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Greenpeace v Canada: Symbolic Blow to the Nuclear Industry, Game-changer for Everyone Else?

Mon, 06/09/2014 - 10:00am

By: Martin Olszynski

 PDF Version: Greenpeace v Canada: Symbolic Blow to the Nuclear Industry, Game-changer for Everyone Else?

Case commented on: Greenpeace Canada v Canada (Attorney General), 2014 FC 463 (CanLII)

In this lengthy (431 paragraphs) decision, the Federal Court allowed in part Greenpeace et al’s application for judicial review regarding the Joint Review Panel report(the Report) for the Darlington New Nuclear project proposed by Ontario Power Generation (OPG). Justice Russell held that the environmental assessment (EA) conducted by the Joint Review Panel (JRP) failed to comply with the Canadian Environmental Assessment Act, SC 1992 c 37 (as it then was).  Specifically, there were gaps in the treatment of hazardous substances emissions and spent nuclear fuel, and a failure to consider the effects of a severe “common cause” accident.  As noted by the media, while the decision is of limited effect on a project already indefinitely postponed by the province, “it is a symbolic blow to an industry coping with the public and political fallout from Japan’s 2011 Fukushima meltdown.”  As further discussed below, the decision is also likely to have implications for EA in Canada generally and several other projects currently making their way through either the regulatory process or the courts, including Taseko’s New Prosperity mine, Enbridge’s Northern Gateway pipeline and Kinder Morgan’s Trans Mountain pipeline.

Background

In the fall of 2006 and under direction from the Ontario Minister of Energy, OPG applied to the Canadian Nuclear Safety Commission (CNSC) for a site preparation license for several new reactors at its existing Darlington nuclear plant in Bowmanville, Ontario.  OPG’s application for this license, as well as for authorizations under the federal Fisheries Act, RSC 1985 c F-14 and the Navigable Waters Protection Act, RSC 1985 c N-22 (now the Navigation Protection Act), triggered the application of the then CEAA (since replaced with the Canadian Environmental Assessment Act, 2012, SC 2012 c 19). The project was referred to a joint review panel in 2008 and a three-member panel was appointed in 2009. Following 284 information requests (IRs) and seventeen days of hearings in the spring of 2011, the JRP submitted its final report to the Minister in August of that same year, concluding that the project was not likely to result in significant adverse environmental effects.  The applicants challenged the adequacy of the EA and JRP Report shortly thereafter.

Justice Russell summarized the applicants’ argument as follows:

 [127] As identified in the Report, the [JRP] itself found that key information about the proposed Project was absent from the EA documentation.  For example, the Panel found that no specific nuclear reactor technology, site design layout, cooling water option, used nuclear fuel storage option, or radioactive waste management option has been selected.  Thus, at the present time, federal decision-makers still do not know: (a) the particulars of the specific project to be implemented at the Darlington site; (b) the full range of site-specific or cumulative environmental effects; or (c) whether there are feasible mitigation measures over the project’s full lifecycle.  These and other fundamental gaps are attributable to the fact that what the [JRP] had before it was not a “project”, but merely a plan for future planning, assessment, and decision-making. (See paras 218 – 220 for the full list of alleged gaps and deficiencies)

 The reason that so many project components remained unspecified was that OPG, with the JRP’s blessing, had prepared its environmental impact statement based on a “plant parameter envelope” (PPE) or “bounding scenario” approach. As described by OPG, “this approach involves identifying the salient design elements of the Project and, for each of those elements, applying the “limiting value” (the value with the greatest potential to result in an adverse environmental effect) based on the design options being considered” (at para 5).  The respondents argued that such an approach was consistent with the requirement, pursuant to section 11 of the CEAA, to conduct the assessment as early as practicable in the planning process and before irrevocable decisions are made (at para 66), and further that it was supported by the case law (at para 72).

Decision

After a thorough review of the statutory regime and associated jurisprudence, Justice Russell concluded that there was nothing that precluded the adoption of the PPE approach per se (at para 181). However, he did find inadequacies with the JRP’s treatment of three specific issues (at para 228):

    • The failure of the Panel to insist on a bounding scenario analysis for hazardous substance emissions, in particular liquid effluent and stormwater runoff to the surface water environment, and for the sources, types and quantities of non-radioactive wastes to be generated by the project;
    • The Panel’s treatment of the issue of radioactive waste management; and
    • The Panel’s conclusion that an analysis of the effects of a severe common cause accident at the facility was not required at this stage, but should be carried out prior to construction.

In assessing these matters, Justice Russell accepted the applicants’ argument – unchallenged by the respondents – that the EA process under CEAA is fundamentally different from future licensing or regulatory processes (at para 230) and that there is therefore a limit to the extent to which the consideration of environmental effects and their mitigation can be left to those later processes. Justice Russell described this as a matter of improper delegation:

[232] Under the CEAA, the ultimate decision-maker for projects referred to review panels is the Governor in Council (in practical terms, the federal Cabinet), which decides whether the responsible authorities will be permitted to take steps to enable the project to move forward.  Parliament chose to allocate this decision to elected officials who are accountable to Parliament itself and, ultimately, to the electorate…

[235] The most important role for a review panel is to provide an evidentiary basis for decisions that must be taken by Cabinet and responsible authorities. The jurisprudence establishes that gathering, disclosing, and holding hearings to assemble and assess this evidentiary foundation is an independent duty of a review panel, and failure to discharge it undermines the ability of the Cabinet and responsible authorities to discharge their own duties under the Act [citing Pembina Institute for Appropriate Development v Canada (Attorney General), 2008 FC 302 (CanLII) at paras 72 – 74]…

[237] In short, Parliament has designed a decision-making process under the CEAA that is, when it functions properly, both evidence-based and democratically accountable. The CNSC, in considering future licensing decisions, will be in a fundamentally different position from the Panel that has conducted the EA. The CNSC will be the final authority making the decision, not merely an expert panel. Although the CNSC approaches this role with considerable expertise, it does not have the same democratic legitimacy and responsibility as the federal Cabinet.

(Emphasis added)

With respect to OPG’s PPE approach, which the JRP acknowledged was a departure from typical EA practices, this meant that it “was incumbent on the Panel to ensure the methodology was fully carried out” (at para 247), bearing in mind also the challenges that such an approach poses for public participation: “The less specific the information provided… the more difficult it may be for interested parties to challenge assumptions, test the scientific evidence, identify gaps in the analysis, and ensure their interests are fully considered” (at paras 247, 249).

Applying this standard to hazardous substance emissions and on-site chemical inventories, Justice Russell concluded that the EA came up short. He noted EC’s submissions to the JRP that, notwithstanding several IRs to OPG, the remaining gaps prevented EC from assessing effects with respect to effluent and storm water management (at paras 257 – 259).  The JRP itself noted that “OPG did not undertake a detailed assessment of the effects of liquid effluent and storm water runoff to the surface water environment” but that it “committed to managing liquid effluent releases in compliance with applicable regulatory requirements and to applying best management practices for storm water” and on this basis concluded that the project was not likely to result in significant adverse environmental effects (at paras 264, 265).

In a passage that is sure to interest administrative law scholars and practitioners (discussed further below), Justice Russell held that while such a conclusion may be reasonable, it did not comply with CEAA:

 [272] To repeat what is stated above, because of its unique role in the statutory scheme, a review panel is required to do more than consider the evidence and reach a reasonable conclusion. It must provide sufficient analysis and justification to allow the s. 37 decision-makers to do the same, based on a broader range of scientific and public policy considerations. One could say that the element of “justification, transparency and intelligibility within the decision-making process” (Dunsmuir, above, at para 47; Khosa, above, at para 59) takes on a heightened importance in this context.

[273] In this case, there are references to commitments by OPG to comply with unspecified legal and regulatory requirements or applicable quality standards, and to apply good management practices. There are references to instruments that may or may not contain relevant standards or thresholds based on the information before the Court (e.g. the Ontario Stormwater Management Planning and Design Manual (March 2003)). And there are references to thresholds or standards in statutory instruments (e.g. Fisheries Act, Canadian Environmental Protection Act) without specific information about how these are relevant to or will bound or control the Project’s effects…

[275] In essence, the Panel takes a short-cut by skipping over the assessment of effects, and proceeding directly to consider mitigation, which relates to their significance or their likelihood.  This is contrary to the approach the Panel says it has adopted (see EA Report at p. 39), and makes it questionable whether the Panel has considered the Project’s effects at all in this regard.

(Emphasis added)

 This is not to suggest that future regulatory processes “have no role to play in managing and mitigating a project’s environmental effects” (at para 241). For Justice Russell, a conceptual distinction can be made between two kinds of situations where a panel, despite some uncertainty, might conclude that significant adverse environmental effects are unlikely (at para 280):

(a)  Reliance upon an established standard or practice and the likelihood that the relevant regulatory structures will ensure compliance with it; or

(b)  Confidence in the ability of regulatory structures to manage the effects of the Project over time.

The latter approach is problematic in that it “may short-circuit the two-stage process whereby an expert body evaluates the evidence regarding a project’s likely effects, and political decision-makers evaluate whether that level of impact is acceptable in light of policy considerations, including “society’s chosen level of protection against risk”” (at para 281, referring to the Government of Canada’s policy on the application of the precautionary principle and adopted by the Darlington JRP).

Turning next to the issue of spent nuclear fuel, there does not appear to have been any real dispute between the parties that the JRP’s treatment of this issue was cursory. Rather, OPG’s position was that this was something that Canada had mandated the Nuclear Waste Management Organization (NWMO) to study. Justice Russell disagreed:

[297] In my view, the record confirms that the issue of the long-term management and disposal of the spent nuclear fuel to be generated by the Project has not received adequate consideration.  The separate federal approvals process for any potential NWMO facility, which has not yet begun…will presumably ensure that such a facility is not constructed if it does not ensure safety and environmental protection. But a decision about the creation of that waste is an aspect of the Project that should be placed before the s. 37 decision-makers with the benefit of a proper record regarding how it will be managed over the long-term, and what is known and not known in that regard.

(Emphasis added)

According to Justice Russell, the management and storage of spent nuclear fuel was not a “separate issue” (at para 312). Rather, the EA “is the only occasion…on which political decision-makers at the federal level will be asked to decide whether that waste should be generated in the first place” (ibid). Nor was there anything in the Terms of Reference that suggested that this issue was not to be addressed (at para 313).

Finally, with respect to a severe “common cause” accident, the problem was not that OPG failed to assess the risks of accidents associated with its new build (at para 327) but rather that it failed to assess these risks in conjunction with the existing Darlington plant.  The JRP itself recognized this gap and recommended that OPG “evaluate the cumulative effect of a common-cause severe accident involving all of the nuclear reactors in the site study area” prior to construction (Recommendation # 63). For Justice Russell, however, that was insufficient:

[334] In my view, the one conclusion that is not supported by the language of the statute is the Panel’s conclusion that the analysis had to be conducted, but could be deferred until later.  Rather, in my view, it had to be conducted as part of the EA so that it could be considered by those with political decision-making power in relation to the Project.

In light of these three deficiencies, and as was the case in Pembina Institute cited above, the Court remitted the Report to the JRP for further consideration, pending which the relevant government agencies have no jurisdiction to approve the project.

Discussion

Justice Russell’s thorough treatment of the federal EA regime means that the decision is likely to have implications for the federal EA regime going forward. This is so because notwithstanding the fact that Greenpeace dealt with the prior CEAA regime and CEAA 2012 is in many ways different, the provisions dealing with a panel’s duties and political decision-making are effectively unchanged. These implications, as well as Justice Russell’s somewhat unprecedented (but in my view correct) approach to judicial review in this context, are further discussed below.

Failure to Assess Environmental Effects “Short-Circuits” the CEAA Regime

Perhaps the most important take-away message from Greenpeace is that, generally speaking, Panels must do the work of actually assessing potential environmental effects and their mitigation. This is a necessary consequence of CEAA’s two-step decision-making process, which Justice Russell describes as “evidence-based and democratically accountable” (at para 237). Democratic accountability is hindered where the evidence with respect to potential adverse environmental effects is missing, inadequate or postponed to some future regulatory proceeding. This finding, supported by prior jurisprudence and the 2008 Pembina Institute decision in particular, is likely to cause problems for both Taseko’s proposed New Prosperity mine and Enbridge’s proposed Northern Gateway pipeline.

I have previously written about Taseko’s New Prosperity project here and here.  Briefly, the second federal panel that reviewed Taseko’s revised project concluded – like the first one – that the project is likely to result in significant adverse environmental effects.  In the first of my posts, I suggested that this result was at least partially its own undoing, and its refusal to provide sufficient information to the panel in particular. Like OPG, Taseko was of the view that such “details” could be dealt with at the regulatory phase (see e.g. its final written submissions to the panel at p 8 – 11), an approach that the New Prosperity panel ultimately rejected (see New Prosperity Report at p 22). In its December 2013 application for judicial review, Taseko argues, inter alia, that the panel erred in law when it did so.  Greenpeace suggests that this aspect of Taseko’s challenge is unlikely to succeed.

Greenpeace also lends support to the recent letter to the Prime Minister, signed by 300 scientists, which urges him to reject the Northern Gateway Joint Review Panel report.  Amongst five major flaws, the signatories to the letter allege inappropriate reliance on yet-to-be-developed mitigation measures:

…Northern Gateway omitted specified mitigation plans for numerous environmental damages or accidents. This omission produced fundamental uncertainties about the environmental impacts of Northern Gateway’s proposal (associated with the behaviour of bitumen in saltwater, adequate dispersion modeling, etc…). The panel recognized these fundamental uncertainties, but sought to remedy them by demanding the future submission of plans… Since these uncertainties are primarily a product of omitted mitigation plans, such plans should have been required and evaluated before the JRP report was issued.

Whether or not the foregoing is an accurate characterization of the JRP’s conclusions and recommendations (a quick glance of the NEB’s 209 conditions does suggest that these scientists may well be onto something), the letter’s characterization of the EA process as one intended to offer “guidance, both to concerned Canadians in forming their opinions on the project and to the federal government in its official decision” (at page 3) could have been written by Justice Russell himself.

What is Separate?

A related aspect of Greenpeace worth discussing is the Court’s approach to the management of spent nuclear fuel.  As noted above, Justice Russell concluded that this was not a separate issue, and that the “creation of nuclear waste” was “an aspect of the Project that should be placed before [Cabinet]” (at para 297).

Such dicta could prove useful to those, such as the City of Vancouver in the context of the National Energy Board’s Trans Mountain pipeline application, arguing that the EAs for major pipelines (including Northern Gateway) should assess the climate change implications of the increased oil production enabled by the construction of such pipelines (in its application, Trans Mountain states that the pipeline is in response to requests for increased capacity “in support of growing oil production”). Although the matter is not free from doubt, the statutory language on this front certainly is broad (see CEAA, 2012 para 5(1)(a): “…a change that may be caused…”).  It also seems plain that panels cannot arbitrarily decide to exclude certain environmental effects, nor is deference to government policy or other initiatives appropriate (e.g. the NWMO in Greenpeace, or Alberta’s intensity-based approach to greenhouse gas emissions in Pembina Institute).

Assessing the climate change effects of increased oil production would not amount to “a trial of modern society’s reliance on hydrocarbons,” as the NEB’s outgoing chief recently stated in an interview with the Financial Post, and which he described as a policy question belonging “to the world of policy-making and politics, in which we are not involved at all.”  With respect to its obligations under CEAA, 2012 at least (recognizing that the NEB is dealing with a dual mandate here, the other coming from s 52 of the National Energy Board Act, RSC 1985 c N-7, which does actually require the NEB to reach a conclusion with respect to the public interest), it would be the exact opposite. Although complex, it would entail an evidence-based analysis of whether Trans Mountain or Northern Gateway may contribute to an increase in oil production and, if so, the greenhouse gas emissions associated with that. Importantly, the final Environmental Impact Statement for Keystone XL determined that this was not likely to be the case for that particular pipeline.

A Green Shade of Reasonableness Review?

There has been much action at the Supreme Court lately with respect to judicial review, most of it dealing with the thorny (in my view) issue of the appropriate standard of review to be applied to questions of law when it is a member of the executive (e.g. a Minister), rather than an adjudicative body, that is interpreting a statute.  In Canadian National Railway Co. v. Canada (Attorney General), 2014 SCC 40, the Supreme Court confirmed that the Dunsmuir framework, and the subsequent presumption of deference on questions of law falling within a decision-maker’s “home statute”, applies to administrative decision-makers generally (at paras 53 and 54).  The issue didn’t come up in Greenpeace, dealing as it does with a tribunal, although there is an interesting discussion to be had as to whether the roster-like (i.e. non-permanent) membership of CEAA panels is sufficient to rebut the presumption of deference given the potential for inconsistent and potentially conflicting, but otherwise reasonable, interpretations of the legislation by different panels.

In the final part of this post, however, I want to briefly discuss Justice Russell’s approach to reasonableness review. For convenience, the relevant passage is as follows:

[272] To repeat what is stated above, because of its unique role in the statutory scheme, a review panel is required to do more than consider the evidence and reach a reasonable conclusion. It must provide sufficient analysis and justification to allow the s. 37 decision-makers to do the same, based on a broader range of scientific and public policy considerations. One could say that the element of “justification, transparency and intelligibility within the decision-making process” (Dunsmuir, above, at para 47; [Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12 (CanLII)] at para 59) takes on a heightened importance in this context.

(Emphasis added)

In my view, this is precisely the kind of analysis that Justice Binnie had in mind when he stated, at para 59 of Khosa, that “[r]easonableness is a single standard that takes its colour from the context.”  In the EA context, judicial review is not available on the merits of government-decision making – as Justice Russell observed that is a matter of democratic accountability. In this context, judicial review should function in the service of democratic accountability by ensuring the integrity of the decision-making process, a process that government predictably and – where it has been adequate – justifiably relies on to gain support for its political decisions.  In the context of Northern Gateway, for example, the Prime Minister and then Minister of Natural Resources Joe Oliver were reported as saying that they will “make a decision only after considering the recommendations of the ‘fact-based’ and ‘scientific’ review panel.”  Mr. Oliver also released a statement where he described the JRP report as “a rigorous, open and comprehensive science-based assessment.”  In this context, the role of a reviewing court should be to ensure that the EAs do in fact meet these standards, failing which there can be no democratic accountability.

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Court of Appeal Confirms the Availability of a Disgorgement Remedy as a Possible Means of Assessing Damages for Breach of a Modern Land Claim Agreement

Thu, 06/05/2014 - 10:00am

By: Nigel Bankes

PDF Version:Court of Appeal Confirms the Availability of a Disgorgement Remedy as a Possible Means of Assessing Damages for Breach of a Modern Land Claim Agreement

Case commented on: Nunavut Tunngavik Incorporated v Canada (Attorney General), 2014 NUCA 02

The Nunavut Court of Appeal has confirmed the availability of a disgorgement remedy as a possible means of assessing damages for breach of a modern land claim agreement. However, the majority of the Court (Justices Slatter and O’Brien) ruled that summary judgment was not available to the Nunavut Tunngavik Inc (NTI) in this case and that consequently damages must still be assessed following the trial. Justice Hunt (dissenting on this point) concluded that summary judgment was available. All members of the Court were agreed that nominal damages would not be appropriate in this sort of case even if NTI were unable to prove actual damages. To allow an award of nominal damages for breach of a land claim agreement would not foster the overall goal of reconciliation.

I discussed the facts of this case and commented on the judgement at trial here.  In brief, NTI is suing the federal Crown for its alleged failure to implement the terms of the Nunavut Final Agreement, a land claim agreement between Canada and the Inuit of Nunavut. One of the specific claims made by NTI is that Canada failed to fulfil its promise to establish an environmental monitoring program for the Nunavut Settlement Area. NTI sought summary judgement on this specific matter based on admissions made by the Crown on discovery and it claimed damages to be assessed on the basis of the savings that accrued to Canada as a result of its delayed implementation of this obligation. The case management judge found a breach and awarded damages on the basis sought by NTI. On appeal the Crown indicated that it would not appeal the finding of breach.

NTI supported its claim for damages on the basis of disgorgement by arguing that the federal Crown owed NTI a fiduciary duty with respect to the discharge of the monitoring obligation. The majority would have none of that and I think rightly so. It will always be hard to argue that a fiduciary obligation covers the same ground as that of an express contractual covenant and perhaps now even more so since the Court has made it clear that in general fiduciary law the test for establishing a “facts and circumstances” fiduciary obligation rests upon establishing a reasonable expectation of loyalty rather than vulnerability: (see Alberta v Elder Advocates of Alberta Society, 2011 SCC 24).

But of course it is not necessary to establish the existence of a fiduciary duty in order to claim restitutionary damages for a breach of contract – and there was certainly a breach of contract here as the majority emphasized:

 [67] If the Land Claims Agreement contains a covenant to do something, the appellant is obliged by that covenant to do it. It has never been a defence to breach of contract that: “Sorry, we ran out of money”, or “Sorry, we never included that in our budget”. If the covenant in the Land Claims Agreement requires a fixed amount of funding, that amount must be provided. If the covenant creates an obligation to fund, but without a fixed amount, the amount must be determined in accordance with the proper interpretation of the covenant (possibly, a “reasonable” amount). If the covenant in the Land Claims Agreement requires the appellant to do something, the appellant must find the necessary funds to perform.

 As to the availability of restitutionary damages, the majority referred to the Supreme Court’s decision in Bank of America Canada v Mutual Trust Co, 2002 SCC 43 noting that:

 [80] Restitutionary damages are available in exceptional cases, where the expectation damages are difficult or impossible to calculate, or where expectation damages would effectively allow the breaching party immunity notwithstanding the breach.

 The majority provided the following principles to guide assessment of damages (at para 85):

 a)   The presumptive rule is that the plaintiff is entitled to expectation damages: Bank of America Canada at paras. 25-6. The plaintiff is to be put in the position it would have been in if the contract had been performed.

b)   Exceptionally, where damage is shown but expectation damages are not readily quantifiable, or where the circumstances of the case call for a different measure of damages to provide an effective remedy:

i)   where the anticipated “bargain” was non-financial or intangible, then damages can be assessed and awarded at large to reflect the expectations of the parties, for example where the contract is not commercial in nature, or the damages are not liquidated: Fidler v Sun Life Assurance Co. of Canada, 2006 SCC 30 (CanLII), [2006] 2 SCR 3 at paras. 44-5, 2006 SCC 30; Honda Canada Inc. v Keays, 2008 SCC 39 (CanLII), 2008 SCC 39 at paras. 55, 59, 2008 SCC 39 (CanLII), [2008] 2 SCR 362; Jarvis v Swan Tours Ltd., [1973] QB 233 (CA).

ii)   in some cases a restitutionary remedy (disgorgement of some benefit achieved by the defendant from the breach) is a potential remedy. Some exceptional circumstances are required (as in Blake, and the facts in Dolly Varden) to justify this approach. The trial judge should give consideration to the concept of “efficient breach”, and the effect that has on the calculation of damages: Bank of America Canada at paras. 31-3; Dasham Carriers Inc. v Gerlach, 2013 ONCA 707 (CanLII), 2013 ONCA 707 at paras. 29-30.

For these purposes “not readily quantifiable” does not just mean that the plaintiff has not marshaled the evidence necessary to prove what would be provable.

c)   Where breach is shown, but no damage is evident, nominal damages should be awarded: B.M.P. Global Distribution Inc. v Bank of Nova Scotia, 2009 SCC 15 (CanLII), 2009 SCC 15 at para. 90, 2009 SCC 15 (CanLII), [2009] 1 SCR 504; Métis National Council Secretariat Inc. v Dumont, 2008 MBCA 142 (CanLII), 2008 MBCA 142 at paras. 40-6, 305 DLR (4th) 356; Place Concorde East Limited Partnership v Shelter Corp. of Canada Ltd. 2006 CanLII 16346 (ON CA), (2006), 270 DLR (4th) 181 at para. 78, 211 OAC 141 (CA).

 Evidently it is principle (b) that is important here. In concluding that the case management judge had not erred the majority considered the following factors to be important (paras 86 – 88):

    • The covenant to establish a system of statistical monitoring is not truly commercial in nature, and there is no obvious way of measuring its value in economic terms.
    • The benefits that accrue from the statistical data would be indirect, and would benefit the general Inuit population in ways that could not easily be measured.
    • Canada had already received valuable consideration (the surrender of aboriginal title) for the covenant to establish a system of statistical monitoring. If Canada could simply refuse to perform that covenant, and argue that it need not pay any damages because none could readily be established, it would potentially deprive the Inuit of many of the intended benefits of the Land Claims Agreement. In the context of a land claims treaty, insulating the contracting government from any consequences of a breach of a covenant like this is legally unacceptable.
    • The case management judge had relied heavily on AG v Blake, [2001] 1 AC 268 but both the majority and the dissent seemed more persuaded by the mining case of Dolly Varden Mines Ltd v Sunshine Exploration Ltd, [1970] SCR 2 – a case which the Court (and I am guessing that this was Justice Hunt) brought to the attention of counsel. In Dolly Varden the defendant had agreed to undertake a program of exploration but failed to do so. The Court held that damages should be assessed based on the cost of performing work program rather than any loss that the plaintiff could prove (or not) as a result of not having the work performed (at para 88): “The ‘savings’ achieved by [Canada] in not performing [the monitoring obligations] are different in character from the profits recovered in Blake, but roughly analogous to the saved expenses in Dolly Varden, and are a relevant consideration.”

At the end of the day however the majority failed to endorse the case management judge’s assessment of the appropriate damages in this case on the grounds that this should not have been determined on an application for summary judgement. Ordinarily one would not expect that a decision on the availability of summary judgement would be a matter on which the disappointed party would be able to obtain leave to appeal from the Supreme Court of Canada. However, the Court’s recent ruling in Hriniak v Mauldin, 2014 SCC 7 suggests that the Court favours making summary judgement more readily available as part of an important agenda of facilitating access to justice. Both the majority and the dissent referred to this decision but the majority was evidently of the view that summary judgement on this issue would be unfair to Canada. Some of the reasons offered by the majority (e.g. Canada did not really know the case it had to meet until the case management judge had rendered his decision (at para 98) and that “both parties” anticipated that the entire dispute would proceed to trial (at para 91)) seem far from convincing – so perhaps this is a case that the Court could be persuaded to review.

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EPA’s New Power Sector Climate Rules: A Brewing Political and Legal Storm

Wed, 06/04/2014 - 10:00am

By: James Coleman

PDF Version: EPA’s New Power Sector Climate Rules: A Brewing Political and Legal Storm

Proposal commented on:United States Environmental Protection Agency proposal for cutting power plant greenhouse gas emissions.

On June 2, the United States Environmental Protection Agency (EPA) proposed requiring all fifty states to adopt greenhouse gas controls for their existing power plants. And EPA went further, proposing that, together, states would have to cut U.S. power sector emissions by 30% by 2030.  (You can see a chart of how much each state would have to cut here.)

These rules face strong political and legal opposition and will not go into action until 2020 at earliest. Their ultimate fate will depend on whether President Obama’s administration stands behind them, whether the public elects a new President that supports them, and whether the courts agree that EPA has authority to cap state greenhouse gas emissions. Their immediate impact is twofold: 1) it tells other countries that there’s a chance the U.S. could commit to strong greenhouse gas rules at 2015 negotiations in Paris; and 2) it sets the stage for an epic political and legal struggle over energy policy in the United States. Many nations, including Canada, are eager to see what will result.

What happened?

EPA acted under Clean Air Act § 111(d). (The text of § 111(d) is at the bottom of this post.) This provision allows EPA to “establish a procedure” for each state to adopt “standards of performance” for existing sources of air pollutants that would have otherwise slipped through the cracks of the Clean Air Act because they 1) are not new sources, subject to new source performance standards, and 2) are not regulated under other existing source regulations in the Clean Air Act.

This section of the Clean Air Act has rarely been used: it’s designed for sources that somehow escaped the Act’s relatively comprehensive coverage. So there are few precedents for EPA to follow, and the courts that review EPA’s rule will not have past cases to go by. There are several ongoing legal disputes about the extent of EPA’s authority to adopt greenhouse gas rules under § 111(d), summarized below, and EPA is pushing for maximum authority to reduce greenhouse gas emissions across the power sector.

Can EPA Issue Greenhouse Gas Rules for Coal Power Plants?

Some question if the Clean Air Act requires greenhouse gas controls at all for existing power plants. The published U.S. Code says § 111(d) doesn’t apply to sources that EPA already regulates under the “hazardous air pollutants” section of the Clean Air Act, § 112. And EPA already regulates power plants under § 112. So how can EPA regulate power plants under § 111(d)?

Bizarrely, the U.S. Code does not reflect the actual text of the law signed by President George H.W. Bush in 1990, and the signed law, not the Code, controls. The signed law actually included two different § 111(d) that were passed by the U.S. House and Senate, respectively, and never reconciled. (#bicameralism) The House text made it into the U.S. Code, but the Senate version is different: it only says that § 111(d) doesn’t apply to pollutants that are regulated under § 112. Although power plants are regulated under § 112, greenhouse gases aren’t, so this version would allow EPA’s greenhouse gas rules.

In 2013, William Haun, writing for the Federalist Society, suggested that the Senate and House versions should be reconciled by applying the plain text of both exclusions, which would negate EPA’s standards. Kate Konschnik, Policy Director of the Harvard Environmental Law Program, has countered with several reasons to think that Congress intended to adopt the narrower Senate exclusion, and arguing that, at a minimum, EPA should be given deference on which text to apply. EPA issued a legal memorandum with its proposed power rule, echoing Konschnik’s arguments, and noting that a 2011 Supreme Court decision also suggested that EPA can regulate greenhouse gases under § 111(d). (See memo at pp. 20-27).

Can EPA Cap State Power Emissions?

The biggest battle over EPA’s power sectors rules will be its scope.

Remember: section 111(d) lets EPA set a “procedure” for states to set “standards of performance for any existing source” that would be subject to standards of performance for new sources. So EPA is proposing § 111(d) standards to accompany the new source performance standards it has proposed rules for new coal and natural gas plants.

But EPA isn’t suggesting source-by-source standards of performance for existing coal and natural gas plants. Instead it’s proposing to cap all greenhouse gas emissions from each state’s power sector. How can the agency propose this?

Under previous EPA regulations, § 111(d) standards must mandate the “best system of emission reduction” for each source. You might think that meant making each coal plant cleaner, but EPA says it also means taking steps to replace coal with other power sources: 1) using natural gas plants instead, 2) using low carbon sources like hydro, nuclear, wind, and solar, and 3) lowering electricity demand through energy efficiency. In other words, the best system of emission reduction for a coal plant is simple: don’t turn it on.

EPA recognizes that state-by-state caps are a departure from the usual approach, but it offers several reasons that they might make sense here. First, it notes that a state cap “achieves greater emission reductions at a lower cost”—if EPA limited itself to the coal plants themselves it could only get small greenhouse gas reductions (4-6%) unless it was willing to demand prohibitively expensive carbon capture. Second, a state cap “takes better advantage of the wide range of measures that states, cities, towns and utilities are already using to” cut greenhouse gas emissions, such as renewable power standards and cap-and-trade systems. Third, EPA says statewide caps “reflect the integrated nature of the electricity system and the diversity of electricity generation technology.”

There’s a lot of political rhetoric right now about “power grabs” but over the next months you will see others develop careful arguments that EPA has overstepped its authority by transforming a “procedure” for state “source” standards into state greenhouse gas caps. Even before the rule came out, Nathan Richardson, at Resources for the Future, suggested that it might be illegal to cap coal & gas together—much less combine the entire electric sector. On the other, hand, Kate Konschnik and Ari Peskoe of Harvard’s Environmental Law Program have defended the broader approach taken by EPA. If EPA’s rules ever go into effect, those arguments will have to be resolved in court.

Is EPA’s Proposed 30% Cut Reasonable?

EPA also says it decided to include all power sector emissions because states, industry, and interest groups all asked for compliance flexibility. And a state cap is flexible because it allows states to choose any low-carbon path that they like: natural gas or energy efficiency, nuclear or wind.

But calling EPA’s statewide caps “compliance flexibility” takes enough chutzpah to make you smile when you’re reading a 645-page proposed rule. Some states are, of course, delighted by EPA’s caps, which validate their pre-existing attempts to lower their greenhouse gas emissions. But the point of EPA’s state-wide caps is to force more greenhouse gas emissions: if EPA limited itself to coal plants, it could only cut emissions by 4-6% without shutting them all down. Many states requesting “compliance flexibility” were hoping to use alternate methods to make that 4-6% cut. Instead, EPA is requiring a 30% cut on average.

It’s as though you asked for an extension on a ten-page paper and your teacher said, “Sure—and since you have more time, make it twenty pages.” So EPA will have to convince the courts not only that it can sweep all power sector emissions into one rule, but also that it can use that wider scope to justify more dramatic reductions.

Will this Administration and Future Administrations Stand Behind This Rule?

This rule will not require states to cut greenhouse gas emissions until 2020, long after President Obama leaves office in 2016. And the proposed rules would run through 2030, by which time there may have been four more presidencies. So the future of EPA’s proposal will not turn on any particular politician, it will depend on the political and legal sustainability of the rules.

And EPA’s existing carbon rules have long been subject to political winds. In 2010, EPA promised to issue today’s proposal by July 2011, and finalize it by May 2012. Then, in the run-up to the 2012 election, it delayed these rules indefinitely. Now the rules are on again, and EPA says it will finalize this rule in June 2015, and will expect state implementing plans from 2016 to 2018, after President Obama has left office. Whether that schedule will stick remains to be seen.

(d) Standards of performance for existing sources; remaining useful life of source

(1) The Administrator shall prescribe regulations which shall establish a procedure similar to that provided by section 7410 of this title under which each State shall submit to the Administrator a plan which

(A) establishes standards of performance for any existing source for any air pollutant

(i) for which air quality criteria have not been issued or which is not included on a list published under section 7408 (a) of this title or emitted from a source category which is regulated under section 7412 of this title but

(ii) to which a standard of performance under this section would apply if such existing source were a new source, and

(B) provides for the implementation and enforcement of such standards of performance. Regulations of the Administrator under this paragraph shall permit the State in applying a standard of performance to any particular source under a plan submitted under this paragraph to take into consideration, among other factors, the remaining useful life of the existing source to which such standard applies.

(2) The Administrator shall have the same authority—

(A) to prescribe a plan for a State in cases where the State fails to submit a satisfactory plan as he would have under section 7410 (c) of this title in the case of failure to submit an implementation plan, and

(B) to enforce the provisions of such plan in cases where the State fails to enforce them as he would have under sections 7413 and 7414 of this title with respect to an implementation plan.

In promulgating a standard of performance under a plan prescribed under this paragraph, the Administrator shall take into consideration, among other factors, remaining useful lives of the sources in the category of sources to which such standard applies.

This post originally appeared on James Coleman’s blog Energy Law Prof.

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Directly and Adversely Affected: The Actual Practice of the Alberta Energy Regulator

Tue, 06/03/2014 - 10:00am

By: Nigel Bankes

PDF Version: Directly and Adversely Affected: The Actual Practice of the Alberta Energy Regulator

Decisions commented on:(1) AER Letter decision to Beaver Lake Cree First Nation re CNRL’s Kirby Expansion Project; (2) AER Letter decision to Cold Lake First Nation re CNRL’s Kirby Expansion Project, (3) AER Letter decision to Fort McMurray First Nation re CNRL’s Kirby Expansion Project, (4) AER Letter decision to Kehewin Cree Nation re CNRL’s Kirby Expansion Project, (5) AER Letter decision to Oil Sands Environmental Coalition re CNRL’s Kirby Expansion Project, (6) AER Letter decision to Whitefish Lake Nation re CNRL’s Kirby Expansion Project, (7) AER Letter decision to AltaGas Ltd re Keyera Energy Ltd’s Rimbey Plant Turbo Expander Project, (8) AER Letter decision to ATCO Energy Solutions re Keyera Energy Ltd’s Rimbey Plant Turbo Expander Project, (9) AER Letter decision to NOVA Chemicals Corporation re Keyera Energy Ltd’s Rimbey Plant Turbo Expander Project

This post examines the actual practice of the Alberta Energy Regulator (AER) with respect to a number of related matters: (1) decisions by the AER as to whether a person is directly and adversely affected by an application, (2) decisions by the AER as to whether or not to hold a public hearing on an application, and (3) decisions by the AER as to whether it should disregard a statement of concern. The discussion is based on nine letter decisions of the AER in relation to two different project applications: CNRL’s Kirby in situ oil sands expansion project, and Keyera Energy’s application to enhance the extraction of liquids at its Rimbey Plant.  The interested parties who filed statements of concern (SOCs) or requests to participate with respect to the two applications include First Nations, an environmental organization, and industrial competitors. Thus the range of decisions examined here provides valuable guidance as to how the AER will exercise its discretion in relation to standing, hearing and statement of concern matters involving a number of different types of interests.

I became aware of these decisions as a result of a presentation by AER counsel Meighen LaCasse at the annual meeting of the Alberta Regulatory Forum on May 14, 2014 in Calgary. The Forum is sponsored by Alberta’s energy regulators including the AER and the Alberta Utilities Commission. Ms. LaCasse kindly provided me with copies of these decisions. My own presentation at the Forum returned to two themes that I have pursued on previous ABlawg posts namely the importance of publishing ERCB/AER letter decisions and questions relating to the AER and aboriginal consultation. This post indirectly speaks to the first of those themes.

There are four parts to this post. The first part summarizes the principal differences between the AER legislation and the previous ERCB legislation in relation to hearings and standing. The second part refers to the provisions of the AER legislation that deal with the power to make subordinate legislation (i.e. regulations and rules) and discusses the relevant rules and regulations pertaining to hearings and standing. Part three summarizes and analyzes the AER’s decisions in relation to the two applications referred to above. Part four discusses the AER’s duty to publish its decisions.

1. The principal differences between the ERCB legislation and the AER legislation with respect to the related matters of public hearings and standing

The ERCB legislation

The ERCB’s principal statute with respect to such matters as standing and hearing was the Energy Resources Conservation Act, RSA 2000, c E -10 (ERCA, now repealed). Under s 26 of that Act the Board was required to give a person a hearing “if it appears to the Board that its decision on an application may directly and adversely affect the rights of a person …”.

The AER legislation

The AER’s principal statute is the Responsible Development Act (REDA), SA 2012, c R-17.3 (REDA). ABlawg has published a good number of posts on the AER and REDA. For a sampling use AER as a search term in ABlawg’s data base or search the REDA category archives.

The following are the relevant steps under REDA.

1. The AER need only consider holding a hearing where a person has filed a statement of concern (SOC): REDA, s 33.

2. A person may only file a SOC if that person believes themselves to be directly and adversely affected by an application: REDA, s 32.

3. The AER shall hold a hearing on an application where required to do so by an energy resource enactment, when required to do so by the rules, or where required by the regulations: REDA, s 34. It is very rare for the energy resource enactments to require a hearing.  For example, the AER is only required to hold a hearing under the Oil and Gas Conservation Act, RSA 2000, c O – 6 in the rare situation under s 99 of the Act where the Lieutenant Governor in Council requires the AER to hold a hearing on the design of a compensation scheme. Similarly, under the Oil Sands Conservation Act, RSA 2000, c O-7 the only time when the AER must hold a hearing is when it is considering ordering adoption of a scheme for enhanced recovery under s 18 of that Act.

4. Where the AER holds a hearing, a person who is directly and adversely affected is entitled to be heard: REDA, s 34(3).

5. Where the AER has made a decision on an application, an “eligible person” may request a regulatory appeal: REDA, s 38. The definition of an eligible person is complex but it includes a person who is directly and adversely affected where the decision in question was made without a hearing: REDA, s 36(b).

6. The AER may make a decision on a regulatory appeal with or without a hearing but if it holds a hearing an eligible person is entitled to be heard: REDA, s 40.

The most significant practical difference between the ERCA scheme and the REDA scheme is that under the ERCA scheme a person who is directly and adversely affected was entitled to trigger the hearing at the application stage. Under the REDA scheme a person who is directly and adversely affected cannot require a hearing at the application stage.

2. The provisions of REDA that deal with the power to make subordinate legislation i.e. regulations and rules

REDA distinguishes between the power to make rules and the power to make regulations.  The power to make regulations is reserved to the Lieutenant Governor in Council (LGiC). So far as relevant here the LGiC may make regulations prescribing the circumstances in which a hearing is required in respect of an application and in respect of an appeal (REDA, s 60(a) and (d).  The AER has the power to make rules. The rules, inter alia, may address the form and content of a SOC (REDA, s 61(c)).

The LGiC addressed the matter of hearings on regulatory appeals in the Responsible Energy Development Act General Regulation, Alta Reg 90/2013. Section 4 provides that the AER shall conduct a regulatory appeal with a hearing if the concerns of an eligible person have not been addressed through any alternative process or otherwise resolved by the parties: REDA Regulation, s 4. Thus, the regulations supplement the provisions of the Act and in effect confirm that a person who is directly and adversely affected is entitled to a hearing either on the application itself or on the regulatory appeal (but not both).

The AER’s Rules of Practice, Alta Reg 99/2013 contain extensive provisions dealings with SOCs as well as decisions to hold a hearing. The Rules confirm the importance of filing a SOC in a timely manner. The AER may disregard a SOC that is filed late or on any number of possible grounds (s 6.2(1)) including on the grounds that the person “has not demonstrated that the person may be directly and adversely affected by the application.” Further it may ignore a concern (s 6.2(2)) if the AER considers that any of the following apply:

(a) the concern relates to a matter outside the Regulator’s jurisdiction;

(b) the concern is unrelated to, or relates to a matter beyond the scope of the application;

(c) the concern has been adequately dealt with or addressed through a hearing or other proceeding under any other enactment or by a decision on another application;

(d) the concern relates to a policy decision of the Government;

(e) the concern is frivolous, vexatious, an abuse of process or without merit;

(f) the concern is so vague that the Regulator is not able to determine the nature of the concern.

The Rules also list a number of factors that the AER may take into account in deciding whether or not to conduct a hearing on an application although they are, as Professor Fluker points out, largely a set of directions as to when the AER should not hold a hearing. Thus, the AER should not hold a hearing on an application where the AER is entitled to disregard a SOC or a concern under the circumstances referred to above.

The general tenor of these provisions as Professor Fluker has pointed out in his post on the Rules is to ensure that the AER will only hold a hearing where there is a person whose interests are directly and adversely affected and whose interests or concerns have not been resolved. Where there is no such person there will be no hearing.

3. The actual practice

CNRL’s Kirby Application

In the case of the Kirby project the AER made an initial decision to hold a hearing in respect of the project and accordingly issued a notice hearing asking parties wishing to participate to file submissions indicating the nature of their interest. The notice is available here. Submissions were filed by at least the following parties: Cold Lake First Nation (CLFN), Fort McMurray First Nation (FMFN), Beaver Lake Cree Nation (BLCN), Kehewin Cree Nation (KCN), the Whitefish Lake First Nation (WLFN) and the Oil Sands Environmental Coalition (OSEC). Upon review of those submissions however the AER ruled under s 9(3) of its Rules that none of those parties should be permitted to participate in the hearing. Furthermore, since that meant that there was no party left with standing the AER would no longer be holding a hearing and would instead make a decision on the application without a hearing. The hearing panel provided each of the above parties with written reasons in the form of a letter decision for its conclusions. Section 9(3) of the Rules provides that:

The Regulator may refuse to allow a person to participate in the hearing on an application if the Regulator is of the opinion that any of the following circumstances apply:

(a) the person’s request to participate is frivolous, vexatious, an abuse of process or without merit;

(b) the person has not demonstrated that the decision of the Regulator on the application may directly and adversely affect the person;

(c) in the case of a group or association, the request to participate does not demonstrate to the satisfaction of the Regulator that a majority of the persons in the group or association may be directly and adversely affected by the decision of the Regulator on the application;

(d) the person has not demonstrated that

(i) the person’s participation will materially assist the Regulator in deciding the matter that is the subject of the hearing,

(ii) the person has a tangible interest in the subject-matter of the hearing,

(iii) the person’s participation will not unnecessarily delay the hearing, and

(iv) the person will not repeat or duplicate evidence presented by other parties;

(e) the Regulator considers it appropriate to do so for any other reason.

 In support of its submissions, the BLCN stated that its members exercised treaty rights and carried out traditional activities “on lands within and adjacent to the Project area.” It also noted that part of the project area overlapped with a Fur Management Area registered in the name of a BLCN member. The First Nation filed affidavits in support and a traditional land use (TLU) report. The Panel relied on the Alberta Court of Appeal’s decision in Dene Tha’ First Nation v Alberta (Energy and Utilities Board), 2003 ABCA 372 and the practice of the Environmental Appeal Board in appearing to adopt CNRL’s contentions that in order to meet the directly and adversely affected tested it was not enough for BLCN to show that its members had the right (whether based on the relevant treaty or the Natural Resources Transfer Agreement) to use the lands in question, the First Nation must also “demonstrate actual use of land and other natural resources in the Project area by its members and a potential for those to be directly affected by the Project.” The First Nation had failed to do that in this case and had failed to take advantage of opportunities offered by CNRL to identify whether the project might directly and adversely affect BLCN or its members.

In its submission FMFN had indicated that it intended to use the hearing to raise two constitutional questions relating to the validity of s 21 of REDA (the section that provides that the AER has no jurisdiction to consider the adequacy of Crown consultation). The Panel concluded (FMFN letter at 5) that these were not matters that should be considered in a public hearing.

The panel’s decisions with respect to the other First Nations largely followed the approach taken on BLCN’s application indicating that the applications to participate all fell short in detailing how this project would affect the harvesting rights of its members. Plainly the AER was not satisfied with general information or traditional land use reports that showed evidence of use of the area or even the affidavits of members showing some use of the project area; instead the AER is signaling that it requires detailed and site specific information about use of the particular area before it will conclude that an applicant has passed the factual part of the directly and adversely affected test. The Panel’s summative comments in response to WLFN’s application are representative of the Panel’s reasoning (WLFN letter at 4):

In conclusion, the Panel has decided that the information from the WLFN harvesters does not provide the degree of location or connection between the Project and the traditional land uses that are asserted by WLFN to satisfy the directly and adversely affected test for any of the twenty-two harvesters, which WLFN stated was a representative sample of WLFN’s membership. The information in the TLU and TLU Update provides only a vague indication of traditional uses in or near the Project area, and it does not locate any WLFN uses within any specific proximity to the Project area.

Thus, concerns about cumulative impacts will perhaps never be enough. The Panel suggested as much (KCN letter at 4) with respect to KCN’s concerns “about cumulative impacts” which it dismissed as “general in nature and not related to the Project or the Project lands.” Any consideration of cumulative impacts must, by the nature of the alleged affect, reach beyond the Project lands.

In a number of the letter decisions the panel also mentioned an additional factor to the effect that industrial activities were already occurring within the project area on the basis of other approvals that had been issued to CNRL. This suggested that (WLFN letter at 4) “much of the land in the Project area has already been approved for development …”.  See also CLFN letter at 6, BLCN letter at 5, and FMFN letter at 6. It is not clear how the Panel believed this to be relevant. Perhaps it was suggesting that this was therefore a concern that already been “adequately dealt with” within the meaning of s 6.2(2)(c) of the Rules but the Panel did not make that point specifically.

OSEC is a coalition of Alberta public interest groups and individuals with a long-standing and documented interest in a range of environmental issues in the oil sands area. Its members include the Alberta Wilderness Association, the Pembina Institute and the Fort McMurray Environmental Association. OSEC’s position was (at least initially) supported by an individual with a Registered Fur Management Area (RFMA) but that person later seems to have withdrawn his support and interest. OSEC sought to present evidence about habitat disturbance in the area of the project which exceeded that prescribed in a federal recovery strategy for caribou. The AER panel gave two reasons (OSEC letter at 4) for concluding that OSEC would not even be given participation rights if a hearing were to be held. First, neither OSEC nor its members “appeared to have a tangible interest in the subject-matter of the Project application.” Second, OSEC’s concerns were “general in nature and … not related to the Project” and as a result OSEC had failed to demonstrate that its participation would materially assist the AER in its deliberations.

Keyera’s Rimbey Application

Statements of concern with respect to the Rimbey project were filed by at least three parties: NOVA Chemicals, AltaGas, and ATCO Energy Solutions. Both AltaGas and ATCO are part owners of the downstream Edmonton Ethane Extraction Plant (EEEP). They argued that Keyera’s proposal would result in a leaner feedstock entering EEEP which would reduce operational efficiency at EEEP which might in turn render EEEP non-viable. NOVA uses ethane and natural gas liquids as feedstock for its operations and sought to obtain a better understanding of the potential impacts of the project.

The AER concluded that the SOCs or the concerns could all be disregarded on several grounds. First, and in respect of both ATCO and AltaGas, under the heading of “Direct and Adverse Effect”, the AER ruled (AltaGas letter at 3) that any impact on either of them would be the direct result of the decisions of producers to have their gas removed at the Keyera facility in the field rather than leaving it in the common stream and not the result of any decision by the AER to approve the application. “At most (AltaGas at 3) the Application might have an indirect impact on EEEP as a result of reduced receipts.” Additionally under this heading the AER noted that neither company had provided adequate information to determine what impacts either might suffer. And finally under this heading it noted that since the basis of the complaints of these two parties was effectively a complaint about competition for feedstock this was not a matter on which the AER was able to make a decision. All of this led the AER to conclude that any impact on ATCO and AltaGas was remote and thus there was no direct and adverse effect on either.

The AER also put the competition point to work in concluding that it was entitled to ignore the concern on the basis that it was outside the AER’s jurisdiction and outside the scope of the application (s 6.2(2)(a) and (b) of the Rules). This was because (AltaGas at 3): “While the AER has the jurisdiction to consider whether the project is consistent with the efficient, safe, orderly and environmentally responsible development of energy resources in Alberta, it does not have the jurisdiction to compel gas producers to have their gas processed as EEEP and to protect EEEP from market forces and the competition arising therefrom. It is not within the scope of the AER’s authority in the context of this application for the AER to interfere with market competition.”

Finally, the AER took the view under s 6.2(c) of its Rules that the matter had already been decided in a previous application. This serves to draw attention to the scope of paragraph (c). Thus it applies not only with respect to the current application but to previous applications in which the same issue had been addressed. The AER in this case (AltaGas letter at 4) reasoned as follows:

Implicit in the Energy Resources Conservation Board’s approval of Keyera’s 2007 application is the determination that recovery of ethane and propane plus from the existing raw gas inlet stream from the field to the Rimbey Plant is, subject to such extraction meeting the applicable technical requirements and regulations, in the public interest. In its consideration of the Keyera 2007 application, the Board noted that “producers have the right to extract NGL in the field.” While each application before the AER must be considered on its own facts and meet the AER’s requirements, in this matter the public benefit of filed extraction of NGLs, particularly at Keyera’s Rimbey Plant, has already been determined.

This provides one more reason why the AER must make its letter decisions systematically available since the previous decision that the AER relies on is indeed a letter decision of March 13, 2008.

Observations

First, “direct and adverse affect” may be relevant at multiple points in proceedings before the AER. It is an important factor in establishing whether or not to hold a hearing, it is important in establishing the right to participate in a hearing, and it is important in assessing whether or not the AER needs to take account of a SOC.

In the case of First Nations the AER has established a very high threshold that a First Nation must meet before it can establish that it is directly affected. It is not enough for it to establish that it has rights in the area and that the proposed activity might interfere with those rights, it must also establish that it exercises its rights in that particular area. The third factor has the potential to be discriminatory. It seems unlikely that the AER would ask whether a fee simple owner actually used her land as part of determining whether that person was directly and adversely affected. Furthermore, the Supreme Court’s decision in Mikisew Cree First Nation v Canada (Minister of Canadian Heritage), 2005 SCC 69 surely establishes that if a First Nation has a treaty right (or an NRTA right) to hunt in an area any authorization by the Crown that results in a taking up of lands causes legal prejudice to the First Nation insofar as the taking up causes land to move categories (i.e. from hunting allowed to hunting not allowed) (and see also Beckman v Little Salmon/Carmacks First Nation, 2010 SCC 53 at para 13). In the case of a First Nation this prejudice is both particular and cumulative; that is to say the change of category affects both the particular lands and potentially the meaningful exercise of hunting rights within the treaty (or NRTA) area. The demanding nature of the tests suggests that a First Nation will never be able to establish direct and adverse effect based on a cumulative effects argument (either with respect to ecological concerns or with respect to its legal rights). Such a conclusion is inconsistent with the statutory mandate of the AER (inter alia to protect the environment and to ensure environmentally responsible development of the environment, REDA, s 2(1) and s 3 of the AER’s General Regulation) and Canada’s obligations under Article 27 of the International Covenant on Civil and Political Rights (see, for example, Poma Poma v Peru (2009)).

4. The AER’s duty to publish its decisions

 Section 33 of REDA requires the AER to publish its decisions in accordance with the Rules. Sections 38 and 7.1 of the Rules requires the AER to post its decisions on its website. The AER’s decision on Keyera’s application is not available on the AER’s website so far as I can determine. The AER’s publication of decision tool indicated that the AER rendered its decision on April 1, 2014 but a reader that clicks on the “view the decision” button is taken to the AER’s Integrated Application Registry (IAR) where, in conformity with the announced practice, all relevant documents will have been removed 30 days following the disposition.

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Swift Judgment in a Complex Commercial Case

Mon, 06/02/2014 - 10:00am

By: Nigel Bankes

PDF Version: Swift Judgment in a Complex Commercial Case

Case commented on: Blaze Energy Ltd v Imperial Oil Resources, 2014 ABQB 326

The Commercial Court of the English High Court is well known for its capacity to give swift judgments in complex commercial cases. This decision confirms that the Alberta Court of Queen’s Bench can offer the same service provided that the parties can agree on the procedures to be followed.

The statement of claim in this matter was filed on April 23, 2014 and on April 29 Chief Justice Wittman granted a Consent Order for an expedited trial confined to three issues. Absent an Agreed Statement of Facts the trial proceeded on the basis of filed affidavits and the transcripts of cross examination on those affidavits. The Consent Order provided that there would be no questioning or viva voce evidence. The trial concluded on May 26 and Justice Frederica Schutz acceded to counsels’ request and gave well written reasons for judgement on May 30.

The case involved two transactions (A and B) involving the purchase and sale of oil and gas assets and an interest in a natural gas processing plant (Plant) and rights of first refusal rights (ROFR) arising under two distinct agreements (the 1960 Lands Agreement and the Plant Agreement).

In Transaction A, Imperial agreed to sell its interests in certain lands to Whitecap. The sale included lands subject to the 1960 Lands Agreement which were part of a block of lands known as the West Pembina Area lands. The sale also included Imperial’s 90% interest in the West Pembina Gas Plant. This Plant which was built in 1988 processes gas from the West Pembina Area including gas from lands subject to the 1960 Lands Agreement. The ownership and operation of the Plant was governed by a Construction Ownership and Operation Agreement (the 1988 CO & O Agreement or Plant Agreement). Imperial concluded that Transaction A triggered the ROFR provision in the 1960 Lands Agreement and accordingly gave notice to Blaze of the proposed sale. Imperial attributed a value of $17 million to its interest in the 1960 Lands Agreement properties in a total transaction of $855 million. In response, Blaze made inquiries as to the additional interest (Blaze already had an 8% interest) that it might be able to acquire in the Plant if it exercised its ROFR rights under the Lands Agreement. Imperial ultimately took the view that Blaze had failed to exercise its ROFR rights under the Lands Agreement in the manner prescribed by the relevant clause.

Imperial concluded that the sale of its interest in the Plant did not trigger the ROFR in the 1988 CO & O Agreement on the grounds that the disposition fell within an exception to ROFR obligations. The exception provided that “Any Owner may, without restriction, dispose of an interest in the Plant in conjunction with the disposal of the Owner’s corresponding working interest in the lands in the West Pembina Area from which Gas is being produced into the Plant.” Imperial advised the relevant parties, including Blaze, that it was taking this position.

In Transaction B, Whitecap agreed to sell Keyera a portion of the assets that it had acquired from Imperial, specifically an 85% interest in the Plant and a corresponding interest in Gas assets in the West Pembina Area. Whitecap provided Blaze with a ROFR notice under the Lands Agreement but, relying again on the exception referred to above, did not provide a ROFR notice under the CO & O Agreement. Blaze exercised its ROFR rights under the 1960 Lands Agreement and then took the position, crucial to this litigation (at para 64) that if it acquired Whitecap’s interest in these lands Whitecap could no longer be said to be selling a “corresponding working interest” in the West Pembina Area Gas Lands to Keyera. Thus, Blaze argued, Whitecap could not take advantage of the exception in the CO & O Agreement and must therefore offer Blaze the opportunity to acquire at least some level of additional interest in the Plant.

The Consent Order directed an expedited trial of three issues:

(a)    Does Blaze have the ROFR rights it claims to have in relation to Transaction A?

(b)   Does Blaze have the ROFR rights it claims to have in relation to Transaction B?

(c)    If Blaze has ROFR rights is it entitled to specific performance?

Justice Schutz concluded that Blaze failed on all three grounds.

(a)   Does Blaze have the ROFR rights it claims to have in relation to Transaction A?

Blaze claimed a right to acquire a 4% interest in the Plant as a result of Transaction A. Blaze fixed on 4% on the basis that the 1960 Lands provided about 4% of Imperial’s production to the Plant from the West Pembina Area over the previous five years.

The short answer to this claim is that neither the 1960 Lands Agreement nor the CO & O Agreement gave Blaze any such right. Furthermore, the Agreements could not be read together to produce such a result since there was no evidence that the two agreements were intended to be connected. One only has to refer to the dates of the two agreements (1960 and 1988) and the different lands served by these two agreements to see that this must be the case.

[17] Put plainly, the 1960 Lands Agreement has nothing whatsoever to do with rights or interests in the Plant and nothing subsequent to the 1960 Agreement has changed that fact.

Blaze also claimed that Imperial’s notice under the 1960 Lands Agreement was defective on the basis that it failed to connect the Lands transaction with the Plant transaction and the later Disposition B (see para 108). For the reasons already stated this submission was doomed to failure insofar as it depended on being able to read the Agreements together, but it also meant that Blaze had failed to exercise its ROFR rights under the Lands Agreement. That was fatal: see para 123 and subsequent discussion of Pierce v Empey, [1939] SCR 247 and Chase Manhattan Bank of Canada v Sunoma Energy Corp, 2002 ABCA 286, at paras 161 et seq.

(b) Does Blaze have the ROFR rights it claims to have in relation to Transaction B?

There appears to be no issue with respect to Blaze’s rights as against Whitecap under the 1960 Lands Agreement. However, Justice Schutz had no hesitation in concluding that the exercise of Blaze’s rights under the Land Agreement could have no effect on the ability of Whitecap to claim the benefit of the exemption under the CO & O Agreement. This must be right. The two agreements are independent (at para 148) and in any event, as Justice Schutz points out (at para 144), the CO & O Agreement uses the term “corresponding” and not “identical”.

(c) If Blaze has ROFR rights is it entitled to specific performance?

Justice Schutz gave three reasons for concluding that specific performance would not be available. First, and with respect to the alleged Plant ROFR entitlement arising under Transaction B, the alleged interest was far too contingent to permit an order of specific performance (at para 158): “Blaze cannot persuade me … that there is unambiguous content or object or subject-matter to the claimed Plant ROFR … Blaze resorts to altering the express contractual language … and contorts the plain meanings” of the relevant clauses in the two agreements. Second, and with respect to the Lands ROFR under Transaction A, Blaze had failed to comply with the terms of the ROFR (see references above to Pierce and Chase Manhattan). And finally Justice Schutz was prepared to apply the clean hands doctrine to forestall claims to relief on the grounds that there was evidence that Blaze was in default under the CO & O Agreement. While this latter hardly seems to be closely enough connected to be a relevant consideration, the first two grounds are convincing. Interestingly, Justice Schutz did not find it necessary to refer to Semelhalgo v Paramadevan, [1996] 2 SCR 415 although it was certainly provided to her.

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British Columbia’s Water Sustainability Act – A New Approach to Adaptive Management and No Compensation Regulation

Wed, 05/28/2014 - 10:00am

By: Deborah Curran

 PDF Version: British Columbia’s Water Sustainability Act – A New Approach to Adaptive Management and No Compensation Regulation

Bill commented on:Bill 18 – 2014 (British Columbia), The Water Sustainability Act, 2014 Legislative Session: 2nd Session, 40th Parliament

The British Columbia Legislature gave third and final reading to Bill 18 – 2014, B.C.’s new Water Sustainability Act (“the Act”), on April 29, 2014 as the long awaited overhaul of the water management and allocation regime in B.C. As someone who teaches both municipal and water law I am pleased with the legislation. I have been so bold as to say that the Act is the best piece of environmental legislation introduced in B.C. in more than a decade. Of particular interest, in this age of if not climate change then more extreme weather events that typically involve precipitation in its liquid or frozen forms, is the way the Act strives towards an adaptive approach to water management and thus water rights. Under the new law licences issued in perpetuity will be subject to regional water sustainability plans that can reduce water diversions (ss 64-85) and subject to having their terms and conditions reviewed anytime after thirty years from when the Actcomes into force (s 23). This spectre of changing water rights may hasten a new era of water use as decision makers may amend the terms and conditions of a licence for more efficient use of water or water conservation, and may take into account the following factors when reviewing licence terms and conditions:

    • the best available technology in respect of water use efficiency and water conservation;
    • best practices in respect of water use efficiency and water conservation;
    • any increase in knowledge respecting actual stream flow or aquifer conditions;
    • the effects of climate change;
    • the licensee’s beneficial use of the water;
    • the use, operation or maintenance of works; and
    • other prescribed factors.

This attention to multiple ways by which water entitlements can be altered over time is fascinating in the context of provincial Crowns that assert their ownership or regulatory jurisdiction over natural resources and their longstanding grappling with the concept of adaptation in law. Law strives towards fixed entitlements to natural resources and we can see this impulse very clearly in water licences issued in perpetuity. The original intent in providing certainty of water use was for land owners and owners of works to be able to rely on a specific amount of water in priority to those who acquired rights to use water after they did. This reliance provided certainty of the ever important water input for investment.

However, the natural environment and hydrology change over time and those entitlements to use water may need to be altered. Indeed, one longstanding debate in the water community is how to deal with existing water rights in times of shortage and climate change where there is simply less water to go around during the summer months. In the Western United States and Australia the approach often has been to provide monetary compensation to water rights holders who are required to cut back from taking water, even over the short term, due to concerns for the environment, or to retire water rights altogether. See, for example, Tulare Lake Basin Water Storage District v United States, 49 Fed Cl 313 (2001), one of the original cases where the court found that forced reductions in water use due to flow requirements for endangered species were a physical taking of private property in the United States.

This is also the approach taken in Alberta under the Water Act, RSA 2000, c W-3 where the presumption is compensation for changes to water rights, subject to a contrary intention expressed in regulations. Not only do the terms of a deemed licence authorizing water rights prior to 1999 take precedence over the Water Act itself (see s18(2)(b)), but s 158(1) explicitly requires compensation to water licensees when the Director amends, suspends or cancels licences for conservation purposes. The changes to licences are authorized under various sections of the Water Act if an adverse effect on the aquatic environment occurs and it was not reasonably foreseeable at the time the licence was issued (see, for example, s 54(2)).

This granting of explicit property rights in a flowing and changing resource is an awkward legal and policy choice, one that is contrary even to how we treat land, which is arguably the category of property that is granted the most firm legal status as property. Of surprise to many landowners, the Canadian approach to land use is to allow governments to restrict virtually all use of land by, for example, zoning regulation without compensating the rights holder. This “no compensation” principle is codified in s 914 of the B.C. Local Government Act, RSBC 1996, c 323 and s 621 of the Alberta Municipal Government Act, RSA 2000, c M-26 which essentially state that no compensation will be paid for changes in the value of land caused by specified decisions made under a land use bylaw or permitting function. It is only when regulation takes away virtually all incidents of private ownership that the regulation will be found to be improper.

These “regulatory takings” or regulatory expropriations are few and far between in Canada. Although we hear about successfully argued “takings” cases in the U.S. Courts, in Canada a court has never found land use regulation to result in a regulatory expropriation. See Mariner Real Estate Ltd v Nova Scotia (Attorney General) 1999 CanLII 7241 (NSCA) for an excellent discussion of this area of law and Canadian Pacific Railway Co v Vancouver (City) [2006] 1 SCR 227, 2006 SCC 5 for the most recent Supreme Court of Canada discussion in the land use context. Courts have awarded compensation for loss of mineral rights upon the creation of a park (R v Tener, [1985] 1 SCR 533; Casamiro Resource Corp v British Columbia (Attorney General), 1991 CanLII 211 (BCCA)) or for the removal of all economic viability including goodwill (Manitoba Fisheries Ltd v The Queen, [1979] 1 SCR 101).

Returning to the context of water and contrary to some international trends in water law, with the Water Sustainability Act the B.C. legislature has explicitly adopted this “no compensation”

principle (s 121), and created a variety of ways to adapt water entitlements as hydrology and the natural environment changes.

The “no compensation” language reads, in part:

 Except as otherwise provided in this Act or by regulation, no compensation is payable by, and no legal proceedings may be commenced or maintained against, the government or any other person for or in relation to loss or damages arising from an effect on… rights under a licence or use approval…resulting under the provisions of this Act, the regulations or an order from…the change in precedence of water rights, a restriction or prohibition on the exercise of rights, or a change or the imposition of new terms and conditions on an approval (s 121).

There are, of course, two exceptions to this no compensation for changes to water rights rule. Cabinet may make regulations respecting the payment of compensation by the government (s 134), and if a water sustainability plan submitted to the minster recommends a significant change in respect of a licence or drilling authorization, the plan must contain a detailed proposal recommending responsibility for compensating the licensee or drilling authorization holder (s 74(2) – (3)).

While these exceptions have the ability to considerably weaken the flexibility with which water reallocation and reduction in water use will occur, this “no compensation” principle is correct if we apply our high tolerance in Canadian law for regulation. If fully applied this new approach could allow B.C. to take an adaptive approach to water management that recognizes hydrological and environmental changes over time. Like regulation in the land use context, water licensees will be required to get used to water regulation in the public interest that may change water entitlements based on ecosystem needs as we adapt to a new normal of climatic fluctuations. As uncomfortable as uncertainty of rights are to us in law, the Act brings a refreshing approach to future climatic unpredictability. Most productive will be the watershed-specific conversations that will result in unique water sharing arrangements and a balancing of interests when flows wane.

Deborah Curran is Hakai Professor in Environmental Law and Sustainability at the Faculty of Law and the Environmental Law Centre, University of Victoria. She presented a seminar at the University of Calgary Faculty of Law in March 2014 entitled “Can B.C.’s New Water Sustainability Act Plug the Leaks?”

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Challenging the Farm Work Exclusions in the Employment Standards Code

Tue, 05/27/2014 - 10:00am

By: Graham Martinelli and Andrew Lau

PDF Version: Challenging the Farm Work Exclusions in the Employment Standards Code

Legislation commented on:  Employment Standards Code, RSA 2000, c E-9

Editor’s Note

This is the fourth and final post in the series written by students in Law 696: Constitutional Clinical in the winter term of 2014.  For the other posts see here, here and here.).

Introduction

In 2014, an adolescent (age 12-14)working in the food industry in Alberta is restricted from participating in any work involving a deep fryer in a kitchen because deep fryers are deemed to be too unsafe for adolescents to operate (Employment Standards Regulations, Alta Reg 14/1997, s 51(a)).  Regardless of the task engaged in, adolescents working in the food industry must be accompanied by an adult older than 18 years old whenever they work (Employment Standards Regulations, s 53(3)(b)). Yet, if that same child, or their younger sibling, worked on a farm instead of in a kitchen there would be no similar restrictions on the conditions of their employment. Farm children of any age younger than 15 can operate dangerous heavy equipment without adult supervision, and the laws of Alberta do almost nothing to regulate this scenario.

Our task in this semester’s Constitutional Law Clinical program at the University of Calgary Faculty of Law was to challenge the farm worker exclusions present in the Employment Standards Code, RSA 2000, c E-9 (the “ESC”) which result in several absurdities including the one outlined above.

The ESC is one of several pieces of Alberta labour and employment legislation that exclude farm workers from several of their key provisions (for posts on other exclusions see here, here and here.).  We have divided the ESC exclusions relating to farm workers into three categories for the purposes of our analysis: Pay and Vacation exclusions (Part 2, Divisions 4-6 of the ESC), Hours of Work exclusions (Part 2, Division 2 of the ESC), and the aforementioned Child Labour exclusions (Part 2, Division 9 of the ESC).  These exclusions can all be challenged under s 7 and s 15 of the Canadian Charter of Rights and Freedoms (the Charter).

Information on the Government of Alberta’s likely justifications for these exclusions is sparse given the dearth of records of legislative debates (Hansard) from the time period in which they were originally written and the general lack of ESC-specific debates in the time period where we do have good Hansard records.  Nonetheless, from the information we do have, the exclusions appear to place farms, and family farms in particular, in a privileged position due to their key role in Alberta’s economic history.  As such, the legislative purpose behind the exclusions appears to be the dual goals of reduction of economic and administrative costs, as well as increasing access to labour for farm owners.

Section 7

Section 7 protects the “right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.” While there are some arguments to be made under the other s 7 rights, the strongest arguments will likely emerge from the right to security of the person.  If evidence can be lead to show that the exclusions lead to an increased likelihood of harm to farm workers then it is likely that a prima facie breach of security of the person would exist.  The Hours of Work and Child Labour exclusions will likely provide evidence favourable to reaching these conclusions.  Precedent in this area suggests that the harm suffered does not have to be particularly burdensome (see Chaoulli v Quebec, 2005 SCC 35 at para 105; Canada v PHS Community Services Society, 2011 SCC 44 at para 93).  It is also noteworthy that the same precedent can be used to support a breach of right to life as well if the evidence compiled is strong enough to mount such a claim.

Section 7 is qualified by the requirement that violations of rights are acceptable if they are in accordance with the principles of fundamental justice.  In this regard there are strong arguments that the Hours of Work and Child Labour exclusions are either arbitrary or overbroad, and depending on the evidence disproportionate (for definitions of these principles see Canada (Attorney General) v Bedford, 2013 SCC 72). The strongest arguments are as follows:

Arbitrariness – Children lack the capacity to safely and competently carry out much of the work farm workers need to do, so excluding them from protection under the ESC does not meaningfully meet the objectives of increasing access to labour nor meaningfully decrease costs.

Overbreadth – All of the exclusions are targeted at the ‘unique’ nature of farm work, which is usually justified as relating to seasonal busy periods such as the harvest or calving.  That the exclusions apply to work outside these busy periods is clear evidence of their overbreadth.  The exclusions also appear to target the ‘family farm’ but are also operative for feedlots with hundreds of employees – this is again clearly overbroad.

Disproportionality – If there is strong evidence that injury and mortality rates amongst farm workers (both children and adults) are significantly worse than those of protected workers, then this will offer a compelling argument that the exclusions are disproportionate.  If children are getting killed or maimed as a result of the exclusions then it will be exceedingly difficult for the government to argue that this harm to individuals is a proportionate price to pay for minor financial relief to farm owners.

If the violation of farm workers’ rights to life or security of the person are found to be arbitrary, overbroad, or grossly disproportionate, the violations will be contrary to the principles of fundamental justice, resulting in a breach of s 7 of the Charter.

Section 15

Section 15(1) of the Charter provides that “Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability”.  In R v Kapp , 2008 SCC 41 at para 17, the Supreme Court set out the most recent version of the test to determine whether a law violates s 15. In order for the court to find that a law (or part of a law) violates s 15, the claimant must show that the challenged law (1) creates a distinction based on an enumerated or analogous ground, and (2) creates a disadvantage by perpetuating prejudice or stereotyping. Both components of the test must be satisfied to establish that a law violates s 15.

The first step of the test requires the claimant to show that they received differential treatment under the challenged law, and that the differential treatment was a result of the claimant belonging to a group that exhibits at least one of the characteristics set out in s 15 (race, national or ethnic origin, colour, etc.) or a characteristic that is analogous to them. The ESC excludes workers from key portions of the Act based on their employment on a farm or ranch.

Although agricultural workers are clearly subject to differential treatment under the ESC, the basis for that differential treatment does not fit within any of the characteristics listed in s 15 of the Charter. Therefore, a key challenge to successfully arguing that the ESC violates s 15 is successfully arguing that the statute makes a distinction based on a ground analogous to the listed characteristics. There are at least two possible grounds that can be put forward as analogous grounds. The first is the ground of ‘occupational status as an agricultural worker’. Since the ESC explicitly contemplates that employees on farms and ranches should receive less protection under the statute, this is the most obvious analogous ground we can argue. The second analogous ground that can be argued for is the ground of ‘immigration status as a temporary foreign worker’.

As noted in the posts on the other statutes, the main difficulty with arguing a s 15 violation on the basis of occupational status as an agricultural worker is establishing that such a characteristic is an analogous ground. The Supreme Court in Corbiere v. Canada, [1999] 2 SCR 203, stated that an analogous ground is one that is based on “a personal characteristic that is immutable or changeable only at unacceptable cost to personal identity”, and is “based on characteristics that we cannot change or that the government has no legitimate interest in expecting us to change to receive equal treatment under the law” (at para 13). There have been several previous cases in which occupational status has been argued to be an analogous ground, but the argument has never been successful. However, the Supreme Court in Baier v. Alberta, 2007 SCC 31, when deciding against the claimant’s s 15 challenge, stated that it could not find any basis for finding that occupational status is an analogous ground “on the evidence presented in [that] case”, suggesting that such an argument could be successful in the future, if sufficient evidence was presented (at para 64). In her concurring opinion in Dunmore v. Ontario, 2001 SCC 94, Justice L’Heureux Dubé stated that “there is no reason why an occupational status cannot, in the right circumstances, identify a protected group.”  She found that the occupational status of agricultural workers constituted an analogous ground, since the government had no legitimate interest in expecting agricultural workers to change their employment status to obtain equal treatment, and due to their poor socioeconomic circumstances agricultural workers could change their occupation only at great cost (at paras 166-169). From these cases, it looks as if the chances for successfully arguing that occupational status as an agricultural worker should be included as an analogous ground may succeed with strong evidence.

It will be easier to successfully argue that immigration status as a temporary foreign worker (“TFW”) is an analogous ground, given the similarities of the group with non-citizens, which the Supreme Court has already accepted as an analogous ground in Andrews v Law Society of British Columbia, [1989] 1 SCR 143. As the ESC does not explicitly set apart TFWs for differential treatment, it will be more challenging to show that the statute actually makes a distinction based on this ground. In order to satisfy the first step of the Kapp test, we must show that TFWs are disproportionately disadvantaged by the exclusions in the ESC when compared with workers who are not TFWs. It can argued that the exclusions in the ESC interact with the disadvantages that TFWs already experience, resulting in adverse effects that are more severe than what non-TFW workers experience. For example, many TFWs are prohibited from working for other employers during their stay in Canada unless they go through a lengthy process to obtain a new Labour Market Opinion (see Temporary Foreign Workers: A Guide for Employees). This means that many TFWs are afraid to ‘rock the boat’ for fear of being fired and unable to find alternative employment, or worse, deported (the recent Tim Hortons scandal is illustrative). When combined with the reduced protections under the ESC, TFWs working as agricultural workers are in a difficult place indeed.

If the first step of the Kapp test can be satisfied on either of the above grounds, the second step may be satisfied fairly easily. To pass the second step, we must show that the ESC creates a disadvantage by perpetuating prejudice or stereotyping. The Supreme Court in Kapp set out four “contextual factors” to assist in identifying such discriminatory attitudes (2008 SCC 41 at para 19). These factors are the: (1) pre-existing disadvantage of the claimant group, (2) degree of correspondence between the differential treatment and the claimant group’s actual circumstances, (3) whether the law has an ameliorative purpose or effect, and (4) nature of the interest affected. More recently, a majority of the Court in Quebec (Attorney General) v A, 2013 SCC 5, suggested that perpetuation of disadvantage may be sufficient to meet the second step of this test without proof of stereotyping or prejudice (see para 327 per Abella J), though in a concurring judgment Chief Justice McLachlin relied on the contextual factors.

Regarding the first factor, the fact that agricultural workers have been excluded from employment standards, workplace safety, workers’ compensation, and labour statutes since the early 20th century is clear evidence of pre-existing disadvantage (see The Labour Welfare Act, SA 1943, c 5, s 3; The Hours of Work Act, SA 1936; The Workmen’s Compensation Act, SA 1908, c 12, s 2). These exclusions have persisted despite the fact that the agricultural industry has a higher workplace injury rate than most other sectors, which further establishes that agricultural workers have experienced long-time disadvantage in Alberta (see Occupational Injuries and Diseases in Alberta). The pre-existing disadvantages experienced by TFWs have already been discussed above, and are equally applicable here. The perpetuation of historic disadvantage by the ESC exclusions may be sufficient to establish a violation of s 15.

As for the second factor, there is arguably little correspondence between the differential treatment and the claimant group’s actual characteristics. The typical justification for the exclusion of agricultural workers is that the unique nature of agricultural work (i.e. its seasonal and weather-dependent nature) requires that employees work longer hours in order to make harvest deadlines. Another common justification is that it would be too economically burdensome for small farms to comply with employment standards and similar legislation. The problem with this reasoning is that it is contradicted by real-life experience. For example, after Ontario was required to include agricultural workers in its labour relations legislation in Dunmore, farms in Ontario did not experience a significant, sustained decline in their net income, which is what one would expect if the nature of the agricultural industry required agricultural workers to be excluded (see Statistics Canada Table 002-0053). Additionally, other seasonal, weather-dependent sectors such as the construction industry are able to fulfill labour needs by simply hiring more workers.

The third factor is not particularly relevant here, as the exclusions of the ESC are not aimed at ameliorating some disadvantage experienced by a specific group, and also do not have such an effect.

The final factor also weighs in favour of finding that the ESC creates a disadvantage by perpetuating prejudice and stereotypes, as the effects of the exclusions are quite severe. The exclusions deny to agricultural workers basic employment rights that many Canadians possess and take for granted. The rights affected by the exclusions are also of high societal significance. It would not be a reach to presume that most Canadians would be appalled to hear that the ESC allows for practices such as employing children under 15 to work over 12 hours a day with no holidays or vacation, even during school hours.  The effects are also severe on temporary foreign workers, whose rights and avenues of recourse are already limited even without the exclusions in the ESC.

In summary, if it can be shown that the ESC creates a distinction based on the ground of ‘occupational status as agricultural worker’ or ‘immigration status as temporary foreign worker’, then there is a good chance that the exclusions in the ESC of agricultural workers from various protections will be found to violate s 15 of the Charter.

 Section 1

In Bedford, McLachlin CJ stated that the question to be asked in a s1 analysis is, “whether the negative impact of a law on the rights of individuals is proportionate to the pressing and substantial goal of the law in furthering the public interest” (at para 125).  Whether a law is reasonable and demonstrably justified in a free and democratic society is determined by its adherence to the test arising from R v. Oakes, [1986] 1 SCR 103 at 138-139.  Professor Hogg has distilled the original judgment into four criteria that that a law must satisfy in order to be saved by s 1:

1)      A Sufficiently Important Objective: The law must pursue an objective that is sufficiently important to justify limiting a Charter right

2)      Rational Connection: The law must be rationally connected to the objective

3)      Least Drastic Means: The law must impair the right no more than is (“reasonably”) necessary to accomplish the objective.

4)      Proportionate Effect: The law must not have a disproportionately severe effect on the persons to whom it applies. (Peter W Hogg, Constitutional Law of Canada, 5th ed, ch 38 at 18 citing Oakes at paras 138-139; see also Dunmore at para 56)

It should also be noted that there is some indication that no violation of a principle of fundamental justice found under a s7 analysis could ever be saved by a s1 application, but as of yet this remains uncertain (Hogg, ch 47 at 4). In Bedford, McLachlin CJ seems to address this uncertainty by contrasting the purposes of the principles of fundamental justice and s1.  She contends that s7 deals with the impugned law’s impact on individuals while s1 does the same in relation to the public interest (at para 125).

With all due respect to the Chief Justice, this distinction does not make sense in application.  That a law has a sufficiently important objective, is rationally connected to its objective, and accomplishes its goal in the least drastic manner are not significantly affected by a distinction between the individual interest and the public interest.  Further, a s1 disproportionality analysis can only be made in reference to proven evidence of harm to an individual so the distinction the Chief Justice outlined would have minimal impact here as well. What this means practically for a lawyer alleging a s7 breach and denying a s1 defense is that the arguments and evidence led will be virtually identical for both.

An application of the facts to the s1 test returns a generally favourable result.  In Dunmore the Supreme Court of Canada recognized the protection of the family farm as a sufficiently important objective so we are unlikely to be successful arguing to the contrary.  Rational connection can be rebutted in the case of the Child Labour exclusions on the basis that children offer no cost savings as compared with an adult in the context of filing an employment role, but generally the exclusions appear to be rationally connected with their objective.  The least drastic means analysis will provide strong opportunity for argument.  The exclusions could target busy periods specifically, or set minimum work age and alternative education options for child workers.  The disproportionality analysis will depend on the severity of the evidence of harm that we will be able to gather; the greater the evidence of harm, the greater the likelihood that the exclusions will be found to be disproportionate.

International Law

The Charter-based arguments above may be further strengthened by Canada’s obligations in the international sphere. Although international treaties and conventions may not be strictly binding on Canada, the Courts may nevertheless be influenced by international law when interpreting whether a statute violates the Constitution (see e.g. Baker v Canada, [1999] 2 SCR 917 at 70).

Article 10(3) of the International Covenant on Economic, Social, and Cultural Rights, which Canada has signed and ratified, states that, “[s]tates should … set age limits below which the paid employment of child labour should be prohibited and punishable by law” (16 December 1966, 993 UNTS 3, Art 10(3)).  The exclusions in the ESC violate Article 10 by allowing children of any age to work on farms and ranches. However, the word “should” in Article 10 may dampen the urgency of the provision.

Article 32 of the Convention on the Rights of the Child, another convention that Canada has ratified, uses more obligatory language, explicitly stating that state parties must “recognize the right of the child to be protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral or social development” (20 November, 1989, 1577 UNTS 3, Art 32). The Convention goes on to oblige states to enact legislation and take other administrative, social, and educational measures to provide for a minimum age (or ages) for employment, appropriate regulations for work hours and conditions, and for effective measures to enforce the above. Again, the exclusions in the ESC clearly contravene this international convention by failing to regulate the hours, work conditions, or minimum age for children employed as farm workers.

Conclusion

There are several opportunities to challenge the ESC exclusions based on a breach of Charter rights.  In particular, there are reasonable arguments to be made in the context of security of the person providing that sufficient evidence of harm can be admitted.  Challenges raised in the context of the Child Labour exclusions should be particularly compelling, as the exclusions seem to be poorly and overly simplistic attempts to address the legislative objective as defined herein.  Depending on the evidence of harm that can be gathered, there is potential to strike this exclusion altogether based on s 7.  Likewise, the Pay and Vacation exclusions, and the Hours of Work exclusions appear to be too broadly constructed to survive close judicial scrutiny.

There is also a fairly solid case to be made that the exclusionary provisions in the ESC violate s 15 of the Charter so long as we can establish occupational status as an agricultural worker as an analogous ground, or show that the exclusions have a disproportionately adverse effect on temporary foreign workers. Given the existing jurisprudence, strong, cogent evidence will be required to successfully argue for the inclusion of occupational status as an agricultural worker as an analogous ground. However, cases like Baier and the concurrence in Dunmore suggest that such an endeavor is not altogether impossible. Showing that agricultural workers are disproportionately affected by the exclusionary provisions in the ESC is somewhat less challenging, but will still require strong evidence to be successful.

If successful, these arguments would support the conclusion that the exclusions of agricultural workers from the ESC should be struck down under s 52 of the Constitution Act, 1982.

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What is “Advice”? Supreme Court Exempts Policy Options from Access to Information Request

Mon, 05/26/2014 - 10:04am

By: Sarah Burton 

Case commented on: John Doe v Ontario (Finance), 2014 SCC 36 (CanLII)

In this case, the Supreme Court of Canada considered whether certain government documents constituted “advice” under the Freedom of Information and Protection of Privacy Act, RSO 1990, c F.31, thus exempting them from disclosure in an access to information request. In making this determination, the Court balanced two competing and important policy interests: the public’s interest in accessing government information, and the government’s interest of obtaining full and frank opinions from public servants. The Court claimed that its decision to protect public service candour was compelled by principles of statutory interpretation. A detailed examination of the case demonstrates that the judgment, while defensible, was actually less inevitable than the Court would like us to believe.

Factual Background

The Ministry of Finance (the Ministry) amended a provision of the Corporations Tax Act, RSO 1990, c C-40 that eliminated a loophole for tax haven corporations. The law was partially retroactive. A tax lawyer (John Doe) made a request pursuant to the Ontario Freedom of Information and Protection of Privacy Act, RSO 1990, c F-31 (FIPPA) regarding the amendment – and particularly its retroactivity. Pursuant to this request, the Ministry located several drafts of a policy option paper (the Policy Options). The Policy Options examined possible effective dates for the relevant amendments, and indicated which options were undesirable. It also made a statement from which the author’s recommendation could easily be inferred (para 5). One of the options was eventually enacted (para 6).

The Ministry refused to provide the Policy Options to John Doe, claiming that they constituted advice to the government from a public servant. Pursuant to s 13(1) of the FIPPA, a public servants’ advice or recommendations can be exempted from disclosure:

13 (1) [Advice to government] A head may refuse to disclose a record where the disclosure would reveal advice or recommendations of a public servant, any other person employed in the service of an institution or a consultant retained by an institution.

The Information and Privacy Commissioner (IPC) held that the Policy Options were not advice, and ought to be disclosed. The IPC reached this conclusion after determining that, in order to constitute “advice”, the Policy Options must:

  • suggest a course of action to be accepted or rejected by the person being advised; and
  • have been communicated to a decision maker (para 8).

There was no clear evidence that the Policy Options were provided to anyone.

The Ministry brought an unsuccessful application for judicial review, and appealed that dismissal to the Ontario Court of Appeal.

The Court of Appeal found that the IPC’s decision was unreasonable. In its view, there was no need to prove that information was communicated to a final decision maker in order to constitute advice. Moreover, there was no need to show a single course of action was recommended (para 14). These restrictions, in the Court of Appeal’s view, would strips 13 of any real meaning (para 15, citing with approval the reasoning in Ontario (Finance) v. Ontario (Information and Privacy Commissioner) 2012 ONCA 125 at para 29).

The Supreme Court of Canada’s Decision

The Supreme Court of Canada agreed with the Ontario Court of Appeal — the IPC’s decision was unreasonable. Justice Rothstein grounded the Court’s unanimous decision in principles of statutory interpretation. He conducted a detailed examination of s. 13’s text, the context of the information request, the FIPPA’s legislative history, and the purpose of the s. 13(1) exemption.

Section 13’s Text

Section 13(1) of the FIPPA exempts a public servant’s “advice or recommendations” from disclosure. While “advice” and “recommendations” are not defined in the FIPPA, common sense dictates that the words be given distinct meanings, lest they be redundant (para 24).

The IPC adjudicator held that, to constitute “recommendations or advice” the document must suggest a “course of action that will ultimately be accepted or rejected by the person being advised” (para 23). While Rothstein J. agreed that this definition encompassed recommendations, he held that advice was a broader term. Because the IPC adjudicator failed to consider and apply a distinct definition for advice, it was unreasonable (para 24).

The Context of the Complaint

Rothstein J. then considered whether policy options were likely considered advice by legislative drafters.

He noted that, while policy options vary greatly in content, they typically provide more than objective data — they filter information, provide an “evaluative analysis” and sometimes (like the present case) provide guidance on the desirability of the listed options (para 26).

With that backdrop, Rothstein J. made several inferences about the nature of policy options, and their interaction with the FIPPA.

First, he noted that a federal case dealing with a similarly worded section of federal legislation (the Access to Information Act, RSC 1985, c A-1) found policy options to constitute advice (see: 3430901 Canada Inc. v. Canada (Minister of Industry), 2001 FCA 254 at paras 61-64 [Telezone]).

Second, he was influenced by s 13(2) of the FIPPA, which provides a list of documents that must be produced, whether or not they constituted “advice” or “recommendations” under s 13(1). To Rothstein J., s 13(2) demonstrated that legislative drafters knew that the word “advice” was open to very broad construction (para 29). Policy options were not on s 13(2) list – a fact that was “telling” in Rothstein J.’s view (para 33).

Finally, s 13(3) of the FIPPA held that disclosure could not be refused where the head of an institution publicly cited the record as the basis for reaching a decision. The Policy Options were not cited publicly. Rothstein J. extrapolated that, where an institution did not publicly cite a record as the basis for reaching a decision, it could not be compelled (para 34).

Legislative History of the FIPPA

The claimant relied on the Williams Commission Report (the report upon which the FIPPA was based) to demonstrate that policy options were not intended to fall within the scope of “advice” under s. 13(1) of the FIPPA (para 36).

Rothstein J. was not persuaded, and declined to give the Report anything but “limited weight” (para  36). He adopted this view because:

  •  the wording ultimately selected for s. 13 was not proposed in the Williams Commission Report (paras 36, 37);
  • there was an 8 year gap and a change of government between the Williams Commission Report and the FIPPA (para 38); and
  • the wording of s 13 was substantively similar to the federal Access to Information Act, which was enacted after the Williams Commission Report was published (para 39).

As such, while it was clear the FIPPA was based on the Williams Commission Report, Rothstein J. did not accept that it reflected the scope of s 13(1) (para 39).

 Purpose

Finally, Rothstein J. considered the purpose of the FIPPA, of s 13(1) specifically, and of the competing policy objectives at play. On the one hand, increased transparency in the government is a valid social objective. As such, the FIPPA establishes a presumption of granting access (para 41).

On the other hand, however, s 13(1) exists to protect the ability of public servants to provide full and frank advice. The Williams Commission Report was concerned that failing to exempt public service advice or recommendations risks the candid, complete nature of public service opinions, and the political neutrality (real and perceived) of Canada’s civil service (paras 43, 44).

Rothstein J. accepted that the Williams Commission Report outlined the purpose of s 13(1). He held that those features were essential to the public service, and that the forced disclosure of advice or recommendations “risks introducing actual or perceived partisan considerations into public servants’ participation in the decision-making process” (para 45).

Rothstein J. concluded that including the Policy Options within the meaning of “advice” accorded an appropriate balance between s 13(1) and the FIPPA to preserve an effective public service while providing meaningful access to information (para 46).

Therefore, the Policy Options were advice, and were exempted from disclosure.

Commentary

Rothstein J.’s judgment that the IPC adjudicator’s decision was unreasonable is defensible. Demanding that all “advice” must suggest a single course of action unacceptably conflates the words “advice” and “recommendation” into the same concept. This is redundant and does not accord with principles of statutory interpretation.

In addition, there is no basis to conclude that advice has to be communicated to the final decision maker to be exempted from disclosure. This would create a troubling paradox whereby all drafts of a final opinion would be producible, but the final version itself would be held back. This defeats the entire purpose of the exemption (para 49).

With that said, Rothstein J.’s ultimate conclusion that the Policy Options (and all policy options generally) are “advice” is somewhat less convincing. To explain, Rothstein J. appears to contradict himself when he initially dismisses the Williams Commission Report because its recommendations did not make it into the final draft of s 13(1). However, six paragraphs later, he relies on the Williams Commission Report as providing an accurate description of s 13(1)’s purpose.

Rothstein J. implicitly acknowledges this inconsistency at paragraph 43 of his decision in stating “[a]lthough I would not give the report much weight in defining the scope of s. 13(1), I accept that its discussion of the purpose of s. 13(1) is accurate.” This acknowledgement, however, completely fails to explain why it was appropriate to rely on the Williams Commission Report to explain the purpose of s 13(1) when, as he pointed out, s 13(1) bore no resemblance to the recommendations in that Report.

Secondly, Rothstein J. was influenced by federal legislation and a Federal Court of Appeal judgment that policy options constituted advice under the federal Access to Information Act, RSC 1985, c A-1 (para 28, discussing Telezone).  Later, however, he refused to assign any weight at all to the legislative treatment of policy options in other provinces. Instead, he dismissed this information from other provinces as “not conclusive” (para 40).

And lastly, while Rothstein J. referred to the balancing of interests and the public’s valid need for a transparent government, the vast majority of his discussion is spent defending the candour of the public service and political neutrality.

Rothstein J. did not consider the extent and frequency with which policy options shape the lives of Canadians in meaningful and significant ways. In this case, John Doe had arranged his clients’ tax liability in compliance with the laws in force at the time. The amendments at issue were retroactive. Rothstein J. declined to ask whether the public (and John Doe’s clients) had a right to know why an exceptional amendment was made to render their previously legal activities retroactively illegal.

This decision will undoubtedly affect access to information requests in the future. Policy options, which are commonplace within the civil service, will now likely be withheld from disclosure, despite the fact that they contain relevant information on government initiatives that affect all Canadians. Given these implications, it is important to be aware that while Rothstein J.’s decision may be logically defensible, it was not a foregone conclusion. Indeed, it was much more discretionary than the judgment would lead us to believe.

Privacy Legislation Tangles with the Civil Litigation Process

Fri, 05/23/2014 - 10:00am

Written by: Linda McKay-Panos

PDF Version: Privacy Legislation Tangles with the Civil Litigation Process

Case commented on:Calgary Board of Education v Alberta (Office of the Information and Privacy Commissioner), 2014 ABQB 189

A recent Court of Queen’s Bench decision demonstrates the intricacies of public bodies holding personal information and seeking to use that information in unrelated legal proceedings.

Harold McBain was formerly employed by the Calgary Board of Education (CBE). He was the subject of harassment complaints in 2003, which were settled. In 2007, Mr. McBain was called as a witness in an unrelated proceeding at the Board of Reference (an appeal process that addresses terminations and suspensions of teachers). The CBE sought to use documents and information related to the 2003 harassment complaints in 2007 in order to attack Mr. McBain’s credibility. The Board of Reference ordered that these documents, which had been obtained by the CBE from one of its human resources employees, be fully disclosed to all other parties in the 2007 matter.

Mr. McBain complained to the Office of the Information and Privacy Commissioner (Commissioner) that the CBE had violated the Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25 (FOIP). There were two aspects to the complaint: 1) the CBE had wrongfully used and disclosed his personal information and 2) the CBE failed to protect McBain’s personal information. The Adjudicator determined that the CBE had used and disclosed Mr. McBain’s personal information contrary to the FOIP, but that it did not violate the FOIP by failing to protect his information.

The CBE applied to the Court of Queen’s Bench for judicial review of the Adjudicator’s decision. The Commissioner was permitted to make submissions on the appropriate standard of review, the record, the jurisdiction of the Commissioner, and the Commissioner’s specialized jurisdiction and expertise, among other issues (at para 11). In order to decide the issues before her, Madam Justice S.L. Hunt McDonald examined the relevant provisions of the FOIP, the Public Inquiries Act, RSA 2000, c P-39, which describes the powers of commissioners, and the School Act, RSA 2000, c S-3, which provides that a Board of Reference has the powers of a commissioner under the Public Inquiries Act (at paras 13-21).

In determining the correct standard of review, Justice Hunt McDonald considered submissions from the CBE, the Commissioner and Mr. McBain, and concluded that the standard of review of the Adjudicator’s decision should be reasonableness. The court noted that although the decision involved statutes other than the FOIP, the FOIP is paramount to those other statutes, and it is also the Adjudicator’s home statute (the statute that the Adjudicator follows and applies). The decision was therefore within the Adjudicator’s specialized area of expertise (at para 44).

The CBE argued that the Commissioner did not have jurisdiction to rule on the broad scope of cross-examination to which a party is legally entitled at either common law or under the FOIP (at para 45). The Court concluded that the Adjudicator’s decision did not rule on the broad scope of cross-examination, but rather on the use, disclosure and failure to protect Mr. McBain’s information by the CBE in a situation where there was “no existing, codified regime for document production” (at para 46).

Justice Hunt McDonald held that the Adjudicator was reasonable in concluding that the CBE had used Mr. McBain’s personal information in contravention of the FOIP. The CBE decided to use the information in order to challenge Mr. McBain’s credibility before the Board of Reference, and the Adjudicator held that the personal information was not used for the purpose for which it was collected, or for a use consistent with that purpose under FOIP section 41 (at paras 63-66).

The CBE argued that FOIP section 40(1)(v) allowed for disclosure of information for use in a legal proceeding, but Mr. McBain argued that the CBE was not authorized to use his file for its defence in the Board of Reference proceeding (at para 68). The Adjudicator had agreed with Mr. McBain, and Justice Hunt McDonald held that the Adjudicator’s reasons on the issue of use of Mr. McBain’s personal information were “justifiable, transparent and intelligible” (at para 69). Justice Hunt McDonald was also unconcerned that the Adjudicator’s reasons did not discuss the importance of cross-examination because the “Adjudicator properly limited her decision to the application of the FOIP in the circumstances” (at para 71).

The Adjudicator had also noted that the CBE originally disclosed Mr. McBain’s information without a requirement to do so in a proceeding to which Mr. McBain was not a party. Further, FOIP section 40(1)(v) provides that the public body can only make disclosures on its own accord into legal proceedings where the Government of Alberta or the public body is itself a party, and thus should “only make disclosures of its own accord that relate specifically to its own, or the government’s, involvement as a party to the proceedings” (at para 76). Justice Hunt McDonald held that these reasons were justifiable, intelligible and transparent (at para 77). She also noted that it was open to the public body to apply to the tribunal to allow disclosure of the documents; if this application were granted, then the information would be disclosed and subject to use for cross-examination (at para 77).

Justice Hunt McDonald upheld the Adjudicator’s decision.

Commentary

Justice Hunt McDonald stressed that the Adjudicator’s decision was not about the right to cross-examine witnesses, but rather about the “production and use of documents containing personal information under FOIP in the specific context of the CBE and the provisions of the School Act” (at para 42). Additionally, this was not a case about parties disclosing information during the course of litigation. Presumably, if you are a party, you must disclose relevant information (subject to a claim of privilege). However, here we had a case about a party who happened to possess information about a witness in an unrelated matter. The party sought to use the information to impugn the credibility of the witness.

The Adjudicator had acknowledged that limiting what information a public body might introduce or use voluntarily or on its own motion might be seen as interfering with the judicial (or quasi-judicial) process (at para 42, citing the Adjudicator’s decision at paras 55-57). The Adjudicator also indicated that these limits would not apply to legal proceedings where the proceeding was related to the purpose for which the information was collected, which would be authorized under FOIP section 39(1)(a) (at para 42, citing the Adjudicator’s decision at paras 55-57). She also noted that FOIP section 3(c) applied to eliminate restrictions that might apply during the discovery process in legal proceedings.

One difficulty pointed out by the Adjudicator was that no processes for the disclosure of personal information in Board of Reference proceedings had been provided for under the regulations of the School Act (at para 42, citing the Adjudicator’s decision at paras 55-57). However, Justice Hunt McDonald held that the Adjudicator’s decision was made in light of this reality.

As stated by Justice Hunt McDonald, this decision demonstrates how one requires a “sophisticated understanding of the provisions of the FOIP and the realities of working with information as a public body under the FOIP regime” (at para 71). Justice Hunt McDonald also noted that the Adjudicator’s decision did not limit the importance of the legal tenet of cross-examination in any way (at para 71). In these circumstances, the proper procedure would be (as noted by Justice Hunt McDonald) for the public body to apply to the tribunal to allow disclosure of the information.

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Round One of the Electricity Competition Playoffs Goes to the Market Surveillance Administrator: MSA 1; TAU 0. TAU Cannot Hijack the MSA’s Own Proceeding

Wed, 05/21/2014 - 10:00am

By: Nigel Bankes

PDF Version: Round One of the Electricity Competition Playoffs Goes to the Market Surveillance Administrator: MSA 1; TAU 0. TAU Cannot Hijack the MSA’s Own Proceeding

Decision commented on:AUC Decision 2014-135, TransAlta Corporation, TransAlta Energy Marketing Corp., TransAlta Generation Partnership, Mr. Nathan Kaiser and Mr. Scott Connelly; Complaints about the conduct of the Market Surveillance Administrator, May 15, 2014

Is it possible to ensure a competitive electricity market in Alberta? This is I think the broad issue that underlies the current proceedings before the Alberta Utilities Commission (AUC) involving the Market Surveillance Administrator (MSA) and TransAlta (TAU). Several months ago the MSA filed with the AUC notice of a request to initiate a proceeding against TAU and two of its current or former employees, Kaiser and Connelly (K & C). In brief the MSA is charging these parties with unlawfully manipulating the price of electricity as set by Alberta’s power pool to the advantage of TAU in breach of the Electric Utilities Act, SA 2003, c E-5.1 and the Fair, Efficient and Open Competition Regulation, Alta Reg 159/2009. The MSA seeks to prosecute those charges before the AUC as contemplated by the Alberta Utilities Commission Act, SA 2007, c A-37.2 (AUCA). Days before the MSA took this action TAU, K and C seized the moment and filed their own complaints with the AUC under s.58 of the AUCA alleging that the MSA was abusing its position. To be clear, TAU and K and C knew what was in store for them. The MSA had informed TAU three years ago (March 2011) that it was commencing an investigation and it has spent the time in between diligently collecting information from TAU and building its case. The MSA provided TAU with the draft case against it in November 2013. It is fairly evident therefore that the preemptive filing by TAU, K and C was a strategic effort to seize the initiative, put the MSA on the defensive, and perhaps seek to have the complaints against the MSA heard before the MSA’s own case.

 And that was the specific issue that was at stake in this set of preliminary proceedings: could TAU, K & C hijack the MSA’s application? The AUC, in my view correctly, has concluded that it cannot.

The legal issue

 The legal issue at stake in this preliminary proceeding turns on the proper interpretation of s.58 of the AUCA. That section provides as follows:

58(1) Any person may make a written complaint to the Commission about the conduct of the Market Surveillance Administrator.

(2) The Commission

(a) shall dismiss the complaint if the Commission is satisfied that it relates to a matter the substance of which is before or has been dealt with by the Commission or any other body, or

(b) may dismiss the complaint if the Commission is satisfied that the complaint is frivolous, vexatious or trivial or otherwise does not warrant an investigation or a hearing.

(3) The Commission may, in considering a complaint, do one or more of the following:

(a) dismiss all or part of the complaint;

(b) direct the Market Surveillance Administrator to change its conduct in relation to a matter that is the subject of the complaint;

(c) direct the Market Surveillance Administrator to refrain from the conduct that is the subject of the complaint.

(4) A decision of the Commission under subsection (2) or (3) is final and may not be appealed under section 29.

The focus here was on the mandatorily framed s 58(2)(a). That provision and the facts of these proceedings gave rise to two principal points of statutory interpretation: (1) Is the relevant time for applying this paragraph the time that the written complaints were filed (at which time there was no MSA proceeding) or when the matter came to be determined by the AUC? (2) Were the complaints and the MSA’s own application “related”?

In answering these two questions the AUC was careful to examine the ordinary and grammatical meaning of the relevant provisions and to consider them within their entire statutory context and legislative intent noting as well that it should avoid adopting an interpretation which led to an absurdity of inconsistency. The AUC’s concluding observations on statutory context and legislative intent are worth quoting at length:

[66] When read as a whole, the Commission finds that the statutory scheme makes clear the fundamental importance of establishing and maintaining an electricity market that is fair, efficient and openly competitive. The scheme establishes the MSA as the market watchdog with one of its primary goals being the protection of the fair, efficient and openly competitive operation of the electricity market. The MSA is given broad powers to carry out this role. The Commission considers that those broad powers reflect the fundamental importance of preserving or maintaining a fair, efficient and openly competitive market.

[67] The Commission notes that the MSA’s exercise of its authority over market participants is not unlimited and is subject to a number of checks. First, it has a statutory duty to act fairly, responsibly and in the public interest. Second, it is required to consult with market participants with respect to its investigation procedures and any guidelines it makes under Section 39(4) of the Alberta Utilities Commission Act. It cannot change existing procedures or guidelines without consultation. Third, the MSA concerns about the conduct of market participants are subject to the Commission’s oversight. Fourth, a person who has a concern about the conduct of the MSA may make a complaint about that conduct.

[68] The statutory scheme places the Commission in a supervisory role over the activities and conduct of the MSA. The Commission not only rules on matters brought before it by the MSA but also rules on complaints relating to the conduct of the MSA. Importantly, neither the MSA nor a complainant is entitled to appeal a decision of the Commission on a complaint.

As to the purpose of s 58(2)(a), the AUC emphasized that the paragraph is not concerned with the merits of the complaints (that is the office of the discretionary paragraph (b)), instead, the purpose of paragraph (a)

[86]… is to address the conflicts that could arise in circumstances where a complaint and a matter brought forward by the MSA are premised on common issues. Specifically, the Commission finds that subsection 58(2)(a) embodies a number of common law doctrines designed to ensure the integrity, fairness and finality of the decision making process. Those doctrines include: abuse of process, collateral attack, issue estoppel, res judicata and lis pendens.

This did not mean however that the statutory provision imported all of the technical rules associated with these common law doctrines. The AUC expressed the relevant test as follows (at para 96): “the Commission finds that subsection 58(2)(a) requires it to dismiss a complaint about the conduct of the MSA if it is satisfied that there is a logical or reasonable connection between the complaint and a matter the essence or essential quality of which is, or has been before the Commission.” As to the question of whether or not the provision was operable even in the situation where the complainants filed first the Commission ruled as follows:

[94] Because the purpose of subsection 58(2)(a) is to safeguard the electricity market while promoting a timely, fair, efficient, and final decision-making process, the Commission finds that an overly technical or literal reading of that subsection that precludes its operation when a complaint is made before the MSA initiates proceedings against the complainant would be contrary to Section 10 of the Interpretation Act and produce an absurd result. This is especially so given the MSA’s practice of providing its facts and findings to a market participant prior to filing its notice commencing a proceeding against that market participant.

[95] Accordingly, the Commission finds that to achieve the purposes described above it may dismiss a complaint under subsection 58(2)(a), even if the complaint is filed before the MSA files a notice under Section 51 of the Alberta Utilities Commission Act.

This did not deprive the complainants of their day in court but it did (at para 91) mean that “the complainant’s ‘day in court’ occurs within the context of the MSA initiated proceeding.” Furthermore (at para 93) “in the event that a matter raised in a complaint dismissed under subsection 58(2)(e) is ultimately not considered in the context of the associated MSA proceeding, a complainant may not be precluded from re-filing the complaint as it relates to the unaddressed matter.”

Applying the “logical or reasonable connection” test to the substance of the MSA charges and the three complaints the Commission had little difficulty in concluding that they covered common ground (at paras 107 – 116).

The decision is not appealable (see s 58(4)) and it is therefore time now to get on with the merits of the MSA’s charges – supported as they are by what appear to be a number of “smoking gun” and self-congratulatory internal email exchanges within TAU (for details see the MSA’s Application to the AUC filed on March 21, 2014 available on the AUC’s website under File 0630). Any further delays will only serve to question the efficacy the MSA’s supervision of Alberta’s electricity market.

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Federal Court of Appeal Clarifies Requirements for Family Status Discrimination

Tue, 05/20/2014 - 10:00am

By: Linda McKay-Panos

PDF Version: Federal Court of Appeal Clarifies Requirements for Family Status Discrimination

Case commented on:Canada (Attorney General) v Johnstone, 2014 FCA 110 (Johnstone, 2014)

In an earlier post (see here) which discussed the case of three women who argued that they were discriminated against on the basis of family status, I included reference to another family status case where a new human rights hearing was ordered (see Johnstone v Canada (Attorney General), 2007 FC 36, [2007] FCJ No 43 (Johnstone); affirmed in 2008 FCA 101, [2008] FCT No 427 (Fed CA)). The Federal Human Rights Commission referred the matter to the Canadian Human Rights Tribunal (CHRT), and in 2013, both the CHRT and the Federal Court agreed that the Canadian Border Services Agency (CBSA) had discriminated against Fiona Ann Johnstone on the ground of family status, by refusing to accommodate her childcare needs through work schedule changes. The CBSA appealed the matter to the Federal Court of Appeal. The Women’s Legal Education and Action Fund (LEAF) intervened in the Johnstone case on appeal, arguing that discrimination on the basis of family status is closely related to sex discrimination because most caregivers in Canada continue to be women. (See LEAF Factum here).

The Federal Court of Appeal in Johnstone 2014 was asked to address several issues, including whether the CHRT erred when:

    • concluding that family status includes childcare obligations;
    • setting out the legal test for finding a prima facie case of discrimination on the basis of family status; and
    • finding that there was a prima facie case of family status discrimination (at para 35).

The Federal Court was also asked to address the remedies that had been provided by the CHRT. Justices Mainville, Pelletier and Scott (concurring) held that the standard of review in this case was correctness, as the issues involved quasi-constitutional human rights matters, among other reasons (at paras 44 to 52).

While the appellant CBSA argued that “family status” should be given a restrictive interpretation that excluded childcare obligations (at paras 53 to 58), the Court of Appeal noted that judges and adjudicators had been “almost unanimous in finding that family status incorporates parental obligations such as childcare obligations” (at para 59). The Court of Appeal supported this assertion by citing the earlier Johnstone decision, as well as a number of tribunal and labour arbitration cases from across Canada (at para 59). Justice Mainville stated:

 [66] There is no basis for the assertion that requiring accommodation for childcare obligations overshoots the purpose of including family status as a prohibited ground of discrimination. Indeed, without reasonable accommodation for parents’ childcare obligations, many parents will be impeded from fully participating in the work force so as to make for themselves the lives they are able and wish to have. The broad and liberal interpretation of human rights legislation requires an approach that favours a broad participation and inclusion in employment opportunities for those parents who wish or need to pursue such opportunities.

 The Court of Appeal noted that the French version of the Canadian Human Rights Act, RSC 1985 c H-6, uses the phrase “situation de famille” for family status, implying that the term “family status” includes family circumstances, such as childcare obligations (at para 67).

The Court also stated that the types of childcare activities that are contemplated by the ground of “family status” must be “carefully considered” (at para 68). The types of childcare needs protected under “family status” must “be those which have an immutable or constructively immutable characteristic” (at para 68). Thus, personal family choices, such as participation of children in dance classes, sports events or other voluntary activities would not be covered by “family status” (at para 69). Childcare obligations that could be considered part of “family status” are “those which a parent cannot neglect without engaging his or her legal liability” (e.g., leaving a young child at home alone in order to go to work) (at para 70).

The Court of Appeal held that “[p]rotection from discrimination flows from family status in the same manner that protection against discrimination on the basis of pregnancy flows from the sex of the individual” (at para 73). This means that “family status” is in the same category as the other listed grounds of discrimination, such as sex, colour and disability (at para 74). From this and other cases, one can conclude that childcare responsibilities are clearly part of “family status”, and that this ground of discrimination should be given equal footing with the other grounds.

However, in Johnstone 2014, the parties disagreed about how a prima facie case of family status discrimination could be made out by a complainant. Previous discussions of discrimination on the basis of family status had resulted in two lines of cases. The British Columbia Court of Appeal in Health Sciences Association of British Columbia v Campbell River and North Island Transition Society, 2004 BCCA 260 (at para 39) (Campbell River) said that “a prima facie case of discrimination is made out when a change in a term or condition of employment imposed by an employer results in a serious interference with a substantial parental or family duty or obligation of the employee.” Thus, there needs to be more than a conflict between work requirements and regular parental obligations in order to establish a prima facie case of family status discrimination. In Campbell River, there was a legitimate change in work hours that was going to affect the complainant’s ability to care for her disabled son. While the court found that the employer had prima facie discriminated against the complainant on the basis of family status, the matter was remitted to the arbitrator to determine whether the employer had met its duty to accommodate her to the point of undue hardship.

A less restrictive standard was set out by the CHRT in Hoyt v Canadian National Railway, 2006 CHRD No 33, and endorsed by the Federal Court of Canada in Johnstone v Canada (Attorney General), [2007] FCJ No 43, affirmed [2008] FCT No 427 (Fed CA) (Johnstone). In Johnstone, the Federal Court of Canada held that the test in Campbell River was too stringent, and instead held that family status discrimination claims should be analyzed in the same way as other discrimination claims. The Court said that the Campbell River test effectively established a hierarchy of grounds of discrimination, thus making family status less important than the others. In particular, the requirement that the complainant must establish a “serious interference” with family status had the impact of relegating family status to an inferior type of discrimination.

In Cindy Richards v Canadian National Railway, 2010 CHRT 24, Kasha Whyte v Canadian National Railway, 2010 CHRT 22, and Denise Seeley v Canadian National Railway, 2010 CHRT 23, CHRT member Michel Doucet declined to apply the Campbell River test, yet he nevertheless concluded that the complainants faced a “serious interference with [their] parental duties and obligations” if they were forced to work in Vancouver (which was far away from their homes in Alberta) (Seeley, at para 109). This suggests that he would have found that there was a prima facie case of family status discrimination whether he followed the Campbell River or the Johnstone approach.  Thus, childcare issues constitute a parental responsibility that falls within the ground of “family status”. In an appeal of the Seeley case to the Federal Court, Justice Mandamin held that the CHRT’s interpretation of the meaning of “family status” was reasonable (see Canadian National Railway v Denise Seeley and Canadian Human Rights Commission, 2013 FC 117).

The parties in Johnstone 2014 disagreed about whether there needed to be a “serious interference” with a “substantial” duty or obligation before a prima facie case of family status discrimination is made out (at para 79). Justice Mainville held that “there should be no hierarchies of human rights” and the test should be substantially the same as the one that applies to the other listed grounds of discrimination (at para 81). He also noted that the test for family status discrimination would also have to be “flexible and contextual” (at para 81).

Justice Mainville agreed with the Federal Court Judge’s conclusion that the childcare obligations claim must be substantive and the complainant must have tried to reconcile family obligations with work obligations, but this does not “constitute creating a higher threshold test for serious interference” (at para 87, citing Federal Court’s reasons at para 120). Justice Mainville provided guidance about requirements to make out a prima facie case of family status discrimination in the workplace:

 [93] I conclude from this analysis that in order to make out a prima facie case where workplace discrimination on the prohibited ground of family status resulting from childcare obligations is alleged, the individual advancing the claim must show (i) that a child is under his or her care and supervision; (ii) that the childcare obligation at issue engages the individual’s legal responsibility for that child, as opposed to a personal choice; (iii) that he or she has made reasonable efforts to meet those childcare obligations through reasonable alternative solutions, and that no such alternative solution is reasonably accessible, and (iv) that the impugned workplace rule interferes in a manner that is more than trivial or insubstantial with the fulfillment of the childcare obligation.

 The type of evidence required to meet the four factors outlined above will vary with the facts of each case and must be determined on a case-by-case basis (at para 99). In Ms. Johnstone’s case, she had one and then two children under her care and supervision. She shared the responsibility with her husband. Both children were toddlers and could not have been left on their own without adult supervision during work hours without violating the law, and it was not a matter of personal choice. The Tribunal had concluded that Ms. Johnstone had made several serious but unsuccessful efforts to secure reasonable childcare for the children. Her regular work schedule interfered with her childcare obligations in a manner that was more than trivial or insubstantial (at paras 100-106).

Thus, Ms. Johnstone had clearly made out a case of prima facie discrimination, and the Tribunal had committed no reviewable error in finding the same (at para 108). The CBSA had not asserted any argument about the working hours being a bona fide occupational requirement or that it would be an undue hardship to accommodate Ms. Johnstone’s shift requirements, so her complaint was substantiated (at para 109).

The decision of the lower court and Tribunal was upheld with some minor amendments to the remedies (see paras 110 to 127).

It should be noted that on the same day, the Federal Court of Appeal released a decision dismissing an appeal in the case of Seeley v Canadian Railway Company, 2014 FCA 111.

LEAF released a statement noting that it was pleased at the outcome of the Johnstone 2014 case because it “is a win for those who have been shut out of meaningful work because of workplace schedules and other rules constructed around the outdated norm of a male employee with a spouse at home doing all the childcare” (see here). Hopefully, childcare is now considered part of family status in the same way that pregnancy is considered part of sex.

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Constraining a Landlord’s Ability to Terminate a Residential Tenancy by Raising the Rent

Thu, 05/15/2014 - 10:35am

By: Jonnette Watson Hamilton

PDF Version: Constraining a Landlord’s Ability to Terminate a Residential Tenancy by Raising the Rent

Case commented on: Milner’s Aloha Mobile Home Park (1998) Ltd v Jenkins, 2014 ABQB 229 (CanLII)

This is an important decision for residential tenants, with potentially far-reaching impact. If a residential tenant is not in breach of his or her tenancy agreement, a landlord is unable to evict them except for a small number of reasons prescribed by the applicable legislation, either the Residential Tenancies Act, SA 2004, c R-17.1 or the Mobile Home Sites Tenancies Act, RSA 2000, c M-20. But because Alberta has no law limiting the amount by which landlords can increase rent, everyone knows that landlords can force tenants out by raising their rent beyond what they can afford or are willing to pay. This decision by Master Andrew Robertson calls into question that received wisdom. Indeed, by finding that the increase in rent in Milner’s Aloha Mobile Home Park (1998) Ltd v Jenkins was really a notice to terminate a periodic tenancy and of no effect as either a notice to terminate or a notice of a rent increase, Master Robertson’s decision potentially signals a significant shift in the power balance between landlords and residential tenants in Alberta.

Facts

In March of 2010, the landlord, Milner’s Aloha Mobile Home Park Ltd of Olds, raised the rent on the sites in the mobile home park. For most (perhaps all) other tenants, the rent was to be raised from $310 per month to $350 per month as of the first of October 2010. But the rent of one tenant, Ms. Brielle Jenkins, was raised to $960 per month, a trebling of the $310 per month that she had been paying.

Ms. Jenkins’ evidence about the behavior of Irving Milner, the landlord’s representative, was not disputed. She alleged his behavior was designed to drive her out of the mobile home park. She recounted a conversation between her companion and Mr. Milner in which Mr. Milner admitted he singled Ms. Jenkins out for a rent increase to almost $1,000 per month in order to get her out of his mobile home park.

The evidence as to whether Ms. Jenkin’s lease was a periodic or fixed term lease was confusing, as was the evidence about the rent arrears. Nevertheless, the landlord, Milner’s Aloha Mobile Home Park Ltd of Olds, applied to court to terminate the mobile home site tenancy of Brielle Jenkins, as well as for judgment against her for arrears of rent totaling $30,760 as of September 2013. The $30,760 in arrears was based on a rent of $960 per month for the mobile home site.

Ms. Jenkins’ response was that the landlord had singled her out for “an effective eviction by inordinate rent increase” (at para 9). And the self-represented Ms. Jenkins carried the day on this argument.

Law

The landlord’s notice of an increase in rent to Ms. Jenkins and the other tenants in the mobile home park was in compliance with sections 16 and 17 of the Mobile Home Sites Tenancies Act, RSA 2000, c M-20 and with section 2.3 of the Mobile Home Sites Tenancies Ministerial Regulation, Alta Reg 54/1996. As is relatively obvious from its title, the Mobile Home Sites Tenancies Act and its regulations apply to sites occupied by mobile homes used as residences, including mobile home parks. Like the equivalent provisions in section 14 of the Residential Tenancies Act, SA 2004, c R-17.1 and section 3 of the Residential Tenancies Ministerial Regulation, Alta Reg 211/2004 — which govern all other types of residential tenancies — the statutes governing rent increases for residential tenants only limit how often landlords may raise the rent and how much notice they must give before raising the rent. There is nothing in either piece of legislation limiting the amount by which a landlord may raise the rent (as there is in most other Canadian jurisdictions).

On the other hand, both the Mobile Home Sites Tenancies Act and the Residential Tenancies Act increase the security of the tenure of periodic residential tenants — their ability to stay where they are — by requiring that landlords have one of only a limited number of reasons for evicting tenants who are not in breach of the relevant Act or their lease. The Mobile Home Sites Tenancies Act provides in section 7:

7(1) A notice under this Part from a landlord to a tenant to terminate a periodic tenancy is of no effect unless the termination is for one or more of the prescribed reasons or for the reasons set out in section 13 or 14.

Section 13 provides for eviction in order to change the use of the mobile home sites or for condo or coop conversions. Section 14 is about evicting former employees of landlords who received accommodation in a mobile home as part of their job. The “prescribed reasons” are found in section 2(2) of the Mobile Home Sites Tenancies Ministerial Regulation:

2(2) For the purposes of section 7 of the Act, a landlord may terminate the periodic tenancy of a tenant for one or more of the following reasons:

(a) the landlord or a relative of the landlord is going to occupy the mobile home site after the tenant vacates the site;

(b) the landlord has entered into an agreement to sell the mobile home site of the tenant in which all conditions have been satisfied or waived and

(i) the purchaser or a relative of the purchaser is going to occupy the mobile home site after the tenant vacates the site, and

(ii) the purchaser requests in writing that the landlord give the tenant a notice to terminate the tenancy;

(c) utilities on the mobile home site of the tenant are to be installed, repaired or improved and it is not reasonable to do the work unless the site is unoccupied;

(d) in the case of a tenancy of a mobile home site located in a mobile home park, the site is to be eliminated or the boundaries of the site are to be substantially altered . . .

(e) in the case of a tenancy of a mobile home site that is not located in a mobile home park, the land in the mobile home site is no longer to be used as a mobile home site.

As can be seen from the provisions set out above, the landlord’s ability to evict a mobile home site tenant who is paying their rent and otherwise complying with their lease and the relevant legislation is limited to a very few types of situations. The same is true under sections 6, 11 and 12 of the Residential Tenancies Act and section 2 of the Residential Tenancies Ministerial Regulation. Although the list of permissible reasons for evicting a tenant is slightly different due to the different context, it is also a very limited set of reasons.

Master Robertson’s Analysis and Conclusions 

Master Robertson characterizes the landlord’s notice of a rent increase from $310 per month to $930 per month as “an obvious attempt to force the tenant out for a non-prescribed reason” (at para 37). He considers the fact that the rent of other mobile home tenants was raised from $310 per month to $350 per month makes it “abundantly clear” that the local mobile home site market did not justify a 300% increase in rent (at para 38).

Master Robertson notes that the Mobile Home Sites Tenancies Act does not set out consequences for landlords who raise the rent to get around the security of tenure protection given to tenants by the Act (at para 39), a situation he characterizes as a “loop-hole” in the Act (at para 41). He acknowledges that there is no upper limit on rent increases in the Act. Nevertheless, he holds that when a landlord is merely attempting to avoid the security of tenure provided by section 7 of the Mobile Home Sites Tenancies Act, it raises the issue of whether such a notice to increase the rent has any effect whatsoever — either as a notice of rent or as a constructive eviction (at para 41). He reasons that if such a notice in such circumstances is effective, then there is no reason for section 7 of the Act. Section 7 states that a notice to terminate a periodic tenancy has no effect if it is not given for one of the prescribed reasons, but a landlord without a prescribed reason can simply raise the rent to force a tenant out. That is the “loop-hole” in the Act.

Master Robertson decides that this cannot be what is intended by the Act. He therefore reads into the Act, based on a public policy he finds expressed in the Act, a requirement that landlords “raise the rent in reasonable increments” (at para 42). For the public policy behind the Act, Master Robertson relies on (at para 43) Joma Sailaway Enterprises Partnership v. Holden, 2009 ABQB 739 (CanLII), a decision of Justice Don J. Manderscheid. In that case, Justice Manderscheid reviewed the history of the Mobile Home Sites Tenancies Act and the purposes of the Act as stated in the Legislative Assembly.  He found that the one of the two primary purposes of the Act was “to provide reasonable protection to mobile home park tenants” (at para 16).

Reading the Mobile Home Sites Tenancies Act as a whole and in the context of the purposes of the Act, Master Robertson sets out the following rule:

[45] Where the rental increase is for a purpose contrary to the protection intended to be provided by the legislature, it is to be read for what it is — a notice to terminate a periodic tenancy and of no effect.

As a result, Master Robertson concludes that the notice of a three-fold rent increase in this case was really a notice to terminate a periodic tenancy that was not for one of the proper reasons (at para 46). The notice of the rent increase was therefore ineffective — ineffective as a notice of a rent increase and ineffective as a notice of termination.

Comments

As intimated throughout this post, Master Robertson’s decision should be just as applicable to residential tenancies governed by the Residential Tenancies Act as it is to those governed by the Mobile Home Sites Tenancies Act that he was considering. Both have the same type of security of tenure provisions and both have the same loop-hole. This easy extension of the relevance of Master Robertson’s decision means its impact could be far-reaching.

Master Robertson’s decision introduces uncertainty. In many ways Milner’s Aloha Mobile Home Park (1998) Ltd v Jenkins was an easy case. The rent was tripled, the rent increase was for one of many mobile home sites in a mobile home park where none of the other tenants faced more than a 13 percent increase in their rent, and the evidence of the landlord’s sole motive for doing so was not disputed. Singling out and tripling one mobile home park tenant’s rent for the sole purpose of evicting that tenant amounted to an illegitimate termination in this case, but what about a doubling of the rent? Or a fifty per cent increase?  Is it the percentage increase that was most important here? Or is it the singling out of one tenant that was key in this case? What if there are no comparables with tenants in similar premises, as there was here? Does evidence of the market have to be introduced? Or is it the fact that termination of the residential tenancy was the only motive for increase in rent? What if termination is instead the primary or only an important motive? What if evidence of motive is lacking, as it probably will be in most cases?

It will probably take quite a while to determine the reach of this decision, assuming it is not appealed and overturned. In the meantime, all of the agencies that produce consumer information advising Albertans of their rights and duties as residential tenants will need to revise their advice. The following advice is now no longer correct or, at the very least, cannot be stated so uncategorically as it currently is:

    • There are no controls over the amount by which the landlord may raise the rent, but there are requirements for how much notice a landlord must give to a tenant prior to a rent increase: Alberta Government, Consumer Tips: Renting a Mobile Home Site at 5.
    • The RTA does not control how much rent can be charged or how much rent can be increased: RTA Handbook and Quick Reference Guide at 47
    • The law does not limit the amount of the rent increase, but the law does say when and how often an increase can take place: Renting 101 A Guide to Renting in Alberta, 3rd edition (2013-08-31) at 13
    • There is no limit on the amount that the landlord can raise the rent: Centre for Public Legal Education Alberta Information Sheet – Rent Increases at 2
    • There are no controls on the amount of rent increases in Alberta: Canada Mortgage and Housing Corporation, “Renting in Alberta

What is now correct is that the law may limit the amount of rent increases in Alberta. While this is a far cry from the prescribed limits on rent increases in provinces such as Ontario (with an allowable rent increase of 0.8% in 2014), British Columbia (2.2%) and Nova Scotia (2.9%), it is a step in that direction. How small or how big a step it is remains to be seen.

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The Constitutionality of the Exclusion of Farm Industries under the Alberta Workers’ Compensation Act

Wed, 05/14/2014 - 10:00am

By: Nelson Medeiros and Robin McIntyre

PDF Version: The Constitutionality of the Exclusion of Farm Industries under the Alberta Workers’ Compensation Act

Legislation commented on: Workers’ Compensation Act, RSA 2000 c W-15

As part of the Constitutional Clinical Law class at the University of Calgary, we studied the constitutionality of the exclusion of farm workers from four statutes in Alberta; the Occupational Health and Safety Act, RSA 2000 c O-2 [OHSA], Labour Relations Code [LSC], RSA 200 c L-1, Employment Standards Code, RSA 2000 c E-9 [ESC], and the Workers’ Compensation Act, RSA 2000 c W-15 [WCA]. With respect to the WCA, we developed arguments as to why the exemption of the agricultural industries from mandatory inclusion under the Workers’ Compensation Act violates s 7 and s 15 of the Canadian Charter of Rights and Freedoms [Charter].  For earlier posts on the constitutionality of the OHSA and LRC see here and here.

 The Workers’ Compensation Act

 In Canada, workers’ compensation is characterized by a guaranteed no-fault benefits and insurance scheme funded by employers; the worker gives up his or her right to sue an employer in exchange for a statutory right to receive benefits in the event of an injury. Also, the employer enjoys immunity from negligence lawsuits. The WCA provides that compensation is payable to a worker who suffers an injury by an accident, and is also payable to the dependents of a worker who has died (see WCA, s 24). Compensation includes income replacement, as well as medical aid and vocational rehabilitation (WCA, s 1(1)(f)).

Alberta’s WCA provides for universal coverage for all workers and industries unless otherwise exempted under Schedule A of the Workers Compensation Regulation, Alta Reg 325/2002. Currently there are 200 industries listed in Schedule A that are exempt from the mandatory application of the WCA. Employers in these exempt industries have the ability to opt in through an application to the WCB (WCA, s 14(2)). However, it is only the employers that can make an application; there is nothing in the WCA to allow an employee or group of employees in an exempt industry to make an application for coverage.

The exempted agricultural industries include those such as farming, fruit growers, egg producers, and feedlots to name a few (see the Workers’ Compensation Regulation at Schedule A). It is estimated that most aspects of agricultural industries are captured by the exemption.

Section 15 Right to Equality

The test for determining if the equality rights under s 15(1) of the Charter have been violated is:

1. Does the law create a distinction on an enumerated or analogous ground?

2. Does the distinction create a disadvantage by perpetuating prejudice or stereotyping? (Quebec (Attorney General) v A, 2013 SCC 5 at para 324 [Quebec v A]).

Does the Law Create a Distinction on an Enumerated or Analogous Ground?

There are two ways in which the first part of the test can be approached; first, the exclusion of agricultural workers from mandatory inclusion in the WCA is a distinction that is made on the basis of occupational status as an agricultural worker; the second argument is that the distinction is made on the basis of disability.

Occupational Status as an Agricultural Worker

 Occupational status is not an enumerated ground of discrimination in the Charter; therefore, to establish a s 15 violation, the argument has to be made that the occupational status as an agricultural worker is an analogous ground of discrimination. The argument here is that the courts have never stated with certainty that occupational status could not be an analogous ground in the right circumstances.

In Dunmore v Ontario (Attorney General), 2001 SCC 94 at para 169, Justice L’Heureux-Dubé, in a concurring judgment, held that agricultural workers were generally disadvantaged and should be seen as a protected group under s 15(1). The Alberta Court of Appeal in Baier v Alberta,2006 ABCA 137 at para 56, also appears to have accepted that agricultural workers may be a protected group under s 15(1). These two cases can be used as persuasive authority to support the argument that the jurisprudence already recognizes occupational status of agricultural workers as an analogous ground. However, the strength of this argument is weakened by Ontario (Attorney General) v Fraser, 2011 SCC 20 at para 295, where Justices Rothstein and Charron, writing concurring reasons, did not accept that occupational status as an agricultural worker was a protected ground on the record before them. This underscores the importance of establishing a compelling evidentiary record about the vulnerability of agricultural workers in order for this argument to succeed. For further development of this argument see the earlier posts on the OHSA and LRC.

 Discrimination on the Basis of Disability

The second way in which the s 15 argument can be framed under the WCA is that discrimination is occurring on the basis of a disability, which is an enumerated ground in s 15(1) of the Charter.

The thrust of the disability argument is that the WCA provides coverage for specific occupational diseases if they are set out in column 1 of Schedule B of the Workers’ Compensation Regulation and if the disease was caused by the employment in the industry or process listed beside it in Column 2 of Schedule B of the Workers’ Compensation Regulation (see s 20 of the Workers’ Compensation Regulation). Two specific occupational diseases enumerated in Schedule B of the Workers’ Compensation Regulation are silo filler’s disease and farmer’s lung. The argument here is that these diseases are likely to be caused by certain types of workplace exposure that only agricultural workers will experience. Excluding agricultural workers from compulsory coverage indirectly discriminates on the basis of disability when an agricultural worker is afflicted with one of these diseases. The distinction that is created is that some worker disabilities are guaranteed mandatory coverage for occupational diseases under the WCA, and others are not. This amounts to effects-based discrimination based on the exclusion of agricultural workers from compulsory coverage for certain disabilities under the WCA.

 Does the Distinction Create a Disadvantage by Perpetuating Prejudice or Stereotyping?

In Alberta, agricultural workers suffer tremendous legal disadvantage by being excluded from the protections found in most labour and employment statutes (see ss 1(s), 1(bb) of the OHSA; s 4(2)(e) of the LRC; and  ss 2(3), 2(4) of the  ESC). Although difficult to ascertain, the government’s policy preference appears to be the avoidance of imposing additional regulatory costs onto family-run agricultural industries. This results in the creation of a large political, legal and social disadvantage for agricultural workers based on the assumption that agricultural business cannot afford the cost of regulation and that those employed on farms would likely be family members.

As L’Heureux Dubé J, noted in Dunmore (at para 169), agricultural workers often have lower levels of education and skill, and reduced labour mobility options, which also perpetuates disadvantage. The disadvantage in this case stems from the definition of ‘compensation’ under s 1(1)(f) of the WCA as including medical aid and vocational rehabilitation, from which agricultural workers are excluded. Disadvantage is perpetuated because an injured agricultural worker will likely receive health and welfare benefits of a lower quality through the public health system and other state services, than that same worker would have received if they had been covered by the WCA. The type of care received by agricultural workers is important because agriculture is a dangerous industry (see Bob Barnetson, “No Right to be Safe: Justifying the Exclusion of Alberta Farm Workers from Health and Safety Legislations” (2012) 8:2 Socialist Studies 134 at 137; W Pickett W, L Hartling, RJ Brison, and J Guernsey, “Fatal farm injuries in Canada” (1999) 160 Can Med Assoc J 1843; Alberta, Agriculture and Rural Development, 1985-2011 Alberta Farm Fatalities).

 Potential Challenges with the s15 Argument

Other posts have discussed the possible issues with the arguments we have raised above. More specifically to the WCA, the government may argue that all of the employers undertaking business in one of excluded industries have the ability to opt in to the scheme; therefore, there is no distinction because all industries could receive coverage if they opted in. The response to this is that the Act does distinguish between mandatory and optional coverage, and this is the distinction that may be discriminatory. Also, a worker is a beneficiary of WCB coverage, but that worker has no ability to opt into the plan on his or her own; only an employer may opt in. It is the worker’s Charter rights that are at issue here, not the employer’s.

Another potential issue is that the WCA is not a state benefit; instead, it essentially provides for an insurance scheme, funded solely by employer contributions. The response to this argument is that the WCA can be coloured by any language or structured through any funding arrangement the government wishes, but this does not change the fact that the WCA is a statutory benefits scheme that is intended to broadly benefit workers through a state mandated compensation scheme. Both Eldridge v British Columbia (Attorney General), [1997] 3 SCR 624 at para 73, and Nova Scotia (Workers’ Compensation Board) v Martin, 2003 SCC 54 at para 72, support the proposition that once the state provides for a benefit it must do so without discrimination.

 Section 7 Right to Life, Liberty, and Security of the Person

In order to establish a breach of s 7, it must be shown that:

1. A deprivation to the right to life, liberty and security of the person has occurred, and

2. The deprivation is not in accordance with the principles of fundamental justice (Gosselin v Quebec, 2002 SCC 84, at para 205).

 Has a deprivation to the right to life, liberty and security of the person occurred?

The argument is that the exclusion of agricultural industries from mandatory inclusion under the WCA is a deprivation to agricultural workers’ rights to life and security of the person.

Based on the case law, the right to life is engaged when a state imposed deprivation can result in death; and security of the person is engaged when a state imposed deprivation, such as delay to access to health care, may result in detrimental physical and psychological effects (see R v Morgentaler, [1988] 1 SCR 30 at para 28; New Brunswick (Minister of Health & Community Services) v G(J),[1999] 3 SCR 46 at para 60; PHS Community Services Society v Canada (Attorney General), 2011 SCC 44 at para 91).

In this case, state-imposed deprivation occurs when an agricultural worker is injured and is forced to have long waiting times for access to health and medical care from the public health system because they are not included under the WCA. Injured workers covered under the WCA will likely have priority access to medical care and diagnostic tests because health care providers receive financial incentive to provide expedited services since the WCB pays additional fees for services performed in an accelerated time frame (see Workers’ Compensation Board, Physician’s Reference Guide at 11). It can be argued that the exclusion of agricultural workers from the WCA results in diminished quality and speed of health care, and other services that are provided by the WCB. When this is coupled with long delays in the public health system for more serious injuries, it can be argued that agricultural workers experience both physical and psychological detriment as a result of the exclusion of mandatory WCB coverage. It is this resulting physical and psychological trauma from the deprivation that engages the agricultural workers’ rights to life and security of the person.

Potential Issues with the s 7 Argument

The first issue with this argument, and potentially the most problematic, is that the court may find that the claimants are attempting to impose a positive obligation on the government to provide benefits, and that s 7 can only be argued in an adjudicative context. Although the court in Gosselin left open the possibility that s 7 may impose positive obligations, as of yet no court has found that it does. The response is that this argument is not imposing a positive obligation but rather, the government has acted by enacting the WCA, and as such it must comply with the Charter. The success of this argument is largely dependent on the concurring judgment of McLachlin CJC and Major J in Chaoulli v Quebec (Attorney General), 2005 SCC 35 where they stated:

 [104] The Charter does not confer a freestanding constitutional right to health care. However, where the government puts in place a scheme to provide health care, that scheme must comply with the Charter.

 The second potential issue is proving that this is a true life and security of the person argument and not a masked economic benefit argument. Central to this argument is that the WCA provides much more than financial compensation. It will be necessary to prove that the WCB can provide expedited services to injured workers covered by the WCA; that injured agricultural workers are forced to face long delays in the Alberta Health care system; and these two factors result in different qualitative outcomes for an injured worker. As noted by McLachlin CJC and Major J in Chaoulli:

[158] In sum, the prohibition on obtaining private health insurance, while it might be constitutional in circumstances where health care services are reasonable as to both quality and timeliness, is not constitutional where the public system fails to deliver reasonable service.

The third potential issue is that it may be difficult to show that this is a true deprivation as the WCA does not prohibit individuals from accessing medical treatment or other private services. To prove that this is a true deprivation, it must be shown that the expediency and scope of the services available under the WCA to injured workers are greater than those services publicly available; the fact that alternative treatment options are available does not diminish the deprivation faced by agricultural workers facing longer delays to get treatment outside of the WCA regime.

Lastly the government may argue that being an agricultural worker is a choice and that workers can choose a different career if they wish to be covered under the WCA. The government advanced a similar argument in both Bedford v Canada (Attorney General), 2013 SCC 72 at para 86, and PHS Community Services Society (at paras 91 and 101) but it was dismissed in both cases. Similar to the s 15 arguments above, there is an argument that can be made that a person’s occupation is not a choice, but an integral part of a person’s identity. Also, agricultural workers are arguably a marginalized group, often with low education and skill levels, which would be a barrier to entering other careers easily.

Is the deprivation in accordance with the principles of fundamental justice?

The second stage of the s 7 test concerns the principles of fundamental justice. At this stage it is relevant to consider arbitrariness, overbreadth, and gross disproportionality to determine if the exclusion of agricultural industries in the WCA is in accordance with the principles of fundamental justice (Bedford at para 96).

With respect to arbitrariness, the question is whether the objective of the impugned law bears no relation to, or is inconsistent with its effects (Bedford at para 98). The purpose of the WCA exclusion is generally thought to be to protect the financial interests of agricultural industries by not forcing mandatory participation in the WCA based on the assumption that agricultural industries may not be able to pay these additional costs because they are small, family-run businesses. However, the exclusion may actually be more harmful than beneficial since an injured agricultural worker, not covered by the WCA, may bring a claim in negligence, resulting in potential liability for the business owner. An example of this is the case of Kevan Chandler, who was an agricultural worker killed during the course of his employment; the employer declared bankruptcy after a settlement to a tort claim was reached with Mr. Chandler’s widow (Bob Barnetson, The Most Unsafe Workplace in Alberta: Why Farm Workers Have So Few Rights and Protections, Alberta Views; see also Judge Peter Barley, Report to the Minister of Justice and Attorney General. Public Fatality Inquiry, Kevan John Chandler). The exclusion of agricultural industries is arbitrary because while the purpose of the exclusion is to financially protect agricultural business owners, the effect is that it may actually place the same owners at greater financial risk due to liability in tort law.

The overbreadth analysis essentially examines whether the law overreaches in its effects, even though it may be rational in some cases (Bedford at para 112). In the case of agricultural industries, even though the exclusion from the WCA may provide financial relief for smaller or family run agricultural businesses, it is overbroad because it also extends to other agricultural businesses that may be run by larger or successful agricultural businesses that could afford these additional costs.

Lastly, gross disproportionality examines whether the negative effect on an individual is balanced with the state’s objective or whether it is grossly disproportionate to that objective (Bedford at para 103). In this case the protection of the financial interests of all agricultural industries is grossly disproportionate to the potential life threatening physical and psychological harm caused to agricultural workers by the exclusion from the WCA.

Section 1: Can the infringements be reasonably justified in a free and democratic society?

If the court finds that the exclusion of agricultural workers from the WCA is a breach of s 7 or s 15, the government would have the opportunity to justify the exclusion under s 1 of the Charter. The following analysis examines the two stage test for the s 1 justification from R v Oakes, [1986] 1 SCR 103, at paras 73-74.

Is The Objective of the Legislation Pressing and Substantial

Agricultural industries have been excluded from the WCA since its inception, which makes it particularly difficult to ascertain the objective of the exclusion. However, it is likely that the government may argue, similar to the s 7 arguments, that the purpose of the exclusion is to protect the financial interests of agricultural business owners. The government would likely argue that mandatory inclusion in the WCA would provide an unsustainable financial burden on agricultural business, which is important to protect the cost and availability of the food supply. The onus would be on the government to provide evidence that agricultural business owners cannot afford to pay into the WCA fund, and that paying into the fund would indeed bankrupt them or drive up the price of food for consumers.

Proportionality

Rational Connection between the Rights Violation and the Aim of the Legislation

If the aim of the legislation is to protect the financial security of family agricultural business owners, the government will have to prove on the balance of probabilities that the exclusion of all farm industries from WCA is rationally connected. In Chaoulli (at para 155), McLachlin CJC and Major J found that despite the government having an interest in protecting the public health regime, there was no evidence that the prohibition on the purchase and sale of private health insurance protected the health care system; as such they were unable to prove a rational connection between the prohibition and the objective. Similarly, in this case it will be difficult for the government to prove the violation is rationally connected to the aim. The government certainly has an interest in ensuring that the family farm does not go bankrupt, however, evidence can be led that paying into the WCA fund is more cost effective over the long term, particularly because it would protect agricultural employers from expensive lawsuits, which as discussed previously can and has bankrupted farms.

 Minimal Impairment of the Impugned Provision on Charter Rights

In Chaoulli (at para 156) McLachlin CJC and Major J found that the denial of access to timely and effective medical care to those who need it was a prohibition that went further than necessary to protect the public system, and therefore it was not a minimal impairment. Similarly in this case, the exclusion of all agricultural industries goes further than necessary to protect the ‘family run farm’, because the exclusion captures in its ambit the large corporate run businesses as well. A cursory review at other provinces’ workers’ compensation schemes reveals that there are other ways to protect the family run farm which affect the rights of agricultural workers more minimally. For example, the Manitoba scheme excludes from coverage only family run farms (Man Reg 196/205, Schedule A, s 15(1)). Furthermore, Abella J noted in Quebec v A that the court has “generally been reluctant to defer to the legislature in the context of total exclusions from a legislative scheme” (at para 361). A more suitable scheme may be the mandatory inclusion of all agricultural industries with ability of business owners to opt out if proof of financial hardship is provided. There are strong arguments that the exclusion is not minimally impairing.

Proportionality between the Effect on the Charter Guarantee and the Attainment of the Legislative Goal

In Chaoulli, McLachlin CJC and Major J found (at para 156) thatthe denial of access to timely and effective medical care was not proportionate to the beneficial effects of the prohibition on private insurance to the health system as a whole. It is a difficult argument to make that one individual’s financial security is more important, or just as important, as another individual’s security of the person, or life, which is why the negative impact on the rights of injured agricultural workers due to the delay in access to medical care is not proportionate to the beneficial impact of the law in terms of saving farm owners money.

 Conclusion

Providing that the factual basis for the s 7 and s 15 arguments can be established, the courts may find that the exclusion of agricultural industries from mandatory inclusion under the WCA is a breach of agricultural workers’ right to equality, and rights to life and security of person. The arguments under s 15 will be challenging due to the uncertainty with occupational status as an analogous ground, and whether sufficient evidence can be led to illustrate the perpetuation of disadvantage based on disability as a result of the exclusion of agricultural workers in the WCA. There is a stronger likelihood that the s 7 arguments will have more success, provided it is successfully argued that no positive obligation is being demanded of the government, and that unreasonable delay in accessing health care can be proved. The biggest hurdle in arguing s 7 or s 15 regarding the WCA is that it does provide the ability for excluded industries to opt into the scheme. This will be a difficult argument to address, but with the right evidence it could be surmounted. If the arguments under s 7 or s 15 are successful, it is not likely that the infringement could be justified under s1 of the Charter, given the predicted justification arguments the government will make. The appropriate remedy would be to strike the various exclusions of farm workers from the Workers Compensation Regulation.

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Ethical vs. Unethical: The Troubling Tales of Tony Merchant

Mon, 05/12/2014 - 10:00am

By: Alice Woolley     

PDF Version: Ethical vs. Unethical: The Troubling Tales of Tony Merchant

Case commented on: Merchant v Law Society of Saskatchewan 2014 SKCA 56

Introduction

Last week the Saskatchewan Court of Appeal upheld the Law Society of Saskatchewan’s three month suspension of E.F. Anthony (Tony) Merchant for conduct unbecoming.   The Court did so unanimously and without evident hesitation, rejecting clearly and unequivocally each of the many objections raised by Merchant to the Law Society’s decision.

I have previously written about Merchant’s negative interactions with courts and law societies in the conduct of his practice (here).  My argument there was that the interesting aspect of Merchant’s history was that the actions that led to criticism by courts or the law societies were not wholly distinct from the proper conduct by lawyers.  Rather, they were unethical extensions of behaviour that would otherwise be considered ethical and proper.  This was most obvious in respect to resolute advocacy.  An unwavering commitment to your client’s cause in some manifestations and circumstances accomplishes the very highest professional ideals.  Taken too far, however, that commitment becomes dysfunctional and – ultimately – both unethical and unlawful.

The Saskatchewan Court of Appeal’s detailed description of the conduct by Merchant giving rise to the suspension, a description that has not previously been available, reinforces the position taken in that paper.  In essence, as described in the judgment, Merchant engaged in clever manipulations of legal forms in order to avoid the effect of a court order.  He did not ignore the court order, and he did not outright defy it.  Instead, he tried to use technical schemes to work around it for the benefit of his client.  As it turned out, the Law Society (and the Court) characterized those schemes as constituting a breach of the court order and as assisting his client to breach the court order.  That characterization was warranted and fair.  Yet it is important to recognize that the – hugely important – distinction between a technical scheme that constitutes a wrongful breach of a court order, and a technical scheme that constitutes a clever bit of zealous advocacy, may be more subtle than we like to think.

This post reviews and analyzes this and other aspects of the Saskatchewan Court of Appeal’s decision, noting in particular its approach to reasonableness review, the decision’s publication of privileged information in relation to Merchant’s client, the lawyer’s duty of loyalty and strict liability offences.

The decision

Merchant represented MH in two matters – Indian residential school litigation and a family law matter.  In the family case MH’s former spouse, VW, obtained a court order requiring payment into court of the first $50,000 of any funds received by MH or by the Merchant Law Group (MLG) on the residential schools litigation, “after payment of reasonable solicitor fees and disbursements” (at para 4).   MLG had not been made a party to the application for the court order, and Merchant was “concerned and upset” about its application to his firm (at para 5).  In his view the order created a “solicitor/client conflict” and in his March 2004 arguments seeking to overturn it he suggested that “This kind of court order requires lawyers to work around an order of the court” (at para 6).

In April 2004 one of Merchant’s associates settled MH’s residential school claim for $100,000, with a release that “provided the funds would be forwarded to MLG in trust for MH” (at para 7).  After the settlement was signed Merchant and MLG realized that “no contingency fee agreement had been signed by MH and MLG” and that “MH did not appear to understand that MLG had a right to be paid first” (at para 8).  MH also did not understand the impact of the court order obtained by his former spouse, all of which left Merchant’s associate “at a loss” as to how to proceed (at para 8).

In May 2004, Merchant took over carriage of the file.  He arranged for the settlement cheque to be made payable to the client, rather than to the law firm (at para 10).  He also arranged for MH to sign a 30% contingency fee agreement (at para 11).  Merchant also discussed payment options with his client.  When MLG received the cheques from the government for MH, Merchant “kept them and held them in his desk drawer until July 14, 2004” (at para 13).  MH asked for the funds but MLG would not release them.  Eventually MH showed up at the MLG offices; at that point Merchant, his office manager and the firm lawyer “concluded that MLG had a duty to provide MH with the settlement cheques” but that they also needed to ensure that they were paid and that MLG did not breach the court order (at para 14).

To accomplish these objectives MLG provided MH with “a loan advance” covering the amounts of the settlement owing to MH after payment of his fees and other obligations to MLG.  They wrote MH a cheque for this amount and included it as a disbursement on his account, with the result that “the legal account and indebtedness of MH to MLG… equaled the entire settlement amount” (at para 16).  MLG then cashed the settlement cheque and applied it to MH’s account with the firm, thereby settling MH’s “debt” to the firm.

Two days later, on July 16 2004, MLG received the judgment of the Court of Appeal overturning the court order’s application to the MLG (at para 19).  In November MH’s former spouse complained about Merchant to the Law Society of Saskatchewan, and in the spring of 2005 she brought contempt applications against MH.  Those were “successfully defended although the court observed that it was clear MH set out to and did frustrate the order of June 4, 2003” (at para 21).

The Law Society began its investigation of Merchant.  In the first instance, however, that investigation was frustrated by MH’s claims of privilege, and his refusal to waive that privilege in relation to the Law Society’s investigation.  The Law Society claimed that it had legal authority to breach the privilege, a claim with which the Saskatchewan Court of Appeal ultimately agreed (Law Society of Saskatchewan v Merchant, 2008 SKCA 128).  As a result of that dispute, however, its initial decision did not include any of the factual details supplied by the Saskatchewan Court of Appeal and summarized here.

In its decision the Law Society determined that Merchant “proceeded purposefully with full knowledge of what he was doing and was the directing mind and will” of the steps that were taken (at para 27).  His actions were taken to “avoid a boldfaced breach” of the court order (at para 27(5)) but he nonetheless did “willfully” breach that order (at para 27(9)).  Based on the nature of that conduct, a review of other disciplinary decisions and other relevant mitigating and aggravating factors, they ordered that Merchant be suspended for three months and that he pay $28,869.30 in costs.

The Saskatchewan Court of Appeal held that the applicable standard of review was reasonableness (at para 38).   From that starting point it considered and rejected each of the many arguments raised by Merchant to challenge the decision’s reasonableness.  The Court held that the reasons given by the Law Society were sufficient and set out the necessary evidentiary basis for its conclusions.  It was unpersuaded by Merchant’s claim that the Law Society’s description of Merchant’s behaviour as “circumventing” a court order did not justifying holding that he “breached” that order (“This argument relies on nothing more than semantics and is devoid of merit” (at para 89)).  It did not view the conviction of Merchant on both counts as violating the Kienapple principle against multiple convictions since the counts were distinct (at para 92).  It held that the delay in the proceeding was not unreasonable (at paras 95-97), that there was no issue with proceeding on different counts concurrently (at paras 98-107) and that the Law Society did not lose jurisdiction by failing to issue its decision within 45 days (at paras 108-112) or by not having the Hearing Committee sign the decision (at paras 113-117).

More significantly the Court applied its earlier judgment in Merchant v Law Society of Saskatchewan, 2009 SKCA 33, in which it had held that a lawyer may be prosecuted on a strict liability basis.  In that earlier decision the Court had stated that, generally speaking, professional discipline did not require the law society to demonstrate knowledge or intentionalityon the part of the lawyer; however, in that earlier case the law society was required to establish mens rea because it had charged Merchant with acting intentionally.

Here, Merchant similarly argued that “the offences as they are worded in the complaint require mens rea and that this element has not been established” (at para 59).  The Court rejected this position.  It noted that “the degree of fault required to be established in any case will vary depending on the particulars of the allegation and its context” (at para 62) and that the law societies “implicitly have the discretion to determine the requisite mental element needed to prove… misconduct” (at para 67).  Here the law society did not charge Merchant as having acted deliberately, and as such “conduct unbecoming can be established through negligence or total insensibility to the requirements of acceptable practice” (at para 68).

The Court went on to state that strict liability was particularly appropriate here given the nature of the allegation – breach of a court order.  “Strict adherence to the terms of a court order is among the most important duties and responsibilities of a lawyer.  Breaching a court order is harmful to the public and the profession, regardless of the subjective state of mind of the lawyer” (at para 72, emphasis added).

Finally, the Court rejected Merchant’s argument that his actions were simply his fulfillment of his duties under the “Code of Professional Conduct and his common law duty of loyalty” to his client (at para 82).  As the Court noted, it is absurd to suggest that a lawyer’s duty of loyalty to his client extends to the point of requiring the lawyer to violate the law or assist the client to do so:

[86] Merchant had a duty to obey the law such as it was.  The duty cannot be supplanted by perceived ethical duties to the client.  If client instructions conflict with a lawyer’s ethical duties or duties to the court, the lawyer must withdraw.

The lawyer’s duty to her client cannot be “completely unfettered” or “the administration of justice would fail” (at para 87).

Analysis

A few points are worth noting from this decision.

First, while the Court does correctly identify reasonableness as the applicable standard of review, and appropriately notes the deferential attitude that that standard requires, the various grounds of argument advanced by Merchant to some extent force the court to review the Law Society’s decision closely.  The Court has to review the evidentiary basis for the decision, the relationship between the two counts with which Merchant was charged and the legitimacy of the Law Society’s approach to mens rea.  After that review the overarching impression of the Court’s decision is that the Law Society’s decision was correct, not just that it was within the range of acceptable outcomes.

This sort of close review and assessment raises the possibility that, in addressing a vigorously contested regulatory decision a court may, practically speaking, have difficulty maintaining an attitude of deference, in which it does not reconsider the issues before the regulator.   Simply by virtue of addressing each substantive objection, it may end up engaging in more searching review.   It is not obvious, though, what a court can do when faced with this problem.  If it had simply declined to consider Merchant’s various arguments, noting that the Law Society decision appears justifiable, transparent and intelligible, all things considered, the court’s own decision would be vulnerable to review.  What this may show is only the innate complexity that plagues administrative law concepts of standard of review, and makes articulating a consistent approach to the accomplishment of deference so elusive.

Second, the Court’s decision to engage in a detailed summary of the facts of the case, including the advice provided by Merchant to his client MH, is surprising.  In its 2008 decision holding that the Law Society had the legislative authority to violate the privilege, the Court noted that the Law Society’s obtaining of the information would not necessarily lead to information being available to MH’s former spouse.  Indeed, the Court suggested that the Law Society ought not to disclose privileged information in its decision:

[65] I am unable to see how any of these requirements would reveal privileged information to Ms. Wolfe [MH’s former spouse].  The date, time and place of a hearing self-evidently disclose nothing of any sort about communications between Hunter [MH] and Merchant or members of his firm.  Notification of the penalty assessed against Merchant, should it come to pass that a penalty is imposed, would likewise reveal no privileged information.  This is because, to the extent the Law Society might have the option of providing a detailed notice including privileged information or a more succinct one which does not contain such information, it would be obliged to choose the latter alternative (2008 SKCA 128, emphasis added).

Following that direction the Law Society did not reveal any factual information about the dispute between MH and his former spouse in its decision.  Yet in the Court’s own decision reviewing that of the Law Society, significant amounts of confidential and privileged information is revealed, including advice given by Merchant to his client in relation to the court order, and about the decisions made by Merchant in relation to the management of the file and the proceeds.  The Court may have had a reason for making that sort of disclosure, but in the face of its own 2008 judgment, the stringent protection usually afforded to solicitor-client privilege, and the Law Society’s decision not to disclose, it certainly should have explained why it was doing so.

Third, on the question of strict liability, the Court is again to be commended for its clear expression of the regulatory function of the law societies, and the difference between professional discipline and criminal sanction.  The legislative function of the law societies is the protection of the public interest; prosecution of conduct deleterious to the administration of justice is necessary for that protection, even if the lawyer in question did not do so knowingly or willfully.

The final matter is Merchant’s assertion of loyalty, that all he did was in protection of his client’s interests, and should not have resulted in his censure and sanction.  The Court of Appeal treated this argument with all the contempt it deserved, legally speaking.  An ethical duty of unfettered loyalty would legitimize every sort of lawyer wrongdoing, and encourage it too.  Yet it is not wholly surprising that Merchant saw loyalty to his client as his governing impulse.  After all, at least in this instance nothing Merchant did was necessary for his own ends.  The Court Order allowed for payment of his fees, and only covered the first $50,000 of the settlement, either of which exception would have allowed the MLG to be paid for the work it had done for MH.  There was nothing for Merchant or his firm to gain by not complying with the court order and simply paying the funds they received into court.  Their motives appear, therefore, to have been motivated by concern for their client.

While clearly wrongful – the Law Society quite reasonably concluded that he had both deliberately violated the court order and assisted his client to do so – Merchant’s behaviour was not oppositional to proper lawyer behaviour.  It was rather proper lawyer behaviour taken beyond where it ought to go.

Being aware of that possibility is crucially important for both lawyers and regulators.  Bad lawyers are, as often as not, lawyers doing the things that good lawyers do but in the wrong way, or too much.  We need to educate lawyers, and structure and regulate the legal profession, with awareness that that is the complicated problem we need to address.   Lawyers need to understand where the lines are, practice in circumstances that encourage them to stay on the right side of the line, and to face regulatory consequences (whether private or public) when they fail to do so.

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Faculty Council Resolution Re: Harper, McKay and McLachlin

Thu, 05/08/2014 - 8:59pm

Editor’s Note

On May 6, 2014, our Faculty Council passed a unanimous motion calling on Prime Minister Stephen Harper and Justice Minister Peter McKay to apologize to Chief Justice Beverly McLachlin of the Supreme Court of Canada for impugning her integrity and that of the Court. The letter is available here: Calgary_Faculty_Council_May_2014; the text is set out below.

The Faculty of Law Council at the University of Calgary joins with the Canadian Council of Law Deans and members of the legal community across Canada in expressing its grave concern with respect to statements made by Prime Minister Stephen Harper and Minister of Justice Peter MacKay, suggesting that Chief Justice Beverley McLachlin engaged in improper conduct in the context of the appointment of Mr. Justice Marc Nadon to the Supreme Court of Canada.

On the contrary, the facts confirm that the Chief Justice’s actions were consistent with the duties of her office, responsible, and beyond criticism. To suggest that the Chief Justice in performing her administrative role was inappropriately lobbying is to endanger one of the most important aspects of Canadian constitutional democracy, that being the relationship of respect between the independent judicial and executive arms of our government.

The University of Calgary Faculty of Law Council joins in the legal community’s condemnation of the government’s declarations regarding the actions of Chief Justice McLachlin. Our shared sentiment is that this is an unprecedented, baseless attack on one of the most important institutions of Canada’s constitutional democracy.

We call on the Prime Minister and the Minister of Justice to immediately and unequivocally apologize to the Chief Justice for wrongly impugning her integrity and to the Supreme Court of Canada for attempting to compromise its independence.

Unanimously approved by the University of Calgary Law Faculty Council on May 6, 2014.

A Vital Judgment: Upholding Transgendered Rights in Alberta

Wed, 05/07/2014 - 12:30pm

By: Jennifer Koshan

Case commented on: C.F. v Alberta, 2014 ABQB 237

Alberta’s Director of Vital Statistics interpreted her home statute, the Vital Statistics Act (RSA 2000, c V-4 (Old VSA), later repealed and replaced by SA 2007, c V-4.1 (New VSA)) in a way that required transgendered people to have genital reconstructive surgery in order to be eligible to have the sex on their birth certificate changed. C.F., a trans female, challenged this interpretation as contrary to her rights under sections 7 and 15 of the Canadian Charter of Rights and Freedoms (Charter). In a ground breaking decision released on April 22, 2014, Justice B.R. Burrows of the Alberta Court of Queen’s Bench found in favour of C.F. and ordered the Director to issue her a new birth certificate. The Alberta government has included amendments to the Vital Statistics Act in section 9 of Bill 12, the Statutes Amendment Act, 2014, which was introduced in the legislature on May 5, 2014.

Facts and Arguments

C.F. was born physically male, but believed herself to be female during her childhood years. As an adult, she transitioned to living as a female, and legally changed her name in June 2011 to reflect this. The Director of Vital Statistics issued a birth certificate with C.F.’s new name, but it still reported her sex as “male”. C.F. sought to have her birth certificate changed, but was advised that section 22 of the Old VSA required that “her anatomical sex structure be surgically changed from male to female and that two physicians depose in affidavits that such a change had taken place” before such an alteration could be made (at para 5). C.F. was “perfectly content with the anatomical sex structure she was born with” (at para 8), and relied on section 24(3) of the Old VSA for the change to her birth certificate, which provided that:

24(3)   If, after a registration has been received or made by the Director, it is reported to the Director than an error exists in the registration, the Director shall inquire into the matter and, on the production of evidence satisfactory to the Director verified by statutory declaration, the Director may correct the error by making a notation of the correction on the registration without altering the original entry.

Error was defined in section 1(i) of the Old VSA to mean “incorrect information, and includes the omission of information.”

In December 2011, C.F. submitted a statutory declaration with her section 24(3) application which attested to her lived identity as a female. She also submitted a letter from a psychiatrist specializing in transgenderism which confirmed that C.F. “has undergone a transformation to being full time in the female gender role for the rest of her life” (at para 12). In her written submissions, C.F. argued that the designation of her sex on her birth certificate as “male” was incorrect information, constituting an error that the Director should correct (at para 13).

The Director rejected C.F.’s application in March 2012 on the basis that “The sex indicator on your birth registration was completed based on evidence of your anatomical sex.  As the registration documents are completed directly after birth, the sex indicator was completed indicating male based on the evidence at the time, and an error did not occur” (at para 14). The Director indicated that an application under section 22 of the Old VSA following genital surgery would be required in order to change the sex on C.F.’s birth certificate. It should be noted that under the New VSA, section 30 also requires genital surgery before a transgendered person is entitled to a change to their birth registration; section 60 continues to provide the Director with discretion in the case of “errors.”

C.F. brought an application for judicial review and Charter relief, arguing that the Director’s decision violated her rights under sections 7 and 15(1) of the Charter (as well as making some procedural fairness arguments).

Section 7 of the Charter protects the rights to life, liberty and security of the person. C.F.’s argument here was that the Old VSA and the Director’s interpretation of the Act “deprived her of liberty and security of the person by making it impossible for her to have an accurate birth certificate unless she submitted to unwanted and potentially dangerous surgery” (para 19). The Court noted that this argument was not pursued in written or oral submissions, but nor was it formally abandoned (C.F. apparently was not represented by counsel at the QB hearing).

Section 15(1) is the Charter’s equality rights provision. C.F.’s argument under this section was that the Old VSA and the Director’s interpretation of the Act discriminated against trans people, who are “forced to have birth registrations that do not reflect their lived sex unless they submit to Genital Surgery” (at para 20, emphasis in original). C.F. submitted that this amounted to discrimination on the combined grounds of sex, mental or physical disability, gender identity, and trans status.

In its response, the Director argued that the Old VSA not discriminatory, rather it provided a benefit to a disadvantaged group, i.e. transgendered persons who had undergone genital surgery. The Director relied on section 15(2) of the Charter, which permits governments to establish ameliorative programs targeted at disadvantaged groups and thereby avoid claims of discrimination by other groups. The Director did not rely on section 1 of the Charter, which allows reasonable limits on Charter rights that are demonstrably justifiable in a free and democratic society.

Decision and Commentary

In his decision, Justice B.R. Burrows focused on the section 15 issues raised by C.F. and the government. He quickly dismissed the Director’s section 15(2) argument, finding that section 22 of the Old VSA and the accommodation it provides to transgendered persons who have genital surgery “is entirely irrelevant to transgendered persons, like C.F., who do not so wish or who are not so willing” (at para 28). Rather, the discrimination “results from the birth registration system not recognizing or accommodating the fact that [C.F.] has transitioned and is now female” (at para 28).

Though he did not cite the leading cases on section 15(2) of the Charter in this part of his decision, Justice Burrows’ reasons are largely in line with R. v. Kapp, 2008 SCC 41, [2008] 2 SCR 483 and Alberta (Aboriginal Affairs and Northern Development) v. Cunningham, 2011 SCC 37, [2011] 2 SCR 670. These cases provide that if a section 15(1) claimant can prove an adverse distinction based on a protected ground, the government then has an opportunity to argue that the distinction is “saved” by section 15(2) on the basis that it is an ameliorative program targeted at a disadvantaged group (Cunningham at paras 43-44). According to Cunningham, even programs that are underinclusive of particular disadvantaged groups can be saved by section 15(2), provided that the programs are truly ameliorative in purpose, and the exclusion of the claimant group “serves or advances” the ameliorative goal (at para 45). In other words, section 15(2) “permits governments to assist one group without being paralyzed by the necessity to assist all, and to tailor programs in a way that will enhance the benefits they confer while ensuring that the protection that s. 15(2) provides against the charge of discrimination is not abused for purposes unrelated to an ameliorative program’s object and the goal of substantive equality” (at para 49).

In Cunningham, the exclusion from Métis settlement legislation of Métis persons who were also registered as Indians was found to serve and advance the purpose of that legislation, which was to “[establish] a Métis land base to preserve and enhance Métis identity, culture and self-governance, as distinct from surrounding Indian cultures and from other cultures in the province” (at para 62; for a critique see Jonnette Watson Hamilton and Jennifer Koshan, “The Supreme Court of Canada, Ameliorative Programs, and Disability: Not Getting It” (2013) 25(1) Canadian Journal of Women and the Law 56-80, available here).

Justice Burrows did not consider whether there was a distinction based on a protected ground before considering section 15(2). But apart from that analytical oversight, his decision that the government could not rely on section 15(2) seems correct. Even if section 22 of the Old VSA could be seen to have an ameliorative purpose in that it provides post-operative transgendered persons with the benefit of having their birth certificates changed, it is difficult to see how the exclusion of those trans persons who are unwilling to have surgery could “serve or advance” this benefit, as required by Cunningham. This is not the sort of case where the government would be “paralyzed by the necessity to assist all”, given that applications by transgendered persons to change their birth registration are likely rare and relatively low-cost. Nor was the exclusion of trans people in C.F.’s position needed “to tailor programs in a way that will enhance the benefits they confer.” It could also be argued that the VSA is the sort of “broad societal legislation” to which section 15(2) was not intended to apply (see Kapp at para 55). The issue was not with section 22 in isolation, but with the overall failure of the VSA regime to allow C.F. and others like her to change their birth certificates.

Turning to section 15(1), Justice Burrows set out the two part test for discrimination from Kapp:

(1) Does the law create a distinction based on an enumerated or analogous ground? (2) Does the distinction create a disadvantage by perpetuating prejudice or stereotyping? (CF at para 30, citing Kapp at para 17).

In his analysis of step one of the Kapp test, Justice Burrows relied on a recent decision of the Ontario Human Rights Tribunal considering a similar regime for changing birth certificates in Ontario. In XY v. Ontario (Minister of Government and Consumer Services), [2012] OHRTD No 715, 2012 HRTO 726, the Ontario government had conceded that the regime requiring genital surgery drew a distinction based on disability, sex, or both grounds. At the time of the case, Ontario had not yet amended its human rights legislation to include gender identity as a protected ground (see Human Rights Code, RSO 1990, c H.19, amended SO 2012, c 7, s 1). The Ontario Human Rights Tribunal held that in light of the government’s concession, it was clear that transgendered persons were protected under the Code, and that it need not determine whether that was on the basis of sex and/or disability. It cited a number of cases supporting the conclusion that transgendered persons are protected on either or both of those grounds (at para 88, citing Hogan v. Ontario (Health and Long-Term Care), 2006 HRTO 32 (CanLII), (Gender Identity Disorder found to be “disability”); Vancouver Rape Relief v. BC Human Rights, 2000 BCSC 889 (CanLII) at para 59, as cited in Hayes v. Barker, [2005] BCHRTD No. 590, at para 31-32 (sex); MacDonald v. Downtown Health Club for Women, 2009 HRTO 1043 (CanLII) (sex); Kavanagh v. Canada (Attorney General), [2001] CHRD No. 21 at para 135 (sex and disability); Sheridan v. Sanctuary Investments Ltd. (c.o.b. B.J.’s Lounge), [1999] BCHRTD No. 43 at para 97 and 110 (sex and disability)).

Justice Burrows noted that while there was no similar concession by Alberta in this case, he had no difficulty finding that the VSA birth registration regime treated transgendered persons differently than non-transgendered persons, as well as from transgendered persons willing to undergo genital surgery. Persons in the claimant group were prevented from obtaining a birth certificate that reflected their lived sex. This was found to be a distinction based on sex, or, “if “sex” … is interpreted so narrowly as to exclude the characteristics of transgendered persons that make them transgendered, then, at very least, the distinction is made on a ground analogous to sex” (at para 39).

It is unfortunate that Justice Burrows did not take the next step and formally recognize gender identity or status as a transgendered person as an analogous ground for the purposes of section 15 of the Charter. Analogous grounds are those that reflect personal characteristics that are “immutable or changeable only at unacceptable cost to personal identity” or that “the government has no legitimate interest in expecting us to change to receive equal treatment under the law.” See Corbiere v. Canada (Minister of Indian and Northern Affairs), 1999 CanLII 687 at para 13 (SCC), [1999] 2 SCR 203. It was not open to the Ontario Human Rights Tribunal to take this step in the XY case, since human rights legislation only protects specifically listed grounds of discrimination and not grounds analogous to those, as section 15 of the Charter does. Although the failure to explicitly recognize gender identity did not undermine C.F.’s claim, it may mean that transgendered persons must continue to rely on sex and/or disability to mount claims of discrimination under the Charter. Disability in particular can be a difficult ground to bring forward in this context. As noted in XY (at para 5), many transgendered persons do not see their gender identity as a disability, yet they must rely on the grounds available to them where gender identity has not been recognized as a protected ground.

In addition, Justice Burrows’ characterization of the claimant group as “transgendered persons” could be seen as a bit too broad, since their comparison to “transgendered persons willing to undergo genital surgery” reveals that the distinction is actually drawn on the basis of willingness to have surgery. Nevertheless, since Withler v Canada (Attorney General), 2011 SCC 12, [2011] 1 SCR 396, a mirror comparator analysis is no longer required in section 15(1) cases. It is clear that transgendered persons in the position of C.F., who wish to have their birth certificates reflect their true gender identity without surgery, are treated differently and disadvantageously under the VSA regime.

As for the second part of the test for section 15(1), Justice Burrows noted that “the focus should be on the impact of the impugned law on the “human dignity” of the group alleged to have been treated unequally” (at para 32). This is incorrect – in Kapp, the Court abandoned human dignity as the focal point for discrimination, noting the problems that focus had caused in section 15(1) claims (at para 22). But Justice Burrows’ subsequent analysis of step 2 does not actually focus on human dignity, but rather on prejudice and stereotyping, the actual focal points in Kapp.

Here, Justice Burrows referred to affidavit evidence from a psychiatrist, Dr. Dan Karasic, which established the “the disadvantage, vulnerability, stereotyping, and prejudice suffered by transgendered persons” (at para 40). Dr. Karasic’s evidence also indicated that the great majority of transgendered persons do not have genital surgery, due to difficulties in access as well as personal preferences. Lastly, he spoke to the importance of having access to legal documents reflecting a transgendered person’s lived sex in terms of reducing risks of violence, harassment and discrimination (at paras 42-45).

The evidence of C.F. substantiated much of the expert evidence. The treatment she received at the hands of the government was described by Justice Burrows as “insensitive at best” (at para 48). He noted how C.F. was required “to discuss her status as a transgendered person and the state of her genitalia with strangers”, or as C.F. put it, “transgendered people’s genitals are essentially a form of public property; it’s open to anybody to ask about them, because they are what defines somebody’s sex, according to Alberta” (at para 49). Not having an accurate birth certificate also prevented C.F. from obtaining an accurate passport, which adversely affected her employment situation.

The response of the Director to C.F.’s evidence and submission (at para 52) was called “remarkable” by Justice Burrows (at para 53); the word “paternalistic” also comes to mind:

In response, Alberta states that giving a transgendered person an official government document with a sex designation which is dissonant with their gender identity does not convey any message about the validity of a person’s gender identity – it simply reflects known facts determined at birth. … Changing the facts as known and recorded at birth to reflect a subsequently developed gender identity would send the message that there is something shameful about a birth sex that is inconsistent with a gender identity, and in need of correction, when the inconsistency is in fact an integral part of the transgendered person’s identity.  In short, altering the birth record to conform to a subsequently developed gender identity sends the message that transgendered people need to hide (or need to be ashamed of) their true identity as transgendered persons who identify with the opposite sex.

As noted by Justice Burrows, this response sends the message to transgendered people “that the prejudice, stereotyping and vulnerability they feel either do not exist or are insignificant”, and “that though their fellow human beings are all either male or female … they should fearlessly “come out” as members of a third sex … and expect to be accepted without question” (at para 56). He found that the VSA birth registration regime thereby perpetuated the prejudice and stereotyping experienced by transgendered persons, and amounted to discrimination contrary to section 15(1) of the Charter.

Justice Burrows’ decision does not cite the latest Supreme Court authority on section 15(1), Quebec (Attorney General) v A, 2013 SCC 5, [2013] 1 SCR 61, where a majority of the Court called into question whether prejudice and stereotyping should still be seen as crucial markers of discrimination requiring proof in every section 15 case (at para 325 per Abella J; for ABlawg commentary see here). But this omission was not critical to the outcome of C.F. v Alberta, as this was a case where prejudice and stereotyping could clearly be shown. It is interesting to note, however, that there was also evidence of the historical disadvantage experienced by transgendered persons in C.F. (at para 46), and the perpetuation of this disadvantage could have been seen as an alternate means of finding discrimination in this case on the basis of Quebec v A.

In terms of remedies, Justice Burrows held that to the extent the VSA did not permit C.F. to obtain a birth certificate consistent with her lived sex, it was inconsistent with the Charter and was of no force or effect. He also granted C.F. a personal remedy under section 24(1) of the Charter, ordering the Director of Vital Statistics to issue C.F. a birth certificate recording her sex as female within 30 days of the judgment (at paras 64-65).

As noted above, the Alberta government introduced an amendment to the Vital Statistics Act in Bill 12, the Statutes Amendment Act, 2014, on May 5, 2014. Section 9 of Bill 12, which is expected to pass this week, would add the following section to the VSA:

30 (1.1) The Registrar may, in a circumstance provided for in the regulations and subject to any conditions in the regulations, amend the sex on the person’s record of birth and may, with the consent of the other party to the marriage, amend the sex on the record of a subsisting marriage, if any, of the person that is registered in Alberta.

Although the scope of the regulations is still to be seen, this section appears to do away with the requirement of an error before the Registrar can exercise his or her discretion to change the birth certificate of a transgendered person. According to Government House Leader Robin Campbell, who spoke to the amendment at Second Reading on May 6:

Changes to the Vital Statistics Act will allow changes to the requirement for individuals to amend their sex indicator on birth records and birth certificates in a manner which is seen as less discriminatory. Service Alberta has been actively monitoring changes in other jurisdictions and collaborating with the Vital Statistics Council for Canada on this issue. The proposed amendments will authorize the creation of regulations to allow a change of sex identifiers on birth records or certificates. While the regulations are being revised, requests for a change of sex on a birth certificate from transgendered individuals will be addressed on a case-by-case basis to accommodate those individuals who have not had sex reassignment surgery. This change shows our government’s commitment to addressing this issue while allowing time for consultation and analysis to ensure that we are getting it right. (Alberta Hansard, May 6, 2014 at 736).

Conclusion

The C.F. case is an important victory for transgendered persons in Alberta wishing to change their birth registration without undergoing genital surgery. More broadly, the recognition that distinctions drawn on the basis of being transgendered amount to distinctions based on sex and that transgendered persons face historic disadvantage will also be useful for cases pending under the Alberta Human Rights Act, RSA 2000, c A-25.5. As noted above, it would have been preferable for Charter purposes if Justice Burrows had recognized gender identity as an analogous ground. But under the Alberta Human Rights Act, gender identity is not yet explicitly protected, so claimants must rely on gender (or disability) as the relevant ground. The Alberta Human Rights Commission has signaled that it will accept complaints of discrimination on the basis of gender identity under the ground of gender, and there is a case currently before the Commission involving a claim by a transgendered person of employment discrimination (See Greater St. Albert Roman Catholic Separate School, District No. 734 v Buterman, 2014 ABQB 14, confirming the Chief Commissioner’s decision to send this claim to a tribunal hearing).

There is a wonderful line from Justice Sheila Greckol in the Buterman case that is a pertinent way to close this post: “Human rights process is not only for the lion-hearted and well-heeled conversant with litigation, but also for the timorous and impecunious — for all Albertans.” (2014 ABQB at para 184). The fact that C.F. successfully asserted a difficult rights claim under the Charter while self-represented makes her victory all the more remarkable.

Thanks to Jonnette Watson Hamilton for comments on an earlier version of this post.

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“The Feather and the Fiddle”: The Meaning of ‘Indian’ in s 91(24)

Tue, 05/06/2014 - 10:00am

By: Geoff Costeloe

PDF Version: “The Feather and the Fiddle”: The Meaning of ‘Indian’ in s 91(24)

Cases commented on: Daniels v Canada, 2013 FC 6; Canada v Daniels, 2014 FCA 101.

A decision by the Federal Court of Appeal has largely upheld a trial judge’s finding on just who exactly is encompassed by the word ‘Indian’ in s 91(24) of the Constitution Act, 1867. The section gives the federal government the power to regulate

24.       Indians, and Lands reserved for Indians.

The argument brought by the plaintiffs is that the word ‘Indian’ is broad enough to include both Métis individuals and non-status Indians. The trial judge found that both of these groups were ‘Indians’ under s 91(24) while the Federal Court of Appeal upheld the inclusion of Métis, but it rejected the inclusion of non-status Indians. Both of these decisions will be discussed below. The trial decision was the subject of the Alberta Court of Appeal moot this year, in which I participated as co-counsel for the plaintiffs (with Dex Zucchi, who dealt with issues on fiduciary duty that will not be addressed here).

This litigation finally arrived at trial after being in the court system since 1999. Interestingly, advancement of the action over this time was largely funded by the federal government through the Test Case Funding Program, designed to fund important test cases for Aboriginal peoples that have potential to create judicial precedent. When that funding expired, the Federal Court granted an advance costs award to the applicants to enable them to continue with the litigation (see 2011 FC 230).

I should note that while ‘First Nations’ is a more acceptable term, I will use the term ‘Indian’ here because it is the term used in both s 91(24) of the Constitution Act 1867 and the courts’ discussion of that section in Daniels.

The Trial Decision

All references in this section are to 2013 FC 6 unless otherwise noted

It was the defendants’ position that because the question being asked was a theoretical one that would only lead to further litigation the Court should refrain from making any of the declarations requested (at para 53). Neither the trial court nor the appellate court was persuaded by this argument and found that there was sufficient interest to deliver declaratory relief. This finding was partially based on the prejudice that both parties would suffer if after 12 years of publically funded litigation, the Court refused to resolve the matter (at paras 77–80). Further, Justice Phelan found that there numerous references, both historic and current, to the jurisdictional uncertainty of the groups. The Federal government has at times accepted and at times rejected that it has jurisdiction to legislate towards the groups at issue (at para 55).

The Court then went on to determine what was meant by the terms ‘non-status Indians’ and ‘Métis’. Justice Phelan found that non-status Indians possess two essential qualities: they are Indians and they have no status under the Indian Act, RSC 1985, c. I-5 (at para 116). They are people who have an ancestral connection to those considered as ‘Indians’, are accepted by the Indian community as such, and are individuals “to whom status could be granted by federal legislation.” (at para 122).

The definition of Métis was guided largely by the findings in R v Powley, 2003 SCC 43. Here, a Métis person is one who has some ancestral family connection to Métis people, identifies as Métis, and is accepted by the Métis community as a Métis person (Powley at paras 31-33). This test was adopted by the trial judge not to decide the outer limits of Métis people, but to establish a framework for potential inclusion under s 91(24) (at para 121).

After defining the groups, Justice Phelan spent the majority of the time examining the extensive historical evidence of the groups from contact onwards. These findings are broken down into pre-Confederation (paras 183-323), Confederation (paras 324-354), and post-Confederation (paras 355-422) eras and provide a fascinating examination of Aboriginal-settler relations during these periods.

The reason behind this historical examination was to allow the trial judge the contextual framework to apply the purposive approach towards interpretation (as described in para 23 of Reference re Same-Sex Marriage, 2004 SCC 79). Justice Phelan concluded the following:

[566] Applying the purposive approach in light of the finding in In Re Eskimo Reference, above, I accept the Plaintiffs’ argument supported by the opinions of Professor Wicken and Ms. Jones that the purpose of the Indian Power included the intent to control all people of aboriginal heritage in the new territories of Canada. The purpose of the Indian Power included assisting with the expansion and settlement of the West of which the building of the railway was a part. Absent a broad power over a broad range of people sharing a native hereditary base, the federal government would have difficulty achieving this goal.

As a result, the two groups at issue fall under Federal jurisdiction under s 91(24) on account of their Aboriginal heritage. This heritage is both genetic and cultural and is not subject to differential jurisdiction based on degrees of kinship or degrees of cultural purity (at para 568, noting that “one can honour both the feather and the fiddle”, a quote originating from the original plaintiff, Harry Daniels).

A similar result was reached almost a century ago in regards to those Aboriginals living in Northern Quebec. Reference whether “Indians” includes “Eskimo”, [1939] SCR 104 also came to the conclusion that “Indian” is intended to be a broad enough word to include “all the present and future aborigines native subjects of the proposed Confederation of British North America…” (Eskimo Reference at p. 12).

Combining the purposive approach with the prior interpretation of the Supreme Court, Justice Phelan came to the conclusion that the two groups, Métis and non-status Indians, are ‘Indians’ within the meaning of s 91(24) on the basis of their Aboriginal heritage.

The Appeal

All references in this section are to 2014 FCA 101 unless otherwise noted

The Federal Court of Appeal (Justice Dawson, with Justices Noël and Trudel concurring) unanimously upheld the declaration relating to Métis but overturned the declaration made in regards to non-status Indians. The Court of Appeal found that this declaration “lacked practical utility” (at para 74).

The Court noted that there are numerous reasons that an individual may be excluded from Indian status under the Indian Act (besides not being of Aboriginal descent). Some lost their claim to status through errors in recording names during the treaty process. Other individuals had status but lost it for varying reasons (such as marrying-out provisions) (at para 77).

As a result, the Court found that there was no benefit to be made through the declaration requested. Because this is a group of people who the government could give status to if it wished, the matter is not advanced by the court declaring these people as ‘Indians’ within s 91(24). Individuals must bring their cases forward individually for a determination whether or not their specific history will classify them as an ‘Indian’ (at paras 78-9).

The Current Status of Métis and Non-Status Indians

While no direct relief was granted for any of the plaintiffs, the Court of Appeal decision has paved the way for how future relations can proceed. Unless the federal government appeals this aspect of the ruling, Métis individuals can now turn to the federal government with their issues on a case by case basis and the federal government is aware that they have the power to legislate in this regard (though whether they have a duty to legislate was not decided; see 2013 FC 6 at para 72).

It is likely that the plaintiffs will seek leave to appeal to the Supreme Court regarding the failure to grant declaratory relief for non-status Indians. The Federal Court of Appeal argues that a declaration determining the limits of the head of power as it relates to non-status Indians does not provide a tangible benefit (at paras 77-78). However, there may be a practical utility in declaring that non-status ‘Indians’ are ‘Indians’ within the meaning of s 91(24) outside of those granted status by virtue of the Indian Act. It is only logical that an individual would need to be an ‘Indian’ in the sense of ancestral connections in order to even be considered for status (s. 2(1) of Indian Act, RSC, 1985, c. I-5). While the federal government has thus far not utilized its power under s. 91(24) apart from the Indian Act (see Attorney General of Canada et al. v Canard, [1976] 1 SCR 170 at p. 207), at least with respect to status, it is not prohibited from doing so in the future.

If the Court was to apply a similar definition for ‘Indians’ as it did for Metis, then s 91(24) would extend to a group, a subset of which may qualify for Indian status under the Indian Act. This is analogous to the situation of the Inuit. The decision in the Eskimo Reference clearly includes the Inuit people as within s 91(24). At the same time, s 4(1) of the Indian Act explicitly excludes them from applying for status. Therefore, there exists a legal space between inclusion within s 91(24) and eligibility for status under the Indian Act that may apply to non-status Indians.

Regardless of an individual’s ability to claim status, if they are an ‘Indian’ the federal government can legislate towards them. If the logic in Daniels v Canada and upheld on appeal is applied to the definition of ‘Indian’, then it would include an individual who has some ancestral family connection to an Indian people or group, identifies as Indian, and is accepted by the Indian community as an Indian person. This modified Powley test would set limits to who would fall under the s 91(24) head of power, which would undoubtedly be different than the requirements of status. A declaration by the court would provide greater certainty for the government and to those potentially falling under this head of power.

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The Statutory Exclusion of Farm Workers from the Alberta Labour Relations Code

Fri, 05/02/2014 - 10:06am

By: Brynna Takasugi, Delna Contractor, and Paul Kennett

Legislation commented on: Labour Relations Code, RSA 2000, c L-1

Editor’s Note

This is the second in the series of four posts written by students in Law 696: Constitutional Clinical in the winter term of 2014 (for the first post in this series see here). This post focuses on the exclusion of farm workers from Alberta’s Labour Relations Code, RSA 2000, c L-1, (LRC), and is being published to coincide with May Day and International Workers’ Day (May 1), as it concerns the inability of farm workers to unionize and collectively protect their interests. The following is a summary of the students’ primary arguments regarding the unconstitutionality of the LRC’s exclusion of farm workers.

I. Background to the LRC

The LRC governs labour relations in the province of Alberta, which gives workers the right to form trade unions, collectively bargain, and to strike under certain conditions.

A number of groups are excluded from Alberta’s LRC, though.  Most groups that are completely excluded from the ambit of the Act are workers covered by alternate labour relations statutes, such as police, who are governed by the Police Act (RSA 2000, c P-18). However, farm workers and domestic workers are completely excluded from not only the LRC (s. 4(2)(e)) but from all other labour relations and most employment related statutes in Alberta as well (See Employment Standards Code, RSA 2000, c E-9 at s 2(3),(4) (ESC); Occupational Health & Safety Act, RSA 2000, c O-2 at s 1(s),(bb) (OHSA); and the Workers’ Compensation Regulation, Alta Reg 325/ 2002 at s 2, Schedule A (WCR)). The exploitation of farm workers is an entrenched tradition in Alberta, and the advantages to the farmers are numerous: farm employers can set wages that are most advantageous to them, have a great deal of flexibility to hire and terminate workers (despite some protection offered by the ESC), can set dangerous and demanding tasks for these workers without fear that the workers will refuse to perform the task and/or make a meaningful complaint to a regulatory body because there is no effective and protected channel for such complaints (as farm workers are also excluded from the OHSA).

The current iteration of the LRC in Alberta was enacted in 1947 with the Alberta Labour Act, (SA 1947, c 8), Alberta’s first comprehensive labour relations statute (Alberta Labour Relations Board, “History of the Labour Relations Board,” (2010) Ch 4(a) at 2). The exclusion of farm workers from labour relations dates back at least to 1943, with The Labour Welfare Act, SA 1943, c 5.

The historical justifications for the exclusion are many, and include keeping agricultural production high and food prices low, the unpredictability of the harvest season, government fears of socialism and aggressive unions, and the insistence of both farm owners and the government that “family” is entrenched in farm operations and therefore farms are not a suitable environment for the types of labour organization that is appropriate for other types of industry (Bob Barnetson, “The Regulatory Exclusion of Agricultural Workers in Alberta” (2009) 14 Just Labour: A Canadian Journal of Work and Society 50 at 63 (Barnetson 2009).

At present, the government of Alberta identifies the key source of pressure to maintain the exclusion as coming from farmers themselves, who claim that the unique nature of “family farms” make farms unsuitable for labour regulation (Barnetson 2009 at 63). This objection is an articulation of the “agrarian myth”: “farming is cast as a virtuous activity entailing personal sacrifice, for which society owes farmers debt. The agrarian myth is often invoked by claiming that the cost of regulation may imperil farms” (Alberta Federation of Labour, “The Regulatory Exclusion of Agricultural Workers in Alberta” (2009)). The ruling Progressive Conservative Party of Alberta also derives a large portion of its electoral support from rural constituencies (Barnetson 2009 at 63).

The government is unlikely to be able to continue to defend the exclusion along these lines. A large portion of the agricultural industry in Alberta takes the shape of sophisticated, mechanized operations that require a much larger staff than just the members of the nuclear family of the owners (Barnetson 2009 at 64; Bob Barnetson, “No Right to be Safe: Justifying the Exclusion of Alberta Farm Workers from Health and Safety Legislations” (2012) 8(2) Socialist Studies 134 (Barnetson 2012)). These workplaces have much in common with other workplaces that are covered by the LRC, significantly with respect to the level of danger that they present to workers (Barnetson 2009 at 50; Barnetson 2012 at 137). It is time for the government to respond to the actual realities of the agricultural workplace, and allow inclusion for farm workers in the LRC.

II. Does the Exclusion Violate Section 2(d): Freedom of Association?

Section 2(d) of the Charter states, “everyone has the following fundamental freedoms: …(d) freedom of association”. In the labour relations context, s 2(d) has traditionally been held to protect “the right to associate to achieve workplace goals in a meaningful and substantive sense” (Ontario (Attorney General) v. Fraser, 2011 SCC 20 at para 32). Notably, s 2(d) has now been held to protect at least a procedural right to collective bargaining (Health Services and Support-Facilities Subsector Bargaining Assn v British Columbia, 2007 SCC 27 at para 91, Fraser at paras 44-45). “Procedural” here means that there is no right to collectively bargain under a certain model, such as what is called the Wagner model, which is widely accepted as the most common form of collective bargaining in Canada. Also not protected under s 2(d) and the procedural right to collective bargaining is the right to a particular result, i.e. there is no guarantee a collective agreement can or will be reached. Thus, although the rights protected by s 2(d) are limited in this way, they do still exist.

The Supreme Court of Canada decisions of Fraser and Dunmore v. Ontario ((Attorney General), 2001 SCC 94 are the seminal cases on the exclusion of farm workers from labour relations legislation in Canada. In Dunmore, farm workers in Ontario, though historically excluded from labour relations legislation, were brought into the scheme with the passage of a new act (the Agricultural Labour Relations Act, 1994 SO 1994, c 6 (ALRA)). Under the ALRA farm workers had trade union and collective bargaining rights. However, the new law was only “the law” for about a year when a new labour statute was passed by a new government (the Labour Relations and Employment Statute Amendment Act, 1995 SO 1995, c 1), which essentially re-excluded farm workers from all labour relations statutes in the province once again. That statute was found to be unconstitutional on the grounds that it infringed the s 2(d) freedom of association of farm workers in the province.

The basis for the Court’s finding of unconstitutionality under s 2(d) was that the exclusion meant that farm workers had no ability to take any collective action whatsoever. In other words, the unique vulnerability of farm workers as an economically disadvantaged group who often work in isolated settings, close to their (farm owner) employers, means that farm workers, unlike some other groups (see e.g. Delisle v Attorney General of Canada [1999] SCR 989 at para 44, concerning RCMP officers) cannot form trade associations or have meaningful negotiations with their employers unless they have legislative protection.

In the Fraser case, the sequel to Dunmore, the Supreme Court re-examined the circumstances of farm workers in Ontario under new legislation that had been enacted post-Dunmore, the Agricultural Employees Protection Act, 2002, SO 2002, c 16 (AEPA), which expressly gave farm workers some labour rights, including “the rights to form and join an employees’ association, to participate in its activities, to assemble, to make representations to their employers through their association on their terms and conditions of employment, and the right to be protected against interference, coercion and discrimination in the exercise of their rights” (AEPA at s 1(2); see Fraser at para 6). However, the United Food & Commercial Workers (UFCW) and certain farm workers in the province challenged the legislation after they had attempted to collectively bargain with a large agricultural producer, had reached an impasse, and had no remedy that would force the employer to bargain in good faith.

The key question to be determined was: “does the legislative scheme or provision substantially interfere with the right to associate to achieve collective goals”(Health Services at para 90), including the right to collectively bargain. If so, s 2(d) will be violated. In Fraser, the test for a s 2(d) violation with regards to under-inclusive legislation in the labour relations context morphed into what some consider a more stringent standard: “whether the impugned law or state action has the effect of making it impossible to act collectively to achieve workplace goals” (Fraser at para 46, emphasis added). That impossibility could not be shown on the evidence in Fraser. Ultimately the constitutional challenge was unsuccessful because the Court found that the claim was “premature” and the workers had not given the legislation a sufficient chance to operate (Fraser at para 116).

The situation in Alberta is much more like the Dunmore scenario than the Fraser scenario—farm workers are completely excluded from the ambit of the LRC.  In fact, s 4(2)(e) of Alberta’s LRC has the effect of completely precluding the ability of farm workers to take any collective action, or to participate in any process of collective bargaining such that it substantially interferes with the freedom of association rights of those workers guaranteed under the Charter.

As in any Charter challenge, the claimant would need to demonstrate that the legislative provision “has, either in purpose or effect, interfered with those activities” (Dunmore at para 13).

As noted above, the purpose of excluding farm workers from the LRC seems to have been largely motivated by demands by farm owners to keep labour costs down and to generally promote farming in the province. There is no direct evidence from legislative debates about why the exclusion was first introduced because there is no accessible Hansard evidence from that time (see Labour Welfare Act (1943)). As such, and given that the purpose of the LRC as a whole is very much valid, the success of a constitutional challenge to s 4(2)(e) on the basis that its purpose infringes s 2(d) may be somewhat difficult to make. However, given that the exclusion has the effect of completely excluding farm workers from not only the ambit of the LRC but labour relations as a whole in Alberta, a constitutional argument based on the effects of the impugned provision ought to succeed.

The success of a challenge brought to this exclusion, especially in light of the challenges faced by the applicants in Fraser, will hinge in large part on the strength of the evidence for the unconstitutionality of s 4(2)(e) of the LRC. Many international conventions of the International Labour Organization also support the ability of all workers to take collective action, and specifically those working in agricultural sectors. Given the difficult working conditions that farm workers often endure and their inherent economic disadvantage, the time is nigh to bring a constitutional challenge to this unjust exclusion on s 2(d) and other grounds.

III. Does the Exclusion Breach Section 7: Life, Liberty, and Security of the Person?

Section 7 of the Charter protects the rights to “life, liberty and security of the person, and the right not to be deprived thereof except in accordance with the principles of fundamental justice.” Exclusion from the LRC breaches farm workers’ life, liberty and security of the person interests in several ways. Farms are dangerous workplaces where tasks are physically demanding and frequently endanger workers’ life and security of the person (see here), and due to the fact that farm workers are realistically precluded from organizing or joining a union, there is no safe avenue of complaint for farm workers who are tasked with difficult and/or dangerous work; complaints may lead to termination of employment. The threats to personal safety engage life and security of the person, and the possibility of losing one’s job by speaking out about bad conditions and/or refusing work is arguably a breach of farm workers’ liberty interests.

The claimants need only establish a sufficient causal connection between the state-caused effect and the prejudice suffered, and government action or law need not be the only or even the dominant cause of the prejudice suffered by the claimant (Bedford v Canada (Attorney General), 2013 SCC 72 at paras 75-76).

The government action in this case is the explicit exclusion of farm workers from the ambit of the LRC. The prejudice suffered by the claimants is death and injury at unsafe agricultural workplaces. The key to this argument is to convince the court that union oversight and protection would lead to both safer workplaces and workers empowered to refuse unsafe work without fear of reprisal from their employers. Or, put differently, since the farm workers cannot realistically join unions, they are isolated from the protections and regulation offered by unions, and cannot realistically assert their right to safe workplaces without fear of losing their jobs.

The claimants might make use of the “bicycle helmet” analogy from Bedford:

The causal question is whether the impugned laws make this lawful activity more dangerous. An analogy could be drawn to a law preventing a cyclist from wearing a helmet. That the cyclist chooses to ride her bike does not diminish the causal role of the law in making that activity riskier. The challenged laws relating to prostitution are no different (Bedford at 87).

The “helmet” in the present situation is union membership, and since workers who are not covered by the LRC are vulnerable to termination if they attempt to organize or join unions, then the exclusion from the LRC makes farm work more dangerous by effectively keeping farm workers distanced from the protection offered by union membership.

Inclusion in the LRC would provide farm workers with a process that could lead to safer workplaces as they could enter into discussion and bargaining with employers without being afraid to lose their jobs. In this respect, the LRC would, by respecting the freedom of association and collective bargaining process, also contribute to the physical safety and security of these workers, and extend protection against loss of employment, a material contribution to their liberty interests.

Therefore, the s 7 rights of farm workers are arguably breached by their exclusion from the LRC because they are a marginalized occupational group whose basic human dignity demands protection. This protection might be well provided by union membership, but this avenue is foreclosed. The government of Alberta has increased the level of isolation and therefore danger present in farm work by virtue of the explicit exclusion, and therefore the requirements of the sufficient causal connection test have been met.

The next question under s 7 is whether the law’s negative effects on life, liberty, or security of the person are in accordance with the principles of fundamental justice, with the relevant principles here being arbitrariness, overbreadth, and gross disproportionality. The specific questions are whether the law’s purpose, taken at face value, is connected to its effects and whether the negative effect is grossly disproportionate to the law’s purpose (Bedford at para 125).

Arbitrariness

A law is arbitrary if the effect on the individual claimant bears no relation to the law’s purpose (Bedford at para 111). The government will most likely assert that the purpose of the exclusion is to protect the unique identity of family farms, whose workers are often related by blood to the owner/operator, and to protect the fragile profits of farmers.

The claimants must endeavour to convince the court that if farm workers join unions, this will have little to no effect on the character of farms nor on the amount of money farmers will earn. Further – if the court is convinced that lack of union oversight has led to workers being faced with the choice of dangerous work or termination, then the claimants have a good argument that the effect of the exclusion – increased injuries and deaths on farms – bears no relationship to the purpose of the exclusion, and the exclusion is therefore arbitrary.

Overbreadth

A law is overbroad if there are some impacts of the law that bear no rational connection to the purposes of the law (Bedford at para 112). If the rationale for the exclusion is the protection of family farms, then it doesn’t make sense to exclude every farm worker from the LRC when a more restrictive exclusion for family farms would accomplish this goal. The law is therefore arguably overbroad.

Gross Disproportionality

A law is grossly disproportionate when the seriousness of the deprivation is out of sync with the purpose of the measure (Bedford at para 120). If farmers are concerned about changes to the character and finances of their farms due to farm workers joining unions, then farmers are welcome to enter into collective bargaining with their workers and/or with the unions who represent them in order to reach a deal that respects the interests of both sides. In other words, a proportionate solution, a solution that respects both farmer and farm workers, would be to permit farm workers the protection of the LRC. At present, the exclusion may well protect the interests of farm owners and operators, but at the entire expense of farm workers. The exclusion is therefore disproportionate.

Further, if the court was persuaded that lack of union membership increases the isolation and vulnerability of farm workers, especially with respect to inability to freely choose to refuse unsafe work, then the price that farm workers pay with their health, their bodily integrity, and their lives must be entirely disproportionate to the goal of protecting the character and profits of family farms. In our opinion, the strongest challenges to the LRC exclusion with respect to s 7 lie in overbreadth and gross disproportionality – the claimants must make it very clear to the court that while farmers’ interests are served by the s 7 exclusion, these interests are being served at the expense of the interests and rights of their employees.

IV. Does the Exclusion Breach Section 15: The Right to Equality?

Since the first interpretation of s 15 by the Supreme Court of Canada, the test for s 15 has undergone significant changes. This presents challenges for equality claimants. Although a Charter challenge to the exclusion of farm workers from the LRC is likely to have the most success under s 2(d), a claim under s 15 could also be made. Claimants can advance a s 15 challenge on three grounds: occupation, sex and immigration status. This post will focus on establishing occupational status of farm workers as an analogous ground (for arguments about sex and immigration status see here).

Review of the Current Section 15 Test

Section 15 is concerned with legislative distinctions that impose disadvantages on certain groups of people based on prohibited grounds (Andrews v Law Society of British Columbia, [1989] 1 SCR143). There will be a violation of s 15 when laws impose burdens or disadvantages in a discriminatory way based on grounds that were expressly enumerated in s 15(1), or on grounds analogous to them. The listed grounds are race, national or ethnic origin, colour, religion, sex, age and mental or physical disability. Grounds previously held to be analogous include sexual orientation (Vriend v. Alberta, [1998] 1 SCR 493) marital status (Quebec v A 2013 SCC 5) and citizenship (Andrews).

The current test for a s15 violation was introduced by the Supreme Court in R v Kapp, 2008 SCC 41, and has two components. First, the law must create a distinction based on an enumerated or analogous ground. Second, the distinction must create a disadvantage by perpetuating prejudice or stereotyping.  However, after the Court’s decision in Quebec v A, there is some confusion about this second step (see here). This will be discussed below.

Occupational Status

The primary hurdle in a s 15 challenge to the LRC will be to establish occupation as an analogous ground. This argument may be difficult to make, as the Supreme Court has previously rejected occupational status as an analogous ground in particular cases. However, it is important to note two things. First, a majority of the Court has never categorically rejected occupational status as an analogous ground, despite having the opportunity to do so (see e.g. Dunmore and Fraser). Second, claimants can argue that occupational status as farm workers is an analogous ground, even if occupational status generally is not.

While the majority decision in Dunmore did not address the s 15 issue, L’Heureux-Dubé, J’s concurrent judgement establishes a s 15 breach on the basis that occupational status of farm workers is an analogous ground, for three main reasons: the historical disadvantage that farm workers have experienced; their lack of political capital to reduce the gap between themselves and society, and their inability to change their occupation without great personal cost (Dunmore at paras 165–167). Unsurprisingly, these three factors are consistent with the description of analogous grounds in Corbiere v. Canada (Minister of Indian & Northern Affairs), which defined analogous grounds as: “personal characteristic[s] that [are] immutable or changeable only at unacceptable cost to personal identity” ([1992] 2 SCR 203 at para 13).

Historical Disadvantage of Farm Workers

Given historical and factual realities, presenting evidence that farm workers have been historically disadvantaged should not be difficult. Indeed, there is support for this position in L’Heureux- Dubé, J’s judgment in Dunmore (at para 165):

agricultural workers have historically occupied a disadvantaged place in Canadian society and that they continue to do so today. For the purposes of the s. 15 analysis, I have no hesitation in finding on the evidence that agricultural workers are a disadvantaged group. They are poorly paid, face difficult working conditions, have low levels of skill and education, low status and limited employment mobility.

While this finding will be helpful, in order to be successful any challenge to the LRC must specifically establish the historical disadvantage of farm workers in Alberta. For instance, Professor Barnetson describes the lower wage and working conditions of farm workers who have not received legislative protection as compared to local sugar plant workers who are a part of the UFCW (2009 at 62). More evidence of this nature will be necessary to establish the historical disadvantage faced by Albertan farm workers.

Lack of Political Capital

Establishing the lack of political capital is particularly important to arguing that the exclusion of Alberta farm workers from the LRC is unconstitutional, especially as compared to their exclusions from the ESC, OHSA and WCA. This is because of the argument that the lack of protection that occurs as a result of the exclusion of Alberta farm workers from the areas of employments standards, occupational health and safety, and workers compensation can only be remedied if and when workers are given the ability to unionize and bargain collectively. Once again, L’Heureux-Dubé, J’s decision in Dunmore is helpful here. She cites the following passage from Andrews regarding immigrants and their lack of political capital and concludes that the same can be said about farm workers, who are:

… a group lacking in political power and as such vulnerable to having their interests overlooked and their rights to equal concern and respect violated. They are among those groups in society to whose needs and wishes elected officials have no apparent interest in attending (Dunmore at para 168).

Inability to Change Without Great Personal Cost

Establishing that occupational status as a farm worker cannot be changed without great cost to personal self is essential to the s 15 argument. Stereotypes and myths about farmers that have been previously utilized to exclude farm workers from legislation may assist us in this case. As noted above, Professor Barnetson describes the “agrarian myth” that farming is a virtuous activity that requires personal sacrifice (2009 at 65). While this myth has been used by the provincial government to justify the lack of legislative protections, it may assist us in establishing the important sense of personal fulfillment and identity a person experiences when being employed as a farm worker.

Finally, L’Heureux-Dubé, J’s comments in Dunmore regarding the importance of employment are useful in this context as well. She asserted that the Court has “repeatedly recognized that employment is a fundamental aspect of an individual’s life and an essential component of identity, personal dignity, self-worth and emotional well-being” (Dunmore at para 167).

One of the government’s primary responses to a challenge would likely be to rely on previous cases where occupational status has been rejected as an analogous ground. However, many of these cases can be distinguished.

In Delisle, an RCMP officer argued that provisions of the Public Service Staff Relations Act, RSC, 1985, c P-35 and Canada Labour Code, RSC, 1985, c L-2 that prevented unionization were contrary to s 15 of the Charter. The Supreme Court rejected this argument on the basis that the occupational status of a RCMP officer was not an immutable characteristic. However, L’Heureux-Dubé, J distinguished this finding in her opinion in Dunmore. She stated that “unlike the RCMP officers in Delisle, agricultural workers suffer from disadvantage, and the effect of this distinction is to devalue and marginalize them within Canadian society” (at para 168).

Similarly, in Baier, the Supreme Court held that occupational status was not an analogous ground (Baier v. Alberta, 2007 SCC 31 at para 103). In this case, the claimant challenged the constitutionality of amendments to Alberta’s Local Authorities Election Act, RSA 2000, c L?21, which prevented school employees from running in elections unless they took a leave of absence and resigned if elected. The Court rejected the s 15 claim on the basis that in this specific case, occupational status of school employees could not be seen as constructively immutable (Baier at para 64). This case supports our position in two ways. First, the Supreme Court’s emphasis that there is no basis to establish occupational status as an analogous ground in this case can be used to argue that under the right circumstances occupational status can be an analogous ground. Second, in its decision on this matter the Alberta Court of Appeal rejected the occupation of teachers as an analogous ground by directly contrasting them with farm workers. Specifically, the Court stated that teachers are respected professionals with high employment mobility, while farm workers might only be able to alter their profession with great cost due to their status in society and low level of training and education (Baier v Alberta, 2006 ABCA 137 at para 56). Given this comparison we might assume that the Alberta Court of Appeal is favourable to establishing the occupational status of farm workers as an analogous ground.

Government Arguments Regarding Choice

The government may argue that because an individual voluntarily chooses to become a farm worker, their occupational status is precluded from being considered as an analogous ground. For instance, a claimant’s choice not to get married may be a consideration in determining the validity of legislation that excludes de facto spouses from spousal support rights which were afforded to married spouses. However, the majority on the s 15 issue in Quebec v A held that the issue of choice should be considered not in the s 15 analysis to determine whether there has been a Charter breach, but in the s 1 analysis to determine whether the breach is justified. Abella J noted that s 15 has rarely been interpreted so as to prevent a legislative distinction from being considered discriminatory on the basis that the claimant chose a certain state of affairs (at paras 336-37).

Second part of the Kapp Test

After the Court’s decision in Quebec v A the exact nature of the second part of the s 15 test, which focuses on whether the distinction was discriminatory, is unclear. The majority s15 decision written by Abella J focused on historical disadvantage, while the concurring decision by McLachlin J focused on the four contextual factors from Law v Canada Minister of Employment and Immigration), [1999] 1 SCR 497, to establish whether discrimination perpetuates prejudice or stereotypes.

Following Abella J’s approach, historical disadvantage is a foundational concern in the second part of the s 15 analysis. If the state worsens the historical disadvantage of a group rather than improve their status compared to the rest of society, then the legislative distinction will be discriminatory (Quebec v A at paras 336-37). Accordingly, to be successful, the claimants must demonstrate that the exclusion of Alberta farm workers from the LRC perpetuates an existing disadvantage that farm workers have historically experienced. The evidence discussed above regarding establishing historical disadvantage can be applied here.

V. Conclusion

The exclusions of farm workers from the LRC can be challenged under s 2(d), s 7 and s 15 of the Charter. Once these breaches are established, we argue that it will be difficult for the government to justify the exclusion under s 1, given the general inconsistency between the government’s stated goal to protect family farms and the wholesale exclusion of all farm workers, including those who are employed at larger farming operations.

As such, s 4(2)(e) of the LRC ought to be struck down as unconstitutional.

Defining the “Client” (or not) in Former Client Conflicts

Thu, 05/01/2014 - 10:00am

By: Alice Woolley

Case commented on: Orr v. Alook, 2014 ABQB 141

PDF version: Defining the “Client” (or not) in Former Client Conflicts

When teaching the law on conflicts of interest to students, I suggest they start by determining the relationships between the parties, lawyer-client, lawyer-lawyer and client-client, and between the matters. This starting point helps the students because knowing whether a client is a former or a current client, whether the matters are the same, related or unrelated, and whether the clients are represented by the same lawyer or lawyers at the same firm, will direct them to the norms and rules that appropriately govern the situation.

Like many helpful professorial tips, however, this advice may help the students more in the abstract than in practice.  Because often the facts of a representation, whether real or hypothetical, confound easy analysis.  The students cannot determine how to apply the various legal rules that govern conflicts of interest because they cannot satisfactorily determine the nature of the relationships so as determine which rules ought to apply, and with what outcome.

A recent decision by a Master Schulz of the Alberta Court of Queen’s Bench in the case of Orr v. Alook, 2014 ABQB 141, illustrates how this sort of challenge can arise when applying the law of conflicts of interest, and also how to address it satisfactorily.  Her decision demonstrates that it is crucial to get those relationships right, but that the point is to look at them in substance, not formally or technically – to determine what, in actuality, are the relevant relationships.  In addition, it shows that the factual categorization cannot be separated from the legal analysis (even if it necessarily precedes it).  Assessing the various relationships depends on understanding the legal principles governing conflicts of interest well enough to know what you ought to be looking for.

In Orr v. Alook the Plaintiff was suing various parties, including the Peerless Trout First Nation.  The Plaintiff was suing on the basis of a contract between him and several parties including the Peerless Lake Band.  One of the issues in the litigation was whether an action could be brought against the First Nation since it was not a signatory to the contract; the Plaintiff argued that it could.  The plaintiff suggested that the term “First Nation” was simply a name change, that “the persons who are now recognized as members of the Peerless Trout First Nation were always a separate community of aboriginal persons” and that the Peerless Trout First Nation was an amalgamation including the previous signatories to the contract (para. 3, quoting para. 23 of a Master’s judgment in a prior summary dismissal application, Orr v. Alook, 2013 ABQB 86).

The issue brought before Master Schulz was an allegation of a conflict of interest on the part of the Plaintiff’s lawyer, Priscilla Kennedy and the Davis LLP firm.  The basis of the claim that Ms. Kennedy and Davis LLP ought to be disqualified was that Ms. Kennedy had represented members of the Peerless Lake Band in land claim actions in 1998 and 2005, as a result of which she had confidential information in relation to the present action.

The challenge for Master Schulz was to determine the relationship between the prior representation and the current representation.  In particular she had to determine whether the Defendants could properly be considered Ms. Kennedy’s former clients, whether the information she received in the prior retainer was confidential, and whether it could be considered relevant to the current case.  Master Schulz began by observing that the court’s function in such cases is not disciplinary, but nonetheless allows the court to determine “whether a lawyer may act for a specific client” (para 7).  Lawyers have a duty of loyalty to their clients, which requires lawyers not to act in cases where they have relevant confidential information from a client which may be used to the prejudice of that client in the current retainer (para 9).  The governing test is “whether the reasonably informed member of the public would be satisfied that no use of confidential information would occur” (para 10).

Here the challenge was to decide whether Ms. Kennedy could be considered to be acting against her former clients in the current case in light of the fact that an outstanding issue in the underlying litigation was just that: can the defendant Peerless Trout First Nation be considered to be a continuance of the individuals for whom Ms. Kennedy previously acted?  Master Schulz consequently declined to decide whether the Defendants were Ms. Kennedy’s former clients; she viewed it as inappropriate to “pre-determine an aspect of that triable issue” and that doing so would “tie the hands of the trial justice” (para 12).  She decided instead to rely on the point that under the Law Society of Alberta Code of Conduct  a conflict may arise in relation to a client or in relation to a third person.  Thus, even if the Defendants could not be considered to be former clients, their status as a third party could give rise to a conflict (paras 13-14).

To determine whether Ms. Kennedy had relevant confidential information about the matter at hand Master Schulz first considered the relationship between the current case and that on which Ms. Kennedy had previously acted.  She relied on the (excellent) decision of the Nova Scotia Court of Appeal in Brookville Carriers Flatbed GP Inc. v. Blackjack Transport Ltd., 2008 NSCA 22, which notes that matters are related if it is “reasonably possible that the lawyer acquired confidential information pursuant to the first retainer that could be relevant to the current matter” (para 15, citing Brookville para 50).  Master Schulz reviewed the Affidavit of Bruce Hirsche, who appears to have been Ms. Kennedy’s co-counsel in the original case (this isn’t clear from the decision, but Mr. Hirsche is not at the same firm as Ms. Kennedy, and is at the firm she was at previously).   Based on that affidavit Master Schulz noted that the matters raised similar legal issues about the nature of the Peerless Lake community, that the matters were therefore related and that it is reasonable to “infer that relevant confidential information was imparted to Ms. Kennedy during her retainer on the previous matter” (para 22).

Ms. Kennedy was unable to rebut this inference.  The affidavits she filed were based on “information and belief” and Master Schulz viewed these as insufficient to rebut the evidence of Mr. Hirsche, which was based on personal knowledge.  In his affidavit Mr. Hirsche attested that client meetings included “wide, free ranging discussions of the legal and evidentiary issues in the land claim actions and the legal strategies available to them based upon the information they had been collecting” (para 27).

Based on this, Master Schulz unsurprisingly concluded that Ms. Kennedy could not continue to act; given her duty to provide competent and resolute advocacy to her new clients, and the relevant confidential information held by her, the “risk that the confidential information will be used is very high” (para 31). She concluded that Ms. Kennedy’s firm Davis LLP could continue to act only if safeguards have been in place since the time Ms. Kennedy joined the firm that would shield the information from disclosure, and that undertakings are given to maintain such safeguards.

The norms applicable to this case are thus straightforward: a lawyer must not act in circumstances where she has relevant confidential information that her new representation puts at risk of disclosure.  The real work of the case is in assessing the facts to decide how that norm applies.  To her credit, Master Schulz hones in on the key issue, which is the relationship between the issues arising in the two cases, and the evidence demonstrating the role played by Ms. Kennedy in both.  She does not get distracted by the confusion over the technical question of whether the new clients and the former clients are the same people since, as she observes, that does not affect the underlying problem.  That is, in the end it is her understanding of the norms that allows her to complete the factual analysis; she knows the relationships she needs to consider to decide whether the conflict exists and is disqualifying.

Which, of course, is why my helpful tip often helps the students less than I wish that it would.  Because students beginning to learn the law governing conflicts of interest do not have the deep understanding of the purpose and norms that govern those relationships so as to allow them to distinguish between those facts that are salient and those that do not matter very much.  They need to try to do it, but it is not surprising that it occasionally confounds them.

One or two other points from Master Schulz’s are worth noting.  First, the judgment illustrates the point that the law on conflicts of interest protects information that is confidential and not merely information that is privileged.  While some of the information held by Ms. Kennedy was privileged – e.g., “free ranging discussions of the legal… issues” (para 27) – much of the information related to underlying facts, such as the “land Claim Plaintiff’s genealogical [and] historical… research in respect of their ancestral and community claims” (para 27).  Master Schulz correctly recognized that the law of conflicts must ensure that lawyers are not at risk of disclosing that information, even if it is not itself privileged.

Second, Master Schulz seems to suggest that once Ms. Kennedy was found to have relevant confidential information that was at risk of disclosure, one ought nonetheless to consider factors that “militate against disqualification” (para 33).  Those factors include protecting a client’s choice of counsel and addressing delay in bringing forward an application.  While those factors can affect a disqualification decision in an appropriate case, in my view they ought to do so only rarely, if at all, when the conflict relates to a potential misuse of confidential information.  The duty of confidentiality is nearly absolute, and where a risk of disclosure exists, protection of that duty should be paramount over issues such as delay or a client’s choice of counsel.

Finally, Master Schulz suggests that Davis LLP may continue to act if it demonstrates that “‘Chinese Walls’ have been in existence around these files from the date Ms. Kennedy joined the firm until the present date” (para 42).  She notes affidavit evidence suggesting that Ms. Kennedy’s “aboriginal files were separated behind a ‘Chinese Wall’” after Ms. Kennedy joined the Davis firm.  The confusion I have in this respect is that since Ms. Kennedy herself was acting on the new case, I do not understand how a meaningful safeguard can be said to have existed from the time she joined the firm.  The participation seems prima facie to demonstrate that safeguards did not exist.  I would argue that, as a general rule, when a lawyer with relevant confidential information at risk of disclosure has been acting on a matter, and is disqualified because of that information, the firm itself is also disqualified.  The only time a firm would not be disqualified is where, as contemplated by Macdonald Estate, the lawyer was not acting on the new case, and safeguards have been in place (Macdonald Estate v. Martin, [1990] 3 SCR 1235).

North American Environmental Commission Investigating Tailings Ponds Leakage Not Deterred by Private Prosecution

Wed, 04/30/2014 - 10:00am

By: Martin Olszynski

Decision commented on: Notification to the Submitters and to Council regarding a proceeding notified by Canada (SEM-10-002) (Alberta Tailings Ponds)

PDF version: North American Environmental Commission Investigating Tailings Ponds Leakage Not Deterred by Private Prosecution

Much has been written recently about the Fisheries Act, RSC 1985 c F-14, that often (and perhaps excessively) venerated piece of federal environmental legislation so maligned by industry and other private interests that the Conservative government, in its 2012 omnibus budget legislation, decided to tamper with its provisions in what has been described as a “gutting” (see here, here, here, here, and here) but that upon closer examination appears more like cosmetic surgery (which is to say, still unnecessary and unhelpful but mostly superficial; see e.g. the new policy from Fisheries and Oceans Canada).  Still more ink has been spilled in the wake of the recently enacted Regulations Establishing Conditions for Making Regulations under Subsection 36(5.2) of the Fisheries Act, which the Department of Fisheries and Oceans (DFO) initially stated would have no impact on regulatees or the public at large while the private bar and environmental groups described them as marking a “significant shift in the regulatory regime for managing water quality in Canada” and as “another tangible and integral step in the overall de-regulation agenda.” Following the April 14 release of a decision of the Secretariat of the Commission for Environmental Cooperation (CEC) in relation to the alleged non-enforcement of section 36 of the Fisheries Act to Alberta’s oil sands (CEC Decision), I decided that it was time to spill some ink of my own.

Background

The CEC was established pursuant to Article 8 of the North American Agreement on Environmental Cooperation (United States, Canada and Mexico, 14-15 September, 1993, Can TS 1994 No 3, 32 ILM 1480 (entered into force 1 January, 1994)) (NAAEC).  Pursuant to Articles 14 and 15, members of the North American public can assert that a party to the NAAEC (Canada, the United States or Mexico) is failing to effectively enforce its environmental laws by way of the “Submissions on Enforcement Matters” (SEM) process.  Although the SEM process is not a dispute resolution mechanism and the CEC has no power to require specific action, it can and does provide the public with relevant (if not always timely) information regarding the enforcement of domestic environmental laws.

Back in 2010, Environmental Defence Canada (EDC) and the U.S.-based Natural Resources Defense Council (NRDC), together with Canadian residents John Rigney, Don Deranger, and Daniel T’seleie, filed Submission SEM-10-002, wherein they asserted that tailings ponds associated with oil sands “contain a large variety of substances that are deleterious to fish,” that “these substances migrate to groundwaters and the surrounding soil and surface waters,” and that Canada is failing to enforce subsection 36(3) of the Fisheries Act, the well-known and strict prohibition against the “deposit…of a deleterious substance of any type in water frequented by fish or in any place under any conditions where the deleterious substance or any other deleterious substance that results from the deposit of the deleterious substance may enter any such water.”

The Secretariat’s Decision

On January 31, 2014, Canada responded to the Submission alleging the existence of a “pending judicial proceeding” with respect to the same “matter” as the Submission, which pursuant to NAAEC Article 14(3), if true, would require the Secretariat “to proceed no further.”  More specifically, Canada informed the CEC Secretariat that a private citizen, Anthony Neil Boschmann, swore an information (the Boschmann Information):

…in accordance with section 504 of the Criminal Code, before the Alberta Provincial Court alleging that Suncor Energy Inc., a company operating in the Alberta oil sands region, permitted the deposit of deleterious substances into the Athabasca River, in violation of subsection 36(3) of the Fisheries Act. The Court is set to hold a process hearing on the matter on February 27, 2014, in which Government of Canada prosecutors will participate. (CEC Decision at para 5).

The CEC Secretariat thus had to consider whether the “matter” of the Submission is the subject of the Boschmann Information, whether the Boschmann Information constitutes a “pending judicial or administrative proceeding,” and whether it is “pursued” by Canada.

On all three fronts, Canada was unsuccessful.  On the first front, the Secretariat noted that the Boschmann Information alleges violations of subsection 36(3) but makes no reference to tailings ponds and does not include any particulars about alleged locations of such violations or how these occurred (CEC Decision at para 12). On the second, the Secretariat observed that a “process hearing” is only a preliminary step and that an actual criminal prosecution cannot be said to have been initiated until a summons or warrant has been issued by a judge, and further that no such summons or warrant was issued following the February 27, 2014 process hearing (CEC Decision at paras 15 – 25).  Finally, on the third front and perhaps most obviously, the CEC Secretariat concluded that since any future proceedings related to the Boschmann Information depend on action being taken by the informant, Canada cannot be considered to be pursuing an action within the meaning of Article 14 (CEC Decision at para 27).

Discussion

The CEC’s decision is noteworthy for several reasons. First, the Secretariat has demonstrated the utility of its process, which has been touted as a “spotlighting” procedure for promoting public participation, transparency and government accountability in relation to environmental law enforcement (see David L. Markell, “The Role of Spotlighting Procedures in Promoting Citizen Participation, Transparency, and Accountability” (2010) 45 Wake Forest L. Rev. 425; closer to home, my colleague Nigel Bankes has made similar observations with respect to Alberta’s Environmental Appeal Board in his article “Shining a light on the management of water resources: the role of an environmental appeal board” (2006) 16 J. Env. L. & Prac. 131). Second, the decision comes at a time of continued heightened public and international scrutiny of the oil sands and Canada’s environmental record generally.  Finally, it is also directly relevant to the above-noted regulation pursuant to subsection 36(5.2) of the Fisheries Act.

Like the authorizing omnibus legislation that spawned it, this new regulation is itself omnibus in nature, dealing as it does with aquaculture, aquatic research (think Experimental Lakes Area), and finally “any other subject matter in Canada.”  It is this third group that is of relevance to Alberta Tailings Ponds and that some might be tempted to view as industry’s salvation, whether oil sands or otherwise.  If passed, the regulations would authorize the Minister of Environment (as opposed to the Governor-in-Council) to pass regulations to authorize the deposit of deleterious substances where the following conditions are met (section 4):

(a) the deleterious substance to be deposited, its deposit or the work, undertaking or activity that results in the deposit is authorized under federal or provincial law, or is subject to guidelines issued by the federal or provincial government, and is subject to an enforcement or compliance regime;

(b) the federal or provincial law or guidelines set out conditions that result in a deposit that is not acutely lethal and contains a quantity or concentration of deleterious substance that when measured in the deposit, or in the relevant waters frequented by fish, satisfies

(i) the recommendations of the Canadian Water Quality Guidelines for the Protection of Aquatic Life that were published in 1999 by the Canadian Council of Ministers of the Environment, as amended from time to time, or the recommendations that were derived from those guidelines on their site-specific application, as amended from time to time, or

(ii) the recommendations of any peer-reviewed guidelines that are established for the purpose of protecting aquatic life and adopted by a federal or provincial body; and

(c) the effects of such a deposit on fish, fish habitat and the use by man of fish have been evaluated in accordance with generally accepted standards of good scientific practice.

In direct contrast to the (at least) half-century-old wisdom of the section 36 prohibition, the 21st century “responsible resource development” solution to pollution is dilution. Except that we know it is not. I can do no better here than to cite the words of the Court in the similarly vintage R v Canadian Forest Products Ltd., [1978] 2 FPR 16 (at para 27) in response to an argument that the deposit of deleterious substances in question there was trivial (or “low risk” as DFO has put it in its Regulatory Impact Analysis Statement for these regulations): “All pollution legislation is concerned not only with the immediate damage of a pollutant but also by the cumulative effect of any substance.”  In other words, dilution only gets you so far.  In addition, as the Environmental Law Centre’s Jason Unger observed in his excellent post on these very same provisions, it is also a fairly complex affair: “This approach to regulation…requires significant knowledge of the assimilative capacity of water bodies at all relevant times as well as a fulsome understanding of cumulative contributions (both anthropogenic and natural) to water quality.”

Returning to Alberta Tailings Ponds and the impact of these regulations more generally, several points emerge.  While they clearly do represent a shift in the water quality regulatory regime, they are but a first step; further regulations are required to actually authorize any deposits.  Moreover, in order for such further regulations to be enacted in the oil sands context, industry and government will have to first acknowledge that tailings ponds are in fact leaking, which would be awkward and certainly doesn’t jive with the promotion internationally of a “world class” regulatory system.  They would then have to demonstrate that the substances therein, which include naphthenic acids, ammonia, benzene, cyanide, oil and grease, phenols, toluene, polycyclic aromatic hydrocarbons, arsenic, copper and iron – several of which are known to be toxic, meet peer-reviewed water quality guidelines.  When they do, these assessments will be made public as part of that regulatory process and will be subject to all kinds of public scrutiny, which could well include some further “spotlighting” by the CEC.

Certainty for industry to be sure, but also for its opposition. And while transparency and political accountability may not be perfect tools in the environmental context, they’re arguably better than the shadowy world of denial and non-enforcement that is the status quo.

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