compensation formula was developed by Terry Boston who was retained by the province. Boston’s letter to the premier suggests that “The criteria are based on net book value of the assets – which is fully auditable and transparent – pro-rated by the years stranded by the policy decision to account for depreciation, and discounted for the probability some of the components of the assets can be re-used.” Boston suggested aiming to have about half of the existing coal facilities changed over to gas rather than constructing all new combined cycle gas plants. This will be both cheaper and produce a generation fleet with more diverse vintages.

The PPA settlement

I have described the PPA dispute in two previous posts here and here. The judicial review application launched by the province has the two-fold objective of striking the “more unprofitable” language from the change of law provisions of the PPAs and quashing the decision of the Balancing Pool to accept an assignment of one of the PPAs. The overall goal of the province in launching the application was to protect consumers from being saddled with the economic burden of the unprofitable PPAs.

The province appears to have reached settlements on this litigation with Capital Power, TransCanada and AltaGas. Thus far there has been no similar announcement with respect to Enmax. Enmax is a wholly owned subsidiary of the City of Calgary and Mayor Nenshi has been unrestrained in his criticism of the province for having the temerity to question this unorthodox backdoor “amendment” of the PPAs.

Although, so far as I am aware, no details of the settlement have been released, the reports in the press suggest that the conceptual underpinning of the settlement is that the Province will cover the incremental costs associated with the carbon levy while the PPA buyers continue to bear the market risks. That makes sense since it would be consistent with the basic understanding in the PPAs which was that the buyers were picking up the market risk but should be shielded from the risk of changes in law. The arguably unlawful addition of the “more unprofitable” destroyed that basic bargain by allowing the buyers to transfer market risk back to government, carried on the back of a change of law.

That conceptual underpinning would be easier to see if the buyers were to keep the PPAs and if monetary compensation were to flow from government to the buyers. But that is not what is happening. It seems that the buyers will get to “terminate” (i.e. assign the balance of the term of the PPAs to the Balancing Pool) but in return must pay the estimated (perhaps guess-timated) discounted market losses to the BP, since upon taking the assignment it is the BP that will bear the market risk. (See Capital Power Press Release, November 24, 2016, stating that Capital Power and its syndicate partners have agreed to pay the Balancing Pool $39 million). There are probably a number of good reasons for structuring the saw-off this way. One reason, as the events of this week amply demonstrate, is that we are going to see more changes in law coming down the pike. And it would be unfortunate indeed if we were to keep- re-playing this record over the next few years. Having the BP hold the PPAs avoids that scenario.

I think that this is a reasonable saw-off because I think it respects the basic bargain. The amendment to the change of law clause was at the very least improper if not simply unlawful. It was clearly not a house-keeping measure, since, as noted above, it changed the basic structure of the bargain by allowing the buyers to transfer market risk to the government\consumers under cover of a change of law. With this addition, the clause was no longer a “normal” change of law clause. And for that reason the amendment was also procedurally flawed since the significant change never went through the public review that was contemplated for the terms of the PPA. But this was hardly the time for the government to put this all this at issue. The province would likely have faced limitations problems in making its case, but of more practical significance, the litigation was sending all the wrong messages at a time when the province needed to be able to attract significant capital investment in the power sector. Whether Enmax will come to the table or whether the matter will still proceed through the courts remains to be seen.

One final thing. There has been some talk about the Notley government acting like a “banana republic” (Adam Legge, Calgary Chamber of Commerce, see Calgary Herald Article here) in the way that it has approached these issues, even threatening to undo the amendment by targeted retroactive legislation. Apart from the odious nature of Mr. Legge’s terminology (Mayor Nenshi to his credit has chosen his words more carefully he simply refers to the government as “absolutely nuts”), these accusations miss the mark. If anything the litigation was attempting to uphold the rule of law in the face of what looks like backroom cronyism of the worst kind. And as for the retrospective legislation I think that all that it would have done was to restore the basic balance to the change of law clause as discussed above. And it would not have been unprecedented. Newfoundland has tried for years, indeed decades, to restore the basic balance to the deal struck for the development of Churchill Falls and has been thwarted only by the technical argument that the contract in question in that case was found to be “located” outside the province and therefore beyond the reach of the legislative assembly of Newfoundland and Labrador: Reference re Upper Churchill Water Rights Reversion Act, [1984] 1 SCR 297 (CanLII). Unfortunately for Enmax it is crystal clear that these PPAs are located right here in Alberta.

The Capacity Market

The AESO report to government confirms what many had been saying over the last year which is that Alberta’s energy only market (EOM) will not be able to deliver energy security; perhaps not under any circumstances but certainly not without creating tremendous price volatility which customers, and therefore ultimately politicians, would not tolerate (with or without a consumer retail price cap). While some argue that new developments in energy storage will help firm up the capacity of renewable sources at this stage that seems quite speculative. There is no doubt some political advantage for the opposition parties to argue that it is the NDP government that has broken the energy only market, the reality is that such a market will probably only work for so long as there is steadily rising demand (load). Such a market probably cannot deliver energy security (lights on) in the face of multiple uncertainties including low oil prices (and therefore lower growth in load), changing government carbon policies and general economic uncertainty.

But if we conclude that EOM is broken there is still the question of what to do about that. The AESO Report considered four options: (1) stay the course (i.e. retain the commitment to the EOM), (2) introduce a capacity market, (3) long term contracting, or (4) a return to cost of service regulation. The AESO report comes down heavily in favour of introducing a capacity market having evaluated the options against a number of criteria: reliable and resilient system, environmental performance, reasonable cost to consumers, economic development including job creation, and orderly transition (costs and risks). The report offers a nice summary of the need to provide two streams of earning to generators (energy and capacity earnings) as follows (at 40):

As more and more renewables are added to the supply mix, Alberta is moving into an environment where it will be energy rich but capacity limited, due to the non-dispatchable nature of a significant portion of the generators in its electricity system. With additional intermittent renewable resources the electricity system will have sufficient or even excess energy at times; however, due to the intermittent, low-reliability capacity value of the resource, supply adequacy cannot be guaranteed. The price signal provided by the current energy-only market increasingly will not signal for new investment. In order to ensure that new generation capacity is developed in a timely and orderly manner, Alberta needs to put a specific value on the attribute of “capacity.” A capacity market will accomplish this. A capacity market will ensure reliability by maintaining supply at a targeted level, something which the current energy-only market structure does not do.

From a legal perspective perhaps the most interesting part of the report is the analysis of the costs and risks of an orderly transition for the four options. With respect to the introduction of a capacity market the AESO acknowledged that the design and implementation process would be time consuming and likely take about three years with some risk (given current rule making processes (including appeals) (see Electric Utilities Act, SA 2003, c E-5.1 ss.20 – 26)) that it might not be achieved in a timely manner and thus might require “a more prescriptive approach (AESO Report at 33) – which I take to be code for legislation. The report went on to note (at 33):

The role of regulatory oversight in the capacity market will need to be established, with a particular focus on clarifying roles, responsibilities and methods to ensure the reasonableness of capacity costs and determine their allocation. This may require minor legislative changes but should not impact the overall role and mandate of existing electricity agencies. In addition, other design decisions must be made early in the design process. Changes to transmission, hydro or intertie policy, as well as treatment of coal generation and renewables, can be incorporated into a capacity market. Design of the capacity market would proceed more efficiently if these policy directions were established upfront, while changes introduced later may result in delays to capacity market implementation.

Unlike the non-market structures [cost of service regulation and long term contracts] there should be fewer claims for compensation with this structure change.

During the transition period while a capacity market is being implemented, it is highly likely that a “bridging mechanism” will be required to ensure reliability before new supply supported by a capacity payment is added to the system (the period from 2021-2024). No investments in new supply are expected until the details of the capacity market are determined. Bridging mechanisms may range from contracts with specific loads to curtail during supply shortages to interim (five year) capacity-like contracts with new generation supply. These contracts would be entered into with the understanding that the new supply will eventually need to compete in the capacity market. In addition to the cost of entering such arrangements, there is some risk that market participants will push to have these contracts extended and continued, thus defaulting to an unintended, alternative market structure [long term contracts].

The bridging would be required because the new scheme will likely take three years to fully implement meaning that the first capacity auctions would be held no sooner than 2019 or 2020 while the time required to build new gas generation is five to seven years.

Also of interest is AESO’s assessment of how the capacity market will fit with other elements of the province’s climate leadership plan. Here the AESO assured government that its renewables program will not be compromised although to the extent that generation has two streams of earning, one would expect energy prices to be lower. This will mean that payments under the contracts for difference approach that the province has adopted will be larger. It may also mean that (at 38) “A portion of the renewable support may be transitioned into a capacity market by carving out volumes for renewables with capacity value.” Furthermore there should be a good fit with coal generation phase-out since (at 38) “a competitive auction for capacity [held] in concert with a retirement schedule provides transparency, mitigates supply adequacy concerns, and can be used to smoothly reduce the volume of coal that can depart from service in any given period.” There might also be a good fit with energy efficiency policies (at 39) to the extent demand curtailments could be brought in to a capacity market. Presumably as well the capacity market approach offers some flexibility to accommodate future technological developments in relation to storage and distributed generation.

Those who will be negatively impacted by the change in approach may include incumbent renewable generation and perhaps incumbent co-generation facilities. Incumbent renewable will be negatively impacted since the introduction of a stream of capacity payments should serve to depress prices in the energy market. Since most renewables will not be able to earn capacity credits because most are non-dispatchable unless matched with storage (hydro and biomass-fueled generation will be the key exceptions) their overall revenue stream will decline. Some co-generation “may actually prefer the revenue upside offered by a more volatile and higher energy price” for their surplus generation.

For those who were thinking of a return to the good old days of cost of service regulation the AESO report carried the warning that this would be like putting Humpty back together again (vertically integrated utilities); a Herculean task creating all sorts of winners and losers with claims for compensation by the losers, a process (at 34) that “would involve legal challenges and take significant time.”

Market Design Issues

The capacity market will operate alongside the energy market. The AESO recognizes that the details of market design matter a lot. These details will have to be worked out (negotiated) with the industry over the next few years. Appendix D to the report discusses some key design considerations for a capacity market including: (1) The method for determining the volume of capacity required. (Elsewhere the report suggests (at 39) that the amount of capacity to be purchased to give an appropriate security margin would be 15% higher than expected peak load.) (2) The question of who holds the obligation to procure capacity? The ISO or load serving entities? (3) The contract term, delivery period and frequency of procurements? Here the report notes that (Appendix D at 1):

Typically, capacity contracts are between one and five years in duration but other durations are possible. New resources often receive longer contract terms than existing resources. In addition to contract duration, it must be determined how far ahead of time before the contract start date the contract should be procured. Typically, procurement is done one to four years ahead of the contract start date but other options are possible. The potential and timing of subsequent procurements after the initial procurement for rebalancing of volume procured must also be established. How often a procurement process is held and how many procurements are conducted for a delivery period must be established.

(4) Resource eligibility. Here the relevant considerations include:

  • Whether existing or only new resources will be eligible;
  • The “firmness” of the resource, or degree of certainty that the resource would be able to provide energy if required, and the proportion of the resource which would be eligible to provide capacity; and
  • Treatment and requirements for resources such as energy efficiency, price responsive load, cogeneration, intermittent renewable resources and interties.

(5) Delivery requirements and performance assessment and incentives. (6) Market mechanics (e.g. price caps and floors, market power mitigation, and secondary markets). (7) Allocation of capacity costs amongst load.

In sum it is evident that much remains to be done and there will be a very active debate as to manner of these variable. And somebody will have to act as the umpire. Will that be the AESO itself or the Alberta Utilities Commission?

Other Matters

Terry Boston’s four page letter to the premier is well worth reading for its strategic advice to the province. Three of his recommendation stood out for me. I have already referred to his comments on coal-to-gas conversions for some existing coal plants. Boston also noted that this might require some relaxation in proposed federal carbon standards for gas generation. Second, he suggested that there should be more exploration of demand side management measures to manage peak demands rather than building simple cycle peaking plants. And finally, Boston makes a big pitch for hydro not only because of its capacity and flexibility benefits but also because of its benefits to Alberta’s economy insofar as “Around 80 per cent of capital dollars for new hydroelectric development will be spent in Alberta as opposed to construction of other renewable resources (which use mostly imported equipment, resulting in less than 20 per cent of the investments for wind and solar being spent in Alberta’s economy).” This will no doubt ignite an active debate about the pros and cons of significant hydro developments in Alberta a debate that will need to involve First Nations and Metis communities as well as environmental interests.

A final comment on process. The public record suggests that the AESO took the initiative in deciding to study how an energy only market might perform under changing condition and what the alternatives might be. It did so in a very non-public way. The process from here on in will be public, but the decisions to start the process, to consider options, to recommend to government and ultimately the government’s decision to adopt a capacity market approach were all made behind closed doors. The consultants retained by AESO spoke to a select number of market participants about the issues but there was no broad, open and transparent consultation. I find that surprising from this government. As I have said before I have been hoping that this government might do thing differently, that it might proceed by publicly considering and assessing options and developing white papers and the like before settling on a particular approach. But on matters involving electricity that seems not to be the case. Why is that? It may the need to act quickly and resolutely, but the Leech report process suggests that it might be possible to achieve those goal and engage in a more public consideration of alternatives.

This post may be cited as: Nigel Bankes “Finally, a Plan (albeit drip-by-drip) to Phase Out Coal and Keep the Lights On” (29 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_NB_CoalTransition.pdf

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You Can’t Rely on a Motor Vehicle’s Mechanical Fitness Assessment

Mon, 11/28/2016 - 10:00am

By: Jonnette Watson Hamilton

PDF Version: You Can’t Rely on a Motor Vehicle’s Mechanical Fitness Assessment

Case Commented On: R v 954355 Alberta Inc (The Fast Lane), 2016 ABPC 229 (CanLII)

The Fast Lane, a used car dealership in Calgary, was charged with three offences under the Fair Trading Act, RSA 2000, c F-2. It was found guilty of misleading and deceiving the customer by representing that the 2006 Mazda she bought was in roadworthy condition, but not guilty of the other two offences. The Fast Lane had argued in its defence that it had relied upon the Mechanical Fitness Assessment required by the province’s Vehicle Inspection Regulation, Alta Reg 111/2006. Judge Heather Lamoureux concluded The Fast Lane’s representation of roadworthiness was not intentionally misleading. However, she held that the used car dealer could not rely on the Mechanical Fitness Assessment for its opinion on roadworthiness because that Assessment did not speak to roadworthiness. A car buyer should not rely on that Assessment either. The Mechanical Fitness Assessment is yet another disappointment in the operation of the troubled Alberta Motor Vehicle Industry Council (AMVIC), which regulates motor vehicles, including their sale and repair, as well as the licensing of dealer and repair facilities in Alberta.

In June 2015, the customer who eventually purchased the 2006 Mazda, which had 240,000 kilometers on it, visually inspected the car and took it for a short test drive. She received a Mechanical Fitness Assessment from the salesperson she dealt with, who noted that three items were said to be “non-compliant” on that Assessment: the wheels, the ball joints, and the windshield. The salesperson told the customer the Mazda was “in roadworthy condition” and “safe and roadworthy” (at paras 3, 18). The customer assumed that The Fast Lane had performed a vehicle inspection and took responsibility for ensuring the fitness of the vehicle. Therefore, she assumed that she did not need to get an independent assessment. She was wrong.

The day after she bought the Mazda, the car would not start. The battery was the original one and a new battery was needed. Just two weeks later, after driving about 900 kilometers, the Mazda suddenly stopped and would not start again. After unsuccessfully trying to give the car back to the Fast Lane, the customer parked the car. A month later, in August 2015, the customer was moving and tried to drive the Mazda from her old home to her new home. There was a sudden bang, oil spilled all over the road and the engine quit. The Mazda was towed to her new home and never driven again; it does not start and is not driveable. A piece of metal was found in the engine block and an independent mechanic told the customer a new engine was needed. The end result was that the customer spent $4,350 to go about 900 miles.

Judge Lamoureux found that at the time of the sale the Mazda was not roadworthy and was not fit for the purpose for which it was intended (at para 9).

The only assessment of the vehicle that was done before it was sold by The Fast Lane was the Mechanical Fitness Assessment (at para 6). An officer from AMVIC testified that the Mechanical Fitness Assessment is a condition precedent to sale of a used vehicle by a licensed dealer to a consumer.  It is required by section 15(1) of the Vehicle Inspection Regulation, Alta Reg 111/2006, which states:

15(1) Subject to subsection (2), a dealer in used motor vehicles shall, before entering into a contract to sell a motor vehicle, give to the buyer a used motor vehicle mechanical fitness assessment that contains the following:

(a) a statement identifying the type of motor vehicle as a truck, motorcycle, bus, van, light truck, automobile or other type of motor vehicle;

(b) a statement showing the make, model, year, vehicle identification number, odometer reading in kilometres or miles, licence plate number and province of registration of the vehicle;

(c) the name and address of the dealer selling the vehicle and the name of the technician who issued the mechanical fitness assessment;

(d) a statement that the mechanical fitness assessment expires 120 days after the date on which it was issued;

(e) a statement certifying that at the time of sale the motor vehicle

(i) complies with the Vehicle Equipment Regulation (AR 122/2009), or

(ii) does not comply with the Vehicle Equipment Regulation (AR 122/2009) and containing a description of the items of equipment that are missing or do not comply with the Vehicle Equipment Regulation (AR 122/2009);

(f) the signature of the technician who conducted the mechanical fitness assessment;

(g) the date the mechanical fitness assessment was issued.

The Mechanical Fitness Assessment is completed by a certified journeyman technician and prepared for the dealer and, eventually, the buyer. AMVIC created the mandatory report form that is to be used for the Mechanical Fitness Assessment. That one-page form, which is available here, provides spaces to input all of the information required by section 15(1). The form appears to list numerous parts of a vehicle and state whether each part “complies” or is “non-compliant”.

Judge Lamoureux agreed that, on its face, the Mechanical Fitness Assessment purports “to be a representation as to the road worthiness of a motor vehicle” (at para 10). However, she stated that there are “fundamental flaws and omissions” in the Mechanical Fitness Assessment and section 15(1) of the Vehicle Inspection Regulation which requires it (at para 10). According to Judge Lamoureux:

the regulation itself omits any requirements to undertake a roadworthiness assessment of the powertrain, accelerator, fuel system, exhaust, transmission, clutch, fluid levels for the power steering and brakes, the CV joints and the front/rear/spindle axles ? all of the fundamental operating aspects of a vehicle. (at para 10).

The Mechanical Fitness Assessment form does require an assessment of the components of the powertrain that Judge Lamoureux listed, but not the engine. All of listed parts of the powertrain do have to be assessed as “complies” or “non-compliant”. The problem which Judge Lamoureux pointed out is that the Vehicle Inspection Regulation does not set any standards for judging the powertrain components.

The same is true of the section of the form titled “Electrical”, which includes wiring, battery, switches and alternator. Those electrical components also must be assessed as “complies” or “non-compliant” but the Vehicle Inspection Regulation sets out no criteria for assessing them. Why the 10-year-old battery in this case was assessed as complying, and with what it was supposed to comply with, is not specified.

The Vehicle Inspection Regulation certainly does set standards or criteria for assessing many of the things listed on the form: all of the various lamps, some instruments, the brakes, the steering, the suspension, the diagnostic codes, the frame and body, the tires and the wheels. For example, section 53(1) adopts SAE Standard J1703 and SAE Standard J1705 for hydraulic brake fluids. See sections 4 to 83 of the Vehicle Inspection Regulation for the entire list of standards and criteria.

The AMVIC website says that “The standards to be utilized when conducting a vehicle Mechanical Fitness Assessment is to use the original equipment manufacturers specified wear limits for compliance” (at para 13). However, there is nothing on that form or in the regulations that requires compliance with the manufacturer’s wear limits.

Because of the peculiar disconnect between the Vehicle Inspection Regulation and the Mechanical Assessment form, Judge Lamoureux determined that the Mechanical Fitness Assessment is not a representation that the engine and the powertrain of the vehicle are roadworthy or fit for the purpose of operating on a highway (at para12).

The Fast Lane was found guilty not because it relied upon the Mechanical Fitness Assessment and, by giving it to the customer, induced her to rely on it as well. They were found guilty because their salesman told the customer that the Mazda was “in roadworthy condition” and was “safe and roadworthy.” Therefore, the customer relied on both the Mechanical Fitness Assessment and The Fast Lane’s representations of roadworthiness. And it was the latter representations that were misleading and deceptive and therefore contrary to section 6(4)(a) of the Fair Trading Act.

For used car dealers, the lesson to be learned from this case is that they should not make any representations about the roadworthiness of their used cars. Not to be too cynical, but they should simply hand their customers the legally-required Mechanical Fitness Assessment and rely on that form’s long and official-looking list of “complies” and “non-compliant” components to give customers the impression their vehicles are fit for the purpose of being driven on the road. (And they should rely on a sales contract that excludes liability under the Sale of Goods Act, RSA 2000, c S-2, section 16(2), which would otherwise imply a condition into the contract that the goods sold are reasonably fit for the particular purpose for which the goods are required.)

For customers buying vehicles from used car dealers, they should not be taken in by the seeming comprehensiveness and meaningfulness of the Mechanical Fitness Certificate. They should have an independent assessment done by their own mechanic. The Vehicle Inspection Regulation and the Vehicle Equipment Regulation do not provide much in the way of protection for the buyer of an ordinary used vehicle (not out-of-province and not salvage).

Why would AMVIC create a Mechanical Fitness Assessment form that must be completed and given to used car dealers and their customers and that includes powertrain and electrical components for marking as “complies” or “non-compliant” without stating what those components must comply with? The AMVIC is supposed to be the government’s watch dog. According to information on its website (here), the AMVIC is a not-for-profit organization that was incorporated in 1999 “for the purpose of administering motor vehicle industry regulations as outlined in the Fair Trading Act”, RSA 2000, c F-2. There is nothing in the Fair Trading Act about AMVIC and nothing in the Fair Trading Act that is specific to motor vehicles. However, under section 136(5) of the Fair Trading Act, the Director of Fair Trading may “delegate to a regulatory board any or all of the Director’s powers, duties or functions under this Act and the regulations, except the power to approve bylaws”. The delegation to AMVIC is made under Part II of the Automotive Business Regulation, Alta Reg 192/1999 that is made under the Fair Trading Act. AMVIC operates through “a delegation agreement with the Minister of Service Alberta”, doing the government’s job.

However, it has not been doing the government’s job very well for quite a few years now. See, for example, Charles Rusnell, “Alberta Motor Vehicle Industry Council sued for negligence: Class-action lawsuit involves failed consignment sales company”, CBC News, 22 June 2015. The class action law suit claims AMVIC failed to effectively regulate the auto industry’s business practices. More interestingly, as Charles Rusnell notes, the lawsuit makes a broader claim that Service Alberta failed to properly oversee AMVIC when it did not make sure that AMVIC corrected the serious deficiencies in its policies and operational conduct identified in previous government reviews. The lawsuit claims that AMVIC failed to implement the recommendations made by Service Alberta in March 2009, February 2013 and August 2014. See also Charles Rusnell and Jennie Russell, “LuAnne Sirdiak abruptly leaves Alberta Motor Vehicle Industry Council: Investigations manager left council on Thursday”, CBC News, 3 April 2015; Charles Rusnell and Jennie Russell, “AMVIC director acted like ‘tyrant,’ internal draft review says: Review says John Bachinski, Alberta Motor Vehicle Industry Council director, bullied staff”, CBC News, 22 April 2015. The Investigative Review Findings of the Operational Review of Investigative Practices begun in August 2014 is available from Service Alberta here.

AMVIC is now being reviewed for the fourth time in seven years, but this time by the province’s new NDP government. See David Boushy and Tony Tighe, “Province announces review of Alberta Motor Vehicle Industry Council” Global News, 11 August 2016; Reid Southwick, “Alberta launches review of how well auto sales watchdog protects consumers”, Calgary Herald, 11 August 2016.The government has appointed former mayor of Spruce Grove, George Cuff to conduct a review of AMVIC. The review is expected to take three to four months and then Cuff will recommend what, if any, changes the province should make to AMVIC. Whether this review by the NDP will lead to better results than did the previous three reviews by the Progressive Conservative government remains to be seen.

This post may be cited as: Jonnette Watson Hamilton “You Can’t Rely on a Motor Vehicle’s Mechanical Fitness Assessment ”(28 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_JWH_Fastlane_Nov2016.pdf

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Making Sense of Nonsense? Or Perhaps Not

Fri, 11/25/2016 - 10:00am

By: Nigel Bankes and Heather Lilles

PDF Version: Making Sense of Nonsense? Or Perhaps Not

Case Commented On: Eon Energy Ltd v Ferrybank Resources Ltd, 2016 ABQB 585 (CanLII)

What happens when two oil and gas companies enter into a joint operating agreement (JOA) to which is attached the 1981 CAPL Operating Procedure and the PASWC Accounting Procedure and then proceed to operate the properties according to a completely different set of arrangements? As one might expect, things are fine for so long as each perceives some benefit from these de facto arrangements. But when relations deteriorate it’s a mess; and then both counsel, and ultimately the Court, have to try and make sense of what has happened. And in this case that evidently proved difficult for all concerned and likely, very, very expensive. The hearing of this case took 16 days and then Justice Kim Nixon took two years to render this judgement. There were also interlocutory injunctive proceedings (unreported) and there will be a series of accounting issues to be addressed as a result of this judgement. The result is extremely unedifying. The judgement is long (53 pages), meandering, fact laden, and convoluted. Perhaps the best that can be said for it is that it might serve as a salutary warning to be used by lawyers acting for junior oil and gas companies: “this is what happens when you make things up as you go along and act as if the written agreement is a mere inconvenience.” The case is also another illustration of the hard reality that co-ownership is a messy business and fundamentally an institution for those who can get along together. Sometimes the costs of maintaining and fighting about the relationship are not worth the benefits to be obtained.

In one of the more enigmatic paragraphs of her decision Justice Nixon suggests that the parties are asking her to re-write their agreement (at para 260 and again at para 397). But the question all along is which agreement? The written agreement? Or the agreement evidenced by the conduct of the parties?

In what follows we will do our best to distill the essential facts and legal reasoning from Justice Nixon’s judgement.

The written agreements between the parties

Ferrybank Resources Ltd. (Ferrybank) and Eon Energy Ltd. (Eon) entered into a Confirmation of Interests and Joint Operating Agreement (the JOA) on February 1, 2001 in respect of six wells (three of these wells were later sold leaving the 2-01, 4-07 and 6-07 wells in dispute). The agreement confirmed that Ferrybank held a 10% working interest and Eon held a 90% working interest in all petroleum substances. There was a 1981 CAPL Operating Procedure (the 1981 CAPL) and a 1983 Petroleum Accountants Society of Canada (PASC) Accounting Procedure appended to the JOA. The JOA appointed Ferrybank as the “Initial Operator”, well-licensee, and the party responsible for entering into marketing agreements with third parties. (at paras 13-15, 247) It would ordinarily follow from these arrangements that Ferrybank and Eon would each be responsible for their proportionate share (10:90) of the costs, expenses and liabilities associated with the properties and also be entitled to the same proportionate share of production and revenues.

The JOA and annexes contained two express provisions with respect to operator fees. The same clause of the JOA (cl. 8(b)) by which Ferrybank appointed Eon “as its sole agent for the purposes of managing the operations on the Joint Lands” also provided that Ferrybank would not be charged its share of operating overhead but would instead receive from Eon ‘$200 per well per month to perform its [functions as the] registered and designated operator of the Assets.” (at para 173) We will refer to this as the administrative fee. The second provision purported to be an election for overhead expenses in the PASC accounting procedure which provides for a $225 per month per producing well operator fee (at paras 176-179). We will refer to this as the PASC well fee.

The same parties acquired a joint interest in four additional wells in the same percentages in October 2001. There was no executed written agreement with respect to these additional wells (at para 6) although the terms of the agreement were set out in a letter from Ferrybank to Eon (at paras 83-84).

The de facto arrangements between the parties

The de facto arrangements between the parties were significantly at variance from the terms of their written agreements. The differences included the following: (1) Eon was the de facto operator of all of the wells; (2) with the exception of the 6-25 well and solution gas production from the 4-07 and 6-07 wells for the first ten years, Ferrybank neither contributed its 10% share of costs and expenses nor received the reciprocal revenues, (the solution gas expenses and revenues for the listed wells were dealt with in accordance with the JOA (at para 18) although with very tardy accounting processes); (3) as of 2004 the parties agreed to share the 6-25 well 50:50 on the condition that Ferrybank repair the pump on the well at its sole risk and expense. The 6-25 well was one of the second groups of wells acquired by the parties. (4) As for the operator fees, the record demonstrated that Ferrybank never billed Eon for the administrative fees provided for under cl. 8(b) of the JOA (at para 194) for ten years. (5) Although the CAPL operating procedure requires the operator to keep the joint accounts neither party (at para 255) kept a joint account for any of the wells.

The reasons for the variances

The underlying reason for the dissonance between the written agreements and the actual conduct of the parties or their de facto arrangements seems to have been to game the Licence Liability Rating Program (LLR program) of the Alberta Energy Regulator (AER). Under that scheme an oil and gas licensee in the province must maintain a positive ratio of deemed assets to deemed liabilities for the wells for which it is the licensee. In the event of a negative ratio a licensee is required to make good the shortfall with a deposit. Non-productive wells have a negative effect on the ratio. The calculation does not take account of the beneficial ownership of the wells. A licensee is deemed to have a 100% interest. The practical effect of having Ferrybank as licensee was that Ferrybank’s other producing wells would generate a positive ratio (and fitted in with Eon’s principal’s plans to move his operations to British Columbia). Section 91(2) of the Oil and Gas Conservation Act, RSA 2000, c O-6 (OGCA) prescribes that a licensee or approval holder that is resident outside of Alberta must appoint an agent within Alberta to carry out the licensee’s or approval holder’s duties and other responsibilities under the OGCA and perhaps the parties were trying to avoid that complication. However, this also meant that it was Ferrybank that was principally responsible to the regulator. Over time, Ferrybank also became concerned that it might need to make a security deposit with the AER as its own LLR declined; and indeed it was required to make such a deposit (at para 241) when the 6-25 well stopped producing in 2010 for the second time and following changes to the LLR program.

The disputes between the parties

Justice Nixon canvasses the many disputes that arose between the parties as a result of the above arrangements and the souring of their relationship. We will refer to five main issues: (1) issues with respect to purported variations in the size of the working interests, (2) issues with respect to operator fees, (3) issues related to foregone production from the 6-25 well, (4) change of operator issues, and (5) the right to take in kind.

(1) The working interest ownership issues

The court held that the parties held 10% (Ferrybank) and 90% (Eon) working interests in all of the properties still held by them. This was what the executed written agreement provided for in the case of the original six wells. This agreement included an entire agreement clause which also precluded any amendment except by agreement in writing signed by both parties (at para. 71). However the parties could, by oral agreement, apply the same rules to the four wells subsequently acquired. We agree with this finding (at para 86) but would have added that such an oral agreement, insofar as it deals with interests in lands would also have had to comply with the Statute of Frauds which requires that the agreement be evidenced in writing signed by at least the party against whom it is to be enforced (or otherwise evidenced by sufficient acts of part performance.) That said, we note that a party must expressly plead the Statute of Frauds and perhaps it was not pled in this case. There was at least some evidence (at paras 83 to 85 and indeed scattered throughout the judgement) of the sufficiency of the necessary evidence in writing but there is no assessment of that evidence in the judgement nor any assessment of issues of part performance (although there are analogous estoppel considerations). See the many discussions on ABlawg of the status of the rules relating to part performance in Alberta by Professor Jonnette Watson Hamilton, most recently here.

For Justice Nixon it also followed that the arrangements between the parties as to the subsequently acquired four wells, including the 6-25 well, could also be amended orally (at para 97). This is less obvious to us (after all, the arrangements now include a set of provisions that require that any amendments be in writing); and again we would argue that, at the very least, any such amendments would also have to comply with the Statute of Frauds as above.

The implications of the subsequent conduct of the parties

If the 90:10 arrangements with respect to the originally acquired wells could not be amended without the written agreement of the parties what should be the consequences of that? It would seem to follow that, subject to the Limitations Act, RSA 2000, c. L-12, Eon should have to account to Ferrybank for 10% of revenues but should be able to recover 10% of the costs. In practice, given the limitations period, this would only apply to the period commencing two years from when the action was begun.

This seems to us to be a rather simple conclusion and not obviously unjust to either party – although there is some unfairness to Eon since it bore the sole risk of continued operations (but there does not seem to be much evidence that the risks were high).

However, the parties (and Justice Nixon) preferred a much more complicated solution drawing on estoppel. The conclusion seems to have been that since the parties were agreed that oral amendments could be effective, each must be estopped from resiling from that oral amendment (at para 95). On the evidence (which is painfully discussed from paras 100 – 150), the oral agreement was not an agreement whereby Ferrybank gave up its 10% interest but was instead an agreement whereby the parties agreed to suspend the usual sharing obligations as to costs and revenues associated with a proportionate working interest. Thus, Eon could keep 100% of production while paying 100% of the costs (quaere what would the parties have said about Ferrybank’s liability if something had gone seriously awry). As for the form of estoppel, the parties apparently canvassed proprietary estoppel, estoppel by convention, and promissory estoppel (at para 153). Justice Nixon plumped for estoppel by convention without indicating why the other forms of estoppel were not available. The estoppel served to suspend the sharing obligations of the JOA until Ferrybank served its counterclaim on Eon. Justice Nixon set out the elements of estoppel by convention (at para 157) relying on the Supreme Court of Canada decision in Ryan v Moore, 2005 SCC 38 (CanLII) (at para 59):

(1)  The parties’ dealings must have been based on a shared assumption of fact or law: estoppel requires manifest representation by statement or conduct creating a mutual assumption. Nevertheless, estoppel can arise out of silence (impliedly) [emphasis in original]

(2) A party must have conducted itself, i.e. acted, in reliance on such shared assumption, its actions resulting in a change of its legal position.

(3) It must also be unjust or unfair to allow one of the parties to resile or depart from the common assumption. The party seeking to establish estoppel therefore has to prove that detriment will be suffered if the other party is allowed to resile from the assumption since there has been a change from the presumed position.

Perhaps the most difficult of these criteria to fill on the facts was the third criterion and here Justice Nixon seems somewhat equivocal, concluding as follows (at para 160):

Having left Eon to pay 100% of these costs and expenses and take 100% of the risk with respect to the operations, it would be unfair to permit Ferrybank to resile from the parties’ shared assumption with respect to oil revenues. Ferrybank cannot claim oil revenues retrospectively. However, there is no evidence Eon took any specific risks with respect to the operation of these wells that would make it unjust for Ferrybank to receive oil revenues net of costs and expenses from the time it served its Counterclaim.

On the other hand, Justice Nixon concluded that waiver would not be available since waiver applied to a situation where one party intentionally and unequivocally relinquishes a right which it holds under the contract (at para 162).

The principal practical difference between simply applying the contract (subject to the limitations rules) and applying estoppel rules is that under the estoppel approach the written agreement re-establishes itself as of the date of service of the counter claim; the contract approach would restore the pre-eminence of the written arrangement two years earlier.

The subsequently acquired wells including the 6-25 well

The analysis was different in relation to the subsequently acquired wells (including the 6-25 well) since, as noted above, Justice Nixon found that there was no limit on the ability of the parties to vary the original oral agreement by further oral amendments and that the evidence confirmed that they had done so in relation to the 6-25 well. Recall as well that it seems as if Ferrybank is both de jure and de facto operator of this well on the basis of its commitment to replace the pump for that well.

Referring (at para 208) to Powermax Energy Inc v Argonauts Group Ltd2003 ABQB 71 (CanLII), at para 117 citing Bank of Nova Scotia v Société Générale Canada)1988 CanLII 166 (AB CA), 87 AR 133; Adeco Exploration Company Ltd v Hunt Oil Company of Canada Inc2008 ABCA 214 (CanLII) at para 68, citing Erehwon Exploration Ltd v Northstar Energy Corp1993 CanLII 7238 (AB QB) Justice Nixon recalled that each party had a duty to account to the other as a fiduciary for any production revenues it received in relation to the jointly owned wells. Ferrybank “is not entitled to withhold revenues from Eon in anticipation of a possible LLR deposit” or “on the basis that the LLR is a ‘regulatory burden’ on each well” (at para 212).

The court ordered an audit with respect to the “records of the other relevant to their joint venture” (at para 215) to be paid for by both parties in accordance with their respective working interest; the auditor to “have a charge on the production of the defaulting party to recover any unpaid share of costs.” (at para 219)

(2) Operator fees

As noted above, the written agreements (at least with respect to the first group of wells) contained two sets of provisions with respect to operator fees. These gave rise to at least two interpretation problems as a matter of the text. The first question (not necessarily the order of issues as discussed by Justice Nixon at paras 172 – 183) was whether the arrangement actually contemplated both fees; the second was the question of who was the operator for the purposes of the PASC well fee. The commercial context for both questions undoubtedly included the rather unusual arrangement in which one party was the operator of record for official purposes and another party was the de facto operator for the physical operation purposes (but not all commercial purposes). In the end, Justice Nixon seems to have concluded that the agreements between the parties did contemplate both the administrative fee and the PASC well fee but with a different beneficiary in each case. The beneficiary of the administrative fee was Ferrybank; the beneficiary of the PASC well fee was Eon. While the former was not subject to prorating, the PASC well fee was, but in this case cl.8(b) of the JOA expressly relieved Ferrybank of its liability for its 10% share. We agree with this analysis of this rather unusual arrangement.

As a result of this interpretation Ferrybank should be able to recover the administrative fee payable by Eon (subject only to any time bar imposed by the Limitations Act) – unless the parties had varied the terms of the contract by oral agreement or by their conduct in a manner that was binding notwithstanding the entire agreement\no amendment except in writing clause of the JOA. Justice Nixon concluded that the evidence did not establish an oral amendment – indeed (at para 192) “There was a dirth (sic) of evidence about fees.” However, (at para 198) “Ferrybank’s long failure to include fees in the accounts it submitted to Eon constitute a waiver”. Ferrybank was entitled to withdraw that waiver prospectively and upon reasonable notice. Ferrybank did this when it started billing Eon in December 2010 for its fees under cl.8(b). Justice Nixon does not explain (or refer to) how waiver operates in light of cl. 2001 of the 1981 CAPL which provides as follows:

No waiver by any party of any breach of any of the covenants, provisos, conditions, restrictions or stipulations herein contained shall take effect or be binding upon that party unless the same be expressed in writing under the authority of that party and any waiver so given shall extend only to the particular breach so waived and shall not limit or affect any rights with respect to any other or future breach.

There was no estoppel that would preclude recovery:

Estoppel by convention does not apply to fees as it did to oil revenues because there was no joint understanding between the parties with respect to fees. As there was no detrimental reliance by Eon on Ferrybank’s failure to claim or to bill for fees, neither of the other two other forms of estoppel raised by Eon, propriety estoppel and promissory estoppel, apply either.
(at para 204)

(3) Foregone production from the 6-25 well

As noted above, the 6-25 well ceased production for the second time in 2010 at which time the parties disagreed as to what action to take. There were competing independent operations notices and court injunctions preventing either party working on the well until Ferrybank secured a court order (at para 242) permitting it to repair the pump on the 6-25 well at its sole expense. That operation was successful and production resumed in September 2013 after a three year hiatus. Ferrybank claimed damages from Eon based on the foregone production and perhaps also for losses it suffered as a result of having to make an LLR deposit with the AER due to the loss of the 6-25 well as a producing well in Ferrybank’s LLR ratio calculations.

The Court rejected this claim (at para 244) on the basis that the above facts did not demonstrate a cause of action. We agree. There is no duty upon co-owners to agree as to how they shall use or operate the property just as, without more, co-owners do no owe each other a fiduciary duty: Kennedy v De Trafford, [1897] AC 180 (HL E).

(4) Change of operator issues

Both parties seem to have had an interest in changing the status of the other under their working arrangements but different rules apply to the removal of the de jure operator and the de facto operator. The operating procedure provides the rules for removing or changing Ferrybank’s status as the de jure operator or operator of record. Eon’s status as the de facto operator is governed by Ferrybank’s delegation of that authority under cl 8(b) of the JOA.

Proposed removal of Eon as the de facto operator

In seeking to terminate Eon’s position as the de facto operator Ferrybank seems to have argued that the arrangement should be terminated because Eon was in breach of its fiduciary obligations as agent of Ferrybank or otherwise in breach of its duties of good faith in relation to the contract, or in breach of various court orders. These arguments all failed. Justice Nixon goes so far as to say (at para 280) that Eon was not an agent and therefore owes no fiduciary duty to Ferrybank; and later she reaches the flat conclusion that “Ferrybank is not entitled to remove Eon” from its de facto role. (at para 317) But we wonder why Ferrybank needed to show breach of any duty to terminate the “agency” or Eon’s de facto role. Cl.8(b) is nothing more than a declaration of an initial appointment. Unless there is something else in Cl.8 of the JOA that requires this appointment to continue it is not clear to us why it was not open to Ferrybank simply to terminate that appointment on reasonable notice. In other words there was perhaps a preliminary interpretive issue which seems to have been glossed over.

Proposed removal of Ferrybank as de jure operator

Justice Nixon considered Eon’s claim to have Ferrybank removed as operator under three headings: (1) breach of fiduciary duty, (2) clause 202 of the operating procedure, and (3) the challenge provisions.

The CAPL operating procedure does not list “breach of fiduciary duty” as a ground for replacing an operator but that was Eon’s argument and Justice Nixon examined it on that basis. Her conclusion was that Ferrybank was manifestly in breach its fiduciary obligations by failing to account for revenues received in relation to the 4-07, 6-07 and 6-25 wells (at paras 290 – 296) but that that did not entitle Eon to remove Ferrybank as operator because “Eon is not eligible to be the named Operator” (at para 298) and had no right to nominate a third party to so act. However, Ferrybank’s chronic failures did “disentitle” it (at paras 392, 308, 330 & 384) from performing any operator functions in relation to these wells. Justice Nixon does not disclose why Ferrybank’s breaches result in this “disentitlement”.

The CAPL Operating Procedure (cl.202) does provide for removal of an operator on account of insolvency. Ferrybank was insolvent and therefore should be removed but it was not necessary to so order in this case because (at para 321) Eon was already the de facto operator. All that it was necessary to do in this case was to remove Ferrybank from its de facto operator roles in relation to the 4-07, 6-07 and 6-25 wells. The Court went on to confirm (at para 239) that it would be Eon’s responsibility as the de facto operator to prepare and maintain the joint accounts. It’s hard to know what to make of this solution. It offers a practical resolution to the inter-party problems posed by insolvency by making sure that Ferrybank never gets its hands on the cash flow; but on the other hand, perpetuating the parties’ end run around the LLR program and leaving an insolvent party as the operator and licensee of record with the AER hardly seems to be a good outcome from a public policy perspective.

The arguments in relation to the challenge provisions are even more bizarre. The challenge concept is simple. A joint operator (Eon in this case) asserts (by a concrete proposal) that it can do the job more cheaply than the current operator (Ferrybank). Unless the operator agrees to operate on those terms it is deemed to have resigned. Eon claimed to have triggered these provisions. There were just a couple of problems with this assertion. First, Eon’s fees look to be higher (at para 340) (and surely a proposed deduction in the penalty fee for independent operations does not count as better terms because it has nothing to do with the function of operator). And second because “Eon doesn’t seek to become named Operator itself as it is ineligible to be such.”[!!] (at para 334)

Justice Nixon was clearly of the view that the challenge notice was ineffective because it did not propose more favourable terms but she still went on to consider Ferrybank’s argument that the notice was also ineffective on other grounds – namely because Eon was not “ready, able and willing to conduct operations” (at para 343) as required by Clause 203. One might have thought that the analysis here would turn on whether Eon’s extraprovincial status would be an impediment but instead it turns out to be a post-mortem of Eon’s actual performance as operator over the previous years. Yes, dear reader, that is correct. Ferrybank’s argument is that Eon can’t succeed with its challenge notice to be the de jure operator because Eon has done such a poor job of serving as the de facto operator. Thus, while the Court examines these issues under the heading of Eon’s challenge of Ferrybank, in this surreal and twilight world of de jure and de

facto operators Justice Nixon’s assessment of why Ferrybank’s attack on the substance of Eon’s challenge notice (which is to remove Ferrybank as operator) must fail concludes as follows:

In summary, Ferrybank’s complaints about Eon’s actions do not support the conclusion that Eon failed to conduct well operations properly. They do not support removal of Eon from well operations.
(at para 377)

The complaints that Justice Nixon assessed included allegations of an improper workover of the 4-07 well, safety issues with the 2-01 well, and instructing third party contractors to deal with Eon not Ferrybank. A good number of these issues became arguments about the relative roles of de jure and de facto operators and the relationship between the written agreement and the agreement as varied by conduct. Thus, Ferrybank’s argument with respect to the 4-07 workover was that Eon should have provided it with an AFE or an independent operations notice. Justice Nixon concluded that neither was required. An AFE was not required if the operation was under the $25,000 because Eon was conducting the operation as the (de facto) operator; if it was over $25,000 there was still no need for an AFE “because Ferrybank was not contributing anything towards expenses.” (at para 350) And round and round we go. Equally, Eon could give directions to the third party contractors and have them deal with Eon as the de facto operator rather than Ferrybank as the de jure operator because “Eon, not Ferrybank, is the party authorized to manage, and to carry out operations on, the wells.” (at para 376)

(5) The right to take in kind

Clause 601 of CAPL 1981 authorizes each party to take in kind. However, the JOA provided that in the event of a conflict between the JOA and the Operating Procedure the JOA would prevail. Eon’s joint venture accountant took the view that there was a conflict between the two agreements (we don’t have the text but apparently the JOA requires Ferrybank to issue directions to oil and gas marketers (at para 383)). It seems surprising that either JV accountant was permitted to opine on the issue of a potential conflict between the two agreements but Justice Nixon agreed with Eon’s expert’s assessment. We are not in a position to assess that conclusion without examining the text of the JOA but the right of a joint operator to market its own share of production is one of the fundamental rights of a co-owner which the CAPL forms address in some detail. One would expect clear language in the JOA to set aside this right over the entire term of operations on the joint lands (just as one might expect clear language to justify the conclusion that the delegation of de facto operator responsibilities is irrevocable for the duration of the contract).

This post may be cited as: Nigel Bankes and Heather Lilles “Making Sense of Nonsense? Or Perhaps Not” (25 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_NBHL_Ferrybank_Nov2016.pdf

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Publication Bans and Interim Mandatory Injunctions in the Context of Freedom of Expression and the Privacy of Youthful Victims

Thu, 11/24/2016 - 9:00am

By: Hasna Shireen

PDF Version: Publication Bans and Interim Mandatory Injunctions in the Context of Freedom of Expression and the Privacy of Youthful Victims

Case Commented On: R v Canadian Broadcasting Corporation, 2016 ABCA 326 (CanLII)

The Court of Queen’s Bench of Alberta in R v Canadian Broadcasting Corporation, 2016 ABQB 204 (CanLII) (CBC QB) denied an interim mandatory injunction and allowed the Canadian Broadcasting Corporation (CBC) to retain past posts with identifying information of a youthful victim on the CBC website. The Crown appealed the denial of the interim mandatory injunction. The Majority at the Court of Appeal held that the Chambers Judge applied the wrong legal test, that the injunction is a civil matter attached to a criminal charge, and that the Chambers Judge had considered a number of irrelevant factors. Thus, the Court of Appeal overturned the prior decision and granted an interim mandatory injunction. In my previous blog post, I criticized the Court of Queen’s Bench decision because that decision gave priority to freedom of expression of the media over a young victim’s privacy rights. One of the major purposes of a publication ban is to protect a child victim’s privacy and thereby ensure future victims will come forward with the assurance of anonymity. In R v Canadian Broadcasting Corporation, 2016 ABCA 326 (CanLII) the Court granted the interim mandatory injunction and maintained the integrity of the administration of justice by protecting the identity of the youthful victim in public interest.

Procedural History

The Crown requested a publication ban and the Chambers Judge ordered a mandatory ban under section 486.4(2.2) of the Criminal Code, RSC 1985, c C-46 (“Criminal Code”) respecting the identity of the youthful victim. However, prior to the non-publication order being made, the CBC had posted articles to its website disclosing the identity of the young victim. Though the CBC has agreed not to make any further postings they declined to remove the historical postings. The Crown brought an application for contempt and for removal of the historical postings, and then brought this application for an interim mandatory injunction requiring the immediate removal of the historical postings.

Both the parties accepted, and the Chambers Judge applied, the traditional three part test for an interim mandatory injunction: a) a strong prima facie case, b) irreparable harm, and c) an assessment of the balance of convenience (at para 3). He decided that the Crown did not have a strong prima facie case, no irreparable harm had been proven, and that the balance of convenience favoured the respondent. Thus, the Chambers Judge denied the Crown’s application for an interim mandatory injunction to require the CBC to remove historical postings from its website. The Alberta Court of Appeal was asked to decide on the interim mandatory injunction application.

The Judgment of the Majority

Mr. Justice Slatter and Mr. Justice McDonald reviewed the traditional three part test and held the following.

A Strong Prima Facie Case

The Chambers Judge did not characterize the issue accurately as he proceeded on the assumption that the Crown had to demonstrate a “strong prima facie case . . . of criminal contempt of court” in order to obtain the interim injunction (at para 4). This case was started by originating notice, which asked for four kinds of relief:

  1. That the CBC be cited in criminal contempt of court.
  2. That the CBC be directed to remove any information from their website that could identify the complainant . . .
  3. That an appropriate sentence be imposed against the CBC and
  4. Any such further order that this Honourable Court deems appropriate.

(at para 5)

The originating notice has a “hybrid” aspect. The application for a permanent injunction and order to remove the information from the website only needed proof on the civil standard. However, the contempt portion required a different standard of proof (i.e., beyond a reasonable doubt) and had different requirements (i.e., to prove mens rea). The different aspects only partially overlapped, as the CBC might have been found not to be in contempt of court, but might still have been required to remove the historical objectionable postings (at para 5).

As noted by the Court of Appeal:

The Originating Notice included in its preamble a statement that:

AND FURTHER TAKE NOTICE that an application will be made for an interim injunction, directing that the Respondent remove any information from their website that could identify the complainant in the [subject] case (at para 6).

The originating notice did not directly relate the request for an interim injunction to the contempt application. The request for an interim injunction is tied back to the second type of relief requested (i.e., the removal of the past postings with identifying information of a youthful victim). Thus, the correct issue is whether the Crown has demonstrated a strong prima facie case that it is entitled to a mandatory order directing removal of the identifying material from the website. Interim relief is available in rare circumstances. In a penal case like a contempt application, interim relief is not an option while the contempt application is pending at trial. The Crown is seeking an interim injunction requiring removal of the postings from the website in anticipation of it receiving the second type of relief requested in the originating notice (at para 7).

The main issue before the court is the interpretation of the phrase: “published in any document or broadcast or transmitted in any way” under section 486.4 of the Criminal Code. The focus has been on the scope of the term “publish”, in light of the companion word “transmitted”. The CBC argued that things that happened prior to the non-publication order are not caught by that order, because they were not “published” after the order was granted. The Crown would not be entitled to an order requiring removal of the postings, if the CBC is correct in maintaining its historic postings do not amount to a “publishing” or “transmission”. (at para 8) The Crown argued that “publishing” is a continuous state of affairs and it is also arguable that the CBC is wilfully disobeying the court order. While the majority found either position arguable, they determined that “it cannot be said that the Crown does not have a strong prima facie case” (at para 10).

Irreparable Harm

The CBC argued that a non-publication order is mandatory under the Criminal Code without proof of harm, but a mandatory injunction enforcing that order requires proof of harm. Parliament has declared that the identity of youthful victims should be protected in the public interest, and it cannot be argued that ignoring those provisions is not harmful. The CBC, by allowing an ongoing breach of a non-publication order, is harming the integrity of the administration of justice. The Chambers Judge made an error of law and contradicting Parliament’s direction by concluding at that “the policy objectives of encouraging young victims to come forward . . . are largely not present here” (at para 11, citing CBC QB at para 54). This kind of analysis conflicts with the mandatory nature of non-publication orders.

Balance of Convenience

The Chambers Judge decided that the balance of convenience favoured the CBC because the non-publication order limits the CBC’s freedom of expression. The CBC has not yet issued a constitutional challenge (despite a “declared intention” to do so (at para 12)), and therefore relevant provisions of the Criminal Code must be assumed at this stage to be constitutional. “To the extent that they limit freedom of expression, it must be presumed (at this stage of the litigation) that those provisions are justified in a free and democratic society” (at para 12). The CBC “cannot argue that it is ‘inconvenient’ for it to obey the law”. Further, the Chambers Judge recognized at para. 66 that the CBC “would be little inconvenienced if ordered to comply with the publication ban . . .” (at para 12).

Although granting or denying a mandatory interim injunction is a discretionary matter, which is entitled to deference on appeal, the Majority found that the Chamber Judge made palpable and overriding errors and the Crown had met the three-part test. Thus, the Court allowed the appeal and granted an interim injunction (at para 13).

The Dissenting Judgment

The Dissenting Judge (Ms. Justice Greckol) disagreed with the Majority about the characterization of the nature of the application before the Chambers Judge. Ms. Justice Greckol stated that “there is no such “hybrid” application or application for a civil interim injunction in anticipation of a permanent injunction at trial” (at para 23). She also stated that the Chambers Judge applied the correct tri-partite test based on the facts (at para 62). She noted that “granting a mandatory interim injunction is a discretionary matter and is entitled to deference on appeal” (at para 62). Ms.Justice Greckol decided that the Chambers Judge applied correct legal principles based on the facts and evidence, and upheld the decision of the Chambers Judge.

Commentary

Access to information on the web and freedom of expression are constantly creating new issues in law. To balance a victim’s privacy with freedom of expression is challenging with web-based information. The purpose of ordering a mandatory ban under section 486.4(2.2) of the Criminal Code is to “prohibit[s] the publication, broadcast or transmission in any way of information that could identify the victim”. The offences specified in section 486.4 of the Criminal Code authorize the court to impose a publication ban on any information that could identify a victim under the age of 18 years. Therefore, the purpose of a publication ban is to protect a child victim’s privacy and thereby ensure future victims will come forward with the assurance of anonymity. The victim in this case was a child. To maintain the integrity of the administration of justice, Parliament declared that the identity of youthful victims should be protected in the public interest. The Court of Appeal granted an interim mandatory injunction which would have required the CBC to remove from its website some historical postings that disclose the identity of a youthful victim of a crime. Thus, this decision upheld the integrity of the administration of justice by protecting the identity of a youthful victim.

This post may be cited as: Hasna Shireen “Publication Bans and Interim Mandatory Injunctions in the Context of Freedom of Expression and the Privacy of Youthful Victims” (24 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_HS_CBCappeal_Nov2016.pdf

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CPAWS Presents to the Expert Panel for Environmental Assessment

Wed, 11/23/2016 - 9:00am

By: Shaun Fluker, Kristina Roberts, and Drew Yewchuk

PDF Version:  CPAWS Presents to the Expert Panel for Environmental Assessment

Case Commented On: Expert Panel Review of Environmental Assessment Processes

The Expert Panel charged with reviewing Canada’s environmental assessment regime continues to hear presentations on recommended amendments to the federal environmental assessment process (Professor Martin Olszynski published his presentation to the Panel in an earlier post). The University of Calgary’s Public Interest Law Clinic was retained to advise and assist the Canadian Parks and Wilderness Society (CPAWS) Southern Alberta Chapter and National Office in making recommendations to the Panel. On November 23, 2016, Professor Shaun Fluker together with Anne-Marie Syslak, the Executive Director of CPAWS – Southern Alberta, co-presented to the Panel on behalf of CPAWS. This submission focused exclusively on the current state of the federal environmental assessment process in Canada’s national parks under the Canadian Environmental Assessment Act 2012, SC 2012 c 19 s 52, a process which is perhaps best summarized as non-transparent, unaccountable, and completely discretionary. What follows is an excerpt from the CPAWS presentation to the Panel.

 

Thank you for the opportunity to present to you today. I’m Anne Marie Syslak, Executive Director of the Southern Alberta Chapter of the Canadian Parks and Wilderness Society, or CPAWS.

I’m joined today by Shaun Fluker, Professor of Law at the University of Calgary.  Shaun is going to speak directly to our recommendations on legal reform to the environmental assessment process.

CPAWS is Canada’s public voice for parks and wilderness. We are a national charity that, for over 50 years, has worked to protect Canada’s wild spaces, and to make sure our existing parks are well protected.

National parks are our most treasured wild places in Canada. They are supposed to provide the highest standard of protection for Canada’s most iconic landscapes. Where Europe has its great cathedrals and castles – Canada has our magnificent national parks.

The Canada National Parks Act requires that ecological integrity be the first priority in park management. You would think, then, that the highest standard of environmental assessment would be required for all projects proposed within national park boundaries.  It is not.

CEAA 2012 left a gaping hole in the national park management system by removing the legal requirement for Parks Canada to conduct environmental assessments for projects in our parks.

Under CEAA 1992, all projects in national parks required environmental assessments, at least at the screening level. And because of their impact on sensitive alpine ecosystems, all ski area development proposals were subject to comprehensive studies. Since CEAA 2012 was enacted, environmental reviews have basically been left to the discretion of Parks Canada. 

The only situation where an environmental assessment is now legally required in a national park is if Parks Canada determines that there is likely to be significant environmental impacts. Yet since 2012, Parks Canada has NEVER concluded that any project proposal in a national park will likely result in significant environmental impacts, even major developments like the proposed near doubling of the Lake Louise Ski Resort into legally protected wilderness used by threatened grizzly bears and home to federally-listed endangered white-bark pine.  So no legal requirement for an EA of a MAJOR development in a national park and World Heritage Site.  This is a problem that needs to be fixed.

Prior to 2012, this project and others as we will outline in our full submission would have been subject to mandatory comprehensive studies under CEAA 1992, as well as rigorous and transparent public review processes.

Yet under CEAA 2012, these kinds of large-scale projects are gaining approval despite major ecological concerns.  They are being approved based on seriously flawed environmental reviews, with no transparency, and with terrible public consultation processes.  They are even going through despite overwhelming public opposition.

Losing the legal framework for environmental assessment in our national parks has exacerbated the development pressures, particularly in Banff and Jasper, and is allowing incremental development to proceed that threatens the ecological integrity of our parks and the public trust in Parks Canada’s management of them.  We are looking to this review panel to consider recommendations under CEAA specific for national parks and federal protected areas to strengthen this legislation and support the Canada National Parks Act’s priority of putting ecological integrity first in the management of our most protected areas.

As just emphasized, national parks should require the highest level of environmental assessment with an overall objective of helping to ensure the Minister and Parks Canada adhere to their legislated mandate that the maintenance or restoration of ecological integrity be the first priority in all parks decision-making.

If there is a general theme to this presentation, it is that the current environmental assessment process in Canada’s national parks has allowed for major projects with significant environmental impacts to be approved with no transparency and flawed public consultation. Despite the legislated ecological integrity mandate, we note that Parks Canada’s own policy guiding environmental impact assessment for the parks fails to even mention the term ‘ecological integrity’ let alone incorporate it as an objective in the environmental assessment process.

ATIP response from September 21st, 2016

As alluded to – There has not been one environmental assessment process conducted under CEAA 2012 for a project in a national park since the legislation was enacted.  All assessments have been administered by Parks Canada using its internal assessment policy.  The result is that decisions with significant impacts to ecological integrity in the national parks are being undertaken without any public input or transparency, and it is unclear how or whether the environmental assessment process serves the Minister’s overarching mandate to maintain or restore ecological integrity as the first priority in national parks decision-making.

Indeed under CEAA 2012 there is no mandated environmental assessment for projects in national parks.  What CEAA 2012 provides is section 67 which specifies that Parks Canada must determine whether a project located in a national park is likely to cause significant adverse environmental effects. If a project is considered likely to cause significant adverse environmental effects, the Governor in Council must then determine whether those effects are justified in the circumstances in order for the project to proceed.

Via an access to information process we have learned: (1) there have been no instances where Parks Canada has determined a project is likely to cause adverse environmental effects and was referred to the Governor in Council under section 67; and (2) that Parks Canada has determined a total of 1533 projects were unlikely to cause significant adverse environmental effects under section 67 between January 1, 2013 and October 30, 2016.

Parks Canada EIA Requirement Checklist

The upshot here is that environmental assessment in the national parks is entirely a discretionary matter for Parks Canada under CEAA 2012 to determine under its own policies.  The reality under CEAA 2012 is that many projects that one would reasonably expect to have significant ecological impacts have been approved by Parks Canada without undergoing any transparent environmental assessment process with little or no public scrutiny.  Parks Canada’s own checklist contemplates the possibility of no EIA for a parks project, and there is no transparency on which projects even received this internal non-legislated review.

Our overall recommendation to this panel will be outlined in detail in our written submission, and it will have both a process and a substantive aspect to it.  On process, we submit that some form of the legislated inclusion list from CEAA 1992 be restored for national parks and that major projects be subject to a minimum legislated process similar to what CEAA 1992 outlined in its comprehensive study list.  On substance, we submit there be a link between the environmental assessment process and the legislated ecological integrity mandate for national parks and that at a minimum this requires the legislation to prohibit any approval for a project with significant adverse environmental impacts in a national park.

This post may be cited as: Shaun Fluker, Kristina Roberts, & Drew Yewchuk “CPAWS Presents to the Expert Panel for Environmental Assessment” (23 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_SF_CPAWS_Nov2016.pdf

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The Application of the Charter to a Protest on the Siksika Nation

Tue, 11/22/2016 - 9:00am

By: Linda McKay-Panos

PDF Version: The Application of the Charter to a Protest on the Siksika Nation

Case Commented On: Siksika Nation v Crowchief, 2016 ABQB 596 (CanLII)

Recently there have been several cases involving the issue of whether the Charter of Rights and Freedoms (Charter) applies in a context where there is some government or public nexus but the action may be characterized as one involving private parties. See for example, my previous post on the application of the Charter to Universities.

This case presents yet another situation where the court is asked to address whether the Charter applies. Most of the decision involves whether the Court should grant an interlocutory injunction to the Siksika Nation. The Siksika Nation, represented by its Chief and Council (Applicant), filed a Statement of Claim seeking an injunction and damages against Ben Crowchief and “Unknown Defendants” (Respondents). A number of band members, including Crowchief, blockaded the reconstruction of Siksika Nation homes being built to address damages from flooding of the Bow River in 2013. The blockade was intended to protest the lack of accountability and transparency by the council and chief (at para 18).

The parties agreed that the three-part test for granting an interlocutory injunction, as set out in RJR MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311 (CanLII), was applicable. In order to obtain an interlocutory injunction:

[26] The onus is on the Applicant to demonstrate that:

(a) it has a serious issue to be tired or, in some cases, a strong prima facie case;

(b) it will suffer irreparable harm before trial if the injunction is refused; and

(c) the balance of convenience favours granting the injunction.

(RJR at 334, 348)

Justice S.L. Hunt McDonald found that the Applicant had demonstrated that it has a strong prima facie case; that it will suffer irreparable harm before trial if the injunction is refused; and that the balance of convenience favours granting an injunction (at para 60). The application for an interlocutory injunction was granted (at para 61).

The Respondent argued that the proposed order (e.g., the injunction) would violate its freedom of expression (right to protest) under Charter s 2(b). Justice Hunt McDonald analyzed first whether the Charter applied in the circumstances. She noted that the case of RWSDU v Dolphin Delivery Ltd, [1986] 2 SCR 573 (CanLII) (Dolphin Delivery) held that the Charter does not apply to private litigation. She also noted, however, that the Supreme Court of Canada (SCC) had held that Charter applies to many forms of delegated legislation (such as by-laws). The SCC held that “where the exercise of, or reliance upon, governmental action is present and where one private party invokes or relies upon it to produce an infringement of the Charter rights of another,” the Charter will apply (at para 64, citing Dolphin Delivery at 602-603). Justice Hunt McDonald then examined the case of Horse Lake First Nation v Horseman, 2003 ABQB 152 (CanLII) (Horse Lake), where Justice Lee held:

[29]  The Charter should apply to any decision or by-law or action the Band Council or the Band makes under the authority of the Indian Act because the Band is using its statutory authority to regulate the life of its members. Therefore, the women whom the Band seeks to restrain from protesting should be able to raise freedom of expression against the Band Council.

[30] There are circumstances where the decisions of the Band should not be subject to the Charter. For example, if the Band or Band Council is contracting with a private party for goods or services, the relationship is one that would likely be governed by private contract law.

Justice Hunt McDonald noted that this excerpt had been cited with approval in Pridgen v University of Calgary (2012 ABCA 139 (CanLII) at para 90). This is another decision that deals with the issue of application of the Charter (on university campuses). See Jennifer Koshan’s blog post on Pridgen here.

In Horse Lake, the defendants were protesting over perceived improper management and administration of funds by the Chief and Band Council. They occupied parts of the Band Council offices and demanded that forensic audits and drug testing be performed (at para 65). Because the facts resembled the first situation set out by Justice Lee (Horse Lake, at para 29), the Charter applied. In the Siksika Nation case, the Applicant was seeking an injunction to prevent the Respondents from interfering with a private contract (at para 67). Justice Hunt McDonald found that the Siksika Nation case fell within the second category discussed by Justice Lee (Horse Lake, at para 30). It occurred in a situation where there were contracts with private parties for services (construction of homes). Thus, although the current case had some similarities with the Horse Lake case, it was distinguishable (at par 67).

While acknowledging that the issue of Charter application under these circumstances is unsettled, Justice Hunt McDonald concluded that it does not apply. However, she was prepared to address the issue of freedom of expression (Charter 2(b) and Charter s 1) in case she was wrong and the Charter does apply (at para 68).

The Applicant conceded that the blockade fell within the ambit and manner of expression that is protected under Charter s 2(b), and that granting the injunction would be a prima facie infringement on the Respondent’s freedom of expression (at para 69). The Court then analyzed whether any limit that would be imposed on the Respondents by the injunction could be justified under section 1 of the Charter (by using the test in R v Oakes, [1986] 1 SCR 103 (CanLII) (Oakes)).

Justice Hunt McDonald noted that the SCC in Retail, Wholesale and Department Store Union Local 558 v Pepsi Cola Canada Beverages (West) Ltd, 2002 SCC 8 (CanLII) (Pepsi Cola), addressed the Oakes test in the context of picketing. The SCC had held that “secondary picketing is generally lawful unless it involves tortious or criminal conduct” and that “picketing which breaches the criminal law or one of the specific torts like trespass, nuisance, intimidation, defamation, or misrepresentation, will be impermissible, regardless of where occurs” (at para 72; citing Pepsi Cola at paras 3, 77). This holding applies to all forms of protest analogous to picketing (at para 72; citing Pepsi Cola at paras 80-82).

In applying the Oakes and Pepsi Cola factors to the facts of the case, Justice Hunt McDonald concluded that the proposed order for an injunction was for a pressing and substantial objective—the risk of significant financial and societal harm. Second, the proposed order was directly linked to that objective. Third, the proposed order was minimally impairing because it only infringed on impermissible expression, such as tortious conduct arising from the blockade together with threats and intimidation. Thus, the injunction order was a justifiable infringement of s 2(b) of the Charter (at para 74).

Justice Hunt McDonald’s hesitancy about the issue of the Charter’s application in this situation demonstrates yet another situation where it is unsettled whether the Charter applies. This case involved the relationship between private parties, but the existence of the Band’s authority derived from legislation could bring the Charter into play. Other cases in which the issue of the application of the Charter can be contentious often involve privately owned spaces to which members of the public are invited. Some of these “public” locations include university campuses, shopping malls, airports, bars, sports stadiums and nursing homes. Because members of the public are invited to these spaces, attendees assume that they are protected by the Charter, when it may not apply. The issue of the application of the Charter in some circumstances is arising with more frequency. It is hoped that such a case will come before the SCC so that even more guidance can be provided.

This post may be cited as: Linda McKay-Panos “The Application of the Charter to a Protest on the Siksika Nation” (22 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_LMP_SiksikaCharter_Nov2016.pdf

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Avoiding the “Tyranny of Small Decisions”: A Canadian Environmental Assessment Regime for the 21st Century

Mon, 11/21/2016 - 9:00am

By: Martin Olszynski

PDF Version: Avoiding the “Tyranny of Small Decisions”: A Canadian Environmental Assessment Regime for the 21st Century

Matter Commented On: Expert Panel Review of Environmental Assessment Processes

The Expert Panel charged with reviewing Canada’s environmental assessment regime lands in Calgary this week. Professor Emeritus Arlene Kwasniak and I are presenting to the Panel later today, while Professor Shaun Fluker and students from University of Calgary’s Public Interest Law Clinic will be presenting on Wednesday. In this post, I step back a bit from the nuts and bolts of environmental assessment and consider the nature of modern environmental law – and environmental assessment law in particular – as primarily a decision-making process and whether this is sufficient going forward. My full submission – indeed all submissions to the Panel – can be found on its website.

“If [Humans] Were Angels, No [Environmental Law] would be Necessary” – James Madison

When considering Canada’s future environmental assessment (EA) regime, it is useful to keep several realities and principles in mind. The first is to recall that it was not so long ago that governments had no formal processes for assessing the environmental effects of projects or their decisions. The first such law was the United States’ National Environmental Policy Act (1969), the first of five American environmental laws passed in that country’s “environmental decade” (A. Dan Tarlock, “Is There a There There in Environmental Law?” (2004) 19 J Land Use & Envtl L 213). It was not until 1992 that Parliament introduced Canada’s own EA law in the form of the first Canadian Environmental Assessment Act SC 1992 c 37. Around that time, the Supreme Court of Canada’s decision in Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 SCR 3 (CanLII)described EA regimes as intended “to ensure that [departments] took account of environmental concerns in taking decisions that could have an environmental impact.” (at 17)

This is a fundamental point. Notwithstanding the Supreme Court’s subsequent endorsement of EA as “as an integral component of sound decision-making,” over two decades of CEAA caselaw (and four decades for NEPA) makes plain that EA continues to be something that governments – of all persuasions – resist. After all, the identification and disclosure of the environmental effects of development can constrain short-term economic – and political – interests. The Newfoundland and Labrador Court of Appeal made a similar observation in Labrador Inuit Association v. Newfoundland (Minister of Environment and Labour) (1997), 1997 CanLII 14612 at paras. 11-12:

[11]  …One must also be alert to the fact that governments themselves, even strongly pro-environment ones, are subject to many countervailing social and economic forces, sometimes legitimate and sometimes not. Their agendas are often influenced by non-environmental considerations.

[12] The legislation, if it is to do its job, must therefore be applied in a manner that will counteract the ability of immediate collective economic and social forces to set their own environmental agendas. It must be regarded as something more than a mere statement of lofty intent. It must be a blueprint for protective action.

Such an approach may seem burdensome, or even anti-democratic, but it is actually rooted in the same basic principles animating the separation of powers and other widely valued constitutional norms. As noted by American environmental law professor Richard Lazarus: “…the existing structure of our government is riddled with efforts to anticipate the dangers of unchecked democracy because of concerns about human nature and its potential interference with our nation’s aspirations for a just society…” (Richard Lazarus, “Environmental Law After Katrina: Reforming Environmental Law by Reforming Environmental Lawmaking” (2007) 81 Tul L Rev 1019-1058 at 1046). In addition to features like bicameralism (i.e. having two legislative chambers rather than one), modern constitutions include “limitations on democratic lawmaking designed to guard against perceived human tendencies to rush to judgement against the criminally accused, to silence unpopular speech, to disrespect minority religions…” etc. (Lazarus, at 1047). The same basic dynamic is at play in environmental law, which attempts to constrain various human tendencies, including our disproportionate discounting of distant and/or future environmental harms (Lazarus, at 1035).

The questions, then, are (i) whether Canadian environmental law – and EA law in particular – is doing an adequate job and (ii) whether it can be expected to do so going forward. With respect to (i), definitive answers are not possible because of the lack of reliable monitoring data at the national level. What evidence there is, however, does suggest a continuing trend of environmental degradation (see e.g. Favaro B, Claar DC, Fox CH, Freshwater C, Holden JJ, Roberts A, et al. (2014) Trends in Extinction Risk for Imperiled Species in Canada. PLOS ONE 9(11)).

Reconsidering the Procedural Focus of EA Law

With respect to (ii), I return to the observation that at their core most Canadian environmental laws basically just set out decision-making processes, with EA laws (including both the previous and current Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52) being paradigm examples: they require the identification and disclosure of adverse environmental effects, which can sometimes be significant, without imposing any clear substantive limits on decision-making. Such effects must merely be deemed “justified in the circumstances” (CEAA, 2012 section 52). In this way, the CEAA is essentially like the NEPA, which the U.S. Supreme Court described as “prohibi[ting] uninformed – rather than unwise – agency action.” (Robertson v Methow Valley Citizens Council, 490 US 332 (9th Cir 1989) at 351). The critical assumption behind such regimes is that disclosure enables political accountability, which in turn should “compel” government agencies and departments to “curb their most environmentally destructive practices” (Bradley C Karkkainen, “Toward a Smarter NEPA: Monitoring and Managing Government’s Environmental Performance” (2002) 102:4 Colum L Rev 903 at 912).

The fundamental question facing the Panel is whether this assumption of political accountability is a still a reasonable one (if it ever was) and, if not, how it might be supplemented. On this point, it is important to recall that the environmental-law-as-process paradigm arose in the 1970s – an era of heightened environmental awareness (see figure below, which is a very rough approximation of legislative activity on the environmental front).

While environmental concerns are still prevalent, especially with respect to climate change, they have more or less resumed their place in public debate amongst other equally pressing concerns, including equality, disparity, national security, and the economy. There has also been a surge of available information following the advent of the internet. While access to this information is critical and has enabled broad public debate about some of Canada’s largest industrial projects (e.g. pipelines), the amount of potentially relevant information can also be overwhelming. In other words, while the case for political accountability was probably always tenuous, it is even more so now, especially for the vast majority of projects, programs, and policies that do not attract media or public scrutiny.

In my view, all of this suggests that Canada’s next EA law requires that at least some substantive standards be built into it. Professors Gibson, Doelle, and Sinclair have suggested sustainability assessment as part of a next generation of EA laws. I think their proposal merits serious consideration. Regional EAs are another way of introducing substantive standards into the EA regime. The current project-by-project approach presumes an endless frontier – and with it an endless supply of freshwater, forests, and wildlife. Of course, the idea of a perpetual frontier has been widely discredited; it is the reason that Alberta embarked on its ambitious land use framework almost a decade ago now. And while that regime has yet to live up to its potential (see e.g. here and here), the basic premise is still the most sound: in a finite world, it is better to first take stock of our natural resources, identify what’s important, and then develop accordingly. Along these lines, such an approach also appears increasingly necessary if Canada and the provinces are to fulfill their constitutional obligations to Canada’s Indigenous peoples.

(Illustration credit: Dr. Aftab Erfan)

Finally, even political accountability won’t work if there is no public knowledge about a given project or program whatsoever. On this point, I agree with Professor Gibson that regimes like CEAA, 2012, which focus exclusively on major projects and on mitigating significant adverse effects, “move us further away from sustainability, though usually only in small steps” (Robert B Gibson, “Favouring the Higher Test: Contribution to Sustainability as the Central Criterion for Reviews and Decisions under the Canadian Environmental Assessment Act” (2000) 10:1 J Envtl L & Prac 39 at 43). Over three decades ago, American ecologist William E. Odum described this process as the “tyranny of small decisions.” With respect to the eutrophication of lakes, for example, Odum noted that

[f]ew cases…are the result of intentional and rational choice. Instead, lakes gradually become more and more eutrophic through the cumulative effects of small decisions: the addition of increasing numbers of domestic sewage and industrial outfalls along with increasing run-off from more and more housing developments, highways, and agricultural fields.

William E Odum, “Environmental Degradation and the Tyranny of Small Decisions” (1982) 32:9 Bioscience 728.

In my view, the previous CEAA, 1992 regime, which saw over 3,000 projects being reviewed annually, and the current CEAA, 2012 regime, which sees roughly 65, could be viewed as representing opposite ends on a spectrum with respect to the number and kinds of federal EAs. Identifying the optimum point on this spectrum won’t be an easy task but the Panel – and ultimately Parliament – should adopt an evidence-based approach. This would include examining and identifying the major drivers of environmental degradation in Canada, both presently and in the future, bearing in mind especially the challenges associated with climate change.

This post may be cited as: Martin Olszynski “Avoiding the “Tyranny of Small Decisions”: A Canadian Environmental Assessment Regime for the 21st Century” (21 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_MO_EA_Review_Nov2016.pdf

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Comments on the Proposed Species at Risk Act Permitting Policy

Fri, 11/18/2016 - 9:00am

By: Shaun Fluker and Drew Yewchuk

PDF Version: Comments on the Proposed Species at Risk Act Permitting Policy

Proposed Policy Commented On: Government of Canada. Species at Risk Act Permitting Policy [Proposed]

Environment and Climate Change Canada has released a series of proposed new guidelines for interpreting various portions of the Species at Risk Act, SC 2002, c 29 (SARA). One of these new proposals is policy guidance on how section 73 of SARA will be interpreted and applied – the Species at Risk Act Permitting Policy. Section 73 is the provision in SARA which allows for the authorization of harm to listed endangered or threatened species or their critical habitat. In the absence of a section 73 permit, such harm constitutes an offence under SARA. The Public Interest Law Clinic was retained by the Alberta Wilderness Association and the Timberwolf Wilderness Society to assist them in formulating a submission to Environment and Climate Change Canada on this proposed new policy guidance for section 73, and this post reproduces the essence of that submission below.

This submission begins by setting out principles which should guide the interpretation of the Species at Risk Act, SC 2002, c 29 [SARA]. This submission then provides the relevant portions of section 73 along with judicial consideration thereof. This submission then proceeds by providing our comments on the proposed policy guidance.

As an overall comment, we are of the opinion the proposed Species at Risk Act Permitting Policy is inconsistent with SARA and thus unlawful in that it purports to allow for the authorization of industrial development and other commercial activity that will harm listed endangered or threatened species and their critical habitat. More particularly we submit the following two proposals if implemented would be unlawful:

  1. the proposal that industrial development will normally satisfy the condition set out by section 73(2)(c) as only incidental harm is fundamentally inconsistent with the purpose of SARA to protect listed endangered or threatened species and facilitate their recovery;
  1. the proposal for consideration of biodiversity offsets in a section 73(3)(c) determination is fundamentally inconsistent with the meaning of critical habitat and the purpose of SARA to protect listed endangered or threatened species and their critical habitat.

Guiding Principles in the interpretation of SARA

Protection and Recovery of Endangered or Threatened Species. Section 6 of SARA states the purpose of the legislation is “to prevent wildlife species from being extirpated or becoming extinct, to provide for the recovery of wildlife species that are extirpated, endangered or threatened as a result of human activity and to manage species of special concern to prevent them from becoming endangered or threatened”. The overall purpose of SARA is to both protect listed endangered or threatened species and facilitate their recovery. Any interpretation or application of SARA must be consistent with both of these objectives of protection and recovery. It follows that any interpretation or application of SARA which serves to impair either protection or recovery of listed endangered or threatened species is inconsistent with SARA and accordingly unlawful.

Listed Endangered or Threatened Species are on life support. A species becomes listed as endangered or threatened under SARA because it is on the verge of becoming extinct or extirpated, in other words the species is on life support. Life support provided to listed endangered or threatened species under SARA includes the obligation to develop a recovery strategy and an action plan, as well as legislated prohibitions against harming individual members of such species or destroying any part of its critical habitat. Critical habitat is defined in SARA as the habitat that is necessary for the survival or recovery of a listed wildlife species and that is identified as the species’ critical habitat in the recovery strategy or in an action plan for the species. Any interpretation or application of SARA which allows for the destruction of critical habitat is thereby necessarily impairing the survival or recovery of a listed species and is thus inconsistent with the purpose of SARA and unlawful.

Cumulative effects must be considered. Most if not all listed endangered or threatened species find themselves depending on the life support mechanisms of SARA because they have been subjected to ‘death by a thousand cuts’. Accordingly, any assessment of impact on a listed endangered or threatened species or its habitat must be done within a rigorous cumulative effects framework. Otherwise, the purpose of SARA is defeated by allowing the same incrementalism which has led to their listing in the first place. Cumulative effects considerations must include: (1) Consideration of potential impacts on other species at risk; (2) Program level reviews to analyze, avoid and minimize impacts before more individual projects are considered; (3) An incorporation of baseline of pre-industrial conditions in both the permitting area and the relevant range (if a migratory species); and (4) All historic anthropogenic impacts should be considered (including climate change), and all future permitted activities and reasonably foreseeable changes and activities (including climate change), should be included in both the permitting area and the relevant range if dealing with a migratory species.

Decision-making under SARA must be transparent and open to public participation. The preamble to SARA provides that all Canadians have a role to play in the conservation of wildlife in this country, including the prevention of wildlife species from becoming extirpated or extinct. The public is unable to perform this role without transparency in government decision-making and meaningful opportunities to participate in SARA decision-making. While certain components of SARA are transparent and encourage public engagement – such as the recovery planning process – other components of SARA are less so. In particular relevance to this submission, the section 73 permitting process currently has very little transparency and no opportunity for public scrutiny. We encourage you to consider this deficiency in the section 73 policy review process.

Section 73 of SARA

73(1) The competent minister may enter into an agreement with a person, or issue a permit to a person, authorizing the person to engage in an activity affecting a listed wildlife species, any part of its critical habitat or the residences of its individuals.

(2) The agreement may be entered into, or the permit issued, only if the competent minister is of the opinion that

(a) the activity is scientific research relating to the conservation of the species and conducted by qualified persons;

(b) the activity benefits the species or is required to enhance its chance of survival in the wild; or

(c) affecting the species is incidental to the carrying out of the activity.

(3) The agreement may be entered into, or the permit issued, only if the competent minister is of the opinion that

(a) all reasonable alternatives to the activity that would reduce the impact on the species have been considered and the best solution has been adopted;

(b) all feasible measures will be taken to minimize the impact of the activity on the species or its critical habitat or the residences of its individuals; and

(c) the activity will not jeopardize the survival or recovery of the species.

Canadian courts have yet to directly interpret the extent to which section 73 allows for activity that destroys critical habitat of a listed species under SARA, but the Federal Court of Appeal references this portion of SARA in its Georgia Strait Alliance v Canada, 2012 FCA 40 decision. The language chosen by the Federal Court in Georgia Strait, strongly suggests these permitting provisions of SARA are to be given a restrictive interpretation to allow for activity that harms listed species under SARA in very limited circumstances:

. . . SARA restricts the authority of a “competent minister” — including the appellant Minister in this case — from entering into an agreement, issuing a permit or licence or making an order under another Act of Parliament — such as the Fisheries Act — authorizing a person to engage in an activity “affecting” the critical habitat of a listed wildlife species unless (a) the activity is scientific research relating to the conservation of the species and conducted by qualified persons; (b) the activity benefits the species or is required to enhance its survival; or (c) affecting the species is incidental to the carrying out of the activity.

Even in such limited circumstances, the agreement may be entered into, or the permit issued, . . . only if the competent minister is of the opinion that all reasonable alternatives have been considered and the best solution has been adopted, measures have been taken to minimize the impact of the activity, and the activity will not jeopardize the survival or recovery of the species.

Comments on the proposed Species at Risk Act Permitting Policy

The remainder of this submission sets out verbatim portions of the proposed Species at Risk Permitting Policy (within bordered text boxes) followed by our comments in relation thereto.

3.2.1 Subsection 73(1)

Policy Statement

For the purposes of section 73 of SARA, the phrase “an activity affecting” will be interpreted as an action that would be prohibited under SARA without a permit.

Clarification

Only prohibited activities require a permit under SARA. The general reference to “affecting” does not imply that non-prohibited activities require a permit under SARA.

This proposed interpretation of ‘an activity affecting’ as solely an action that is prohibited under SARA without a permit is inconsistent with section 73(2)(b) which contemplates the legislated need for a section 73 permit for activity which benefits a listed species or is required to enhance its chance of survival in the wild. Accordingly, this proposed interpretation is unlawful as it renders section 73(2)(b) to be a nullity.

3.2.2.1 “Scientific research” and “qualified persons” – paragraph 73(2)(a)

Policy Statement

To satisfy paragraph 73(2)(a), the scientific research in question: 1) must have as its main purpose the conservation of the species at risk; 2) must be consistent with the recovery documents that have been developed for the species under SARA; 3) in the absence of a recovery document, must support the recovery of the species based on an assessment of the best information available; 4) must be intended to generate scientific results that will be used to advance the recovery of the species, and any such results must be accessible to the public, unless doing so could place a species at risk at greater risk; and 5) must be overseen by individuals with demonstrated expertise relevant to the species.

Clarification

Recovery documents required under SARA, such as recovery strategies and action plans, guide the recovery of species at risk. Any scientific research related to the conservation of the species must be consistent with the direction and desired outcomes in any relevant recovery documents that have been developed for the species. This could include research directed at understanding what may prevent or limit recovery as well as what may promote recovery.

In cases where a recovery document under SARA is not yet available, other relevant information will be considered, including a provincial or territorial recovery document or the species status assessment prepared by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC).

In the context of SARA, a “qualified person” cannot be a generalist; he or she must have expertise related to the biological requirements of, and threats to, the species at risk in question or similar species. Criteria for determining whether a person is qualified include, but are not limited to, previous experience, knowledge of the species and specific training related to the proposed handling of the species.

This proposed guidance for section 73(2)(a) could be improved. In particular, there must be an additional consideration of the potential cumulative effects that the research in combination with other activities may have on a species. For example, if a species is very limited in numbers, then repeated exposures to research may contribute to further stressing the species and slowing recovery as well.

3.2.2.2 “Benefits the species” – paragraph 73(2)(b)

Policy Statement

To satisfy paragraph 73(2)(b), the activity in question must support the implementation of recovery actions as described in recovery documents for the species, where these are available. Where recovery documents are not available, the activity must support the recovery of the species based on an assessment of the best information available.

Clarification

Recovery documents, such as recovery strategies and action plans, are developed using the best available information on the species and the threats to the survival and recovery of the species. As such, they are the best reference for activities that could be considered beneficial for a species at risk.

When recovery documents are not available for a species, other relevant information will be considered, including a provincial or territorial recovery document or the species status assessment prepared by COSEWIC. In addition, species experts and best-available peer-reviewed information about the species or similar species, including its recovery needs and threats to its survival, can be consulted to support determining whether an activity benefits the species.

At a minimum, it must be clear that the species would be better off as a result of the activity and any accompanying action.   In the case of research intended to help with the conservation of species at risk, the timeframe for achieving the overall benefit for the species may be long-term.

We submit the reference to ‘any accompanying action’ – and accordingly biodiversity offsets – is not a lawful consideration in a determination on whether an activity will benefit a species. The consideration of biodiversity offsets in a section 73 determination is fundamentally inconsistent with the purpose of SARA and accordingly unlawful. We elaborate on this further below in relation to section 73(3)(c).

We note a draft 2005 Environment Canada draft policy on section 73(2)(b) stated that an activity will fulfill the requirements of this subsection only if (1) it is consistent with an approved recovery strategy for the species, and will support the achievement of population and distribution objectives identified in the strategy, or (2) it will address recognized conservation needs of, or threats to, the species when a recovery strategy has not been approved (e.g., those identified in COSEWIC status reports or scientific literature.

3.2.2.3 “Incidental to” – paragraph 73(2)(c)

Policy Statement

Paragraph 73(2)(c) will be interpreted as meaning that the effect that carrying out the activity has upon the species must not be the purpose of the activity.

Clarification

While some definitions of “incidental” consulted in the development of this policy include the notion of minor, all of the definitions of “incidental to” did not include this notion. Accordingly, the scale of the project, or its impact, is not a consideration for meeting this condition. Scale will be taken into account when determining if the activity is likely to jeopardize survival or recovery (see sub-section 3.2.3.3).

With the exception of activities covered by paragraphs 73(2)(a) and (b), activities where the intent is to affect the species cannot be permitted. For example, hunting and fishing where the target species is listed would be prohibited, even if the activity does not result in mortality (e.g. catch-and release fishing). If the listed species, however, is accidentally harmed during hunting or fishing activities aimed at other species (e.g., by-catch), this may qualify for permitting further to this provision of SARA.

Industrial development projects will usually satisfy this paragraph of SARA, as they are usually not directed at wildlife species. However, this does not mean that they will satisfy the other permitting provisions of SARA.

We note that 2005 Environment Canada draft policy defined an incidental activity as “an activity … that is not directed at the species, but that can reasonably be expected to affect it. Activities that may accidentally affect a species will be considered under this purpose.” We submit the 2005 draft guidance is easier to follow and understand, and the current proposed guidance is unnecessarily convoluted for the reason that the policy is drafted as a prohibition yet the statutory provision it purports to interpret is drafted as a permissive provision.

We are aware that section 73 permits have been issued to authorize activity on the justification that effects on a listed species will be incidental as per section 73(2)(c). However, the overwhelming majority of such permits we reviewed concerned the authorization of incidental harm caused by infrastructure maintenance on physical works such as bridges or roads. We submit it is contrary to the purpose of SARA and thus unlawful to read section 73(2)(c) in a manner that allows the section to justify industrial development more generally. In particular, we submit it is unlawful to read section 73(2)(c) in a manner that justifies harm to a listed endangered or threatened species or its critical habitat in the context of, for example, authorizing commercial logging activity or the construction of a new industrial or resource development project such as a coal mine.

There are technical concerns with issuing permits using section 73(3)(c) as a justification. In particular, it is scientifically difficult and often impossible to determine quantitatively before the fact what the actual incidental effects, and their magnitude, of an activity will be on a listed species. This is especially true with incidental effects which, because they are not deliberate (as the interpretation of “incidental” contemplates), are inherently unexpected. It is illogical that all unexpected events could ever be anticipated and properly assessed for authorizing harm to species and habitat which is already threatened or on the verge of extinction. In practice, quantitative evaluations of risk and estimation error are seldom made.

The practical consequence of this problem is that mistakes in risk assessments are likely, and will have disproportionately large consequences for survival of populations that are already at risk. For these reasons the precautionary principle should be the default, and no permit should be issued under the policy’s proposed interpretation of “incidental” unless the activity is minor – as might be the case with routine maintenance or repair of existing physical works.

Furthermore, there are no quantitative standards for guiding the competent minister’s decisions under this proposed policy. In light of the fact that listed species have already been identified scientifically and legally as already at serious risk of extirpation or extinction, how much additional risk is tolerable? To what extent can these species sustain any further harm if SARA is to meet its objective?

The proposed interpretation of “incidental” would result in banning certain relatively harmless activities (the examples given included catch-and-release fishing with zero mortality), while permitting largescale industrial developments, many of which have inherently high probability of destruction of critical habitat, and even direct mortalities of nominally protected species, however incidentally. We submit this is an absurd reading of section 73(2)(c). It is plain that successive permitting of industrial development projects under the proposed interpretation of “incidental” would inevitably lead to further decline and ultimately extirpation or extinction of listed species under SARA.

We submit the sentence “Industrial development projects will usually satisfy this paragraph of SARA, as they are usually not directed at wildlife species” must be struck from the proposed permitting policy. The purpose of SARA and the context within which section 73 has been drafted by Parliament cannot bear this interpretation of ‘incidental’ without effectively rendering the legislation meaningless in its effort to both protect listed endangered or threatened species and facilitate their recovery. We submit that the only interpretation of the word “incidental” consistent with the purposes of SARA is “minor” or “inconsequential.”

3.2.3.1 “All reasonable alternatives” – paragraph 73(3)(a)

Policy Statement

Paragraph 73(3)(a) will be interpreted as meaning that the applicant is required to consider all reasonable alternatives to their activity with a view to reducing the impact on the species, make a choice among the alternatives considered, and justify why this choice is the best one. The range of alternatives considered will be proportional to the significance of the activity’s anticipated impact on species at risk. Costs may be considered when deciding whether a given alternative is reasonable. Among the reasonable alternatives identified, the solution that best advances conservation of the species must be adopted.

Clarification

The English version of SARA specifies that it is “reasonable” alternatives that must be considered. While the qualification of “reasonable” is not in the French version, as a matter of policy, applicants will only be expected to consider reasonable alternatives. The determination of whether an application meets the requirements of this paragraph will be case-specific based on the facts of the situation. The decision whether to issue a permit must be evidence-based and the amount of analysis undertaken must reflect the significance of the impact of the activity on species at risk. Applicants need to demonstrate that all reasonable alternatives to their proposed activity were considered and that the needs of the species were considered when doing so. The option of not proceeding with the activity must be considered among the alternatives, although it would not necessarily be identified as a reasonable alternative (i.e., it must be considered whether not proceeding with the activity is a reasonable alternative). Biological, ecological, technical and economic limitations are to be considered when determining what alternatives can be considered “reasonable”. Once the reasonable alternatives have been identified based on consideration of the above-noted factors, the solution that best advances conservation (i.e., “the best solution”) must be adopted. As all the alternatives have been deemed “reasonable”, the only determining factor for selecting the best solution must be the impact on conservation of species at risk.

Section 73(3) of SARA sets out conditions that must be met in order for the Minister to enter into an agreement or issue a permit to a person. While in general it is agreed that it is beneficial for an applicant to provide information to the Minister that will help guide decision making, the responsibility lies not only on the applicant to demonstrate that they have met all conditions set out in section 73(3), but also on the Minister to consider whether proceeding with the activity with all reasonable alternatives and feasible measures taken will nonetheless still impair survival or recovery of the species and thus be inconsistent with the purpose of SARA. This consideration must include an analysis of the cumulative impacts of all activities and permits regarding the species and must prove that survival and recovery of the species in question will remain unimpaired if the permit is issued.

The option of not proceeding with the activity must be considered among the alternatives, but it must be considered not only by the applicant but also by the competent Minister and be subject to public scrutiny. We have little confidence that an applicant for a permit will provide full, true, and plain disclosure for the purposes of a section 73(3) assessment in the absence of meaningful public scrutiny and a transparent process.

We are supportive of the statement that ‘the solution that best advances conservation (i.e., “the best solution”) must be adopted’. This of course includes consideration of not proceeding with the activity.

3.2.3.2 “All feasible measures” – paragraph 73(3)(b)

Policy Statement

For the purposes of paragraph 73(3)(b), the feasibility of measures will be determined based on an evaluation of biological, ecological, technical and economic factors. The amount of analysis required to identify all feasible measures, and the nature of such measures, must be proportional to the significance of the activity’s impact on species at risk.

Clarification

The determination of whether an application meets the requirements of this paragraph will be case-specific based on the facts of the situation. The decision whether to issue a permit must be evidence-based and the amount of analysis undertaken must reflect the significance of the impact of the activity on species at risk.

The applicant is responsible for demonstrating that the needs of the species were considered during the design of the activity and for identifying feasible measures to minimize impacts of the activity. Consideration must be given by the applicant to identifying and adopting best practices for the species.

Biological, ecological, technical and economic limitations are to be considered when considering what measures are “feasible”.

We submit this reading of section 73(3)(b) is consistent with SARA.

3.2.3.3.1 Addressing jeopardy with biodiversity offsets

Biodiversity offsets proposed by an applicant are among the tools and actions that will be considered when assessing whether the survival or recovery of the species would be jeopardized by a proposed activity. The applicant must demonstrate that the proposed activity, with any proposed offsets and any other accompanying actions, would not jeopardize the survival or recovery of the species. The applicant must also demonstrate that the offset is being used only to address residual effects after applying avoidance and mitigation measures to comprehensively reduce the effects of the activity on species at risk individuals, residences and critical habitat, as required under paragraphs 73(3)(a)&(b) of SARA.

We submit the proposal for consideration of biodiversity offsets in a section 73(3)(c) determination is fundamentally inconsistent with the meaning of critical habitat and the purpose of SARA to protect listed endangered or threatened species and their critical habitat.

Research on biodiversity offsets has found that such offsets have been largely inconsistent in meeting conservation objectives, finding that while compensation and no net loss are worthy goals, and bartering biodiversity might appear more promising than simple and weakly enforced prohibitions, policies that enable biodiversity trading may perversely yield worse biodiversity outcomes. We direct your attention to The Policy for the Management of Fish Habitat (1986) which purported to implement offsets under the Fisheries Act (Canada), and which was later considered to be flawed with serious and irreparable problems in compliance and actual effectiveness of offsetting measures.

In practice biodiversity offsets are likely to be institutionalized as any other mitigation measure – merely costs of doing business as usual. The so-called mitigation hierarchy of only considering biodiversity offsets after all possible harm avoidance looks good on paper but has very substance to support its effectiveness in practice. The use of offsets is more likely to impair the development of innovative ways to avoid and minimize harm to habitat damage. SARA is not the place to experiment with this sort of ‘pie-in-the-sky’ policy.

We reiterate the proposal for consideration of biodiversity offsets in a section 73(3)(c) determination is fundamentally inconsistent with the meaning of critical habitat and the purpose of SARA to protect listed endangered or threatened species and their critical habitat, and is therefore unlawful. In further support of this positon, we provide the following.

Critical habitat is defined in SARA as “the habitat necessary for the survival or recovery of a listed wildlife species.” Critical habitat is the absolute minimum requirement and typically does not include the entire habitat range and needs for the species. By definition critical habitat is scarce and unique, and is thus not a fungible commodity or replaceable. The concept of offsets requires the subject of the offset to be fungible and replaceable and have functional equivalency. Biodiversity offsets are incapable of serving the role proposed for them in this policy.

Actual implementation rates of biodiversity offsets are poor. For example, the US Wetland Banking mechanism was found to have 50% of offsets fully implemented. In Canada, the Department of Fisheries and Oceans (DFO) found that only 37% of compensation projects achieved the conservation policy of no net loss of habitat productivity under the Fisheries Act.

This policy proposes to allow for a time lag between the destruction of critical habitat and the implementation of the offset. A review by the Department of Fisheries and Oceans (DFO) in 2006 of their offsetting policy found that “temporal losses are exacerbated due to the time lag until compensatory habitats function ecologically in a manner comparable to pre-impact conditions. In many cases, the time lag may be considerable because some projects will likely never achieve equivalent functionality.” Offsets would have to be implemented before any habitat loss or degradation took place, be biologically relevant to the sub-population in question, and ensure connectivity between populations. Additionally, given the low success rate of offsetting measures, it would have to be proven that survival and recovery of a species would continue even if offsetting was unsuccessful. Habitats which have been exhaustively researched as technically very difficult and/or very lengthy (requiring many decades) to reclaim include native prairie, old growth forests and peatlands.

There are serious problems with compliance of offsetting measures. A review of Policy for the Management of Fish Habitat (1986) compliance found that “noncompliance with HADD and compensation areas contributed to substantial losses of habitat. The prevalence and magnitude of larger HADD areas and smaller compensatory works far exceeded gains in fish habitat due to authorizations with smaller HADD areas or larger compensation. Habitat loss as a result of improperly installed or designed compensatory structures (e.g., perched culverts, impassable weirs, dry channels) was also considerable. In many cases, these habitat losses exceeded the original HADD that necessitated the compensation habitat”. Constant enforcement (pre and post construction) to ensure compliance and effectiveness would be necessary, and enforcement would have to be managed in perpetuity. Additional funding measures would have to be put in place for enforcement and as insurance against default. Failure to appropriately complete biodiversity offsets would be in direct contravention of Sections 58 and 73 of SARA, yet the likelihood of a proponent being prosecuted for non-compliance is low. The same review of compliance under the Fisheries Act found that from 2000-2005, more than 2529 authorizations were issued, yet DFO had only ever issued 3 charges for noncompliance to date. It is highly unlikely that sufficient resources would be available to fund adequate enforcement.

This post may be cited as: Sean Fluker and Drew Yewchuk “Comments on the Proposed Species at Risk Act Permitting Policy” (18 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_SF_SARA_Nov2016.pdf

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The Enhanced Protection for Farm and Ranch Workers Act One Year Later

Thu, 11/17/2016 - 9:00am

By: Jennifer Koshan

PDF Version: The Enhanced Protection for Farm and Ranch Workers Act One Year Later

Legislation Commented on: Bill 6, Enhanced Protection for Farm and Ranch Workers Act, 29th Legislature, 1st Session (2015-2016)

It has been exactly one year since the government introduced Bill 6, the Enhanced Protection for Farm and Ranch Workers Act, in the Alberta Legislature. The Bill made amendments removing the exclusion of farm and ranch workers from Alberta’s labour and employment legislation, and eventually passed in December 2015 after heated debate (for an earlier post on Bill 6 see here). The Bill went through some amendments during legislative debates, notably exempting family members and unpaid farm and ranch workers from inclusion in the Occupational Health and Safety Act, RSA 2000, c O-2 and Workers’ Compensation Act, RSA 2000, c W-15. The government also constituted broad-based working groups to make recommendations on implementing Bill 6, and the inclusion of farm and ranch workers in employment standards, labour relations and occupational health and safety legislation was suspended pending these consultations. In spite of these concessions, the Wildrose party – which vociferously argued against the Bill – reiterated its intent to “kill Bill 6” at its convention in Red Deer in late October.

In the midst of this ongoing debate, University of Alberta Press has released a new book, Farm Workers in Western Canada: Injustices and Activism (Shirley A. McDonald and Bob Barnetson, editors), which provides some much needed context for the issues surrounding the regulation of agricultural work and the rights of farm and ranch workers. One chapter in the book is based on a series of ABlawg posts written by several U Calgary law students and me, which argues that the exclusion of farm and ranch workers from labour and employment legislation violates the Charter (see the references to these posts in our e-book on farm and ranch workers here).

Given this constitutional imperative, the implementation of Bill 6 seems be taking a long time. The working groups have not yet made their recommendations to the government, in spite of having been struck last spring. The most recent update from the government on the consultations, released last week, provides as follows:

Technical working groups on the Enhanced Protection for Farm and Ranch Workers Act continued to meet over the summer.

A lot of the conversation centered around where, when and how to best share information with farmers and ranchers on the changes to the legislation, and how to share existing resources to promote on-farm safety.

The working groups have highlighted the importance of communicating directly with those industry sectors that will be impacted by any changes.

There is also discussion in several groups about the development of an organization to coordinate agriculture safety education across the province.

The working groups will continue to examine these and many other important and challenging questions in upcoming months to inform their recommendations to government and provide greater clarity to the agriculture community.

Some groups are beginning to come to consensus on specific topics and will begin drafting their recommendations to government.

Employment Standards Code

  • This group discussed employment standards considerations like overtime, hours of work, rest days and breaks, general holidays and holiday pay, minimum wage, and rules around youth employment and family members.
  • They are also considering standards around payment of earnings, employment records, job protected leaves, and termination notice and pay, among other standards in the Code.
  • They highlighted the importance of education and consideration for the impact on Alberta small businesses.

Labour Relations Code

  • This group discussed many difficult and intricate questions like: if, how many and which types of farm workers could be included in a collective bargaining unit.
  • These discussions led them to the importance of quality resources and training and communication for those affected by changes to the legislation, and highlighted the importance of Alberta Labour Relations Board meetings with agriculture sector stakeholders to ensure a common understanding of labour and agriculture in Alberta.

OHS: Review of existing requirements and exceptions (Two Groups)

  • One OHS working group considered reviewing health specific parts of the Occupational Health (OHS) and Safety Code and whether or not they should apply to farms and ranches with or without modifications. They looked at emergency preparedness, first aid, ventilation systems and other parts of the code in detail.
  • This group reinforced that communication, training and supports to the agriculture community will be critical for the successful adoption of OHS practices, so that all workers have a safe and healthy working environment and employers can profitably operate their businesses.
  • The other OHS working group is considering parts of the OHS safety code and discussing, in-depth, which parts can be applied to farms and ranches without conditions, which may require conditions and which parts should not apply at all.
  • They specifically discussed radiation, joint worksite health and safety committees, walkways, stairs, entrances and fixed and portable ladders, and practical modifications to legacy buildings and equipment.
  • The two groups reviewing the OHS Code also met together to complete a review of code areas jointly assigned for discussion and consensus. Specifically, they discussed hazard assessment, worker competencies and manufacturer specifications. They are also building a working definition of farm and ranch operations for application of the Code.

OHS: Best practices for agriculture

  • Among other things, this group talked about the importance of partnerships between government and agriculture associations to facilitate awareness of the North American Guidelines for Childrens’ Agricultural Tasks.
  • The group also considered best practices to avoid death and injury due to roll-overs and developing a health and safety system for agricultural operations with employees. The group highlighted the importance of updating resources and creating new resources to reflect the changes to the OHS Code, and developing new resources to help employers fulfill their obligations.

OHS: Education, training and certification

  • After receiving feedback from working group members and their respective stakeholder communities, this group is drafting some initial recommendations on the creation of an organization to coordinate agriculture safety education across the province.
  • They identified criteria for evaluating the educational resources and tools they will examine in upcoming meetings, and agreed that all education resources should be suitable, usable, adaptable, practical and accessible to the targeted agriculture community stakeholders.

The technical working groups will develop recommendations on how employment standards, occupational health and safety, and labour relations requirements should be applied given the unique needs of employers and employees in the agriculture sector.

More information about the consultations is available on the website of the Alberta Agriculture Farm and Ranch Safety Coalition (AgCoalition), a coalition of producer groups formed in January 2016 in response to Bill 6, which appears to be well represented on the working groups.

In an open letter about Bill 6 last December, Premier Notley noted that “Since laws to protect farm and ranch employees were introduced [in British Columbia], the farm fatality rate was reduced by 68%, the farm injury rate was reduced by 52%, and the serious injury rate was reduced by 41%.” At the same time, “Family farms are thriving in those other provinces and they will continue to thrive here.” With these compelling figures in mind, it is to be hoped that the working groups will report to the government soon, and that the long awaited and constitutionally mandated inclusion of farm and ranch workers in employment standards, labour relations, and occupational health and safety laws becomes a reality.

This is not to say that concessions based on the interests of farm producers cannot be made. In some provinces, farms and ranches are exempted from employment legislation based on size (see e.g. New Brunswick’s Employment Standards Act, SNB 1982, c E-7.2, section 5) and sector (see e.g. Manitoba’s Employment Standards Regulation, Man Reg 6/2007, section 3), or are subject to alternate regimes for labour relations (see e.g. Ontario’s Agricultural Employees Protection Act, 2002, SO 2002, c 16). These tailored schemes may constitute reasonable limits on the rights of farm and ranch workers under section 1 of the Charter (see Dunmore v. Ontario (Attorney General), [2001] 3 SCR 1016, 2001 SCC 94 (CanLII)). However, it is not an option to “kill Bill 6” – to do so would be to return to the almost absolute exclusion of farm and ranch workers from labour and employment legislation, which would be contrary to their Charter rights and difficult to justify under section 1.

This post may be cited as: Jennifer Koshan “The Enhanced Protection for Farm and Ranch Workers Act One Year Later” (17 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_JK_Bill6_Nov2016.pdf

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Selim v Alberta: Reasonableness is Not Always Fairness

Tue, 11/15/2016 - 9:00am

By: Geea Atanase

PDF Version: Selim v Alberta: Reasonableness is Not Always Fairness

Case Commented On: Selim v Alberta (Information and Privacy Commissioner), 2016 ABQB 562 (CanLII)

Summary

This case involves a judicial review, on a standard of reasonableness, of a refusal by the Information and Privacy Commissioner to conduct an inquiry stemming from a decision by the Calgary Police Service (CPS) to close an access to information request file. The decision of Alberta Court of Queen’s Bench Justice J.B. Veit hinges on the legislative intent behind the Freedom of Information and Protection of Privacy Act (FOIPPA), RSA 2000 c F-25, and the authority of the Commissioner to refuse to conduct an inquiry, as well as on the reliability of the evidence on which the Commissioner relied in making the decision. However, the decision in this case has wider implications that fall outside of the scope of judicial review, and points to a striking lack of accountability on the part of CPS when it comes to the conduct of one of its own. Rather than address the magnitude of the injustice to which the appellant was subjected in this case, Justice Veit focuses almost exclusively on applying a standard of reasonableness in reviewing the decision of the Commissioner.

Facts

Mr. Selim fell victim to scammers who used photographs of a model, identified in this case as JC, to elicit payment of $2,000. Mr. Selim believed that JC had also been scammed by the con men and developed an obsession with her. He found a photo of JC on a Hawaiian modelling agency website, and inundated the agency with phone calls about JC. An employee from the agency contacted her friend, a detective with the Calgary Police Service (CPS), and the detective contacted Mr. Selim to explain the concept of criminal harassment and to ask him to stop calling the agency, as JC had not worked with the agency for eight years (at paras 9-10).

Extensive communication between the detective and Mr. Selim followed, with the detective engaging in an elaborate pretend police ‘investigation’ to locate JC. Although the detective did not open an investigation with CPS and only corresponded with Mr. Selim as a favour to his friend from the modelling agency, his communications with Mr. Selim came from the CPS website, had formal CPS insignia on it, and used official sounding language in an attempt to persuade Mr. Selim to end his obsession with JC. The detective’s emails to Mr. Selim used language such as “completed my preliminary investigation and can now report to you” and “update my records associated with this investigation.” Additionally, the detective told Mr. Selim that JC was living in Alaska with her family, and wrote a letter to Mr. Selim, which was stated to be ‘from JC’ and which advised Mr. Selim that JC did not return his affections. The detective had an acquaintance mail the letter from Juneau, Alaska; the Juneau postmark was intended to make the ruse more convincing (at paras. 10-12, 17).

On September 25, 2013, after being inundated with 27 emails in one day from Mr. Selim, the detective advised him that they would no longer be working together, and on November 14, 2013, he advised Mr. Selim that he would not be communicating with JC again. In January 2014, Mr. Selim made a freedom of information (FOIP) request to CPS for records on JC. During an investigation into the records, the detective explained to CPS staff that had not conducted any sort of investigation, and that he had engaged in the ruse in an attempt to stop Mr. Selim’s delusional thinking. CPS informed Mr. Selim that no such records existed and that they were closing the FOIP request file. In June 2014, pursuant to section 65(1) of the Freedom of Information and Protection of Privacy Act (FOIPPA), RSA 2000 c F-25, Mr. Selim requested from the Commissioner a review of the decision to close the file. In such cases, as outlined in section 68 of the FOIPPA, the Commissioner advises its staff to try to settle the matter, but the Commissioner does not receive copies of the report or any information other than that regarding the attempt to settle the matter and whether or not it was successful. Following an unsuccessful attempt to settle, Mr. Selim was told that the review was finished (at paras. 11-15).

Mr. Selim asked the Commissioner for an inquiry into the review in February 2015, pursuant to his right to do so under section 69(1) of the FOIPPA. A civilian member of the CPS, who was also a Senior Disclosure Analyst, met with the detective and affirmed an affidavit that stated that the detective did not have information about JC and that he did not know her, that he communicated with Mr. Selim in his own personal capacity, and that he fabricated information about JC to attempt to persuade Mr. Selim to give up his obsession with JC. However, the declaration was taken improperly, and the person who took the declaration did not certify that the declarant was entitled to make an affirmation. Additionally, CPS failed to provide the Commissioner with some of the facts relating to the detective’s deception. Namely, the Commissioner was not made aware of the letters that Mr. Selim exchanged with the detective, who was posing as JC, or of the arrangement to mail a letter from Juneau so it bore an Alaskan postmark. The Commissioner was also unaware that correspondence from the detective came from a CPS computer and bore CPS insignia, or of the many phone calls between the detective and Mr. Selim related to this matter (at paras. 16-17, 36).

In January 2016, the Commissioner informed Mr. Selim that he was refusing to conduct an inquiry based on the fact that CPS had searched for records and that no records about JC existed because the detective had never been in contact with her (at para 18). Section 70 of the FOIPPA states that:

“the Commissioner may refuse to conduct an inquiry pursuant to section 69 if in the opinion of the Commissioner (a) the subject-matter of a request for a review under section 65 has been dealt with in an order or investigation report of the Commissioner, or (b) the circumstances warrant refusing to conduct an inquiry.”

Mr. Selim applied to the Alberta Court of Queen’s Bench for judicial review of the Commissioner’s decision.

Issues

The Alberta Court of Queen’s Bench addressed two issues:

  1. What is the standard of review?
  2. Was the Commissioner’s refusal to conduct an inquiry reasonable?

Decision

  1. What is the standard of review?

Justice J.B. Veit refers to Ontario (Public Safety and Security) v Criminal Lawyers’ Association, 2010 SCC 23 (CanLII), (“Criminal Lawyers’ Association”) at paragraph 70 in stating that the standard of review is reasonableness. In that case, the SCC stated that review of the Assistant Commissioner’s decisions that interpret and apply the FOIPPA are usually subject to a reasonableness standard. In this case, the FOIPPA confers upon the Commissioner the ability to refuse to conduct an inquiry, and that “the decision about whether or not an inquiry is undertaken is deep within the core of the Commissioner’s rights and responsibilities” (at para 21).

  1. Was the Commissioner’s refusal to conduct an inquiry reasonable?

Justice Veit found that the Commissioner’s refusal to conduct an inquiry was reasonable, and dismissed the application for judicial review. In assessing the reasonableness of the decision, Justice Veit considered the principles of interpretation of the Commissioner’s obligation to hold an inquiry and whether the Commissioner gave reasons for refusing to conduct an inquiry. Justice Veit also considered whether these reasons were reasonable in light of the veracity of the evidence on which the Commissioner relied to make the decision and whether the Commissioner was entitled to rely on this evidence. However, Justice Veit acknowledged that Mr. Selim may find this conclusion difficult to accept, and states that because of the conduct of the detective, “even though Mr. Selim has not been successful in his application for judicial review, he will not pay costs to either the CPS or the Commissioner” (at para 46).

Section 2(a) of the FOIPPA states that “the purposes of this Act are to allow any person a right of access to the records in the custody or under the control of a public body subject to limited and specific exceptions as set out in this Act.” A purposive interpretation of the legislation would lead to the inference that the default standard is to hold an inquiry, particularly in light of the SCC’s position in Criminal Lawyers’ Association that access to information is an important aspect of a transparent and democratic society. However, the legislation is clear that the decision to hold an inquiry is discretionary, and the Commissioner may refuse to hold an inquiry if she provides an adequate explanation, as the court noted in Alberta Teachers’ Association v Alberta (Information and Privacy Commissioner), 2011 ABQB 19 (CanLII). As the Senior Disclosure Analyst also stated in her statutory declaration, even if the records that Mr. Selim is seeking existed, CPS would have to refuse disclosure under section 17(1) of the FOIPPA because they would violate the personal privacy of JC, a third party. However, in this case, Justice Veit concluded that because CPS and the Commissioner have stated that the records that Mr. Selim is seeking do not exist, this basis to refuse disclosure does not apply (at paras 22-29). Justice Veit also found that the reasons that the Commissioner gave for refusing to hold an inquiry, despite being relatively brief because of their reliance on the affidavit of the Senior Disclosure Analyst, “were sufficient to meet the obligation to explain to Mr. Selim why an inquiry was refused” (at para 31).

Justice Veit also assessed the affidavit on which the Commissioner relied to make his decision in considering whether the decision of the Commissioner was reasonable. Affirmations must follow specific guidelines and formalities under the Alberta Evidence Act, RSA 2000, c A-18; this ensures that the evidence is reliable and that declarant knows that making a false statement constitutes perjury. Despite the issues with the affirmation in this case, however, Justice Veit concluded that the Commissioner was entitled to rely on the affidavit as evidence because the affirmation of the Senior Disclosure Analyst “demonstrates an intention to make a solemn declaration for which she could be charged with perjury if it was false” (at paras 33-37).

As Justice Veit points out, section 2(e) of the FOIPPA states that one of the purposes of the legislation is to resolve complaints and to “provide for independent reviews of decisions made by public bodies” (at para 22). In assessing whether this legislative purpose was met by CPS in this case, Justice Veit found that although the Commissioner relied on evidence submitted by CPS, the same public body to which Mr. Selim made a FOIP request, which would suggest that the legislative purpose of the FOIPPA was not met, the Commissioner’s staff “appears to be the ideal independent investigator,” and the affidavit presented sufficient information regarding the interactions between CPS and Mr. Selim that the Commissioner was entitled to rely on it as evidence (at paras 39-41)

Further, Justice Veit concluded that the character of the evidence presented to the Commissioner was such that it indicates awareness on the part of Mr. Selim regarding the role of the detective in the matter. Justice Veit writes that Mr. Selim should have been aware that CPS would not have a file related to JC because it was “abundantly clear” that he knew that there was never a criminal investigation involved; the detective, known to Mr. Selim as a member of the homicide unit, was simply ‘helping’ him to communicate with JC, not investigating a homicide. Additionally, the evidence presented to the Commissioner also included statements made by the detective against his own interest, including admitting that over a period of time, the detective repeatedly misled Mr. Selim and used his position as a police officer for personal purposes, namely to help his friend from the modelling agency. The law regarding statements made against one’s own interest in both criminal law and civil procedure establishes the principle that these admissions are generally reliable (at paras 42-45).

Comment

If objectively, no records exist, then it follows that there are no records to produce when they are requested. However, from the outset, CPS was aware that the matter involved a detective’s attempt to mislead Mr. Selim by using official language and a false investigation scenario. In effect, CPS was aware that one of its own officers was using his position as a detective to advance a personal interest. CPS was also aware that Mr. Selim had obsessive tendencies and likely suffered from some form of delusional thinking, given the facts of the situation. While the fact remains that there were no records to produce and that even if records existed, CPS would be unable to produce them because they would contain personal third party information about JC, Mr. Selim was not made aware of any reason for a lack of existence of records. He was simply told that no records existed and that the matter was closed.

It is difficult to accept on the face of the evidence here, as Justice Veit has, that Mr. Selim should have known that there would be no police file or record related to JC. If Mr. Selim had been aware that no such records existed at any point, he would not have made a FOIP request, nor would he have had any reason to go forward with a request for review or a request for an inquiry. In Justice Veit’s own words, the detective “abused his authority as a police officer” (at para 44) and Mr. Selim was “made subject to a rather elaborate deception” (at para 46). Mr. Selim came to believe that JC was a victim of the same men who scammed him and took a great deal of his money, and the detective specifically told him that he was conducting an “investigation” and that there existed a “file” and “records associated with this investigation” (at para 11). As Canadians, we tend to place a great deal of trust in police officers. We expect them to uphold the law and act in a fair and just manner. Given this reliance and the extent of the deception perpetrated against him, Mr. Selim had every reason to believe that a real investigation had taken place.

Further, the Commissioner chose not to conduct an inquiry based only on the limited information to which she had access. The fact that the detective’s correspondence came from a CPS computer and bore CPS insignia, for example, is a key fact that illustrates why Mr. Selim would have reasonably believed that the detective was conducting an investigation into the matter. Although there do not appear to have been any inconsistencies in the affidavit of the Senior Disclosure Analyst, the affidavit did not provide the Commissioner with enough information about the scenario to make an informed decision regarding an inquiry. It does not appear that the information in the affidavit was of the same type as that to which the Commissioner was not privy, as Justice Veit concludes. The affidavit simply showed that the detective admitted that he lied to Mr. Selim and communicated with him only in his personal capacity, while the information that the Commissioner did not obtain showed that the detective used official emails, corresponded with Mr. Selim at length, and even went so far as to arrange to have a letter mailed from Alaska. The information in the affidavit implies some deception for the purposes of helping a friend, while the other information indicates a gross abuse of power that explains Mr. Selim’s reliance on the detective’s statements. Of course, it is not possible to deduce whether the Commissioner would have decided to open an inquiry if she had been privy to all of this information. As Justice Veit herself points out, the Commissioner’s reasons for refusing to hold an inquiry are brief because they rely on very little information. At the very least, however, she may have felt compelled to give Mr. Selim additional details about the case in her written reasons had she been privy to all the necessary information.

Putting aside these issues, and whether one agrees with the decision in this case or not, it is impossible to ignore the fundamental unfairness with which Mr. Selim was treated by a police officer. Perhaps Justice Veit’s hands were tied by the fact that addressing a punishment for the detective would have been outside the scope of judicial review. Indeed, Justice Veit manages to avoid contemplating the gross mistreatment of Mr. Selim by focusing simply on the reviewable issues. In fact, save for the decision not to levy costs against Mr. Selim, Justice Veit does not address the fact that he experienced injustice in his dealings with CPS. Mr. Selim’s conduct throughout his interactions with the detective demonstrates that he lacked the knowledge and understanding that the detective was advancing a personal cause. When this issue first came to light, CPS could have taken the opportunity to fully explain the situation to Mr. Selim and perhaps even to offer an apology for the way in which he was treated, potentially avoiding the request for review and the resulting inquiry and judicial review.

This post may be cited as: Geea Atanase “Selim v Alberta: Reasonableness is Not Always Fairness” (15 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_GA_Selim_Nov2016.pdf

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Public Consultations, Anti-Terrorism Law, & Canada’s National Security Framework

Mon, 11/14/2016 - 9:00am

By: Michael Nesbitt

PDF Version: Public Consultations, Anti-Terrorism Law, & Canada’s National Security Framework

Legislation Commented On: The Anti-Terrorism Act, 2015 SC 2015, c. 20

Report Commented On: The Government of Canada’s Our Rights, Our Security: National Security Green Paper, 2016

Sitting in opposition during 2014 through the beginning half of 2015, the Liberal Party of Canada chose to support the Conservative Government’s controversial Bill C-51, which became the Anti-Terrorism Act, 2015 on 18 June 2015 (SC 2015, c. 20). While the New Democratic Party voted against the Bill, the Liberals promised to pass, then revisit the Bill should they win the 2015 Federal Election. The Liberals did (win), and they have (begun to revisit Bill C-51).

The first step in this review has been the issuance of a “Green Paper” on Canada’s “National Security Framework” followed by a multi-pronged approach to public consultations on national security law and policy in Canada. There are a plethora of legal and policy considerations that deserve close governmental and public scrutiny during this process. However, this post focuses on the need to consult with and take seriously the views of Canada’s younger generations, including but not limited to law students, in deciding how best to balance Canadian’s rights with our security interests. In an effort to ensure these voices are heard, the Faculty of Law’s Terrorism Law & Reform lab will be posting on ABlawg in December a series of self-generated, student-authored legal and policy recommendations on three of the more controversial aspects of Canada’s national security framework. As a primer to this initiative, this post offers background on the Government’s consultative process as well as my remarks as prepared as testimony for the Standing Committee on Public Safety and National Security. These comments focus briefly on national security oversight and review and then in a little more detail on CSIS’s new “disruptive” powers as authorized by Bill C-51.

Background on the Government of Canada’s “National Security Framework Review”

Almost from the outset Bill C-51 was a controversial and extraordinarily broad piece of legislation to say the least. It was passed in response to the tragic 22 October 2014 Parliament Hill shooting of Corporal Nathan Cirillo by Michael Zehaf-Bibeau, as well as the 20 October 2014 Saint-Jean-sur-Richelieu attack by Martin Couture-Rouleau that killed Patrice Vincent and injured a second person, both of whom were members of the Canadian Armed Forces. Very little public consultation took place during the drafting of the Bill and the debate in the House of Commons was equally perfunctory. (An excellent overview of the Bill, its passage, and its controversies was written post-haste by Canada’s leading legal experts on national security law, Professors Craig Forcese and Kent Roach. See False Security: The Radicalization of Canadian Anti-terrorism (Toronto: Irwin Law, 2015).)

Both as a first step in fulfilling its campaign promise and in response to the perceived shortcomings with the drafting and consultation process associated with Bill C-51, on 8 September 2016 the Liberal Government produced a so-called “Green Paper”, called “Our Rights, Our Security: National Security Green Paper, 2016 The idea was to set the stage for a broad-based public discussion on national security in Canada by making available a background document – the Green Paper – which was rolled out with a series of associated questions on which the public could provide input (see here for background on the idea and the Government consultations). Public feedback was initially solicited via “online consultation” – ostensibly an online survey (see here). It should be noted that the Government is accepting online submissions up until December 15 – so click the previous hyperlink and have your say!

In addition, the Standing Committee on Public Safety and National Security has undertaken a tour across parts of Canada, with stops in Vancouver, Calgary, Toronto, Montreal, Halifax and Ottawa. The idea behind the tour is to discuss Canada’s “National Security Framework”, a topic that includes but can be broader than Bill C-51, with the Canadian public and select “experts” in the field (the website on the Standing Committee, its hearings, and its purpose, can be found here).

In practice, the Standing Committee has held at least two consultation sessions in each city on the tour. At one of those meetings, the Standing Committee would open the door to members of the public and hear what they had to say on Bill C-51 and the newly produced “Green Paper”. A separate meeting – open for viewing to the public – was arranged as between the Standing Committee and invited “witnesses”, consisting usually of heads of interest groups, important stakeholders, or academics who work in the field of national security. More often than not the Standing Committee appears to have met with two panels of three such “witnesses” – meaning about six people per city.

The invited witnesses were given about 10-minutes to provide oral testimony of their thoughts on the extraordinarily large omnibus Bill C-51 and the Green Paper, followed by a question and answer period led by the Standing Committee members, who by all accounts have been tremendously engaged and open to input.

As a result of time restrictions, common with Parliamentary and Standing Committee hearings, less tends to be more when it comes to witness testimony. You can access minutes of the meeting I attended here. The “Evidence” before the Standing Committee – meaning the actual transcript – can be found here.

Reproduced below are the remarks that I prepared for my witness testimony before the Standing Committee. These remarks focused on two critical aspects of Canada’s national security framework: (1) the need for better oversight and review of Canada’s security institutions; and, (2) the problematic aspects of an amendment to the Canadian Security Intelligence Service Act (RSC 1985 c. C-23, (CSIS Act)). The aforementioned amendment to the CSIS Act allowed CSIS, for the first time in the institution’s history, to conduct “disruptive activities” against perceived terrorist threats.

Even the grant of such “disruptive” authority was controversial. (For a review of the history of the creation of CSIS, its powers and why the change is controversial today, see the McDonald Commission: Commission of Inquiry Concerning Certain Activities of the Royal Canadian Mounted Police, Freedom and Security under the Law (Ottawa: Supply and Services, 1981); and, Forcese & Roach, False Security: The Radicalization of Canadian Anti-terrorism (Toronto: Irwin Law, 2015) at Chapter 2 and Chapter 8, page 248.) However, perhaps more controversial was the fact that Bill C-51 empowered CSIS to act unlawfully or to obtain a warrant to breach the Charter in fulfillment of its new powers, with very few legislative constraints on such activity. I have written a lengthier analysis of these new powers in a forthcoming article for the Canadian Human Rights Yearbook (website here), but for now my brief comments below should provide an introduction to the legal reasoning behind this controversy.

The Future of National Security Law

Before providing my comments before the Standing Committee I did want to offer one final thought – which serves also as a plug to come back to ABlawg in December. My comment goes as follows. I have spent a long time working in and studying national security law in Canada. But what I deem most important is really of marginal relevance. It is informed by the past and by the law, so it is relevant in that way, but whether or not what I choose to focus on is more important than something else is truly indeterminate (at least by me). The people that the federal government should be seeking out first and foremost in these public consultations are our youth. In particular, those who feel affected by our laws and policies and those that have informed themselves of the issues. Our up-and-coming generation of lawyers and policy-makers is a great place to start. The simple reason for this is that we know that there is no “profile” for a terrorist in Canada. As a result, it is difficult to “profile” an interest group. Instead, we must look not to those groups that we think will produce the next terrorist – we simply do not know who this is – but those groups that have been particularly affected by our national security response to terrorism. In this regard we can safely say that our younger generation(s) are the ones that will live with the decisions that we make today for the longest. The culture that is created from the balancing of rights and security that we decide on over the next year or two will last long into the future, likely after I am gone. But that is not true of our students. As a result, if one is looking for a “profile” for consultation purposes, look first to those particularly affected by the laws, and one will see (at least) our next generation.

In an effort to speak to the need for greater engagement on national security law in law schools and by law students, and more importantly in an effort to give a voice to those whose opinions arguably matter the most, the University of Calgary, Faculty of Law, has introduced a new Criminal Law & Policy Lab: Terrorism Law & Reform (Full disclosure: I teach this course.) The idea is to introduce national security law and its practice in Canada as well as the controversies associated with Bill C-51 in particular. The class then follows along in real-time as the Government strives to address these controversies. Students study the law, policy and theory behind the various legislative endeavors. But students also hear from police, CSIS agents, those responsible for the review of our national security institutions (including this year the Executive Director of the Security Intelligence Review Committee, the body that reviews CSIS activities), and other practitioners and policy-makers. The idea is then to put the learning in practical context by requiring the students to work together in a “lab” setting with the goal of self-generating policy-reform recommendations, which they defend through a series of skills-based learning assessments, such as mock elevator pitches, briefing notes to the “Minister”, and policy-reform papers. In other words, the idea is not just to teach the law and theory but the skills necessary for Canada’s up-and-coming generation of lawyers to make their ideas heard in policy and government circles. The end product will be three short policy-reform papers, with an analysis of the law and practice as well as recommendations for reform. In an effort to reach the greatest number of people possible, at minimum these papers will be published on ABlawg in December. So if you are interested in some of the other legal controversies that flow from Bill C-51, please check back and see what the next generation of lawyers from the University of Calgary, Faculty of Law thinks of Canada’s National Security Framework!

Introduction to Remarks before the Standing Committee:

It is truly an honor to sit here before you and I must begin by thanking all of you for affording me this privilege.

To my mind, there are two critical issues that demand consideration in your review of Canada’s national security framework.

The first is Bill C-51’s unprecedented grant of authority for CSIS to move beyond its traditional role as an information collection and analysis agency to one that is authorized to conduct disruptive activities, including the specific authority for Charter-infringing and unlawful activities.

The second is the desperate need for better review and oversight of Canada’s national security bureaucracy. I say this based on my experience as a lawyer and policy advisor within Ottawa’s civil service as much as I do as an academic: too often the effectiveness of our bureaucracy is limited by the fact that decisions are made – and information is passed-up to Ministers and reviewed, if at all – in departmental silos. Cross-cutting issues can thus evade cross-cutting review and oversight.

And let me be very clear: review and oversight are not solely about protecting against possible abuses or correcting mistakes, though this is obviously important. Review and oversight are also desperately needed to improve the coordination and effectiveness of our institutions in responding to national security threats. In this regard, Parliamentary review of national security matters of the type that has now been proposed is a crucial first step to bring us in line with our Five Eyes allies, but it is not enough. Internal review of national security operations that stretches government-wide is needed. Greater central coordination, or the possibility thereof, for example in the hands of the National Security Advisor, is also needed.

The Three Legal Difficulties with CSIS’s Disruptive Power:

With that in mind, I will spend the remainder of my brief talk on the first element that I mentioned, that being Bill C-51’s amendment to the CSIS Act to grant the Department new “disruptive” powers.

In particular, I will focus on three troublesome aspects of this new disruptive power, including: (1) the authority to breach the Charter; (2) the authority to act “unlawfully”; and, (3) the limited opportunity for any independent party, but particular the courts, to review the legality of CSIS’s exercise of these disruptive powers.

To be very clear from the outset: I do not necessarily take issue here with the objective of the new disruptive powers nor with the specific determination that CSIS must have such powers. To my mind we the public simply do not have sufficient information to make a determination on that ground. Rather, my concerns relate to the scope of the grant of power as it was legislated.

  1. Authority to Breach the Charter

First, to perhaps the most clear-cut of the issues: CSIS’s new authority to breach any Charter provision so long as it obtains a warrant. No other body in Canada can obtain prior authorization to breach the Charter, let alone any section of the Charter. Such authority is completely unique and is found nowhere else in Canadian legislation and for good reason: it is very likely unconstitutional.

This authority to conduct unlawful activity has been compared to the process by which police obtain a warrant to search a home or seize goods, actions that would otherwise seem to run counter to section 8 of the Charter which protects against unreasonable search and seizure.

But let us be clear: when police have a warrant judicially authorized it is done to confirm the “reasonableness” of the proposed search or seizure. Quite the opposite of authorizing a Charter breach, the normal warrant process confirms that police are indeed acting legally and in compliance with Charter obligations. Put another way, the process is meant to ensure the prevention of Charter breaches in the first place, not to authorize future breaches.

Moreover, this normal process only applies to section 8 of the Charter because it is the only section wherein the right is qualified by the term “unreasonable”. And yet, CSIS is nevertheless now empowered to request authorization for a breach of any section of the Charter.

One other argument I have heard is that section 1 of the Charter provides for reasonable limits to Charter rights, so the CSIS warrant process is really no different. But section 1 requires that the Government legislate specifically and clearly when introducing a legislative provision that might breach the Charter. It is incumbent on the Government to articulate the specific objective, its scope and its limitations. An open-ended invitation to judges to undertake this legislative process ex parte and in camera to determine when and how state actions might infringe the Charter is, once again, a very different animal.

My suggestion would thus be to remove from the CSIS Act the authority to breach the Charter.

  1. Authority to Conduct “Unlawful” Activities

Second, under its new disruptive powers CSIS is authorized to conduct “unlawful” activities. Such a power is not without precedent: under the Criminal Code the police have a similar power in theory (sections 25, 25.1, 25.2, 25.3 and 25.4 of the Criminal Code of Canada).

Yet again there are some striking differences in practice, even if the wording sounds similar.

First, police power is constrained by about four pages of legislation in the Criminal Code, including specific limitations on the types of unlawful activity like the loss of or serious damage to property, and the requirement to file a specific report on the unlawful activity as well as detailed annual reports on all such activities.

The CSIS Act does not offer anything close to the same protections, does not require any reporting, and does not limit the scope of what unlawful activity might be in the way that the Criminal Code does.

Although I am not convinced one way or the other that there needs to be authority for CSIS to engage in “unlawful” activity, if CSIS makes a specific and compelling case that such authority to conduct unlawful actions should remain in the CSIS Act, then many of the protections and limitations that apply to the police under the Criminal Code should be introduced to the CSIS Act.

  1. Oversight and Review of CSIS’s Disruptive Activities

This brings me to the third difference between the exercise of police powers and the exercise of CSIS disruptive powers. When the police act, they act with the goal of making an arrest. The result is that the situation goes to court, and police warrants and the exercise of police power is challenged by the defence and reviewed by the courts. If there is a mistake, it can be appealed again. In other words, if there are defects with the police actions or warrants then the courts are available to review and correct the behavior.

CSIS is in a very different situation. Even if their actions do become known, by their own admission and given their mandate, CSIS activities are highly unlikely to form a part of a criminal prosecution and thus unlikely to be challenged in the same way as police activities. The idea is for one to be public, the other secret. As excellent a job as the Security Intelligence Review Committee [known as the SIRC, the body that reviews CSIS’s activities] does, it is not an adequate substitute for layers of judicial oversight and adversarial challenge, particularly in these circumstances.

Again, there is a solution available, or a partial one at least. A so-called special advocate responsible for providing a challenge function to CSIS requests should be specifically built into the CSIS Act, just as it exists in the Immigration and Refugee Protection Act (section 85). The idea would be to compensate for the fact that CSIS warrants are a different animal than police warrants in that they are unlikely to be challenged by a defence lawyer at a criminal trial, they are unlikely to be reviewed by a court, and the subsequent implementation of the warrant by CSIS is unlikely ever to be reviewed by a court or made public.

With these inherent differences in mind, the special advocate would need authority not just to challenge a warrant but to follow-up on the CSIS action to ensure its subsequent compliance with the terms of the judicial warrant and, where abuse or a mistake is suspected, request subsequent judicial review. To be very clear here: my primary concern is an innocent mistake or misunderstanding, either by the warrant authorizing judge or in the execution of the warrant. Where the matters are serious, rights are affected, and the pressure of national security is great, innocent mistakes will be made. As it stands, there is very little that would provide review or oversight of CSIS actions that could correct for mistakes or ensure they do not become systemic; because these mistakes could include unlawful behaviour, vigilance with respect to meaningful judicial review of the actions is paramount.

Thank you.

This post may be cited as: Michael Nesbitt “Public Consultations, Anti-Terrorism Law, & Canada’s National Security Framework” (14 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_MN_BillC51_Nov2016.pdf

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Bill 27: Financial Support for Renewable Electricity

Thu, 11/10/2016 - 9:00am

By: Nigel Bankes

PDF Version: Bill 27: Financial Support for Renewable Electricity

Legislation Commented On: Bill 27, Renewable Electricity Act

Report Commented On: AESO, Renewable Electricity Program, Recommendations, dated May 2016, publicly released November 3, 2016

Press Release Commented On: Government of Alberta, Renewable electricity plan to create jobs, spur investment, November 3, 2016

Alberta’s Climate Leadership Plan (CLP) of November 2015 has four key planks:

  1. Phasing out emissions from coal-generated electricity and developing more renewable energy
  2. Implementing a new carbon price on greenhouse gas emissions
  3. A legislated oil sands emission limit
  4. Employing a new methane emission reduction plan

The government introduced legislation to implement an economy-wide carbon price in June (the Climate Leadership Implementation Act) and in the resumed session this fall (2016) it introduced first of all Bill 25: The Oil Sands Emission Limit Act to implement the third objective, a legislated oil sands emission limit (I commented on Bill 25 here) followed now by Bill 27, the Renewable Electricity Act to implement the second half of the first plank – developing more renewable energy. We have yet to see the detailed plans for phasing out coal generation.

Following the announcement of the CLP the government referred the design of a renewable program to the Alberta Electric System Operator (the AESO). The AESO operates the power pool and the province’s transmission system under the authority of the Electric Utilities Act, SA 2003, c E-5.1 (EUA). In the letter of referral (January 26, 2016), the Department of Energy instructed the AESO to develop a plan by May 2016 to bring new renewable electricity on to the grid while keeping the costs of doing so “as low as possible through a competitive process such as an auction.” The letter also noted that the process must be carefully coordinated with the retirement of coal units. Finally the letter confirmed that the Government “has not chosen to fundamentally alter the current wholesale electricity market.”

In acting on that direction the AESO invited submissions from industry and stakeholders. The AESO summarized what it heard here and also provided at that time (May 2016) some hints of the recommendations that it had provided to the Department:

  • The definition of “renewable” is anticipated to align with the definition used by Natural Resources Canada (http://www.nrcan.gc.ca);
  • The procurement is anticipated to be fuel-neutral;
  • Facilities may be expected to be in-service in 2019; and
  • It is anticipated that the existing transmission system will be leveraged.

One useful piece of information included was an indicator of typical development timelines for different renewable resources: Wind: 4-6 years; Solar: 1.5-3 years; Biomass: 2-3 years; Geothermal: 3-7 years; and Large Hydro: 10-14 years.

The following sections of this post discuss the AESO’s recommendations and then Bill 27 and the concurrent announcements by Minister McCuaig-Boyd (Minister of Energy), Minister Phillips (Minister of Environment and Parks and Minister responsible for the Climate Change Office), and by the AESO

The AESO Recommendations

The AESO made its recommendations to the Government of Alberta (GoA) in May 2016 but the government chose not to make them public until November 3, 2016 the same day that the government introduced Bill 27. The report is 38 pages in length plus six appendices.

The report provides recommendations related to the overall program, recommendations related to a generic competitive process and recommendations specific to the features of the first competition. It also describes (under the heading due diligence) the comparative jurisdictional work that it commissioned (the full report is Appendix D) as well as certain legislative changes needed to implement the program.

Recommendations related to the overall program

AESO identified three key general recommendations or insights (at 10). First the AESO supported embedding the overall target in legislation but did not consider that the legislation needed to specify the frequency of procurements. Second, the AESO emphasised the need for transparency with industry with respect to the competitive process so as to allow parties to understand whether:

  • The objectives for each competition will remain mostly consistent;
  • The majority of competitions will be fuel neutral; and
  • The volume being procured in any given competition will be relatively consistent.

In connection with this the AESO recognized that the “the coal emissions phase-out plan is not yet fully defined” and that “the competition schedule for renewables … will be informed by this plan.” However, the AESO went to note that in light of its “mandate to ensure the ongoing reliability of the AIES … the AESO believes it is best positioned to develop the schedule of competitions once more details regarding the coal retirement plan are known.” (at 10)

Third, the AESO recognized that renewable procurement programs evolve over time and that this was broadly understood in the industry.

Recommendations related to a generic competitive process

The AESO recommended a three-step process involving: (1) request for expressions of interest (REIO), (2) requests for qualifications (RFQ), and (3) request for proposals (RFP). It recommended that the AESO should run the bidding process and it referred to its experience with running similar processes including competitive processes for new transmission lines and for ancillary services in relation to the power pool (at 11). For further details on each of these steps see the AESO report.

The next, and perhaps most crucial step was to settle on a preferred payment mechanism. Clearly the AESO recognized, as had the Leach Report, that some public financial support would be required in order to reach the government’s renewable targets. The AESO advised that it had considered three options: (1) a fixed credit of $/MWh for renewable electricity supplied to the grid (a fixed REC); (2) a variable credit of $/MWh for renewable electricity supplied to the grid calculated by reference to the pol price and the bid price (under this scheme the generator receives the difference between its bid price and the pool price (referred to as an Indexed Renewable Credit but more transparently as a contract for difference (CFD)), and (3) a capacity payment mechanism whereby the generator of renewable energy receives a capacity payment for installed capacity of its renewable facility.

It was fairly easy for AESO to dismiss the capacity payment mechanism on the basis of cost, but also on the basis that it would be inconsistent to provide capacity benefits for an intermittent source of power such as solar or wind. As between fixed and indexed credit systems, the AESO came down (at 21 – 22) fairly strongly in favour of the indexed system, largely on the grounds that uncertainties in the pool price would cause bidders under fixed system to heavily discount the expected pool price, thus seeking high levels of provincial support and thereby increasing the cost of the program. By contrast, an indexed system transfers the pool price risk to the government thus encouraging maximum participation in any competition and allowing the bidder to focus on managing their own risks.

Recommendations specific to the features of the first competition

For the first competition AESO recommended (at 24 – 25) that the approach “must be kept simple” given the aggressive ‘in service’ goal of 2019. More specifically AESO recommended that the competition be fuel neutral (although in practice shorter regulatory requirements will favour some fuels and technologies); utility scale (with a minimum 5MW); with 20 year contract terms; indexed payments; and require demonstrated ability to connect to existing distribution or transmission system. As to the latter, AESO advises that there is likely enough capacity in the transmission system to accommodate the first few competitive rounds without requiring expensive and time-consuming reinforcements.

Comparative assessment

As part of its work the AESO retained a number of advisors to assist it: (1) London Economics International for a jurisdictional review of the experience of support mechanisms in other jurisdictions; (2) a report from its capital markets advisor (JCRA Financial) as to the financing environment for power projects in Alberta, and (3) advice from Morrison Park Advisors with respect to the challenges that could be anticipated with securing additional non-renewable generation in Alberta’s energy only market. AESO clearly drew on many of the learnings from the first two of these reports in developing both its overall recommendations as well as the generic and specific recommendation with respect to the competitive process to be adopted. The jurisdictional overview also makes passing reference to the idea of a fairness advisor to oversee the process.

Recommended legislative changes

The AESO identified four principles that would inform consideration of the necessary legislative changes that would be required to implement the program as well as a few more concrete suggestions. It also strongly recommended that these amendments needed to be introduced and passed at the Fall sitting of the Legislature.

The four principles (at 36) are as follows;

Principle 1: The AESO must have explicit authority to develop and implement the Program.

Principle 2: Attempt to minimize the risk of legal and regulatory challenges to the development and implementation of the Program.

Principle 3: Be mindful of how the Program will be implemented within the current market structure and minimize changes to the legislative framework to maintain investor interest and confidence.

Principle 4: Encourage efficient and timely processes and oversight in order to reduce Program-related regulatory burden on interested parties and regulatory agencies.

Drawing on these principles the AESO made two concrete recommendations for amendments. The first was to amend the purposes section of the Electric Utilities Act, SA 2003, c E-5.1 (EUA) to include the incenting of renewable generation. The second was to amend s.17 (which details the main duties of the AESO) to specify that the AESO would have responsibility for implementing the program and to make permissible certain features of the program that might be inconsistent with some of the basic principles underpinning the EUA and the current structure of the energy market.

Bill 27 and the Government\ISO Press Releases

It is evident that the government has adopted most\all of the AESO’s recommendations although in some cases the Bill does not go in to all of the detail of the AESO’s report. This is most obviously (and importantly) the case with respect to the nature of the financial support to be offered. Thus the bill does not express a preference for any of the three forms of support considered by the AESO (although s. 10 hints at the structure of a contract for difference). However, many of these details are acknowledged in the press releases and the postings on the AESO’s website. Thus we understand that the government aims to add 5,000 MW of renewable capacity by 2030; the first procurement will be for 400MW of capacity; 20 year contract terms; open to all technologies but projects should be operational by 2019; new or expanded projects; the AESO will seek feedback on the commercial terms of the first REP procurement starting November 10; the first competition will launch in early 2017 with an REOI, and RFQ and an RFP with successful bidders announced at the end of 2017; the first competition will adopt the contract for difference approach (indexed renewable energy credit).

The Bill (s.2) adopts a concrete target of at least 30% of electric energy produced in Alberta from renewable sources by 2030. It bears emphasising that the target is expressed in terms of energy and not capacity and that it refers to energy produced in Alberta. Hydro energy imported from British Columbia will not count.

Section 3 gives the Minister the authority to direct ISO to prepare renewables programs according to specified goals (including environmental, social, and economic goals) and evaluative criteria. Sections 3 and 4 instruct the ISO to respond and submit proposals to the Minister for approval. While the AESO’s May report addresses some of matters required by these sections, s.5 in particular will require additional details particular with respect to estimates of costs and expenses, and a draft of the proposed electricity support agreement. The Minister may approve the proposed program “with or without modification”. Once approved the ISO shall implement the competitive acquisition (s. 7) ultimately entering into, and then administering (s. 9), renewable electricity support agreements (RESAs). The Minister (s. 10) is responsible for reimbursing the ISO for monies paid out pursuant to a RESA (and is entitled to be paid by the ISO for any monies ISO receives under a RESA). Section 12 anticipates that the monies for this will come from the Climate Change and Emissions Management Fund with any shortfall to be paid out of the General Revenue Fund.

Section 6 instructs the ISO to engage a “fairness advisor” external to the ISO to provide advice to the ISO on the development of the competitive process “to ensure that it is a fair process” and “to ensure” that implementation of the program “is conducted fairly”.

The ISO is to recover the costs of developing and implementing a REP from the participants in the competition and the generators who enter in to RESAs. Presumably these recoverable costs would include the costs of retaining the fairness advisor. Shortfalls will be recovered from the Minister (s. 11) rather than passed through to consumers in the ISO tariff.

The ISO is subject to the direction of the Minister (s. 14) in implementing REPs but is shielded from investigation by the Market Surveillance Administrator (MSA) and the Alberta Utilities Commission (AUC) (s. 16) “regarding the development of a proposal for a renewable electricity program”. Participants in the competitive process and generators who enter into RESAs are deemed to be electricity market participants for the purposes of s.6 of the EUA and ss. 39 & 46 of the Alberta Utilities Commission Act, SA 2007, A-37.2 (AUCA). The effect of this is to commit all of these persons to “conduct themselves in a manner that supports the fair, efficient and openly competitive operation of the market” (the FEOC principle). Furthermore, while the ISO is protected from investigation by the MSA and the AUC, these deemed participants are clearly not.

The consequential amendments

The most important amendments are those with respect to the Electric Utilities Act and in particular with respect to the roles and responsibilities of the ISO. These include straightforward amendments to section17 which lists the duties of the ISO. These amendments simply add ISO’s new duties under this Act. However, the Bill will also amend s. 16 which currently provides as follows:

The Independent System Operator must exercise its powers and carry out its duties, responsibilities and functions in a timely manner that is fair and responsible to provide for the safe, reliable and economic operation of the interconnected electric system and to promote a fair, efficient and openly competitive market for electricity.

The proposed amendment will simply provide that this direction does not apply to the “development of renewable energy program proposals under the Renewable Electricity Act.” I wonder if this proposed amendment is both over- and under-inclusive.

On the over-inclusive side of things I understand that a REP may be subject to the criticism that it is not entirely consistent with FEOC because it actually advantages certain forms of generation over others which would not be either “fair” or “openly competitive” or even “efficient”. But surely we don’t want to release the ISO from its obligations in relation to the safe, reliable and economic operation of the interconnected electric system. I note as well that the title to this section is “Duty to act responsibly” – the very blunt “shall not apply” language hardly captures a nuanced understanding of the relationship between the two statutes that we might hope to see.

As for the under-inclusiveness the non-applicability of the section is confined to the “development” of the REP proposals. Bill 27 distinguishes between the development of REPs (s.4) and their implementation as well as the administration and implementation of RESAs. If some elements of s.16 create a problem for the ISO in relation to the developments of REPs, why is there no issue in relation to the implementation of REPs? I also wonder whether it might not have been appropriate to reflect the REP somewhere in s.5, the purposes section of the Act (as the AESO itself had recommended). Finally, to the extent that the compressed timing envisaged for tying-in renewables might have some implications for expediting connections for these sources, there might be a need to authorize the ISO to take this into account in discharging its obligations to provide non-discriminatory access under, inter alia, ss.29 and 33 of the EUA.

Bill 27 will also amend s.3(1) of the Hydro and Electric Energy Act, RSA 2000, c. H-16 (HEEA). This is the provision in HEEA which prohibits the AUC from considering need when approving the addition of new generation. That is a risk for the applicant to assess in Alberta’s energy only market. The proposed amendment adds that the AUC “shall not have regard to whether the generating unit is the subject of a renewable electricity support agreement under the Renewable Electricity Act”.

Comments

The following sections comment on: the potential role of rural communities, First Nations and Metis communities; what is excluded from the program; the implications for natural gas generation; and the fairness advisor and the role of the MSA.

What happened to rural communities, First Nations and Metis communities?

In its discussion of the need to incent renewables the Leach Report discussed the potential role that rural communities, First Nations and Metis communities might play as partners in renewable energy development. The Leach Report stated as follows (at 50):

The panel recommends, as per the methodology employed in B.C., government set evaluation criteria of bids with respect to factors they consider valuable. In particular, we recommend government introduce a premium in the adjudication of bids for projects that partner with rural, First Nations and Métis communities. These types of partnerships have proven, in Ontario among other examples, to contribute positively to community acceptance of renewable energy projects.

In its report AESO (at 37) passes the buck back to the GoA recording that:

The AESO notes that the outcome of discussions between itself and the GoA in early 2016 resulted in a decision by the GoA that it would manage and coordinate engagement with Indigenous peoples, landowners and municipalities. The focus of the AESO’s engagement efforts would therefore be with the investor and developer communities as well as other interested parties. This delineation has and will continue to allow the AESO to concentrate on the types of feedback necessary to further develop key elements of the Program, such as the procurement documents and long-term agreements. It also enables the GoA to coordinate its engagement for the Program with its broader CLP engagement activities.

Section 3 of Bill 27 allows the Minister to direct the ISO to take into account social and economic concerns in the design and implementation of a REP including in the bidding criteria; but one has the sense that this first procurement will barrel ahead without incorporating these design ideas. That may be understandable given the tight timing schedule of this first call but it would be far better to incorporate these ideas at the outset so as to ensure that communities, and especially indigenous communities, will see a benefit from the significant investment of public money in these projects; some of these projects will be coming on-stream before the next election!

What is excluded?

While the policy and the legislation adopts a broad definition of renewable energy (the same as that of Natural Resources Canada) the persons who may benefit are actually more circumscribed for three main reasons. First, this program is directed at generation and therefore energy in the form of electricity. As a result some energy sources (e.g. most geothermal) will not benefit from this program. Second, the AESO recommended in the RFQ part of its proposal that the scheme be directed at utility scale proposals (c. 5 MW). This has the effect of excluding small scale generation and in particular distributed generation (e.g. home-based generation that serves to displace generation supplied by the more conventional transmission and distribution systems) unless aggregated by a broker. Third, given the required in-service date some types of project will simply not be able to make it.

The other required generation

As noted in the introduction to this post, the government’s renewable program is part of an overall objective of phasing out coal but it is only one element of that program. The other main challenge is to ensure the overall security of the interconnected system by procuring additional gas generation for base load and peaking purposes as the coal units are retired. After all, the lights must stay on. And here it is evident that the province faces significant challenges given the energy-only nature of Alberta’s market and currently depressed pool prices due to low natural gas prices, overbuild of generation, and soft growth or declining demand due to economic recession and depressed oil prices. In this scenario it is hard to imagine new gas generation investments coming in to the province to participate in an energy only market absent very clear signals as to when the market will tighten due to coal retirements. There is therefore some urgency in clarifying this schedule. Whether that will be enough remains to be seen. The REP program solves the investment problem for renewables by retaining the pool price to establish the index on which the contract for difference is based. It may be necessary to provide capacity credits to attract the necessary gas investments we will require.

Treatment of renewable imports

Imports don’t count. Not only are out-of-province projects excluded from eligibility in the REP (s.4) but out-of-province renewable energy that is imported will not count towards the target identified in s.2.

The Fairness Advisor

Based on its survey of best practices emerging from other jurisdictions, AESO recommended that a fairness advisor be retained. The AESO report provides very little advice on the role of a fairness advisor, how such a party might be selected, what fairness means in this context, and who is the relevant constituency – bidders, incumbents, others? The legislation is not much more informative. Section 6 suggests that the advisor will have two responsibilities: (1) to advise on the development of the competitive process, and (2) to ensure implementation of the program. One question that comes to mind is the potential role of the fairness advisor in relation to the form of the renewable electricity support agreements. Can we expect the fairness advisor to be opining on the form, for example, of any “change of law” provision?

One might also question why we need a fairness advisor when we have both the MSA and the AUC with statutory responsibilities for supervising and considering complaints in relation to the ISO. Is the ISO perhaps more comfortable retaining its own fairness advisor than having to deal with the MSA and the AUC? And if so is that a relevant consideration? Clearly the province acceded to this arrangement and, as noted above, the Bill shields the ISO from investigation by both the MSA and the AUC but only “regarding the development of a proposal for a renewable electricity program” (s.16(1)). This shield is quite narrowly framed since this language appears to be a reference to the ISO’s responsibilities under s.5 of the Bill. It likely does not extend to the distinct activities of implementation of REPs (s.7) or the administration of RESAs (s.9).

This post may be cited as: Nigel Bankes “Bill 27: Financial Support for Renewable Electricity” (10 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_NB_Bill27_Nov2016.pdf

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No Priority for a Matrimonial Property Certificate of Lis Pendens Sandwiched Between Writs of Enforcement

Wed, 11/09/2016 - 9:00am

By: Jonnette Watson Hamilton

PDF Version: No Priority for a Matrimonial Property Certificate of Lis Pendens Sandwiched Between Writs of Enforcement

Case Commented On: Singh v Mangat, 2016 ABQB 349 (CanLII)

The issue in Singh v Mangat was one of priority: in what order were different groups entitled to sale proceeds. There were three types of claimants to the proceeds of the sale of a husband’s interest in the matrimonial home: the wife, who had brought a matrimonial property action and registered a certificate of lis pendens on the title to those lands; those of the husband’s judgment creditors who registered their writs of enforcement on the title to the home before the wife’s certificate of lis pendens; and those of the husband’s judgment creditors who registered their writs of enforcement on the title to the home after the wife’s certificate of lis pendens. The relative timing of the registrations created what Master A. R. Robertson, QC, called a “CLP sandwich” (at para 2). This case appears to be the first time an issue of priority in circumstances involving a “CLP sandwich” has come before the Alberta courts. Master Robertson analyzed a complex statutory interpretation issue in order to resolve the priorities issue in this decision (handed down in June 2016 but only added to the CanLII database in October). In a result that might surprise those accustomed to priorities under a Torrens land title system, he resolved the issue in favour of all of the judgment creditors, those registered before the certificate of lis pendens and those registered after.

The husband and judgment debtor was Nazar Singh (Manny) Mangat. He held a one-third interest in the matrimonial home. Another one-third was held by the wife, Pavitra Mangat, and the remaining one-third was held by Amarjot S. Mangat. Up for grabs in this case were the proceeds of the sale of the husband’s one-third interest, an interest sold to satisfy the husband’s debts.

The wife had begun a matrimonial property action against her husband in January 2007. Although a spouse who begins proceedings under the Matrimonial Property Act, RSA 2000, c M-8 (MPA), is entitled under section 35(1) to file a certificate of lis pendens ? a notice of a pending court action ? against the title to the matrimonial home at the Land Titles Office, the wife did not do so until February 22, 2013, more than six years later. Had the wife filed a certificate of lis pendens in January 2007, there would have been no priority issue for the courts to decide. The MPA in section 34(3) goes on to provide that, if a spouse files a certificate of lis pendens, any instrument (such as a creditor’s writ of enforcement) that is subsequently registered and purports to affect that land is subject to the spouse’s claim.

What happened in this case, however, was that the plaintiff, Arvind Singh, obtained a judgment for $19,200 against the husband in May 2012. The plaintiff registered a writ of enforcement of that judgment against the husband’s interest in the matrimonial home on July 20, 2012. Another writ of enforcement, this time for $20,155, had been registered against the husband’s interest by the Bank of Montréal on June 7, 2012. Then, on February 19, 2013, a caveat was registered against the matrimonial home by a civil enforcement agency instructed by the plaintiff, giving notice of their intention to sell the husband’s one-third interest under the Civil Enforcement Act, RSA 2000, c C-15 (CEA). It was shortly thereafter that the wife learned that her certificate of lis pendens had not been registered against the title to the matrimonial home and she acted to remedy that omission.

After the wife’s certificate of lis pendens was registered against the title to the matrimonial home in February 2013, and before the sale of the husband’s one-third interest was approved by the court in August 2015, five other writs were registered against title. One was for just over $61,000, a second for about $33,500, a third for just over $82,000, a fourth for about $57,600, and the fifth, a Justice Canada writ, for $8,620.

These events created what Master Robertson called a “CLP sandwich” – two writs totaling about $40,000 registered against the matrimonial home ahead of the certificate of lis pendens, and five writs totaling approximately $243,000 registered after the certificate of lis pendens.

The husband’s one-third interest in the matrimonial home sold for $225,000 to a relative of the wife. No one appeared to contest the application by a civil enforcement agency for an order approving that sale. As the husband’s one-third interest in the matrimonial home sold for only $225,000, not everyone could be paid. So in what order would the different groups of claimants be paid? It was clear the two judgment creditors who had registered their writs before the certificate of lis pendens would be paid first. But who would get the remaining $185,000 (less interest and costs)? Would it be the wife, perhaps leaving nothing for the other judgment creditors? Or would it be the judgment creditors who registered their writs after she registered her certificate of lis pendens, leaving nothing for the wife?

The tricky statutory interpretation point involved the interplay between the priority established by the MPA and the priority established by the CEA (at para 24). As Master Robertson stated, the problem is that the certificate of lis pendens has priority over subsequent writs under section 34(3) of the MPA, but a prior writ binds the judgment debtor’s lands and the distribution scheme set out in the CEA “groups all of the writ holders together in writ proceedings for distribution amongst eligible claims in one distributable fund” (at para 7).  He concluded that the CEA “creates a method of distribution of the funds, essentially a code, and the guiding principle is that writ holders are paid pari passu” (at para 8). Pari passu literally means “on equal footing”. In other words, once one writ holder ranks ahead of the matrimonial property certificate of lis pendens, all writ holders do, even those whose writs were registered after the certificate of lis pendens.

As a result, the sale proceeds were ordered to be distributed to the writ holders, those prior to and those subsequent to the certificate of lis pendens. There was nothing left for the spouse from the sale of the husband’s one-third interest.

It may seem odd that the interplay between the two statutes compels this conclusion. The two statutes do not expressly consider one another when dealing with the priority issue, so the question was whether they could be read in harmony with one another.

Section 35(3) of the MPA creates a priority by stating:

35 (3) If a certificate of lis pendens has been registered under this section, any instrument that

(a) is registered after the registration of the certificate of lis pendens, and

(b) purports to affect land included in the certificate of title,

is subject to the claim of the spouse who filed the certificate of lis pendens.

(emphasis added)

The question was whether section 35(3) MPA meant that those who registered their writs of enforcement after the wife’s certificate of lis pendens were not entitled to share in the distribution under the CEA, the statute under which the one-third interest had been sold at the instigation of the plaintiff writ holder.

Master Robertson found the key to be the concept of “writ proceedings” under the CEA and the idea that “writ proceedings” are a different “level” of claim than is the registration of a writ of enforcement (at para 41). The key CEA priority provisions were the following:

33(2) A writ,

(b) in the case of land under the Land Titles Act, on being registered under the Land Titles Act binds all of the enforcement debtor’s exigible land described in the certificate of title against which the writ is registered;

34(1) Except as otherwise provided in sections 35 to 40 or in any other enactment, an interest acquired in property after the property is bound by a writ is subordinate to the writ.

(2) Where an interest in property is subordinate to a writ,

(a) the property is subject to writ proceedings to the same extent that the property would have been if the subordinate interest did not exist, and

(b) a person who acquires the property as a result of writ proceedings acquires the property free of the subordinate interest.

(emphasis added by Master Robertson, at para 42)

Note that section 34(2) provides that an interest in property that is subordinate to “a writ” ? one writ ? is subject to “writ proceedings” ? and not just to that one writ ? as though that subordinated interest did not exist (at para 43). Section 34(2)(a) does not say that it binds only for the benefit of the one writ holder (at para 102). The sale proceeds are available for distribution in the writ proceedings and “writ proceedings” are defined in section 1(1)(uu) of the CEA as “any action, step or measure authorized by this Act to be taken for the purpose of enforcing a money judgment.” The delivery of a notice of intention to sell ? in this case a step taken by the plaintiff ? was the commencement of “writ proceedings” (at para 76).

Master Robertson also noted that section 34 talks about an “an interest acquired in property after the property is bound by a writ” and an “interest in property” being subordinated to a writ. A certificate of lis pendens gives notice of a claim that might become an interest after a court order (at para 104). Until then, and when the certificate is filed, it is merely an unproven claim (at para 111). However, Master Robertson did not rely on this particular point to reach his decision.

The CEA goes on to define what happens to the proceeds that are the result of “writ proceedings.” Section 96(1)(a) of the CEA goes on to say that all the money that is realized through “writ proceedings” must be dealt with in accordance with Part 11 on “Distributions” (at paras 42 and 110). Section 97(a) provides that any money to which this Part applies constitutes a “distributable fund”. There is only one distributable fund (at para 99). Allowing the certificate of lis pendens to divide writ holders into those registering before and those registering after would, in effect, create two distributable funds (at para 124). Then section 99(1)(a) sets out that the eligible claims under a “distributable fund” are “the amounts outstanding on all related writs that are in force against the enforcement debtor” (emphasis added by Master Robertson, at para 48). What are “related writs”? That is not discussed.

After reviewing peripherally-related case law and concluding that distribution pari passu is the correct approach (at paras 60-72), Master Robertson summarized potential problems with allowing the certificate of lis pendens to interrupt and postpone distribution to all or some of the writ holders. The writ holders argued a judgment debtor and his or her spouse could frustrate debt collection by filing a certificate of lis pendens to stop distribution and then never resolve the matrimonial property claim (at para 90). The ability to hold off judgment creditors indefinitely could become a bargaining tool (at para 91). Writ holders would have less incentive to direct a sale (at para 92). A second potential problem is that waiting to distribute might allow more judgment creditors to claim against the distributable fund, perhaps even creditors with debts left unpaid after the distributable fund is set up (at para 94). The judgment debtor could control when and who was paid from the sale of his property (at para 95), and judgment creditors might not bother to enforce their claims once a certificate of lis pendens was filed (at para 96).

Master Robertson concluded that for all of these reasons and more ? but most particularly due to a careful analysis of the legislation ? the entire interest of the judgment debtor in the matrimonial home was attached by the registration of the first writ and a subsequent certificate of lis pendens does not create two distributable funds, nor did it change the priorities as between writ holders, who rank pari passu (at para 101). Writ holders are to be treated as one group, sharing in the distribution of sale proceeds as a result of writ proceedings brought by any one of them (at para 121).

Master Robertson found that the priority provisions of the CEA could be read in harmony with those of the MPA. He concluded his interpretation of the CEA allowed a priority created by section 35 of the MPA to take effect between spouses but not necessarily between creditors, at least not unless the certificate of lis pendens is registered before writ proceedings are commenced ? as it could have been in this case.

Is this reasoning applicable to other “sandwiches”? The answer which can be inferred from Master Robertson’s case law discussion (at paras 60-72), is that it depends on the statute authorizing the sale. If that statute is the CEA, then this reasoning and result would apply. If a sale was conducted under a different statute, as in the case of a mortgage foreclosure, then the same reasoning and result might not follow. This is so because the reasoning is very dependent on the specific wording of the relevant statutes.

This post may be cited as: Jonnette Watson Hamilton “No Priority for a Matrimonial Property Certificate of Lis Pendens Sandwiched Between Writs of Enforcement” (9 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_JWH_Singh_Mangat_Nov2016.pdf

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The Supreme Court of Canada (By a Slim Majority) Confirms the Presumption of Deference in Alberta

Tue, 11/08/2016 - 9:00am

By: Shaun Fluker

PDF Version: The Supreme Court of Canada (By a Slim Majority) Confirms the Presumption of Deference in Alberta

Case Commented On: Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd,  2016 SCC 47

In 2015 the Alberta Court of Appeal issued two decisions which suggested the Court is attempting to curtail the presumption of deference in the judicial review (or statutory appeal) of statutory tribunal decisions in this province: see Edmonton (East) Capilano Shopping Centres Ltd v Edmonton (City), 2015 ABCA 85 (CanLII) (Capilano, ABCA) which I commented on in Where Are We Going on Standard of Review in Alberta? and Stewart v Elk Valley Coal Corporation, 2015 ABCA 225 (CanLII) which I commented on in Fundamental Legal Questions and Standard of Review in Alberta. The Supreme Court of Canada granted leave to appeal on both decisions, and on November 4 the Supreme Court issued its decision in Capilano: Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd, 2016 SCC 47 (Capilano) . The slim majority judgment (5-4) written by Justice Andromache Karakatsanis reverses the Court of Appeal on both its standard of review analysis and on the merits of the case by restoring the assessment review board decision. The result for standard of review analysis is that the presumption of deference to substantive decisions made by statutory tribunals should be alive and well in Alberta, but it should be noted there is a growing resistance to the presumption not only at the Alberta Court of Appeal but also within the Supreme Court of Canada.

In Some Thoughts on the Presumption of Deference I gave a brief overview of the fundamentals at issue in judicial review, and I won’t reiterate those at length here. Simply put, a reviewing court must arrive at its conclusion on whether to set aside a tribunal decision taking into account the rule of law which demands a measure of rigor and accountability by administrative tribunals to legal principles, but the court must also respect the intention of the legislature to empower a statutory tribunal to make legal determinations for the area in question. The standard of review chosen by the court speaks largely to which of these considerations it favours in a given case: correctness suggests more concern with the rule of law and reasonableness suggests a court deferential to legislative intent. This is proving to be a difficult exercise, and there is a fissure developing across the current members of the Supreme Court. This is evident both here in Capilano and in Wilson v Atomic Energy of Canada, 2016 SCC 29 (CanLII) released in July of this year. Concern for the rule of law is leading some Supreme Court Justices to push back against the presumption of deference and return to more of a ‘functional and pragmatic’ approach to standard of review.

The administrative law issue in Capilano concerns the Edmonton assessment review board, a statutory tribunal empowered by Part 11 of the Municipal Government Act, RSA 2000, c M-26 to hear complaints from city taxpayers on their property assessments, typically arguing the assessed value is too high and should be reduced by the Board. Municipalities in Alberta assess property values every calendar year, and the assessed value for a property determines the amount of property tax payable by the owner to the municipality in a calendar year. In this case the Board had decided it had the authority under the Municipal Government Act to not only dismiss a complaint seeking a reduction in assessed value but also to increase the assessed valued of the complainant’s property as requested by the City during the hearing. In the initial judicial review hearing Justice Rooke concluded the applicable standard to review the Board’s decision was correctness on the basis that the Board’s determination that it could increase assessed property value was a true question of jurisdiction – one of the established exceptions to the presumption of deference owed by a reviewing court to a statutory tribunal interpreting its home legislation (see Edmonton East (Capilano) Shopping Centres Limited v Edmonton (City), 2013 ABQB 526 (CanLII) at paras 18-31). The Court of Appeal likewise ruled the applicable standard of review was correctness, but did so on very different grounds, which was the subject of my post in Where Are We Going on Standard of Review in Alberta?.

The majority of the Supreme Court in Capilano rules the standard of review for the Board’s decision is reasonableness and that it was reasonable for the Board to increase the assessed value of complainant’s property during the hearing (at para 3). My analysis in this post is organized under the following themes: (1) the presumption of deference; (2) the statutory right of appeal; (3) relative expertise; and (4) the contextual or factored standard of review analysis.

The Presumption of Deference

The notion of employing a presumption of deference to simplify standard of review analysis was suggested by Justice Binnie in his concurring opinion in Dunsmuir v New Brunswick, 2008 SCC 9 (CanLII) (at para 146), however the majority of the Supreme Court in Dunsmuir did not concur with him. The presumption gained additional traction in Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Association, 2011 SCC 61 (CanLII), where Justice Rothstein wrote that the principle of judicial deference asserted in Dunsmuir had evolved to the point where there is a presumption the standard of review is the deferential reasonableness where a statutory tribunal applies and interprets its home statute (Alberta Teachers’ Association at para 39). Then in McLean v British Columbia (Securities Commission), 2013 SCC 67 (CanLII), Justice Moldaver reinforced the presumption of deference by asserting the onus lies on an applicant in judicial review to establish the statutory interpretation given by a decision-maker to its home statute is unreasonable (McLean at paras 40, 41).

The majority in Capilano once again articulates the jurisprudential strength of this presumption:

Unless the jurisprudence has already settled the applicable standard of review (Dunsmuir, at para. 62), the reviewing court should begin by considering whether the issue involves the interpretation by an administrative body of its own statute or statutes closely connected to its function. If so, the standard of review is presumed to be reasonableness (Mouvement laïque québécois v. Saguenay (City), 2015 SCC 16, [2015] 2 S.C.R. 3, at para. 46). This presumption of deference on judicial review respects the principle of legislative supremacy and the choice made to delegate decision making to a tribunal, rather than the courts. A presumption of deference on judicial review also fosters access to justice to the extent the legislative choice to delegate a matter to a flexible and expert tribunal provides parties with a speedier and less expensive form of decision making.

The Dunsmuir framework provides a clear answer in this case. The substantive issue here — whether the Board had the power to increase the assessment — turns on the interpretation of s. 467(1) of the MGA, the Board’s home statute. The standard of review is presumed to be reasonableness. (at paras 22, 23)

The dissenting opinion in Capilano written by Justices Côté and Brown departs from the majority by holding that the presumption of deference is rebutted in this case. Interestingly Justice Moldaver who wrote about a very strong presumption of deference in McLean joins the dissent here in Capilano as does Chief Justice McLachlin who seems to have abandoned her support for the Dunsmuir approach. The dissent finds the statutory scheme of the Municipal Government Act and the Board’s lack of relative expertise in statutory interpretation rebuts the presumption of deference in this case.

The Statutory Right of Appeal

The Alberta Court of Appeal gave us a surprising new exception to the presumption of deference owed to statutory tribunals by ruling in Capilano, ABCA that the statutory right of appeal set out in section 470 of the Municipal Government Act demonstrates a legislative intent for an intrusive judicial role into municipal property tax assessment and therefore is an indication that the standard of review should be correctness (see Where Are We Going on Standard of Review in Alberta? for more on this). The Supreme Court is unanimous in rejecting this line of reasoning. Justice Karakatsanis for the majority expressly disagrees, writing that the Court of Appeal goes against ‘strong jurisprudence’ from the Supreme Court on this point (at paras 27 – 31). Justices Côté and Brown for the dissent agree with the majority on this point that the presence of a statutory right of appeal does not establish a new category for correctness review (at para 70), however they do give the statutory right of appeal some work to do in a contextual analysis that leads to correctness – more on that in a minute.

Relative Expertise

I noted in Some Thoughts on the Presumption of Deference that the presumption of deference risks overlooking the context or subtle wrinkles that arise in the exercise of statutory power. I also observed the concerns set out by a string of concurring opinions in the Supreme Court of Canada which caution against a blanket presumption of deference towards statutory interpretation by administrative tribunals of their home legislation and assert the need for deference to rest on a more principled foundation like demonstrated expertise or familiarity of the tribunal with that legislation. For example, Madam Justice Deschamps wrote a concurring opinion in Alberta Teachers’ Association on the view that judicial deference is based upon the principle of relative expertise or experience in a particular area, and thus a bare assertion of a presumption of deference simply because a statutory decision-maker is interpreting its home statute pays too little attention to whether the statutory decision-maker actually has sufficient expertise or experience to justify deference to its determination of a legal question (Alberta Teachers’ Association at paras 82 – 89). The issue in part is how much probing into the expertise of a statutory tribunal will a reviewing court undertake to establish relative expertise?

A fissure is developing at the Supreme Court over standard of review, and I suggest it is forming around this notion of relative expertise. Justice Karakatsanis for the majority here in Capilano simply looks to the governing statute and institutional specialization to establish relative expertise in the Board with respect to interpreting provisions of the Municipal Government Act:

The presumption of reasonableness is grounded in the legislature’s choice to give a specialized tribunal responsibility for administering the statutory provisions, and the expertise of the tribunal in so doing. Expertise arises from the specialization of functions of administrative tribunals like the Board which have a habitual familiarity with the legislative scheme they administer: “. . . in many instances, those working day to day in the implementation of frequently complex administrative schemes have or will develop a considerable degree of expertise or field sensitivity to the imperatives and nuances of the legislative regime” (Dunsmuir, at para. 49, quoting D. J. Mullan, “Establishing the Standard of Review: The Struggle for Complexity?” (2004), 17 C.J.A.L.P. 59, at p. 93; see also Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 25). Expertise may also arise where legislation requires that members of a given tribunal possess certain qualifications. However, as with judges, expertise is not a matter of the qualifications or experience of any particular tribunal member. Rather, expertise is something that inheres in a tribunal itself as an institution: “. . . at an institutional level, adjudicators . . . can be presumed to hold relative expertise in the interpretation of the legislation that gives them their mandate, as well as related legislation that they might often encounter in the course of their functions” (Dunsmuir, at para. 68). As this Court has often remarked, courts “may not be as well qualified as a given agency to provide interpretations of that agency’s constitutive statute that make sense given the broad policy context within which that agency must work” (McLean, at para. 31, quoting National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324, at p. 1336, per Wilson J.). (at para 34)

Justices Côté and Brown accuse the majority of ignoring the expertise factor in this case. They warn that grounding tribunal expertise merely in its institutional setting risks making the presumption of deference irrefutable: “Courts must not infer from the mere creation of an administrative tribunal that it necessarily possesses greater relative expertise in all matters it decides, especially on questions of law.” (at para 85) They probe expertise to a greater depth here, and find – like the Alberta Court of Appeal did – that the Board does not have relative expertise in statutory interpretation.

The Contextual or Factored Standard of Review Analysis

Readers with history in Canadian administrative law that stretches further back than the 2008 Dunsmuir decision will sense there is something innately familiar with the dissent’s reasoning here in Capilano. Indeed, the dissenting opinion reads very much like the old ‘pragmatic and functional approach’ to standard of review analysis – you know – the approach that Dunsmuir was supposed to sweep out the back door because it was too mechanical and repetitive. Early in their dissent, Justices Côté and Brown write that “[i]n every case, a court must determine what the appropriate standard of review is for this question decided by this decision maker.” (at para 71, emphasis in original). They are careful to distance themselves from a full return to the pragmatic and functional approach by stating that a full contextual standard of review analysis need not be conducted in every single case, however there isn’t much context left unturned in their analysis here regarding this question and this decision maker, and for the most part Justices Côté and Brown only pay lip service to the Dunsmuir approach. Their dissenting opinions in Capilano and in Atomic Energy are both directed at dismantling the presumption of deference articulated by the Court since Dunsmuir. Expect more of the same when the Supreme Court issues its decision in Elk Valley.

This post may be cited as: Shaun Fluker “The Supreme Court of Canada (By a Slim Majority) Confirms the Presumption of Deference in Alberta” (8 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_SF_Capilano_Shopping_Nov2016.pdf

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The Saga of the Intoxication Defence Continues: Desjarlais and its Application to Uttering Threats

Fri, 11/04/2016 - 10:00am

By: Dylan Finlay

PDF Version: The Saga of the Intoxication Defence Continues: Desjarlais and its Application to Uttering Threats

Case Commented On: R v Desjarlais, 2016 ABPC 182 (CanLII)

The defence of voluntary intoxication holds an awkward place in Canadian criminal law. Everyone who commits a crime must both do a guilty act (actus reus) and possess a guilty mind (mens rea) – even if that guilty mind is mere recklessness. But what if someone gets so drunk they commit a criminal act? What is the difference between someone who is sleepwalking and someone who is in a drunken stupor so severe they do not have the mental capacity comprehend their actions? Technically, neither hypothetical offender possesses a guilty mind.

True, voluntary intoxication is voluntary, sleepwalking is not. But legally, this distinction is irrelevant. The relevant mens rea is the mental state possessed at the time of the offence. Thus, public policy steps in. While sleepwalking is a defence to murder (see R v Parks, [1992] 2 SCR 871 (CanLII)), voluntary intoxication is not. However, the public policy argument against the intoxication defence does not strike such a chord if the offence becomes causing a disturbance.

Where does the law stand on the intoxication defence for uttering threats? (s. 264.1(1) of the Criminal Code). In July, Judge Allen of the Alberta Provincial Court in Edmonton produced a lengthy decision on this subject. The case is R v Desjarlais, 2016 ABPC 182 (CanLII). It involves a messy situation with multiple witnesses and plenty of credibility analysis; what is important for our purposes is that it involved a situation where the accused threatened to kill the complainant (para 88) while the accused was intoxicated to the point of being, in the words of different witnesses: “eight and one half to nine on a scale of ten,” or “temporarily insane” (para 97).

Review of Law on Voluntary Intoxication as a Defence

Judge Allen conducts an extensive review of the law on voluntary intoxication as a defence (paras 98 – 129), beginning with the English common law. In DPP v Beard, [1920] AC 479 (English House of Lords), Lord Birkenhead ruled: “evidence of drunkenness that renders an accused incapable of forming the specific intent to commit a crime should be taken into consideration with other facts proved in order to determine whether or not the accused had the intent to commit a crime” (paras 99 – 100).

The Supreme Court of Canada adopted Beard in R v MacAskill, [1931] SCR 330 (CanLII). In R v George, [1960] SCR 871 (CanLII), “Fauteux J. held that voluntary intoxication is a defence to crimes such as robbery that involve a specific intent. However, he held that voluntary intoxication short of intoxication giving rise to insanity is not a defence to crimes of general intent” (Desjarlais, para 103).

The distinction between crimes of general and specific intent perpetuates the awkward position the intoxication defence holds, and a brief reminder becomes necessary. In George, the SCC distinguished general intent from specific intent (p 890):

In considering the question of mens rea, a distinction is to be drawn between “intention” as applied to acts done to achieve an immediate end on the one hand and acts done with the specific and ulterior motive and intention of furthering or achieving an illegal object on the other hand. Illegal acts of the former kind are done “intentionally” in the sense that they are not done by accident or through honest mistake, but acts of the latter kind are the product of preconception and are deliberate steps taken towards an illegal goal. (Emphasis added)

For a simple example, imagine pushing a button to fire a rocket. If one pushes the button with the intent of causing the button to be pushed, one possesses general intent. If one pushes the button with the intent of firing the rocket, one possesses specific intent.

In a series of cases, the Supreme Court ruled that sexual assault was a general intent offence and thus that voluntary intoxication would not be a defence (Leary v Queen, [1978] 1 SCR 29 (CanLII)). With the enactment of the Charter, the Supreme Court revisited this decision in R v Daviault, [1994] 3 SCR 63 (CanLII). In this case the Supreme Court acquitted the accused because the Court had a reasonable doubt that the accused had the minimal intent to commit sexual assault because of evidence of extreme intoxication. Justice Cory, writing for the majority, held intoxication can be a defence to crimes of general intent when the accused proves “on the balance of probabilities that he or she was in a state of intoxication akin to automatism or insanity”. To fulfil this onus, expert psychiatric evidence is needed” (Desjarlais, paras 115 – 116).

Controversy followed, and Parliament reacted by enacting s. 33.1 of the Criminal Code, prohibiting voluntary intoxication as a defence “where the accused departed markedly from the standard of care as described in subsection (2)” (s. 33.1(1)) and where the offence “includes as an element an assault or any other interference or threat of interference by a person with the bodily integrity of another person” (s. 33.1(3)).

I would suggest that while the distinction between general and specific intent offences may have originated with an attempt to analytically determine the requisite mens rea of an offence, the legislative intent of s. 33.1 was to prohibit intoxication as a defence where such a defence would be contrary to public policy.

Despite the legislative changes to the Criminal Code (and what I suggest was the intent of Parliament) the general/specific intent approach persisted. Recently, in R v Tatton, 2015 SCC 33 (CanLII), the Supreme Court adopted the analysis employed by Justice Sopinka’s dissent in Daviault as to how to distinguish a specific intent from general intent offences. First, if the jurisprudence has classified the offence in a satisfactory manner, the jurisprudence should be adopted (Tatton, at para 32) Second (if the jurisprudence is unclear), two main considerations must be considered – the ‘importance’ of the mental element, and the social policy underlying the offence (Tatton, para 21, 26).

In Tatton, Justice Moldaver held that the ‘importance’ of the mental element comprised the “complexity of the thought and reasoning processes that make up the mental element of a particular offence” (para 34) and that “specific intent offences contain a heightened mental element” (para 39). Justice Moldaver held that the social policy underlying the offence consideration required a consideration as to “whether alcohol is habitually associated with the crime in question” (paras 40 – 45).

Is Uttering Threats a Specific or General Intent Offence?

Judge Allen applies Tatton to rule that s. 264.1 is a general intent offence (paras 132 – 146). In doing so, Judge Allen concludes there is not satisfactory jurisprudence already classifying the offence (paras 132 – 135).

Judge Allen considers the ‘importance’ of the mental element of the mens rea of s. 264.1, and admits that “analysis may not give rise to a clear answer” (para 143). This is hardly surprising, but I digress. On the one hand Judge Allen recognizes that s. 264.1 contains the word “knowingly”, which is more ‘important’ than mere recklessness. “Specifically, the mens rea is that the threatening utterances made must be meant to intimidate or to be taken seriously” (para 137). On the other hand, Judge Allen recognizes that the “mental element is closely tied to the prohibited act, i.e., that the threats were uttered. The mental element requires minimal mental acuity. The mental element does not require a heightened mental element, such as an ulterior motive, actual knowledge of any consequences, or intent to bring about those consequences” (para 142).

Judge Allen considers the social policy underlying the offence and rules that s. 264.1 “is an offence of unruly conduct where alcohol consumption is habitually associated with the offence. There is no lesser included general intent offence. The offence is not one where a harsh minimum sentence will be incurred upon conviction” (para 145). Therefore s. 264.1 is a general intent offence (para 146), and the defence of intoxication does not apply.

Judge Allen also rules that s. 33.1 applies to s. 264.1(1)(a) (threat to kill or cause bodily harm) because a threat to kill or cause bodily harm includes a threat of interference to bodily integrity (para 148). Therefore, voluntary intoxication to the extent of automatism or insanity is not a defence to s. 264.1(1)(a), but may be a defence to ss. 264.1(1)(b) and (c) (threats to damage property or to kill/injure an animal) (para 148).

Judge Allen concludes that “the voluntary intoxication of alcohol here provides no defence to the s. 264.1(1)(a) offence” (para 149).

My Commentary

Judge Allen’s finding that there was not satisfactory jurisprudence classifying s. 264.1 can be challenged. The analysis of R v Bone (1993), 81 CCC (3d) 389 (Man CA) was considered by Judge Allen. In Bone, Twaddle J.A. “held that the offence of threatening was a specific intent offence and found the accused not guilty because of intoxication” (Desjarlais, para 133). This was dismissed by Judge Allen because the reasoning was “very brief” and subsequently not satisfactory (para 135). Judge Allen also noted that the SCC had not considered intoxication as a defence to explore whether s. 264.1(1) was a general or specific offence. Judge Allen seems to have ignored R v McRae, 2010 BCSC 558 (CanLII), in which Justice Romilly held that uttering threats is an offence of specific intent and that “the defence of intoxication could apply” (para 109). However, Romilly’s J.’s reasoning could also be considered brief.

More broadly, I would argue that the above challenge falls into the trap laid by the antiquated and awkward distinction between general and specific intent. For this reason, the better challenge lies in abandoning general and specific intent altogether, and returning to the public policy concern that the distinction seeks to quell.

Tatton’s social policy consideration as to “whether alcohol consumption is habitually associated with the crime” (Tatton, para 42) provides the example of sexual assault as an offence often associated with intoxication. I would argue that this consideration is overreaching when applied to uttering threats. Intoxication is habitually associated with crime generally, and one could make the case that Tatton‘s social policy consideration would apply to all but a few Criminal Code offences. While this rational is compelling to crimes such as impaired driving (where intoxication makes up an element of the offence), or sexual assault (where the bodily integrity of the victim is compromised), it is less compelling for crimes that simply require the offender to have said something. A drunk automaton uttering threats is no different that a drunk automaton causing a disturbance, and indeed far less concerning that a sleepwalking automaton who commits murder.

I also note that Judge Allen’s finding that s. 33.1 prohibits intoxication as a defence to uttering threats can be challenged. This challenge would necessarily challenge s. 33.1 itself, since the section explicitly mentions “the threat of interference”, however such a challenge is not impossible. An argument could be made that uttering threats is really just an extreme example of causing a disturbance (as I alluded to above); to rule that a sufficiently impaired person possesses the mens rea for one but not the other is arbitrary and a violation of s. 7 of the Charter.

In R v McLeod, 2008 QCCQ 5726 (CanLII), Judge Gervais stated that: “Although the question can be debated, it appears reasonable now to consider that intoxication as a defence is no longer admissible for an offence committed under section 264.1 of the Criminal Code” due to the enactment of s. 33.1 (McLeod, para 39). Although this ruling appears to agree with Desjarlais, I suggest it is not very persuasive because it concedes that “the question can be debated”. Considering the awkward place intoxication holds as a defence, if one thing is clear, it is that the defence’s application will continue to be debated.

This post may be cited as: Dylan Finlay “The Saga of the Intoxication Defence Continues: Desjarlais and its Application to Uttering Threats” (4 November, 2016), on-line: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_DF_Desjarlais_Nov2016.pdf

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