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The Website of the Alberta Courts

Fri, 01/09/2015 - 9:00am

By: Nigel Bankes, Jennifer Koshan, and Jonnette Watson Hamilton

PDF Version: The Website of the Alberta Courts

Matter Commented On: The Alberta Courts’ website

This post deals with Court websites. We are posting it now because all three Alberta Courts have just made a significant change in their practice. At the beginning of this week (January 5, 2015) they announced that they will no longer post judgments on their own website. Instead, users are referred to CanLII for copies of recent judgments. Here is the notice that you will find on the ABQB and ABPC websites:

A collection of the judgments of the Court of Queen’s Bench of Alberta is available from CanLII. The official version of the reasons for judgment is the signed original or handwritten endorsement in the court file. If there is a question about the content of a judgment, the original court file takes precedence. Copies of the original judgment may be obtained on payment of the applicable fee, by contacting the relevant court location.

You are about to leave the Court of Queen’s Bench of Alberta website. The Court of Queen’s Bench of Alberta is not responsible for the content of any external website.

Queen’s Bench judgments on CanLII

The Court of Appeal has yet to implement this decision but anticipates doing so in the near future.

We are given to understand that, while this move has been made to conserve staff time and reduce technology costs the Courts will continue to update the judgment databases — but henceforward the databases will only be available to internal users on the Courts’ intranet. We also understand that the decisions of the Courts will be sent to Can LII on a daily basis, and that there should not be a significant time lag in accessing them on Can LII.

In making this move the Alberta Courts are following the practice of some other Canadian courts, including those in Saskatchewan, Manitoba and Newfoundland and Labrador.

ABlawg is a strong supporter of Can LII, and was one of the first blogs to participate in Can LII Connects. However, we think that there is a case to be made for Courts maintaining their own publicly accessible judgment databases, as well as contributing to open source databases such as CanLII.

What is that case? We think that a website offers any entity, including the different branches of government, the opportunity to communicate to the public about who they are and what they do. The practice of rendering public judgment is a central part of what a court does and should be celebrated. Many courts do just that, both in Canada and internationally. For Canadian examples, see the websites of the Courts of British Columbia and Nova Scotia. The website of the former includes an easily accessible “Recently Released Judgments” for both superior courts that lists the courts’ most recent decisions and a one sentence summary of the issue(s) dealt with by the court. The website of the latter includes, on their Court Decisions page, a list of “Today’s Releases” by five different levels of court. The Courts of Nova Scotia website also includes webcasts of court proceedings, among numerous other features.

Some courts even go beyond this content and use their websites to make additional materials available to the public, including appellate factums, transcripts, podcasts and in some specialized cases the pleadings. Examples here include the Supreme Court of Canada, the High Court of Australia, the Supreme Court of the United Kingdom (where it appears you can even rent the Court for special events; see “Venue Hire”!), and the International Court of Justice. In the case of the Australian and UK courts, these websites are additional to the open source databases AustLII and BAILII.

Of course these initiatives may not be appropriate to all levels of Court; we are not advocating any particular approach. But what we are saying is that a website is a crucial means of communication between the Courts and the public. A Court’s website conveys something about how accessible that Court is, or how accessible it wishes to be perceived to be. It says something about how central it sees the work of written decision-making and the dissemination of that work.

The message that the Alberta Courts send with the notice quoted above is that, while judgments may be central to who they are and what they do, they will leave it to others to publish those decisions and to be responsible for them. We think that that’s a shame. It’s even more of a shame if the Courts continue to maintain and update the database for their own use, since that suggests that any cost savings will be marginal at best.

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A Methodology for Beginning Fundamental Justice Reform

Tue, 01/06/2015 - 9:00am

By: John-Paul Boyd

PDF Version: A Methodology for Beginning Fundamental Justice Reform

Discussion on the reform of civil justice in Canada reached a new crescendo last year with the publication of the various reports of the national Action Committee on Access to Justice in Civil and Family Matters and the initiatives that have popped up here and there across the country, and continue to pop up, as a result. An enormous amount of learned discussion on justice processes, barriers to justice, the meaning of access to justice, potential solutions and reform processes is available on websites of organizations like the Canadian Forum on Civil Justice, Slaw and the Canadian Bar Association.

As the various initiatives move forward, the issue of reform processes has in particular taken on a new importance. The reasons for this are fairly straightforward: the rules and principles of the English common law justice system are 900 years old and somewhat hidebound as a result; the system engages a significant number of influential stakeholder groups that must be convinced to support efforts toward substantive reform; the system is managed by a dense bureaucratic administrative structure laden with regulations, politics and vested interests that must be reorganized and reenergized; and, the system itself is incredibly expensive, as are the cost of mistakes and false starts. The process most likely to be successful must be one that is capable of reconciling these intransigent, obdurate circumstances and achieving broadly supported change. At present, the most promising reform process available is the social lab approach, which has been eloquently written about by people such as Nancy Cameron and Nicole Aylwin.

I won’t reiterate what Nancy and Nicole have said; they’re both very articulate writers who have described the concept better than I could, and you really should read their articles. (Nicole’s article, incidentally, has lots of helpful links to related resources.) Suffice it to say that the social lab approach attempts to mobilize the different stakeholders involved in a particular social issue to collaboratively implement prototypes of new processes which are continuously refined in an iterative cycle of evaluation and adaptation. This is all very well and good, and the social lab approach is likely one of the very few means of achieving the large-scale reform of intractable social problems in a manner that is neither coercive nor unpleasantly prescriptive. It’s also the approach being used in Alberta’s Reforming Family Justice Initiative, which Diana Lowe has succinctly described.

Some concerns

I am, however, worried that the social lab approach might circumscribe our ability to be genuinely creative in developing new approaches to systems that are complex, multidisciplinary and massive, like the justice system, and involve multiple stakeholders with varying commitments to reform. The implementation > evaluation > feedback > adjustment > re-implementation loop required by the prototyping methodology strikes me as being limited to taking the bits and pieces of existing systems and rearranging them, albeit in innovative, novel ways. There may be some aspect of the social lab process that I have failed to grasp, but it seems to me that the approach may be incapable of contemplating a fundamental redesign of established complex systems; rather than being a renovation that takes the house back to the studs and starts over, the prototyping approach seems to be limited to reconfiguring the furniture and testing new arrangements. I raise this point as it is not at all clear to me that the way we manage disputes within the present family justice system has any necessary or intrinsic merit. While I suspect there will always be a need for authoritarian and perhaps adversarial court processes to address truly difficult individuals and problems of immediate urgency, I am concerned that a proper reconceptualization of the system may require more than triage processes and the co-location of social services, both of which are really not much more than reconfigurations of existing protocols and resources, and may demand:

  • a fundamental reconsideration and reappraisal of our basic assumptions; and,
  • a critical examination of alternatives such as inquisitorial processes, abridged trial procedures, non-adversarial judging techniques, the embedding of mental health professionals in decision-making processes, mediation-ligation hybrid processes and so forth.

A social lab approach may be the most effective way to pilot new ideas and new procedures once this reconceptualization has taken place, but I suggest that it may not be suitable to reforms addressing the fundamental underpinnings of family justice processes, assuming of course that these processes need to be addressed at all.

A potential methodology

In light of my concerns with the social lab approach, and given that the usual alternatives to that approach are, for the reasons pointed out by Nicole, unworkable for the purposes of justice reform, the next step must be to discover the process that will work if we are to develop a completely new way of doing family law. I do not pretend to have the answer, but I do have a suggestion.

I think that first there needs to be some really big-picture brainstorming. I would hand-pick a dozen of the best and the brightest thinkers on family justice, focussing on people with practical experience in the trenches who are genuinely creative, out-of-the-box thinkers with a deep understanding of justice issues and family law. I’d send them off to a secluded place outside of Banff with a box of notepads, whiteboards, markers, the best research currently available on family breakdown and its sequelae, and a case or two of good wine, with instructions to come up with a comprehensive outline of a new family justice system, complete with workflows, processes and rules, applying no preconceptions that any aspect of the current system needs to be or should be retained, and I would tell them to keep at it until they reach a consensus about a completely new model of family justice.

When they’re done, I’d bring them back, and get them to write up their model in two statements, a technical draft for legal professionals, government and others involved in the system and another in plain language for the public and the media. I would take a year with the group criss-crossing the province talking to the bench, bar, community groups, court staff, social workers, counsellors, advocates, social service agencies and so on to collect feedback, correct problems and foster buy-in. The group would then issue a final statement on the new system that reflects the insights gained from touring the province. This, by the way, is more or less the approach taken by Professors Rollie Thompson and Carol Rogerson between the release of their first draft of the Spousal Support Advisory Guidelines in 2005 and the release of the final draft in 2008, and it worked wonderfully well.

I would then put the final statement into the care of a larger, more comprehensive group of stakeholders for implementation in one justice centre, using the social lab approach to prototyping and the iterative evaluation and adaptation of new processes. When the new model seems to be more or less functional, I’d roll it out to other justice centres and their local stakeholders for the same process of evaluation and adaptation, tailoring the implementation of the model to the particular needs of each community.

The point of all of this is to achieve a redesign of the family justice system from the ground up, by putting aside our current assumptions about family breakdown, and how the disputes arising from family breakdown should be managed, and starting afresh in a principled manner supported by research. Family justice is, you see, fundamentally different than any other branch of civil justice. We should not and must not handle the legal issues arising from family breakdown as we do those arising from shareholders’ grievances, motor vehicle accidents and wrongful dismissals.

Just an idea.

This post originally appeared on Access to Justice in Canada.

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Expert Reports: Are They Inherently Material Evidence?

Mon, 01/05/2015 - 9:00am

By: Camille Sehn

PDF Version: Expert Reports: Are They Inherently Material Evidence?

Case Commented On: E.G. v Alberta (Child, Youth and Family Enhancement Act, Director), 2014 ABCA 396

This summer I posted a comment on a successful application to stay the Queen’s Bench decision of the Honorable Mr. Justice G.C. Hawco, which reversed a Permanent Guardianship Order (“PGO”) made by the Provincial Court at trial. On the hearing of the appeal of the Director of Child and Family Services (“the Director”) of Justice Hawco’s decision, there were several issues raised surrounding the expert reports that were entered as evidence at trial and relied upon in Justice Hawco’s decision, but not relied upon in the trial decision of the Honorable Judge L.T.L. Cook-Stanhope. This post will comment upon the Court of Appeal (Justices Côté, Rowbotham and Jeffrey) decision on those issues.

Facts

The background to the appeal is outlined in greater detail in the decision and my earlier post, but it is important to highlight several important developments within the case which began at trial. There were two reports entered as evidence by counsel for the parents, the reports of Ms. Debra Harland and Dr. Sonya Vellet, which were then withdrawn during trial. The authors of these reports were not called as witnesses, therefore not available for cross-examination, and counsel for the parents confirmed to Judge Cook-Stanhope that the parents were not intending to rely on them.

However, the reports were admissible, remained on the record, and were referred to in questioning of the only expert witness called, Dr. Rosalyn Mendelson. The first issue that arose on appeal with respect to these reports was whether Justice Hawco erroneously relied on them on appeal. The Court of Appeal concluded that Justice Hawco did rely on the reports, and should not have (at para 31). Secondly, the Court of Appeal discussed whether such reports would constitute material evidence which, if disregarded at trial, would be a reviewable error. Ultimately, the Court clarified that these reports were not material evidence, and that Judge Cook-Stanhope was correct to not address them in her reasons (at para 35).

Discussion

These reports, and the way in which they should be dealt with, bring up several issues related to the weight of expert evidence and the level of deference to a trial judge on appeal. Without a jury, the judge assumes the role of the trier of fact. If the reports had been withdrawn from a jury trial, the jury would not be able to rely on them. The expert witness role, and the reason for a higher standard of qualification of these experts as opposed to lay witnesses, is that their evidence is not entered for the truth of its contents (at para 21); there is probative value in expert opinions that can assist the trier of fact in making inferences. The trier of fact still has the discretion, absent an overriding and palpable error, to choose which evidence he or she prefers, including which opinions and inferences are preferable (at para 37).

Counsel for the children suggested that Justice Hawco was entitled to reweigh the evidence presented at trial, but the Court of Appeal confirmed that the standard of review for an appellate court does not allow that court to substitute its own view by re-weighing the evidence absent an error in principle or a correct finding that the trial judge had disregarded material evidence. Since the reports were not material, and there was no error in principle (at para 45), the decision of Judge Cook-Stanhope to grant a PGO was restored.

This decision confirms that the level of deference in weighing expert opinions remains very high. If Ms. Harland and Dr. Vellet had been called, Judge Cook-Stanhope would have needed to address their testimony in her decision if she was disagreeing with their opinions, but would not have been required to place any greater weight on those opinions. Without the opportunity for cross-examination and, further, without counsel for the parents specifically relying on the reports, they were not material evidence (at para 45). This is despite the fact that they were expert reports.

However, the Court also indicated (at para 44) that in this case, the issue is not even whether the trial judge preferred the evidence of one expert over another. Essentially, there was only the expert evidence of Dr. Mendelson available at trial. While the reports were completed by experts and remained on the record as admissible evidence, the Court of Appeal reveals in this decision that it is not only the qualification of an expert that has a higher threshold, it is also the presentation of that expert’s evidence that has a high threshold in order to be material evidence. Without an opportunity to cross-examine an expert on their report, it seems that evidence contained within the reports should have no probative value.

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The Top Ten Canadian Legal Ethics Stories – 2014

Fri, 01/02/2015 - 9:00am

By: Alice Woolley

PDF Version: The Top Ten Canadian Legal Ethics Stories – 2014

For the last two years I have written up the “top ten” Canadian legal ethics stories for the prior year (2013 and 2012). This year I initially wondered whether it would be possible to identify ten important legal ethics stories. It wasn’t. Moreover, it is fair to say that some of these stories now justify the descriptor “saga,” making their third consecutive appearance on the list.

It should be noted that the ordering of the list is neither rigorous nor based on a precise calculation of each story’s importance. Nor is the “Top Ten” descriptor a claim I’d aggressively defend. I’m not sure whether, in an objective sense, these are the top ten stories and nor am I sure which ones are more interesting and significant than the others. But since “Ten Canadian legal ethics stories listed in no particular order but that I, for my own idiosyncratic reasons, think are interesting and significant” is not exactly catchy, I’m sticking with “Top Ten.”

  1. Trinity Western’s Approval Revoked

On December 11, 2014 the British Columbia Minister of Advanced Education revoked the consent it had previously granted to Trinity Western University to open a law school. It did so based on the “current uncertainty over the status of the regulatory body approval” for the law school (CBC, December 11 2014). That uncertainty arose from the decisions by the law societies in British Columbia, Ontario, New Brunswick and Nova Scotia either not to approve the admission of graduates of Trinity Western or to do so only conditionally. My overview of the regulatory history of Trinity Western’s proposal, and the issues it raises, is here. Elaine Craig’s article from June 2014 on TWU is here. SLAW blog posts on Trinity Western from 2014 can be found here, here, here, here and here.

The Trinity Western law school proposal is one of the legal ethics sagas. It has raised significant issues in legal ethics, particularly in relation to the effectiveness of the Federation of Law Societies (whose approval process was in the end not treated as binding or even given much weight); the scope of anti-discrimination and protection of diversity with respect to admission to the profession; the role of the law societies in determining that scope and protection (as opposed to, say, human rights commissions); the process used by law societies to consider Trinity Western’s application; and, finally, the role of law societies in regulating the content of legal education.

It is also a saga likely “to be continued” in the next few years: if Trinity Western proceeds with its various applications for judicial review of its law school, and if it succeeds in those applications, either procedurally or substantively, then this matter will end up back before the Minister of Advanced Education and, perhaps, the law societies.

  1. Settlement of the complaint against Lori Douglas

On November 24, 2014 the Canadian Judicial Council stayed its investigation into the conduct of Associate Chief Justice Lori Douglas in consideration for her agreement to retire effective May 2015. As noted in an article on CBC.ca, the investigation into ACJ Douglas had been ongoing for four years and cost approximately $3 million. The legitimacy of the investigation was – and continues to be – fiercely criticized. Most recently critics focused on the CJC’s insistence on viewing the pictures of ACJ Douglas, even though the basic content of those pictures was widely known (see, e.g., Blatchford, Drummond #1, Drummond # 2, Open Letter).

The settlement agreement prevents the continuation of proceedings that seemed most unlikely to reach any satisfactory and fair conclusion given the muddied issues they raised – was the issue the failure to disclose the existence of the pictures on her written application for appointment? Was it Douglas’s alteration of her personal diary once the investigation commenced? Or was it the existence of the pictures themselves? A letter written by Norman Sabourin in response to an Open Letter criticizing the CJC suggests all of the above.

The agreement also means, however, that the significance of online sexual pictures to future judicial applicants remains unclear. Do prospective judges need to disclose the existence of pictures that are on the web? Do they need to disclose the existence of pictures that may be put on the web at some future time? Does disclosure depend on the likelihood that the pictures will end up on the web? What, ultimately, is the burden on an applicant? From a policy perspective, given the increased prevalence of such pictures in a digital age, what would the effect of compulsory disclosure of such pictures be on applications by women to the bench relative to men over the longer term? These are questions that merit further consideration and clarification.

  1. The Canadian Bar Association Futures Report

In August 2014 the Canadian Bar Association published the report of its Legal Futures Initiative, Transforming the Delivery of Legal Services in Canada. The result of extensive consultation and research, the Report offered a considered assessment of issues and challenges facing the legal profession, and made recommendations for changes to the regulation and education of Canadian lawyers. The most controversial of those recommendations are those supporting liberalization of the legal services market and that lawyers be permitted to practice in “Alternative Business Structures”. Specifically, the Report recommended that “Lawyers should be allowed to practise in business structures that permit fee-sharing, multi-disciplinary practice, and ownership, management, and investment by persons other than lawyers or other regulated legal professionals” (Recommendation #1, p. 35). It also recommended regulatory changes to permit effective rather than direct supervision of non-lawyers (Recommendation #4, p. 42), fee-sharing with non-lawyers (Recommendation #5, p. 43) and compliance-based entity regulation (Recommendation #8, p. 47).

The merits of the CBA’s proposals can be debated. The regulatory changes they propose are, in some cases, themselves top ethics stories from the year, as discussed below. But of independent significance is the fact that the CBA has been willing to engage in this process, and to take positions that challenge the regulatory status quo. There is nothing modest or timid about the CBA’s approach. When faced with a similar opportunity the American Bar Association ducked, declining to consider any liberalization to the rules preventing non-lawyer ownership (see James Moliterno’s criticism of the ABA 20/20 Commission, here but also some debate on Moliterno’s criticisms here). I am not an impartial observer– I was a member of the CBA’s Professional Regulation Futures Committee – but in my view the CBA is to be commended for its initiative and openness to new ways of regulating the profession.

  1. Alternative Business Structures

As noted, one of the key recommendations of the CBA was to permit alternative business structures (ABS), law firms that are owned, at least in part, by non-lawyers. In September the Law Society of Upper Canada released its Discussion Paper Alternative Business Structures: The Future of Legal Services, seeking input from its membership about whether, and to what extent, alternative business structures ought to be permitted.

The debate around ABS focuses on their risks and rewards, with opponents suggesting that ABS pose significant risks to lawyers’ integrity and their provision of services to clients, while creating few real benefits to access to justice (see, e.g., Ontario Trial Lawyers Oppose ABS; Ken Chasse on ABS).

Proponents suggest that there is evidence to support ABS’s positive effect on access to justice (Kowalski on ABS) and that, in any event, the risks posed by ABS to the legal profession ought not to be overstated (Mercer #1 and Mercer #2). The questions now are whether any law society will be willing to proceed with ABS, if so which one and if so will others follow suit?

  1. Jian Ghomeshi’s Statement of Claim

The serious criminal allegations against Jian Ghomeshi were one of the top news stories in Canada in 2014. But the allegations also had a legal ethics dimension. Specifically, was it ethical to file a statement of claim that was arguably meritless and that may have been intended to suppress legal claims against Ghomeshi? This question was debated by David Tanovich (arguing that filing such a claim is unethical) and me (arguing that, while ethically problematic, it is not improper). Howard Levitt and I have also raised questions about the sufficiency of the advice given by Ghomeshi in relation to filing the Statement of Claim.

  1. British Columbia Regulatory Task Forces

As noted, the CBA Futures Project recommended the adoption of compliance-based entity regulation. In 2012, the British Columbia Legal Profession Act was amended to give the Law Society of British Columbia the authority to regulate law firms. The Law Society has struck a task force to “recommend a framework for the regulation of law firms” (LSBC Task Force). Adam Dodek wrote a paper advocating law firm regulation in 2012 (here) and it is significant that the law societies are taking concrete steps in this direction.

Of perhaps even greater note, however, is that in December 2014 British Columbia’s Legal Services Regulatory Framework Task Force recommended that “the Benchers seek an amendment to the Legal Profession Act to permit the Law Society to establish new classes of legal service providers to engage in the practice of law, set the credentialing requirements for such individuals, and regulate their legal practice.”   The areas in which such legal service providers would be permitted to practice include family law. A loosening of the constraints on legal practice by non-lawyers may be the most significant development in increasing access to justice, particularly in family law, where it is estimated that 70% of participants are unrepresented (Julie MacFarlane, cited in Mercer #2)

  1. A2J

Access to justice continues to be a significant issue for Canadian lawyers and the public, and for good reason. As John-Paul Boyd noted in a post on SLAW on December 5th: “The present situation is, with the greatest respect, staggering. We have at hand a crisis on a national scale, affecting a system that costs governments billions of dollars a year to maintain, and yet we as a society are unwilling to allocate the few millions of dollars that are necessary to tackle the problem as aggressively as it requires” (Boyd on A2J). Two major reports on access to justice were published in 2013 (Action Committee on Access to Justice in Civil and Family Matters Report and CBA Equal Justice Report) and, as indicated by the BC task forces, the CBA Futures Report and the debate over ABS, legal regulators and the legal profession are taking the access to justice problem seriously. They are trying to remove barriers to the provision of legal services and to facilitate access to lawyers and legal services. Until some material progress is made, however, access to justice will properly remain a top legal ethics story in Canada.

  1. The Boyle Recusal

On September 4 2014, Tax Court Justice Patrick Boyle wrote a 47 page decision recusing himself from further participation in a matter in which he had previously issued a decision that was now under appeal to the Federal Court of Appeal. He did so on the basis of submissions made by the appellants and, in particular, what he felt were unfair allegations that he had been “untruthful, dishonest and deceitful” in his judgment, and what were “clear untruths” about him (see 2014 TCC 266 (para 4)). Some commentators have suggested that the factum of the appellants was not particularly unusual or out of order (Tax Judge Issues Rare Ruling in Own Defence) while others have suggested it was “unusually aggressive” and contained “ad hominem” attacks (Judge Slams Counsel, then Recuses Himself).

Whatever the ethics of counsel’s conduct, however, Boyle’s decision to engage with the merits of the case in a recusal decision raises its own ethical problems. An article reproduced on the Dalhousie Law school website quotes Professor Brent Cotter as saying “this engagement by the judge raises questions about whether impartiality has been preserved in this case” and quotes lawyer Gavin Mackenzie’s description of Boyle’s reasons as “completely unnecessary” and his suggestion that certain aspects of Boyle’s judgment “can raise a legitimate question about the civility of the judge in this case” (Was Canadian Judge’s Recusal in McKesson Out of Bounds).

The effects of Boyle’s judgment is now before the Federal Court of Appeal, who recently allowed taxpayer’s counsel to amend its grounds of appeal to include the question of whether the reasons for recusal compromised “the appearance and reality of a fair process in this case such that a new trial is necessary” (Notice of Motion). In his decision Justice Stratas said “the recusal reasons, by responding to the appellant’s memorandum of fact and law, depart from the norm. They are a new, material development in this appeal and have become part of the real issues at stake.” (2014 FCA 290 at para 11; see in general: FCA allows taxpayer motion).

  1. The Collapse of Heenan Blaikie

On February 5, 2014 the national law firm, Heenan Blaikie, announced its dissolution. Even though the firm’s economic foundations had been relatively solid, a diminution in partner earnings early in the year led to a “run on the bank” with 30 partners leaving and the firm dissolving soon after. In an article for Legal Ethics in June 2014 Adam Dodek summarized the various explanations offered for the firm’s collapse: “the inability of a mid-tier large firm to compete in the Canadian legal market; the failure of the partnership model; a clash of cultures between the Toronto and Montreal offices; a failure in succession planning, etc. In a bizarre turn, one commentator blamed law schools for Heenan’s fall, apparently on the theory that the market cannot absorb the number of Canadian legal graduates.” ((2014) 17 Legal Ethics 135 at 136). Heenan had also allegedly had internal conflicts in relation to its international practice, and in particular its involvement in transactions in Africa which may have undermined its stability (How Heenan Blaikie’s stunning collapse started with a rogue African arms deal).

From the distance of a few months the broader significance of Heenan’s collapse seems less clear; it may have been a product of broader challenges and issues in the legal services market, but it may also simply reflect pathologies specific to Heenan at that time. A determination of its broader significance perhaps awaits future events.

  1. The LPP Path to Articling

2014 saw the first entrants into Ontario’s new alternate path to articling, the Law Practice Program (LPP). The LPP has been praised as opening up the profession to law school graduates who would otherwise be precluded from practice (see, e.g., The new faces of law school). In 2013 Tom Conway, then Treasurer of the Law Society of Upper Canada suggested that the LPP may be a better form of training than traditional articling, an entirely plausible claim given the dearth of regulation of articling, and of evidence to demonstrate the quality of education it provides (as discussed by Adam Dodek, here).

The LPP has also, however, been subject to criticisms in relation to the significant increase in articling fees associated with the program, the unavailability of student loans for participants and the fact that students are not paid for practicum placements (see e.g., Articling fees and access to justice and Reality bites for LPP students). Some critics, as evidenced by the comments to the article on Articling fees and access to justice, also complain that the LPP is enabling an unjustified expansion in the number of lawyers in Ontario.

As a final note, on December 27 Canada lost a legal icon with the death of Eddie Greenspan. For good and occasionally not so good reasons, Greenspan was an outsized figure in the Canadian profession and in relation to issues of legal ethics. In the casebook I co-edit and co-author he appears in a less positive light from time to time (as the unsuccessful defendant in Stewart v. Canadian Broadcasting Corp, [1997] OJ No 2271 and as the author of a stinging and problematic 1999 National Post editorial directed at Justice Claire L’Heureux-Dubé after her judgment in R v Ewanchuk, [1999] 1 SCR 330). But Greenspan was also an ardent defender of Joe Groia in relation to the Law Society of Upper Canada’s prosecution of Groia for incivility (The horrible crime of incivility) and actively worked to improve the quality of the Canadian legal system, both for his own clients and more generally, as evidenced by his last editorial, published posthumously (Stephen Harpers’ scary crime bluster).

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ABlawg a Runner up for 2014 Clawbie

Wed, 12/31/2014 - 10:05am

The Canadian Law Blog Awards (Clawbies) for 2014 were announced this morning, and ABlawg is very pleased to have been recognized as a runner up in the category of Best Law School/Law Professor Blog. One of ABlawg’s nominees, Paul Daly’s Administrative Law Matters, took the top spot in the category this year. Our colleague Lisa Silver, who teaches criminal law, was also a runner up in the category for her Ideablawg.  And, our colleague John Paul Boyd from the Canadian Research Institute on Law and the Family – also one of our nominees – was recognized in the category of Best New Blogs for his blog Access To Justice in Canada.

We extend our thanks to all of our nominators and the Clawbie selection committee, and our congratulations to all the winners, runners up and nominees.

ABlawg looks forward to continued engagement with our readers in 2015. Happy New Year!

Ensuring Competent Representation: Know What You Don’t Know

Tue, 12/30/2014 - 10:00am

By Alice Woolley

You’ve got to know when to hold ‘em

Know when to fold ‘em

Know when to walk away

And know when to run

You never count your money

When you’re sittin’ at the table

There’ll be time enough for countin’

When the dealin’s done

The Gambler (Don Schlitz; performed by Kenny Rogers)

Being a competent lawyer means knowing your own limits.  Lawyers representing clients in cases for which they do not have the necessary knowledge and skills risk liability in negligence, being found to have provided ineffective assistance of counsel (in a criminal case) and violating the obligations of the codes governing their conduct.  Those codes define the competent lawyer as “recognizing limitations in one’s ability to handle a matter of some aspect of it and taking steps accordingly to ensure the client is appropriately served” (FLS Model Code, Rule 3.1-1(h)).  They further state that a lawyer ought not to take on a matter for which she is not competent and must recognize “a task for which the lawyer lacks competence” (Rule 3.1-2, Commentaries 5 and 6).

How difficult can this be?  Quite, according to some recent media reports.  While the facts as reported are not sufficient to support the conclusion that the lawyers involved acted improperly, they do at least raise the question: given the apparent disconnect between their expertise and their clients’ circumstances, why were these lawyers acting?  And what lessons might we be able to draw to allow lawyers to appreciate when folding ‘em is wiser than holding ‘em?

The first case is the representation of Jian Ghomeshi by two lawyers from the Dentons firm.  As noted here – Why did Ghomeshi hire Dentons? – the lawyers who filed Ghomeshi’s (now withdrawn) civil claim against the CBC were a partner specializing in “commercial litigation and insolvency” and a senior associate “with experience in real estate, employment, defamation and fashion.”  The dubious merits of that claim have been widely discussed (see, e.g., here: Levitt on Ghomeshi).   More concerning, however, is the admission in the Claim that Ghomeshi engaged in “sado-masochism”, an admission Ghomeshi also made in his statement on Facebook (which counsel may or may not have reviewed before it was posted – Ghomeshi FB post).  It is hard to see how either the Claim or Facebook post advanced Ghomeshi’s legal interests and it is quite easy to see how each may ultimately injure those interests given that “when it comes to BDSM – or at least its more intense versions – the law doesn’t actually care about consent.” (See: Cossman on Consent).

The second case arises from a lawsuit brought – ironically enough – against Ghomeshi’s new counsel, Marie Heinen, and another criminal defence laywer, Steve Skurka.  Skurka and Heinen have been sued by their former client Nathan Jacobsen in part because of their representation of him in a US criminal trial.  A December 5, 2014 article in the Globe and Mail noted that Jacobsen’s original guilty plea in the US was struck out, and that his American counsel argued that Jacobsen has received “ineffective assistance of counsel”.  It also reported that in testimony in the US proceeding, Skurka stated “We were hammered by the fact, Ms. Henein and I, by the fact that there were different discovery rules than we had in Canada.” (Globe and Mail, December 5 2014)

Heinen and Skurka are not the first Canadian lawyers to be criticized for their handling of a US criminal case.  Eddie Greenspan’s representation of Conrad Black several years ago was criticized not only by Black, but also by journalists, although the journalists were not necessarily prepared to see Greenspan’s representation as the cause of Black’s problems:  “This wasn’t Eddie Greenspan’s finest hour. But it is stingingly absurd to suggest that Conrad Black was done in by his lawyers. He was done in by the facts.” (E.g., Wells on Black and Greenspan).  It should also be acknowledged that Greenspan worked with US counsel on Black’s representation – in fact, he made the retainer of such a lawyer a condition of his representation (Greenspan on Black)

In each of these cases the lawyer’s (or lawyers’) area of expertise (insolvency and commercial litigation/Canadian criminal law and procedure) deviates from the issues raised by the representation (sex and employment/US criminal law and procedure).  The quality of their representation has been challenged.  So why were the lawyers acting? Why didn’t they refuse the brief?

My guess is that it was not because of ignorance of their legal and ethical duties.  Rather, it was because they did not see any issues with the representation.

One explanation for that (mis)perception may be that the feeling of not being competent is not abnormal for a lawyer.  Most lawyers in the early stages of their career – and some lawyers (and academics!) at later stages of their careers – will feel like they don’t know enough, or have sufficient skill, to be handling the work they have been given to do.  But they persevere, because the work has been given to them and it’s their job to figure out how to do it as best they can.  They trust the senior lawyer to identify any mistakes, or their own hard work and effort to ensure that such mistakes are avoided.  As a consequence, however, lawyers may become somewhat inured to that feeling of incompetence, and less likely to see it as a basis for ethical decision-making.

Another may be that human beings simply tend to think we are better at things than we are.  In one study 94% of university professors rated themselves as above average teachers (here); in another study 88% of drivers reported themselves as above average (here).   Evidence does suggest competent people have better self-assessment in their area of competence than do incompetent people (the Dunning-Kruger effect, summarized here), which might suggest that lawyers ought to know the boundaries of their competence.  But on the other hand, it may suggest the opposite: that it is at the boundaries of our competence, when we are becoming incompetent, that we become the least able to assess our own abilities.  As David Dunning noted in the article linked above, “Logic itself almost demands this lack of self-insight: For poor performers to recognize their ineptitude would require them to possess the very expertise they lack.” It may be at the point where our expertise runs out that we do not know that it has.

A further contributing factor is the fact that while lawyers clearly do specialize we do not treat ourselves as specialists from a regulatory perspective.  We admit all lawyers to legal practice as generalists and we don’t identify them as specialists absent the satisfaction of certain criteria (and even that only occurs in some jurisdictions). This may create a perception amongst members of the bar that they have general competence, that their competence is not limited to their area of specialization. As a result lawyers may be more willing to practice outside of their specialty than are, say, doctors; one can’t really imagine a dermatologist being willing to practice occasionally as a neurosurgeon, or a neurosurgeon deciding to dabble in skin cancer detection.

If this is the case, then how might a lawyer avoid overreaching into areas where she lacks the necessary competence?  One way is to view oneself as a specialist and to know what that specialty is. The specialty may not be an area of law – lawyers practicing in smaller communities and litigators often deal with a variety of legal questions.  But it may be that all one’s clients are individuals; the cases are small; they don’t involve issues of crime or sex; they all occur within Canada.

And if a case is outside of her area of specialty, then the lawyer ought to presume that she is not competent to deal with it, and also be aware that she is far more likely to mistakenly believe that she is competent than to mistakenly believe that she is not.  That, most significantly, the lawyer may not even know the risks to her client that her lack of knowledge and experience in the area presents, because she doesn’t know enough about the governing law and procedures to know the dangers.  A lawyer who, e.g., never practices in areas touching on criminal law simply will not appreciate that an admission of certain sexual practices may indicate guilt regardless of consent.  This does not mean that the lawyer cannot be involved in such a case, but it does suggest that the lawyer ought not to act as sole and senior counsel on it.  Rather, the lawyer should be involved in a junior or supporting role in the case or, if acting as senior counsel, should ensure that there is supportive expertise provided by someone with the knowledge and competence the lawyer acts.

This post originally appeared on Slaw.

All I Want for Christmas is the Justification for Shell Jackpine

Tue, 12/23/2014 - 9:00am

By: Martin Olszynski

PDF Version: All I Want for Christmas is the Justification for Shell Jackpine

Case Commented On: Adam v Canada (Environment), [2014] FC 1185

On December 9, 2014, the Federal Court rendered its decision in Adam v. Canada (Environment). Chief Allan Adam, on his own behalf and on behalf of the Athabasca Chipewyan First Nation (ACFN), challenged two federal government decisions pursuant to the Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52 (CEAA) in relation to Shell Canada’s proposed Jackpine oil sands mine expansion project. The first was the Governor in Council’s (GiC) determination pursuant to section 52(4) that the project’s anticipated significant adverse environmental effects are “justified in the circumstances.” The second was the Minister’s “Decision Statement” pursuant to section 54, which contains the conditions subject to which the project may proceed. In a decision that reads somewhat tersely but that also covers a lot of ground, primarily Aboriginal consultation and division of powers issues, Justice Tremblay-Lamer dismissed the ACFN’s challenge. This post – the first of what will likely be a series – focuses on the first challenged decision: the GiC’s determination that the project’s significant adverse environmental effects are justified.

As I noted when the Joint Review Panel (JRP) report for Shell Jackpine was first released back in the summer of 2013, this was the first time that a JRP concluded that an oil sands project was likely to result in significant adverse environmental effects:

[9] The Panel finds that the Project would likely have significant adverse environmental effects on wetlands, traditional plant potential areas, wetland-reliant species at risk, migratory birds that are wetland-reliant or species at risk, and biodiversity. There is also a lack of proposed mitigation measures that have been proven to be effective. The Panel also concludes that the Project, in combination with other existing, approved, and planned projects, would likely have significant adverse cumulative environmental effects on wetlands; traditional plant potential areas; old-growth forests; wetland-reliant species at risk and migratory birds; old-growth forest reliant species at risk and migratory birds; caribou; biodiversity; and Aboriginal traditional land use (TLU), rights, and culture.  Further, there is a lack of proposed mitigation measures that have proven to be effective with respect to identified significant adverse cumulative environmental effects.

The effect of all of this was that before the project could proceed, the GiC (i.e. the federal cabinet) had to determine that these effects were “justified in the circumstances” pursuant to section 52. This the GiC did, or at least purported to do. As I noted here, the GiC never actually provided any justification. Rather, and in contrast to the detailed justification provided for the Lower Churchill Hydroelectric project (a project also found likely to result in significant adverse environmental effects), the Shell Jackpine ‘Decision Statement’ simply stated that “[in] accordance with paragraph 52(4)(a) of CEAA 2012 the Governor in Council decided that the significant adverse environmental effects that the Designated Project is likely to cause, are justified in the circumstances.”

The ACFN challenged this aspect of the GiC’s decision from a consultation perspective, arguing that as a consequence the process lacked transparency (at para 28). The federal government responded that “the Minister’s advice to Cabinet and the reasons for Cabinet’s decision are confidential; the ACFN had no right to disclosure” (at para 34). The Federal Court agreed with the government:

[79] …The applicant was not entitled to disclosure of the Minister’s advice to Cabinet: as they acknowledge, the Minister properly asserted privilege (Canada Evidence Act, RSC 1985, c C-5, s 39(2)). Furthermore, the duty to consult is determined by the actions that Canada took during the consultation process, not by what the Governor in Council may have considered.

[80] This Court could draw an adverse inference if the Crown selectively disclosed only those documents that favoured its position (Babcock v Canada (AG), 2002 SCC 57 (CanLII) at para 36, [2002] 3 SCR 3), which cannot be said of the present case. No adverse inference can stem from the Crown’s exercise of privilege.

[81] Nor did the Crown have to justify to the ACFN the Cabinet’s decisions on the Project (Babcock at paras 21–27). The applicant cites no authority in support of their purported right to such justification. The duty to consult obliged the Crown to justify its rejection of the ACFN’s position but not to disclose the explanation that it gave to the Cabinet for recommending approval of the Project (West Moberly First Nations v British Columbia (Chief Inspector of Mines), 2011 BCCA 247 (CanLII) at para 148, 333 DLR (4th) 31) (emphasis added).

I haven’t seen the pleadings so it’s hard to know where things went sideways here, but it appears that there was some confusion between the confidential deliberations of Cabinet, which are indeed privileged, and the “justification” (i.e. explanation) required by the Act. The authority for that latter proposition is the Federal Court of Appeal’s very recent decision in Council of the Innu of Ekuanitshit v. Canada (Attorney General), 2014 FCA 189 (CanLII), another case involving a challenge to a CEAA justification decision (for the previously mentioned Lower Churchill hydroelectric project). As I noted here, the Court of Appeal held that a CEAA justification is reviewable in order to ensure that the government complied with the Act:

[40] …the Court will only intervene with the [Governor in Council’s] and Responsible Ministers’ decisions…if it finds that: … 2) the GIC or Responsible Ministers’ decisions were taken without regard for the purpose of the CEAA; or 3) the GIC or Responsible Ministers’ decisions had no reasonable basis in fact; which is tantamount to an absence of good faith.

Without any reasons or explanation, it is not possible to determine whether the GiC had regard for the CEAA’s purposes, the duties imposed on it pursuant to section 4 (to “exercise [it’s] powers in a manner that protects the environment and human health and applies the precautionary principle”), or that the decision had a reasonable basis in fact.

Even the federal government seemed to appreciate the implications of the Innu of Ekuanitshit decision for this part of CEAA, as evidenced from the circumstances surrounding the release of its response – soon thereafter – to another project recently deemed likely to result in significant adverse environmental effects, the Site C dam. Although the Decision Statement for that project is as sparse with respect to justification as was the one for Shell Jackpine, the same day that it was released the Minister of Environment also released a “statement outlining the [GiC’s] determination” that Site C’s environmental effects are justified in the circumstances:

The Site C project, which has been proposed by BC Hydro and Power Authority, underwent a thorough independent federal-provincial review by an independent panel. This process included extensive, meaningful and respectful consultations with the public and Aboriginal groups. The environmental assessment process provided the scientific and technical expertise and the effective engagement of the public and Aboriginal groups to enable an informed decision by both governments.

The proposed Site C project is an important one for British Columbia and for Canada as it will support jobs and economic growth while providing clean, renewable energy over the next 100 years. The Site C Clean Energy Project will translate into about 10,000 direct person-years of employment from now until 2024 and when indirect and induced jobs are added in, that figure climbs to 29,000 person-years of employment.

This decision will benefit future generations. Over the life of the project, Site C is expected to help mitigate the growth in greenhouse gas emissions in Canada by preventing the discharge of between 34 to 76 megatonnes of CO2 equivalent.

In the Decision Statement that I released today, there are over 80 legally binding conditions that must be fulfilled by the proponent, BC Hydro, throughout the life of the project in compliance with the Canadian Environmental Assessment Act, 2012. Failure to meet these conditions is a violation of federal law (emphasis added).

Several questions went through my mind when I first read this statement back in October. The first was whether similar explanations accompanied the Decision Statements for Shell Jackpine or Enbridge’s Northern Gateway. I checked and couldn’t find any. My second question was to consider whether such a statement, “outlining the GiC’s determination,” was sufficient for the purposes of verifying compliance with CEAA’s purposes and duties and for enabling the primary form of accountability intended here, which is to say political.

Obviously, the Site C “justification” is light on details. It doesn’t speak to the majority of concerns raised by those opposed to it, e.g., that it appears unnecessary from an energy perspective, that there are other less environmentally harmful alternatives potentially available, such as geothermal, and that it will have a significant impact on Aboriginal and Treaty rights in the area. But there is one thing that Site C undeniably has going for it from a CEAA perspective, something that the only other project to come with a real justification (Lower Churchill) also has going for it and which makes both projects entirely different from Shell Jackpine: the promise of positive environmental effects in the form of reduced greenhouse gas emissions. It is at least arguable that Site C’s approval is consistent with taking “actions that promote sustainable development in order to achieve or maintain a healthy environment and a healthy economy” (CEAA, at para 4(1)(h)).

Shell Jackpine? Not so much. In my view, CEAA requires, and Canadians – especially the ACFN – deserve to know why or how this project is “justified in the circumstances,” circumstances which include the destruction of “a large part of the ACFN’s traditional lands” with harm that “is potentially irreversible or has not been mitigated through means of proven efficacy” (Adam, at para 71).

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Two Alberta Perpetuities Stories

Fri, 12/19/2014 - 9:00am

By: Nigel Bankes

PDF Version: Two Alberta Perpetuities Stories

Matters Commented On: Bill 8, Justice Statutes Amendment Act and Gottlob Schmidt’s donation to the province of Antelope Provincial Park

This post covers two matters. The first is the amendment to the Perpetuities Act, RSA 2000, c. P – 5 enacted as part of Bill 8, the omnibus Justice Statutes Amendment Act which received third reading on December 9th and Royal Assent on December 17th. The second relates to a story carried in the Calgary Herald about Gottlob Schmidt’s generous donation to the province of a block of land for parkland purposes.

Section 9 of Bill 8, the Justice Statutes Amendment Act provides that

(2) The following is added after section 22 [of the Perpetuities Act]:

Rule against perpetuities not applicable to qualifying environmental trusts

22.1(1) In this section, “qualifying environmental trust” means a qualifying environmental trust as defined in section 1(2)(g.011) of the Alberta Corporate Tax Act.

(2) The rule against perpetuities does not apply to a qualifying environmental trust created after December 31, 2013.

The definition of a qualifying environmental trust (QET) is complex since it involves reference not only to the Alberta Corporate Tax Act, RSA 2000, c.A-15 but also to the QET provisions of the federal Income Tax Act, RSC 1985 (5th supp.), c 1. The basic idea of a QET is that it is a trust that is established to meet reclamation obligations principally in the natural resources sector. This amendment to Alberta’s Perpetuities Act became necessary (or at least desirable) as a result of the National Energy Board’s consideration of the need to make provision for the reclamation obligations of operators of federally regulated pipelines.

In its report, Reasons for Decision, Set Aside and Collection Mechanisms: Pipeline Abandonment –Financial Issues, issued in May 2014, the NEB made decisions about the types of financial mechanisms that it would accept to ensure that regulated companies would have adequate funds in place to pay for pipeline abandonment out into the future. While the Board generally supported the use of QETs as a tax efficient mechanism for achieving this goal, it also noted that any such trusts would need to take account of the applicable perpetuities rules of the relevant jurisdiction. This might, for example, involve commitments to re-settle QETs before the expiry of any perpetuity period in a “wait-and-see” jurisdiction, or it might involve some jurisdiction shopping to establish the trust in a jurisdiction like Manitoba that has abolished the rule (although the Board noted (at 32) that a settlor’s choice of law would not always be determinative). However, the Board also noted (at 33) that “Enbridge argued that there is the potential that Alberta will abolish the rule against perpetuities. The Board expects that Enbridge is working to achieve this goal in view of its submissions.”

In sum, the current amendment is a response to the concerns identified. Hansard for December 1, 2014 (at 217) records that the amendment was sought by the Canadian Energy Pipeline Association on behalf of its members. The amendment is designed to provide greater certainty for those seeking to establish QETs in Alberta to provide for pipeline abandonments costs. It will make Alberta a more attractive jurisdiction for this purpose since the inapplicability of the rule means that the settlor will be able to avoid the complexity associated with the need to re-settle funds before the end of the perpetuity period.

The second story which caught my attention was carried in the Calgary Herald on December 6th, referring to a generous donation of land by Gottlob Schmidt of native grasslands for the creation of Antelope Hill Provincial Park. What caught my attention was the statement in the story that “The donation from Schmidt comes with the requirement that the province ‘preserve the land in its natural state for future generations to enjoy.’” Now I don’t know how Schmidt actually structured this gift but this language does ring some alarm bells because of changes made to the perpetuity rules in Alberta in 1972 (effective 1973).

As everybody knows, perpetuities reform in Alberta introduced the idea of “wait-and-see” to Alberta’s perpetuities rules as a result of which most contingent gifts will be saved: Perpetuities Act, ss. 2- 4. But the perpetuity reformers of that era (see Institute of Law Research and Reform, Report No. 6, Report on the Rule Against Perpetuities, August 1971) also changed the law on the age old distinction between determinable estates and estates subject to a condition subsequent.

In the pre-Act days it would have been easy to advise Mr. Schmidt as to how to structure this transaction to make it stick for the benefit of future generations. The advice would have been to structure the gift as the grant of a fee simple determinable, i.e. “for so long as the land is maintained in its natural state”. That would have left Mr. Schmidt and his heirs with a possibility of reverter and in the pre-Act days that possibility of reverter was not subject to the common law rule: Village of Caroline v Roper (1987), 82 AR 72 (QB). But the Act changed all of that.

Section 19 made three changes to the common law rules on the distinction between determinable estates and estates subject to a condition subsequent. First, s.19 says that the distinction between the two is abolished for perpetuities purposes. Hence, both the possibility of reverter and the right of re-entry are subject to the rule. Second, the result of making both interests subject to the rule is that if the contingent event has not come about during the perpetuity period, the right of re-entry or the possibility of reverter is henceforward void, i.e. in this example, the province’s title becomes an absolute fee simple shorn of the private law obligation to maintain the property in its natural state. The result of these two changes is that Mr. Schmidt can no longer structure the deal to benefit future generations but can only structure it to achieve this result as a matter of private law for the perpetuity period. And so third, what is the perpetuity period for this purpose? Well the normal rule under the Act is the (statutory) lives in being plus 21 years for non-commercial transactions (see s. 5) or 80 years for commercial transactions (s.18) – but in the case of s.19 the perpetuity reformers recommended a very short period of 40 years.

The Institute’s Report argued as follows (at 56):

We assume that the distinction between a determinable fee and a right of entry applies in Alberta though we know of no case on the subject; and indeed there may be doubt whether either type of interest is registerable under the Land Titles Act. In any case we think it advisable to deal with them. Morris and Leach (209-218) think that both types of interest should be treated in the same way. The next question is whether they should both be within the Rule or outside it. Both England (s. 12) and Ontario (s. 15) have brought determinable fees within the Rule. On balance we agree with this policy. The determinable fee, like a right of re-entry creates a cloud on the title and it may remain indefinitely in favour of some one who can be identified only with difficulty.

The Institute gave a similar reason (at 57 – 58) for preferring the shorter period of 40 years as the relevant perpetuity period, namely the difficulty of tracing the person entitled to benefit from the condition or limitation.

The short answer to this may of course be that it is not up to the grantee (the Province in our example) to trace anybody. It is up to an interested grantor (or his or her successors) to take the initiative if the “possibility” comes about. If they are not interested then that is likely the end of the story. In any event, 40 years does seem a very short period when considered in the environmental context of protecting land and biodiversity values for future generations.

We have seen some piecemeal reform of the Perpetuities Act in the last couple of years to respond to concerns of mineral owners (see the new s.19(5)) and my post on the background to this amendment) and now of pipeline companies (and the landowners who will benefit from perpetual QETs). If we are to engage in a more comprehensive review of the perpetuities legislation then it might be appropriate to revisit the policy behind this particular change that was made in 1972 and ask whether we really want to prevent somebody from trying to ensure that land donated for public purposes will continue to be used for those purposes for more than just a 40 period.

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The Supreme Court’s Other Opportunity to Revisit Adverse Effects Discrimination under the Charter: Taypotat v Taypotat

Thu, 12/18/2014 - 9:00am

By: Jennifer Koshan and Jonnette Watson Hamilton

PDF Version: The Supreme Court’s Other Opportunity to Revisit Adverse Effects Discrimination under the Charter: Taypotat v Taypotat

Case Commented On: Taypotat v Taypotat, 2012 FC 1036; rev’d 2013 FCA 192; leave to appeal to SCC granted 2013 CanLII 83791 (SCC)

A few weeks ago we wrote a post on Carter v Canada (Attorney General), 2012 BCSC 886, rev’d 2013 BCCA 435, leave to appeal to SCC granted 2014 CanLII 1206 (SCC), predicting what the Supreme Court might decide on the issue of whether the prohibition against assisted suicide amounts to adverse effects discrimination against people with disabilities, contrary to section 15(1) of the Charter. We mentioned that Carter is one of two adverse effects cases currently before the Supreme Court. This post will consider the second case, Taypotat v Taypotat.

Taypotat concerns a community election code adopted by the Kahkewistahaw First Nation in Saskatchewan to govern elections for the positions of Chief and Band Councillor. The adoption of the code was controversial and took a number of ratification votes, stemming in part from the fact that it restricted eligibility for these elected positions to persons who had at least a Grade 12 education or the equivalent. Although he had previously served as Chief for a total of 27 years, the Kahkewistahaw election code excluded 74 year old Louis Taypotat from standing for election because he did not have a Grade 12 education. He had attended residential school until the age of 14 and had been assessed at a Grade 10 level. His nephew, Sheldon Taypotat, was the only eligible candidate for Chief, and he won the election by acclamation. In an application for judicial review, Louis Taypotat challenged the eligibility provision and the election results under section 15(1) of the Charter.

At the Federal Court hearing, Taypotat argued that the election code’s education requirement discriminated on the basis of educational attainment, a ground he argued to be analogous to race and age (2012 FC 1036 at para 54). The Federal Court rejected this argument, finding that no evidence had been led to support the inclusion of educational level as an analogous ground, and that “educational level is not beyond an individual’s control” (at para 58). Taypotat also argued that the education requirement adversely impacted older band members and residential school survivors. The Federal Court found that requirements based on education relate to “merit and capacities” and were therefore “unlikely to be indicators of discrimination, since they deal with personal attributes rather than characteristics based on association with a group” (at para 49). The Federal Court saw no evidence of adverse effects discrimination on the basis of age or race, and dismissed the claim (at para 60).

On appeal, Taypotat’s arguments focused on the adverse effects claim based on the grounds of age and Aboriginality-residence. The Federal Court of Appeal noted that in the Supreme Court’s most recent equality rights decision at the time, Quebec v A, the Court had reaffirmed the application of section 15(1) to laws with discriminatory effects (2013 FCA 192 at para 47, citing Quebec v A, 2013 SCC 5, [2013] 1 SCR 61 at para 171). It also relied on Quebec v A for the point that neutral laws can inadvertently perpetuate stereotypes and disadvantage:

Laws may be adopted that unintentionally convey a negative social image of certain members of society. Moreover, laws that are apparently neutral because they do not draw obvious distinctions may also treat individuals like second-class citizens whose aspirations are not equally deserving of consideration. (at para 55, citing Quebec v A at para 198).

Applying these principles and the test for discrimination from R v Kapp, 2008 SCC 41, [2008] 2 SCR 483 and Withler v Canada (Attorney General), 2011 SCC 12, [2011] 1 SCR 396, the Federal Court of Appeal found that while the education requirement did not directly engage a protected ground under section 15(1), it resulted in adverse effects discrimination based on the enumerated ground of age and the analogous ground of Aboriginality-residence (at para 45).

The first step of the Kapp/Withler test requires analysis of whether the election code created a distinction based on a protected ground. The Court referred to evidence submitted by Taypotat showing a deficit in education levels for on-reserve Aboriginal peoples in Canada, as well as an education gap between older and younger Canadians generally and on First Nations reserves specifically (at para 48, citing John Richards, “Closing the Aboriginal non-Aboriginal Education Gaps,” C.D. Howe Institute Backgrounder 116 at 6). In addition, the Court took judicial notice of “readily available census information” from 2006, which provided supporting evidence of these gaps on the basis of age and Aboriginality-residence (at para 49). Support for this approach was found in Justice LeBel’s judgment in Quebec v A, where he took judicial notice of the proportion of couples living in de facto unions by relying on census data (at para 51, citing Quebec v. A at paras 125 and 249). Based on this evidence, the Federal Court of Appeal concluded that the election code’s education requirement “disenfranchise[d] … a disproportionate number of elders and on-reserve residents” (at para 52). As a result, the election code created a distinction “which has the effect of targeting segments of the membership of the First Nation on the basis of age and of Aboriginality-residence” (at para 56). The requirement of a distinction based on protected grounds was thus made out.

The challenged provision of the election code also satisfied step two of the Kapp/Withler test, which considers whether the distinction is discriminatory. The Court found that denial of an opportunity for election to Band Council, a fundamental social and political institution, “substantially affect[ed] the human dignity and self-worth” of persons such as Louis Taypotat, amounting to prejudice (at para 56). The education requirement also perpetuated stereotyping because it did not “correspond to the actual abilities of the disenfranchised to be elected and to occupy public office” (at para 58). The Court found that “[e]lders who may have a wealth of traditional knowledge, wisdom and practical experience, are excluded from public office simply because they have no “formal” (i.e. Euro-Canadian) education credentials. Such a practice is founded on a stereotypical view of elders” (at para 60).

Under section 1 of the Charter, the Court held that although the education requirement sought to “address the lack of education achievement among aboriginal peoples by encouraging them to complete their secondary education” (at para 60), and thus had a pressing and substantial objective, there was no rational connection between that objective and “the disenfranchisement of a large part of the community from elected public office” (at para 62). The relevant provision of the election code was declared unconstitutional and invalidated, and new elections were ordered without the education requirement (at para 66). Louis Taypotat was re-elected Chief of the Kahkewistahaw First Nation following this judgment (Taypotat, Factum of the Respondent (Supreme Court of Canada), para 28).

The Federal Court of Appeal decision confirms the point that not all members of a particular group need to be adversely affected in order for adverse effects discrimination to be made out (at paras 52-53). The fact that the claimant — an elder who was a residential school survivor residing on a First Nations reserve — was a member of a group widely acknowledged to be especially vulnerable likely facilitated this finding.

The Court of Appeal also appeared unfazed by the holding in Withler that adverse effects discrimination will be more difficult for claimants to prove (Withler at para 64). However, this was one of the more contentious issues in the hearing of the Taypotat appeal before the Supreme Court. The Appellants (Chief Sheldon Taypotat and Council representatives of the Kahkewistahaw First Nation) argued that the evidentiary sources relied upon by the Court of Appeal were too generalized, and did not speak to the particular situation of their community (Taypotat, Factum of the Appellants (Supreme Court of Canada), paras 86, 88). Respondent’s counsel was asked several questions about the evidentiary basis for his client’s claim by members of the Supreme Court during the oral hearing, and responded that Louis Taypotat had attested to the specific impact of the education requirement on older residents of the Kahkewistahaw First Nation (Webcast of the Taypotat Hearing (2014-10-09)).

Evidentiary issues have undermined several adverse effects cases at the Supreme Court level: see e.g. Symes v Canada, [1993] 4 SCR 695; Thibaudeau v Canada, [1995] 2 SCR 627; Health Services and Support – Facilities Subsector Bargaining Assn v British Columbia, 2007 SCC 27, [2007] 2 SCR 391. Nevertheless, the Federal Court of Appeal’s acceptance of statistical evidence in Taypotat does align with the approach in Withler, which discussed the desirability of bringing forward evidence of historical or sociological disadvantage (Withler at para 64).

Another argument made by the Appellants at the Supreme Court is that the education requirement goes to the merits of election candidates and is a personal attribute they can attain if they choose (Taypotat, Factum of the Appellants at para 69). This point was emphasized in the Appellants’ presentation of oral argument, which raised questions from members of the Court about whether choice is still a relevant consideration under section 15(1). This issue arises from the Court’s ruling in Quebec v A, where a majority indicated that the state’s support of freedom of choice (of marital status in that case) was not pertinent until the section 1 analysis (Quebec v A at paras 334-338). Questions were also asked by members of the Supreme Court about whether Louis Taypotat’s lack of education could actually be attributed to choice. We suggest that choice should not be a relevant consideration in section 15(1) claims, and that it is refuted on the facts of a case involving residential school survivors such as Taypotat in any event.

Several members of the Supreme Court also questioned whether the education requirement reflected “arbitrary disadvantage” based on age. We would argue that, similar to choice, arbitrariness is a consideration relevant under section 1 of the Charter, not under section 15(1). Incorporating such questions under section 15(1) presents particular problems for adverse effects discrimination claims because arbitrariness focuses on the purpose rather than effects of the law. Even if a requirement such as educational level is intended to address the merits of election candidates, and is not arbitrary in that sense, it may still disproportionately impact older persons resident on First Nations reserves in an adverse way. The rationality and justifiability of that impact should be addressed under section 1 of the Charter, not section 15(1).

Nor is it appropriate to consider the merit-based purpose of the education requirement under section 15(2) of the Charter, as the Appellants urged the Court to do (Taypotat, Factum of the Appellants at para 102ff). Section 15(2) allows governments to “save” ameliorative laws and programs that would otherwise be discriminatory under section 15(1) (see Alberta (Aboriginal Affairs and Northern Development) v. Cunningham, [2011] 2 SCR 670, 2011 SCC 37 at para 41). Section 15(2) is not relevant in adverse effects cases because by definition they involve neutral rules rather than benefit programs targeted at disadvantaged groups, which are the proper subject of section 15(2). In any event, section 15(2) should not preclude claims where, even though adopted for an ameliorative purpose, a law has discriminatory adverse effects on a group protected under section 15(1) (see Jonnette Watson Hamilton and Jennifer Koshan, “The Supreme Court of Canada, “Ameliorative Programs, and Disability: Not Getting It” (2013) 25 CJWL 56, available here).

We predicted that the Supreme Court may avoid the section 15(1) argument in Carter and decide the case under section 7, but the option of deciding the claim on another Charter right is not available in Taypotat. The case thus presents an important opportunity for the Court to clarify the law on adverse effects discrimination, and we eagerly await its decision.

This post is based on a paper that is forthcoming in the Review of Constitutional Studies, available on SSRN.

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Imposing Limits on the Public’s Right to Access Transit Services: Is the Alberta Court of Appeal’s Train of Thought in the Case of R. v. S.A. on the Right Track?

Tue, 12/16/2014 - 11:55am

By: Ola Malik and Sarah E. Hamill

PDF Version: Imposing Limits on the Public’s Right to Access Transit Services: Is the Alberta Court of Appeal’s Train of Thought in the Case of R. v. S.A. on the Right Track?

Case Commented On: R. v. S.A., 2014 ABCA 191, leave denied December 11, 2014 (SCC)

The trilogy of decisions in R. v. S.A. discusses the limits that may be placed on the public’s right to access transit services. Initially, S.A.’s Charter arguments succeeded at trial (2011 ABPC 269 (SA (ABPC)), but she lost the subsequent appeal at the Court of Queen’s Bench (2012 ABQB 311 (SA (ABQB)) and, after having been granted leave from that decision to the Court of Appeal (2012 ABCA 323 (SA (leave application)), she ultimately lost at the Court of Appeal (2014 ABCA 191 (SA (ABCA)). On December 11, 2014, the Supreme Court of Canada denied leave to appeal. This decision has been the subject of previous posts on ABlawg here, here, and here.

In R. v. S.A., a thirteen year old girl was issued a Notice Not to Trespass under Alberta’s Trespass to Premises Act, RSA 2000, c T-7 (TPA) after she assaulted another youth at a train station. She was subsequently convicted of that offence. Edmonton Transit Service (ETS) issued the Notice, and banned S.A. from being on any ETS property for a period of 6 months. Although not obvious from the text of the Notice, it could be modified on application by the affected party to allow access to public transit for specified purposes and times, such as to attend school. With the help of a youth worker, S.A. sought, and was granted those modifications for certain hours during the week. S.A. was not ticketed on occasions where she used transit to travel to school, appointments, or for other “legitimate” purposes. She admitted to using ETS property on occasions which were subject to the ban. Several months following the issuance of the Notice, S.A. was found on ETS property and was charged with trespass under the TPA.

S.A. brought a Charter challenge asserting that the Notice unjustifiably infringed upon her section 7 Charter rights by:

  • Preventing her from accessing places to which the public was generally permitted or invited to be;
  • Impairing her ability to make meaningful choices going to her personal autonomy, contrary to her section 7 Charter rights; and
  • Violating her liberty in a manner that was contrary to the principles of justice, because the Notice was overbroad and did not allow for a proper review process.

The S.A. case raises important public policy questions for any municipality and, in what follows, we examine four of the key issues. The first issue is whether or not trespass legislation should apply to public property. Should a municipality have the power to exclude someone from accessing public transit property like a bus or subway station? The second issue is related to the first and is whether or not a transit ban affects personal autonomy in cases where a banned individual cannot access or afford other methods of transport. The third issue is how much deference courts should show to a municipality’s process with respect to such bans. The fourth issue is how to balance the rights of transit passengers to a safe transit environment with the rights of banned users to access essential public services. With respect to the fourth issue, we discuss Justice Bielby’s dissent at the Court of Appeal because we believe she provides useful, practical suggestions on how a municipality might craft a constitutional ban.

Is it appropriate to apply Trespass to Premises legislation to public property?

At trial, S.A. argued that the Notice engaged her section 7 rights because it banned her from accessing public property to which the public otherwise had a right of access. During the Occupy protests of 2008, one of the issues before various courts was the constitutionality of bans issued against protesters pursuant to trespass to premises legislation. That question was never satisfactorily settled until the S.A. case (for decisions in which trespass to premises legislation has been used, see Weisfeld v R, [1995] 1 FC 68; R v Semple, 2004 ONCJ 55; R v Breeden, 2009 BCCA 463; Vancouver (City) v O’Flynn-Magee, 2011 BCSC 1647; and Batty v Toronto (City), 2011 ONSC 6862). The Crown argued that no such breach of S.A.’s section 7 rights had occurred because the TPA applied to all property, whether owned by a private landowner or by government, to which the public had a general invitation and right to attend.

The trial judge, Judge Dalton, reviewed the common law of trespass and concluded that the concept of trespass only applied in the context of privately-held ownership over lands. She found S.A.’s case to be readily distinguishable given that it was one in which a municipality was seeking to ban a member of the public from accessing public property specifically made available for public use (SA (ABPC) at paras 69-88). Judge Dalton concluded that while the TPA might properly reflect the common law as it pertained to the unlimited right of control exercised by a landowner over his or her private property, applying these same powers in respect of public property “…is not commensurate with modern conceptions of public goods and public property.” (SA (ABPC) at para 90).

In Judge Dalton’s view, limiting the applicability of the TPA to privately owned lands:

…accords better with a modern understanding of public property and a citizen’s right vis-a-vis that property in a liberal democracy. An absolute right to exclude persons from public property is inimical to the very notion of public property. The trespass paradigm proposed by the Crown…is, in my view, an antiquated conception that is neither borne out in the context of emerging social mores nor in the jurisprudence. (SA (ABPC) at para 91)

Consequently, Judge Dalton found that the TPA was unconstitutional as it applied to public property and declared the TPA of no force and effect as against S.A.

While Judge Dalton was ultimately overturned on appeal, her comments are nevertheless instructive and raise important questions of public policy. The TPA only applies to trespassers but the act’s definition of “trespasser” which is set out at section 1(f) as “a person who commits a trespass under this Act” does not really clarify what, exactly, a “trespasser” is. In the case of private property, you’re a trespasser if you don’t have the owner’s permission to be on their property. Defining trespass on public property is more of a challenge because the public has an invitation and implied right to be there. The justifying factor for excluding the public seems to depend on the activity which the alleged trespasser is engaged in. The challenge is to establish a clear dividing line between behaviour which is so inimical to the use of the public property in question that it would justify banning someone as a trespasser, and non-offensive conduct which would not. How would a potential “trespasser” know where that dividing line falls, and whose responsibility is it to draw this line — the legislature’s, the courts’, or the property owner’s?

On appeal, Justice Binder of the Court of Queen’s Bench reversed Judge Dalton’s findings. Although most of his judgment focused on whether S.A.’s section 7 rights had been infringed, he also held that while ETS Property was property on which the public was ordinarily entitled to be, public transit property is unique in the purpose which it serves (R v SA (ABQB) at paras 88-89). He noted that users of public transit find themselves in “confined spaces with limited opportunities to exit in the event that they are exposed to violence” (SA (ABQB) at para 90). He recognized that public carriers have an obligation to keep other transit users safe and found that S.A.’s violent behavior justified a ban. He further recognized that there was no constitutional bar to prevent the TPA from applying to public property. Rather, it was the use of the TPA by public bodies which was potentially unconstitutional (SA (ABQB) at para 85).

Justice Binder’s point is an important one because it reminds us that not all public spaces are created equal and so rights of access will differ. Banning someone from attending a municipal park, for example, is a very different proposition than banning someone from the atrium of City Hall, judge’s chambers, or a Fire Hall (For more on this line of thinking, see the Breeden decisions: 2007 BCPC 79, aff’d 2007 BCSC 1765, aff’d 2009 BCCA 463).

Justice Binder is not the first to point out that the function of a public place is important, as the majority of the Supreme Court of Canada did the same in Committee for the Commonwealth of Canada v Canada (Committee for the Commonwealth of Canada v Canada, [1991] 1 SCR 139 at 156-158). In that case, a majority concluded that expressive activity carried out on government-owned property on which the public is ordinarily entitled to be would engage Charter protection if the primary function of that space is compatible with free expression and if expressive activity in such a place serves the values underlying the free speech guarantee. In contrast, expressive activity undertaken on government-owned property which has a private use aspect to it or is a place of official business would likely not attract Charter protection because of its disruptive and negative impact on the orderly conduct of business.

The majority of the Alberta Court of Appeal in S.A. (Justices Côté and O’Ferrall) agreed with Justice Binder’s observations that it is the intended purpose or function of public property which matters rather than the mere fact that it is made available to the public. The majority emphasized that, unlike a municipal park which is designed to accommodate public idling and a range of other activities such as “…camping, selling wares, partying or sleeping”, subway stations are “public” spaces with a very specific design and purpose: that of transporting a high volume of people at high speeds ((SA (ABCA) at paras 101, 98; note however that camping is banned in some public parks: Sarah Hamill, “The Charter Right to Rudimentary Shelter in Victoria: Will it Come to Other Canadian Cities?” (25 March 2010), Centre for Constitutional Studies).

In fact, the majority held that the TPA was merely the machinery through which breaches of the Edmonton Transit Bylaw could be enforced or addressed. The power to exclude S.A. from ETS Property did not derive from any powers granted by the TPA, but came from the Transit Bylaw, which banned certain conduct on transit property and arose out of the common law of common carriers (SA (ABCA) at paras 65-81). Common carriers have a longstanding obligation to keep the travelling public safe and this obligation includes the duty to prevent “physical injuries of any kind including injury from the acts of other passengers” (SA (ABCA) at para 76).

Given that the power to exclude the public derived from breaches of the Transit Bylaw or out of the common law of common carriers, the majority held that there was no basis for challenging the constitutionality of the TPA. If a Charter challenge should have been brought at all, the majority thought it should have been directed at the Transit Bylaw rather than the TPA (SA (ABQB) at paras 33-41). Moreover, given that the TPA did not contain special rules for public property, the majority concluded that the legislature must have intended that it apply generally, whether to public or private property. In respect of public property, the majority held that permission, once given for public access, could always be revoked. Consequently, someone who engages in activities which are inconsistent with the purpose for which transit property exists or who otherwise engages in behaviour which threatens the health and safety of other users, could properly be subject of a ban under trespass to premises legislation (SA (ABQB) at para 105).

Does banning someone from using transit property impair their ability to make meaningful choices which go to their personal autonomy?

The next question was whether the Notice engaged S.A.’s liberty rights by precluding her from exercising those life choices which lie at the heart of her individual dignity and personal autonomy. Put differently, what impact does a ban on using transit property have on the lives of people who do not have alternative means of transportation to get to work, medical, family appointments, recreational activities or other day-to-day activities? This is a fascinating public policy question and, as far as we know, has not been dealt with elsewhere.

Having heard from several young people called as witnesses and an outreach worker, Judge Dalton held that access to transit was a critical component for allowing people to exercise those basic choices which lie at the core of section 7. She noted that access to public transit is “the means by which those basic choices can be expressed” and that the “old, the young and the poor … are most affected” by transit bans (SA (ABPC) paras 146 and 148). In her view, the freedom to make the choices at the heart of the section 7 right “is an empty one indeed when one does not have the means to reify those choices”:

…In a city the size of Edmonton, goods and services are scattered about and not all within walking distance of home, particularly in a climate as intemperate as Edmonton’s. People need transportation to go to school, to go to work, to buy groceries, to visit the doctor or hospital, to visit friends and family, to go to the library, to go to the bank, to go to concerts, to go to the swimming pool, to take their children to daycare, to go to the park, to go to church, to attend Alcoholics Anonymous meetings.

 …For many others with limited financial means, public transit is virtually the only way to get about the city. They don’t have the resources to buy or own a vehicle, or even to take taxicabs (SA (ABPC) at paras 146-150).

Irrespective of whether one agrees with Judge Dalton’s conclusions, her observations are worthy of further thought. She highlights that for many people living on the margins of our society, restricted access to public transit would have a dramatic impact on their day-to-day lives. Of course any violation of section 7 must then be balanced against the rights of other transit users to be safe when using transit property under section 1 of the Charter. We can well imagine how even a short term ban might have a disastrous impact on someone who is entirely dependent on public transit. In whose favor should the balance lie?

Justice Binder reversed Judge Dalton’s decision on the basis that not every restriction on someone’s ability to access public property will engage their section 7 rights. Having examined the jurisprudence on section 7, he concluded that the Notice would only engage a person’s 7 liberty interests were it to:

  • Prevent that person from having the same access to property enjoyed by other members of the public, particularly areas where the public is “free to roam”, “hang around” or “idle”, or where people normally conduct business or engage in social or recreational activities, and
  • Affect (beyond inconvenience) a person’s autonomy with regard to important, fundamental, inherently personal life choices (not just lifestyle choices), going to the core of what it means to enjoy individual dignity and independence (SA (ABQB) at para 60).

Justice Binder held that S.A. failed to satisfy the first branch of this test. Following on from his conclusion that transit property was different from other “public” property (which might allow for unhindered public access), it was a small leap for him to conclude that a train platform was not a place “…intended primarily for roaming, loitering, conducting business or engaging in social or recreational activities” (SA (ABQB) at para 61). As for the second branch of the test, Justice Binder held that being unable to use public transit was no more deleterious to her section 7 rights than a driving suspension or living in a place where there was only limited public transit services (SA (ABQB) at para 62).

Justice Binder concluded that S.A. had failed to provide sufficient evidence on how the Notice had impaired her day-to-day activities. He pointed to the fact that S.A. had not been ticketed on those occasions when she had a legitimate explanation for using transit, such as going to school, work, probation appointment or any other appointment (SA (ABQB) at para 65). This seems to have eased his concerns regarding the potentially draconian effects on S.A. were the ban to amount to an outright prohibition.

The majority of the Court of Appeal was particularly critical of the sufficiency of S.A.’s evidence on this point. They reiterated the guidelines for a Charter claimant raising hypotheticals to prove that there is a sufficient causal connection between the restriction and the claimant’s section 7 rights. The majority noted that “the proposed hypothetical….must not be remote or extreme” and that legislation will not be unconstitutional simply because one “can imagine an emergency which would compel violating a restriction given for a previous string of mild offences” (SA (ABCA) at paras 117 – 120). The hypotheticals relied on by the provincial court did not, in the majority’s view, meet these tests. In fact the majority found that, aside from issuing restrictions for “persistent loitering,” there was “no evidence” that transit restrictions were issued for “minor offences” such as “smoking while underaged” (SA (ABCA) at para 124).

Both the opinions of Justice Binder and the majority of the Court of Appeal underscore the point that, when assessing whether a restriction upon someone’s liberty rights violates section 7, what matters is actual evidence of infringement, not merely hypothetical discussions about the impact of such restrictions. While we acknowledge that restrictions affecting someone’s right of access to public transit would likely have a disproportionate impact on already vulnerable and marginalized groups, these should not be determinative if the applicant who is bringing the Charter challenge cannot demonstrate a Charter infringement on an individual level. An applicant who brings a Charter challenge must prove that a law actually infringes the Charter – making an argument about a hypothetical breach without evidence may be important in terms of advancing the public policy debate, but is insufficient to establish a legal case.

The majority of the Court of Appeal also agreed with Justice Binder’s finding that not every restriction on someone’s liberty amounts to a violation of their section 7 rights:

Section 7 does not bar a small restriction on something vital. Exiling a person to live in one municipality when his or her work and family and friends are in other municipalities, might be protected. But that is not the same as requiring him or her not to use a certain travel route, or to drive or to purchase gasoline only on even-numbered days. A small impairment of important human choices does not violate s 7 just because ultimately it is conceivable that a cloud of such small impairments might cumulate into something worse (SA (ABCA) at para 170).

For the majority, the threshold for finding a section 7 breach is high indeed and they sought to keep it there. Their concern was that section 7 could come to be over-relied upon if they made it any easier to prove an infringement:

Is s 7 to be implicated when municipalities temporarily exclude private vehicles from certain neighborhoods, or restrict parking there to local residents? Will cancelling the only bus route into one neighborhood, or cutting out bus service on Sunday mornings or after 11 pm, be upset by a s 7 injunction? Will courts regulate increases in transit fares under s 7? Will cancelling seniors’ bus passes be unconstitutional? Does s 7 guarantee the right of pedestrians and cyclists to use every freeway or bridge? Does s 7 bar curfews imposed by bylaws, bail orders, peace bonds, conditional sentences, or conditional discharges? (SA (ABCA) at para 167).

The majority’s point is that section 7 should not be used to second guess a government’s policy decisions. Yet here the majority seems to be importing a section 1 analysis into section 7. It may well be that the hypothetical examples the majority lists could breach section 7 but that such breaches would be justified under section 1.

How much deference will a municipality’s administrative process be given?

The Edmonton Transit System Notice Not to Trespass Policy (ETS Policy) required that bans be issued to anyone found committing a breach of the Transit Bylaw, particularly if that breach endangered the safety and security of ETS employees or the public. The ETS Policy used the severity, frequency, and nature of the conduct being engaged in to help determine the length of time an individual could be banned for. At trial, the question was whether the ETS Policy was “law” and thus subject to Charter scrutiny and, if so, whether the ETS Policy unlawfully deprived S.A. of her section 7 rights for being overbroad, and therefore contrary to the principles of fundamental justice.

As a matter of evidence, Judge Dalton found that the ETS Policy was not a confidential document, had been made available on request to the public, and was intended to guide the actions of ETS enforcement personnel (SA (ABPC) at para 196). Having also concluded that the ETS is a government entity, Judge Dalton held that as the ETS Policy “…sets out a standard that is meant to be binding, and is sufficiently accessible and precise,” it was “law” for the purpose of Charter application (SA (ABPC) at para 193, citing Greater Vancouver Transportation Authority v. Canadian Federation of Students, 2009 SCC 31, [2009] 2 SCR 295 [GVTA]).

Having concluded that the ETS Policy was “law” and therefore subject to Charter review, Judge Dalton held that it was overbroad. She found the policy to be overbroad because bans could be issued against someone who had not yet been convicted of the offence giving rise to its issuance and would not be automatically revoked even where the affected the person was later acquitted; bans were not limited in geographical scope and therefore captured all transit property including transit stops and buses; the issuance of a ban was not restricted in its application to serious public safety offences but could be served on a person for activities not giving rise to safety and security issues such as nuisance type activities (loitering, drug and alcohol use or other unacceptable behavior), under-aged smoking, fare evasion, etc; there were insufficient procedural safeguards for engaging in a review or appeal of a ban; and no information was provided to the affected person with respect to the procedures for initiating an appeal. In addition to this overbreadth, individuals were not provided with a specific contact person to speak to within ETS and the procedure for having the ban modified was time-consuming, shrouded in secrecy, cumbersome, and difficult to navigate (SA (ABPC) at paras 205-240).

Justice Binder did not address the question of whether the ETS Policy was “law” because he did not find there the issuance of the Notice or ETS Policy wrongfully infringed upon S.A.’s Charter rights. He concluded that the guidelines set out in the ETS Policy were more administrative than judicial and that no more than minimal procedural fairness was required since the ban was temporary in nature and allowed for an administrative appeal (SA (ABQB) at para 75). Justice Binder pointed out that S.A. had availed herself of the appeal process and had successfully obtained some modifications to the ban restrictions. In his view, S.A. had not sufficiently established how she had been prejudiced by the ban – there was no evidence to show that S.A. had been ticketed for trespassing when attending school, work, or other appointments, and she had apparently not been ticketed when she provided ETS enforcement personnel with a “legitimate” explanation for being on ETS Property. While Justice Binder was generally satisfied with the adequacy of the safeguards found in the ETS Policy, he did point out that the ETS Policy fell below the minimum requirements of procedural fairness by failing to provide a contact number to seek a modification of the ban. Without it, an affected party would not know who to contact (SA (ABQB) at para 78).

With respect to the level of procedural fairness required of the ETS Policy, Justice Binder set a very low bar and explicitly stated that the municipality would be granted a great deal of discretion in its selection of the administrative process to follow. He held that individuals under a temporary ban “have little or no legitimate expectation as to any particular element of procedural fairness” because the decision “is on the lower end of the spectrum of importance to the individual” (SA (ABQB) at para 75).

The majority of the Court of Appeal disagreed with Judge Dalton and held that the ETS Policy was not “law” and that the issue was, in any event, completely irrelevant to a section 7 analysis. For the majority, the issue of determining the ETS Policy as “law” was only to be dealt with under section 1 (which refers to “reasonable limits prescribed by law”), but not under section 7. Further, the majority differed on the evidence heard before Judge Dalton and held that as the ETS Policy was understood to be discretionary, served as a guideline only, was non-binding upon ETS enforcement personnel, and as it had been heavily modified over the years, it should not be considered to be “law” to which the Charter applied. As the majority stated, “[t]he courts cannot review internal policy documents for Charter compliance, and the issue is not “the quality of the guidebooks” (SA (ABCA) at para 250).

With respect to the argument of overbreadth, the majority concluded that the ETS Policy, like most administrative policies meant to apply universally, has to have some measure of in-built flexibility. The mere granting of administrative discretion or flexibility to administrative decision makers (or in this case, ETS enforcement personnel) which might produce some inconsistency in the application of standards does not in itself render the policy vague or overbroad. The majority put it this way (at paras 212-215):

It is often hard to justify constitutionally any government policy, or legislation, which is completely rigid, and treats identically a host of individuals and types of activities or organizations. That can violate a number of rules of administrative and constitutional law. Conversely, almost inevitably government activity will occasionally interfere unduly and unnecessarily with individuals, and even cause them actual harm…

But putting into the legislation or policy some flexibility, or leaving a lot of leeway and judgment for the officials applying the legislation or policy, equally opens up a new range of attacks. Counsel call them vagueness, uncertainty, inaccessibility, secrecy, arbitrariness, discrimination, bias, and lack of procedural fairness. Again, counsel can multiply hypothetical examples.

None of that proves that constitutional limits are a bad thing, or are to be doled out only with stingy hands.

However, it does show that neither of the above two extremes, neither type of attack, should be broad enough that the two attacks come together (or even overlap), and so produce a Catch-22. Legislators, governments and municipalities must have enough room to navigate between that rock and that whirlpool.

In this respect, the judgments of Justice Binder and the majority of the Court of Appeal are of tremendous help to municipalities who delegate much of their regulatory function to administrative processes. It is, of course, long-settled law that municipalities must be granted a degree of deference in their decision-making process (see e.g. Catalyst Paper Corp v North Cowichan (District), 2012 SCC 2 at paras 19-35; United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19 at paras 6-8;114957 Canada Ltee (Spray-Tech, Societe d’arrosage) v Hudson (Ville), 2001 SCC 40, at paras 3 and 23). In practical terms, however, it is usually a municipality’s application of administrative guidelines and policies which ultimately affect an individual’s ability to use or have access to municipal resources. When an aggrieved party challenges a municipal bylaw it is usually on the basis that they were denied some right subject to a discretionary administrative decision. Consequently, the critical question becomes whether the administrative decision maker complied with its obligations regarding the affected party’s natural justice and procedural fairness rights.

What does this mean for an individual seeking to challenge the application of administrative rules? If the administrative guideline or process is not “law”, only its use can be challenged under the Charter and the majority seemed to leave a wide degree of discretion for municipalities here. Has the majority left municipalities “off the hook” as far as the application of their administrative processes as long as the bylaw being challenged is found to be Charter compliant? Doesn’t this complicate the remedy which an affected individual has to pursue?

However, it must also be recognized that municipalities face the practical challenge of making thousands of administrative decisions on a daily basis. To expect municipalities to act in every case as if it was acting in the capacity of a judicial decision maker would set a standard which no municipality could ever hope to achieve.

How can the rights of transit passengers to be free from harassment or intimidation be balanced with rights to access essential services?

Justice Bielby wrote the dissenting judgment for the Alberta Court of Appeal and it is worth discussing in some detail as it provides a useful and practical path forward for municipalities who might be somewhat perplexed on how to proceed with their own banning procedures.

Justice Bielby noted that S.A. was not about:

…preferring the rights of an offender to use public transit over those of other users. Rather, the task is how to address the balance which must be achieved between these two considerations; acknowledging that a rider who has assaulted another person nonetheless retains some rights does not drive the conclusion that no other rider has any rights (SA (ABCA) at para 309).

She agreed with Judge Dalton that the Notice engaged S.A.’s liberty interests because it interfered with S.A.’s “fundamental personal autonomy” (SA (ABCA) at para 313; see the discussion of S.A.’s liberty interests at paras 307-362). In particular, Justice Bielby noted that for S.A. and others like her “the mode of transportation … is fundamentally connected with the exercise of her general right to freedom of movement” (SA (ABCA) at para 326). However, Justice Bielby agreed with the decisions of both Justice Binder and the majority judgment of the Court of Appeal that the TPA should apply to publicly owned property (SA (ABCA) at paras 343-344). With respect to the ETS Policy, Justice Bielby disagreed with the majority of the Court of Appeal and held that while application of the ETS Policy had some discretion, it was generally intended to be binding on ETS employees and so was subject to Charter scrutiny (SA (ABCA) at para 358). Justice Bielby further concluded that the manner in which the ETS Policy was being applied by ETS personnel was not in accordance with the principles of fundamental justice because the Notice did not provide information about how to seek a modification; as worded, the Notice applied to all Edmonton public property, not just ETS Property; the ETS Policy allowed Notices to be issued for any type of criminal activity, however minor; and the appeal process for challenging the Notice was informal and not clearly explained (SA (ABCA) at paras 365-387).

However, Justice Bielby recognized that the issues which she identified with the Notice would be relatively straightforward to fix. With respect to the overbreadth of the Notice’s geographical scope, Justice Bielby recommended that the wording of the Notice should specify that it applied only to “LRT Stations and Trains, all ETS Buses, shelters and terminals” (SA (ABCA) at para 383). Justice Bielby commented that although the City’s Notices currently reproduce the information about ways to modify the ban, they do so “in very small type, so small as to be unreadable to some and easily missed by all” (SA (ABCA) at para 384). She recommended that the information about modification be made much bigger and more noticeable by being placed within a box (SA (ABCA) at para 385). Such recommendations are simple for other municipalities to follow: written trespass notices must clearly give information about how they can be modified or appealed, and they must be clear about their geographic scope.

With respect to the Notice’s appeal process, Justice Bielby found that when S.A. was issued the Notice, she could not appeal it herself but needed an adult to do it on her behalf (SA (ABCA) at para 295). The process also did not allow for bans to be overturned, only modified. Not surprisingly Justice Bielby recommended that “any individual, even youth who had no adult representation” should be allowed to apply for their ban to be modified and that the adjudicator of such applications should have “the power to set a ban aside in its entirety” (SA (ABCA) at para 387).

Justice Bielby also suggested that Notices should not be issued for minor infractions but ought to be limited to “conduct which occurs on transit property or which otherwise affects the safety and security of others who ride or work for ETS, whether or not that conduct also constitutes a criminal or provincial offence” (SA (ABCA) at para 386). Her comments in this respect were prompted by the fact that ETS had issued bans to a large number of people: “333 persons were banned from public transit in 2008; fewer than half of them were banned for reasons involving the commission of a criminal offence and fewer than a quarter for the commission of an offence involving violence” (SA (leave application) at para 14).

The recommendations included within Justice Bielby’s dissent are broadly in keeping with similar jurisprudence in other jurisdictions. In Zhang v Vancouver, 2010 BCCA 450, for example, the British Columbia Court of Appeal found Vancouver’s policy about free-standing structures on city streets to be unconstitutional because it did not set out procedures for individuals to apply for an exception (at paras 48, 67). The British Columbia Court of Appeal thus balanced the need for free movement on city streets with the need to protect free expression.

The section 7 rights at issues in S.A. are equally if not more important than the section 2(b) rights at issue in Zhang, and will likely be the source of future litigation in Edmonton or elsewhere. Implicit in Justice Bielby’s dissent is the idea that Notices are being overused and if they are to be issued at all, their use should be tempered and well-considered. In order to avoid unnecessary challenges, municipalities would do well to well to follow Justice Bielby’s practical advice.

Conclusion

The fundamental issues regarding the public’s access to municipal services and government owned property raised by S.A.’s case are here to stay. Each of the court decisions in S.A. raises important questions of law and public policy and, irrespective of which view you ultimately take, makes for fascinating reading. And perhaps that is where the true value of a case such as this truly lies – in its capacity to make judges, lawyers, and the public think about issues in a way that challenges our own perceptions of what we would like our society to look like.

This article was originally published in the Digest of Municipal and Planning Law, (2014) 6 DMPL (2d) December 2014, Issue 24, and is being reproduced here (with some changes) with kind permission.

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ABlawg: The Year in Review

Mon, 12/15/2014 - 9:00am

PDF Version: ABlawg: The Year in Review

It is the time of year for making lists, and at ABlawg we have decided to put together a compilation of our highlights from 2014. It is also the season for the Canadian Law Blog Awards (Clawbies), and we have included a list of some of our favourite blogs as well.

A Series of Series

In 2014 ABlawg ran several series of posts on important judicial decisions and legislative developments in Alberta and Canada more broadly. These series provided an opportunity for the authors to discuss the nuances and impacts of these developments and to share that dialogue with ABlawg readers. Our series covered the following:

  • July / August 2014: Posts by Nigel Bankes, Jennifer Hocking, Jennifer Koshan, Kirk Lambrecht, Q.C., Sharon Mascher, Martin Olszynski, and Jonnette Watson Hamilton on Tsilhqot’in Nation v British Columbia, 2014 SCC 44 and Grassy Narrows First Nation v Ontario (Natural Resources), 2014 SCC 48 covered issues including the scope of Aboriginal title, treaty rights, and the duty to consult, and the demise of the interjurisdictional immunity doctrine and the “lands reserved” head of section 91(24) of the Constitution Act 1867. Faculty, students, research associates and guests discussed this commentary and the underlying decisions in a roundtable discussion in July.

  • September 2014: A series of posts by Nigel Bankes, Shaun Fluker and Martin Olszynski on Syncrude Canada Ltd. v Attorney General of Canada, 2014 FC 776 commented on the first Canadian case challenging the constitutional validity of federal greenhouse gas regulations, reviewing administrative law, constitutional and climate change issues.
  • October / November 2014: Posts by Shaun Fluker, Jennifer Koshan and Martin Olszynski on Ernst v Alberta (Energy Resources Conservation Board), 2014 ABCA 285 and Ernst v EnCana Corporation, 2014 ABQB 672 reviewed developments in Jessica Ernst’s litigation against EnCana, the ERCB, and Alberta Environment for harms flowing from hydraulic fracturing and breach of the Charter. The posts led to media interest (e.g. here).

Broadening our Scope

ABlawg was very pleased to be one of the blogs featured in the launch of Can LII Connects in April 2014, and all ABlawg posts on Canadian judicial decisions are now cross-posted to this site, expanding our audience.

ABlawg also welcomed some new bloggers this year. John-Paul Boyd, Executive Director of the U of C affiliated Canadian Research Institute for Law and the Family, launched an excellent new blog on Access to Justice in Canada, and we have been cross-posting some of his commentary on ABlawg. Sarah Burton joined the Alberta Civil Liberties Research Centre as a research associate, and has also been posting on access to justice issues on ABlawg. Over the summer, students from Student Legal Assistance contributed blogs on criminal and family issues to ABlawg (see here, here and here).

Measuring Impact

A number of ABlawg posts were cited, excerpted and reprinted in judicial decisions, professional publications, legal arguments, law review articles, and the blogosphere, a sampling of which follows:

  • On Can LII Connects in May 2014, Nate Russell posted a comment on blog posts that had been cited in judicial decisions, and all were written by ABlawg bloggers: John-Paul Boyd, Jonnette Watson Hamilton and Alice Woolley
  • The Council of the Innu of Ekuanitshit cited Martin Olszynski’s post Federal Court of Appeal Reviews CEAA “Justification” Determination for Lower Churchill Falls in its application for leave to appeal to the Supreme Court of Canada

Our Favourite Canadian Law Blogs

  • Can LII Connects, for creating a comprehensive site for commentary on Canadian judicial decisions
  • Susan on the Soapbox, for Susan’s incisive and provocative commentary on the Alberta political scene
  • We also love Slaw (though it is not in the running for a Clawbie)

We encourage our readers to get in on the Clawbies by nominating your favourite Canadian law blogs. Instructions for how to do so are here, and for those of you who don’t have your own blog or Twitter account, we understand you can use the Clawbies “Contact us” page here to email nominations.

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Alberta Introduces Amendments to PIPA

Fri, 12/12/2014 - 9:00am

By: Ronaliz Veron

PDF Version: Alberta Introduces Amendments to PIPA

Bill Commented On: Bill 3, Personal Information Amendment Act, 3rd Sess, 28th Leg, Alberta, 2014

On November 15, 2013, the Supreme Court of Canada held in Alberta (Information and Privacy Commissioner) v United Food and Commercial Workers, Local 401, 2013 SCC 62 (AIPC v UFCW) that Personal Information Protection Act, SA 2003, c. P-6.5 (PIPA) and Personal Information Protection Act Regulation, Alta Reg 366/2003 (PIPAR) violated section 2(b) of the Charter of Rights and Freedoms, as they limited a union’s ability to collect, use, or disclose personal information in a lawful strike (See Linda McKay-Panos’ post on the decision). In oral argument, the Attorney-General of Alberta and the Information and Privacy Commissioner indicated that, if they were unsuccessful, they would prefer to have the entire legislation struck down to allow the legislature to re-consider PIPA as a whole. Acknowledging the comprehensive and integrated structure of PIPA, the Supreme Court declared it invalid but suspended the declaration of invalidity for a year to give the Alberta legislature ample time to make the necessary amendments (AIPC v UFCW at paras 40-41).

In an open letter dated September 22, 2014, Information and Privacy Commissioner, Jill Clayton, expressed concerns about the effect of the delayed start to the legislative session on the status of PIPA. The third session was set to open November 17, 2014, two days after PIPA was scheduled to lapse. In particular, she noted:

If PIPA is allowed to lapse, Alberta’s citizens and businesses will lose the unique benefits afforded by the legislation, including: mandatory breach reporting and notification to affected individuals, local enforcement without court involvement, and protection for the access and privacy rights of employees of provincially-regulated private sector businesses.

In response to this letter, Premier Prentice filed a motion to extend the suspension of invalidity in the Supreme Court. On October 30, 2014, the Supreme Court granted the Alberta government a 6-month extension to amend PIPA (see here at page 1778). As a result, PIPA remains valid until May 2015. The Alberta legislature, however, did not wait until the expiry of the extension before introducing an amendment to PIPA. On December 1, 2014, Bill 3, Personal Information Amendment Act, 3rd Sess, 28th Leg, Alberta, 2014 passed Third Reading.

Amendments to PIPA

Bill 3 introduces significant changes to PIPA in relation to trade unions engaged in a labour dispute. It allows trade unions to collect, use, and disclose personal information about an individual without his or her consent if two conditions are satisfied. First, the collection, use, or disclosure of information must be reasonably necessary for the purpose of informing or convincing the public about an important public interest issue in a labour relations dispute. Second, it must be reasonable to collect, use, or disclose personal information without consent after taking into account all relevant circumstances, including the nature and sensitivity of the information (See ss. 14.1(1), 17.1(1) and 20.1(1)). These changes appear to be made in response to the Supreme Court’s ruling in AIPC v UFCW.

Commentary

Bill 3 essentially removed the blanket prohibition against the collection, use, and disclosure of personal information without consent. This narrow amendment attempts to balance the union’s right to freedom of expression with privacy interests protected by PIPA. While such amendments will make notable changes concerning trade unions in a labour dispute, this is far from a dramatic overhaul of our privacy legislation. During the debates in the legislature, opposition MLAs expressed doubts about whether Bill 3 actually addresses the whole spirit of the Supreme Court decision. For example, they expressed concerns about the limits of the application of the Bill to disclosure of personal information during labour disputes, and not in the context of other union activities (e.g., social justice contexts) (See: Alberta, Legislative Assembly, Hansard, 28th Leg, 3rd Sess, No 10e (1 December 2014) at 259-265 (David Eggen, Kent Hehr, Deron Bilious, Brian Mason and Rachel Notley)). It remains to be seen whether or not the Alberta government will introduce broader and more comprehensive changes to PIPA that will accommodate not only the freedom of expression of unions in a labour dispute but the interests of other social and political groups as well.

Now that Alberta has taken the lead in amending PIPA to make it consistent with the Charter, it will be interesting to see how and when the federal government and other provinces with similar privacy legislation will follow suit.

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Judicial Economy, Judicial Extravagance and Pension Splitting under a Matrimonial Property Order

Thu, 12/11/2014 - 9:00am

By: Jonnette Watson Hamilton

PDF Version: Judicial Economy, Judicial Extravagance and Pension Splitting under a Matrimonial Property Order

Case Commented On: McMorran v Alberta Pension Services Corporation, 2014 ABCA 387

The Court of Appeal decision in McMorran v Alberta Pension Services Corporation determines an instrumentally important question in the pension and matrimonial property law areas. In addition, it is procedurally unusual for two reasons. First, although it is a matrimonial property action, the dispute is really between Justice Robert Graesser, the Court of Queen’s Bench judge who rendered the decision appealed from (McMorran v McMorran, 2013 ABQB 610) and the administrator of the Alberta public service pensions plans, the “appellant” by court order in the Court of Appeal — i.e., not between the former husband and wife who are both “respondents”. Second, the concurring judgment of Justice Thomas Wakeling disagrees with the majority judgment of Justices Ronald Berger and Frans Slatter on one statutory interpretation point, but no consequences appear to flow from that disagreement and the two judgments do not engage with each other on the point. The reasons for two separate judgments are not made explicit, but they appear to be a result of different perspectives on the value of judicial economy. And in these days of legal and public focus on access to justice issues and the need for a “culture shift” in the current legal system, I think it is important to consider whether we can afford judicial extravagance.

A. Facts

Catherine McMorran (the first wife) and Scott McMorran (the husband) divorced in 2002. In 2003, a consent matrimonial property order provided that the first wife had an ownership interest in the husband’s Special Forces Pension Plan equal to one-half of the pension that accrued during their marriage, and that her ownership interest would be realized when the husband retired and started to draw the pension. At the time of the divorce, the husband had been a member of the pension plan for about 15 years. He remarried in 2005 to his (unnamed) second wife and he retired in 2011 after 22 years of pensionable service.

B. Court of Queen’s Bench Decision

Justice Graesser determined that, under the terms of the 2003 consent matrimonial property order, the first wife was entitled to a 50% interest in 15/22nds of the husband’s pension. The husband was entitled to the other 50% interest in 15/22nds of his pension, plus a 100% interest in the remaining 7/22nds. He also decided that the husband should elect a “joint life not reduced pension” with the result that his pension during his life would be smaller, but on his death the pension of his survivors would not be reduced; that the first wife was entitled to take her interest in monthly payments; and that the husband, the “participant” in the pension plan, had to name his first wife as his “pension partner” for her share of the pension. There was no appeal from those parts of Justice Graesser’s order.

The problem with those parts of the order, as far as Justice Graesser was concerned, was their consequences for the second wife. Naming a “pension partner” determines how long a pension will last; all benefits under the pension end after the participant and his pension partner die. In this case that meant that, if the husband predeceased the first wife, then his second wife would be entitled to his portion of the pension (the other 50% interest of 15/22nds and the 100% interest in the remaining 7/22nds). But if both the husband and the first wife predeceased the second wife, the pension would end and the second wife would receive nothing.

Justice Graesser did not think it fair that the second wife did not receive her own share of her husband’s pension. As a result, he took the unusual step of inviting counsel and the pension plan administrator to make submissions about whether the second wife could also be a “pension partner” (ABQB at para 68), a point not raised by the parties in their arguments. He decided that more than one “pension partner” could be designated under the Special Forces Pension Plan. As a result, the challenged paragraph 5 in his order provided:

5. It is further ordered that the Plaintiff shall be at liberty to elect a different pension partner for the portion of the pension that is not the Defendant’s Share, and can elect a normal pension for his remaining share of the pension.

C. The Court of Appeal Decision

Paragraph 5 of Justice Graesser’s order was the only part of the order that was appealed. The appellant was the Alberta Pension Services Corporation. It was granted standing to appeal based on section 34(1) of the Public Sector Pension Plans (Legislative Provisions) Regulation, Alta Reg 365/1993: “If, on the filing of a matrimonial property order, the Minister is unable to comply with it because . . . it does not comply with this Part . . . , the Minister may apply to the Court to redress the situation arising from that inability so to comply.”

This appeal was therefore an appeal on a question of law involving a narrow, albeit instrumentally important, point of statutory interpretation, namely, whether the term “pension partner” in section 2(1)(dd.1) of the Special Forces Pension Plan Regulation, AR 369/93 could be interpreted to include more than one pension partner.

(1) The Majority Opinion

Justices Ronald Berger and Frans Slatter wrote a 23 paragraph opinion that struck paragraph 5 of Justice Graesser’s order.

(a) Standard of review, burden and onus

In discussing the standard of review, in addition to noting that Justice Graesser’s decision had to be correct because the interpretation of statutes is a question of law, the majority accorded “deference to the decision of the [pension plan] administrator” (at para 10). The “decision” of the administrator that they referred to was the administrator’s opinion, proffered to both Justice Graesser and to the Court of Appeal, about whether Justice Graesser’s order was consistent with the provisions of the Special Forces Pension Plan Regulation.

Why the deference to the administrator and not the judge? The specialized role of the pension plan administrators is recognized in the provision that gives the administrator standing and also in other provisions in the Public Sector Pensions Plans Act, RSA 2000, c. P-41. Relying on Nolan v. Kerry (Canada) Inc., [2009] 2 SCR 678, 2009 SCC 39 (CanLII), which was a more traditional judicial review of an actual decision of the Financial Services Tribunal, the majority noted (at para 10) that “[t]he funding, interpretation, and administration of a pension plan are complex” and “[t]hose charged with administering the plan will develop an expertise in its interpretation and management”. This endorsement of expertise and the administrator’s mandate under the legislation to represent the interests of all participants in the pension plan, present and future, led the majority to hold that “[s]ignificant weight should be placed on the position of the administrator as to whether particular arrangements are consistent with the plan” (at para 10).

As a result, and even though the administrator was styled the “Appellant” in this appeal, the majority held that “the burden is on the claimants to demonstrate the administrator’s conclusion” that “a particular agreement or proposed court order would interfere with the actuarial foundations of the plan” was “unreasonable”, and “the onus is also on the claimants to prove that any decision of the administrator on the proper interpretation of the plan is unreasonable” (at para 10). The first wife supported the administrator’s position, but the husband benefited from Justice Graesser’s interpretation and thus the onus and burden were, effectively, on him.

(b) Can there be more than one pension partner?

The majority sets out a number of reasons why the definition of “pension partner” did not support an interpretation of multiple pension partners. The relevant portion of that definition is:

(dd.1) “pension partner” means

(i) a person who, at the relevant time, was married to a participant or former participant and had not been living separate and apart from him or her for 3 or more consecutive years, or … (emphasis added)

The majority characterized the phrase “at the relevant time” in the definition of pension partner as “somewhat enigmatic” (at para 14). The most logical time might seem to be the time when the participant in the pension plan began to receive the pension, i.e., when the pension went “into pay”. But at the time the husband’s pension went into pay in this case, the first wife did not qualify under the definition because the couple had been divorced for nine years. The majority held that “at the relevant time” had to include more than the time when the pension went into pay or else the definition would have specified “at the time the pension goes into pay”. The “relevant time” could therefore encompass cases where that time was “at the time their interest accrues under the terms of a matrimonial property order.” (at para 14)

As for the issue of whether the definition of “pension partner” would allow for the naming of more than one such person, counsel for the administrator argued and the majority accepted that:

  • The phrase “a person who, at the relevant time, was married to a participant”, given its ordinary meaning, would contemplate only one “person” because Canadian law contemplates only one spouse at any “relevant time” (at para 15).
  • Including more than one pension partner in effect turns the phrase “at the relevant time” into “at any time” (at para 15).
  • The definition of “pension partner” goes on to include a cohabitant if no one is married to the participant (at para 15).
  • Adding a third party such as the second wife who might receive benefits after both the husband and first wife die would create benefits for which no reserves had been set aside because the pension plan is funded on actuarial assumptions based on two lives, the participant’s and his or her pension partner’s (at para 16).
  • Pensions are funded based on actuarial calculations which require certainty about the number of people who might receive pension benefits and their life expectancies (at para 17).
  • The second wife knew or ought to have known, when she married the husband, that his first wife had an interest in his pension (at para 20).
  • The generic provisions of the Interpretation Act, RSA 2000, c I-8, section 26(3), which provides that “[i]n an enactment, words in the singular include the plural” are inapplicable and inappropriate in the circumstances (at para 21).

The majority therefore concluded (at para 22) that the definition of “pension partner does not support an interpretation that a pension participant can have more than one pension partner.”

(2) The Concurring Opinion

Justice Wakeling, in his concurring opinion, took 70 paragraphs to reach the same conclusion. He stated the issue somewhat differently (at paras 28 and 29), following the challenged paragraph 5 more closely, as a question of whether the matrimonial property order in this case could divide the husband’s pension into two or more discrete units, each of which could have a different pension partner (first wife versus second wife) and payout scheme (“joint life not reduced pension” versus “normal” pension). He concluded in his “Brief Answers” at the beginning of his opinion that the definition of “pension partner” in the relevant legislative context “inexorably leads to the conclusion that a pensioner may have only one pension partner” (at para 32) and that the husband’s pension is “one indivisible whole” (at para 33).

After setting out the facts, quoting the relevant statutory provisions, examining the values underlying pension plan administration, summarizing the pension plan administrator’s arguments, and reviewing the law about the distribution of these pension benefits on marriage breakdown both before and after major changes in 2003 (that disallowed orders of the type made in this case), some principles of statutory interpretation, and the purpose of the pension plan legislation, Justice Wakeling determined (at para 73) that the outcome of the appeal turned on the meaning of “pension partner.”

Justice Wakeling noted that section 2(1)(dd.1) of the Special Forces Pension Plan “unequivocally reveals” that a participant may have only one pension partner and that pension partner “has easily identifiable criteria at a very specific time — ‘at the relevant time’” (at para 80). It is with respect to the interpretation of the phrase “at the relevant time” that Justice Wakeling disagreed with the majority. He indicated there was no disagreement about what the phrase “at the relevant time” meant, stating that “[b]oth counsel informed us that ‘at the relevant time’ means when the ‘pension goes into pay’”, i.e., when the husband started receiving his pension (at para 81). Justice Wakeling also stated, albeit in a footnote, that “[a] careful review of the Special Forces Pension Plan in force as of June 23, 2003 supports this interpretation” (at footnote 47). Nevertheless, Justice Wakeling did not discuss the implications of this different interpretation of “at the relevant time”, nor did he discuss whether the first wife qualified if section 2(1)(dd.1) is interpreted that way. He simply noted that a pension only goes into pay once (at paras 81-82) and then moved on to discuss that there can only be one form of pension and one pension partner (at para 83).

Justice Wakeling decided that both the language of the relevant statute and the administration of the pension plan support his conclusion that there can be only one pension partner (at paras 84-89). He ended with a discussion of whether this interpretation is unfair, concluding that not only is it not unfair to the second wife for reasons similar to those advanced by the majority (at paras 90-91), but it is also fairer to all of the pension plan participants because Justice Graesser’s order would have burdened the pension plan by increasing pension payouts (at para 92).

D. Commentary

(1) The Interpretation of “Pension Partner”

Pensions have long been one of the most contentious types of matrimonial property for two reasons: their valuation and their method of distribution. See Jonnette Watson Hamilton and Annie Voss-Altman, The Matrimonial Property Act: A Case Law Review (2 October 2010). However, distribution between the former spouses was not the issue in this case. Instead it was a question of distribution among all spouses, past and present, of the pension participant, and not only in this particular case. Had Justice Graesser’s interpretation stood, it could have been adopted by other judges and by couples and lawyers negotiating property divisions on relationship breakdowns in cases where the same definition of pension partner applied.

The idea that a second spouse could be added appears to be a novel notion. It seems fairly obvious that paying one pension for the lives of three people would usually cost more than paying one pension for the lives of two people. And if a second spouse is included, why not a third?

This case illustrates the utility of section 34(1) of the Public Sector Pension Plans (Legislative Provisions) Regulation, the section that allows the Minister to apply to the Court when a matrimonial property order does not comply with the pension plan regulation and administration. Someone needs to represent the interests of all of those financially dependent on the pension plan and its long-term fiscal health. However, the Court of Queen’s Bench did not accord deference to the expert opinion of the pension plan administrator and the administrator in this case still needed to apply for standing before the Court of Appeal, necessitating an extra court application. The standing and role of the pension plan administrator could be specified in the regulations in order to simplify and lower the costs of the process.

(2) The “Parties” to the Appeal: Justice Graesser and the Alberta Pension Services Corporation

Justice Wakeling notes (at footnote 17) that the challenged part of Justice Graesser’s order — paragraph 5 — granted relief that had not been sought by the husband. It was Justice Graesser’s initiative. Justice Wakeling noted that a court should be reluctant to raise, on its own initiative, a new issue, if only because it increases the parties’ costs. While paragraph 5 of Justice Grasser’s order favoured the husband and was therefore adopted by him, paragraph 5 was strictly the court’s idea. The husband would not have had to defend it before the Court of Appeal had it not been for Justice Grasser’s initiative.

The majority opinion says nothing about costs, but Justice Wakeling’s opinion concludes with the direction that “[e]ach party is responsible for its own costs” (at para 94). While it is true that the husband benefited from Justice Graesser’s paragraph 5, that relief was granted on Justice Graesser’s own initiative. It is not clear why all three parties were required to bear their own costs in such circumstances. No reasons are offered for this part of the Court of Appeal’s decision.

The addition of the pension plan administrator as the appellant is another unusual aspect of this case. Being cast as the “Appellant” seemed inappropriate. The arguments of the administrator were treated more like the reasons for decision of an administrative tribunal. This is another reason for the relevant legislation to specify the role of the administrator.

(3) Justice Wakeling’s Extravagant Reasons for Decision

Given that Justice Wakeling’s different interpretation of “at the relevant time” did not seem to make a difference to the result or have any consequences for the parties, and given the lack of engagement on that point between the majority and the concurring opinions, was Justice Wakeling’s 70 paragraph, 55 footnote judgment necessary or desirable as an alternative or addition to the majority’s 23 paragraph disposition of the issue before the court, i.e., the legitimacy of paragraph 5 of Justice Graesser’s order? That is the question I address in this part of my post. And it is not simply a question about Justice Wakeling’s judgment in this particular case.

A review of those of Justice Wakeling’s written judgments that have been posted to the Alberta Courts Court of Appeal website since his appointment to that Court in March 2014 (which followed his appointment to the Court of Queen’s Bench in February 2013), reveals an approach to judgment writing that is often the opposite of judicial economy and an unusual decision-making style. His judgments are often lengthy due to the inclusion of matters that do not need to be discussed in order to resolve the matter before the court. This is especially true of the content of some of his footnotes.

Judicial economy” describes a sort of judicial minimalism or judicial restraint, i.e., saying no more than necessary to justify the outcome of a case. See my October 2014 post, Disagreement in the Court of Appeal about the Wisdom of Judicial Economy. It seems to me that the concept of judicial economy has a role to play in access to justice. In Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87 — the oft-heeded and much-expanded-upon decision increasing the availability of summary judgments — Justice Karakatsanis, for a unanimous court, wrote about the “recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system” (at para 2). In elaborating on what a shift in culture requires, she enunciated the “proportionality principle”:

A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible — proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure (at para 28).

Justice Karakatsanis elevated the status of the proportionality principle to that of “a touchstone for access to civil justice” (at para 30). The Court endorsed an understanding of “an underlying principle of proportionality which means taking account of the appropriateness of the procedure, its cost and impact on the litigation, and its timeliness, given the nature and complexity of the litigation” (at para 31).

The Action Committee on Access to Justice in Civil and Family Matters October 2013 Final Report, Access to Civil and Family Justice: A Roadmap for Change, had previously identified a culture shift as something that is urgently needed: “a new way of thinking — a culture shift — is required to move away from old patterns and old approaches” (at 5). Of the six guiding principles that make up this new culture, two seem especially relevant to the concept of judicial economy:

  • Put the public first: “For example, court processes — language, location, operating times, administrative systems, paper and filing requirements, etc. — typically make sense and work for lawyers, judges and court staff. They often do not make sense or do not work for litigants. The focus must be on the people who need to use the system” (at 7).
  • Simplify, Make Coherent, Proportional and Sustainable: “Our current formal procedures seem to grow ever more complicated and disproportionate to the needs of the litigants and the matters involved. Everyday legal problems need everyday solutions that are timely, fair and cost-effective.” (at 8)

How do these ideas fit with the concept of judicial economy? The advantages of judicial economy identified by Cass R. Sunstein, One Case at a Time: Judicial Minimalism on the Supreme Court (Harvard University Press, 2001) at 4-5 were three. First, it reduces the burdens of judicial decisions, especially on multi-member courts. It might mean, for example, fewer concurring decisions. Second, and more importantly, it ensures that fundamental errors are made less frequently and are less damaging. The more that is said, especially on matters not argued by counsel, the more that might be wrong. Third, it reduces the risks of unanticipated bad consequences as a result of intervening in a complex system. I would add that resources are freed up by restricting decisions to narrow grounds, whether those resources are a judge’s time and energy, judicial clerks’ time and energy, or the parties and/or their counsel’s time, energy and money.

As I have already noted, Justice Wakeling’s approach to judgment writing is unusual. Not only are his judgments often lengthy, with discussion of matters only peripherally related to the issues before him, but they are often heavily footnoted. In this particular case he used 55 footnotes, a large number of which are textual footnotes with “asides” on substantive points, and not simply footnotes citing the authority for a particular point in the text. They often reference English or American authorities, or dissenting opinions. Some pose hypotheticals. To substantiate these points, lengthy quotations from a few of these footnotes are necessary (and see also footnotes 15, 18, 24, 32, and 51):

  • Footnote 17 (which is over 500 words long and has therefore been edited): “Mr. McMorran did not apply for this relief. The chambers judge put the interest of Mr. Morran’s [sic] second wife into issue on his own motion. . . . This initiative of the motions court brings to mind Justice Cardozo’s admonition that a judge ‘is not a knight-errant roaming at will in pursuit of his own ideal of beauty and goodness’. The Nature of the Judicial Process 141 (1921). Generally speaking, a court should be reluctant to raise, on its own motion, a new issue, the resolution of which will not affect the dispute the parties have asked the court to resolve. There may be good reasons which account for the failure of the parties to present the question. In addition, additional submissions drive up the costs for all parties. As well, a court must always consider whether by raising a new issue “a reasonable, right-minded and informed person [would] conclude it [was] probable that the adjudicator was not impartial”. Bizon v. Bizon, 2014 ABCA 174, ¶49. See The Queen v. Mian, 2014 SCC 54, ¶39 (“When a judge … intervenes in a case and departs from the principle of party presentation, the risk is that the intervention could create an apprehension of bias”). This concern was not engaged here. . . . To say more may be inappropriate given that the appellant did not put into issue the propriety of the chambers judge raising and deciding this new issue. See The Queen v. Mian, 2014 SCC 54, ¶41 (“An appellate court should only raise a new issue when failing to do so would risk an injustice”) & District of Parry Sound Social Services Administration Board, [2003] 2 S.C.R. 157, 206 (“The Court of Appeal erred in raising this issue, not chosen by the parties” per Major J.) On the other hand, courts have frequently adopted different solutions to disputes from those proffered by the parties to resolve disputes the litigants have presented for resolution. E.g., Reference re Provincial Court Judges, [1997] 3 S.C.R. 3, 175 (in determining the nature of the s. 11(d) Charter values – an independent and impartial tribunal in criminal proceedings – the majority, on its own motion, introduced the concept of judicial compensation commissions); . . . .
  • Footnote 38: A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 31 (2012) (“A fundamental rule of textual interpretation is that neither a word nor a sentence may be given a meaning that it cannot bear”) & F. Frankfurter, “Some Reflections on the Reading of Statutes”, 47 Colum. L. Rev. 527, 543 (1947) (“violence must not be done to the words chosen by the legislature”). See Henry v. Saskatchewan Workers’ Compensation Board, 172 D.L.R. 4th 73, 110 (Sask. C.A. 1999) (the dissent lamented the majority’s focus on the purpose of workers’ compensation legislation – “To protect workers and their dependents from the hardship of economic loss sustained through injuries suffered by the worker in the cause of his employment”: “It is inconceivable to me … that the legislature … provide[d] coverage for suicides [in its workers’ compensation legislation] but drafted this enactment so that only the most perceptive [judges] would recognize their intention”); City of Prince Albert v. Co-Op Health Centre, 42 D.L.R. 4th 706, 709 (Sask. C.A. 1987) (the dissent rejected the assertion that a medical clinic was a hospital: “[Legislation] could say black is white for certain purposes and it would be so. However, I do not think it is unreasonable to require the legislators to use clear and unequivocal language if they intend to produce a result contrary to that which is the product of reasonable expectation”) & Roschen v. Ward, 279 U.S. 337, 339 (1929) (“There is no canon against using common sense in construing laws as saying what they obviously mean”).
  • Footnote 39: Olmstead v. United States, 277 U.S. 438, 470 (1928) (Justice Holmes, dissenting from the Court’s opinion that a telephone wiretap intercept is not a search under the Fourth Amendment, observed that “Courts are apt to err by sticking too closely to the words of a law where those words import a policy that goes beyond them”) & Johnson v. Southern Pacific Co., 196 U.S. 14 (1904) (in holding that a statutory ban against a railroad using “any car … not equipped with couplers coupling automatically by impact and which can be uncoupled without necessity of men going between the ends of cars” included locomotives, the Court declared that the contrary conclusion “appears to us to be inconsistent with the plain intention of Congress, to defeat the object of the legislation, and to be arrived at by an inadmissible narrowness of construction”).
  • Footnote 43: Why would an employer insist that bereavement not be available if two parents died in a common accident? An employee, most likely, would be away from work the same amount of time whether he or she was mourning the death of one or two parents.
  • Footnote 54: A court could not order an enhanced payout scheme for the second wife just because she might need more money to help her cope with a foreseeable income shortfall. Isidore Garon ltée v. Tremblay, [2006] 1 S.C.R. 27, 41 (“A desire to achieve a favourable outcome to the employees in a particular case cannot dictate which principles apply”); Alberta v. McGeady, 2014 ABQB 104, ¶23 (“No … decision maker can ignore substantive statutory provisions because it believes [it] … produces unfair results and adopt another norm which it is satisfied produces a more satisfactory result”); J.W. v. Victims of Crime Financial Benefits Program, 2013 ABQB 212, ¶35 (a “statutory delegate … cannot ignore … legislative direction”); Hamilton Street Railway v. Amalgamated Transit Union, 243 O.A.C. 51, 54-55 (Super. Ct. J. (Div. Ct.) 2008) (an arbitrator cannot alter a dismissal clause by inserting “flagrant” and changing the criterion) & International Association of Machinists and Aerospace Workers Local Lodge 1579 v. L-3 Communications Spar Aerospace Ltd., 201 L.A.C. 4th 85, 153 (Wakeling 2010) (an adjudicator cannot ignore legislation and a collective agreement to assist workers who lost their jobs on account of a plant closure and received no termination or severance pay).

Not all of Justice Wakeling’s footnotes are textual ones making substantive points that might raise a question about whether they can be cited as authority. Some are simple citation footnotes, and still others establish acronyms or other short forms of names. The latter type of footnotes are simply matters of style. For example, in Edmonton (City) v Edmonton (Subdivision and Development Appeal Board), 2014 ABCA 337, a 27 paragraph, 5 footnote decision on an application for leave to appeal, three of Justice Wakeling’s five footnotes merely establish short forms or acronyms, as for example when footnote 1 states that “This judgment frequently refers to the City of Edmonton as the ‘City’”. These are the sort of things that most judges indicate by including the short form or acronym in brackets after the first use of the term in the text (e.g., “This is an application by the City of Edmonton (the City) for leave to appeal”).

This style of judgment writing does seem to be Justice Wakeling’s norm when he is writing for himself in a concurring or dissenting judgment or on an application for leave to appeal. For example:

  • In the December 2, 2014 decision in Buffalo Trail Public Schools Regional Division No. 29 v Alberta Teachers Association, 2014 ABCA 407, his 46 paragraph, 28 footnote dissent can be contrasted with the majority’s 17 paragraph, no footnote judgment;
  • In the December 2, 2014 sentence appeal decision in R v Murphy, 2014 ABCA 409, his 68 paragraph, 74 footnote concurring decision stands out when juxtaposed with the majority’s five paragraph, no footnote decision;
  • In the May 6, 2014 decision in Can v Calgary (Police Service), 2014 ABCA 322, his 162 paragraph, 134 footnote concurring opinion stands in stark contrast to the 12 paragraph, no footnote decision of the majority; and
  • His May 12, 2014 leave to appeal decision in Boychuk v Edmonton (Police Service), 2014 ABCA 163 ran to 60 paragraphs and 44 footnotes.

Only two of the Court of Appeal cases in which Justice Wakeling has been involved have explicitly referenced the notion of judicial economy, but they do so as a reason for not signing on to his opinions. These are examples of judicial extravagance increasing the burdens of judicial decision-making in a multi-member court. Those two cases are:

  • In a May 21, 2014 decision in Bizon v Bizon, 2014 ABCA 174, Justices Picard and Costigan concur in four short paragraphs with the result of Justice Wakeling’s 86 paragraph, 46 footnote decision. They noted that they agreed with the reasons in paragraphs 66-77 of his judgment and, because that was sufficient to dispose of the issues, stated that “it is unnecessary for us to consider the other issues discussed in the memorandum of judgment of Wakeling J.A.” (at para 89).
  • In a June 25, 2014 decision in Lubberts Estate (Re), 2014 ABCA 216, the two paragraph decision of Justices Picard and Veldhuis concurs in the “conclusion reached by Justice Wakeling that the decision of Justice Ross … is well written and carefully reasoned, and that this appeal must be dismissed [and] finds her decision sufficient to dispose of all issues” (at para 80). This terse comment stands in stark contrast to the 78 paragraph, 44 footnote decision of Justice Wakeling that addresses numerous “other matters” that Justices Picard and Veldhuis found unnecessary to consider.

Justice Wakeling’s approach seems out of step with the stated need for a “culture shift” within the Canadian judicial system and the Supreme Court of Canada’s call for “proportionality.” In the year since Hryniak v Mauldin was handed down, it has been extended by lower courts and counsel within and beyond the summary judgment context. See Jonathan Lisus, “Case Comment” The Advocates’ Journal (Summer 2014) 7 at 8-9, noting that Hryniak’s talk of a culture shift has been seized upon in lower courts, as has the emerging doctrine of procedural proportionality in the Canadian justice system which takes into account the appropriateness of process, including considerations of cost, timeliness, and impact on litigation given the nature and complexity of the litigation.

Embracing judicial economy and deciding on narrow grounds appears to fulfill many of the goals of a culture shift identified in Hryniak v Mauldin. The principle of proportionality embraced by the Supreme Court would seem to demand judicial economy. Not only does it reduce the burdens of judicial decisions on multi-member courts faced with judicial extravagance, but it ensures that fundamental errors are kept to a minimum. Access to justice concerns suggest that the time and resources that go into crafting the elaborate judgments of Justice Wakeling — and reading them — are extravagances that the legal system and the public can no longer afford.

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How much discretion does a regulator have to limit the recovery of a utility’s legal costs?

Wed, 12/10/2014 - 9:00am

By: Nigel Bankes

PDF Version: How much discretion does a regulator have to limit the recovery of a utility’s legal costs?

Case Commented On: ATCO Gas and Pipelines Ltd v Alberta (Utilities Commission), 2014 ABCA 397

In this case the Court of Appeal confirmed that the Alberta Utilities Commission (AUC) has some level of discretion as to the extent to which it allows a regulated utility to recover its prudently incurred legal costs from its customers when that utility participates in hearings called by the AUC to consider generic issues of interest to all regulated utilities and their customers and shareholders. One member of the Court (Justice Peter Martin) thought that the Commission went too far in denying recovery in relation to one set of costs and would have sent that matter back to the Commission.

The decision is interesting because it involves the intersection between an adjudicator’s discretion to allow for the recovery of legal costs and the general principle that a utility ought to have the opportunity to recover all of its prudently incurred operating costs (including the legal costs associated with rate setting) through the tariff approved by the regulator. A decision that recognizes that a utility has prudently incurred certain costs but which then denies the utility even the opportunity to recover those costs will generally be unsupportable: BC Electric Railway Company v Public Utilities Commission, [1960] SCR 837. In this case however there were special considerations and thus while the majority found the Commission’s decision both reasonable and correct, the decision is not likely of broad application – a point that Chief Justice Fraser herself seems to acknowledge at paras 70 – 73. In particular, and notwithstanding other and rather more sweeping statements from the Chief Justice (see, for example para 106, quoted below, and paras 110 – 111), it is not likely that the decision can be applied in the more routine situation in which a utility incurs legal costs as part of preparing and presenting its general rate application (GRA) to the AUC for it to set just and reasonable rates. The AUC may still scrutinize those legal costs on prudence grounds (and see here in particular Justice Martin at para 171) to ensure that the utility is not gold-plating its costs (e.g. where it chooses to retain expensive outside counsel to undertake a task that could be more economically dealt with in-house) but it likely cannot say (even on a reasonableness standard of review) that the legal costs associated with preparing and presenting a GRA are not recoverable.

The decision features (not for the first time, see also ATCO Electric Limited v Alberta (Energy and Utilities Board), 2004 ABCA 215) a lengthy disquisition by the Chief Justice on rate making and the history of utility regulation in Alberta and the introduction of competition into the generation/supply and retail elements of the energy sector while maintaining full regulation of the lines side of the business (transmission and distribution).

The background

These matters had their origin in two generic hearings convened by the AUC. The first was in response to the historic Stores Block decision of the Supreme Court of Canada: Atco Gas and Pipelines Ltd v Alberta (Energy and Utilities Board), 2006 SCC 4. The second related to a set of hearings convened by the AUC to consider the introduction of performance based regulation (PBR) for distribution utilities in Alberta. Both proceedings are now complete. For the PBR Report see AUC Decision, 2012-237; for the Stores Block matters see a report known as the Utility Asset Disposition (UAD) decision (see AUC Decision, 2013-417). Leave to appeal aspects of the merits of both decisions has been granted by the Alberta Court of Appeal but those matters were not at issue in this case. For leave on the UAD matters see FortisAlberta Inc v Alberta (Utilities Commission), 2014 ABCA 264. I have discussed elements of the AUC’s UAD report here.

The crucial point for present purposes is that the nature of the UAD generic hearing changed over the course of its life. It began in quite an abstract way with the AUC creating a list of issues that the Commission had identified as “matters arising” from the Court’s decision in Stores Block. At that time the Commission took the view and announced to all parties (including regulated utilities) in the most resolute terms (quoted here at para 30) that it would not consider cost claims:

Parties who participate shall not be entitled to submit cost claims to the Commission and no funding will be awarded by the Commission to participants. Each party shall be responsible for its own costs. The Commission considers this Proceeding to deal with generic issues which concern all stakeholders and that utility ratepayers should not be required to underwrite the costs of the participants through regulated rates. [Emphasis in original]

The nature of the UAD hearing changed as a result of other proceedings before the Commission specifically ATCO Gas’ GRA application and the AUC’s proceeding on the Generic Cost of Capital (GCC) (both summarized here at para 37). In the GRA matter the AUC concluded (following Stores Block), that production assets without an operational purpose should be removed from the rate base and at the expense of the shareholders; and in the GCC case the AUC further confirmed that the risks associated with stranded assets should be borne by the shareholders. ATCO sought review and variance of both decisions. Rather than dealing with these matters directly the AUC concluded that they should be dealt with as part of the UAD proceedings once they resumed. The UAD hearings which began in April 2008 had actually been put on hold in November 2008 and did not resume until October 2012. The delay was occasioned by other post-Stores Block litigation specifically the Carbon Storage litigation (ATCO Gas and Pipelines Ltd v Alberta (Energy and Utilities Board), 2008 ABCA 200), the Harvest Hills litigation (ATCO Gas and Pipelines Ltd v Alberta (Energy and Utilities Board), 2009 ABCA 171) and the Salt Cavern litigation (ATCO Gas and Pipelines Ltd v Alberta (Energy and Utilities Board), 2009 ABCA 246.) One thing that is abundantly clear from this recitation is that the ATCO family wins the award for the most litigious utility in Canadian legal history, certainly in modern times – perhaps ever.

When the UAD hearing did resume the AUC again reiterated its position that participants should bear their own legal costs. On an application for review and variance of that ruling the AUC ultimately ruled (February 2013) that it would allow ATCO Utilities and other Alberta utilities to recover their legal costs in accordance with its Rule 22 Rules on Intervener Costs in Utility Rate Proceedings for the period from the reconvened hearing until close, but with no recovery for the first part of the proceedings. In sum, the AUC did allow the recovery of legal costs on fixed scale from the time when the stranded costs and production abandonment issues were added to the UAD agenda but denied recovery for the first part of the hearing. The ATCO Utilities sought leave to appeal the February 2013 decision.

The PBR matters proceeded somewhat differently but encompassed both a generic hearing of PBR issues and PBR filings by all of the distribution utilities. More than two years in to the proceedings the ATCO Utilities and other Alberta Utilities advised the AUC that they would be seeking full recovery of all of their legal costs and in excess of the scales fixed by Rule 022. The AUC ultimately awarded legal costs to the ATCO Utilities on the basis of the Rule 022 tariff plus an additional 20%.

The two leave applications were heard together and Justice Conrad ruled that the two matters should also be heard together on the merits: Atco Gas and Pipelines Ltd v Alberta (Utilities Commission), 2013 ABCA 331. Leave was granted on the following terms: “Did the Commission err in law or jurisdiction by denying or limiting recovery of the Appellants’ claimed regulatory costs and by treating the costs of or incidental to any hearing or other proceeding of the Commission differently than other costs?”

The relevant statutory provisions

The relevant statutes, the Electric Utilities Act, SA 2003, c. E-5.1, the Gas Utilities Act, RSA 2000, c. G-5 and the Utilities Commission Act, SA 2007, c. A-37.2 offer surprisingly little guidance as to the recovery by a utility of its operating costs as part of the exercise of setting just and reasonable rates. For example, while the Gas Utilities Act is quite prescriptive with respect to establishing a rate base and providing for a just and reasonable return on the undepreciated part of the rate base, it has nothing else to say about operating costs other than a section dealing with the cost of gas (which seems of limited applicability in a competitive retail market environment) and a general provision (mirrored in the Public Utilities Act, RSA 2000, c. P-45, s. 91) allowing the Commission to “consider all revenues and costs” of a utility over a particular period of time (a provision that was initially introduced to deal with the problem of regulatory lag and to provide statutory authority for a limited degree of retrospective rate making). The Electric Utilities Act is a little more forthcoming. Thus, section 102(1) provides that “Each owner of an electric distribution system must prepare a distribution tariff for the purpose of recovering the prudent costs of providing electric distribution service by means of the owner’s electric distribution system” and section 122 provides that “When considering a tariff application, the Commission must have regard for the principle that a tariff approved by it must provide the owner of an electric utility with a reasonable opportunity to recover” inter alia costs related to the cost of capital and then “any other prudent costs and expenses that the Commission considers appropriate, including a fair allocation of the owner’s costs and expenses that relate to any or all of the owner’s electric utilities”.

The Utilities Commission Act is silent with respect to the recovery of the operating costs for a utility (evidently this is left to the subject specific statutes) but it does expressly address the subject of costs in section 21 in these terms:

The Commission may order by whom and to whom its costs and any other costs of or incidental to any hearing or other proceeding of the Commission are to be paid.

While there was some argument in the case to the effect that this provision was intended to deal with the costs incurred by the Commission and any interveners in proceedings before it Chief Justice Fraser (at para 85) rejected those submissions and chose to emphasise that this provision included both applicants and interveners and accorded the Commission a broad discretion in disposing of costs issues.

Standard of review

Chief Justice Fraser concluded that the standard of review of AUC decisions on the recovery of legal costs was reasonableness. She rejected (at para 65) ATCO’s suggestions that the AUC’s decision to award costs on any basis other than the prudently incurred standard raised a true question of jurisdiction that attracted a correctness standard. Rather, in Chief Justice Fraser’s view this was a case which dealt with the AUC’s interpretation and application of its home statutes and which presumptively attracted a reasonableness standard (at paras 58 and 68). The Chief Justice would also have upheld the AUC’s decisions on a correctness standard (at paras 69 and 79).

The Grounds for Dismissing the Appeal – Chief Justice Fraser

Chief Justice Fraser offered six reasons for her conclusion. I have already referred above to the first reason namely that section 21 of the UCA clearly afforded the Commission a broad discretion and that that discretion extended to applicants as well as interveners. Furthermore, as a matter of practice the AUC had engaged in rule making on the matter of legal costs and the relevant Rule, Rule 22, did, notwithstanding its title, deal with the costs of both applicants and interveners (and quaere at para 123 whether Rule 22 embodies a standard of prudence or whether there is a mismatch between Rule 22 and the prudence standard?). Second, and also alluded to above, Alberta utility legislation does not provide an express right for a utility to recover all of its legal costs but rather afforded the AUC a degree of discretion in relation to these matters (at paras 102 – 105). Third, public policy supported the Legislature’s decision to grant the AUC some discretion (at para 106):

Without the ability to regulate legal costs as the Commission considers appropriate, the Commission would be unduly restricted in its ability to govern its proceedings. Without this control, there would be no effective incentive on any party in proceedings before the Commission to minimize their legal costs. If all legal costs (I am here referring to those that meet the prudence standard) can be paid from the ratepayer purse, where is the incentive for a utility to hold legal costs in check and minimize challenges and objections or the scope of the subject proceedings? And if all legal costs are recoverable, where is the incentive not to seek review and variance of every Commission decision adverse to the utility? Finally, if all legal costs of a utility company are recoverable as prudent costs no matter the nature of the proceedings before the Commission, where is the balance between the utility company and the ratepayers?

Fourth, ATCO could not rely on the regulatory compact theory to trump the statutory scheme. In any event, properly interpreted the compact does not afford a utility any more than an opportunity to earn a reasonable return or (at para 110) “to recover prudent costs” and furthermore neither the EUA nor the GUA (as we have seen) “provides for legal costs to be characterized and treated as prudent costs.” Furthermore, even if the regulatory compact could be said to guarantee recovery of prudent legal costs such a guarantee must be revised and modified in light of the language of Alberta statutes. Fifth, the matters in dispute here and the nature of the proceedings were not traditional rate setting proceedings but generic proceedings. While the utilities clearly had a self interest in participating in these proceedings to protect their interest they were not required to do so and the Commission had clearly advertised the terms of participation. Furthermore, and in the end, the AUC had actually allowed a measure of recovery. And finally, by denying full recovery the Commission was not (at para 119) negatively impacting a utility’s “rate of return in an improper or unfair manner” because the AUC would have in mind its rules and practices, including Rule 22, when setting the rate of return for a utility.

Justice Côté’s separate concurring opinion

Justice Côté concurred in the result on both appeals but clearly found the UAD matter much more challenging. Thus, while the AUC’s principal argument (which I take to be the section 21 of the UCA argument that the matter is simply a question of statutory ‘discretion’” (at para 128)) gave him “grave misgivings”, he felt able to concur in the result principally on the basis that the AUC was not dealing with an ordinary rate application. Hence (at para 134):

In these rather unusual circumstances, the respondent Commission had to use its experience and expertise to craft a fair and reasonable solution to the appellants’ request for indemnification of its hearing expenses. … I am of the view that the Commission did so properly and reasonably here. That entails no error of law, given these circumstances, and even if there were one, it could not have affected the result.

And just to be sure (at para 133):

So I find it unnecessary to reach any final conclusion about anything else. For example, about how to handle a utility company’s hearing expenses in the more ordinary type of rate hearing for a traditionally-regulated public utility.

As for the PBR matters, since the standard for review was reasonableness and since it was an argument about the amount of costs that the Commission had awarded (and perhaps whether it amounted to full indemnity), these were matters that engaged the experience and expertise of the Commission and ATCO had not met the onus of showing that the Commission’s decision was unreasonable.

Justice Martin’s Dissenting (in Part) Opinion

Justice Martin agreed with the disposition of the PBR matters but would have allowed the appeal on the UAD matters. He did agree that section 21 of the UCA did cover fee matters for both interveners and applicants but concluded that in denying ATCO its costs for the first part of the UAD generic hearing the Commission was acting arbitrarily. For Justice Martin there was only one test for the recovery of legal costs and that was the prudence test and the Commission was entitled to use its Rule 22 as a measure of prudence in any particular case. But to exclude recovery completely, whether costs were prudently incurred or not, was arbitrary; and it was no answer to say that participation in the generic hearings was voluntary, for (at para 165) “had they elected not to participate it would have been at their peril; policies and procedures that directly affected them would have been developed without their input, perhaps to their detriment.”

ATCO’s record suggests that the ATCO Utilities will seek leave to appeal this decision. The outcome of both that application and any subsequent hearing on the merits may well be affected by two decisions which we are now awaiting from the Supreme Court of Canada: ATCO Gas and Pipelines Ltd v Alberta (Utilities Commission), [2013] SCCA 459 on appeal from 2013 ABCA 310 (ATCO Pension case) and Ontario Energy Board v Ontario Power Generation Inc, [2013] SCCA 339 on appeal from 2013 ONCA 349. As luck would have it these appeals were both heard on December 3, 2014, the day after judgement came down in this case. Both cases raise the connection between prudently incurred costs and the right or opportunity of recovery. In particular it seems that the questions that the Court will have to answer in these cases include the following: (1) if a utility claims a set of operating costs, must the regulator rule on the prudency of the utility in incurring those costs, and (2) if the regulator rules that the costs incurred were indeed prudently incurred, must the regulator allow the utility at least the opportunity to recover those costs. In the ATCO Pension Case the AUC denied ATCO full recovery of the pension costs that it had incurred on the basis of independent actuarial advice. In the course of refusing to interfere with the Commission’s decision, the Court (at para 9) ruled as follows:

The appellants argue that the applicable statutes mandate a two-stage analysis. First the Commission must determine if the expenditures were prudently incurred. If so, they must be included in the second stage of the analysis, which is the setting of just and reasonable rates. While a two-stage analysis might often be helpful and appropriate, the applicable statutes do not mandate that line of analysis. The decisions of the Commission are entitled to deference, and that includes the selection by the Commission of its line of analysis. Given the focussed objective of the 2011 pension hearing, the analytical framework selected by the Commission was not unreasonable.

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Bill 202 v Bill 10: A Battle of the Bills

Tue, 12/09/2014 - 9:57am

By Ronaliz Veron and Sarah Burton

Bills commented on: Bill 202: The Safe and Inclusive Schools Statutes Amendment Act, 2014, 3rd Sess, 28th Leg, Alberta, 2014; Bill 10: An Act to Amend the Alberta Bill of Rights To Protect Our Children, 3rd Sess, 28th Leg, 2014

The Alberta Legislature has been the subject of some controversy in recent weeks. On November 20, Liberal MLA Laurie Blakeman introduced Bill 202: The Safe and Inclusive Schools Statutes Amendment Act, 2014, 3rd Sess, 28th Leg, Alberta, 2014. A week later, in an abruptly called press conference, Premier Jim Prentice described Bill 202 as “unnecessarily divisive” and announced that his government would introduce its own bill dealing with the issues raised by Bill 202. On December 1, Bill 10: An Act to Amend the Alberta Bill of Rights To Protect Our Children, 3rd Sess, 28th Leg, 2014 was introduced by the Progressive Conservatives.  After being subjected to widespread public scrutiny, Bill 10 was amended on December 3, 2014. By the next day, it was clear that the amendment did not quell the rising tide of opposition and on December 4, Premier Prentice announced he was deferring Bill 10’s Third Reading until 2015.

This post will examine the salient parts of both Bill 202 and Bill 10 and their impact on the human rights regime in Alberta. It particularly focuses on the heart of the controversy: how the creation of gay-straight alliances is treated under both Bills.  Serious concerns that remain to be addressed by Bill 10 will also be identified. Given Premier Prentice’s apparent willingness to step back to examine his party’s Bill, we can only hope that these pressing concerns will be addressed in the new year.

Private Member’s Bill 202

Bill 202 aimed to promote safe, inclusive, and supportive learning environments for Alberta students regardless of sexuality, sexual orientation, or gender identity. To achieve this goal, it introduced the following changes to existing legislation (see Liberal Communications, “Blakeman’s Bill 202 will make schools safer and more inclusive”, (15 October 2014)):

  • All school boards would be required to develop policies to support students who want to lead and establish gay-straight alliance activities and organizations.
  • Section 11.1 of the Alberta Human Rights Act, RSA 2000, c A-25.5 (“AHRA”), which requires a parent or guardian to be notified if sexual orientation will be discussed in the classroom, would be repealed.
  • The Canadian Charter of Rights and Freedoms and the AHRA would be referenced in Alberta’s Education Act, SA 2012, c E-0.3.

Gay-Straight Alliances

At present, section 33(2) of the Education Act reads,

33(2)  A board shall establish, implement and maintain a policy respecting the board’s obligation under subsection (1)(d) to provide a welcoming, caring, respectful and safe learning environment that includes the establishment of a code of conduct for students that addresses bullying behaviour.

To further this anti-bullying goal, Bill 202 would have required section 33(2) policies to accommodate student-led organizations that promote a positive school environment for all students regardless of sexual orientation or gender identity. It also allowed the students who form these organizations to identify their group as a “gay-straight alliance” or any other name that is consistent with their group’s purpose.

Section 11.1 of the AHRA

Bill 202 would also have repealed the controversial section 11.1 of the AHRA. Section 11.1 was introduced back in 2009, notably at the same time “sexual orientation” was added as a protected ground of discrimination. Section 11.1 gives parents the legal right to exclude their children from discussions primarily involving religion, human sexuality, or sexual orientation. Linda McKay-Panos discussed the concerning effects of this provision in this post. Bill 202’s removal of s. 11.1 sent a signal that sexual orientation should be treated no differently than any other ground of discrimination.

Reference to the Charter of Rights and Freedoms and Alberta Human Rights Act

Bill 202 would have amended section 16(1) of the Education Act to state that all programs of study in Alberta must respect “the Canadian Charter of Rights and Freedoms and the Alberta Human Rights Act.” While the reference to the Charter and the AHRA is unnecessary given section 1(1) of the AHRA and section 32(1) of the Charter, which make it clear that other statutes operate subject to the AHRA and Charter, it still added clarification to this provision of the Education Act.

Progressive Conservative’s Bill 10

On November 28, 2014, Premier Jim Prentice announced that the Conservative government would be introducing Bill 10: An Act to Amend the Alberta Bill of Rights to Protect our Children. While Bill 10 purports to deal with the same issues as Bill 202, it has some notable differences, particularly in relation to the creation of gay-straight alliances in schools.

Gay-Straight Alliances

Unlike Bill 202, Bill 10 does not give students a positive right to form student-led organizations that promote a welcoming and safe learning environment (including gay-straight alliances). Instead, a student must ask a school staff member for support creating such a club. That staff member is entitled to refuse to support the student’s initiative. The student is then permitted to appeal that refusal to the school board (see section 2(4) of Bill 10).

Up until December 2, 2014, Bill 10 stated that following a school board’s rejection, a student could make an application for judicial review on issues of jurisdiction and unreasonableness. This onerous process came under severe scrutiny in the media because it raised serious access to justice concerns. Judicial review is a long, costly, and complicated process. In the event of a school board’s refusal, students and their parents would, in all likelihood, be required to hire a lawyer and head to court. Not only would this impose a heavy financial burden on students and parents, it would also have subjected them to an unnecessarily laborious process. Appearing in court can be a very discouraging and intimidating prospect for any adult, let alone a young student. Furthermore, this appeal and judicial review process could be extremely lengthy. A student who was involved in the initiative may already have graduated before a final decision would be rendered.

After a lengthy debate on the evening of December 3, 2014, the Legislature amended Bill 10, purporting to address these concerns. As Bill 10 currently stands, the school board’s decision to support or refuse a student-led gay-straight alliance is final. However, if the board rejects the student’s initiative, that student can send a request to the Minister of Education. The Minister is obligated to facilitate and support the establishment of the organization (see section 2(4) of Bill 10 as amended).

This curious amendment appears to (or at least attempts to) shift the burden of resolving disputes from the student onto the Minister. While the reference to judicial review was removed from Bill 10, it cannot actually preclude a student from challenging the school board’s decision in court.  A human rights complaint against a school board that rejected a GSA would also be an option. However, because the Minister is obligated to support a student’s initiative, any battle over the right to create a gay-straight alliance will now likely occur between the school board and the Minister. So while this amendment provides an avenue of support to the student, it does not remove the possibility that a student could end up before a judge asking to create a gay-straight alliance.

While this change may mitigate some of the more obvious problems with Bill 10, it falls short of addressing many other serious concerns.  First and foremost, the new amendment does not change the fact that schools can prohibit the creation of gay-straight alliances. This implicates Charter issues relating to a student’s freedom of expression, freedom of association, and equality rights. It maintains a separate regime for students who want to start a gay-straight alliance, because only clubs that fall under Bill 10 are subjected to this process. In doing so, it discredits these students’ right to equal treatment. This is particularly vexing because, given Bill 10’s anti-bullying agenda, it bears mentioning that these peer-support groups that have been shown to reduce bullying and lower suicide rates among youth (see Alberta, Legislative Assembly, Alberta Hansard, 28th Leg, 3rd Sess, Issue 12e (3 December 2014) at 357 (Joe Anglin)).

As an additional concern, the Legislature is passing its responsibility to school boards to determine whether or not students have a right to form a gay-straight alliance. Bill 10 ignores the requirement that any legislation must be consistent with the AHRA and the Charter. On its face, that would require equal treatment in allowing student-led groups to address protected grounds of discrimination.

Repeal and Transfer of Section 11.1 of the Alberta Human Rights Act

Another controversial (yet less publicized) amendment included in Bill 10 is its treatment of section 11.1 of the AHRA. While it repeals section 11.1, it places a nearly identical provision into the Education Act and the School Act. Similar to the existing section 11.1 of the AHRA, section 58.1(1) of the Education Act and section 50.1(1) of the School Act will allow parents to exclude their children from discussions of religion or human sexuality. While the words “sexual orientation” have been removed from the new parental opt-out provision, absent a clear definition of “human sexuality,” one may argue that “sexual orientation” is subsumed under this category.

From the government’s perspective, this amendment is a smart way to keep a more acceptable form of section 11.1 without changing the status quo. In practice, section 11.1 of the AHRA is often dealt with by schools boards and not the Alberta Human Rights Commission in any case (See section 22(1.1)(a) of the AHRA). In a way then, this amendment merely codifies the existing state of affairs.

Sexual Orientation” to be added to the Alberta Bill of Rights

Bill 10 also adds “sexual orientation” to section 1(2) of the Alberta Bill of Rights, RSA 2000, c A-14. While this addition may not have a new and ground-breaking legal effect, it is good to bring this legislation in line with the AHRA.

Conclusion

Gay-straight alliance members demand a reform of Bill 10 to make it more consistent with Bill 202 (Leah Holoiday and Jeremy Nolais, “Prentice puts gay rights on hold”, Calgary Metro (5-7 December 2014). Whether the government will listen to these public demands remains to be seen. It will be very interesting to see how this contentious debate continues to unfold over the next few months.  Despite the temporary ceasefire, the Alberta Legislature is still faced with the challenging task of balancing the interests of the LGBTQ students, their allies, parents, and school boards. Ultimately, the critical issue that needs to be addressed is whether or not students should have a positive right to form gay-straight alliances. Anything short of a definitive answer to this question will only perpetuate an already heated and protracted debate.

A Revised Aboriginal Consultation Direction issued to the Alberta Energy Regulator

Mon, 12/08/2014 - 10:06am

By: Giorilyn Bruno and Nigel Bankes

Direction and Decision commented on: Energy Ministerial Order 105/2014 /  Environment and Sustainable Resource Development Ministerial Order 53/2014; Prosper Petroleum Ltd., 2014 ABAER 013

On October 31, 2014, the Minister of Energy and the Minister of Environment and Sustainable Resource Development (ESRD) by Order issued a revised Aboriginal Consultation Direction to the Alberta Energy Regulator (AER). The main purpose of this Direction is “to ensure that the AER considers and makes decisions in respect of energy applications in a manner that is consistent with the work of the Government of Alberta” in meeting its consultation obligations associated with the existing rights of Aboriginal people (Direction at 2). This is the second Ministerial Order issued under s. 67 of the Responsible Energy Development Act, SA 2012, c R-17.3 (REDA) and it repeals the previous one. In April we posted a blog commenting on the first Order (available here). This post provides an overview of the changes introduced by the new Direction, comments on its scope, and identifies some of the issues that have yet to be addressed.

What are the changes?

The first noticeable difference is that the new Direction is issued under the authority of both the Minister of Energy and the Minister for ESRD whereas the previous one was issued only by the Minister of Energy.

The requirements of the new Direction overall remain similar to those established by the previous Direction although worded in slightly different terms. To improve clarity, the new Direction groups these requirements under four subheadings: (a) Coordination, (b) Applications, (c) Decisions, and (d) Appeal and Reconsideration.

(a) Under “Coordination”, the new Direction reiterates that the AER is required to create and maintain a consultation unit that will work with the Aboriginal Consultation Office (ACO). The Direction also introduces a new requirement for the AER to collaborate with the ACO in establishing operating procedures that address how these two organizations will administer and coordinate their work. Once these operating procedures are in place, the AER must follow them (Direction at 3). The requirement for the AER to collaborate with the ACO in establishing operating procedures is perhaps the most significant change introduced under the new Direction.

(b) Under “Applications”, the new Direction confirms that the AER must require all proponents to contact the ACO before submitting an energy application to the AER. Once submitted, the AER is to provide the ACO with certain information with respect to the application. Despite a few minor revisions and omissions, there seem to be no significant changes in this requirement. It requires that a copy of or access to the application be submitted to the AER, as well as a copy of any statement of concern, submission, evidence and information filed by any aboriginal group concerning the application. The following requirements have not substantially changed but the new Direction introduces an exception to their application, i.e. they do not operate if the application concerns an activity that is deemed not to require consultation. This would happen in two instances: (1) the application concerns an activity that is listed under Appendix C of the Consultation Guidelines or (2) the application is accompanied by a pre-consultation assessment of the ACO indicating that no consultation is required. Assuming that consultation is required, the AER must ensure that proponents have included in their application information about the potential adverse impact of the proposed project on existing rights and traditional uses of aboriginal people. Also, the AER is required to advise the ACO of any changes to the application, whether alternate dispute resolution which involves aboriginal people will be used, whether a hearing will be held on the application, and whether aboriginal people will be included in the hearing process (Direction at 3-4).

(c) Under “Decisions”, the new Direction restates that the AER is required to seek advice from the ACO with respect to the adequacy of consultation and mitigation actions on potential adverse impacts on aboriginal rights and traditional uses. Just as before, the AER is also required to notify the ACO and provide the ACO with a copy of its decision and related reasons concerning the outcome of an energy application at the same time it notifies the proponent. The only difference under this subheading is that the AER is no longer required to provide the ACO upon request with a copy of its draft decision before issuance (Direction at 4).

(d) Finally, no changes are introduced under “Appeal and Reconsideration”. The AER is still required to provide the ACO with a copy of any application for regulatory appeal, reconsideration, or leave to appeal to the Court of Appeal filed by aboriginal people (Direction at 4).

What is the scope of the new Direction?

In a recent decision, the AER had the chance to consider the scope of application of the previous Aboriginal Consultation Direction (Ministerial Order 141/2013). This decision is Prosper Petroleum Ltd., 2014 ABAER 013, and it involves a regulatory appeal under Division 3 REDA and Part 3 of the AER Rules of Practice. The proceeding was brought by Fort McKay First Nation and Fort McKay Métis Community Association (Fort McKay) against the AER’s decision to grant 24 oil sands evaluation well licences to Prosper Petroleum Ltd. (Prosper) under the Oil and Gas Conservation Act.  Among other issues, Fort McKay claimed that Prosper had failed to consider the potential adverse effects of the project on Fort McKay’s treaty and aboriginal rights in the area, and did not provide the AER with this information. Since Ministerial Order 141/2013 explicitly required project proponents to provide the AER with a detailed assessment of potential impacts of energy resource activities on aboriginal communities, Fort McKay argued that Prosper did not meet the requirements set by the Order and consequently the AER did not have the proper information before it when it issued the licences. Thus, Fort McKay asked the AER to revoke the well licences.

In reaching its decision (at paras 32-42), the AER noted that under REDA, a “specified enactment” is distinguished from an “energy resource enactment”.  A “specified enactment” includes the Environmental Protection and Enhancement Act, RSA 2000, c E-12, the Public Lands Act, RSA 2000, c P-40 and the Water Act, RSA 2000, c W-3, but does not include the Oil and Gas Conservation Act, RSA 2000, c O-6, the Oil Sands Conservation Act, RSA 2000, c O-7, or the Pipeline Act, RSA 2000, c P-15, which fall under the definition of an “energy resource enactment”. The AER also noted that the Preamble of Ministerial Order 141/2013 at page 2 contains a statement of applicability. Based on this statement, the AER concluded that Ministerial Order 141/2013 applies to applications under specified enactments but does not apply to applications under energy resource enactments. Since the well licences were granted to Prosper under the Oil and Gas Conservation Act, the AER rejected Fort McKay’s claim on the basis that the Direction does not apply to applications under energy resource enactments. The AER also rejected Fort McKay’s argument that a purposive reading of the Direction should prevail over its narrow interpretation to ensure that the AER’s decisions are consistent with Alberta’s constitutional obligations to aboriginal people.

Despite the AER’s decision, the scope of Ministerial Order 141/2013 remains controversial. On first reading, the Direction does seem to suggest that its applicability concerns applications to the AER under specified enactments rather than energy resource enactments. The Direction indicates as follows:

This Direction applies to “applications” to the AER for “energy resource activity” “approvals” under “specified enactments”, all as defined in REDA (“energy applications”).

The syntax of the statement naturally leads to assume that the Direction applies to applications to the AER for energy resource activity approvals under specified enactments. In other words, the statement seems to require the AER to consider adverse impacts on existing rights of Aboriginal people for decisions under specified enactments only. The AER took that position (see para 37) and in a comment to our previous post we suggested a similar approach. However, further analysis reveals that the statement of scope is not as clear as it may seem, and it is possible to reach a different conclusion by considering some of the definitions in REDA. The statement of scope refers to REDA for the meaning of the terms “application”, “energy resource activity” and “approval”. These terms are each defined under s. 1(1)(a), s. 1(1)(i) and s. 1(1)(b) REDA as follows:

“application” means an application to the Regulator for the issuance of an approval; …

“energy resource activity” means

(i) an activity that may only be carried out under an approval issued under an energy resource enactment, or

(ii) an activity described in the regulations that is directly linked or incidental to the carrying out of an activity referred to in subclause (i) (emphasis added); …

“approval” means, except where the context otherwise requires, a permit, licence, registration, authorization, disposition, certificate, allocation, declaration or other instrument or form of approval, consent or relief under an energy resource enactment or a specified enactment (emphasis added)

The above definition of “application” refers to the issuance of an approval, and the definition of “approval” refers to permits and licences issued under both energy resource enactments and specified enactments. The definition of “energy resource activity” refers to an activity that requires an approval issued under an energy resource enactment (or which is listed by regulation as linked or incidental to an activity that requires an approval under an energy resource enactment). This definition does not refer to “specified enactments” – thus, it is hard to see how one can even have an approval of an energy resource activity that is issued under a specified enactment. Given this tangle, it is far from clear that the Direction only applies to applications under specified enactments. Rather, it may be argued that the Direction applies to applications under both energy resource enactments and specified enactments (see e.g. Kirk N. Lambrecht, “Constitutional Law and the Alberta Energy Regulator” at 42-43, here).

A broad and purposive interpretation as opposed to a narrow one seems preferable for three main reasons. First, it takes into account the defined meaning of “approval” and “energy resource activity”. Second, it avoids absurd consequences caused by the fact that under the existing legislation it is not possible to have an approval of an energy resource activity that is issued under a specified enactment. Last, a broad interpretation is consistent with the purpose of the Direction, and more generally with the goals of the Regulatory Enhancement Project and the Government’s decision to establish the ACO. The intent of the Government with the recent reforms is to move toward a streamlined, integrated and coordinated process for energy applications, including applications that require Aboriginal consultation. The ACO was established to centralize the responsibility for assessing the adequacy of Aboriginal consultation, and the Direction was issued to ensure that the AER’s decisions are consistent with the work of the Government of Alberta in meeting its consultation obligations associated with the existing rights of Aboriginal people. Considering these goals, it is not clear why the Minister of Energy and the Minister of ESRD would want to differentiate between the rules for applications under specified enactments and the rules for applications under energy resource enactments.

The Prosper decision was based on Ministerial Order 141/2013, but the Preamble of the new Order contains a statement of scope, which is exactly the same as Ministerial Order 141/2013. For this reason, the AER may once again decide to restrict the applicability of the new Direction to applications under specified enactments. Unfortunately, the new Direction preceded the AER’s decision by five days and thus does not address this issue. It remains to be seen whether the Ministers will intervene again to clarify the scope of the new Direction in response to this decision. While that may be embarrassing for the Ministers, it would be useful to have this issue clarified once and for all.

What are the legal effects of the new Direction?

A further issue that remains uncertain concerns the legal effects of the new Direction. The recent Prosper Petroleum Ltd. decision raises interesting questions, which are likely to come up again in the future. May a decision of the AER be subject to judicial review (or actually form the basis for an application for leave to appeal the decision to the Alberta Court of Appeal under s. 45 of REDA) on the basis that it failed to comply with the Direction or to determine whether the AER committed an error of law in restricting the application of the Direction to specified enactments? The answer to this question depends on the nature of the Direction. In our post on the previous Direction, we discussed at length the distinction between administrative and legislative directions as well as the different legal effects they produce for the AER and third parties (for more on this point, see page 3 here). Briefly, administrative directions are used to dictate administrative policy within the ranks of government departments. If they are drafted in imperative terms they may be binding on those to whom the direction is addressed, but their infringement can only have administrative consequences as opposed to judicial ones. By contrast, legislative directions bind all those to whom the direction is addressed, may create substantive rights for third parties, and are legally enforceable in court. Since this type of direction must be interpreted and applied as any other law, an interested party may seek to have a direction enforced by way of prerogative relief and a decision of the agency may be subject to judicial review (or their equivalents on an appeal with leave) to determine whether it complies with the direction or whether the agency made an error in applying it. In our previous post, we concluded that it is difficult to characterize with certainty the nature of directions issued under s. 67 REDA; this remains unclear. It will be interesting to see the Court of Appeal’s response in the event that Fort McKay seeks appellate review of the AER’s recent decision.

What are the procedural requirements under s. 67 REDA?

There is currently no answer to the issue of whether the Ministers of Energy and ESRD are bound by some sort of procedural requirements when issuing directions to the AER under s. 67 REDA. The new Direction can be accessed through the Alberta Responsible Energy Policy System (AREPS) portal, here. However, just as with Ministerial Order 141/2013, it seems that the new Direction was not published in the Alberta Gazette. In our previous blog we have already discussed that adopting an informal procedure to issue directions to the AER may cause a direction to be ineffective in certain circumstances, and those considerations remain unaltered (for more on this issue, see page 4 here).

Ms. Bruno’s research on the REDA is supported by a grant from the Alberta Law Foundation to the Canadian Institute of Resources Law.

National Day of Remembrance and Action on Violence Against Women and the Failed Challenge to the Repeal of the Long Gun Registry

Sat, 12/06/2014 - 9:14am

By Jennifer Koshan

Case commented on: Barbra Schlifer Commemorative Clinic v. Canada, 2014 ONSC 5140 (CanLII)

Yesterday the University of Calgary marked the 25th National Day of Remembrance and Action on Violence Against Women with two events: the annual ceremony held by the Women’s Centre, and our own ceremony in the Faculty of Law. Our event involved strong components of both remembrance and action. We recognized the 20th anniversary of the installation of Teresa Posyniak’s beautiful and haunting sculpture “Lest We Forget” in the Faculty. The sculpture honours women who were killed by men, including Aboriginal women, sex trade workers and the 14 women of L’Ecole Polytechnique. Teresa was present to share her reflections on creating the sculpture, the progress we have made on issues of violence against women over the last 20 years, and the work we still have to do. In terms of action, we also heard from Michelle Robinson, a Yellowknife Dene woman who spoke powerfully about the ongoing colonial violence experienced by indigenous women and indigenous peoples in Canada, and of the actions that we can and must all take to respond to this violence. Dean Ian Holloway stressed the importance of hosting the sculpture in our faculty as a reminder to reflect on the meaning of justice.

That brings me to the case I wish to comment upon in this post. Three years ago, I marked the National Day of Remembrance with an ABlawg post inquiring into whether the federal government’s repeal of the long gun registry was a violation of its obligations concerning violence against women. There has now been litigation on that question, and the applicant Barbra Schlifer Commemorative Clinic was unsuccessful in arguing that the repeal violated sections 7 and 15 of the Charter (Barbra Schlifer Commemorative Clinic v. Canada, 2014 ONSC 5140 (CanLII)).

Justice E.M. Morgan of the Ontario Superior Court of Justice began his judgment by setting out the recent history of firearms regulation in Canada. Before 1995, any restrictions and penalties associated with firearms were found in the Criminal Code, RSC 1985, c C-46. The Firearms Act, 1995, SC 1995, c. 39, created “a comprehensive licensing and registration scheme for all firearms, including prohibited and restricted weapons as well as non-restricted firearms” (at para 6). It established a new registry and was enforced via measures in the Criminal Code, which created offenses for the possession of firearms without meeting licensing and registration requirements. The Supreme Court of Canada upheld the Firearms Act as a constitutional exercise of the federal government’s criminal law powers in Reference re Firearms Act (Can), [2000] 1 SCR 783, 2000 SCC 31. The Court in that case noted that when the Firearms Act was introduced, then Justice Minister Allan Rock cast the objective of the legislation as “the preservation of the safe, civilized and peaceful nature of Canada.”  He also noted the social problems of “suicide, accidental shootings, and the use of guns in domestic violence, and detailed some of the shooting tragedies that had spurred public calls for gun control”, including the shootings at L’Ecole Polytechnique in 1989 (Reference re Firearms Act (Can) at para 20, citing House of Commons Debates, vol. 133, No. 154, 1st Sess., 35th Parl., February 16, 1995, at p. 9706).

In 2012, the federal government passed Bill C-19, An Act to Amend the Criminal Code and the Firearms Act, SC 2012, c 6 (the Act). The Act repealed the firearms registry and mandated the destruction of all registration records regarding non-restricted firearms. However, the Act retained the existing licensing requirements for firearms, which require all persons who wish to possess or acquire firearms to obtain a license, and continues to require all licensees to pass a firearms safety course and to comply with a number of eligibility requirements. Licensing is subject to background checks on the applicant’s criminal record and history of violent behavior, and requires notice of the application to the licensee’s current and former intimate partners. The Act also maintains existing offenses and punishments with respect to firearms, except those related to non-registration. The rationale for the amendments was articulated by then Minister of Public Safety, Vic Toews, as follows:

In essence, Bill C-19 retains licensing requirements for all gun owners, while doing away with the need for honest, law-abiding citizens to register their non-restricted rifles or shotguns, a requirement that is unfair and ineffective…

The bill before us today is about making sure that we invest in initiatives that work. It is about making sure we continue to protect the safety and security of Canadians without punishing people unnecessarily because of where they live or how they make a living.

Hon. Vic Toews, House of Commons Debates, No. 37 (October 26, 2011, at p. 2535 (cited in 2014 ONSC 5140 at para 9).

The Applicant’s first argument was that the Act violated section 7’s guarantee of the right to life, liberty and security of the person, in that it “decreased Canadians’ personal security and increased the risk of death by firearms” (at para 16). Justice Morgan noted that proof of a violation of section 7 requires a deprivation of life, liberty or security of the person that is supported by the evidence. If such a deprivation can be established, the applicant must show that it was contrary to the principles of fundamental justice. There were three difficulties with the section 7 argument for the Applicant.

First, the Court identified a “state action problem”. It is well established that laws which impose or fail to reduce the risk of serious bodily or psychological harm engage the right to security of the person (see Canada (Attorney General) v Bedford, 2013 SCC 72 (CanLII), [2013] 3 SCR 1101 and Canada (Attorney General) v PHS Community Services Society, 2011 SCC 44 (CanLII), [2011] 3 SCR 134, cited at para 19). This is true even where the underlying risk of harm is caused by non-state actors. For example, the harms of prostitution may be directly caused by third parties, but the former criminal prohibitions related to prostitution amounted to state action that “actively countered” the risk reduction measures that prostitutes could take (at para 27, citing Bedford at paras 66-67). In contrast, the absence of state action responding to the risk of serious bodily or psychological harm has not traditionally be seen to engage section 7 (see e.g. Gosselin v Quebec (Attorney General), 2002 SCC 84 (CanLII), [2002] 4 SCR 429, at para 81 per McLachlin CJ for the majority).

That is how Justice Morgan characterized this case – the repeal of the long gun registry was seen as an absence of state action. According to the Court, “[t]he upshot of the Applicant’s position is that the state is obliged to maximize life, liberty, and security of the person, and not just to refrain from depriving persons of those rights” – an obligation that the courts have “consistently rejected” (at paras 32-33). Unless there is a constitutional entitlement to the state action that is being sought – for example in the case of underinclusive legislation that excludes farm workers from the protections of freedom of association afforded to other workers (see paras 35-36 and here) – there is no positive obligation on the government to protect security of the person.

The second problem with the section 7 argument, according to the Court, was a “baseline problem.” Although the constitution is a “living tree” and the rights that it protects may expand and evolve over time, “this does not support the far more extreme claim that existing distributions should be taken as the baseline from which to decide whether there has been partisanship or neutrality” (at para 40, quoting Cass Sunstein, The Partial Constitution (Cambridge, MA: Harvard U Press, 1993) at pp. 129-130). The Applicant’s argument was seen to frame the 1995 Firearms Act as a neutral baseline, departure from which was a “partisan deviation” (at para 41). The Court noted that a similar argument had failed in Ferrel v Ontario (Attorney General) (1998), 42 OR (3d) 97 (Ont CA), an unsuccessful challenge to the repeal of employment equity legislation in Ontario.

The third difficulty with the section 7 argument was the Court’s finding of a lack of evidentiary basis for the claim. In short, it found that there was no causal link between the repeal of the registry and any increased risk of harm. There was no clear evidence that the registry had reduced the risk of violence generally or in the context of domestic violence. Rather, statistics showed that “there has been a long term, gradual decline in gun violence in Canada, including in domestic settings, regardless of the existence of the Firearms Act” (at para 52). Furthermore, there was no evidence of an increase in gun related violence after the repeal of the registry took effect in 2012. There was a significant drop in seizures of firearms in 2012, but it was difficult to say how many of those firearms were long-guns no longer covered by the registry as opposed to weapons that had been restricted all along.

Although these three problem areas resulted in a finding that there was no violation of security of the person, Justice Morgan went on to state that any such violation would have been in conformity with the principles of fundamental justice in any event. The Applicant had argued that the repeal of the registry was arbitrary, as it was “absolutely unrelated to the general public safety objective of the Firearms Act” (at para 68). Justice Morgan disagreed, noting that the objective behind the repeal was “to eliminate the portions of the Firearms Act which were determined by Parliament to be ineffective in achieving that goal” (at para 72). Nor were the effects of the repeal grossly disproportionate – the evidence indicated that any negative effects were “minimal or non-existent” (at para 73). Overall, Parliament was found to have made a policy choice that “was not flawed in any way which would implicate the fundamental justice requirement of section 7” (at para 79).

I had predicted that Ferrel and the other “state action” cases may be a stumbling block for litigation challenging the repeal of the firearms registry, but had hoped that the strong precedent in PHS Community Services Society might provide a rebuttal. PHS effectively required the federal government to maintain an exemption for Vancouver’s safe injection site (Insite) under the Controlled Drugs and Substances Act, SC 1996, c 19. However, PHS was based on a very strong evidentiary record of the harms that failing to grant the exemption would create, similar to the strong evidentiary record in Bedford of the harms of the prostitution laws. The evidence in the Barbra Schlifer case (at least the rendition of the evidence provided in the decision – see an alternate view here) did not establish the same sort of causal link, even if the repeal could be characterized as state action.

The other argument put forward by the Applicant was that the Act violated equality rights under section 15 of the Charter, as it put women “at greater risk of injury and death by firearms, especially in situations of domestic or intimate partner violence” (at para 80). The Court relied on the current incarnation of the test for discrimination set out in R v Kapp, 2008 SCC 41 (CanLII), [2008] 2 SCR 483, as modified by Quebec (Attorney General) v A, 2013 SCC 5 (CanLII), [2013] 1 SCR 61 at para 323: “the claimant’s burden … is to show that the government has made a distinction based on an enumerated or analogous ground and that the distinction’s impact on the individual or group perpetuates disadvantage.”  The Court also relied on Withler v Canada (Attorney General), 2011 SCC 12 (CanLII), [2011] 1 SCR 396 for the point that section 15 requires a contextual analysis of the various interests the government was trying to balance. In this case, that meant that “one cannot examine the Act in isolation, but rather one must keep in mind the social circumstances in which it is enacted as well as the broader criminal justice and law enforcement policy environment” (at para 89).

On the question of whether there was a distinction, the Court noted that although one of the goals of the 1995 Firearms Act was to protect women against domestic violence, the Act was aimed more broadly at public safety. Similarly, the 2012 Act was said to be aimed at public safety, as it did away with the allegedly inefficient registry in an overall context of mandatory minimum sentences and tougher approaches to bail for firearms offences (see the Tackling Violet Crime Act, SC 2008, c. 6 and the Safe Streets and Communities Act, SC 2012, c. 1). The Act therefore had no discriminatory intent, and the case was characterized as one of adverse effects discrimination (at paras 93-94).

The difficulty with the adverse effects argument was similar to that for section 7 – the evidentiary record was found to fall short in establishing an increase in the risk of gun related violence post-repeal, either generally or in the case of women specifically. According to the Court, the evidence showed that the number of men killed by firearms has long “dwarfed” the number of women, and men are also more likely to die from accidents and suicides committed with firearms than women are (para 101). There was also no evidence that women faced an increased risk of domestic violence by firearms in the short period post-repeal – there was only “conjecture” (at para 102). This aligned with the evidence of an expert, Wendy Cukier, that many of the firearms used in incidents of violence against women were not registered, so the Court saw the registry as ineffectual in preventing those sorts of crimes in any event (para 104). Even though there had been positive changes in the statistics between 1995 and 2012, i.e. “a decrease in domestic altercations leading to death by firearm during the period in which the registry was in force” (at para 95), the Court indicated that this could have been the result of the government’s “tough on crime” reforms, and was probative only of a correlation but not a causal link between the registry and any reduction in gun violence.

This aspect of the case is in line with the findings that Jonnette Watson Hamilton and I made in our recent review of adverse effects discrimination cases – many such claims are subjected to evidentiary and causation standards that are very difficult to meet. For example, even if men are victimized by gun violence at higher rates than women, women are subjected to domestic violence at higher rates, and an overall adverse impact on the rates of women subjected to gun violence in that context should be sufficient to establish an adverse distinction created by the law. Domestic violence is gender-based violence, which has been characterized as a form of discrimination against women at the international level (see e.g. General recommendation 19 of the Committee on the Elimination of Discrimination against Women), and any state action which adversely affects rates of domestic violence should be seen in that light. However, Justice Morgan found there was “no reliable evidence that the Act has caused and/or perpetuated, or that it will cause and/or perpetuate, a distinction based on gender” (at para 109).

On the question of whether there was discrimination, Justice Morgan returned to the point that the analysis should be contextual and should consider the broader legislative context of the reforms. Here, although the government had repealed the registry and related offences, it had maintained the licensing scheme and enacted mandatory minimum sentences and tougher bail provisions for some gun related offences. According to the Court, the overall scheme is “designed to ameliorate the circumstances of women who may be subject to intimate partner violence” (at para 114), and “neither stereotypes women nor increases any disadvantage or risks which they already suffer; rather, it seeks a balance between criminal law sanctions, regulatory restrictions, and facilitation of police work that is geared toward violence reduction” (at para 115). To the extent that policy considerations were at play, these were for the government to decide upon, not the court. The Act therefore did not engage in gender discrimination.

The Court’s discrimination analysis is arguably problematic for incorporating section 1 considerations into section 15. This is a broader difficulty in section 15 jurisprudence that Jonnette Watson Hamilton and I have also critiqued (see here). Assessment of the proper balance between the rights engaged by the impugned law and the overall legislative scheme should await the reasonable limits analysis under section 1 of the Charter, where the burden is on the government to uphold its actions as demonstrably justified. Under section 15, it should be sufficient to prove discrimination by showing that a law perpetuates historic disadvantage against a protected group.

Although it was not necessary for the Court to do so, it went on to find that any violations of section 7 and 15 could have been saved under section 1 of the Charter. Justice Morgan also sided with the government at this stage. I take particular issue with two aspects of the section 1 analysis. First, the Court reviewed the objective of the Act in terms of the government’s overall approach to firearms regulation, rather than looking specifically at the rationale behind the repeal of the registry (see e.g. M v H, [1999] 2 SCR 3 at para 82). If the Court had focused on that more narrow objective, it may have been more difficult for the government to prove that it was pressing and substantial, especially based on an “efficiency” rationale. Second, under the minimal impairment stage, the Court indicated that the registry scheme was only justifiable as criminal legislation, and had to be eliminated once removed from the criminal law regime (at para 129). However, in Reference re Firearms Act (Can), the Supreme Court left open the possibility that the national concern branch of the federal government’s powers over peace, order and good government might be a basis for finding the registry constitutionally valid. The suggestion that there were no alternatives open to the government beyond a criminal registry does not comport with that decision.

The constitutional challenge in Barbra Schlifer Commemorative Clinic v. Canada was thus dismissed, and I am advised that the Applicant will not be filing an appeal. The decision is a disappointing one for advocates of gun control, but it must be noted that the Coalition for Gun Control – which includes survivors and family members of victims of the Montreal Massacre – remains active. The Coalition intervened in a constitutional challenge mounted by the Quebec government to recover the gun registry data for that province that Bill 19 required to be destroyed. The case was heard by the Supreme Court in October, and while it deals with the federalism aspects of the Act rather than Charter issues, the Court’s decision will hopefully shed further light on an area that is difficult both doctrinally and in social policy terms.

Whose (Pipe)line is it Anyway?

Wed, 12/03/2014 - 10:33am

By: Martin Olszynski 

PDF Version: Whose (Pipe)line is it Anyway?

Document Commented On: Quebec’s Letter to TransCanada Corp. Imposing 7 Conditions on Energy East

On November 18th, on the heels of a unanimous vote of non-confidence in the National Energy Board (NEB) by Quebec’s National Assembly, Quebec’s Environment Minister sent a letter to TransCanada outlining seven conditions that the company must meet before the province “accepts” the Quebec portion of the company’s proposed pipeline. Most of the conditions are similar to those stipulated by British Columbia with respect to Enbridge’s Northern Gateway pipeline (e.g. world class emergency and spill response plans, adequate consultation with First Nations) with three notable differences. First, while Quebec insists that the project generate economic benefits for all Quebecers, unlike British Columbia it is not asking for its “fair share” (whatever that meant). Second, because Energy East involves the repurposing of an existing natural gas pipeline, Quebec insists that there be no impact on its natural gas supply. Finally, and the focus of this post, Quebec insists on a full environmental assessment (EA) of the Quebec portion of the pipeline and the upstream greenhouse gas emissions from production outside the province – something that the NEB has consistently refused to assess in its other pipeline reviews. Last week, Ontario joined Quebec in imposing these conditions (see here for the MOU). Premier Kathleen Wynne acknowledged that “Alberta needs to move its resources across the country,” but argued that the two provinces “have to protect people in Ontario and Quebec.” In this post, I consider whether this condition is consistent with the current approach to the regulation of interprovincial pipelines.

Not All Conditions Are Created Equal

As noted by my colleague Professor Nigel Bankes in the context of Northern Gateway, the “general proposition is that a province will not be permitted to use its legislative authority or even its proprietary authority…to frustrate a work or undertaking which federal authorities…consider to be in the national interest.” The question thus becomes what kind of conditions might amount to frustration? Fortunately, we have a recent decision of the NEB, in the context of Kinder Morgan’s equally contentious Trans Mountain pipeline application, which sheds some useful light on this issue.

Briefly, Kinder Morgan has applied to the NEB for a certificate of public convenience and necessity (section 52 of the National Energy Board Act, RSC 1985 c. N-7) for the expansion of an existing pipeline from Alberta to British Columbia. This past summer, Kinder Morgan indicated that its preferred corridor had been revised and that its preferred routing was now through Burnaby Mountain. Consequently, the NEB determined that it required additional geotechnical, engineering and environmental studies to be completed before it could make its section 52 determination. Although section 73 of the NEB Act gave the company the power of entry required to carry out these studies, Kinder Morgan sought Burnaby’s consent to enter upon the relevant lands to do the work, which included borehole drilling and some site preparation (e.g. the removal of some trees and brush). Burnaby refused to give its consent. In fact, its mayor has long staked out a position of opposition to the pipeline.

After a month of failed correspondence, Kinder Morgan began its work on Burnaby Mountain, which also happens to be a conservation area. Several days into that work, its employees were issued an Order to Cease Bylaw Contravention and a bylaw notice for violations of the Burnaby Parks Regulation Bylaw 1979 (Parks Bylaw, which prohibits damage to parks) and the Burnaby Street and Traffic Bylaw 1961 (Traffic Bylaw, which amongst other things prohibits excavation work without consent). Subsequently, Kinder Morgan filed a motion, including a notice of constitutional question, seeking an order from the NEB directing the City of Burnaby to permit temporary access to the required lands.

The NEB granted the order, on both paramountcy and interjurisdictional immunity grounds. After summarizing the relevant jurisprudence with respect to paramountcy (at p 11), the NEB concluded that there was a “clear conflict” between the Parks Bylaw and Traffic Bylaw on the one hand, and paragraph 73(a) of the NEB Act on the other. With respect to the Parks Bylaw, for example:

…Section 5 [contains] a clear prohibition against cutting any tree, clearing vegetation or boring into the ground, regardless of whether minimal tree clearing is necessary where the trees would create a safety risk for the drilling work that must occur. While the Board accepts that the Parks Bylaw has an environmental purpose, the application of the bylaws and the presence of Burnaby employees in the work safety zone had the effect of frustrating the federal purpose of the NEB Act to obtain necessary information for the Board to make a recommendation under section 52… (at p 12)

The NEB made the same finding with respect to the Traffic Bylaw: dual compliance was impossible, such that the doctrine of federal paramountcy applied and the bylaws were inoperable to the extent that they prevented Kinder Morgan from carrying out the necessary work. The NEB made clear, however, that this did not mean that “a pipeline company can generally ignore provincial law or municipal bylaws. The opposite is true. Federally regulated pipelines are required, through operation of law and the imposition of conditions by the Board, to comply with a broad range of provincial laws and municipal bylaws” (at p 13).

With respect to interjurisdictional immunity (IJI), which the NEB considered in the alternative, after acknowledging that its usage “has fallen out of favor to some degree,” the NEB observed that “it is still an accepted doctrine for dealing with clashes between validly-enacted provincial and federal laws” (at p 13). The effect of the doctrine is to “read down” valid provincial laws where their application would have the effect of impairing a core competence of Parliament or a vital part of a federal undertaking. Impairment is key: provincial laws may affect a core competence of Parliament or a federal undertaking (to varying degrees), but this is not sufficient. Applying this test to the facts before it,

The Board finds that the Impugned Bylaws impair a core competence of Parliament… the routing of the interprovincial pipeline is within the core of a federal power over interprovincial pipelines. Actions taken by Burnaby with respect to enforcing the Impugned Bylaws impair the ability of the Board to consider the Project and make a recommendation regarding on the appropriate routing of the Project. The Board requires detailed information from surveys and examinations in order to make a recommendation to Governor in Council and to complete an environmental assessment. Similar to the location of aerodromes being essential to the federal government’s power over aeronautics, detailed technical information about pipeline routing is essential to the Board.

Thus, when considering Quebec’s (and Ontario’s) conditions, the following principles ought to be kept in mind. Generally speaking, provincial laws apply to federal undertakings such as pipelines. Such laws will only be vulnerable to the extent that they conflict with or frustrate the purpose of the NEB Act (paramountcy), or impair a core competence of Parliament of vital part of the federal undertaking (IJI). Another point worth keeping in mind is specific to environmental laws. As I have noted in previous posts, environmental laws are primarily procedural, not substantive, in nature. At their core they merely confer decision-making authority (e.g. to authorize activity that would otherwise be a contravention of the law), although they do seek to improve that decision-making by imposing certain “guideposts” (e.g. conducting an EA). This suggests that it will be very difficult, if not impossible, to conclude whether such environmental laws frustrate a federal law or impair a federal undertaking until an actual decision has been made.

Condition 2: Comprehensive EA including Upstream Greenhouse Gas Emissions

In its letter to TransCanada, Quebec states that an EA of the Quebec portion of the pipeline is required pursuant to para 2(j) of the Regulation respecting environmental impact assessment and review, ch. Q-2, r. 23 (“the construction…of more than 2 km of oil pipeline in a new right-of-way”). Seemingly unsure of itself, however, it also suggests that it is in TransCanada’s “interest to respect the will of Quebecers” (my translation) – not that it must. The desired result was a comprehensive assessment of those portions of the project situated in Quebec, which until yesterday included a marine terminal and storage facility at Cacouna, before Quebec’s EA agency, le Bureau d’audiences publiques sur l’environnement (BAPE). As of yesterday, however, TransCanada announced that the marine terminal plans are on hold in light of the continuing deterioration of the St. Lawrence Beluga whale population, presumably leaving just the pipeline to be assessed for the time being.

The results of this assessment will “serve to inform Quebec’s decision and in this way its position before the NEB” (my translation). The letter does not state which “decision” it is referring to, but the answer would seem to lie in sections 31.1 and 31.5 of Quebec’s Environmental Quality Act CQLR c Q-2:

31.1. No person may undertake any construction, work, activity or operation…in the cases provided for by regulation of the Government without following the environmental impact assessment and review procedure and obtaining an authorization certificate from the Government.

31.5. Where the environmental impact assessment statement is considered satisfactory by the Minister, it is submitted together with the application for authorization to the Government. The latter may issue or refuse a certificate of authorization for the realization of the project with or without amendments, and on such conditions as it may determine…

Viewed this way, it does not seem unreasonable to suggest that “Quebec’s government has had enough and has taken control of the process in the province,” and that “the proceedings before the [NEB], replete with 30,000 pages of unilingual English text, are now very secondary.” Does such a situation conflict with, or frustrate the purposes of, the NEB Act?

I don’t think it does. EA has long been understood in Canada as “simply descriptive of a process of decision-making” (Friends of the Oldman River Society v. Canada (Minister of Transport [1992] 1 SCR 3). There is no conflict between the requirements of the NEB Act and the CEQ; Trans Canada can comply with both. Doing so may seem duplicative but that is a matter of policy, not constitutional imperative. And even as a matter of policy this argument is weak in light of changes to the federal EA regime (including restrictive standing rules and a restricted definition of environmental effects) and the decision by the NEB to exclude upstream greenhouse gas emissions from its own review.

Nor does such a condition impair a core competence of Parliament or a vital part of a federal undertaking, for as old as is the understanding of EA as process so too is the recognition that jurisdiction with respect to the environment is shared between the federal and provincial governments. And while not determinative, it is worth noting that the current chair of the NEB would seem to agree that there is room for both levels of government here, having recently suggested that the NEB’s primary environmental concern is to ensure the proper construction and operation of pipelines, and that it is up to the provinces and the company to look after broader issues around climate change (as an aside, for a case where the Supreme Court of Canada seemed to adopt a broader view of the NEB’s mandate, see Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 SCR 159).

That being said, what Quebec can actually do with the results of its EA is another matter entirely. The short answer is probably not very much. It might be able to secure some modifications to the project (e.g. that certain standards or ‘best practices’ be applied during construction and operation), but if the NEB makes a positive recommendation to the federal Cabinet then outright refusal of a certificate of authorization would seem off the table (or would be rendered inapplicable). One might reasonably then ask: why go through all the trouble in the first place? The answer is rooted in the procedural nature of environmental law referred to above. With respect to EA specifically, while the process is certainly intended to improve governmental decision-making, it is also intended to enable political accountability through the full disclosure of the tradeoffs being made (see Ted Schrecker, “The Canadian Environmental Assessment Act: Tremulous Step Forward, or Retreat into Smoke and Mirrors?” (1991) 5 CELR 192). Indeed, it is the potential for political accountability that at least partially drives better decision-making.

This dynamic provides a reasonable explanation for why Alberta and Saskatchewan appear so uncomfortable with the mere idea that upstream greenhouse gas emissions be assessed, which prompted Ontario’s Energy Minister to ask what the Premier of Saskatchewan is afraid of. Presumably, it is the same thing that the current federal government is afraid of.

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Alberta Utilities Commission Approves the Proposed Sale of AltaLink’s Transmission Assets to the Berkshire Hathaway Group

Mon, 12/01/2014 - 9:00am

By: Nigel Bankes

PDF Version: Alberta Utilities Commission Approves the Proposed Sale of AltaLink’s Transmission Assets to the Berkshire Hathaway Group

Decision Commented On: AUC Decision 2014-326, AltaLink Investment Management Ltd. and SNC Lavalin Transmission Ltd et al, November 28, 2014

AltaLink owns significant transmission assets in Alberta. AltaLink in turn is owned by SNC Lavalin. SNC Lavalin wanted to divest itself of these assets and found a wiling purchaser in the form of the US based Berkshire Hathaway Group. The transaction however requires the approval of federal foreign investment and competition authorities (already in place) and of the Alberta Utilities Commission (AUC).

The AUC ‘s approval is required under the terms of s.102 of the Public Utilities Act, RSA 2000, c. P-45 (PUA) which provides as follows:

Unless authorized to do so by an order of the Commission, the owner of a public utility designated under section 101(1) shall not sell or make or permit to be made on its books a transfer of any share of its capital stock to a corporation, however incorporated, if the sale or transfer, in itself or in connection with previous sales or transfers, would result in the vesting in that corporation of more than 50% of the outstanding capital stock of the owner of the public utility.

The various relevant AltaLink and SNC Lavalin corporate entities are all designated under s.101: see Public Utilities Designation Regulation, Alta. Reg. 194/2006. The AUC approved the sale subject to some limited terms and conditions. The AUC rejected many of the terms and conditions proposed by intervenors. This post discusses the scope of the AUC’s authority to review this type of transaction, the matters that the AUC considers to be relevant as part of its “no harm review” and the AUC’s treatment of some of the proposed conditions.

The scope of the AUC’s review

As noted above, the AUC’s jurisdiction over this matter arises under s.102 of the PUA but s.102 provides the AUC with no specific guidance as to the considerations that it should take into account in conducting its review (at para 56), leading the Commission to grasp for the “general guidance” offered by s.6(1)(a) of the Utilities Commission Act, SA 2007, c. A-37.2, which prescribes that every member of the Commission “shall act honestly, in good faith and in the public interest”. This, emphasized the Commission, distinguished its responsibilities from the responsibilities of a director of a corporation who owes the duty to act in good faith and in the best interest of the corporation. This was enough to launch the Commission into a soliloquy on the meaning of that multifaceted term “public interest”:

58. Public interest is a multi-faceted concept that will necessarily mean different things in different contexts. Responsibility for determining the overall public interest of Canadians is divided between the Parliament of Canada and the provincial legislatures. The provincial legislatures or Parliament may then delegate responsibility for certain public interest determinations to the lieutenant-governor in council, ministers or various agencies of the province. For example, the public interest mandate of an administrative body charged by statute with overseeing public education in Alberta would be different from one charged with overseeing the delivery of public health care in Alberta and different again from an administrative or quasi-judicial tribunal like the Commission, which is charged with regulating certain public utility matters in Alberta. …

60. It is clear from the above that the Commission does not have authority over all matters related to regulated utilities in Alberta. ….. The responsibilities of the Commission are limited to its central rate-setting and utility system integrity functions set out in its enabling legislation.

61. It is also clear that the role of the Commission in carrying out its public interest mandate is different from that of a court. Unlike a court, proceedings before the Commission are not held to resolve private disputes. The Commission has the responsibility to arrive at an outcome in the public interest in a particular proceeding, not to make a determination in favour of one or another of the private interests of the parties participating in the proceeding. (emphasis added)

This meant that many of the concerns that had been expressed to the AUC, including concerns over the sale of infrastructure assets to a foreign investor, and concerns as to possibly increased energy exports to the United States, all fell outside the AUC’s remit (at paras 64 and 67). The Commission was also careful to emphasise that it would continue to regulate AltaLink even after the sale and that therefore many of the matters that intervenors sought to have the Commission address through conditions on its approval were more appropriately dealt with through the Commission’s ongoing regulatory review of AltaLink.

The AUC’s no harm review

What then did “public interest” mean in this context given the AUC’s focus on its rate setting authority? For the AUC this meant that it should examine the proposed transaction through a “no harm” lens. The Commission elaborated on this drawing on submissions of counsel and adding some content of its own. Here is my edited version of those considerations (the first 8 factors drawn from counsel’s submissions and the latter 3 added by the Commission) (at paras 108 – 109):

  1. Will there be any impact to the rates and charges passed on to customers?
  2. Will there be any operational benefit or risk as a result of the acquiring party’s utility experience?
  3. Will the financial profile of the utility be impacted for the purposes of attracting capital? (A crucial consideration given the ongoing expansion of Alberta’s transmission infrastructure)
  4. Will the utility remain sufficiently legally, financially and operationally separate from the acquiring party? (Which may be addressed through conditions dealing with ring-fencing, code of conduct etc)
  5. Will the Commission maintain sufficient regulatory oversight of the utility?
  6. Will the management and operational expertise remain in place post transaction?
  7. Will the transaction result in any cost impacts for customers relating to such things as tax and pension funds?
  8. Observations on the reality that the acquiring party wishes to be in the utility business in Alberta whereas the divesting party does not.
  9. Customers should, to the maximum extent possible, be protected against any negative ramifications arising from the transactions.
  10. Customers are not entitled to a level of post-transaction regulatory certainty they would not have realized if the transaction had not been approved.
  11. Customers are at least no worse off after the transaction is completed after consideration of the potential positive and negative impacts of the proposed share transactions. (edited and abridged)

In applying these considerations the Commission follows a two-step analysis: first does the transaction result in harm? And second, if the Commission identifies harm, can that identified harm be mitigated by imposing conditions? I do not propose to review the Commission’s detailed assessment of these various considerations. The Commission’s overall assessment was as follows (at para 111):

The Commission finds that customers will be at least no worse off after the transaction is completed, and that the proposed transaction satisfies the no harm test without the need to impose any additional specific conditions on the sale, apart from changes to the ring-fencing measures and Inter-Affiliate Code of Conduct to reflect the new ownership structure. Accordingly, as noted in the sections that follow, the Commission has directed AIML/AML to file an updated affidavit on the revised ring-fencing measures, and to provide, if necessary, any changes to its Inter-Affiliate Code of Conduct to reflect the new ownership structure.

Conditions

As noted above, the Commission declined to impose a number of terms and conditions that some of the intervenors requested that the Commission impose. One of the more interesting discussions concerned a proposal that the Commission condition its approval on performance of the commitments that Berkshire Hathaway (BH) had already made to Industry Canada (IC) as part of IC’s foreign investment review. The Commission declined to do so (at para 291) on the basis on the basis that the Commission has no jurisdiction to compel BH to comply with its commitments to IC. Furthermore it also observed that it would be vigilant to ensure that fulfillment of commitments with respect to staffing for example would not result in staffing levels which were beyond those required to deliver appropriate levels of service (at paras 309 – 311) (a.k.a no gold plating). The Commission would monitor these matters as part of its ongoing regulation of AltaLink.

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Alberta releases the Carbon Capture and Storage Quantification Protocol for Public Comment

Fri, 11/28/2014 - 9:00am

By: Nigel Bankes

PDF Version: Alberta releases the Carbon Capture and Storage Quantification Protocol for Public Comment

Document Commented On: Quantification Protocol for CO2 Capture and Permanent Storage in Deep Saline Aquifers, Version: DRAFT for public comment, November 2014 and associated commentary on changes made from the version released for technical review.

The Government of Alberta (GoA) continues to make progress in putting together the legal and regulatory framework for commercial scale carbon capture and storage (CCS) projects in the province. Such a legal and regulatory framework needs to address four types of issues: (1) property issues including the ownership of pore space and a scheme for leasing or disposing of rights to pore space; (2) regulatory or permitting rules for reviewing the merits of particular projects and to establish the terms and conditions under which projects might proceed; (3) liability issues; and (4) greenhouse gas (GHG) accounting issues to ensure that CCS projects are fully integrated into regulatory approaches for managing greenhouse gas emissions – in the case of Alberta this means integrating CCS projects into the Specified Gas Emitter Regulation, Alta Reg 139/2007 (SGER).

The key elements of the province’s framework to date (with links to previous posts on the topic), are as follows:

  1. Commercial scale CCS projects constitute a large and essential wedge in Alberta’s commitment to reduce greenhouse gas emissions over a business as usual (BAU) scenario. Alberta’s 2008 Climate Change Strategy envisages CCS contributing 139 Mt in reduced emissions in Alberta per year by 2050. This is close to 70% of the reduced emissions that Alberta anticipates over BAU.
  2. Alberta passed legislation to establish the framework for dealing with the property, regulatory and liability issues in 2010 (Carbon Capture and Storage Statutes Amendment Act, SA 2010, c.14). This legislation amended the Mines and Minerals Act (MMA), RSA 2000, c. M-17, the Oil and Gas Conservation Act (OGCA), RSA 2000, c.O-6, and the Surface Rights Act, RSA 2000, c.S-24. See post here.
  3. The province built on that framework in 2011 by promulgating the Carbon Sequestration Tenure Regulation, Alta Reg 68/2011. See post here.
  4. The province has committed $1.3 billion over 15 years to support two projects, Shell’s Quest Project (a deep saline sequestration project) and the Alberta Carbon Trunkline Project.
  5. The province amended the SGER in 2011 to begin addressing how CCS projects should be integrated into the province’s GHG management plans. See post here. Those amendments gave effect to two key decisions. First, the province decided that CCS projects should be credited as offset projects and not as emission performance credits (i.e. as avoided emissions at associated regulated emitters). Thus, regulated facilities report CO2 sent offsite as an emission. Second, the province decided to give double credits to CCS projects associated with bitumen upgraders (subject to some conditions). Thus the Regulation credits both sequestration and capture (provided that capture occurs at a facility “upgrading or refining bitumen” in Alberta and provided that construction of the infrastructure commences after January 1, 2012 and that the infrastructure is used before December 31, 2017). In practice the only project likely to qualify was and is Quest.
  6. The SGER was scheduled to sunset in September 2014. The province has extended the regulation until December 31st There are rumours that the new regulations will be available in mid-December. For a report on a workshop examining possible adjustments to the regulations see here.
  7. The Quest project received regulatory approval from the Energy Resources Conservation Board in July 2012 (see post here) and shortly after that Shell and its partners made the commercial decision to go ahead. Shell anticipates commencing injection in 2015 – hence the need to get the Quantification Protocol (QP) approved.
  8. In order to help address possible public concerns with respect to CCS projects, the province commenced a multi-stakeholder review of Alberta’s regulatory framework for such projects. This project was known as the Regulatory Framework Assessment (RFA). The RFA was designed to identify gaps in the regulatory scheme for CCS and to provide recommendations to address any gaps. I served as a member of the Steering Committee. The RFA commenced in March 2011 and completed its work in November 2012 although the Report was not released until well into 2013. The Report contains some 71 recommendations. The Department of Energy continues to work on its responses to those recommendations.
  9. Under the amendments to the MMA referred to above, the province agreed to accept a transfer of most of the liabilities for a CCS project once a closure certificate has been issued for that project. The MMA amendments and the subsequent regulations also contemplated the creation of a Post Closure Stewardship Fund to cover at least some of those liabilities with contributions to the Fund coming from those injecting CO2 under the terms of a sequestration leases. The province has yet to establish the fee for this activity but has received a report from DNV GL on the methodology for establishing the fee.

This post describes how the QP fits within the overall regulatory scheme described and offers some brief comments on the QP from a legal perspective – the QP is an 80 page technical document and I lack the expertise to critique it from anything other than a legal perspective. A Quantification Protocol is an essential part of qualifying a project for offset credits under Alberta’s SGERs. The SGERs require regulated facilities (i.e. facilities emitting more than 100,000 tonnes CO2e/ year) to meet emissions intensity reduction targets set against a three year historic baseline. A regulated facility may achieve compliance in one of four ways: (1) by meeting its efficiency targets, (2) by paying the $15 per tonne levy to the Climate Change and Emissions Management Fund, (3) by applying emissions performance credits (EPCs) (generated by a regulated facility that beats its own target) or (4) by applying offset credits from a qualifying offset project. A qualifying offset project is a project that reduces emissions over a business as usual (BAU) baseline from a project at a non-regulated facility and in accordance with an approved QP. There is considerable technical guidance available from the GoA in the form of Technical Guidance for Offset Protocol Developers and Technical Guidance for Offset Project Developers. A list of approved QPs is available here. Once registered, an offset project will ordinarily generate credits for eight years with a possible extension of five years. It is assumed that a CCS Offset project will generate credits for a longer period and the Summary of Comments for the Draft QP advises that the Technical Guidance for Project Developers will likely be amended to provide that CCS Offset projects will have a crediting period of 25 years. The purpose of a QP is to establish a methodology for quantifying the net emission reductions associated with the project activity. In Alberta a QP also authoritatively establishes “additionality” which is an assessment that a project which proceeds on the basis of the Protocol would not have proceeded but for the incremental carbon financing provided through the offset scheme. In some cases a QP may be withdrawn where the technology or the process on which the QP is based simply becomes BAU – because it simply makes economic (or other) sense to adopt that process or technology, or it becomes required by law. A relevant example in Alberta is acid gas disposal (AGD) which used to be the subject of an Alberta QP. The QP has now been withdrawn on the basis that AGD (which involves the capture and re-injection of acid gases from sour gas processing into underground formations rather than flaring the residue (thereby producing sulphur oxides and other emissions) or scrubbing it (and producing elemental sulphur) is actually BAU. Comments on the Protocol The Protocol applies (at 6) to CCS deep saline projects for which a proponent will have both a sequestration lease and a scheme approval under the OGCA. The Protocol does not apply to emissions sequestered through a CO2 miscible flood enhanced oil recovery (EOR) project. There is a separate Protocol dealing with CCS/EOR projects although that Protocol has been “flagged” for some time – meaning that it can only be used with special permission. For a report considering the differences in the legal treatment of CCS deep saline and CCS/EOR see here. The Protocol envisages that it might also be used for projects that capture GHGs at a facility or facilities and then transport the captured gases for injection at a number of different projects only some of which might be disposal projects and others might be EOR projects. In such a circumstance it might be necessary to prorate captured emissions across these projects, with some presumably being credited under this Protocol and others credited, if at all, under an EOR Protocol. I noted above that the SGER was amended in 2011 to provide for double crediting for Quest. Thus the regulation provides offset credits for the sequestration of CO2 and also provides offset credits for the capture of CO2 at an upgrading facility provided that the CO2 is also sequestered. As a result the Protocol can be used to quantify both sets of credits. Double crediting undermines the integrity of Alberta’s offset system and one wonders why the province decided to make carbon financing available in this manner rather than simply adjusting the other sources of financial support available for Quest. But that is a broader issue which goes far beyond the details of this QP. The QP contains the “disclaimer” that all QPs are subject to regular review but offers the assurance that such a review “will not impact the credit duration stream (sic) of projects that have been initiated under previous versions of the protocol. Any updates to protocols … will apply at the end of the first credit duration period for applicable project extensions.” This is a standard clause included in most QPs. It clearly makes sense in the context of the normal crediting period associated with offset projects (8 + 5). Thus a conventional offset project would have to re-qualify at the end of the 8 year term on the basis of the revised QP. In the case of CCS projects however the application of this clause will ensure that a qualifying project such as Shell’s Quest project will be grandparented or “stabilized” for twenty five years (assuming that is the crediting period agreed upon). This may well be appropriate given the capital costs associated with CCS projects and the reality that CCS projects, unlike EOR projects or methane capture projects, do not provide any revenue stream. Shell and others will require some certainty as to the manner in which credits will be quantified over something like the life of the project. But it does mean, for example, that even if CCS were in the future to be required by law for a project that is registered under this Protocol (and is therefore BAU), the project would still continue to generate offset credits. This is actually consistent with s.7(1.1)(c) and s.7(1.2)(c) of the SGERs, which contemplate sequestration and capture crediting provided that “the sequestration\capture of the specified gas must not be required by law at the time sequestration\capture of specified gas is initiated”. (emphasis added) All of that said, it does seem a little strange that something as important as the crediting period for an offset project is provided for in the Technical Guidance documents rather than in the regulations. This is simply one example of how these issues are negotiated between government and industry without any opportunity for public participation. The SGER is anything but transparent in its application. The CCS Saline Protocol is generally structured in the same manner as other Alberta Protocols. Thus it endeavours to describe the project condition (i.e. a project involving capture, transportation and storage) and then identifies all possible project sources of CO2 emissions and any possible sinks. Having done so, Table 5 identifies whether a proponent should be required to quantify (measure/estimate) these sources or sinks. A common reason given for not requiring quantification (e.g. the emissions associated with construction activities or decommissioning activities) is that such emissions are one-off and are negligible in the context of the entire project and that their exclusion is “consistent with Alberta practice”. In providing comments on an earlier draft of this QP I suggested that it would be nice to know if this was consistent with international practice as well as Alberta’s practice. The current version of the QP has not changed in this regard. Is this important? I think that it is important to the extent that Alberta is interested in maintaining market access for oilsands production. Premier Prentice indicated through the throne speech that market access remains a critical issue for his government (hardly a surprise) and thus it becomes important to reassure others that Alberta’s offset scheme is as stringent in ensuring ‘environmental integrity’ as are other offset schemes. One way to do that is to offer the assurance that Alberta’s offset protocols are at least as stringent as the offset protocols of, say, the Clean Development Mechanism. The Protocol distinguishes between the monitoring that is required for quantification and verification purposes under the Protocol (project monitoring) and the monitoring that is required to provide assurance that the injected CO2 remains sequestered (referred to in the Protocol as MMV (monitoring, measurement and verification) of containment) and that there are “no emissions to surface”. The latter as the QP points out is actually the responsibility of the Alberta Energy Regulator (AER) under the terms of the OGCA and the AER Directives and of the Minister of Energy under the terms of the MMA and Sequestration Regulations. Consequently it is not clear to me why the Protocol needs to address this second type of monitoring at all except to the extent that if MMV of containment identifies a leak to surface such an event would inter alia trigger a reassessment of offset credits as discussed in the next few paragraphs. Finally, the QP contains (at 69) a statement about “liability”. It observes that liability for “sequestered carbon” rests with “the project developer” until a closure certificate is issued. In fact, as the rules are currently written, “climate CO2 liability”, whatever we mean by that, is not a liability that is assumed by the Crown when the closure certificate is issued. It is true that the RFA recommended that this liability should be assumed by the Crown but this recommendation has yet to be implemented. The QP hints at this since it acknowledges that the GoA is “developing policy guidelines on climate CO2 liability for the post closure period and will update the regulations and protocol, as required.” But this may easier said than done because of the lack of clarity about what we mean by the term “climate CO2 liability” or equivalent terms. In general there is no liability for CO2 emissions. The only people who carry a CO2 liability are the owners of (persons responsible for) regulated facilities under the SGER and then only for any emissions that they release in excess of their emissions intensity based targets. The owner/operator of a CCS saline project will never have any liability as the person responsible for a regulated facility because a saline project will never be regulated facility. So how might CO2 liability arise in the first place? The only liability we can possibly be talking about is the potential liability that a person responsible for a regulated facility (i.e. not the sequestration project) might have if that person has used offset credits generated under this Protocol to achieve compliance and it subsequently transpires that some of the sequestered CO2 on which those credits were based has leaked into the atmosphere. In sum, the liability is a liability of the “person responsible” for the regulated facility that has used CCS offset credits to meet its obligations and not a liability of the operator of the CCS injection facility. While in some cases this may be the same person, the offsets may also have been sold on the carbon market. I think that this interpretation is confirmed by s.26 of the SGER, which provides as follows:

26(1) The director may issue an order to the person responsible for a facility requiring the person responsible to take the measures specified in the order to minimize or remedy the effects of the facility releasing specified gases into the environment in amounts in excess of those within the net emissions intensity limit for the facility where

(a) a compliance report indicates that the net emissions intensity limit for the facility has not been met,

(b) the director determines that the calculation of the net emissions intensity of the facility was incorrect or was based on inaccurate, incorrect or false information and that the net emissions intensity limit for the facility was exceeded, or

(c) the value for the emission offsets that was used to calculate the net emissions intensity of the facility for a year is no longer valid because some or all of the tonnes of specified gases which the emissions offsets represented as not being released into the environment have subsequently been released.

(2) An order under subsection (1) may require the person responsible to take the following measures:

(a) obtain emission offsets or emission performance credits;

(b) make contributions to the Fund;

(c) any other measures that the director considers advisable. (emphasis added)

The issue is also addressed in the Technical Guidance for Completing Specified Gas Compliance Reports, version 7.0, January 2014 under the heading of “Offset Credit Error Correction”. That Guidance also warns (at 36) that “Corrective actions between buyers and sellers of offset credits are determined through contractual arrangements between the two parties and are outside the scope of the Regulation.” All of this suggests that the problem of “CO2 liability” is a general problem and not something specific to this Protocol. Indeed, to the extent that I have checked, no other Alberta Protocols contain a section on “Liability”. Perhaps then this section might simply be removed from this Protocol. To the extent that Alberta wishes to assume CO2 liability post closure certificate as well as other forms of liability it may do so – but by means of an amendment to the Mines and Minerals Act.

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