The phenomenon of organized pseudo-legal commercial arguments (OPCA) being used to advance claims not recognized by law has received a great deal of attention in the past year. From last year’s judgment of Associate Chief Justice Rooke in Meads v Meads, 2012 ABQB 571 [Meads], to the recent occupation of a Calgary apartment by a Freeman-of-the-land who claimed it as an “embassy”, OPCA litigants have disrupted the functioning of the legal system while attracting public attention and interest. In this column I argue that the defining indicia of OPCA are also present in the activities of some lawyers; specifically, in lawyers sending out demand letters based on spurious claims in the hope of extracting funds because of the fear and ignorance of those who receive them. I will further argue that our failure to address that conduct undermines our moral authority to challenge OPCA litigants and, worse, may contribute to a cultural climate of skepticism about the law’s legitimacy and authority, which helps OPCA to flourish.
The OPCA phenomenon have been the subject of analysis by the courts (for a summary, see: “What has Meads v Meads Wrought”), the media (see, e.g., “More about the Freeman-on-the-land movement”) and online commentary (see, e.g., “The OPCA Litigant Case”), including in an earlier column I wrote for SLAW (“The Human Excellence of Judging”). As set out there, one of the fundamental challenges posed by OPCA is that they manipulate the language and forms of legality to advance arguments and claims that the law does not recognize and that, in some circumstances are “inherently frivolous and vexatious” (Meads at para 554). They use arguments of jurisdiction and sovereignty to deny the jurisdiction of the court, and arguments of contract and consent to avoid the imposition of legal obligations. In his judgment in Meads Justice Rooke sets out the indicia of OPCA litigants noting for example their reliance on documents with unusual formalities and markings, atypical phrases and language, and reliance on “obsolete, foreign, or typically otherwise irrelevant legislation” (Meads at para 228). OPCA commonly deny the authority or jurisdiction of the court, or claim that the court must prove its jurisdiction over them.
These features suggest that the activities of the OPCA litigants are far removed from the work of Canadian lawyers. Lawyers and judges have to respond to the challenge that such litigants present, but they are presumptively unlikely to offer arguments that adopt legal forms while being substantively frivolous and vexatious.
This is, of course, largely the case. Yet when I read about the indicia of OPCA I am reminded of one activity that a small number of Canadian lawyers do engage in, which is sending demand letters to shoplifters or their parents, making legal claims that are substantively unmeritorious, or seeking an amount in damages that would not be sustainable even where liability was demonstrated.
Like OPCA litigants, these lawyers rely on statutes that have nothing to do with the claim that they pursue. Thus the letter referenced in DCB v Zellers,  MJ No. 362, 138 DLR (4th) 309 (Man QB), listed statutes and regulations in support of its demand, but they were the rules of court and civil procedure, which do not support a substantive claim.
Like OPCA litigants, these lawyers list a series of causes of action that may only loosely relate to the claim they advance. Thus the letter noted on this website asserts an action based in “trespass to goods, fraud, deceit, breach of fidelity and/or conversion”. While a suit arising from shoplifting may relate to trespass to goods, it is difficult to see what “breach of fidelity” would have to do with anything, and fraud and conversion add colour rather than substance, particularly since the shoplifter has been caught and (normally) the goods recovered.
Like OPCA litigants, these lawyers twist the concept of jurisdiction and authority in search of a substantively unmerited result. In their case, they do not deny the jurisdiction of the court in an attempt to avoid its authority. But they do assert claims against others while not bringing those claims to court for adjudication. They seek to obtain financial compensation for their clients, while apparently avoiding application of the case law that does not support that result (as discussed here).
The lawyers who write these letters may fairly be described as a small and marginal part of the legal profession. There are other lawyers who have done their best to discredit and respond to them (see, e.g., here, here and here). It is also the case that not every demand letter sent after a shoplifting incident matches this description. In jurisdictions where strict liability is imposed on parents, for example, claims asserted against them may occasionally have more substance than they do in jurisdictions where parental liability arises only from negligence. It should also be noted, though, that the companies who retain the lawyers are large corporations who certainly have in-house counsel to arrange their legal affairs and to instruct outside counsel. The letters thus cannot be attributed solely to a few professional outliers. And neither the occasional sending of a meritorious letter, or the activism of a few lawyers in response, has had much impact on the general practice.
Further, to the best of my knowledge, law societies do not investigate or discipline lawyers who send these letters. After receiving a complaint last year, the Law Society of Upper Canada declined jurisdiction to act:
Please be advised that the Law Society has previously addressed the issue of the specific wording of these types of civil recovery letters and we are satisfied that this version of the civil recovery letter does not breach the Rules of Professional Conduct. The amount of civil recovery to which Mr. [name]‘s client may or may not be entitled is a legal issue that falls outside of the Law Society’s jurisdiction. Consequently, this file has been closed (see: “Lawyers Regulating Lawyers (Redux)”).
As I have discussed elsewhere, there is some basis for the law societies’ reluctance – they do not want to be placed in the position of adjudicating the legitimacy of legal claims (“Lawyers Regulating Lawyers (Redux)”). Yet that generally legitimate concern is misplaced and unfortunate when it leads the law societies to do nothing about lawyers whose behaviour distorts the law in the way these demand letters do.
It is unfortunate in terms of the actual matter of the letters, since what these lawyers do is uncomfortably close to extortion, using their legal skills and authority to obtain funds for their clients to which those clients have no bona fide legal claim. But it is even more unfortunate in a world where OPCA litigants present a significant challenge to the functioning and legitimacy of our legal system. If lawyers engage in conduct not in essentials different from that of OPCA litigants, and legal regulators do nothing to sanction it, then how do we unambiguously condemn OPCA? How do we maintain the absolute separation from that behaviour that, as lawyers, we ought to enjoy?
Lawyers play a pivotal role in ensuring the rule of law. We help clients to access the law’s entitlements, and to avoid its improper application. We ensure that its adjudicative system functions fairly. When we do so, we offer by example the counter-argument in favour of the authority and legitimacy of the legal system, and against the distortions and absurdities put forward by OPCA gurus and their adherents. But the lawyers who send these letters demonstrate the opposite. In abandonment of their fundamental professional obligation– an obligation that the OPCA litigants do not share – they treat the law as nothing more than an instrument for manipulation by the powerful. They act as if the law is not legitimate and authoritative, but is rather a tool to help you get what you want, whether or not you deserve it.
This stance on law taken by the few, when coupled with the complicity of the many, deprives us of our moral authority to object to the conduct of the OPCA litigants. As we resist what they do, our own membership engages in conduct that is in substance identical. Further, we show that their strategy is effective: with the skills to put a bogus argument in the proper form you will indeed get the result you want, even when you do not deserve it.
This has to change. As a profession we cannot allow the improper actions of a few to undermine the message that lawyers help to sustain the rule of law, in their own actions and when resisting the strategies employed by OPCA gurus and their adherents.
This post originally appeared on Slaw.
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Decisions commented on: (1) ERCB Letter Decision, April 18, 2013, re Fort McKay First Nation, Notice of Question of Constitutional Law; (2) ERCB Letter decision, May 23, 2013, reasons for decision in relation to Fort McKay First Nation, Notice of Question of Constitutional Law; (3) 2013 ABAER 014, Dover Operating Corporation, Application for a Bitumen Recovery Scheme Athabasca Oil Sands Area, August 6, 2013; and (4) Fort McKay First Nation v Alberta Energy Regulator, 2013 ABCA 355
The Alberta Court of Appeal has granted leave to the Fort McKay First Nation (FMFN) to appeal two questions of law or jurisdiction in relation to decisions made by the Energy Resources Conservation Board (ERCB) (the predecessor to the Alberta Energy Regulator (AER)) and the AER itself in approving, subject to the further approval of the Lieutenant Governor in Council, Dover’s application for a major steam assisted gravity drainage (SAGD) bitumen recovery project. The two questions on which leave was granted are as follows:
(a) Whether the Tribunal erred in law or jurisdiction by finding that the question whether approval of the project would constitute a meaningful diminution of the Treaty rights of the Fort McKay First Nation and therefore be beyond provincial competence was not a question of constitutional law as defined in the Administrative Procedures and Jurisdiction Act;
(b) Whether the Tribunal erred in law or jurisdiction by finding that it had no jurisdiction to consider constitutional issues other than those defined as “questions of constitutional law” in the Administrative Procedures and Jurisdiction Act.
This is a significant development since to this point it has proven to be extremely difficult for First Nations in Alberta to persuade the Court of Appeal to grant leave on ERCB/AER decisions where the effect of the activities carried out pursuant to the relevant decision will arguably impair treaty based hunting rights or other aboriginal or treaty rights. The decision also creates significant uncertainty for the developer in this particular case.
In other posts I have commented on previous decisions of the ERCB in which the ERCB declined to answer constitutional questions with respect to the discharge of the Crown’s duty to consult and accommodate on the grounds that such questions fell outside the jurisdiction of the Board, not because they were constitutional questions per se but because these issues fell outside the jurisdictional scope of the Board’s responsibilities under its substantive statutes. See “Duty to consult application is premature – what’s the big deal?”, here, commenting on the Joint Review Panel’s decision in the Jackpine Mine application and the subsequent (unsuccessful) leave to appeal application, and “Who decides if the Crown has met its duty to consult and accommodate?”, here.
Since then the Responsible Energy Development Act, SA 2012, c.17 (REDA) has entered into force (June 17, 2013). One of the significant features of that new statute is that it makes it clear (s 21) that while in general the AER still has the jurisdiction to determine constitutional matters that arise in the course of making its decisions (see Designation of Constitutional Decisions Makers Regulation (AR 69/2006) passed pursuant to the Administrative Procedures and Jurisdiction Act, RSA 2000, c. A-3 (APJA)) the AER has no authority to assess the adequacy of Crown consultation with respect to the rights of aboriginal peoples.
In this post I review the following questions: (1) What were the constitutional issues that the FMFN put before the ERCB? (2) What did the ERCB decide? (3) What did the AER decide in its August decision on the merits? (4) What were the matters on which the Court of Appeal granted leave? (5) What were the matters on which the Court of Appeal declined to grant leave? (6) What happens now? and (7) The AER’s policy in deciding what to publish on the web – Bankes as a broken record.
(1) What were the constitutional issues that the FMFN put before the ERCB?
FMFN filed a notice of questions of constitutional law (NQCL), which posed the following two questions:
1. Would approvals sought by Dover … if granted, constitute a prima facie infringement of the rights guaranteed by Treaty 8, s. 35 of the Constitution Act, 1982 and the Indian Act, so as to be of no force or effect or otherwise inapplicable by virtue that the Province of Alberta has no jurisdiction over Indians and Lands Reserved for the Indians under s. 91(24) of the Constitution Act, 1867 (“Inter-jurisdictional Immunity Argument”)? [Constitutional Question No. 1]
2. Has the Crown discharged its duty to consult and accommodate Fort McKay with respect to adverse impacts arising from the proposed project upon the rights guaranteed to Fort McKay pursuant to Treaty 8, s. 35, and the Natural Resources Transfer Agreement (“Inadequate Consultation Argument”)? [Constitutional Question No. 2]
The bracketed labels seem to have been supplied by FMFN. The first label is somewhat misleading insofar as the question seems to raise constitutional questions of both validity and applicability. Validity is not an issue in an applicability argument. Thus in the present case it is clear that the province has the jurisdiction to make a law like the Oil Sands Conservation Act, RSA c. O-6 (OSCA); the only issue is whether it is applicable to these particular lands or in this particular set of circumstances. Since the project will not take place on reserve lands (although it may affect reserve lands) the argument of the FMFN (once they get to make it) must presumably be that while the OSCA would ordinarily be applicable to these lands, it ceases to be applicable where the project, if authorized, would breach FMFN’s treaty rights. Such treaty rights are part of the core content of s 91(24), (Indians and lands reserved for Indians) of the Constitution Act, 1867. The FMFN must allege that the breach of treaty rights would occur in this case because the substantive limits of the Crown’s power to take up lands under the treaty have been reached, since (it must be alleged) there is no longer an adequate land base on which to meaningfully exercise the right to hunt. It will be observed that this argument is necessarily a form of cumulative effects argument.
(2) What did the ERCB decide?
In its letter decision (LD) of May 2013 the Board decided that it lacked the jurisdiction to consider these specific constitutional questions.
With respect to question # 1 the Board took the view (LD at 8) that this question was not a question of constitutional law within the meaning of the APJA and “for that reason the Board is not authorized to consider it.” The APJA defines a question of constitutional law as follows:
(i) any challenge, by virtue of the Constitution of Canada or the Alberta Bill of Rights, to the applicability or validity of an enactment of the Parliament of Canada or an enactment of the Legislature of Alberta, or
(ii) a determination of any right under the Constitution of Canada or the Alberta Bill of Rights.
Since a Board approval is not an enactment and the FMFN was therefore not contesting the validity of an enactment the validity part of clause (i) was not relevant. But the Board also disposed of the applicability track of clause (i) on the grounds that the applicability analysis would require the Board to assess the core content of a federal head of power (here, s 91(24), Indians and Lands Reserved for Indians) and that, according to the Board, fell outside its legislated mandate under its various statutes (LD at 9):
There is nothing in its mandate …. which cloaks the ERCB with the authority to determine the “basic minimum unassailable core” of a federal head of power or to determine if the exercise of that core is impaired. As the Board does not have the jurisdiction to make the enquiries required to answer Question # 1, it cannot have jurisdiction over that question.
This conclusion must be wrong for the simple reason that in an applicability analysis the decision maker (court or tribunal) must always start by assessing the core content of the federal head of power. Since it is unlikely that the provincial legislature will ever confer this authority expressly, the Board is effectively saying that a tribunal can never consider the applicability of a provincial law even where that tribunal has been listed under the APJA and even though the APJA expressly refers to applicability as well as validity. In short, the Board’s reasons prove too much since they deprive the reference to applicability in the APJA of any meaning.
There may also be a problem with the first part of the analysis (i.e. the validity part of the analysis) which is that if the Board interprets the term “question of constitutional law” too narrowly there is a risk that a court may turn around and say that that may be appropriate as an interpretation of the statutory term but it is so narrow that it does not encompass all possible constitutional questions. Perhaps a more appropriate way to put this point is that a reviewing court will say the following: (1) review of the interpretation of the term “question of constitutional law” should proceed on the basis of the standard of correctness; (2) a narrow interpretation of “constitutional question” would undermine the purpose of the notice provisions of the statute (and because of the argument described in the previous sentences) and accordingly the Board’s interpretation should be rejected.
The Board was also of the view that it had no jurisdiction under clause (ii) of the definition of questions of constitutional law. The Board’s reasoning on this point is somewhat obscure (LD at 8 – 9) but in general the Board seems to be saying that while FMFN was seeking a determination on the meaning or scope of its rights, that was not a necessary part of the Board’s jurisdiction in assessing the project before it:
The panel is also satisfied that its mandate, as set out in the sections of the ERCA and the OSCA … does not … extend to determining the meaning and scope of Aboriginal rights including the right to reserve lands. The Board’s mandate … is to consider … if energy matters [sic] meet the Board’s technical requirements and are in the public interest having regard to any social, economic or environmental impacts which may emanate from these matters. Neither part of this mandate, whether the technical review or considering impacts, encompasses defining the extent of Aboriginal rights.
(3) What did the AER decide in its August decision on the merits?
In its decision on the merits of Dover’s application (2013 ABAER 014) the AER addressed seven issues: (1) the need for the project, (2) the Lower Athabasca Regional Plan (LARP), (3) resource recovery, (4) environmental effects, (5) traditional land use, (6) FMFN’s proposal for a 20 km buffer zone around its reserves, and (7) social and economic effects. In addition, the AER largely reaffirmed the position that the ERCB had taken in its letter decision with respect to the constitutional issues raised by FMFN, with the additional qualification (at para. 32) that the new s.21 REDA further precluded the AER from considering any matters relating to the duty to consult.
Dover’s project is a large scale project. Dover’s leases cover some 376.8 sq km and Dover estimates that they contain about 4.1 billion barrels of recoverable bitumen. Dover proposes that the project will proceed in a number of phases with two central processing facilities. Maximum production is estimated at 250,000 barrels per day and the project will produce over a 65 year period. The Dover property is located northwest of Fort McMurray and some of the producing wells will be located within 1.5 kms of the Moose Lake Reserves of the FMFN.
The need for the project was established on the basis of the need to recover the identified reserves. The applicant and the Board relied on LARP as evidence that the province favoured development of this resource, i.e. the project is located in an area that is designated for oil sands development under LARP (at paras 44 – 46). The configuration of the identified reserves favoured development of the deeper reserves first in order to maximize resource recovery.
Under the environmental effects heading the AER considered water use, Dover’s environmental impact assessment and cumulative effects, wildlife (including a modeling report based on ALCES), access management, sulphur recovery and odours, emissions and air quality. The AER approved the plans to use principally non-saline water for the project (at paras 107 – 108) (no apparent requirement to consider alternatives). On the important subject of cumulative impacts the AER seemed dismissive, commenting that predictions of cumulative impacts were not very useful (“What is more important are the actual effects detected through monitoring”, para 110) and further noting the AER process was concerned with project level effects. Broader policy objectives could be achieved through the terms of the order in council approval and through other policies that fell within the jurisdiction of Alberta Environment and Sustainable Resource Development (AESRD). The not so subtle message in all of this is that if it’s in the LARP (or any other regional plan) we’ll take account of it; if it isn’t then (as in pre-ALSA days) cumulative effects are not our responsibility.
The AER was scarcely more forthcoming with respect to the impacts on wildlife and the related matter of the ALCES. Yes, the AER was concerned about potential declines in woodland caribou (a threatened species) but some mitigation matters (deer and wolf population control programs) were the responsibility of others; while the ALCES program apparently tended to over-estimate project-scale impacts all leading to the rather lame exhortation encouraging (not even “should” and certainly not “must”):
 Dover to work with other in situ operators and ESRD to develop and implement appropriate, regionally-based monitoring and compensation programs that would offset the effects of oil sands development on caribou habitat. These plans could inform the decisions of regulatory agencies issuing surface dispositions on Crown lands.
All of this suggests that unless regional plans under Alberta Land Stewardship Act, SA 2009, c. A-26.8 (ALSA), deal prescriptively with issues of thresholds and cumulative effects the AER, like its predecessor, will continue to go through this ritualistic washing of hands.
The AER returned to the subject of cumulative impacts under the heading of traditional land use concluding that:
 While the Panel understands the importance of its traditional territory to Fort McKay and acknowledges that there will be some localized adverse effects from the project, it finds that the disturbance levels will not prevent Fort McKay from exercising its traditional land use activities in the Moose Lake Reserves area or regionally.
Finally (and here I am passing over the Panel’s treatment of social and economic effects), the Panel dealt with FMFN’s proposals for a 20km buffer zone between the project area and the FMFN’s reserve. While acknowledging the value of such an area as a refugium the AER appeared to give several reasons for rejecting the proposal. The first reason was that a similar proposal had been proposed (and presumptively rejected) under the LARP process (at para. 205). Second, the FMFN had plenty of other areas within its traditional territory which supported traditional activities. (I can only assume that the AER is familiar with Justice Binnie’s trenchant response to this “let them eat cake argument” in Mikisew Cree First Nation v Canada (Minister of Canadian Heritage),  3 SCR 388 at para 45 – truffles in that case). Third, while drilling and production might occur close to the reserve, Dover’s activities were some distance from the settlement area of the reserve such that (at para 208) “community members in the Moose Lake settlement area are unlikely to hear, smell, or see Project-related activities.” Fourth and finally, the creation of a buffer zone would preclude recovery of over a billion barrels of oil. This would create an “adverse impact on the project” which was “not acceptable”. Why was it not acceptable? Here the reasoning becomes circular:
 The Panel therefore finds that the economic impacts on the province and regional municipality of establishing a buffer are significant and would not be in the public interest.
Thus, while the AER agreed that it had “the authority to create a setback between a project and adjacent lands …. given that there would be little if any impact on the Moose Lake Reserves lands directly, it is not necessary or in the public interest to impose the requested buffer.”
(4) What were the matters on which the Court of Appeal granted leave?
The applicants applied for leave on four questions. Justice Frans Slatter as noted above, granted leave on the first two questions which raised questions of constitutional law (at least in a general sense – the question of whether or not they are real questions of constitutional law within the meaning of the APJA presumably remains to be determined).
(a) Whether the Tribunal erred in law or jurisdiction by finding that the question whether approval of the project would constitute a meaningful diminution of the Treaty rights of the Fort McKay First Nation and therefore be beyond provincial competence was not a question of constitutional law as defined in the Administrative Procedures and Jurisdiction Act;
(b) Whether the Tribunal erred in law or jurisdiction by finding that it had no jurisdiction to consider constitutional issues other than those defined as “questions of constitutional law” in the Administrative Procedures and Jurisdiction Act;
It should be observed that these questions differ from the specific questions of which the FMFN gave notice in its Notice of Constitutional Questions in two respects. First, the FMFN is no longer raising a duty to consult argument. This makes sense in light of s.21 of REDA. Second, the questions are now focused on the definition of the question of constitutional law in the APJA and the implications of that definition. Some of the parties on the application for leave to appeal tried to make something of the differences between the constitutional questions as originally formulated and the grounds of appeal but Justice Slatter took a more robust view ruling that the matters raised in the first two questions of the leave application fell within the earlier Notice.
That said, Justice Slatter offers very little in support of his conclusion that leave to appeal should be granted in this case on these two grounds. In particular, while he refers (at para 7) to Berger v Alberta (Energy Resources Conservation Board), 2009 ABCA 158 as a principal authority for the criteria that an applicant must satisfy in order to obtain leave, Justice Slatter does not even recite those criteria, let alone apply them in a rigorous manner to the case at bar. Given the many similar cases in which the Court has denied leave Justice Slatter has, I think, missed an opportunity to provide some guidance to the regulatory bar as to why this was such an easy case by comparison with some of the earlier cases.
(5) What were the matters on which the Court of Appeal declined to grant leave?
Justice Slatter declined to grant leave on the third and fourth issues raised by FMFN:
(c) Whether the Tribunal erred in law or jurisdiction by reason of its narrow interpretation of its inquiry jurisdiction and its remedial jurisdiction to consider and respond, respectively, to cumulative environmental effects; and
(d) Whether the Tribunal erred in law or jurisdiction by reason of the process through which it purported to make findings respecting project impacts on constitutionally protected Treaty rights of the Fort McKay First Nation.
In essence Justice Slatter concluded that the AER had not refused to consider cumulative effects as part of its decision had done so, at least to a limited degree. Since it had done so there could be no question of law or jurisdiction (at paras 17 – 18). While I can see the argument that if the AER did consider cumulative effects then the applicants are simply arguing that the AER did not give this evidence sufficient weight and that can never be a question of law or jurisdiction, there must come a point at which the treatment of a matter is so cursory or dismissive that such (non) treatment can be characterized as raising a point of law or jurisdiction. I suggest (see my comments in part 2 above on the AER’s treatment of cumulative effects) that we must have been close to that line here. But in any event I think that the more serious issue as I hinted at in part 1 of this post is that the constitutional and cumulative effects arguments are actually inextricably linked. At some point FMFN must be forced to argue that the AER’s treatment of cumulative effects was so cursory that it could not form an opinion as to whether or not the provincial power to authorize a project had become inapplicable.
Is there then some risk that the panel that hears the appeal will rule that Justice Slatter’s decision precludes FMFN from framing the issue this way? I don’t think so. I think that the better response is that while the AER did consider cumulative effects it never considered the implication of those cumulative effects in the context of the constitutional argument but only in the context of the discharge of its statutory responsibilities. Thus the remedy, if this is the way things go, is for the Court of Appeal to send the matter back to the AER with the instructions to assess the question of applicability in light of the cumulative effects of activities authorized by the Crown in taking up lands in the traditional territories of the FMFN.
(6) What happens now?
There has been much discussion in the media (see for example, Dan Healing, “Athabasca Oil shares sink on band appeal” Calgary Herald, October 22, 2013, C4) about the next steps for the Dover (now Brion Energy) project. It has been correctly observed that the granting of leave to appeal does not itself suspend the AER’s decision; but the AER’s decision is not itself enough for Dover/Brion to proceed since the AER’s decision must be confirmed by order of the Lieutenant Governor in Council (LGiC). While the LGiC could, as a matter of law, proceed to confirm the AER’s decision (assuming it is satisfied that the Crown has fully discharged its duty to consult and accommodate, see here Robert Janes’ comment on “What’s the big deal”) it may wish to delay doing so. In either event the result is uncertainty for Dover/Brion until the matter can be heard and decided by the Court of Appeal.
(7) The AER’s policy in deciding what to publish on the web – Bankes as a broken record.
Anybody who has followed my posts on ABlawg relating to both the ERCB and the AER will know that I have a bit of a thing about the ERCB/AER and transparency (“bit of thing” might be understating it, a prominent member of the Calgary bar recently accused me of missionary zeal in relation to some of my posts, not I think in relation to this issue, but if the cap fits …). In particular, I have questioned why the Board/Regulator does not post its letter decisions, especially where such decisions are on significant points of statutory interpretation or other points of law: see in particular “The letter decisions of the Energy Resources Conservation Board” here. It seems especially bizarre not to do so when one considers what both the Board and the Regulator do publish. Visitors to the ERCB’s website over the last few years will have noticed that the Board regularly took the trouble to issue written reasons in which it said little more than this: “The application has been granted. A party with intervenor status has now withdrawn its objection. Accordingly the matter has been processed as a routine application.” Sometimes the Board even published decisions in which it told us that the applicant had withdrawn its application. While such matters might, just might, merit a press release I have no idea why they are included in a catalogue of Board decisions. It is dismaying to me that the AER is continuing this practice (see for example, 2013 ABAER 012, 2013 ABAER 010 (withdrawal of a very significant matter from the AER’s hearing list) and 2013 ABAER 008).
But as for the matter at hand (i.e. what the Board/Regulator does not publish rather than what it does) I believe that the Board/Regulator itself has now provided its own convincing reasons for publishing its letter decisions. I refer to the fact that the ERCB in its May 23, 2013 decision not only referred to its earlier decisions in the Osum and Jackpine matters but went on to say (at 10) that “The Panel acknowledges that it is not bound to follow the reasoning in Osum or Jackpine. However, it does note the desirability of having consistency and certainty in decisions made by it in its proceedings. Like courts, tribunals such as the ERCB should make consistent decisions on the same legal issue. Predictability in the regulatory process is a good thing.” To which I say bring it on. But how do I know what you’ve already decided unless you tell me (the Panel decision in Jackpine would be in the CEAA public record because it was a joint panel decision and it was also included as Appendix 4 of the panel’s final decision, but the only place I know where Osum is readily and publicly available is on the ABlawg website). I acknowledge that Board counsel (at least until they read this post) have always been willing to accommodate requests for particular letter decisions – but my point here is that I can only ask for decisions the existence of which I am aware. And if the Board and the AER really do subscribe to values like consistency, transparency and efficiency then that’s not good enough.
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Case commented on: Chikonyora v Chikonyora, 2013 ABCA 320
Had the decision of the Court of Queen’s Bench been allowed to stand in this case, the division of matrimonial property could have become much more difficult for many divorcing spouses in Alberta. They might have had to sue in every jurisdiction in which they held property, whether that was in a province other than Alberta or a country other than Canada. The lower court decision had held that spouses did not have to disclose information about their assets held outside Alberta because the Alberta superior courts had no jurisdiction over those assets. Fortunately an appeal was taken to the Alberta Court of Appeal, which applied the relevant provisions of the Matrimonial Property Act, RSA 2000 c M-8 (MPA), and required disclosure of assets held outside Alberta. In addition to the “potential crisis averted” aspect of this case, it is also an example of how frustrating access to justice can be for self-represented litigants.
The ex-husband and ex-wife in this case were married in Zimbabwe in 1994. Sometime after their marriage, they moved to Canada and both parties now live in Alberta. After separating early in 2009, the ex-wife filed for a divorce in the Court of Queen’s Bench and a divorce was granted in October 2012.
The ex-husband had filed a Counterclaim seeking division of the couple’s matrimonial property and a Notice to Disclose/Application in response to the ex-wife’s divorce action. The ex-wife did not comply with that Notice and the property issues have not been resolved. The parties disagreed about the disclosure of information about matrimonial property in Zimbabwe. The ex-husband claims that there is a house in Zimbabwe owned by the parties that his ex-wife is collecting rent on.
Both parties were self-represented when they appeared before Justice Dallas K. Millar on the ex-husband’s Notice to Disclose/Application for information about the property in Zimbabwe. The ex-wife took the position that the Court of Queen’s Bench of Alberta did not have jurisdiction to deal with the property in Zimbabwe and that she did not therefore have to provide any information about it.
Justice Millar ordered the ex-wife to comply with the Notice to Disclose within 30 days. If she did not, the ex-husband could bring an application for an order for contempt of court. Justice
Millar’s order was for disclosure only and he did not deal with the jurisdictional issue regarding the property in Zimbabwe. He told the ex-wife that if she wanted to make an argument that certain assets should not be dealt with by the courts in Alberta, she could make that argument after disclosure.
The ex-wife filed a Reply to the ex-husband’s Notice to Disclose in January 2013. Her Reply did not include any information about property in Zimbabwe. As a result of what he saw as incomplete disclosure, the ex-husband brought the contempt application which was heard by Justice Rodney A. Jerke in May 2013. Both parties were again self-represented. The ex-wife again argued that any information about Zimbabwe properties was irrelevant because the courts in Alberta had no jurisdiction to dispose of foreign property.
According to the Court of Appeal, Justice Jerke dismissed the ex-husband’s contempt application on the basis that no court in Alberta would have jurisdiction over the Zimbabwe properties. He also refused to make an order for more complete disclosure by the ex-wife because he was not satisfied “that there is any issue between the parties in Alberta upon which any disclosure order beyond the disclosure of documents mentioned in the divorce judgment would apply” (as cited at para 10 of the ABCA decision).
As a result of Justice Jerke’s order, the ex-husband retained a lawyer and appealed. He was represented by counsel before the Court of Appeal. Although the ex-wife continued to be self-represented, the Court of Appeal allowed a friend of hers to make certain submissions on her behalf as her agent.
There were two grounds of appeal and the ex-husband succeeded — easily — on both.
The first ground was whether Justice Jerke had erred in law when he held that the Court of Queen’s Bench of Alberta did not have jurisdiction to compel the ex-wife to provide disclosure about the properties in Zimbabwe. The second ground was whether Justice Jerke erred in law when he failed to consider the prior ruling of Justice Millar about the need for disclosure. As both grounds of appeal were about whether or not a superior court has jurisdiction to decide a particular matter, both were questions of law. The standard of review was therefore correctness.
On the first ground — the one with the most far-reaching consequences for divorcing couples — the Court of Appeal held that the MPA gave Justice Millar jurisdiction to issue the order compelling disclosure of information about the Zimbabwe properties. They pointed out that section 31(1) of the MPA provides so explicitly:
31(1) If an application has been commenced under Part 1, each spouse shall file with the Court and serve on the other spouse a statement, verified by oath, disclosing particulars of all the property of that spouse, whether it is situated in Alberta or elsewhere.
The Court of Appeal also noted that subsections 7(3) and 8(d) of the MPA direct a court to take into consideration “the income, earning capacity, liabilities, obligations, property and other financial resources” of each spouse both at the time of marriage and time of trial when making a property division. They held (at para 17) that if one spouse earns rental income from a property in a foreign jurisdiction, that income should be taken into consideration when the court is determining how to divide the property.
In addition, section 9(1) of the MPA is also explicit about property held outside of Canada:
9(1) If part of the property of the spouses is situated in Alberta and part elsewhere, the Court may distribute the property situated in Alberta in such a way as to give effect to the distribution under section 7 of all the property wherever it is situated.
It authorizes Alberta courts to distribute the property that is located in Alberta in a way that equalizes the foreign-held assets of spouses. The Court of Appeal concluded (at para 18) that in order for a court to do so the court would require disclosure of information about property located outside the jurisdiction.
As the Court of Appeal noted (at paras 15 and 19), the question about the jurisdiction of the Court of Queen’s Bench of Alberta over assets held outside of Alberta was not before Justice Millar. He dealt with disclosure of information about those assets only. Thus the Court of Appeal concluded (at para 19) that “Justice Millar had jurisdiction to grant that order and Justice Jerke erred in law in holding otherwise.”
On the second ground of appeal, the Court of Appeal held (at para 21) in no uncertain terms that “Justice Jerke had no jurisdiction whatsoever to disregard the prior order of Justice Millar in this matter.” He had no authority to, in effect, vacate Justice Millar’s order.
The Court of Appeal thus allowed the ex-husband’s appeal and ordered the ex-wife to comply with the order of Justice Millar within 30 days. They made it clear that complying with Justice Millar’s order included listing any and all property located in Zimbabwe in which the ex-wife had or has an interest. They went on to order that, if the ex-wife failed to do so, the ex-husband could bring an application for an order holding the ex-wife in contempt of court before any justice of the Court of Queen’s Bench of Alberta other than Justice Jerke.
The Court of Appeal did not address the issue of the Court of Queen’s Bench of Alberta’s jurisdiction over property outside Alberta because it was not properly before them. It must be noted, however, that section 9 of the MPA does not purport to grant the Court of Queen’s Bench of Alberta’s jurisdiction over property outside Alberta. It gets around any need to do so by giving the court the discretion to distribute property that is situated in Alberta in such a way as to, in effect, distribute all the couple’s property regardless of its location. Presumably, in the jurisdictions outside Alberta, title to the property would determine which spouse retained it, in the absence of an action for distribution brought in that jurisdiction. Such a provision facilitates access to justice by allowing one court in one jurisdiction to effect a distribution that takes into account all of a couple’s assets.
In this particular case, access to justice was not facilitated. At the end of the day, after three hearings before the superior courts and after hiring a lawyer, the ex-husband was back where he started, wanting information about his ex-wife’s income from properties in Zimbabwe.
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PDF Version: The Vriend Case 15 Years Later
This year marks the 15th anniversary of the Supreme Court of Canada decision in Vriend v Alberta,  1 SCR 493 [Vriend] in which the Court unanimously held that the lack of protection for discrimination based on sexual orientation in Alberta’s human rights legislation was an unconstitutional violation of Charter equality rights (for a previous post on the Vriend decision by Linda McKay Panos, see here). To celebrate the anniversary Delwin Vriend visited Alberta this week, and his visit included participation in a public forum organized by the Sheldon Chumir Foundation for Ethics in Leadership, as well as a visit to my human rights class at the law school.
The public forum began with remarks from a number of panellists on the legal protection of discrimination based on sexual orientation at the international, national and provincial levels. Blair Mason, Chief Commissioner of the Alberta Human Rights Commission, noted that Mr. Vriend’s human rights claim had been blocked by the Alberta government back in 1991, after he was fired from his position as a lab instructor at King’s College in Edmonton for being gay. The government instructed the Commission not to accept complaints based on sexual orientation. Chief Commissioner Mason described how Mr. Vriend had pursued his complaint in spite of the barriers and opposition he faced, including intractability and prejudice on the part of the government. The Chief indicated that such interference with the independence of the Commission would not be tolerated today.
At both the public forum and in my human rights class, Mr. Vriend talked about the saga of the case from his perspective. Although he was not involved in framing the legal strategy, he was highly involved in the media response, which had its challenges. There were also access to justice challenges. Mr. Vriend initially had paid counsel representing him, but was eventually represented by pro bono lawyers. In spite of this, disbursements in the case totalled approximately $75,000, offset by fundraising efforts and ultimately a donation on the part of the family of one of his lawyers. As a class, we talked about the fact that human rights commissions are intended to be accessible processes that complainants can navigate without a lawyer, but that option was closed to Mr. Vriend. The inability of Alberta’s human rights commission to file complaints was raised as a continuing access to justice issue in Alberta as well (see the Alberta Human Rights Act, RSA 2000, c A-25.5, s 20). In spite of these challenges, Mr. Vriend was clear that he would make the same decision today to bring a constitutional challenge.
Another issue that was discussed at the public forum and at the law school was the Alberta government’s continued refusal to explicitly amend its human rights legislation to include sexual orientation until 2009. A majority of the Supreme Court in Vriend had granted the remedy of reading sexual orientation in to our human rights legislation, but in spite of this, it took the government 11 years to change its Act. Although complaints based on sexual orientation were accepted before the formal amendment was made, Linda McKay Panos described on the panel how this state of affairs created uncertainty, especially for newcomers.
And the eventual addition of sexual orientation came with a price. In 2009, the government added s 11.1 to the newly named Alberta Human Rights Act, which requires school boards to give notice to parents when teaching materials and lessons will deal with issues related to religion, human sexuality or sexual orientation. Parents may then request an opt out for their children. At the public forum, Dan Shapiro from the Chumir Foundation described how this section is having a chilling effect on discussions of sexual orientation in classrooms in Alberta (for the Foundation’s position paper on s 11.1, see here).
The lack of explicit protection of gender identity in the Alberta Human Rights Act was also raised in both forums. At the same time, the Human Rights Commission has indicated that it will accept complaints on this basis under the ground of gender, and there are some cases raising gender identity discrimination that are currently working their way through the human rights system in this province (see e.g. Greater St. Albert Roman Catholic Separate School, District No. 734 v Buterman, 2013 ABQB 485).
The federal government was also taken to task for failing to participate in a recent high level meeting of foreign ministers on discrimination against LGBT persons at the United Nations in September.
At both the forum and law school, there was discussion on the progress made in the area of LGBT rights, but also of the work that remains to be done. There is still a lack of formal protections against discrimination on the basis of sexual orientation and gender identity at the international level. Violence, oppression, discrimination and hatred continue to be perpetrated against LGBT persons nationally and internationally. Delwin Vriend’s visit to Alberta provided an excellent opportunity to reflect on these matters, and many people expressed their thanks to him for that, as well as for his courage and tenacity in pursuing his rights in Alberta.
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This appeal is ultimately about contractual interpretation. It is about the types of obligations, over and above the express terms, that can be brought into the contract and the difficulties created as a result of the assertion that the contract goes beyond its express terms. Importantly, it considers the duty of good faith in the context of commercial relations and, as stated by the Supreme Court of Canada, which has granted leave to appeal, whether such duty could be excluded by an entire agreement clause.
Canadian American Financial Corp (Canada) Limited (“Canadian American”), a subsidiary of Allianz Life Insurance Company of North America, registers education savings plans. This registration is done through retailers, two of whom are Mr. Bhasin and Mr. Hrynew, the parties in this case.
The operation is governed by a contract between Canadian American and each dealer. Years into the contractual relationship, Canadian American proposed amendments to the contracts. The dealers were given an opportunity to consider the proposed wording; they obtained a legal opinion about the new wording, and when the dealers’ counsel suggested changes in wording, Canadian American accepted much of it. Some dealers signed the new contract; others chose to remain under the old one. Mr. Bhasin received a copy of the legal opinion, which included a negotiation of clause 3.3 (which is in issue in these proceedings), and he signed the new contract.
When the Alberta Securities Commission, the regulator of the registered education plan industry, became concerned about what it perceived to be inadequate compliance to the regulations by the dealers, it directed Canadian American to appoint one of its members to monitor compliance, which included auditing the dealers. Canadian American appointed Mr. Hrynew to monitor compliance, and Mr. Bhasin was one of the dealers being audited. While Mr. Bhasin had no problem with being audited, he did object to being audited by Mr. Hrynew because Mr. Hrynew was a competitor and Mr. Bhasin did not wish to disclose to him his confidential information. To that end, Mr. Bhasin did not permit the audit by Mr. Hrynew.
While Canadian American did not disagree in principle with Mr. Bhasin’s concerns, it nonetheless subsequently gave Mr. Bhasin notice that it intended to let the contract lapse when it came up for renewal. It did not rely on the clauses in the contract allowing for termination on short notice, which it was permitted to do under clause 3.3; rather, it relied on the notice requirements in clause 3.3. Clause 3.3 allowed Canadian American to notify Mr. Bhasin that it would let the contract lapse, provided it gave him notice of at least 6 months:
3.3 The term of this Agreement shall be for a period of three years from the date hereof (the “Initial Term”) and thereafter shall be automatically renewed for successive three year periods (a “Renewal Term”), subject to earlier termination as provided for in section 8 hereof, unless either CAFC or the Enrollment Director notifies the other in writing at least six months prior to expiry of the Initial Term or any Renewal Term that the notifying party desires expiry of the Agreement, in which event the Agreement shall expire at the end of such Initial Term or Renewal Term, as applicable.
Mr. Bhasin sued Canadian American. The trial lasted 24 days and the court heard a lot of parol evidence. At trial, Mr. Bhasin was awarded $381,000 in damages, based on breach of an implied term “that any decision whether or not to renew the contract had to be carried out in ‘good faith’” (at para 15). The Court of Appeal allowed the appeal and dismissed the lawsuit.
The Court of Appeal dealt with a few issues, but I will only be discussing parol evidence, implied contractual terms and the duty of good faith. Most of these issues can be resolved with a few basic principles of contract law. Essentially, the agreement between Canadian American and Mr. Bhasin, on its face and according to the strict wording, allows Canadian American to terminate the agreement under these or any circumstances, providing timely notice was given. For Mr. Bhasin to assert a breach, he must be successful in arguing either for a contractual undertaking in the form of parol evidence, which is not part of the main written contract, or for an implied term importing a duty of good faith into the main contract.
Parol evidence is written or oral evidence not contained in the contract, used to vary the terms of the contract. The parol evidence rule maintains that parol evidence cannot be admitted to assist in interpreting the contract if the contract itself forms the full agreement, or if the contract is unambiguous or clear. There are some exceptions to the parol evidence rule, which will be visited below.
The trial judge let evidence on circumstances surrounding the negotiation of the contract be admitted, in addition to evidence on “what the parties felt and wished and expected” (at para 28) as well as evidence on the oral promises that were made. The trial court found, based on the evidence, that there were pre-conditions to the non-renewal under clause 3.3 (at para 25).
In this case, Mr. Bhasin did not argue that the contract was ambiguous or unclear (at para. 22), nor did the Court of Appeal make those findings (at para 30). Rather, he argued that the contract did not cover the circumstances that transpired, thereby creating the need for the admission of parol evidence (at para 22).
In this case, there is an entire contract clause in the contract:
11.2 This Agreement expresses the entire and final agreement between the parties hereto and supersedes all previous agreements between the parties. There are no representations, warranties, terms, conditions or collateral agreements, express, implied or statutory, other than expressly set out in this Agreement.
The inclusion of an entire-agreement clause bars the consideration of parol evidence, especially if the agreement is unambiguous. To that end, as the appellate court found, the trial court should not have allowed the inclusion of parol evidence. To the extent that, as Mr. Bhasin argued, the contract did not cover the circumstances in issue, it is typically the case that a contract cannot anticipate and account for every possible contingency. Rather, one of the things it can do is provide the ability by each party to terminate the contract upon certain events, or act reasonably.
In this case, clause 3.3 prescribes for the automatic renewal of the agreement every three years, unless the party is notified in writing at least six months prior to the expiry of the term of the agreement. According to the provisions set out in the judgment, and the reasons provided, it appears that there are no preconditions that need to be met for termination, so long as timely notice is provided. There is allowance for earlier termination under a different clause, where there is misconduct. When Canadian American notified Mr. Bhasin that it would not be renewing the contract when it next came up for renewal, it did so under clause 3.3, not the misconduct clauses. Pursuant to the agreement, Canadian American was allowed to terminate the agreement in this way.
Given the above, the trial court was not permitted to rely on parol evidence to interpret this agreement, unless one of the exceptions to the parol evidence rule applied. One exception to the parol evidence rule is evidence on the validity of the agreement, such as unconscionability. If there is evidence to show there was unconscionability at the time the parties entered into the contract, the evidence could be admitted to show the invalidity of the contract. The trial judgment mentioned inequality of bargaining power or sophistication but the appellate court found the factual conclusions to be unsustainable (at para 34). Inequality of bargaining power is present in most contracts, and, alone is not enough to support a claim of unconscionability. If that inequality is coupled with independent legal advice, which Mr. Bhasin received, a claim of unconscionability would be difficult to advance.
Therefore, if Mr. Bhasin wished to advance a claim based on duties or understandings not expressly included in the contract, getting around the parol evidence rule was not the most fruitful path. Given the structure of the agreement, and the circumstances in which the agreement was entered into, the parol evidence rule would be applicable in these circumstances, which bars the admission of parol evidence and leaves us only with the obligations contained in the main contract.
Implied Terms/Duty of Good Faith
In Skye Properties Ltd v Wu, 2010 ONCA 499 at para 79, the court maintained that it was its goal, when interpreting a contract, to give effect to the intention of the parties at the time the contract was made. To that end, the court may imply terms into the contract, implied terms being those not expressed in words. However, imposing implied terms is a judicial tool that can cause much uncertainty and instability, and as a result, the test for implying a term is not the standard test typically applied in contract law, being one of reasonableness, but rather, the test is a more onerous one of necessity. As Justice Iacobucci stated in M.J.B. Enterprises Ltd. v Defence Construction (1951) Ltd.,  1 SCR 619 (“M.J.B. Enterprises Ltd.”):
 A court, when dealing with terms implied in fact, must be careful not to slide into determining the intentions of reasonable parties. This is why the implication of the term must have a certain degree of obviousness to it, and why, if there is evidence of a contrary intention, on the part of either party, an implied term may not be found on this basis.
Given the consequences of implying contractual terms, in principle, the tool must therefore be used carefully and restrictively, but, that all said, it is not infrequent for judges to imply terms (S.M. Waddams, The Law of Contracts, Fifth Edition (Toronto: Canada Law Book, 2005), at 493-4)). As a result, rules have been developed, to allow for the imposition of implied terms only in specific circumstances, namely, as specified in M.J.B. Enterprises Ltd. (at 634-35), in three situations: (1) if the parties presumptively intend for the term to be there; (2) if the custom or usage of the trade requires it; or (3) to give business efficacy to the agreement (otherwise known as the “officious bystander” test).
Additionally, the argument has been made, and there is case law on the point, regardless of the presumed intention, that terms can be implied into an agreement “when a court believes that, whether or not the parties thought about the point, an obligations has to be imposed on one side” (Angela Swan & Jakub Adamski, Canadian Contract Law, Third Edition (LexisNexis Canada Inc., 2012) at §8.102.7. Swan and Adamski go on to cite Liverpool City Council v Irwin,  UKHL 1,  AC 239,  2 All ER 39 (HL), where the plaintiff landlord, who had not maintained the building appropriately, sued the tenants for rent arrears which the tenants had withheld in an effort to get the landlord to fix the facilities. The House of Lords, in upholding the majority judgment in the Court of Appeal, found that imposing an obligation on the landlord was necessary and reasonable. Lord Wilberforce said, with regard to the facilities that had not been maintained,
All these are not just facilities, or conveniences provided at discretion: they are essentials of the tenancy without which life in the dwellings, as a tenant, is not possible. To leave the landlord free of contractual obligations as regards these matters, and subject only to administrative or political pressure, is, in my opinion, inconsistent totally with the nature of this relationship. The subject matter of the lease (high rise blocks) and the relationship created by the tenancy demand, of their nature, some contractual obligation on the landlord.
In Canadian Pacific Hotels Ltd. v Bank of Montreal,  1 SCR 711, Le Dain J. commented on Liverpool City Council v Irwin by noting that the House of Lords “held that [the proposed implied term] could, and should, be implied as a legal incident of that particular kind of contractual relationship, regardless of presumed intention” (at para 44). Therefore, even if the initial test for implied terms is not met, it may be possible to argue that it is necessary and reasonable to impose an implied obligation in this case. If so, what would the nature of the implied obligation be? Mr. Bhasin argued that the implied obligation ought to be one of carrying out the contract in good faith. Given that, can a duty of good faith be implied in a contract?
There is no standalone duty of good faith in Canadian law. It has been found in certain types of contracts, but not as a broad, overriding principle in all contracts. The approach by Canadian courts to the duty of good faith was aptly summarized in Transamerica Life Canada v ING Canada (2004), 68 OR (3d) 457 (CA):
 Canadian courts have not recognized a stand-alone duty of good faith that is independent from the terms expressed in a contract or from the objectives that emerge from those provisions. The implication of a duty of good faith has not gone so far as to create new, unbargained-for, rights and obligations. Nor has it been used to alter the express terms of the contract reached by the parties. Rather, courts have implied a duty of good faith with a view to securing the performance and enforcement of the contract made by the parties, or as it is sometimes put, to ensure that parties do not act in a way that eviscerates or defeats the objectives of the agreement that they have entered into…
In addition, any implied duty of good faith cannot be used to alter the words of the contract (Agribands Purina Canada Inc. v Kasamekas, 2011 ONCA 460 at para 51).
Presuming the contract in issue is an employment contract, and the Alberta Court of Appeal neither agreed nor disagreed on this point (at para 27, no 1), there are some elements of it that could have a duty of good faith imposed on them. Employment contracts are different than other commercial contracts in that there is an inherent inequality of bargaining power between the employer and employee. As Wallace v United Grain Growers Ltd.  3 SCR 701, 152 D.L.R. (4th) 1 noted, “This results in employee vulnerability — a vulnerability that is especially acute at the time of dismissal. The nature of the relationship thereby necessitates some measure of protection for the vulnerable party” (at para 138). However, this does not impose a duty of good faith on the carrying out of every aspect of the employment contract. It imposes it when an employer is dismissing an employee. Importantly, however, this good faith obligation “does not extend to prohibiting employers from dismissing employees without ‘good faith’ reasons… Both employer and employee remain free to terminate the contract of employment without cause. This is not inconsistent with the duty of good faith” (Wallace at para 135).
The difficulty in this case is determining the exact cause of action. Mr. Bhasin does not take issue with the contract itself (at para 22), nor with the way in which he was dismissed. He also does not base his claim on Canadian American’s reasons for not renewing his contract (at para 16). The Court of Appeal alludes to the same issue, where it confirms that the issues referred to in the trial reasons were never pleaded. The appellate judgment also does not lay out the substance of the parties’ arguments. It appears, and I will base my conclusion on this point, that Mr. Bhasin claims he was wrongfully terminated. The trial reasons say that the notice given to Mr. Bhasin by Canadian American was ineffective, and that the contract would automatically renew every three years “if the motive for giving the notice does not meet certain standards” (at para 33).
Could the commentary in Liverpool City Council v Irwin and Canadian Pacific Hotels be used to support the imposition of a duty of good faith on Canadian American? The trial court said a duty of good faith could be imposed on Canadian American, to have “a very good reason” not to renew the employment contract (at para 15, relying on the reasons at trial). But there is no reasonable likelihood of having a duty of that nature imposed, given the principles that have arisen through case law in the area, and given the contract in issue. As noted above, employers and employees can terminate the contract of employment without cause. Reasonable notice of the termination needs to be given, which is not an issue in this case, but beyond that, the contract can be terminated. However, we may still be able to apply Liverpool City Council v Irwin here, to argue that the subject matter of the contract itself could impose a duty of good faith. Consider also that in Jacobs U.K. Limited v Skidmore Owings & Merrill LLP,  EWHC 3293 (TCC), the court found general obligations of good faith could be imposed on both sides to make the contract work, which is about “mutual commercial conduct” (at para 20).
In my opinion, the claim (which is never directly stated in the appellate decision) is not about having or not having a reason not to renew the employment contract. Rather, the claim relates to the main factor that contributed to Canadian American’s decision to terminate Mr. Bhasin, which was one created by Canadian American itself. When Canadian American appointed Mr. Bhasin’s competitor to audit Mr. Bhasin, it created a situation which put Mr. Bhasin in a clear conflict – either he had to submit to turning over his confidential information to his competitor or refuse to be audited. When he voiced his concerns, Canadian American “did not disagree in principle” but it then proceeded to give him timely notice that when his contract came up for renewal, it would let it lapse. This leads to the argument that there could be a duty of good faith. Could a duty of good faith be imposed on an employer to ensure the employer does not create circumstances in which an employee faces the choice of performing his employment duties to his detriment, or not at all?
In Culina v Giuliani,  SCR 343, the Court held that a party cannot make performance of the contract impossible, which is arguably a situation Canadian American created here. And in Transamerica Life Canada, Associate Chief Justice O’Connor said “[C]ourts have implied a duty of good faith with a view to security the performance and enforcement of the contract made by the parties, or as it is sometimes put, to ensure that parties do not act in a way that eviscerates or defeats the objectives of the agreement that they have entered into” (at para 51). Taking these principles together, as well as the fact that the doctrine of the duty of good faith is continuing to develop, and applying it to the situation created by Canadian American, it is arguable that a good faith duty could be imposed on an employer to refrain from putting its employee in a position where the employee must act to his detriment in carrying out his employment duties or face termination. By doing so, Canadian American simply undermined the contract and defeated the ability for the parties to act according to their contractual obligations.
These principles taken together can also support the argument for a good faith duty in these circumstances even if this is not an employment contract. In a purely commercial contract, as said in Transamerica Life Canada, parties cannot act in a way to undermine the goals of the agreement they entered into, which is arguably exactly what turning over confidential information to a competitor would do, even if a confidentiality agreement is signed. These principles do not need the higher measure of protection necessary in an employment contract in order to be applicable.
The Court of Appeal did not find a duty of good faith here, but depending on the issues pleaded (which are not all that clear from the appellate decision), it might have been possible to find one, especially if an employer/employee relationship did in fact exist between Canadian American and Mr. Bhasin. It would simply be an obligation of good faith imposed on an employer to not require its employee to act to its detriment, or failing so, face termination. And even without an employment relationship, there is nonetheless arguably a good faith duty here, to simply make it possible to carry out the contract without undermining its goals.
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Responses commented on: (1) “Still Alberta’s prerogative to say who speaks at oilsands reviews: Alison Redford” as reported by Canadian Press, Calgary Herald, October 4, 2013, and (2) “Environment minister defends officials in oil sands case”, as reported by James Wood, Calgary Herald, October 9, 2013
My colleague Shaun Fluker posted a comment on the judgment in Pembina Institute v Alberta (Environment and Sustainable Resources Development), 2013 ABQB 567 last week here. In that case Justice Marceau ruled that a Director within the Department of Environment and Sustainable Resources Development acted unlawfully when he decided that the Pembina Institute and the Fort McMurray Environmental Association were not entitled to file a statement of concern with respect to the MacKay River oil sands project. Justice Marceau ruled that the Director in making his decision took into account irrelevant and improper considerations – namely that the applicants were no longer as cooperative as they had been in their dealings with government in relation to oil sands developments and the environmental impacts of those developments.
Since then, both the Premier (a lawyer) and the Minister responsible for the Department of Environment and Sustainable Resources Development have commented on that judgment. The purpose of this post is to examine those responses through the lens of the doctrine of the separation of powers. My conclusion is that the comments of both the Premier and the Minister reveal fundamental misunderstandings (or the deliberate flouting) of the concept of the separation of powers and the related concept of the rule of law.
What did the Premier say?
The Premier apparently said that “It was the position of the government of Alberta that they [Pembina and the Fort McMurray Environmental Association ] weren’t directly impacted by the project and it was certainly within our prerogative as a government to make that determination and it continues to be in our prerogative as a government.” (Emphasis added)
What did Minister McQueen say?
Minister McQueen apparently said that “government officials did not act improperly”.
What does the doctrine of the separation powers say?
The doctrine of the separation of powers in a Westminster style democracy deals with the relationship between, and the relative responsibilities of, the three branches of government: the Executive, the Judiciary and the Legislative branches. It is the responsibility of the Legislative branch to make new laws (statutes). It is the responsibility of the Judicial branch to interpret those laws and to determine whether government action is consistent with those laws. And it is the responsibility of the Executive branch to administer the existing laws, to make subordinate legislation (e.g. regulations, but only as authorized by laws passed by the legislature) and to propose new laws for consideration by the legislature. The Executive does not have the power to make new laws beyond the subordinate laws (regulations) referred to above and in a very, very narrow category of exceptional cases as authorized by what is known as the Royal Prerogative. I will not get into the question of what if anything is left in the residual category of the “Royal Prerogative” (the English civil wars of the 17th Century were fought about that and Charles I lost his head over claims that he could make new laws without Parliament); suffice it to say that it is trite law that there is no prerogative power to make a new rule where the matter is already governed by a statute. Since the matter of standing to file a statement of concern is governed by statute (the Water Act, RSA 2000, c. W-3 and Environmental Protection and Enhancement Act, RSA 2000, c. E-12) there is no role for the prerogative.
Application to the Premier’s Comments
The Premier could hardly have chosen a more ill-advised word than the word “prerogative”. The government (and here we mean the Executive) has no prerogative power to determine who is directly impacted and who gets to be heard. The Executive’s only authority is to apply the current state of the law as laid out in the relevant statutes in this case and as interpreted by the courts. It does not have the prerogative to deny standing because the party that wished to express its concerns is not cooperative. If the Executive does not like that state of the law it is free to propose a change in the law for consideration by the legislature. But until such a change is effected the Executive must administer and apply the current law. That is what the rule of law is all about. The “government” cannot make new laws – only the legislature can do that. As Lord Denning famously said (quoting from Thomas Fuller) “Be you ever so high, the law is above you”: Gouriet v Union of Postal Workers,  QB 729 and see also Roncarelli v Duplessis,  SCR 121 (also referred to by Justice Marceau in Pembina).
Application to Minister McQueen’s comments
It is the responsibility of the judicial branch to interpret the laws as they stand. Once the judiciary has spoken and has ruled that the behaviour of the Executive branch does not comport with the law it is no longer open to a Minister of the Crown to take a different view and say that “government officials did not act improperly.” The Executive can appeal the judicial decision but until the Executive does so and the decision is overturned, Justice Marceau’s decision is binding on the Executive and it is the duty of any Minister of the Crown to ensure that the practice within her Department is changed so that it does comport with the law. There is an additional complication in this case since in at least some situations decisions with respect to statements of concern will now be made by the Alberta Energy Regulator, but in non-energy cases the Department will still be making these decisions. In any event, it is simply not open to Minister McQueen to say that government officials did not act improperly when the Justice Marceau has ruled that the Director did act improperly. In making that claim Minister McQueen is ignoring both the concept of the separation of powers and the rule of law. She may be making a different claim such as the “the officials were doing what I told them to do – suppress criticism of our policies” but that is a different story.
For a similar “take” on the government’s response expressed in even more trenchant terms see the excellent and edgy blog maintained by alumna Susan Wright here.
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PDF Version: Prosecutorial Discretion and Solicitor-Client Costs
Case commented on: R v Leonard, 2013 ABQB 531
In R v Leonard, 2013 ABQB 531, Justice Thomas awarded solicitor-client costs against the Crown on the basis that the Crown continued with the prosecution of Leonard after the point where it “should have realized it had no realistic basis to continue” (at para 97). He did so after rejecting an application by the Crown that he should recuse himself. The Crown had argued for recusal because Justice Thomas had tried the underlying criminal case and, in the course of doing so, had reserved jurisdiction to award costs, had suggested that the Crown’s conduct warranted review by the Minister of Justice and Solicitor General of Alberta, and had emphasized the weakness of the Crown’s case.
Justice Thomas’s decision not to recuse himself seems justified. He properly noted the “presumption of judicial integrity and independence” that “protects against allegations of bias, influence or conspiracy” (at para 15). He also noted that (1) a decision (or decisions) made in one party’s favour do not warrant recusal simply because other matters remain to be decided (at para 16); (2) bias does not arise from a judge initially favouring “a particular approach, outcome, or result” (at para 17); and (3) a judge is not biased simply because he or she does “not mince words and may be direct and emphatic in disapproval of conduct” (at para 19).
On those facts, that Justice Thomas had indicated that costs might be available did not create bias (at para 20). Nor did his reference to review by the Alberta Ministry of Justice and the Solicitor General, given that that “is a distinct process separate from my role in ensuring that justice is provided by this Court” (at para 21). Finally, that Justice Thomas was critical of the Crown’s conduct represents a proper exercise of his jurisdiction to comment on the conduct of counsel appearing before him in a “forthright way” (at para 26):
 I believe an aspect of my role, as a judge, is that I clearly identify instances where I observe a Crown Prosecutor has acted in a manner that is inconsistent with that lawyer’s duty as an officer of the court. That commentary should be in a manner that leaves no potential for misapprehension, not just for the education of the criminal bar and as a common law precedent, but also maintain public confidence in the courts….
 I do not believe a reasonable apprehension of bias would therefore arise when I explicitly indicated the shortcomings I had detected and which, unfortunately, I believe would have been obvious to that objective and informed member of the public, had that person observed the same trial and testimony as myself.
As noted, this conclusion on bias seems reasonable. Justice Thomas’s second point, that a finding of bias should not arise simply because a party has had decisions go against it in the course of a trial or proceedings, seems particularly persuasive. Justice Thomas did not make comments against the Crown that were personal, dismissive or unjudicial in tone. He simply found that the Crown had failed to discharge its onus of proof, and that its case was in substance so weak as to cast doubt on the validity of the decision to have brought it. That result is adverse to the Crown, but it does not suggest that Justice Thomas has lost the ability to be fair and impartial in his decision-making.
Awarding solicitor-client costs against a Crown who has improperly brought a prosecution also seems reasonable. It addresses the wrongful injury suffered by a person subject to a meritless prosecution, and creates a form of accountability for the Crown’s office when it proceeds in such cases.
Having said that, however, the actual decision on the facts reached by Justice Thomas seems very difficult to justify. Further, his legal analysis is problematic given the usual deference granted by courts to the Crown’s exercise of prosecutorial discretion, and to their reluctance to impose consequences on Crown counsel who do so improperly. In Miazga v Kvello Estate, 2009 SCC 51[Miazga], the Supreme Court held that a Crown could only be sued for wrongful prosecution where the prosecutor “deliberately intended to subvert or abuse the office of the Attorney General or the process of Criminal Justice” (Miazga, at para 89). Demonstrating “incompetence, inexperience, poor judgment, lack of professionalism, laziness, recklessness, honest mistake, negligence, or even gross negligence” would be insufficient to justify liability (Miazga, at para 81).
Justice Thomas distinguished the wrongful prosecution cases on the basis that they are “distinct in their origin, operation, and objective” (at para 46). In particular, the purpose of a cost award is part of a court’s “jurisdiction to control trial process” (at para 46). He notes cases that have awarded costs against the Crown, including for wrongful prosecution (at para 57). Costs have been awarded where the prosecution has engaged in “oppressive or improper conduct” (at para 57, citing R v Garcia,  OTC 472 (Ont Sup Ct J)). In the case of prosecutorial discretion, costs have been awarded “… where the prosecution has been frivolous, or where the prosecution has been conducted for an oblique motive” (at para 57, citing R v King (1986), 26 CCC (3d) 349).
With respect, however, the cases on awarding costs for improper exercises of prosecutorial discretion that Justice Thomas noted predate the Supreme Court’s decision in Miazga. They do not account for the statement by the Supreme Court in that decision that courts ought to be very reluctant to interfere in exercises of prosecutorial discretion so as to ensure that prosecutors “will not be hindered in the proper execution of their important public duties” (Miazga, at para 81). It may be, as I have suggested, that Miazga is unduly protective of the Crown, and that the Supreme Court ought to have been more willing to subject incompetent, negligent, reckless or grossly negligent exercises of prosecutorial discretion to civil liability (On Miazga see in general, Alice Woolley, “Prosecutorial Accountability”, ABlawg, November 12, 2009: here). That the Court did not do so, however, suggests that any attempt by a court to discipline Crown exercises of prosecutorial discretion, whether in the form of civil liability or a costs award, must be done cautiously and only in extreme circumstances.
Justice Thomas stated that costs should only be imposed on the Crown where the prosecutorial misconduct, including exercise of prosecutorial discretion, “goes well beyond inadvertence or carelessness, and amounts to oppressive or otherwise improper conduct; and… involves a marked and unacceptable departure from the reasonable standards expected of the prosecution” (at para 67). As onerous as this test is, however, it is nonetheless less onerous than that imposed by the Court in Miazga. A marked and unacceptable departure from reasonable standards could arise from inadvertence or carelessness as much as from a deliberate intention to subvert or abuse the office of the Crown, which is the standard imposed in Miazga.
Further, the actual basis on which Justice Thomas imposed an award of solicitor-client costs suggests that in practice he does not view the conduct that creates a “marked and unacceptable departure” as equivalent to a deliberate intention “to subvert or abuse the office of the Attorney General or the process of Criminal Justice” (Miazga, at para 89). He locates the misconduct of the Crown in two decisions.
First, the Crown advanced the testimony of Ms. Foss, the mother of the children Leonard was alleged to have abused, who was also Leonard’s former partner. She was found by Justice Thomas to be an unreliable witness – her testimony was “very suspect” (at para 87). He noted that previously Foss had sent “harassing e-mails” to Leonard, had been documented as stalking Leonard and was subject to a restraining order (at para 87). As a consequence, the Crown had abandoned a charge of a breach of a recognizance order against Leonard. Justice Thomas stated that he “can only conclude that [decision] was on the basis that Ms. Foss’s account was not credible” (at para 88). Justice Thomas went on to state that he found it “difficult to understand how the Crown can, on one hand, implicitly acknowledge that it has a witness who is so unreliable that she cannot provide a reasonable basis for criminal charges, then advance that same person as an in any way credible witness” (at para 90). Further, the Crown knew of Foss’s malice to Leonard. It is conceivable that her credibility could have been restored by her testimony at trial, but there was nothing in her testimony that “could, in my opinion, restore her credibility in the eyes of a reasonable and prudent prosecutor” (at para 93).
Second, the Crown continued with the trial against Leonard after the three complainants’ “accounts all but collapsed on cross-examination” (at para 95). Justice Thomas noted an exchange with the defence counsel and one witness where she said “yeah” to questions suggesting that she was reluctant to testify because she was worried that the court proceedings would spin out of control. One part of that exchange was:
Q. And the reason they have spun out of control is because none of this is true, right?
These two decisions were, Justice Thomas concluded, each an “improper and a marked and unacceptable departure from the reasonable expected standard” (at para 97and 92).
The first of these decisions – the presentation of Foss’s testimony – is not technically a decision related to prosecutorial discretion, since it is not about whether or not to proceed with a criminal case (see Krieger v Law Society of Alberta, 2002 SCC 65). This could mean that the concerns of inconsistency with Miazga are less significant. Justice Thomas also only awarded $1000 in costs against the Crown for this decision. Having said that, however, this aspect of the decision does appear to involve a serious amount of second-guessing by the Judge. The Crown advanced a witness who Justice Thomas implicitly determined that the Crown had previously judged not to be credible. He did not have any non-circumstantial evidence to support that conclusion, and did not consider the other reasons that may have led to the Crown dropping its breach of recognizance charge. This does not seem to amount to a sufficient basis for finding that the Crown had engaged in a marked departure from the appropriate conduct.
Further, on the issue of the testimony of the complainants Justice Thomas did impose significant costs – he assessed solicitor-client costs against the Crown for the entirety of the trial after the closure of the Crown’s case. His assessment was that, at that point, the Crown ought not to have proceeded. In short, he was willing to impose solicitor-client costs for a decision that was clearly and entirely an act of prosecutorial discretion. Further, he did so because he viewed a cross-examination as so objectively destructive of a witness that the Crown ought not to proceed further with its case. He did not entertain the possibility that, to the Crown who presented the witness, the cross-examination may not have seemed so obviously devastating as it did to Justice Thomas. From my perspective, the statement quoted above, where the witness answered “no” to the question suggesting that none of her testimony was true, is not “as close to a recantation as can be imagined”, despite Justice Thomas characterizing it that way (at para 95). And in any event, while it may be that a Crown lacks a strong independent grasp of the strength of his or her case, that does not demonstrate that the Crown is acting with the equivalent to the mala fides contemplated by Miazga.
I have been critical of the Supreme Court’s decision in Miazga. It seems entirely reasonable to me to impose solicitor-client costs on the Crown where a prosecution ought not to have been brought forward, and where the decision to do so was grossly negligent or reckless. However, it also seems incoherent to suggest that wrongful prosecutions ought only to be permitted in cases of prosecutorial mala fides in order to ensure the independence of the Crown’s exercise of its discretion, while then imposing solicitor-client costs on the Crown for the bona fide, albeit poorly judged, exercise of that discretion.
I understand Justice Thomas’s dismay with the Crown’s conduct here, particularly given the severity of the charges faced by Leonard, and his subsequent acquittal. The outcome and the reasons for that outcome offered by Justice Thomas suggest that Leonard ought not to have been prosecuted. At the same time, however, prosecutors need to be given the ability to exercise their discretion independently. When faced with an accusation of child molestation the Crown may reasonably be concerned not to be unduly hesitant in bringing the case forward. That they occasionally err ought not to be the basis for the court acting in a manner that undercuts their independence of judgment.
The ideal answer would be that prosecutors may be held liable for gross negligence or recklessness in exercising their discretion, and that solicitor-client costs ought also to be awarded in those circumstances. Yet even there, it does not seem obvious to me that that standard would have been met in this case. And, in any event, that more relaxed standard does not reflect the principles set out by the Court in Miazga, which ought to be governing in this area, whether imposing civil liability or awarding solicitor-client costs.
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PDF Version: Clarion Call for Consistent Statute Interpretation
This Alberta Court of Appeal decision (per Justices Frans Slatter, Patricia Rowbotham, and Barbara Lea Veldhuis) came to my attention as a preferences case under section 95 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (“BIA”). The weightiness of the analysis reversing Justice R.A. Graesser’s conclusion of a “non-arm’s length” relationship between the debtor corporation Piikani Energy Corporation and the two payees 607385 Alberta Ltd. (“607”) and Dale McMullen made the insolvency and preferences issues irrelevant.
The distinction between dealing at arm’s length and not dealing at arm’s length in BIA section 95(1) is significant. Whether a transaction is at arm’s length determines the applicable review period. Under section 95(1)(a) an arm’s length transaction is reviewable if it occurred within the three months before the bankruptcy. Under section 95(1)(b) for a non-arm’s length transaction the review period is 12 months before the bankruptcy. The BIA doesn’t define “arm’s length”.
The Court of Appeal explained the proper statutory interpretation of “arm’s length” in BIA section 95(1) in Piikani Energy Corporation, 2013 ABCA 293, rev’g 2012 ABQB 187 as this comment will elaborate.
607 is a consulting business owned and operated by Stephanie Ho Lem. It received “early” payment of an annual retainer under a consulting agreement with Piikani Energy. McMullen received a severance payment under an employment contract with Piikani Energy. When those payments were made Ho Lem and McMullen were directors and officers of Piikani Energy. Neither 607, Ho Lem, nor McMullen were ever Piikani Energy shareholders.
The Court of Appeal pointed out (at para 38) that Ho Lem and McMullen were only two of the five directors of Piikani Energy and not 50% of Piikani Energy’s Board of Directors as erroneously found (at para 138) by Justice Graesser.
The two impugned payments (“payments”) were made more than three months, but less than 12 months before the bankruptcy of Piikani Energy. The trustee of Piikani Energy attacked the payments as preferences under BIA section 95(1)(b) for being made to a creditor who was not dealing at arm’s length with the insolvent debtor during the 12 months review period.
Interaction Between BIA Section 4 and BIA Section 95(1) Preferences
BIA section 4 defining “related persons” includes the following:
(2) For the purposes of this Act, persons are related to each other and are “related persons” if they are
(b) an entity and
(i) a person who controls the entity, if it is controlled by one person,
(ii) a person who is a member of a related group that controls the entity, …
The BIA section 4(2) definition of “related persons” came from the Income Tax Act, RSC 1985, c 1 (5th Supp) (“ITA”) concerning persons who are closely connected with each other (see ITA section 251, “Definition of related persons”, and Frank Bennett, Bennett on Bankruptcy, 13th ed (Toronto: CCH Canadian Limited, 2010) at 403).
BIA section 4(4) reads as follows:
4(4) It is a question of fact whether persons not related to one another
were are at a particular time dealing with each other at arm’s length.
BIA section 4(5) provides the following presumption:
4(5) Persons who are related to each other are deemed not to deal with each other at arm’s length while so related. For the purpose of paragraph 95(1)(b) …, the persons are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length.
In other words, whether persons not related to each other were dealing at arm’s length is a question of fact, but related persons are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length.
BIA section 95, which deals with preferences, reads in part as follows:
95(1) … a payment made … by an insolvent person
(b) in favour of a creditor who is not dealing at arm’s length with the insolvent person … that has the effect of giving that creditor a preference over another creditor is void as against – or, in Quebec, may not be set up against – the trustee if it is made … during the period beginning on the day that is 12 months before the date of the initial bankruptcy event and ending on the date of the bankruptcy.
Given BIA sections 4(4) and (5), BIA section 95(1)(b) requires an individualized analysis, meaning each case turns on its own facts.
The Court of Appeal mentioned (at paras 14-16) the recent amendments to BIA section 95(1) creating a distinction between arm’s length and non-arm’s length creditors and removing intent as a legal requirement for a preference between non-arm’s length parties. If the facts prove a preference occurred between non-arm’s length parties, the transaction is void as against the trustee in bankruptcy. Determining whether the parties were not dealing at arm’s length was crucial to the outcome in this case.
Justice Graesser correctly concluded (at para 128) that Lo Hem and McMullen were not related to Piikani Energy under the BIA.
Justice Graesser and the Court of Appeal conducted an individualized analysis of the facts, examined the same statutes, considered the same case law, and achieved opposite conclusions on the “arm’s length” issue.
Justice Grasser’s Analysis of the “Arm’s Length” Issue
Justice Graesser in an application hearing decided that Ho Lem and McMullen were not dealing at arm’s length to Piikani Energy because they were among its key employees and directors at the time of the payments. He declined to use case law defining “arm’s length transactions” in the ITA. Justice Graesser reasoned that arm’s length transactions in the ITA had a different purpose from the BIA preferences provisions. He relied on three concepts to conclude that directors are not at arm’s length from their corporation
1. “arm’s length” for BIA purposes is more closely connected with the concept of “insiders” under the Securities Act, RSA 2000, c S-4 (at para 120);
2. a corporate director’s fiduciary duties make it difficult for a director to be at arm’s length to the corporation (at para 123);
3. decision makers can’t be at arm’s length when they make decisions to pay themselves (at para 129).
Justice Grasser focused on the absence of evidence to create suspicious circumstances surrounding the payments, including the following:
1. “There is no evidence of board meetings, resolutions or corporate actions in the making of the payments to Mr. McMullen and Ms. Ho Lem” (at para 132);
2. “There is no evidence that Ms. Ho Lem played a role in the decision to pre-pay the retainer … but it was paid some two weeks early” (at para 133);
3. “There is no evidence that she was involved as a decision-maker relating to the payments … it is hard to see how decisions on the payments were made, without Ms. Lo Hem being involved …” (at para 136);
4. “In the absence of evidence of a directors’ meeting, … it is difficult to piece together how the decisions to pay Mr. McMullen and pre-pay Ms. Ho Lem’s company were made and it is inconceivable that Mr. McMullen was not directly and intimately involved in all aspects of the decisions as they related to himself, Ho Lem and 607385” (at para 137);
5. “Significant decisions could have been made only by the board of directors (of which Mr. McMullen and Ms. Ho Lem comprised 50%) or by senior officers or employees (which Ms. Ho Lem was and Mr. McMullen was at least to … when his employment was terminated)” (at para 138).
Justice Graesser decided the two payees 607 and McMullen were not dealing at arm’s length because Ho Lem and McMullen were among Piikani Energy’s key employees and directors at the relevant time.
Court of Appeal’s Analysis of the “Arm’s Length” Issue
The standard of review (at para 17) was palpable and overriding error on whether persons not related to one another were dealing at arm’s length and errors of law were to be reviewed for correctness on the meaning of “arm’s length” in the BIA.
The Court of Appeal determined Justice Graesser made a reviewable error by failing to appreciate that being a director does not necessarily mean a non-arm’s length relationship with the corporation. The Court of Appeal noted that the BIA definition of “related persons” does not specify a “director”. The Court of Appeal reasoned that had Parliament intended to create a presumption that a director is not dealing at arm’s length with the insolvent person, it would have included director in the definition of “related parties” [sic] in the BIA (at para 36).
The Court of Appeal also determined that Justice Graesser erred in law by not using case law defining “arm’s length transactions” in the ITA. The Court of Appeal strongly disagreed with Justice Graesser rejecting the ITA in favour of the concept of “insiders” under Alberta’s Securities Act as the source for defining “arm’s length” in the BIA. The Court of Appeal relied on compelling case law where the ITA was used for interpretative guidance to define “arm’s length” in the BIA, including McClarty v R, 2008 SCC 26 where Rothstein J discussed the term “not dealing at arm’s length” in ITA section 69. The Court of Appeal summarized from the judgment of Rothstein J in McClarty as follows:
… the Canada Revenue Agency Income Tax Interpretation Bulletin IT-419R2 “Meaning of Arm’s Length” (June 8, 2004) contains the following “useful criteria that have been developed and accepted by the courts”: (i) was there a common mind which directs the bargaining for both parties to a transaction; (ii) were the parties to the transaction acting in concert without separate interests; and (iii) was there de facto control…
The Court of Appeal directed (at para 30) that these three factors are to be used by courts in determining whether, as a question of fact, two parties dealt with each other at arm’s length in the BIA context.
The Court of Appeal explained the importance of the principle of the legislature’s “statute book” in defining a term in an enactment by stating (at para 26):
This approach relies on the logical assumption that Parliament knows what other statutes say when it passes an enactment, and perhaps even more so when it amends a statute (i.e. the BIA) to incorporate a term that has been defined in the courts in another context (i.e. the ITA). This approach also minimizes the potential for unnecessary conflicts in interpretation.
The Court of Appeal cited (at para 27) the Supreme Court of Canada decision in R v Ulybel Enterprises Ltd.,  SCR 867 quoting from Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed (Markham: LexisNexis, 2008) as follows:
 The meaning of words in legislation depends not only on their immediate context but also on a larger context which includes the Act as a whole and the statute book as a whole. The presumptions of coherence and consistency apply not only to Acts dealing with the same subject but also, albeit with lesser force, to the entire body of statute law produced by a legislature. … Therefore, other things being equal, interpretations that minimize the possibility of conflict or incoherence among different enactments are preferred.
In reversing Justice Graesser’s conclusion of a non-arm’s length relationship between the parties to the payments, the Court of Appeal’s analysis defining “arm’s length” focused on the legislative history of the terms “control” in BIA section 4(2)(b)(i)-(ii) defining “related persons”, and undefined “arm’s length” in BIA section 95(1) concerning preferences. The Court of Appeal emphasized (at paras 21-23) the significance of the terms “control” and “arm’s length” already existing in the ITA before being brought into the BIA for what became section 100 “Reviewable transactions” recently merged into a new remedy in BIA section 96, “Transfer at undervalue”.
The evidence before Justice Graesser about the circumstances surrounding the payments was affidavit evidence from Ho Lem and McMullen. There was no evidence that Ho Lem or McMullen directed or controlled the payments to 607 and McMullen. The evidence of 607 and McMullen was entirely contrary to them directing or controlling the payments. In the Court of Appeal’s view (at para 39) Justice Graesser disregarding that evidence was a reviewable error. The Court of Appeal concluded (at paras 40, 41) that Ho Lem and McMullen were each acting at arm’s length to Piikani Energy at the time of the payments.
The Alberta Court of Appeal in this case explained why “arm’s length” in BIA section 95(1) and “control” in BIA section 4(2)(b)(i)-(ii) have the same meaning as in ITA section 69(1), “Inadequate considerations” and ITA section 251, “Definition of “related persons””, respectively.
For the application judge ordinary perception trumped legal reality. In contrast, the Court of Appeal’s interpretation of “arm’s length” differs from ordinary definitions of that term. For example, Osborn’s defines the term “arm’s length” as “[t]he relationship which exists between parties who are strangers to each other and who bear no special duty, obligations, or relation to each other; e.g. vendor and purchaser” (see Osborne’s Concise Law Dictionary, 11th ed, s.v. “arm’s length, at”). At the Alberta Court of Appeal, consistent statutory interpretation among statutes is a top priority, more so than the plain meaning approach.
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Some previous posts on ABlawg (see, for example here) have addressed the narrowing of the definitions of “employee” and “employment”, particularly in Alberta human rights cases, and the implications of these decisions. Two recent decisions outside of the human rights realm demonstrate both the importance and implications of finding an “employment” relationship.
In Van Lent v Place, 2013 ABQB 494 [Place], the defendants applied to set aside a judgment obtained by Van Lent and others for an award of damages of over $333,000. The case involved, among other allegations, violations of cease trading orders given by the Alberta Securities Commission against Locate Technologies, a numbered company, and an individual, Lorne Drever. Both Drever and another defendant, Nason, were stated to be “providing services” to Locate. There were a number of orders pertaining to the same individuals by other provinces’ Securities Commissions. Notwithstanding the orders in Alberta, these three parties allegedly induced Van Lent and Wereka to loan money to Locate Technologies, and promised shares of Locate as security for the loans. Van Lent and Wereka advanced $313,000 to Locate but never received the shares. The defendants also promised the plaintiffs security in three properties, one of which was the matrimonial home in which Drever and Place resided. Drever and Place later encumbered these properties with mortgages, and title to one of the properties was transferred to Place alone. In November 2011, a Statement of Claim was filed in the Alberta Court of Queen’s Bench alleging that the defendants fraudulently induced the Plaintiffs to make various loans to them in the amount of $313,000. A number of attachment orders were also obtained. In May 2012, Justice Don J. Manderscheid granted Default Judgment against the Defendants. In June 2012, the Alberta Securities Commission released a decision in proceedings against Locate, the numbered company and Drever. The larger issue of the case is whether the Default Judgment of May 2012 could be set aside. The issue that is relevant to this post is whether Nason could argue that he was an employee of Locate rather than an independent contractor, such that he could rely on Drever’s advice that he (Drever) was going to take care of filing a defence in the matter if necessary (thus explaining why Nason did not file a defence).
Justice Manderscheid indicated that the evidence available before him did not satisfactorily clarify whether Nason was an employee or an independent contractor or subcontractor of Locate and Drever. This was a triable issue because it had “significant ramifications…for the nature of his legal duties, rights, responsibilities and the consequences attached to them” (Place at para 50). The court noted that the caselaw authorities suggest that where an employee-employer relationship is clearly established, it may be a valid excuse for an inaction or action of the employee that he relied on the representations of the employer or someone ‘higher up’ in the business relationship (Place at para 51, citations omitted). With regard to the issue of whether he was an employee, the court was prepared to give Nason the benefit of the doubt, and thus Nason was entitled to rely on the information provided to him by Drever that Drever was going to file a defence as necessary. The court then set aside the Default Judgment against Nason.
In a very different case, Lovely v Prestige Travel Ltd., 2013 ABQB 467 [Lovely], claimed that Prestige Travel and McDonald & Bychkowski Ltd., carrying on business as CMB Insurance Brokers, owed him one year’s base salary as termination pay under an employment agreement entered into on March 20, 2008. The court (per Justice Thomas Wakeling) concluded he was so entitled (based on either the terms of the contract, or the appropriate reasonable notice period of twelve months). Among the issues addressed was who was Lovely’s employer? Following general employment principles, the court concluded that McDonald & Bychkowski Ltd. was an employer of Lovely. The factors taken into account by the court included that its four shareholders had selected Lovely to lead a project to make the travel business profitable. The same people discussed the contract terms with Lovely and the nature of the business plan. They also decided to dismiss Lovely. In addition, McDonald & Bychkowski Ltd. paid Lovely’s salary, provided his benefits, issued his T4 slips identifying itself as his employer and claimed that it was his employer when it dismissed him. All aspects of Lovely’s work were subject to the direction and control of McDonald & Bychkowski Ltd. (Lovely at paras 86-7). Prestige Travel Ltd. admitted that it was Lovely’s employer and the court found that McDonald & Bychkowski Ltd. was also his employer. The court then concluded that the common law principles governing the termination of employment applied.
It is interesting to note that in both cases it was to the benefit of the party involved (whether plaintiff or defendant) that he be found to be an employee. Likewise, in human rights cases (where the remedies are arguably much less onerous to the respondent employer) it is actually necessary to find that the respondent is an employer because the Alberta Human Rights Act, RSA 2000, c A-25.5 only protects people from discrimination based on certain listed grounds (e.g., race) in listed areas, such as employment. In the recent human rights caselaw, parties were able to avoid responsibility based on a fairly restrictive definition of “employment” (see e.g. Lockerbie & Hole Industrial Inc v Alberta (Human Rights and Citizenship Commission, Director), 2011 ABCA 3). Because it is remedial in nature, human rights law is supposed to be given a “large and liberal” interpretation (see Canadian National Railway Co v Canada (Canadian Human Rights Commission),  1 SCR 1114 at p 1134). Yet, recent human rights cases seem to going against this grain with respect to the definition of “employment”. Ironically, at the same time, in cases occurring in settings where a finding of an employment relationship arguably results in much more significant impacts on the parties, judges seem more willing to find that an employment relationship exists.
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Cases Considered: Pembina Institute v Alberta (Environment and Sustainable Resource Development), 2013 ABQB 567
This decision by Justice Marceau exposes the very disconcerting trend in Alberta of public officials – in particular those with Alberta Environment – opposing the participation of environmental groups in resources and environmental decision-making. Think about this for a minute. Public officials who work on behalf of Albertans and are paid with public funds actively, and in some cases aggressively, oppose participation by organized members of the public seeking input into how public resources are allocated and developed. To be sure, there is something terribly amiss within the corridors of Alberta Environment. The Pembina Institute and the Fort McMurray Environmental Association have served Albertans generally in bringing attention to this by defending their right to participate in the decision-making process concerning a SAGD (Steam Assisted Gravity Drainage) oil sands project along the MacKay River.
This comment proceeds as follows. First, I describe public participation in general terms and provide some examples of where the right to participate in resources decision-making has been codified in law. Second, I say a few words about the right to public participation in resource project decision-making under Alberta legislation. Third, I examine Justice Marceau’s decision. And I conclude with my thoughts on the importance of this decision for public participation in resources and environmental decision-making going forward.
The subject of public participation in resources and environmental decision-making has received significant attention from policymakers and scholars during the course of the last fifty years (For an overview see Rebeca Macias, Public Participation in Energy and Natural Resources Development: A Theory and Criteria for Evaluation (Calgary: Canadian Institute of Resources Law, 2010) at p 7-13, here). Resources and environmental decisions are administered by public authorities and so determinations of who gets to participate and how they participate is significantly informed by political theories on the relationship between the state and its citizens. Proponents assert that public participation enhances the accountability of state officials to citizens and provides a greater likelihood that the decision is seen as legitimate by those affected. Critics of public participation, on the other hand, argue resources and environmental issues are complex and are best resolved by experts and technocrats. In the eyes of critics, public involvement in the decision-making process simply introduces unnecessary costs and delay.
The right to public participation in resources and environmental decision-making is codified in domestic and international law. The most relevant piece of international law is the United Nations Economic Commission for Europe Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (the Aarhus Convention, here). The Aarhus Convention provides that signatory countries establish a legal right to public participation in state decision-making concerning specified resource project developments. The right to participate established by the Convention extends to any person with an interest in the decision, and expressly includes environmental organizations. Canada is not a party to the Aarhus Convention.
Public participation in resources and environmental decision-making in Alberta is a highly regulated subject. There are a number of statutes governing participation including the Responsible Energy Development Act, SA 2012, c R-17.3, the Water Act, RSA 2000 c W-3, and the Environmental Protection and Enhancement Act, RSA 2000, c E-12. These statutes represent just a fraction of provincial legislation applicable to resources and environmental decisions generally, but they are most applicable to public participation and energy project approvals. The common feature in these enactments is the narrow scope of persons whom are provided the legal right to participate in project decision-making: Only those persons who can demonstrate they are or, in some cases, may be directly affected by the resource development project in question are entitled to the legal right to participate. But in order to exercise this right a person must first file a statement of concern with the applicable regulatory authority and therein demonstrate to the satisfaction of that authority that the person is or may be directly affected. So the Alberta framework entrusts a large measure of discretion in the hands of government officials to decide who gets to participate in energy project approvals.
Needless to say, in recent years Alberta environmental groups have found it increasingly difficult to convince Alberta Environment to accept their statements of concern as a directly affected person in relation to a resource development project. My own experience with this comes from work in the Faculty’s Environmental Law Clinic which I documented last year on ABlawg (see Shaun Fluker, “Access to Justice: University of Calgary Environmental Law Clinic in 2011/2012”, here). The result has been that environmental groups are unable to participate in Alberta Environment decisions to approve resource development projects – even in cases where the governing legislation includes fostering public participation as one of its purposes (e.g. section 2(g) of the Environmental Protection and Enhancement Act). Alberta Environment also opposes any attempt by these groups to appeal such decisions to the Alberta Environmental Appeals Board. The message from Alberta Environment has been very clear: Environmental groups are not welcome to participate in its decisions concerning resource development projects.
Alberta Environment was not always so averse to participation by these groups. Specifically in relation to oil sands projects, statements of concern filed by the Pembina Institute, the Fort McMurray Environmental Association, and the Toxics Watch Society (collectively under the umbrella of the Oil Sands Environmental Coalition) were commonly accepted by Alberta Environment until a few years ago. Similarly in relation to water management decisions elsewhere in the province, Alberta Environment used to be open to participation from groups such as the Alberta Wilderness Association.
But something changed a while back, and now an environmental group can expect Alberta Environment to oppose its participation at every turn as a matter of course. It seems wrong for a decision-maker exercising public authority to be so set in its ways, but proving attitudinal bias is always difficult. The onus of proof is high and the evidence is elusive. Simply because the Alberta government invests millions, probably billions, of our dollars telling the world we have resources for the taking does not prove Alberta Environment is biased against environmental groups who oppose resource development. Alberta Environment rejects participation by environmental groups on the ground that these groups fail to demonstrate how they are or may be directly affected by a project. The ‘directly affected’ test is codified in governing legislation, and reasons provided by Alberta Environment for denying participatory rights are always the same: the group is not a legal person capable of being directly affected; the group fails to demonstrate a majority of its individual members are directly affected; the group fails to demonstrate how the project will adversely affect land it owns or its use of land in close proximity; the group fails to demonstrate how its concerns are unique from that of the public generally. Notably, none of these reasons are set out in the legislation. They have evolved from years of administrative and judicial consideration into what it means for a person to be ‘directly affected’ by a resource project.
But now the smoking gun has been revealed. In an August 2009 internal briefing note, Alberta Environment staff gave us the truth behind their decision to begin opposing participation by the Oil Sands Environmental Coalition in oil sands project decisions. The Pembina Institute attached the full text of the briefing note to its media release announcing Marceau J.’s decision. The briefing note states the members of the Oil Sands Environmental Coalition are “no longer simple to work with” and “less inclined to work cooperatively” – making insinuating remarks on the use of legal process by these groups to oppose project approvals. In relation to Pembina specifically, the briefing note mentions Pembina publications critical of oil sands development. In the words of Alberta Environment, it was time to stop giving these groups “the benefit of the doubt” when it comes to assessing whether they are truly directly affected by an oil sands project.
Justice Marceau sets out the entire briefing note in his judgment at para 22. After setting out the briefing note, Justice Marceau makes several key findings (at para 23): (1) the briefing note was not disclosed prior to this hearing; (2) subsequent to this briefing note, the statements of concern filed by Oil Sands Environmental Coalition on 4 successive projects were rejected by Alberta Environment; (3) the reasons for these rejections make no mention of the concerns described in the briefing note, and the reasons that are provided “are so close to being identical they seem to have been cast from the same template”; (4) by rejecting statements of concern Alberta Environment precludes any participation by these groups including their ability to appeal the decision (this raises significant rule of law issues which I previously noted on ABlawg in “Access to Justice: University of Calgary Environmental Law Clinic in 2011/2012”, here).
The application before Justice Marceau from Pembina and the Fort McMurray Environmental Association is for judicial review of a decision by Alberta Environment to reject their statements of concern filed under sections 73 of the Environmental Protection and Enhancement Act and section 109 of the Water Act in relation to a SAGD project proposed by Southern Pacific Resource Corp. The applicants sought to have the Court quash the Alberta Environment decision and declare that they have met the directly affected test for filing a statement of concern under the legislation. Justice Marceau quashes the Alberta Environment decision on his finding that Alberta Environment failed to adhere to principles of natural justice. Justice Marceau doesn’t grant the applicants the declaration sought on the issue of whether they were directly affected, but he does suggest in obiter that the test ought to be applied with more ‘flexibility’ (at para 45) which presumably helps the applicants’ case going forward.
Marceau J.’s ruling that Alberta Environment breached principles of natural justice is based on his finding that Alberta Environment rejected the statements of concern on the basis of reasons set out in the briefing note. He finds legal authority for his ruling in two landmark Supreme Court of Canada decisions: (1) the majority decision written by Madam Justice L’Heureux-Dubé in Baker v Canada,  2 SCR 817 concerning procedural fairness and bias of public officials; and (2) the opinion of Justice Rand in Roncarelli v Duplessis,  SCR 121 concerning the improper exercise of discretionary power by government officials. In relying on an undisclosed briefing note to deny participatory rights, Marceau J. rules Alberta Environment failed to give the applicants an opportunity to respond to the actual case against them (at para 34). He also rules that the briefing note expresses an aversion to public participation that contradicts the purpose of the governing legislation, and sets out irrelevant and improper considerations on the part of Alberta Environment (at paras 33 and 35). The Pembina Institute and Fort McMurray Environmental Association were improperly targeted for their negative views on oil sands development (at para 37). Marceau J. stops short of calling this an abuse of power, but the tone of his judgment clearly sends this message.
This decision is a strong statement of the link between principles of natural justice and participation in resources and environmental decision-making. The decision sits alongside the recent 2012 decision by the Alberta Court of Appeal in Kelly v Alberta (Energy Resources Conservation Board), 2012 ABCA 19, concerning participatory rights in energy project decision-making. No doubt there is more work to be done. Access to justice can be expensive. The right to participate is empty for someone without the requisite financial means. And the ‘directly affected’ test continues to govern determinations by the Alberta Energy Regulator and Alberta Environment in terms of who gets to participate in resource project decision-making. But this thread of legality recently sown into the jurisprudence by Alberta courts is nevertheless important. It provides Albertans with a basis upon which to stand against government officials who seem fixated on removing public participation from the landscape.
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Interesting times lie ahead for the Columbia River Treaty (CRT) of 1964 between Canada and the United States. The CRT provides for the cooperative development of the upper Columbia River and the Kootenay River for two purposes, flood control and power. Under the terms of the treaty Canada agreed to build and operate three dams: Duncan, Mica and Arrow/Keenleyside. The treaty also authorized the United States to construct Libby dam on the Kootenay River in the United States. Libby dam created Lake Koocanusa (Kootenay/Canada/USA) which backs up into British Columbia (hence the need for treaty authorization). In return for all of this, Canada received a $64 million dollar lump sum payment for the first sixty years of flood control offered by the Canadian dams, and 50% of the incremental power and capacity made available at US mainstem dams as a result of the new storage. The mainstem dams are existing dams on the Columbia, some owned by the US federal government (e.g. Grand Coulee and Chief Joseph), and some owned by public utility districts (e.g. Wells, Rocky Reach, Rock Island, Wanapum and Priest Rapids). The Canadian storage improved the efficiency of these dams by firming up capacity (i.e. providing stored water when installed generation would otherwise be running at less than full capacity) and storing water when the same dams might otherwise be spilling water. These power benefits currently have an average annual value of about $202 million. Canada/British Columbia also receives other benefits from the treaty facilities including local flood control (for communities like Trail and Castlegar) and on site generation at Mica, Revelstoke (not a treaty dam, but a facility which benefits from the regulation provided by Mica) and Keenleyside. For maps of the basin and dam locations and more information about the treaty see the website of the Columbia Basin Trust here.
The treaty has no fixed termination date but either party may terminate the power benefits provisions of the treaty by giving ten years notice to terminate beginning in 2014. Notice to terminate will not affect the flood control provisions of the treaty but the flood control provisions change automatically in 2024 (regardless of what the parties do with respect to the power provisions). There is no agreed interpretation of the scope of the flood control provisions that will kick-in in 2024 (for detailed analysis see Bankes, “The Flood Control Regime of the Columbia River Treaty: Before and After 2024” (2012) 2 Washington Journal of Environmental Law and Policy 1-74 (available here)) but it is clear that they offer less protection, and less certain protection, to downstream interests in the United States than the provisions which are in place until 2024.
It is important to recognize the implications of the separate and asymmetrical manner in which the treaty deals with termination in relation to power and flood control. Since Canada cannot terminate its changed flood control obligations it has little interest in terminating the power provisions of the treaty from which it receives benefits. It would prefer to continue to receive those benefits indefinitely. By the same token, since the United States can relieve itself of its obligation to share the power benefits associated with upstream storage without prejudicing its post-2024 changed flood control entitlement, it follows that the US has a considerable incentive to terminate those power provisions as soon as possible (unless of course the US concludes that continuing the prescribed power operation delivers not only power benefits but also flood control benefits that might justify continuing to share the incremental energy and capacity with Canada).
Both the United States and Canada (British Columbia) have put in place processes to inform what course of action each should take in 2014 and beyond. The US process (informed by the “Sovereign Review Team” comprised of affected states, federal entities and the tribes) is described here. That process contemplates the draft regional recommendation that has just been released which is to be followed by a final recommendation to the State Department by the end of the year on a proposed course of action. British Columbia’s process is described here.
This post examines the Draft Regional Recommendation published by the Army Corps of Engineers and the Bonneville Power Administration (collectively the US Entity under the CRT) on September 20, 2013. “Entity” is the term that the treaty gives to the parties actually responsible for the day-to-day implementation of the treaty. BC Hydro is the principal Canadian entity. The post then offers some thoughts on possible responses from Canada to this US position on the assumption that the State Department will end up confirming a version of a future vision for the treaty that looks much like this draft regional proposal.
THE DRAFT REGIONAL RECOMMENDATION
As noted above, the treaty itself contains only two options: continue the entire treaty (which requires no action) or terminate the power provisions of the treaty. The flood control provisions change automatically.
The Draft Regional Recommendation effectively rejects this binary view of the future and instead paints a radically different vision of a new Columbia River Treaty which will better serve downstream interests and ecosystem function in the lower basin than does the current treaty (at least as it will change in 2024). The Draft Regional Recommendations contain three main ideas. The first is that the post-2024 legal regime for the Columbia River needs to add improved ecosystem function to the values of flood control (now, in the argot of the Army Corps of Engineers, flood risk management) and power that animated the original treaty. Second, the Draft recommends that the power provisions of the treaty should be amended to ensure that the US only shares with Canada the actual benefits that accrue to the US as a result of coordinated power operations. At the present time, benefits are shared with Canada on the assumption that US mainstem facilities are actually operated to optimize generation when in fact the operation of these facilities is constrained by orders issued under the US Endangered Species Act, 16 USC 1531. Third, the Draft recommends that the post-2024 should offer the same level of flood risk management as the current regime.
In order to achieve these objectives the Draft recommends that the “the United States government make a decision by mid-2014 to proceed with a renegotiation of the Treaty with Canada in order to modernize the Treaty by incorporating the objectives in this regional recommendation. Further, the region recommends the United States government seek to complete that effort by no later than 2015.”
While some parts of the Draft are carefully couched in terms of mutual and reciprocal benefits (e.g. at 4: “A modernized Treaty should recognize and minimize adverse effects to Tribal, First Nations and other cultural resources in Canada and the United States”), much is written in unilateral terms. For example, the detailed flood risk management provisions of the Draft contemplate (at 5 – 6) that “The United States and Canada should establish a common understanding of the methods and procedures for post-2024 ‘called upon’” flood control, but only on the basis of the United States Entity White Paper: Columbia River Post-2024 Flood Risk Management Procedure, September 2011 (an annotated version of the paper is available here). In other words, let’s have an agreement but only on the basis of our interpretation of what the treaty text says about the post-2024 flood control rules. Equally remarkable and unilateral is the proposal that the scope of US influence over upstream management of Canadian dams and reservoirs should be expanded post-2024. Thus, one of eight “key principles” (# 5) of the Draft is that “The United States and Canada should integrate both Treaty and Canadian non-Treaty storage into the Treaty to increase the flexibility to, and benefits of, meeting ecosystem-based function, power, flood risk management and other authorized water management purposes in both countries.” Under the current arrangements the CRT rules only apply to certain amounts of designated storage at the three Canadian treaty facilities. Other facilities and the non-treaty storage at Mica are not subject to the treaty (except in the case of a flood control emergency – the current incremental on-call flood control operation which has never been triggered). Principle # 5 suggests that the US is interested in greater rather than less control of storage in Canada post-2024. But note that there is no suggestion that US facilities such as Libby or Grand Coulee be brought more explicitly under the terms of the new treaty.
SOME POSSIBLE RESPONSES
If we assume that the State Department ultimately confirms the policy position embedded in the regional recommendation, what are some possible responses? In reflecting on this question we should recognize that the province and the federal government (Canada) may have different views as to how to proceed. The relations between the two governments are governed in part by two federal-provincial agreements of 1963 and 1964 (for the text of those agreements see here (at p 103 and 107)). As a matter of law, the federal government takes the lead on treaty negotiations; as a matter of practice, most of the necessary expertise to appreciate the trade-offs associated with these negotiations lies with the province and the Canadian operating “entity” BC Hydro.
1. The US position on sharing the power benefits associated with Canadian storage
Given the asymmetry of the termination provisions of the treaty, Canada’s position on the power benefits is weak. As a matter of international law, the United States is free to terminate these provisions as of 2024 by giving notice in 2014. British Columbia has tried to make the case for continuing the power benefits of the treaty but it is clearly an uphill battle. For some elements of BC’s arguments see here.
If the US does terminate the power benefits of the treaty, Canadian storage will no longer be under the day-by-day, week-by-week control of the treaty. BC Hydro will be free to operate that storage as it sees fit to maximize benefits for British Columbia, subject only to the constraints of domestic law such as the federal Fisheries Act, RSC 1985, c. F-14 and the provincial Water Act, RSBC 1996, c. 483 (including any current or future water use plan). This may mean, for example, that BC Hydro elects to keep Arrow Lakes high in order to maximize generation at the Keenleyside dam. This might in turn cause the US to draw down Grand Coulee to provide replacement flood protection which would reduce generation at that site (lower head = less energy produced) and increase pumping costs for irrigators in the United States. But whatever Canada’s preferred operation the key point is that what the US loses if it terminates the power provisions of the treaty is predictability in downstream flows.
In addition, or alternatively, it may be possible for BC Hydro and the operators of US mainstem dams to reach ad hoc commercial agreements in the future on the coordination of Canadian releases pursuant to which the parties may agree to share the benefits of those coordinated operations. These arrangements would fall outside the treaty and be subject to ordinary commercial law. They would likely be modeled on the existing non-treaty storage agreements (NTSA) (as to which see here). The province has poured cold water on this idea suggesting that such an arrangement would be difficult to negotiate. But difficult is a relative term and a short term commercial agreement or a series of such agreements looks a lot more achievable than a global (re-)negotiation that brings in a whole new set of variables (ecosystem benefits). But such short-term commercial arrangements will not fully compensate for the predictability offered by an assured operation and in particular will be unlikely to help on the flood control side of things or in providing firm capacity in critical low flow years.
In sum, the treaty allows the US to terminate the power provisions of the treaty but in doing so the US loses predictability and increases its risk level. The US will want to maintain some level of predictability but at a lower cost (sharing actual benefits rather than larger hypothetical benefits). There is likely some room to reach a middle ground on this point.
While the above discussion of the termination of the power provisions speaks to the position as a matter of treaty law (international law), a decision to give notice to terminate the power provisions of the treaty may also raise complex question of US domestic law. I will leave it to others to explore these issues with more authority but it seems possible that a decision to terminate may require US agencies to prepare biological opinions under the Endangered Species Act (ESA) and/or an environmental assessment under National Environmental Policy Act, 42 USC 4321 (NEPA) before any such notice to terminate can be finalized. If this is correct the United States will not be in a position to issue a termination notice any time soon. This may weaken the US’ bargaining position.
2. The US position on flood control
Canada’s response to the US position on post-2024 flood control is much stronger than Canada’s position on power benefits. The flood control operation changes automatically in 2024 and while the details are contentious the overall result is not: the post-2024 is less favourable to the US. Consequently, when the regional Draft recommendation suggests that the region should seek to obtain a flood control regime that is as effective as the current regime then the question becomes what might Canada seek in return?
One possibility is that Canada might adopt the US position on sharing the benefits of incremental power associated with the storage operation. That position is a “with and without you” position i.e. here’s what we generate without coordination and here’s what we can generate with coordination (and we’ll share those incremental benefits according to some agreed formula, perhaps the current 50:50 sharing or perhaps some other formula). In the context of post-2024 flood control the approach translates as follows: here’s the flood related damage that we avoid by using practically and legally available US storage plus a called-upon operation (the default position under the treaty post-2024) and here is the incremental damage that we avoid by negotiating an assured Canadian storage operation. And then, once again, there must be further agreement on the sharing of that incremental benefit. Thus, under this scheme there might be two types of payments to Canada. The first would be full indemnification for the costs and foregone benefits associated with the called-upon operation; the second payment would be based on sharing the benefit (the incremental avoided flood damage) associated with any negotiated post-2024 assured flood control operation. A more aggressive Canadian negotiating position might be to also seek a “share-the-benefits” payment for the called upon operation, but that is not what the treaty currently provides for post-2024.
This “sharing the benefits” approach informs the pre-2024 flood control regime but it disappears from the post-2024 regime. The argument here is that if the US seeks a post-2024 arrangement on flood control that is just as effective as the current arrangement then it should compensate Canada on a similar basis. Canada should be open to negotiations along these lines i.e. agree to provide some measure of assured protection in return for a share of the benefits/avoided costs.
3. The US position on ecosystem function
I am guessing that the gut reaction of most people will be that of course we should build ecosystem function into the treaty. The treaty was negotiated in the bad old days of the 1960s when we didn’t understand these things, but times have changed and now we take ecosystem values seriously.
But hold on a minute. This is hardly a pristine ecosystem. This is an ecosystem that has been seriously compromised by the construction of many dams on the mainstem of the Columbia. Perhaps the most damaging of those dams is Grand Coulee, immediately downstream of the border in the United States. It is that dam (authorized and built long before the CRT) which cuts off the escapement of salmon and steelhead to the entire upper Columbia Basin in Canada, including Columbia and Windermere Lakes. That dam is not authorized by the Columbia River Treaty.
While we can all celebrate the idea that salmon may one day be restored to the upper Columbia we may need to temper that ambition and think more modestly and from Canada’s perspective about ecosystem function upstream of Grand Coulee in terms of resident rather than anadromous fish populations. (“Anadromous fish populations” refers to species of fish born in fresh water the young of which migrate to the ocean where they spend most of their adult lives before returning to their natal streams to spawn. Dams constructed without fish passages, such as Grand Coulee, preclude returns to natal streams and make sub-populations extinct. The anadromous fish at issue here include the various species of Pacific Salmon (chinook, coho etc) and steelhead trout). The implications of this are profound in terms of possible arrangements with the United States for two related reasons. First, if, as the upstream state, we focus on resident fish populations upstream of Grand Coulee then we manage flows principally for those and other important domestic purposes (e.g. bird habitat, recreational interests as well as local flood and power generation at Canadian dams) rather than to provide downstream flows for anadromous fish. Second, as the upstream state we will be in a better position to manage for the above interests outside the terms of the treaty rather than within. In other words, there is little incentive for Canada to want to insert ecosystem function as a new value within the treaty. It can meet these interests regardless of a treaty; a treaty will likely make it more difficult to meet these interests since a treaty will constrain Canada’s liberty to operate its storage as it sees fit.
This suggests that Canada’s position in relation to ecosystem values in relation to the basin as a whole might look more like Canada’s position on flood control than it does on the power side. In a nutshell, the current treaty says nothing about ecosystem function. Grand Coulee currently severs the Columbia River ecosystem. For so long as that barrier remains in place it is disingenuous to talk about a shared ecosystem and if there is no shared ecosystem then the “with and without you model” may also applicable. It might work this way: here are the opportunities that the United States has to enhance ecosystem function in the downstream part of the basin without a coordinated operation of Canadian storage, and here are the enhanced opportunities that might be possible with a coordinated operation. Further agreement would be required on how that enhanced benefit would be shared (or paid for). Such discussions would likely be very complex since they might require monetization of the benefits and in some cases coordinated operation might also produce offsetting ecosystem benefits in Canada which would have to be factored into any sharing formula.
One way to simplify the discussions might to be build on current practices under the treaty rather than the more ideological position that the treaty text has to be amended to specifically address ecosystem function. What do I mean by that? Simply that while it is true that the current treaty text does not mandate operations for ecological purposes, neither does it preclude operations for such purposes. And indeed it is well known that the two entities have for decades negotiated detailed operating agreements and supplementary operating agreements which do in fact provide flows to benefit anadromous fish and resident fish and for a variety of other purposes. The entities make these agreements when each perceives a benefit (again a with and without you calculation measured against the default assured operation, but one in which there is no further sharing of costs and benefits). While such operations and flows are not assured in advance, the practice suggests that even as written the treaty does offer a mechanism that permits ecosystem function to be taken into account. The non-treaty storage agreements provide additional flexibility. It may be better to build on those flexibility procedures rather than engaging in radical restructuring of the treaty and making yet more storage subject to the prescriptive terms of the treaty.
4. The implications of upping the level of ambition
To adopt a phrase that is common in climate change negotiations (although never applied to the domestic policies of either the US or Canada) the level of ambition displayed in the Draft is remarkably high. While the original negotiations for the treaty took many years even though those negotiations were confined to two sets of values which generally worked harmoniously (flood control and power), the US regional proposal is that the negotiations should expand to include ecosystem function and to subject all Canadian storage to the terms of the new treaty. We can therefore reasonably anticipate that the proposed negotiations will be even more time consuming than the original negotiations, and may be far too complex to succeed. Failure is a realistic possibility. Risk of failure may lead some interests in the US to want to simultaneously provide a notice of termination of the power provisions so that negotiations occur in the shadow of that threat; offsetting that risk is the reality that the US domestic law considerations alluded to above (NEPA and ESA) may make it difficult to pursue such a risky approach, and that may redound to Canada’s benefit.
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Cases commented on: 2195002 Ont. Inc. v Tribute Resources Inc, 2013 ONCA 576
In this decision the Ontario Court of Appeal confirmed the conclusion reached in two separate applications before the Superior Court of Justice in Ontario related to a gas storage matter. For my post on these two decisions see here.
One decision, Tribute Resources v 2195002 Ontario Inc, 2012 ONSC 25 dealt with the jurisdiction of the Superior Court to consider the matter, the argument being that all gas storage issues should be litigated before the Ontario Energy Board (OEB) because of the preclusive clauses in the Ontario Energy Board Act, SO 1998, c.15 and the decision of the Ontario Court of Appeal in Snopko v Union Gas Ltd, 2010 ONCA 248, the subject of an earlier post here. A second decision, that of Justice Helen Rady in 21955002 Ontario Inc v Tribute Resources Inc 2012 ONSC 5412, dealt with the substantive question of whether Tribute could claim storage rights on the basis of an oil and gas lease and a unitization agreement or whether its rights were confined to such rights as it held under a gas storage lease which lease the Ontario Court of Appeal in an earlier action held to have expired: Tribute Resources v McKinley Farms, 2010 ONCA 392, also the subject of a previous ABlawg post here.
The only decision under appeal here was that of Justice Helen Rady in 2012 ONSC 5412.
In its decision the Ontario Court of Appeal agreed with Justice Rady’s main conclusion on the substantive and interpretive questions in 2012 ONSC 5412 to the effect that Tribute’s gas storage lease (GSL) had been intended by the parties to completely replace any storage rights that Tribute might have been able to claim under the earlier agreements (the oil and gas lease and the unitization agreement) and thus, with the expiry of the GSL, the only possible conclusion was that Tribute’s storage rights had come to an end. In reaching that conclusion the Court of Appeal relied on many of the same grounds as had Justice Rady including the entire agreement clause in the GSL, and the greater specificity of the GSL which made it clear that storage matters were to be governed exclusively by the GSL and not the earlier agreements. The Court of Appeal also relied upon the fact that the different agreements offered different ways for determining the payment for gas storage rights (at para. 54): “this difference in the payment provisions makes it clear that the 1998 Tribute Gas Storage Lease was intended to replace the earlier agreements and not merely to supplement them. Because of the difference in the payment provisions, the two sets of documents could not co-exist.”
The decision on the jurisdictional issue 2012 ONSC 25 authored by Justice Bryant was not appealed (at para. 27 of this decision) and that matter was therefore not technically before the Court of Appeal in this decision. But 219 Ltd still ran a variant of that application taking the position that the Court of Appeal had no jurisdiction to consider the appeal since between Justice Rady’s decision (rendered October 18, 2012) and the matter coming on before the Court of Appeal, the OEB, on the application of Tribute, had made an order designating the subject lands as a gas storage area under the Act (however the OEB stayed the associated compensation matters pending the outcome of this litigation). The Court of Appeal rejected that argument concluding that its jurisdiction was founded upon Justice Bryant’s decision and when that decision was made there was no gas storage order in place. The Court commented more extensively as follows:
 The jurisdiction of this court to entertain this appeal derives from s. 6 of the Courts of Justice Act, R.S.O. 1990, c. C. 43 (the “CJA”). Under s. 6(1)(b) of the CJA, this court has jurisdiction to entertain an appeal from the application judge’s decision because it is a final order of a Superior Court judge.
 The parties agree that the application judge had jurisdiction to render her judgment interpreting the relevant contractual documents. Her judgment is a final order and nothing in s. 38(3) of the Energy Act ousts this court’s jurisdiction to entertain an appeal under s. 6(1)(b) of the CJA. Neither the decision of the application judge, nor this decision, address compensation under the Energy Act. The order of the OEB made some four months after the decision of the application judge cannot turn what was an order interpreting contractual rights into an order for compensation under the Energy Act.
 The questions of what, if any, effect this court’s decision will have on the OEB’s determination of the compensation issues now outstanding under the Energy Act and whether this appeal may now be moot are different issues than the jurisdictional issue raised by 219 Ontario.
 The fact that this court has jurisdiction to entertain an appeal from the application judge’s decision does not determine the question of the effect, if any, of this court’s decision on the compensation issues under the Energy Act.
 We make no comment on that subject, which will be a matter for the OEB to determine.
Thus, at least so long as there is no OEB designated gas storage area order in effect in relation to the subject lands at the time that a matter is heard by the ordinary courts, the ordinary courts of justice have the jurisdiction to determine the existence, validity and interpretation of natural gas storage rights arising by way of contract between the parties.
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Policy commented on: Alberta Wetland Policy
The new Alberta Wetland Policy, released on September 10, has already been much commented upon and critiqued. Understandably, such commentary has generally come from the perspective of trends in Alberta’s protection of wetlands. For example, in a recent ABlawg posting Arlene Kwasniak has provided a thorough review of the context, history and some specific features of the new policy. My orientation here is somewhat different. I wish to look at the new approach to wetlands as part of the emerging trend toward market-based conservation, and in particular the use of offset mechanisms to preserve ecosystems and biodiversity.
Before going further, let me define what I am talking about. Conservation offsets are the measurable conservation outcomes resulting from actions designed to compensate for significant residual adverse environmental impacts arising from development. The wetland policy does not use the term “offset”, but rather refers to “replacement”. In doing so it adds to the proliferation of synonyms in this area including “conservation offsets” (the Alberta Land-Use Framework and the Alberta Land Stewardship Act, SA 2009, c. A-26.8), “biodiversity offsets” (commonly used internationally), “habitat compensation” (the federal fish habitat program), “compensatory mitigation” (U.S.), and “conservation allowance” (a recent addition courtesy of Environment Canada). While all of these terms may not be perfectly synonymous, a close examination reveals a very high overlap in their meaning, and much cross-referencing. I think it is safe to say that Alberta with the new wetland policy is in the same camp, at least in part.
Growing Interest in Conservation Offsets
Both Canada and Alberta have some history with the use of conservation offsets. Federally, our most extensive experience with habitat offsets has been under the federal Fisheries Act, RSC 1985, c F-14. That Act contains a provision (s 35) prohibiting any “harmful alteration, disruption or destruction of fish habitat” unless permitted and pursuant to conditions imposed by the Department of Fisheries and Oceans (DFO). Based on that legislative foundation, in 1986 DFO released a policy which committed to a goal of no net loss of fish habitat, and a commitment to “strive to balance habitat losses with habitat replacement on a project-by-project basis.” Since the release of that policy developers impacting fish habitat have routinely faced conditions requiring them to create or rehabilitate fish habitat in compensation.
As discussed by Arlene Kwasniak in her earlier post, Alberta’s 1993 interim wetland policy was also largely based on the compensation concept, with developers in the settled area of the province being required to pay into a conservation fund proportionate to wetlands lost.
There is increasing interest across Canada, both federally and provincially, in making use of conservation offset mechanisms. In 2012 Environment Canada released an Operational Framework for Use of Conservation Allowances, which reviewed past federal experience with conservation offsets and set out guidelines and principles for their further application. At approximately the same time, as part of the controversial omnibus Bill C-38, the Jobs, Growth and Long-term Prosperity Act, SC 2012, c-19, the Canadian government amended the Fisheries Act to require the Minister to consider “whether there are measures and standards to avoid, mitigate or offset serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or that support such fishery”(s 135, emphasis added). This raised the status of the offset concept from policy to legislation.
In Alberta the development of regulations to enable conservation offsets is authorized by ss 45-47 of the Alberta Land Stewardship Act in the context of the Act’s more general expression of interest in market-based stewardship tools. The approach has been endorsed by a broad range of stakeholders from the Pembina institute and the Canadian Boreal Initiative to the Alberta Conservation Association to the Oil Sands Leadership Initiative. The Province has been quietly considering options and initiated a pilot project on offsetting for grassland habitat.
Again that background, then, we might see the approach prescribed by the new wetlands policy as having a significance beyond the fens, bogs, and sloughs of the province.
For better or worse, environmental protection measures in Alberta are often framed in terms of their contribution to Alberta’s international reputation, particularly as it is relevant to the marketing of our petroleum resources. If that is part of the purpose of the new policy, or a use to which the policy might be put, then it is important that we consider international thinking on conservation offsets. A 2011 international survey report found that over 45 jurisdictions worldwide have habitat compensation schemes, with another 27 in development. There is, therefore, an abundance of international experience and emerging international standards. For instance, many scholars and policy experts refer to the Standard on Biodiversity Offsets of the Business and Biodiversity Offset Programme (BBOP), an international collaboration of approximately 80 companies, financial institutions, government agencies, civil society groups, and individual experts.
Among those with the most experience in habitat offsets is our largest trading partner, and the focus of a large part of Alberta’s reputational concern: the United States. Since 1990 the Americans have had a federal regime of required offsets for wetlands (see here for the 1990 policy memorandum and here for the 2008 rule encompassing and reforming the policy, and elevating its legal status). As well, their Endangered Species Act contains provisions which enable the regulated offsetting of the habitat of listed species. It might serve Alberta well, therefore, to be cognizant of American experience and direction.
Offsetting Provisions in the New Alberta Wetland Policy
A goal of “no net loss” or “net gain” of the target resource is explicit in almost all offset policies in other jurisdictions. Indeed, BBOP uses it as an element of the definition of the concept. As Arlene Kwasniak has pointed out, the wording of Alberta’s 1993 interim wetland policy objectives, while not adopting the term “no net loss” implies something very like it.
The new policy deviates substantially from this norm with its goal “to conserve, restore, protect and manage Alberta’s wetlands to sustain the benefits they provide to the environment, society, and economy” (p 2, emphasis in original). The vagueness of this commitment is heightened by the statement which immediately precedes it: “This policy will minimize the loss and degradation of wetlands, while allowing for continued growth and economic development” (p 2).
The lack of commitment to the no net loss goal has both symbolic and operational importance. Symbolically, Alberta has departed from an emerging international norm, one which our largest trading partner, among many others, has embraced for more than two decades. The optics of this cannot be good.
Secondly, the commitment to no net loss provides a concrete benchmark by which the adequacy of conservation measures, including offsets, can be measured. Whether at the level of the individual project or program-wide, those responsible for the policy, or concerned with it, may determine the adequacy of their actions by reference to the goal. As well, administrators, auditors and concerned citizens may gauge a program’s success against the no net loss standard. Indeed, one of the most common critiques of offset systems is that they fail to meet the standard, or fail to collect sufficient data to make such an evaluation possible. (For a critique of this nature of the federal fish habitat compensation program see here; for a thorough critique of the U.S. wetlands compensation program as it existed in 2001, with a similar type of finding, see here.) In contrast, it is hard to imagine anyone being held to account for failure to meet the uncertain goals of Alberta’s new policy.
2) Scope of Application
One of the reasons why offset schemes often have serious difficulties in meeting their no net loss goals is that they do not encompass all of the activities which lead to loss. As Alberta’s new policy is quite limited in its scope of application, this may be one of the reasons why it was felt inadvisable to strive for no net loss.
The scope of the policy is limited in several ways. First, it is a “go-forward policy” (p 7), such that it does not apply to activities for which application was made prior to its approval. That grandfathering is not unusual, and can be seen as a reasonable measure, but it means that a great deal of development activity, much of its controversial, is not covered by the new policy. Further, it is not at all clear when the new policy is actually to be approved, coming into effect. The policy makes repeated reference to further guidance, tools, systems and programs which are necessary to its full implementation, but gives no indication of when those may be ready. Indeed, it lists a timeline for implementation as one of its key components yet to come (p 23). If these elements are necessary to the implementation of the policy, then does the grandfathering apply to all those applications which will come forth between the policy’s release and the completion of the needed components?
Finally, the provisions respecting wetland replacement, which are discussed in detail below, and which are the more innovative of the policy’s aspects, are limited still more in their application. First, they do not apply to ephemeral water bodies, such as seasonal creeks and ponds (p 7). This is certainly a matter for the policy-makers to delineate, but it does ignore that fact that such bodies may play an important ecological role during their wet periods, and may carry forward valuable wetland components (such as soils and plant materials) from one wet period to another. They may also capture pollutants during dry periods which then adversely affect downstream waters come wet season. It is for these reasons that the U.S. wetlands regime assumes jurisdiction over certain ephemeral waters providing they have a “significant nexus” to downstream navigable waters (broadly defined). (For a discussion of the upstream jurisdiction of the U.S. Clean Water Act regime by the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers see here.)
Finally, and perhaps most importantly, the replacement provisions of the new Alberta policy only apply to permanent, not temporary loss of wetlands (pp 17, 18). These terms are not clearly defined, however, with a temporary impact described in the policy’s glossary as: “A negative effect . . . that can be restored to pre-disturbance conditions within a reasonable time frame, as established through regulatory mechanisms” (p 24, emphasis added). Those regulatory mechanisms are under development one hopes, and one hopes that they do not give too wide berth to the definition of “temporary”.
The distinction between temporary and permanent impacts is important because many of the most common and most significant impacts in Alberta come from resource extraction activities (including oilsands mining) which are intended to last for up to several decades, but eventually to be reclaimed. If the policy exempts a major development of 70 or 80 years duration from any replacement obligations, that is unlikely to impress.
3) Assessing Relative Wetland Value
One of the enduring challenges of habitat offsetting is how to classify landscapes. While in fact each piece of land, each wetland, is unique in its particular combination of location, hydrology, species mix and other factors, if a comparison is to be drawn for purposes of prescribing offsets actions, then commonalities must be focussed upon. Further, it is not uncommon to rank the ecological value of sites as a means of prioritizing and guiding actions.
The new policy prescribes the assessing of a “relative wetland value” for each wetland site. The relative value will be expressed in a “high, moderate, moderately low, and low” ranking (p 13), which will be assessed on five variables (p 12):
While all of these factors are no doubt important, there is a need for elaboration on how some of them might be applied. For example, with respect to biodiversity and ecological health, how is a site with an abundant mix of common species to stack up against a more sparse site with a few members of a species at risk?
It is commendable that the policy prescribes evaluating individual wetlands within their larger landscape and social context. Many key considerations, such as the contribution of a wetland to a migration route, or its contribution to watershed level water flows and quality, may only be determined in the context of the larger landscape. The value which a regional human community puts on a site for any number of reasons is also critically important.
The assessment of relative wetland value is important in that it guides how the mitigation hierarchy is applied, the next matter to which I turn.
4) The Mitigation Hierarchy
The mitigation hierarchy is a key component of any offset scheme. It prescribes a simple sequence of consideration of means of environmental protection. First, environmental impacts are to be avoided. Secondly, where they cannot be reasonably avoided, then they should be minimized by all practicable means. Thirdly, only a last resort, those residual impacts which remain after steps one and two are to be offset. Strict application of the hierarchy is essential if the availability of offsetting is not to be used as a justification of unnecessary primary impacts. It is that fear that has occasionally led offsets being referred to as a “license to trash,” a label which all policy-makers administrators would no doubt like to avoid.
The new policy expresses the mitigation hierarchy well, and in keeping with international standards. Its administrators may find, however, as others have, that application of the hierarchy is not as easy as it appears.
Avoidance of impacts is the first and most critical step in the hierarchy, but it is also one of the most difficult to apply. A 2010 study found that the concept is often given short shrift in the context of Canadian wetland compensation systems. It has also been identified as one of the enduring challenges in the U.S. wetlands compensation scheme (see here).
This difficulty is not surprising, as the concept is difficult to pin down. It is safe to assume that a developer has reasons for selecting a particular location or using a particular development method. Those reasons may be seen as dictating a need for the location and method or, in other words, for not being able to avoid their impacts. As well, the developer can point to many other impacts which are not being produced and so, in a sense, avoided. To assess avoidance is to consider what the developer is not doing, an exercise fraught with intangibles. It is difficult to see how it can ever be done with any certainty or precision.
The intersection of avoidance and relative wetland value in the new policy is instructive. While impacts are to be avoided “regardless of wetland value”, where that is deemed impractical, “stronger evidence of effort to avoid” is required for wetlands of high value than of low value (p 16). The suggestion here seems to be that avoidance is a looser requirement for low value wetlands. This casts some doubt on the rigour of application of the mitigation hierarchy.
Minimization, combined with avoidance, is the process we think of as conventional environmental assessment and management. Precisely because it is (fortunately) largely routine, it is neither remarkable nor controversial.
The wetland policy enunciates several helpful principles respecting minimization (p 17): that it ought to apply to both direct and indirect effects, that it should be based on sound science and proven measures, that experimentation and continuous improvement are to be encouraged, and that monitoring may (may?) be required.
Another principle is that the minimization measures should remain functional for the potential life of the impact. This principle ought not to be remarkable, but it stands in contrast to the way duration is dealt with, or rather not dealt with, respecting replacement measures. This point will be taken up below.
Wetland replacement is the third step in the mitigation hierarchy, to be invoked only when avoidance and minimization have been maximized. It is defined in the new policy as “compensation for wetland value that has been permanently lost, due to human activity on the landscape” (p 25). It is here that the policy contends with the essence of offsetting, though, I will suggest, it deviates significantly from much offset thinking.
The policy offers a prospective developer seeking a permit to impact a wetland two options to satisfy the replacement obligation. The developer may undertake “restorative replacement” itself, or it may pay a prescribed in-lieu fee.
Under the first option, called “permittee-responsible replacement”, the developer itself will take responsibility for “restorative replacement.” This is one of the aspects of the new policy most in keeping with conventional offset schemes. Interestingly, it is one of the changes in the new policy, as it is an option not allowed under the old interim policy. (For compensation options under the old policy, see the 2007 provincial guide.)
Restorative replacement is defined as “replacement activities that attempt to make up for the permanent loss of a wetland through restoration, enhancement, or construction of another wetland” (p 18). This definition is notable in that its focus on activities and intention contrasts with the notion of offsets as measurable conservation outcomes.
Many have pointed out that our ability to restore or construct wetlands or other natural ecosystems is significantly flawed and inadequate (on the general point see here and here and, with respect to wetlands, here and here). The new policy deals with the potential gap between intended and actual outcomes not by holding the actor responsible for the particular outcomes of its restorative replacement activities, but by taking the risk of failure into account through the application of multiplier ratios at the front end of the replacement requirement. Multiplier ratios prescribe that a restoration of an area multiple times larger than the impact area is required to compensate for various risks of failure. It is a very common risk management tool in offset schemes, but one which is never precise. (For an excellent discussion of the factors behind multiplier ratios, and the variation in their application see here.)
Some regimes assess multiplier ratios on a case-by-case basis, but that is cumbersome and usually contentious. This was a feature of the compensation component of the old interim wetland policy. In the new policy Alberta adopts a fixed set of ratios, based upon the relative wetland values of the impact and replacement sites (pp 18-19). The highest ratio is 8:1, where the loss of one hectare of high value wetland is to be replaced with eight hectares of low value wetland. This maximum ratio is said to be set so as to incent developers to avoid high value wetland sites (p 19).
An examination of the chart of prescribed ratios reveals something curious, however. Like-for-like replacements (i.e. high value for high value, moderate for moderate) are subject only to a 1:1 ratio (p 19). How does that take into account any risk of failure, or the inevitable time lag in the provision of ecological functions? It seems to rather assume that we can perfectly and immediately replicate wetlands, a proposition which the policy itself rejects earlier on the same page. This important detail requires revisiting.
The second option for prospective developers is payment of an in-lieu fee. This fee is to be set taking into account the costs of land, restoration work, monitoring and an administrative fee (p 20) but no specific fee is actually set. The funds are to be paid into an unspecified agency, which I will call simply the “wetland agency”, where they will be “allocated toward specified restorative or non-restorative measures, as determined by established guidance documents” (p 18). It is not clear what guidance documents are referred to or when they might be established and available.
At this point I should say that I do not consider in-lieu fee arrangements to be a strict offset system. This is because they typically do not require habitat compensation to match impacts. This seems to be particularly so under the new policy in the absence of even a loose commitment to no net loss. The credibility of the compensation scheme, therefore, relies on the credibility and resourcing of the wetland agency. In the absence of any details on its identity, nature, governance or direction, that is impossible to currently judge. As a caution, those designing the operation of the new agency may wish to review the U.S. General Accounting Office’s 2001 report on the in-lieu fee program for U.S. wetlands, which found thoroughly inadequate systems for seeing that such fees were actually expended on effective habitat compensation.
The application of multiplier ratios to the in-lieu fee program is not clear. While the policy specifies that the highest multiplier ratios are to be applied as a matter of routine to in-lieu fee (p 20), it does not say how one converts hectares lost to fees assessed. This puzzle is compounded by the fact that many of the uses to which the fees may put cannot be measured in area.
As quoted above, the wetland agency may use in-lieu funds to undertake restorative or “non-restorative” replacement. Non-restorative replacement is of interest for more than its novel semantics. It includes the securement of wetlands for long-term conservation. Such protection, usually by means of conservation easement or outright land acquisition, is a common means of offsetting under most systems, often referred to as “averted loss”. The conservation value of averted losses is usually measured by reference to the seriousness and imminence of the threat the land is under, a factor which is not mentioned in the new policy. That measure, of course, is not critical in the absence of a no net loss or other specific conservation objective.
Non-restorative replacement contains many other elements, however, and it is here that we stray from what is generally considered to be acceptable offset measures. Other measures allowed by the policy include specified restoration research, provincial-level monitoring, wetland inventory and data gathering, specified wetland health assessments or modelling, and public education and outreach programs (p 18). I will refer to this amalgam of programs as capacity-building programs, in that they build the structure of wetland conservation, but do not actually deliver it. There is no doubt that all of these activities are important and valuable, but it is precisely this lack of a direct contribution to on-the-ground environmental protection which leads to such measures frequently being discounted or dismissed as valid offsets. A landmark 2004 paper by Kerry ten Kate et al. considered just this point in interviews with a wide variety of participants in offset schemes worldwide (p 70):
Several referred to the “cynicism” stakeholders and observers would feel if companies presented training and scientific research in lieu of damaged ecosystems. As one interviewee put it, “local people would not be willing to trade habitat for education. Education is not always a conservation benefit.”
It is worth noting in this regard that the U.S. policy guidance on its in-lieu fee program for wetlands specifically excludes educational programs as a valid use of fees collected (p 19657).
These points of criticism would be more severe if the new policy anticipated developers paying directly for research and education programs. If, however, these are only to be elements of a well-rounded, thoughtful and strategic effort to restore and protect wetlands, as may be contemplated by the new in-lieu fee program, then these elements may be more understandable. Again, however, the credibility of that effort and of the wetland agency itself depends on guidance and direction which we have yet to see.
As noted above, the duration of minimization measures is prescribed by the policy to match the life of the impact. There is no such prescription, or one of any kind, respecting the duration of either restorative or non-restorative replacement measures. One would expect that they should also match the duration of the primary impacts, but the policy is silent on this. Typically in other jurisdictions (U.S., Australia, BBOP Standard) offset measures are to be designed, both technically and legally, to last in perpetuity, or at least for the life of the primary impact.
5) Where are the bankers?
One replacement option which the new policy does not provide to our prospective developer is that of buying offset credits from a third party. This is notable because third party production and “banking” of offset credits is the preferred method of offsetting under the U.S. wetlands compensation regime, and a market in such credits is envisioned by the Alberta Land Stewardship Act (s 45). Banking is often presented as a means of bringing economic efficiency and market discipline to habitat restoration and protection. It also holds the not insignificant promise of producing offsets in advance of negative impacts, thus overcoming the time lag in habitat conditions which is unavoidable when restoration is only commenced at the same time or after the destruction following on development.
Conclusion: Is Conservation Offsetting the Right Frame for the New Policy?
Throughout this post I have compared the new Alberta wetlands policy with concepts and doctrines developed through the experience of Canada and other jurisdictions with forms of conservation offsets. As we have seen, the policy is in the mainstream in some details, and quite far out of it in others. That in itself is not a weakness; there is nothing wrong with innovation.
The new policy might best be seen as a hybrid between a developer-led (“permittee-responsible”) offsets system and a developer-financed government-run broad based wetland conservation program. The latter is not based on offsetting impacts one by one, and of course is not oriented to a no net loss goal. It will have its own direction, strategies and governance, all of which have yet to be developed.
It will also have its own source of finance from the in-lieu fees. The adequacy of its finances will no doubt depend on the relationship between the level of the fee set and the cost of permittee-responsible restorative replacement. Just as with the specified emitters program for carbon pricing, if the in-lieu fee is substantially lower than actual restoration costs, then an influx of development dollars may be expected to the new wetland agency. Unfortunately, that will also mean a great deal of wetlands are being lost, and even the ample revenues may not be adequate to keep up.
In fact the specified emitters program may be the best comparator for the new wetland policy. There, as here, the theme is “lower your impact or pay a fee”. The fee is based on performance, but is not necessarily destined to address the particular impacts of that performance. In wetlands, as in carbon management, we may end up with an agency which pursues its own priorities and strategies quite apart from industry performance day to day. The designers and administrators of the wetland agency could do worse than to study the strengths and weaknesses of their carbon management colleagues. They might also have close look at the international expectation respecting offset systems.
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Cases Considered: Alberta Wilderness Association v Canada (Attorney General), 2013 FCA 190, Wildlands League and Federation of Ontario Naturalists v Ministry of Natural Resources (Ontario) et al., Court file no. 400/13, Sandy Pond Alliance to Protect Canadian Waters Inc. v Canada, Court file no. T-888-10
As most readers are probably already aware, last week the federal government announced that it will be issuing an emergency protection order (EPO) under the federal Species at Risk Act SC 2002, c 2 for the Greater Sage-grouse (for the background to this announcement, see my previous post here). Ostensibly, this is a ‘good news’ story about the separation of powers at work: The federal government delayed in taking the measures ecologically necessary and (ultimately) required by law to protect the Sage-grouse; the matter was brought before the courts, which concluded that the government’s actions were illegal; the government is now taking steps to bring itself into compliance.
Only I am not so sure. While Ecojustice appears optimistic, the government’s press release states that although the details have yet to be sorted out the EPO will contain “no restrictions on activities on private land, nor on grazing on provincial or federal crown lands.” On this front, the situation is similar to that which is occurring on a greater scale in Ontario right now with respect to its endangered species legislation, where the Liberal government recently introduced regulations that effectively exempt numerous sectors from the Act’s application. There, as was the case for the Sage-grouse here, Ecojustice has initiated a legal challenge alleging various legal defects in the decision-making leading up to the regulations, which they also allege are ultra vires by virtue of the fact that they “undermine the ESA’s very purposes”.
In her post on this situation, which she describes as “a tremendous blow to species protection” in Ontario, environmental lawyer and expert Dianne Saxe asks several questions that speak to the separation of powers and some of the fundamental dynamics of environmental law and policy. Dianne frames the legal challenge this way:
To win this legal challenge, Ecojustice will have to persuade the courts that governments cannot make policy decisions, for political and economic reasons, that increase the danger to endangered species that they said they would protect. Is this the type of decision that courts will prevent politicians from making? And if so, should they?
In other words, who as between the executive and the judiciary should have the ultimate word on matters of public policy? The obvious response, of course, is the executive. An alternative response, however, is to frame the matter not as one of current public policy but of legislative intent and statutory interpretation, the broad policy decisions having already been made by previous legislatures as manifested through the Endangered Species Act, 2007, SO 2007, Ch. 6. A very similar argument was recently made in Sandy Pond Alliance to Protect Canadian Waters Inc. v Canada, T-888-10 (decision pending, but see 2011 FC 158 (CanLII) for some background on the case in the context of an application for intervener status). In that case, the applicants have alleged that the Metal Mining Effluent Regulations (MMER), SOR 2002/222, and more specifically those sections that authorize the use of natural water bodies as mine tailings impoundment areas (TIAs), are ultra vires the federal Fisheries Act, RSC 1985 c F-14, otherwise regarded as one of Canada’s strongest environmental laws. On this theory, a court striking down such regulations is not engaging in policy-making but rather ensuring that the will of previous legislatures is respected and given effect. Such an outcome could be considered analogous to the “Charter dialogue” described by Professor Hogg and Allison Bushell in their classic article on the subject: “Where a judicial decision is open to legislative reversal, modification, or avoidance, then it is meaningful to regard the relationship between the Court and the competent legislative body as a dialogue” (“The Charter Dialogue Between Courts And Legislatures (Or Perhaps The Charter Of Rights Isn’t Such A Bad Thing After All)” (1997) 35(1) Osgoode Hall LJ 75 at 79).
Indeed, it is the spectre of negative “legislative reversal” in the case of the ESA that Dianne raises towards the end of her post:
The Ontario government presumably decided to weaken the Endangered Species Act in order to increase its chances of surviving the next election. It is already facing substantial anger in many rural areas over the Green Energy Act. If Tim Hudak’s Conservatives were to win the next election, they are certainly no friends of the Endangered Species Act; what would happen to the Act and its regulations then?
To be sure, such ‘pyrrhic victories’ are not uncommon in environmental law; many of the changes to federal environmental and natural resource legislation over the past few years can be explained by this dynamic, the most obvious example being the amendments to the scoping provisions of the previous Canadian Environmental Assessment Act, SC 1992, c 37, following the Supreme Court of Canada’s decision in MiningWatch Canada v Canada (Fisheries and Oceans), 2010 SCC 2. While SARA has to date largely been spared, on my last count the federal government is batting 0-7 in terms of litigation related thereto and there is every reason to believe that more litigation is likely should the EPO for the Sage-grouse be deemed inadequate. The fundamental question, then, is which is better: to preserve a law by allowing it to be covertly rendered ineffective, or to insist on its strict implementation and risk having it modified or scrapped altogether?
From an environmental outcome perspective, it is tempting to point to last year’s federal omnibus legislation and vote for the former, perhaps with the hope of a policy reversal down the road. Without staking out a position conclusively, however, I am inclined to go with the latter on both democratic and environmental grounds. Although opposition (in the broadest sense of the word) efforts ultimately failed to have that legislation modified, its introduction in Parliament was a catalyst for a reinvigorated national debate on the importance of not just environmental protection but also on the role of science and evidence in Canadian environmental law and policy (likely a reflection of the incredible chasm between the two as reflected in the omnibus bills, as discussed here and here), debate that is ongoing and that has reached international dimensions (for the most recent example, see this editorial in the New York Times). Such debate seems much less likely where a government bypasses the legislature and effectively re-writes legislation through executive regulation. The 2002 promulgation of the MMER provides a useful illustration, Schedule II of which now boasts an impressive list of nineteen lakes and rivers authorized for use as TIAs with many more waiting in the queue. Arguably, that regulation has done more to undermine the conservation of fish and fish habitat than the byzantine amendments to the Fisheries Act introduced last year, though to little fanfare. And while I am not suggesting that it always leads to better environmental outcomes (at least not in the short term and not without other factors), anyone doubting the value of public debate in this context need only consider the great and awkward lengths to which the current federal government went to in order to avoid it throughout so much of last year.
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PDF Version: A Provincial Proposal That Affects All Canadians
Policy commented on: Proposed Quebec Charter of Values
As evidenced by the entries on our Faculty ABlawg, the recent announcement of the proposed “charter” of “values” in Quebec has led to a strong response across Canada. While the proposal itself may be limited to Quebec, it is clear that the impact is wider than that.
Professor Jennifer Koshan described the experience of teaching the famous, Reference re Secession of Quebec,  2 SCR 217, the day after the charter proposal was announced. I also teach Constitutional Law at the Faculty, and I found that her blog, in turn, provided an excellent teaching resource for discussion in the following class session. As this all occurred during the second week of law school for our first-year students, it was a powerful introduction, both to the ever-changing nature of Constitutional Law, and to the inconsistencies that can emerge under our constitutional system.
Professor Alice Woolley has added her commentary on the ethical implications of the proposal, which adds an innovative dimension to the discourse around this subject. As she points out, this proposal has repercussions well beyond the normative legal issues that have been discussed in much of the public discourse, and she adds an important layer to an interesting debate.
As I read all of the commentary about the proposal, I am reminded of my own personal experiences in Quebec.
I arrived in Canada about ten years ago as a new immigrant from the United States. I first lived in Montreal for several years while I completed my graduate studies in law at McGill University. I will never forget the warmth of the welcome that I encountered there. People were eager to talk to me about why I was moving to Quebec, and to offer me assistance and encouragement with learning French. I was frequently reassured that my American accent was appreciated, even when I spoke French, because Quebec was a province that embraced diversity and welcomed new immigrants, so accents were common. When I decided to formally immigrate to Canada, I did so through Quebec’s distinct immigration system. While I no longer live there, Quebec is important to me as my first Canadian home, and I remain grateful for the warmth with which I was embraced.
It is painful to contrast those memories with these most recent developments. Yet, even in the face of a governmental proposal that is so egregiously discriminatory, I see evidence of the inclusiveness that so stood out for me. Many have discussed the constitutional implications of this proposal, which touch on Charter protections such as freedom of religion, freedom of expression, and the prohibition on discrimination. The proposal raises issues on many other levels as well. I have been fascinated to see the range of expression in opposition to this charter, especially in light of the charter’s express intent to limit certain forms of expression.
Political Discourse: The Fight for the Public Image of Quebec
Many of my friends in Quebec have expressed outrage, not just about the proposal itself, but about the impression that this proposal gives about Quebec. Like me, those friends believe the proposal to be antithetical to the true underlying cultural values of Quebec, much less of Canada as a whole.
This being the Internet age, a battle of sorts to control the public discourse about Quebec’s image has begun. The PQ itself engaged in image-based discourse in announcing its proposal, using an illustration with the tagline “Un État Neutre Au Service de Tous,” (loosely translated “A secular state in service of all”) with accompanying images on the left of workers with no religious garb or very small items – deemed permissible – and an image on the right of workers wearing clear religious symbols, including a large cross, a Muslim hijab, a Sikh turban, a Muslim niqab and a Jewish yarmulke – deemed impermissible. Somehow, leaving a large crucifix on top of Mount Royal, or those displayed in public buildings, or Christmas trees, would be permissible, because those symbols were deemed cultural, or “historical,” rather than religious.
Image Source, the National Post.
Almost immediately, contradictory discourse opposing the proposal arose. Justin Trudeau, for instance, wrote an op-ed in the Globe and Mail, calling on Canadians not to judge Quebec by this proposal, and not to engage in simplistic stereotyping of Quebec based on it. Calling his piece “I have faith in Quebec. So should you,” Trudeau wrote “Like our fellow Canadians elsewhere, Quebeckers are open, positive people. We believe in defending each other’s freedoms, not restricting them.” He added:
Resist the temptation to indulge in easy stereotypes and reactive characterizations of Quebec and Quebeckers. The PQ government’s plan is divisive, negative and emotional. It is designed to be that way. Quebeckers will reject it.
In some ways, political responses to this proposal have crossed party lines and are not limited to Justin Trudeau or the Liberals, with representatives of Stephen Harper’s Conservative Government immediately announcing that they would present a constitutional challenge to the charter if adopted.
Even among those from whom the PQ might expect political support, there has been some backlash. There is much speculation that the true reason for this proposal is to revive larger discourse surrounding Quebec secession. If that is, indeed, the intention, even that has not played out entirely in that manner. Maria Mourani, a member of the federal Bloc party, was ousted from her caucus after she spoke out against the proposal. The irony is that she is rather well known for the strength of her separatist views, although, in subsequently resigning from the Bloc, she indicated that she was reconsidering those views. Her resignation demonstrated the use of symbols that is undergirding so much of the discourse around this issue, as she wore a visible crucifix in making her announcement.
Individual online responses have also emerged in interesting ways. One, a blog that purports to be an open letter to Mme. Marois, has been widely circulated. One Ontario hospital used the proposal as a recruiting tool for healthcare workers, showing a picture of a woman wearing hijab, and saying “We don’t care what’s on your head. We care what’s in it.”
Parodies of the proposal have also cropped up, showing the use of humour to demonstrate perceived ridiculousness of the proposal. In one, a little girl is required to remove her snowsuit, because it too closely resembles a burqa. The child is also told not to use plus signs because they too closely resemble the Christian cross.
Protest Movements and Free Expression in Universities
One form of response, in the midst of the multi-layered reactions, has been especially poignant for me. According to the PQ announcement, many levels of the public sector are expressly included in the proposal, and among those would be universities – although supposedly universities can opt out. I am especially proud of the swift and unequivocal response to the charter among so many in Quebec universities.
Even before the formal announcement, university professors were speaking out against this proposal, with an excellent example being this commentary by Professor Shauna van Praagh, a law professor at McGill, which I have included on my course syllabus for a seminar I teach in Advanced Public Law. She wrote:
… by adding this Charter of Quebec Values into the mix, we diminish rather than strengthen our society. We betray our own heritage; we forget our own history; we fail to uphold the values that we say are so crucial to our everyday lives and future. Only misguided rhetoric can establish this proposed Charter as a symbol of what it means to be vraiment Québécois.
Professor van Praagh also participated in an online panel of legal experts discussing the constitutionality of the proposed charter, which also included Professor Kathleen Mahoney, from the University of Calgary. Opinions varied among those on the panel as to the constitutionality of the proposal, with my own opinion among those who felt that it could not withstand constitutional scrutiny.
A more symbolic protest took place across a number of universities in Montreal, beginning on Thursday, September 12th. Professor Catherine Lu, at McGill, and Professor Marie-Joëlle Zahar, at the University of Montreal, wrote an open letter to their colleagues in Quebec, which concluded with:
We call on all educators and members of the public service to reflect on the fundamentally unjust, incoherent, self-defeating and dangerous nature of the proposed Charter, and to join in a Week of Action, starting on Thursday, September 12th, to express our strongest opposition to its adoption. For one week (and perhaps indefinitely until the Charter is rejected by the National Assembly), we call on all educators to adopt and wear visible religious symbols of their choosing in classes and lectures. [Portions of the letter have been reproduced in the media. Professor Lu has provided the full text of the letter, and I quote from her version].
Many professors wore items that resembled religious symbols in response, particularly on September 12th. For instance, Professor Lu taught a large political science class wearing a head scarf that resembles a hijab. She explained to her class that, while she did not espouse a particular religion, she was wearing a garment resembling a hijab, in part to demonstrate that such attire would be banned in the public sector, even if the person were wearing it for non-religious reasons.
Professor Lu graciously granted ABlawg permission to include a picture of her from that day. As she pointed out, there were many professors at different Quebec universities also participating.
The Montreal Gazette carried this video interview with a professor at Dawson College, who self-identified as an atheist, who also joined in the protest and wore a head scarf while teaching. She spoke of how what people wear was now being proposed as a basis for discrimination, while, tomorrow, it might be based on languages spoken or content of speech.
Although I oppose this proposal on every level, I believe that it is especially insidious that it purports to include those working in universities. Free expression, free thought, and academic freedom are foundational underpinnings to the role universities play in society, and the decisive nature of this response from within those universities was therefore especially important.
Professor Suzanne Fortier, Principal and Vice-Chancellor at McGill University, made a statement this week in opposition to the proposal:
The University must remain a place for the free and full exchange of ideas. The proposal to prohibit our professors and staff from wearing visible religious symbols runs contrary to our principles. The wearing of such symbols in no way interferes with the religious and political neutrality of McGill as an institution. All the members of the University community with whom I have spoken on this issue are clearly worried about the proposal, and would like to see it withdrawn.
On Saturday, September 13th, many of my friends, again some of whom work in Quebec universities, but also others who work in various public and private sector positions in Quebec, took part in a large protest march in Montreal. Thousands of people participated. Since then, the media are reporting a swell in the public backlash against the proposed charter. It is amazing to watch the impact that free expression can have.
It is difficult to characterize this proposal as anything other than an attempt at divisiveness. It is intriguing, given the express attempt to stifle expression through this proposal, that free expression in opposition has taken so many creative forms. Public-opinion polls were suggesting, early on, that this proposal had majority support in Quebec, but as the response swells, this dynamic may be changing as well.
I remain hopeful that this low moment in Quebec history will result in a resurgence of the type of inclusiveness that I found so moving when I first arrived in Quebec. I believe that the true measure of culture and values in Quebec is in that inclusiveness, not in the type of obvious divisiveness symbolized by the PQ’s proposed charter. While I believe that legal challenges to this charter, if adopted, would succeed, I hope that it will never reach that stage, and that the strong response in opposition will, in the end, stop this proposal from moving forward.
I applaud my colleagues and friends in Quebec who have spoken out so strongly against this charter. I stand in full support of them.
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PDF Version: Enforcing and Extending Vexatious Litigant Orders
Case commented on: 1158997 Alberta Inc v Maple Trust Company, 2013 ABQB 483
This decision is interesting for two reasons. First, it illustrates a problem with the vexatious litigant provisions in Part 2.1 of the Judicature Act, RSA 2000, c J-2 or their administration namely, the absence of a list of those declared to be vexatious litigants that is easily and widely available both to those within and those outside the legal profession. As it stands now, it appears that even the clerks of the court do not have a list of who these orders have been made against, even though those orders state that the persons named vexatious litigants cannot commence or continue actions in the specified court without leave of that court. In this case, a company with two such orders made against it (in 2010 and 2011) was able to begin proceedings in 2012 and 2013 without the required leave of the court. Second, it illustrates the application of the seldom used subsection 23.1(4) of the Judicature Act. That subsection allows the court to make an order declaring someone who is not a party to an action to be a vexatious litigant as long as they are someone who, in the opinion of the court, is associated with the person against whom a vexatious litigant order is made. In this decision, five corporate plaintiffs in three different actions were declared to be vexatious litigants, and six individuals, who were not parties to any of the three actions but who were found to be associated with the corporate parties, were also declared to be vexatious litigants. One such individual was twice removed from the parties declared to be vexatious litigants. (The decision might also be noteworthy for a third reason: the number of persons — eleven — declared to be vexatious litigants by one order.)
Summary of the decision
Justice Sal LoVecchio’s decision in 1158997 Alberta Inc v Maple Trust Company, 2013 ABQB 483 arose as a result of applications by three financial institutions — Maple Trust Company, Alberta Treasury Branches and the Royal Bank of Canada — for summary judgment and other relief in three cases that had been consolidated for the purpose of a Special Chambers Application. As Justice LoVecchio notes (para 49), there are striking similarities among the three actions that were before him. In each case 1158997 Alberta Inc purchased and obtained title to a residential property that was either being foreclosed on or about to be foreclosed on. 1158997 Alberta Inc would then resell the residential property to a different numbered company. The numbered company that was the new owner then granted a mortgage to an entity called Partners in Success Mortgage Inc and that mortgage was registered against title, behind the legitimate first mortgages that were being foreclosed upon. The first mortgagees — Maple Trust, Alberta Treasury Branches and the Royal Bank in these three cases — never received any money from 1158997 Alberta Inc, the numbered company the properties were sold to, or Partners in Success Mortgage Inc. As a result, foreclosure proceedings were begun or continued and an Order for Sale was eventually granted.
It appears that the original owners stayed in their homes through all of this buying and selling and that they paid rent to 1158997 Alberta Inc (or the numbered company that became the subsequent owner or Partners in Success Mortgage Inc). The rental income would come in but no mortgage payments would be made. According to K.R. Laycock, Master in Chambers in Scotia Mortgage Corporation v Gutierrez, 2012 ABQB 683 (CanLII) at para 23-26 — another case involving 1158997 Alberta Inc and very similar facts — this is a revival of a 1970s scam known as “Dollar Dealing”. Essentially, the rental income from numerous desperate homeowners gives the Dollar Dealers substantial cash flow. The longer the Dollar Dealers can hold off foreclosure, the more money they make, and so they tend to make a lot of court appearances and spurious arguments.
But Dollar Dealing is not the entire story. After the Order for Sales were granted in each of the three actions, 1158997 Alberta Inc, Partners in Success Mortgage Inc and the numbered companies who bought from 1158997 Alberta Inc sued the foreclosing bank, the lawyers for the foreclosing bank, the Master of the Court of Queen’s Bench who granted the Order for Sale and the Court itself. The original owners who had sold their homes to 1158997 Alberta Inc were either not involved in these actions or obtained orders removing them as plaintiffs. These lawsuits alleged similar things: the financial institutions ignored the sales and attempts by the new owners to pay out the mortgages. The claims against the Master and Court were, of course, struck rather quickly on the basis of the long-standing doctrine of judicial immunity. All of those orders were appealed but all three appeals were struck. The three applications that Justice LoVecchio heard were brought by the remaining defendants, the foreclosing banks and their lawyers.
Justice LoVecchio granted all three summary judgment applications under Rule 7.3 of the Rules of Court, applying the test in Condominium Corp No 0321365 v 970365 Alberta Ltd, 2012 ABCA 26 to determine that there was no merit to any of the claims by 1158997 Alberta Inc, Partners in Success Mortgage Inc and the other numbered companies. If necessary, he would have struck those claims under Rule 3.68 on the basis it was “plain and obvious or beyond reasonable doubt that the claim cannot succeed” (at para 95, quoting MacKay v Farm Business Consultants Inc, 2006 ABCA 316 at para 7).
The requisite notice having been provided to the Minister of Justice and Attorney General in March 2013 (now the Minister of Justice and Solicitor General of Alberta), Justice LoVecchio also granted the financial institutions’ application to declare 1158997 Alberta Inc, Partners in Success Mortgage Inc and Derek Ryan Johnson, the sole director and voting shareholder of 1158997 Alberta Inc, to be vexatious litigants. Justice LoVecchio declared (at para 103) that the three were prevented from “commencing or attempting to commence, or from continuing, any appeal, action, application, or proceeding in the Court of Appeal, Court of Queen’s Bench or the Provincial Court of Alberta (Civil) on their own behalf or on behalf of any other entity or estate without an Order of the appropriate court …”. He relied upon Onischuk v Alberta, 2013 ABQB 89, affirmed 2013 ABCA 129 for the indicia of vexatious litigation and found (at para 71) the indicia to be “a textbook précis of the three actions.” He also relied on the fact that 1158997 Alberta Inc and Derek Johnson’s related companies had begun these actions in contravention of previous court orders declaring them to be vexatious litigants (at para 102). Justice LoVecchio also granted the application to declare as vexatious litigants the three other numbered companies which had been plaintiffs in the actions and which were controlled by Johnson: 1673793 Alberta Ltd, 1691482 Alberta Inc, and 1660112 Alberta Ltd.
Five individuals who had not instituted or conducted any of the proceedings, and who therefore could not be declared to be vexatious litigants under subsection 23.1(1) of the Judicature Act, were found to have been “associated with a person against whom an order under subsection (1) is made” and therefore declared to be vexatious litigants under subsection 23.1(4). Justice LoVecchio declared three of those individuals to be vexatious litigants because they were directors of the three numbered companies which were plaintiffs and which “purchased” the homes from 1158997 Alberta Inc and therefore they associated with parties to the action declared to be vexatious litigants: Sarabjit Singh Sarin , the sole director and voting shareholder of 1673793 Alberta Ltd; Jason Mizzoni, who filed the Notice of Appeal of the order removing Master Laycock and the Court of Queen’s Bench of Alberta as defendants in one of the three actions on behalf of 1691482 Alberta Inc; and Ajay K. Aneja, the sole director and shareholder of 1660112 Alberta Ltd. “Ty Griffiths”, identified in each action as an agent for all of the corporate plaintiffs was declared to be a vexatious litigant if he actually exists (at paras 105-106). As Ty Griffiths was not present at the hearings, it was not clear that Ty Griffiths is a real person as opposed to, say, a pseudonym for Derek Johnson. However, as the person the corporate plaintiffs named as their agent, he was associated with entities named as vexatious litigants under subsection 23.1(1). Finally, Evanna Ellis, who appeared on the first day of the hearing of the Special Chambers Application and said she was the agent for Ty Griffiths, was also declared to be a vexatious litigant. Justice LoVecchio stated (at para 108) that she was “by extension” an individual associated with a person against whom an order under subsection (1) is made.
Comments on the decision
1) The need for a list of those declared to be vexatious litigants that is widely available
Do the Alberta courts maintain a list of persons declared to be vexatious litigants? If so, who is it distributed to? It is certainly not made publicly or widely available. And it does not appear to be available within the courts themselves, or to the clerks. 1158997 Alberta Inc sued banks, bank lawyers, Masters of the Court of Queen’s Bench and the Court itself, despite the fact the company has been the subject of at least two vexatious litigant orders by Court of Queen’s Bench judges that prohibited it from commencing a court action without leave of the court.
Members of the public or legal profession would have difficulty even finding out that 1158997 Alberta Inc had at least twice been declared to be a vexatious litigant even if they searched databases of the courts’ judgments. It appears that the previous orders were not posted on the Court’s web site, are not in CanLII and are not in any commercial database. We only know about them because Master Laycock in Scotia Mortgage Corporation v Gutierrez, 2012 ABQB 683 noted that 1158997 Alberta Inc had been declared a vexatious litigant in at least two other cases because of arguments made by Derek Johnson when he appeared in court on behalf of the company. Master Laycock stated that the two cases were Exceed Mortgage Corporation and Exceed Funding Corp v 1158997 Ltd., Action No. 1001-08610 (December 3, 2010) per Justice Wilson, and in HSBC Finance Mortgages Inc. v Strand Action No. 1001-14143 (February 9, 2011) per Justice Strekaf. Justice LoVecchio repeats this information in 1158997 Alberta Inc v Maple Trust Company (at para 57).
In the United Kingdom, the Ministry of Justice maintains a list of vexatious litigants, who in that country are people who have been forbidden by a High Court Judge to issue civil proceedings in any court in England and Wales without permission. Vexatious litigants are named, and the date of their being declared a vexatious litigant is specified, in a list available here that non-lawyers as well as the legal profession can access. The Scottish Courts website has a short and rather sparse “[l]ist of members of the public who have habitually and persistently instituted vexatious legal proceedings without reasonable ground and have been declared vexatious litigants under the Vexatious Actions (Scotland) Act 1898.” Because it includes only first and last names and some of those names appear to be rather common ones (e.g., James Bell), it is not clear how helpful such a list is to the legal profession, courts, and members of the public (especially those named James Bell).
In the United States, far more information is disclosed about vexatious litigants in those states that do publish lists. For example, California’s statewide vexatious litigant list is updated monthly and may be found on the California Courts Web site here. It includes middle names or initials if known, the court making the order, the case number and date. The Nevada courts implemented a similar Vexatious Litigants List in 2009. Texas court administrators make a list of Vexatious Litigants available on their web site as well, based on reports received from both Texas and federal courts. Their list is also much more than just names. It includes a helpful link to a copy of the order declaring the person to be subject to what they call a “pre-filing order.” The list — a rather lengthy one — is even available as a sortable Excel spreadsheet.
Vexatious litigant orders should be enforced by the courts that make them without another innocent party being forced to bring an application and incur the cost of enforcing the order. At the very least, the clerks of the various courts should have such lists available to them. But making the lists widely available to members of the public and the legal profession might help those facing persistent and unfounded claims by these vexatious litigants in other forums.
2) Vexatious litigant orders against those who do not themselves institute or conduct vexatious court proceedings.
Based on recent reported cases, subsection 23.1(4) of the Judicature Act has not been used very often. It allows the court, on application or on its own motion, and with notice to the Minister of Justice and Solicitor General, to make an order declaring someone who is not a party to an action to be a vexatious litigant as long as they are someone who, in the opinion of the court, is associated with the person against whom a vexatious litigant order under subsection 23.1(1) is made. In other words, it catches those who are merely “associated with” persons who institute or conduct vexatious proceedings. What does “associated with” mean?
The application of subsection 23.1(4) to Derek Johnson, the sole director and voting shareholder of 1158997 Alberta Inc and the person who appeared in court on the Special Chambers Application and made arguments as the director of Partners in Success Mortgage Inc, appears uncontroversial. If anyone is “associated with” a party declared a vexatious litigant, Derek Johnson is, as a result of his multiple relationships and multiple court appearances to represent those parties. Perhaps Derek Johnson even satisfies subsection 23.1(1) as a person “conducting a proceeding in a vexatious manner” when he appears for the corporate parties, although as their agent, it might be better to see the corporate parties as the ones conducting the vexatious proceedings.
At the other extreme, however, is Evanna Ellis, who appeared on the first day of the hearing of the Special Chambers Application and said she was the agent for Ty Griffiths. Ty Griffiths was also declared to be a vexatious litigant, if he exists, but under subsection 23.1(4), and not 23.1(1). Ty Griffiths did not institute or conduct vexatious proceedings; he did not show up for any of the hearings and was merely named in the corporate parties’ documents as their agent. Perhaps Ty Griffiths is Derek Johnson, but the order against Ty Griffiths was not made on that basis. (“Ty Griffiths” bills himself as a “human rights activist” and appears to operate the website www.privatesectoract.com/. While Derek Johnson recirculates the 1970s Dollar Dealer scheme on freelistcalgary.com, “Ty Griffiths” uses his website to encourage homeowners to babble discredited nonsense about “dual/split person” and other OPCA concepts (see “The Organized Pseudolegal Commercial Argument (OPCA) Litigant Case”).
Evanna Ellis is thus twice removed from a party who instigated or conducted vexatious proceedings. She is the agent for an agent of such a party. Justice LoVecchio perhaps acknowledged that he was stretching the scope of subsection 23.1(4) when he stated (at para 108) that she was “by extension” an individual associated with a person who instigated or conducted vexatious proceedings. While subsection 23.1(1) is necessary in order to be able to catch people like Derek Johnson who appear to incorporate numerous companies to instigate vexatious proceedings, it is not clear it can or should extend to someone as distanced from the instigators as Evanna Ellis appears to have been.
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Policy commented on: Alberta Wetland Policy
On September 10, 2013, the Alberta Government released its new Alberta Wetland Policy (“New Wetland Policy”). The release was long anticipated. It was preceded by 20 years of an “interim policy” applying to only part of the province, and by about 10 years of both lengthy and spurts and starts of consultations and processes aimed toward the province developing a comprehensive wetland policy approach applicable to the entire province. This ABlawg post presents and discusses the New Wetland Policy in a comparative, legal/political, and historical context. It describes the importance of wetlands and outlines wetland protection and conservation approaches in Alberta and elsewhere. It reviews the New Wetland Policy in this context to demonstrate how the New Wetland Policy compromises the protection of slough/marsh wetlands. A forthcoming ABlawg post by University of Calgary LLM student Dave Poulton will focus on the New Wetland Policy’s mitigation hierarchy and the offset provisions.
The Nature of Wetlands, Government Authority to Regulate Them, and Wetland Loss
As defined in the New Wetland Policy “Wetlands are land saturated with water long enough to promote formation of water altered soils, growth of water tolerant vegetation, and various kinds of biological activity that are adapted to the wet environment” (at 4). Wetlands are among the most valuable natural systems on earth. They store and release surface water, re-charge groundwater, and aid in flood control. They reduce sedimentation and purify water, help control erosion, and sequester carbon. They can be hotbeds of biological diversity, and serve as important habitat for waterfowl, shorebirds, and other animals. They produce numerous ecological goods and services, have aesthetic, economic, heritage, recreational, and intrinsic values. (For general information on wetlands and wetland values see Ducks Unlimited Canada website wetland pages, Environment Canada, Wetlands Alberta, and Alberta Environment and Sustainable Resource Development (ESRD), and links and references .
The Alberta government derives its legal authority to regulate wetlands and development that affects them under the Public Lands Act, RSA 2000, c P-30, as the owner of the bed and shores of all permanent and naturally occurring bodies of water (s 3), and under the Water Act, RSA 2000, c W-3 (and under predecessor legislation, the Water Resources Act, RSA 1980,c W-5), as the owner of all water in the province( Water Act, s 3). Under the Water Act and predecessor legislation a person who wishes to divert water or carry on land uses that impact water in a natural setting (subject to certain exceptions) requires an authorization, whether or not the bed and shores of the wetland is Crown owned under the Public Lands Act. Municipalities derive their authority to regulate impacts on wetlands under Part 17 of the Municipal Government Act, RSA 2000 c M-26, which deals with subdivisions and developments within a municipality. The federal government’s authority may be found primarily under the Fisheries Act, RSC 1985, c F-14, s 34-38, which regulates impacts and pollution to wetlands that constitute fisheries habitat (spawning grounds or nursery, rearing, food supply, or migration area for fish), and under the Migratory Birds Convention Act, 1994, ss 5-5.1, and Migratory Birds Regulations, CRC 1035, s 6, which prohibits the “taking” of migratory birds, nests, and eggs, and the deposit of harmful substances into waters frequented by migratory birds, without federal authorization . (For law related information on wetlands see A. Kwasniak, “Alberta Crown Ownership of Slough/Marsh Wetlands” (2007) 18 JELP 1, and A. Kwasniak, Alberta Wetlands a Law and Policy Guide (2001, North American Waterfowl Management Plan / Environmental Law Centre)).
Notwithstanding the significant values, functions and services of wetlands, it was not until the middle/latter 20th century that the need for wetland protection and conservation was visibly recognized. Even though efforts are now universally made to protect and conserve them (e.g. under The Convention on Wetlands of International Importance (Ramsar Convention) February 2, 1971, 11 l.L.M. 969 (1972) (in force 1975), and numerous legislative and policy frameworks and tools worldwide), losses continue. In Alberta, losses, mainly due to agricultural drainage activities and urban development, in the settled (White) area of the province (see Alberta government Land Use Framework White Area/Green Area map here ) have been estimated at 70% and are growing at a rate of about 0.3%- 5% per year (Alberta ESRD, here).
Losses in the Green Area (boreal ecoregion) are more difficult to quantify but losses have occurred and will continue from development, such as impacts from current and planned oil sands mining and in situ operations, and forestry dispositions. It has been estimated that existing, approved, and proposed oil sands mining alone could result in the loss of up to 460,000 hectares of peatlands (Pembina Institute Backgrounder, Alberta Provincial Wetland Policy, May 2013, at 2, referring to Peter Lee and Ryan Cheng, Bitumen and Biocarbon Land Use Conversions and Loss of Biological Carbon Due to Bitumen Operations in the Boreal Forests of Alberta Canada (Global Forest Watch, 2009).
Legislative and Policy Directives
The Federal No-Net Loss Policy (1991) and U.S. No-Net Loss Policy
The federal government became manifestly involved in wetland protection and conservation by developing a wetland policy in 1991 with the Canadian Federal Government Policy on Wetland Conservation. The objective of the federal policy is to “to promote the conservation of Canada’s wetlands to sustain their ecological and socio-economic functions, now and in the future” (p 5). The policy commits “all federal departments to the goal of no net loss of wetland functions (i) on federal lands and waters, (ii) in areas affected by the implementation of federal programs where the continuing loss or degradation of wetlands has reached critical levels, and (iii) where federal activities affect wetlands designated as ecologically or socio-economically important to a region” (p 7).
“No net loss” policies or directives seek to balance development that impacts wetland with wetland protection and conservation so that development results with no net loss of wetland function, and ideally result with a net gain. No net loss directives or policies typically prescribe a wetland management to achieve no net loss of wetland function known as a “no net loss mitigation formula, or hierarchy” such as, in the following order of preference: avoiding impacts to wetlands, and if avoidance is not achieved, then to minimize impacts. The last preference is to compensate through wetland restoration elsewhere, or possibly through wetland creation (see Environment Canada, Canada Wildlife Service, Implementing “No Net Loss” Goals to Conserve Wetlands in Canada, Issue Paper No. 1992-2, here).
In the U.S. the primary legal management and protection of wetlands is derived from the Federal Water Pollution Control Act of 1972, commonly called the Clean Water Act. Section 404 of the Act requires a federal authorization for dredging or filling activities impacting the “nations waters” including many wetlands. In exercising authority under section 404 of the Clean Water Act federal agencies implement no net loss of wetland function policies and directives (see EPA Compensatory Mitigation here. “No net loss” in the U.S. may be traced to the 1987 National Wetlands Policy Forum. As reported by the University of Florida, Florida Wetlands website , the “forum aimed to “achieve no overall net loss of the nation’s remaining wetlands base and to create and restore wetlands, where feasible, to increase the quantity and quality of the nation’s wetland resource base” (National Wetlands Policy Forum, 1988)”.
Alberta’s Wetland Management in the Settled Area of Alberta, An Interim Policy – a No Net Loss Policy
Like Canada, Alberta (through the now long defunct Alberta Water Resources Commission) also developed wetland policy in the early 1990’s. In developing it, Alberta recognized that the nature of, stresses on, knowledge about, and issues relating to wetlands in the White Area (primarily slough/marsh wetlands) were not the same as the nature of, stresses on, knowledge about, and issues relating to wetlands in the Green Area (primarily peatlands, i.e. fens and bogs). Although the ultimate objective was one wetland policy and policy goal for the whole province, the Alberta Water Resources Commission proposed a different policy intent and mitigation formula for wetlands in the White Area than for wetlands in the Green Area of the province.
Alberta began with the White Area and in 1993 Cabinet approved Wetland Management in the Settled Area of Alberta: An Interim Policy (“Interim Policy”). Slough/Marsh wetlands, as defined in the Interim Policy (p 3) are “shallow, depressional areas that are permanently or periodically covered by standing or slowly moving water. Water levels fluctuate and open water may or may not be present. Vegetation may range from floating or submerged plants in the centre to cattails, rushes, sedges and grasses to willows and other shrubs along the fringes or margins. Potholes and marshes along water courses fall into this category. Slough/Marsh wetlands are most common in central and southern Alberta.” The stated goal of the Interim Policy “… is to sustain the social, economic and environmental benefits that wetlands provide, now and in the future” (p 1).
The Policy Intent part of the Interim Policy sets out a no net loss formula/hierarchy for slough/marsh wetlands in the White Area of the province (p 3):
The intent of the policy with respect to slough/marsh wetlands in the Settled Area is, in descending order of preference:
(a) to conserve slough/marsh wetlands in a natural state.
(b) to mitigate degradation or loss of slough/marsh wetland benefits as near to the site of disturbance as possible.
(c) to enhance, restore or create slough/marsh wetlands in areas where wetlands have been depleted or degraded.
To illustrate, if a developer (urban, rural, agricultural, forestry, etc.) wants to drain or deplete or degrade any slough/marsh wetland (whether permanently containing water or intermittantly containing water), the developer needs authorization under provincial water legislation (prior to 1999 the Water Resources Act, and afterwards the Water Act) and, if the wetland is permanent and natural occuring, a disposition under the Public Lands Act. In determining whether to grant the authorization(s) and any conditions, the Interim Policy requires applying the no net loss mitigation formula/hierarchy. The Alberta Government eventually developed compensation ratios if preference (c) were utilized in the authorization process (see Provincial Wetland Restoration Compensation Guide). The Guide prescribes compensation for wetland loss on an replacement area basis. It justifies and explains this approach as follows ( p 7):
Compensation for lost wetland will be available on the basis of replacement ratios. It is almost impossible to fully replicate the complexity of a natural wetland ecosystem. For this reason, it is a generally accepted practice that a greater area (hectares) of restored wetland habitat will be required as compensation for a smaller area of destroyed natural wetland.
Wetland replacement ratios are numeric expressions of the ratio of wetland area replaced through restoration to wetland area lost. For example, a ratio of 3:1 means three hectares of equivalent wetland must be restored for each hectare of natural wetland impacted or lost. A minimum replacement ratio of 3:1 is commonly used. This ratio may change depending on site-specific circumstances as determined by a QWAES and subject to the approval of Alberta Environment.
Determination of replacement ratios is not an exact science. … The restored wetland should be an equivalent type of wetland, located in a landscape that is equally or less impacted, and offer the same degree of permanency as the impacted wetland wherever possible.
The Interim Policy has been in effect since 1993, and will stay in effect until the New Wetland Policy comes into effect.
Beyond Prairie Potholes: A Draft Policy for Managing Alberta’s Peatlands and Non-Settled Area Wetlands (1993)
Concomitant with releasing the Interim Policy for the Settled Area of Alberta the Water Resources Commission released Beyond Prairie Potholes: A Draft Policy for Managing Alberta’s Peatlands and Non-Settled Area Wetlands (“Draft Non-Settled
Area Policy”). In 1993 there was already industrial use in the Green Area, but extensive oil sands development was still in the future. It is safe to say that Government anticipated increased oil sands development and was wise to try to get a policy in place for the Green Area. Although the Draft Non-Settled Area Policy covered both peatlands and slough/marsh wetlands in the Green Area, the lion’s share of wetlands in the Green Area are peatlands. Peatlands account for 93% (12.7 million hectares) of the wetlands in Alberta, mostly located in the Green Area (Draft Non-Settled Area Policy p 5). Although the proposed (for discussion) Policy goal for the Draft Non-Settled Area Policy was the same as that for the Interim Policy for the Settled Area (“to sustain the social, economic and environmental benefits that functioning wetlands provide, now and in the future” p 9), the Draft Non-Settled Area Policy proposed (for discussion) different policy intent and mitigation approach for peatlands, in contrast to slough/marsh wetlands (p 9):
Peatlands: The Intent of the draft policy with respect to peatlands located throughout the province is:
Slough/Marsh Wetlands: The intent of the draft policy with respect to slough/marsh wetlands located throughout the province is:
Accordingly, a no net loss approach and mitigation formula/hierarchy would apply for slough/marsh wetlands, wherever they occur in the Province, Green Area or White Area, and something less than a no-net loss approach would apply to peatlands. The Draft Non-Settled Area Policy anticipated losses of peatlands, though the Policy intent was to protect significant peatlands, and to require, “where necessary,” minimization and mitigation of peat land loss.
The Non-Settled Area Policy never saw the light of day and until the New Wetland Policy comes into effect there is no wetland policy that applies to the Green Area.
The Consultation Years
The enactment of the Water Act in 1999, subsequent Water for Life policy (2003), and the development of the multi-stakeholder Alberta Water Council (2004) “to champion the achievement of the [Water for Life] strategy’s three goals” (safe, secure drinking water supply; healthy aquatic ecosystems; reliable, quality water supplies for a sustainable economy) (see Water Council website here), all lead to the development of a Water Council wetland subcommittee, the multi-stakeholder Wetland Policy Project Team (which I was on) (the “Project Team”). The mandate of the Project Team was to make recommendations for a wetland policy that would apply to the whole province. In 2005-2006 the Project Team drafted a policy and implementation plan and the Water Council approved the key outcomes. In 2007 the Project Team held 7 workshops throughout the province, and developed a public consultation workbook which was put to public consultation. The draft goal set out in the workbook was to maintain or increase wetland area and hence wetland function. The public and special interest sectors all endorsed this goal (though sector percentages differed), and in 2008 the Project Team engaged in tense, final negotiations. In the end a non-consensus report was made to the Water Council in September 2008. The dissenters to consensus were the Alberta Chamber of Resources, and the Canadian Association of Petroleum Producers who, among other matters, objected to no net loss claiming that this was an unreasonable and infeasible expectation for the oil sands industry (see Pembina Institute Alberta provincial wetland policy Backgrounder here). In 2008 the Water Council presented the Project Team’s recommendations to the Minister of the Environment (see Alberta Water Council recommendations for a New Alberta Wetlands Policy here), and included the two non-consensus letters. The recommendations included a no-net loss of wetlands goal (p 2 “the goal … is to maintain wetland area in Alberta such that the ecological, social, and economic benefits that wetlands provide are maintained”) with increase to wetland area as a voluntary and aspirational goal (p 3). The proposed mitigation formula/hierarchy, like the Interim Policy, was to avoid, minimize, and compensate as a last preference. Compensation was to be area based. The document stated ( p 2) “ … until such time as a practical and scientifically sound function-based approach is available, the objective of compensation under the current Wetland Mitigation Decision Framework is to replace the area of wetland lost and the associated wetland functions.” After two years, the Minister of Environment announced that it would not be accepting the Alberta Water Council Project Team recommendations. Then Minister Renner was reported to have said “Not all wetlands are alike,”… “A one-size-fits-all policy isn’t going to work” (see Kelly Cryderman, “Alberta dilutes wetland defence – Lost habitat won’t always be replaced” Calgary Herald October 30, 2010, here).
Since then the government took on the task of developing a policy and consulted in various forms, e.g. in 2010 it distributed to key stakeholders a Wetland Policy Intent, and in 2011/12 engaged in other consultation such as an expert consultation on wetland valuation and mitigation.
The New Wetland Policy
Overview- goal, outcomes, mitigation formula
The New Wetland Policy covers both the White Area and the Green Area of the province with one set of goals, outcomes, and methods to reach the outcomes. The New Wetland Policy has been subject of considerable commentary, including by the Pembina Institute (September 10th) Jennifer Grant, “Pembina reacts to the release of the new Alberta Wetland Policy here , the Alberta Wilderness Association (September 10th) ”Alberta Wetland Policy Exempts Oilsands Industry, Abandons No-Net-Loss in Prairies” (contact, Carolyn Campbell) here; the Environmental Law Centre (September 11th) Jason Unger, “Alberta’s new wetland policy: baby steps in an adult world” here; the Calgary Herald, numerous articles, including (September 10th) Canadian Press, “Alberta has released a wetland policy seven years in the making” here, (September 11th) Stephen Ewart , “Ewart: McQueen reveals ‘watered down’ wetland policy here, and (September 13th) Graham Thompson, “Alberta’s wetlands policy turns out to be all wet” here ; and the Edmonton Journal, (September 11th) Sheila Pratt, “Environmental Groups slam wetland plan” here, and (September 14th) Graham Thompson, “Bogged down by Alberta’s Wetland Policy” here . The New Wetland Policy states that it is a “go-forward” policy, that it will be “effective from date of approval” (p 7) and anticipates an implementation phase in and timeline (p 23). To my knowledge, neither the proposed date of approval nor implementation phase in or timeline have been provided by government. Regarding it being a go-forward policy, Sheila Pratt, Ibid, reported that “Environment Department ecologist Thorsten Hebben confirmed that all currently operating, approved and approval in-waiting projects are exempt.”
The goal of the New Wetland Policy, like the Interim Policy is to “conserve, restore, protect, and manage Alberta’s wetland to sustain the benefits they provide to the environment, society, and economy.” But as the following discussion shows, from there on there are significant departures. To demonstrate, this post will comment on the goal in conjunction with the outcomes.
The “outcomes” for achieving the New Wetland Policy goal are (p 2):
Re Outcome 1: Saving wetlands on the basis of “value” and “relative value”
In the Interim Policy, if a wetland is a slough/marsh wetland in the White Area, then the policy applies, and the mitigation formula/hierarchy applies so that the preferred course of action is to conserve the wetland in a natural state, and to avoid impacts. This is not so with the New Wetland Policy. The New Wetland Policy will protect wetlands of the “highest value.” Although the New Wetland Policy states that “avoidance of impacts” is the preferred course of action “regardless of wetland value” (p 16), it continues by stating that in “cases where avoidance is deemed impracticable and a negative wetland impact is likely to occur, wetlands of higher relative value should require stronger evidence of effort to avoid than lower value wetlands” (p 16). “Relative value” in the New Wetland Policy means the “importance of a wetland from an ecological and human perspective. Using this approach, wetlands are compared across a common list of meaningful metrics and assigned a relative value category” (p 25, New Wetlands Policy). “Deemed impracticable” is not clear (deemed by whom, the developer who wants to drain a wetland, deemed by the decision maker?) but assuming impracticable is deemed, value or relative value will play a critical role in government deciding whether to authorize a wetland loss.
The notion of wetland “value” and “relative value” in the New Policy is, in my view, problematic, based on questionable criteria, and likely will place an unfortunate social and economic burden on the public, heritage, Aboriginal, community, and other interests who may strive to protect a given wetland from loss or impact. The New Wetland Policy states that “wetland value will be assessed based on relative abundance on the landscape, supported biodiversity, ability to improve water quality, importance to flood reduction, and human uses” (p 2). Why these factors amount to “value” or “relative value” is a mystery, and it is not obvious why some particular accumulation of the presence of these factors make any given wetland more “valuable” in an ordinary parlance sense than another wetland. Although some wetland functions and benefits may be measurable (e.g. wetland function in assimilating pollution and benefits to water utilities or users by reducing water treatment costs) factually ascertainable functions and quantifiable benefits do not equate to normative value. A wetland with significant heritage value in an area where wetlands are abundant with little, e.g. flood protection, exceptional improvement of water quality, etc. might be as valuable, in a normative sense, in the real world, and to real people, and as worthy of saving, as a wetland in a non-abundant area, that scores highly under each of the criteria.
And why should abundance detract from value? Are the children in an elementary school with 1000 students less valuable than the children in an elementary school with 100 students (and the latter children more valuable than the more abundant ones)? What does “supported biodiversity” mean? Directly, indirectly supported? Is more better here, and if so, why should that be? Isn’t desert ecology as valuable as a rainforest ecology?
What will happen if a developer applies to drain a wetland and a local neighborhood community wishes that it stay natural and intact? Do both the developer and the neighborhood have to hire scientists and consultants to determine the various value components and argue them to decision makers? The New Wetland Policy anticipates wetland relative value mapping, to be used along with other tools and approaches to determine relative value, but how will this value mapping be established, and will the mapped values be set in stone? (See New Wetland Policy p 17). What if a wetland is up for drainage and there is no concerned person or group with deep enough pockets to hire the appropriate experts and consultants to argue for a high enough value to save the wetland?
Re Outcome 3: mitigation formula
Outcome 3 sets out the mitigation formula in the New Wetland Policy as “avoid, minimization, replacement.” This sounds similar to earlier policy iterations, but “replacement” in Orwellian doublespeak style includes options, such as cash payments, that could be used for education and other purposes that will not actually replace wetland area or function on the ground (New Wetland Policy, pp 14, 15 and 18-20). Dave Poulton’s forthcoming ABlawg post will provide more detailed discussion on the mitigation formula, and offsets relating to wetland loss.
Re Outcomes 2 and 4: Conservation where there are high losses, and Regional considerations
Outcome 2, that “Wetlands and their benefits are conserved and restored in areas where losses have been high” suggests that there may be more emphasis on avoidance and minimization in the White Area where there have been high losses. This might fall out of the wetland valuation scheme in applying the non-abundance criterion as well. But this outcome is still a far cry from the Interim Policy that directs that all slough marsh wetlands are conserved in a natural state as a first preference.
Outcome 4 is that “Wetland management consider a regional context.” Although not explicit in the New Wetland Plan, this outcome may eventually tie into regional planning under the Alberta Land Stewardship Act, SA 2009, c 26-8, Alberta’s legislative foundation for regional planning and implementation. Outcome 4 also implicitly supports the potential for more wetland loss in some areas, e.g. where wetlands are abundant, and less loss in other areas, e.g. where wetlands are not abundant.
Not No-Net Loss
The New Wetland Policy, unlike the Interim Policy, the Federal Wetland Policy, the U.S. Wetland Policy, and the Water Council/Wetland Project Team (non-consensus) recommendations, is not a no-net loss policy. Absent are the words “sustain” or “maintain” wetlands area or function. The New Wetland Policy anticipates loss, and loss will inevitably especially occur in abundant wetland areas (e.g. the Green Area) where wetlands will score lower under the relative wetland value criteria, and where replacement will occur by mechanisms that will not add wetlands or wetland function on the ground (like paying cash).
Final comment – 20 years ago, and we were so much older then
As earlier mentioned, back in 1993 government anticipated one wetland policy for the province with a single goal “… to sustain the social, economic and environmental benefits that wetlands provide, now and in the future” but proposed different mitigation approaches to reach that goal. The Interim Policy for the White Area intent and implementation required no net loss of slough/marsh wetlands, and the Draft Policy for the Green Area anticipated loss, but required protection of significant or representative wetlands, and mitigation measures as necessary. Although the Draft Policy certainly could and should have been stronger, I believe, and have personally maintained throughout the post Interim Policy wetland policy development, that in principle the government’s 1993 approach was correct. The stresses on, knowledge about, and issues relating to wetlands in the White Area (primarily slough/marsh wetlands) are different from those relating to the Green Area. The New Wetland policy suffers from the lowest common denominator effect to make the policy workable, in the perspective and views of the oil and gas industry, with respect to mitigation of peatland impacts. Reclamation in the oil sands under the Environmental Protection and Enhancement Act, RSA 2000, c E-12, and the Conservation and Reclamation Regulation, Alta Reg 115/1993 is to “equivalent land capability,’ which does not mean necessarily what it was before. Scientists have claimed that “Contrary to claims made in the media, peatland destroyed by open-pit mining will not be restored. Current plans dictate its replacement with upland forest and tailings storage lakes, amounting to the destruction of over 29,500 ha of peatland” (see Rebecca C. Rooney, Suzanne E. Bayley, and David W. Schindler, “Oil sands mining and reclamation cause massive loss of peatland and stored carbon,” 109 PNAS 13, 4933–4937 (2011) (quote from Abstract)). Given that in the past the industry has not gone the route of replacing peatland landscapes with peatland landscapes in reclamation processes and plans, it is not surprising that the industry balked at the proposal for a no net loss policy applying to peatland losses, even on a go-forward basis. Mitigating peatland loss with peatland restoration or creation poses challenges to the industry (see Lee Foote “Threshold Considerations and Wetland Reclamation in Alberta’s Mineable Oil Sands” (2012) 17 Ecology and Society 1, art. 35, here). Peatland restoration and construction science and practices, though progressing, are not as developed as the science and practices of slough/marsh wetland restoration and construction. (Generally see Carolyn Campbell, “Compensation for Disturbed Wetlands – A Leap of Faith?” WLA June 2008 • Vol. 16, No 3, pp 13-14, here, and lecture by Dr. Susan Bayley, 2013, “Ecological Resilience of Alberta Wetlands”, here). Nevertheless, peatlands may take millennia to develop and have vast ecological, economic, heritage, aesthetic and other values (see, for example APEX: Introduction to Peatlands, University of Guelph here and Lee Foote, supra) and it is vital that peatland losses be mitigated in the oil sands development processes, even if, in the end, not on a strictly no net loss basis.
This comment should not be seen as support for oil and gas industry preventing Wetland Project Team consensus. Instead it should be seen as a reality check, and a pondering as to what would have happened if the comprehensive wetland policy had, as proposed in 1993, one policy goal, but two mitigation formulae: a no net loss approach for slough/marsh wetlands, and an ecologically sound, based on current and developing science, but different peatland loss mitigation approach. Perhaps, as a result of the policy development process we would now have a strong no net loss and ideally net gain policy for slough/marsh wetlands in Alberta that was built by focussing on the nature of, stresses on, knowledge about, and issues relating to slough/ marsh wetlands, rather than a watered down, lowest common denominator policy that is weaker than the Interim Policy, the Federal Policy, and the U.S. policy. Perhaps we also would have a separate mitigation approach for peatlands that is appropriate for peatland loss and restoration (which may or may not, at the end of policy development, be no net loss) that was established in light of the unique and substantial current and future stresses on these critically important wetland landscapes.
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Case commented on: R v Booyink, 2013 ABPC 185
If the Canadian Centre for Bio-Ethical Reform (“CCBR”) hasn’t yet made an appearance in your town, city or neighbourhood, chances are they soon will. The CCBR is an educational, pro-life activist organization devoted to the stated objective of making Canada abortion-free. Its goals are to expose as many Canadians as possible to images of, and to engage directly in conversations about, abortion. The CCBR sees its messaging as educational in nature which might include any of the following strategies:
The CCBR is not timid about its strategies for changing hearts and minds. The images of bloody aborted foetuses placed on CCBR’s placards, postcards, billboards and truck panels are designed to engender angry and extreme public opposition.
Most of us recognize that public parks, gardens, squares, plazas and streets serve an important function in providing venues for public expression and protest. We also appreciate that these spaces cannot fulfill their intended purpose and function unless they remain accessible for everyone’s use and enjoyment, and not merely those few who choose to protest. We all lose out if those with the largest placards, loudest megaphones or biggest demonstrations hegemonize our public space and use their Charter rights as a cudgel against the rest of us.
In the fall of 2011, members of the CCBR including Emil Booyink (the “defendants”) held several demonstrations by the luggage carousel in the arrivals area of the Calgary International Airport. The Calgary Airport is managed by the Calgary Airport Authority (CAA), a Provincial not-for-profit corporation created in 1990 to transfer the management and administration of the Calgary Airport from the Federal Government. At these demonstrations, the defendants held signs, handed out pamphlets and sought to engage passengers in conversation about the evils of abortion. They maintained that they had a right to protest in the Calgary Airport even though they were told by an official from the Calgary Airport that they had no rights to be there at all. The defendants were issued several notices not to trespass pursuant to section 2 of the Alberta Trespass to Premises Act, RSA 2000, c T-7 (TPA). The defendants refused to follow the direction given by the Calgary Police Service that they leave the Calgary Airport, and they were consequently charged with trespass pursuant to section 3 of the TPA which reads:
3. A trespasser, whether or not any damage is caused by the trespass, is guilty of an offence and liable (a) for a first offence, to a fine not exceeding $2000, and (b) for a 2nd or subsequent offence in relation to the same premises, to a fine not exceeding $5000.
If the protest-in-an-airport scenario strikes you as vaguely familiar, it should. In the 1991 case of Committee for the Commonwealth of Canada v Canada,  1 SCR 139 (Commonwealth) the Supreme Court of Canada held that a prohibition by airport authorities on the distribution of political pamphlets in the public areas of the Montreal airport in Dorval violated the right to freedom of expression guaranteed by section 2(b) of the Charter of Rights and Freedoms, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c11 and that this infringement could not be justified by section 1 of the Charter. In Commonwealth, the Justices differed on the correct test to be applied when assessing the limits of freedom of expression on government-owned property, yet largely agreed that there would be little opportunity for the public to engage their right to freedom of expression if the public was denied the right to engage in protest on government-owned property.
In R v Booyink, the Crown argued that the CAA was not a government entity to which the Charter applied and that it was empowered, as any private landowner, to eject the defendants from its property and that its actions in doing so were exempt from Charter scrutiny.
The defendants believed that section 8 of the TPA afforded them a complete defence to the trespass charge because they reasonably believed, based on the Commonwealth decision, that they had a right to protest in the Calgary Airport. Section 8 of the TPA reads as follows:
8. Nothing in this Act extends to a case where the trespasser acted under a fair and reasonable supposition that the trespasser had a right to do the act complained of.
In respect of the freedom of expression issue, the defendants argued that the CAA is a public entity to which the Charter applies, either by acting as an agent of, or substantially controlled by, the Federal Government and that its main function, namely providing air transport to the public, is governmental in nature. The defendants further argued that their protest activities had expressive content, were consistent with the functions of public areas within airports, and that the location of the defendants’ protest, namely the arrivals area of the Calgary Airport, was protected by the Charter.
Judge Fradsham acquitted the defendants of all charges, concluding that their section 2(b) Charter right to freedom of expression had been unjustifiably infringed.
Judge Fradsham’s decision in R v Booyink
Do the defendants have a complete defence to the TPA?
Judge Fradsham begins his analysis with a discussion of whether section 8 of the TPA affords the defendants with a defence to the charge of trespass by determining whether they “acted under a fair and reasonable supposition that they had a right to do the act complained of.”
Judge Fradsham discusses the Canadian and British common law authorities and concludes that the section 8 defence of the TPA is available if a defendant can prove that he or she has reasonable grounds for believing that they had a right to enter onto the complainant’s property. For Judge Fradsham, this includes a defendant “…who has received legal advice to the effect that he or she had, at the time of the actions undertaken, a legal right to engage in those actions, and who has no reason to doubt the accuracy of that legal advice” (Booyink at para 65). Judge Fradsham concludes that the defendants had a reasonable basis for believing that they had a right to protest in the Calgary Airport. The defendants were aware of the Commonwealth decision and relied upon it as the legal basis for justifying their activities in the Calgary Airport. The mere fact that they were told by a Calgary Airport official that the Commonwealth decision did not apply was not sufficient to undermine the reasonableness of that belief.
The test which Judge Fradsham establishes for proving a section 8 defence to a charge of trespass raises serious issues for municipalities wishing to use the TPA as a mechanism for excluding trespassers from government property. Protesters are becoming more sophisticated in their knowledge about their legal rights and, more often than not, obtain legal advice or review freely available public legal information. It is increasingly rare to find committed activists unaware of the Charter, leading Supreme Court of Canada jurisprudence or applicable legislation. It will therefore be relatively simple for a defendant to a TPA charge to demonstrate (and correspondingly difficult for the state to refute) that they had a reasonable basis for believing they had a right to enter onto government property to engage in protest. This is especially true where, as here, protesters obtain legal advice, reasonably believe that the advice is correct and consequently, that they are lawfully entitled to come onto another’s property and protest.
However, should the mere reliance on legal advice and the belief that this advice provides a legal justification for engaging in the act complained of serve as a complete defence to a trespass charge? Or, should the person relying on that advice have to prove that the advice is correct in law, thereby providing them with the necessary justification for their actions? What if the legal advice acted upon is subsequently found to be wrong or is based upon case law that is later reversed on appeal? And isn’t case law subject to interpretation?
The difficulty with the current “fair and reasonable supposition” defence set out in section 8 of the TPA as interpreted by Judge Fradsham is that it lacks an objective test, leaving authorities in Alberta with fewer tools to prevent protesters from coming onto government-owned property and engaging in public protest.
Is the Calgary Airport Authority a government entity to which the Charter applies?
In Booyink, one of the legal questions which occupied much of the written submissions of both parties was whether the CAA is a government entity pursuant to section 32 of the Charter. Section 32 states the Charter applies to Parliament (including the Yukon Territory and the Northwest Territories) and to the Provincial legislatures. In order for the CAA to be subject to Charter scrutiny, it would need to fall under the purview of section 32.
The CAA is a statutory body created pursuant to the Regional Airports Authorities Act, RSA 2000, c R-9 (RAA Act), and is granted the capacity, rights, powers and privileges of a natural person. The RAA Act expressly codifies a variety of procedural matters affecting the creation and governance of the CAA. It expressly stipulates matters of procedure which the CAA must follow, such as the process to be followed in creating a regional airport authority, rules regarding the appointment of directors, the duties and liabilities of the Authority’s members, directors, officers and employees regarding their rights, obligations and appointment, and other requirements such as conducting an annual public meeting.
With respect to the purpose or function of the CAA, section 21 of the RAA Act stipulates that the purpose of the regional airport authority in Alberta is to manage and operate airports in a safe, secure and efficient manner. This section further stipulates that the CAA must advance economic and community development by means that include promoting and encouraging improved airline and transportation service and an expanded aviation industry for the general benefit of the public in its region. Further, the Federal Government’s National Airports Policy sets out the policy reasons for creating Canadian airport authorities and commits the Federal Government to continue with its regulatory obligations in providing for the safe and effective operation of Canadian airports and for aviation safety (Booyink at para 108).
In assessing whether the CAA is a governmental entity, Judge Fradsham reviews much of the recent Canadian jurisprudence pertaining to the interpretation of section 32 of the Charter and cites heavily from Justice La Forest’s reasons in the Supreme Court of Canada decision of Eldridge et al v British Columbia (Attorney General) et al, 3 SCR 624 (Eldridge) and Justice Paperny’s decision for the Alberta Court of Appeal in Pridgen v University of Calgary, 2012 ABCA 139, aff’g 2010 ABQB 664 (Pridgen).
In Eldridge, one of the issues was whether hospitals in British Columbia and the Medical Services Commission of British Columbia could successfully argue that the Charter did not apply to their decisions to deny funding for sign language interpreters because they were private, non-governmental entities. Writing for the Court, Justice La Forest confirmed that private entities may not be exempt from Charter scrutiny (Eldridge at paras 41 – 44). His Lordship set out two grounds upon which a private entity might be characterized as “government” pursuant to section 32 of the Charter: (1) if the entity by its very nature or by virtue of the degree of governmental control exercised over it can properly be characterized as “government,” or (2) if the entity carries out an activity which can normally be ascribed to government (Eldridge at para 44). In this second category, the question to ask is whether the “nature of the activity itself”, or the quality and function of that act, is one which government would normally perform.
In Pridgen, two students studying at the University of Calgary (U of C) posted comments to a public wall of Facebook which were critical of a professor teaching one of their courses. The students were found guilty of non-academic misconduct in disciplinary proceedings. The students brought a judicial review application, arguing that the U of C had infringed their Charter section 2(b) right to freedom of expression. The U of C argued that the Charter does not apply to public universities because they are non-governmental bodies and consequently, that universities are immune from Charter scrutiny pertaining to disciplinary proceedings of its students.At the Alberta Court of Appeal, Justice Paperny provides a very useful summary of the five categories of government or government activities to which the Charter applies: (1) legislative enactments; (2) government actors by nature; (3) government actors by virtue of legislative control; (4) bodies exercising a statutory authority; and (5) non-governmental bodies implementing government objectives (Pridgen at paras 79 – 98). (For an excellent discussion of Pridgen, see Face-ing the Charter’s Application on University Campuses by Jennifer Koshan.)
For both Justice La Forest in Eldridge and Justice Paperny in Pridgen, the rationale for extending the reach of section 32 of the Charter to private entities is to prevent governments from delegating important functions to those entities as a method of seeking immunity from having to withstand Charter scrutiny (Pridgen at paras 96 -100).
Having reviewed the link between the RAA Act and the CAA, the National Airports Policy and the Courts’ decisions in Eldridge and Pridgen, Judge Fradsham concludes at paragraph 113 that the CAA is “government” as defined in section 32 of the Charter because “… [i]n short, the Provincial Government has the power to exercise complete control over virtually all aspects of the CAA.” Judge Fradsham asserts at paragraphs 115 and 116 that, in the event he is wrong on that point, he is also of the view that the CAA is “government” by virtue of it performing government activities in operating the Calgary Airport:
 The National Airports Policy of the Federal Government makes it clear that the Policy, and consequently the creation of the airport authorities, does not change the fact that “the federal government will maintain its role as regulator” of airports such as the Calgary International Airport. The Federal Government continues to be the owner of the airport, but has delegated the operation of the airport to the Calgary Airport Authority… The CAA is simply a new mechanism through which the owner of the Calgary International Airport (i.e., the Federal Government), operates its property….
 The Federal Government owns the Calgary International Airport, and one of its governmental functions is to operate that property. The Federal Government has chosen a new way of operating that property, that is, through the Calgary Airport Authority. The Calgary Airport Authority in operating the Calgary International Airport for the Federal Government is performing, on behalf of the Federal Government, the governmental activity of operating the airport.
There is a strong argument to be made that government should not be able to shirk its Charter obligations by a delegation of its powers to ostensibly private, non-governmental entities. To be allowed to do so would eviscerate the public’s ability to hold government accountable when its actions run afoul of the Charter. Consider, for example, a public service managed and operated by a municipality for the purpose of fulfilling some governmental function or purpose. Should a municipality be able to avoid its Charter obligations merely by privatizing or downloading those services onto an ostensibly arms-length private contractor?
Much like the maintenance and operation of bus stops, train stations and other municipal transit infrastructure, the regulation, operation and maintenance of public air travel facilities such as airports comprise a governmental function. The potential for abusive application of trespass legislation would be considerable if private contractors were left in charge of deciding who gets to access those facilities. The impact upon a person banned from using their city’s only public airport could be devastating to their ability to exercise those fundamental life choices which go to exercising their personal individual autonomy and dignity protected by section 7 of the Charter. (For a broader discussion, see Transporting Liberty: A Right Not to be Deprived of Access to Public Transit by Jennifer Koshan and Transporting Liberty: Where is the Track Heading? by Ola Malik and Heather Beyko.)
Did the CAA infringe upon the defendants’ right to freedom of expression?
In Booyink, Judge Fradsham concludes that the protest activities carried out by the defendants in the arrivals area of the Calgary Airport are protected by section 2(b) of the Charter (Booyink at para 134). This is unsurprising given the Supreme Court of Canada’s decisions in Commonwealth and Montréal (City) v 2952-1366 Québec Inc, 2005 SCC 62,  3 SCR 141 (Montréal (City)) regarding the test to meet in establishing that expressive activity carried out on government-owned property is protected by section 2(b) of the Charter.
Judge Fradsham finds that the messages conveyed through the defendants’ words and conduct have expressive content as per the Supreme Court of Canada’s decision in Irwin Toy Ltd v Québec (Attorney General),  1 SCR 927 (Irwin Toy) bringing the expressive activity within the protective scope of section 2(b) of the Charter. This is to be expected give that the test for proving expressive content in Irwin Toy is set so low that we wonder whether any lawful activity would not be captured. Indeed, at paragraph 42 of the decision, it was Justice Lamer in Irwin Toy who held that an activity as mundane as parking a vehicle may convey meaning and constitute an expressive activity worthy of Charter protection.
Judge Fradsham then applies the test outlined by McLachlin C.J.C. in Montréal (City) to determine whether the protest activities of the defendants were compatible with the function of the Calgary Airport or fell outside of the protective scope of section 2(b). The test set out by McLachlin C.J.C. asks “whether the place is a public place where one would expect constitutional protection for free expression on the basis that expression in that place does not conflict with the purposes which s. 2(b) is intended to serve, namely (1) democratic discourse, (2) truth finding and (3) self-fulfillment. To answer this question, the following factors should be considered: (a) the historical or actual function of the place; and (b) whether other aspects of the place suggest that expression within it would undermine the values underlying free expression (Montreal (City) at para 74).
Judge Fradsham turns to Commonwealth in which the majority of the Supreme Court of Canada concurred that the function of areas of airports which are accessible to the public are similar to streets and parks. As Justice La Forest stated in Commonwealth:
 I agree with the Chief Justice and McLachlin J. that that freedom does not encompass the right to use any and all government property for purposes of disseminating one’s views on public matters, but I have no doubt that it does include the right to use for that purpose streets and parks which are dedicated to the use of the public, subject no doubt to reasonable regulation to ensure their continued use for the purposes to which they are dedicated. I see no reason why this should not include areas of airports frequented by travellers and by members of the public.
In Commonwealth, Justice L’Heureux-Dubé drew a distinction between publicly accessible, non-security zones such as lounges, waiting areas, restaurants, gift and cigar shops, newsstands, and the connecting halls and foyers where expressive activity should be expected and those areas of public airports where public expression is clearly not appropriate including inside of airplanes and security zones such as Customs, check-in counters, metal detector surveillance areas and baggage inspection. In Commonwealth, Justice L’Heureux-Dubé explained:
 … [B]us stations and airports have much more in common with streets and parks than they do with the buses or airplanes which they service. These locations are “contemporary crossroads” or “modern thoroughfares”, and thus should be accessible to those seeking to communicate with the passing crowds.
 Airports also draw a tremendous number of travellers over the course of a day… Bus, train and airport terminals are indeed modern boulevards, extensions of Main Street. The list of sites traditionally associated with public expression is not static. As means of locomotion progress, people shall begin to gather in areas heretofore unknown. Hence the “traditional” component of the public arena analysis must appreciate the “type” of place historically associated with public discussion, and should not be restricted to the actual places themselves.
 … [The] respondents did not select the airport in order to convey their message to planes, but rather chose the airport for the people who would be present within it. While airport terminals do not have a monopoly on high concentrations of passers-by, few locations offer similar opportunities to encounter such a wide cross-section of the community. For the aforementioned reasons, and upon consideration of the above factors, the non-security zones within airport terminals, in my view, are properly regarded as public arenas. Therefore, the government cannot simply assert property rights, or claim that expression is unrelated to an airport’s function, in order to justify the restriction.
Drawing from the majority’s decision in Commonwealth, Judge Fradsham finds in Booyink that the defendants’ protest is protected by the Charter by virtue of its location within the public area of the Calgary Airport and that the CAA had infringed upon the defendants’ rights to freedom of expression when it issued them with its trespass notices pursuant to the TPA:
 [T]he defendants’ words and conduct were protected under section 2(b) as a result of their location. The Airport is public or government-owned property. Montreal states that the Charter will protect public property where the historical or actual function of the place is compatible with free expression. Based on Committee, the Airport attracts Charter protection, because it is the type of place that has traditionally served as a public forum. Airports allow members of the community to meet, congregate, and travel to other destinations. The Airport is therefore the modern equivalent of a city street. In light of this characterization, the Airport is a place that is historically protected under the Charter.
 In addition to the Airport’s historical function, the actual function of the Airport is compatible with the defendants’ right to free expression. The Defendants were not in a security zone that may require more privacy; rather, the Defendants were at the Arrivals level of the Airport which serves as a connecting hall, foyer, and waiting area. Such areas are open to the public and conducive to fulfilling the purposes underlying section 2(b): that is, democratic discourse, truth finding, and self-fulfillment. The location of the defendants’ expression was therefore protected under the Charter.
 Given that the defendants’ words and conduct were protected under section 2(b) of the Charter, the only issue to be determined is whether the Authority’s actions infringed the defendants’ freedom of expression. … The legislation […] does have the effect of limiting the defendants’ freedom of expression. Moreover, the defendants’ expression arguably promoted one of the values underlying section 2(b): that is, self-fulfillment. The defendants’ expression promoted self-fulfillment because it allowed the defendants to articulate, justify, and seek support for their own deeply-held beliefs and opinions. The defendants have successfully established a breach of section 2(b).
Having found an infringement on the defendants’ section 2(b) Charter rights, Judge Fradsham concludes that there is no evidence to justify the infringement pursuant to section 1 of the Charter (it does not appear from the judgement that the Crown led any evidence justifying the infringement).
We have argued above that airports are similar in their purpose to public transit facilities and should be treated alike as far as the placing of limits on expressive activity. The Quebec Court of Appeal has held that a bylaw which allowed for the distribution of pamphlets inside a subway station (except for those areas critical to passenger circulation and safety) did not constitute an infringement on the section 2(b) Charter right (Société de transport de la Communauté urbaine de Montréal v Robichaud, 1997 CanLII 10417, 147 DLR (4th) 235). In Société de transport, the Court held that it was reasonable to restrict pamphleteering in areas of the station which were for the exclusive benefit of those who had paid a fare and which served as “…corridors, transit areas and platforms that lead, in a subway station, from the turnstile to the train.” (at para. 27) And a bylaw prohibiting pamphleteering on transit property was found to infringe upon a political campaigner’s rights to hand out election materials when he was standing beside the steps leading up to a train station, the Court found that the public area outside of a subway station could be distinguished from the restricted “fare-paid” zone in Société de transport (Churchill v Greater Vancouver Transportation Authority, 2001 BCSC 572).
It is a challenge for municipalities to restrict or limit expressive activity which occurs on property found to be synonymous with a public city street. This is because public streets have traditionally been considered to be a natural location for people to communicate with one another. It is argued that the public street gives you the choice of engaging with the protester or avoiding them if you find the message offensive or disagreeable — you can avert your eyes or cross the street if you don’t like the message coming from the person yelling into the bullhorn or printed in large type on a placard. But is this choice always that simple or obvious?
Protesters calculate the time of the day, day of the week, location for protest and method of communication which is likely to reach as many people as possible and have the largest possible impact. In considering the CCBR’s tactics which by its own account are clearly intended to be antagonistic, combative and provocative, is it realistic to believe that the public can avoid the CCBR by simply looking away or choosing another route? While waiting for your luggage or the arrival of your family in an airport concourse, how easy is it for you to avoid looking at the graphic, bloody placards depicting aborted foetuses? Do your children, sitting in the back seat of your car in a traffic jam have any choice other than to stare at the same placard (only bigger) affixed to the back of the van in front of your car? How free do you feel to avoid a protester’s message when the sidewalk you are walking along is flanked on both sides by protesters yelling at you into bullhorns and shaking their placards?
We wonder whether the “captive audience” doctrine might apply in appropriate circumstances to place sensible limits on expressive activity which occurs in a public place. While the doctrine has been relied upon in limited cases to justify restrictions on expressive activity at abortion clinics (R v Spratt, 2008 BCCA 340), and in the lobby of a courthouse, municipal hall and fire station(R v Breeden, 2009 BCCA 463), it has not yet been more generally applied to justify an infringement on expressive activity which takes place on a public street. In the Ontario case of Ontario (Attorney General) v Dieleman, 1994 CanLII 7509, 117 DLR (4th) 449 (Ont GD), Justice Adams summarized the captive audience doctrine as follows:
 It has also been held that freedom of expression assumes an ability in the listener not to listen but to turn away if that is her wish. The Charter does not guarantee an audience and, thus, a constitutional right to listen must embrace a correlative right not to listen. In Committee for the Commonwealth of Canada v. Canada, supra, at pp. 204-05, L’Heureux-Dubé J., in considering the access of would-be speakers to an airport terminal, dealt with the concern that such access could result in exposing “captive viewers or listeners” to unwanted messages. In this respect, she reproduced and approved the following excerpt from the reasons of Douglas J. in Lehman v. City of Shaker Heights, 418 U.S. 298 (1974) at pp. 306-307:
… if we are to turn a bus or a streetcar into either a newspaper or a park, we take great liberties with people who because of necessity become commuters and at the same time captive viewers or listeners.
In asking us to force the system to accept his message as a vindication of his constitutional rights, the petitioner overlooks the constitutional rights of the commuters. While petitioner clearly has a right to express his views to those who wish to listen, he has no right to force his message upon an audience incapable of declining to receive it. In my view the right of the commuters to be free from forced intrusions on their privacy precludes the city from transforming its vehicles of public transportation into forums for the dissemination of ideas upon this captive audience.
 The principle behind a constitutional aversion to “captive audiences” is that forced listening “destroys and denies, practically and symbolically, that unfettered interplay and competition among ideas which is the assumed ambient of the communication freedoms.” See Black Jr., “He Cannot Choose but Hear: The Plight of the Captive Auditor” (1953), 53 Columbia L. Rev. 960 at p. 967. Free speech, accordingly, does not include a right to have one’s message listened to. In fact, an important justification for permitting people to speak freely is that those to whom the message is offensive may simply “avert their eyes” or walk away. Where this is not possible, one of the fundamental assumptions supporting freedom of expression is brought into question.
It does not appear that the captive audience doctrine was argued before Judge Fradsham and we are not clear as to whether it would even apply to the facts before him. We are curious to see whether this doctrine might attract greater judicial treatment and tilt the pendulum towards greater restrictions and limitations with respect to the rights of protest on public property.
The demands on public space are becoming greater as cities grow and populations become more diverse. Increasing pressures are being brought to bear on the vexing question of how to share public space and how to accommodate an increasingly diverse public use of this space. We would suggest that recent decisions in Alberta such as R v Whatcott, 2012 ABQB 231, aff’g 2011 ABPC 336, R v Pawlowski, 2011 ABQB 93, rev’g 2009 ABPC 362, leave to appeal to ABCA granted, and Booyink, in which challenges have been made to governments’ regulation of public space, serve as a reminder that the debate over the purpose of public space is far from over.
It does not appear that the Crown has filed an appeal of Judge Fradsham’s decision. The appeal period has now expired.
The Calgary Airport Authority has filed a Statement of Claim (1301-06153) which seeks an injunction against the Centre for Bio-Ethical Reform enjoining its members from trespassing onto Calgary Airport lands and premises and further, claims damages in the sum of $500,000.00. The Statement of Claim was filed prior to Judge Fradsham’s decision and it is unclear whether the Calgary Airport Authority intends to proceed with civil proceedings.
*This article was originally published in the Digest of Municipal and Planning Law, (2013) 6 DMPL (2d) September 2013, Issue 9, and is being reproduced here (with less extensive footnotes and some formatting changes) with kind permission.
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Policy considered: Quebec Charter of Values
Even prior to this week’s publication of Quebec’s proposed Charter of Values, its prohibition of “ostentatious” religious symbols being worn by public employees had come under heavy criticism. Critics suggested that it violated the Canadian Charter of Rights and Freedoms through its interference with religious freedom. They also suggested that it violated international and domestic human rights laws. On this blog Jennifer Koshan noted the discrepancy between the Charter of Values and the constitutional values recognized by the Supreme Court of Canada in the Quebec Secession Reference (here).
In this post I suggest a further problem with the Charter of Values, one that does not necessarily speak to its legality, but rather to its ethics. Specifically, I argue that the adoption of the Charter undermines the ability of those subject to it to achieve ethical lives, and it does so without justification sufficient to warrant that effect.
The concept of ethics I rely on comes from Bernard Williams, who suggests that ethics is a broad category incorporating the various concepts used to answer the question, “how should one live?” Morality is a subset of ethics, and refers to the duties and obligations that follow from the impartial principles governing human interaction (Bernard Williams, Ethics and the Limits of Philosophy (Cambridge: Harvard University Press, 1985) at 6 and 14). Morality is not co-extensive with ethics, and the accomplishment of a moral life will not be sufficient to ensure the accomplishment of an ethical one. An ethical life additionally requires that a person have the opportunity to pursue projects of central importance to her, those things that give her life meaning and without which she would experience her life as unimportant and lacking in value. As further explained by Susan Wolfe, the ethical category of meaningfulness involves, “loving something (or a number of things) worthy of love, and being able to engage with it (or them) in a positive way” (Susan Wolf, Meaning in Life and Why it Matters (Princeton: Princeton University Press, 2010) at 26).
Williams further suggests that the pursuit of meaning – what he calls ground projects – may be inconsistent with moral demands in some circumstances. That inconsistency does not, he notes, result in an excuse from compliance with moral demands. It means only that a person faced with a conflict between morality and meaning will, if choosing to comply with morality, suffer a loss of integrity, and a loss that will impact her ability to achieve an ethical life. She may act morally, but at an ethically material cost.
Williams illustrates this point through describing the life of a fictional painter “Gauguin” (Bernard Williams, “Moral Luck” in Moral Luck: Philosophical Papers 1973-1980 (Cambridge: Cambridge University Press, 1981)). Gauguin abandons his wife and his children in order to paint in Tahiti. Williams suggests that while Gauguin’s family (and others) can legitimately criticize the morality of that choice, the ethical significance of Gauguin’s pursuit of his craft cannot be denied, particularly given the objective value and worth of the art that Gauguin created. Gauguin’s life may thus be morally bad, but ethically good. Further, had Gauguin made a different choice, he would have suffered a loss of integrity, one that has significance in assessing whether that choice was the one Gauguin ought to have made in answering the ethical question, “how should one live”.
How does all of this relate to the proposed Charter of Values? I think it illustrates two points. First, it identifies a significant aspect of the cost that the Charter of Values would impose on those to whom it applies. One’s religious beliefs and the expression of those beliefs are obvious examples of things that will make a person’s life meaningful. Even for an agnostic like myself, it seems evident that one’s faith, and the values of one’s religion, fall into the category of things that a person can love and actively pursue, and that merit that love and pursuit. By requiring a person to abandon compliance with his religious beliefs and values to maintain his public sector employment, the Charter of Values would require him to abandon that which makes his life meaningful to keep a job. Complying with the Charter of Values will require him to violate his integrity; failure to comply will result in the loss of his livelihood (which might in turn require the sacrifice of other things of value and importance to his life). Arguments like Yosie St Cyr’s on Slaw, that “Leaving your cross or your head scarf from 9 to 5 to work for the government is not an imposition nor does it remove from who you are,” fail to recognize the costs of the choice that the Charter of Values would impose.
Second, Williams’ analysis indicates the insufficiency of the justification offered for the broad and strict restrictions that the Charter of Values would impose. As Williams observes, moral duties and obligations following from impartial principles may be used to justify the restriction of other ethical values. There are moral principles such as the prevention of harm or the creation of equality that justify the restriction of religious practices, even if those restrictions undermine the meaningfulness of the lives of the persons to whom they apply. Moral principles justify the imposition of duties and obligations, even when compliance with those duties and obligations will require a person to violate her integrity. But in the case of the Charter of Values, no moral justification has been offered, or could be offered to justify the broad restriction that it seeks to impose. Secularism in the public service is a partial and specific value, one said to arise from Quebec’s history and cultural distinctiveness, not from impartial and universal principles governing human interaction. To use a culturally specific value to impose this sort of cost – a compelled choice between one’s livelihood and the creation of an ethical life – is wrong.
I am not suggesting that we may never disrupt a person’s ability to achieve meaning except on the basis of moral claims or values. Since meaning is necessarily subjective, at least in part, it may be that the operation of law disrupts a person’s ability to achieve a meaningful life. That fact will not, in and of itself, demonstrate such a law’s illegitimacy. Where, though, the direct and central effect of a law is to disrupt the meaningfulness of the lives of those to whom it applies, only the sort of serious justification associated with a moral claim ought to be sufficient.
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Case/Policy considered: Reference re Secession of Quebec,  2 SCR 217; Charter of Quebec Values
It’s as if Pauline Marois and her government knew we would be discussing the Quebec Secession Reference case in constitutional law this week when they finally released their plans for a Charter of Quebec Values on September 10. The Quebec Secession Reference case famously decided that Quebec did not have the unilateral right to secede from Canada under domestic or international law. It is also taught by many constitutional law professors as our first case, given its important pronouncements on sources of constitutional law and Canada’s constitutional history and values. The constitutional values – actually unwritten principles of constitutional law – that the Supreme Court found to be relevant in the context of Quebec secession were federalism, democracy, constitutionalism and the rule of law, and respect for minorities (at para 32). The Court’s elaboration on these principles takes on a new relevance in light of Quebec’s proposed Charter.
In its discussion of federalism, the Supreme Court quoted (at para 43) from George-Etienne Cartier’s speech, cited in the Parliamentary Debates on the subject of the Confederation (1865), where he stated:
Now, when we [are] united together, if union [is] attained, we [shall] form a political nationality with which neither the national origin, nor the religion of any individual, [will] interfere. It was lamented by some that we had this diversity of races, and hopes were expressed that this distinctive feature would cease. The idea of unity of races [is] utopian — it [is] impossible. Distinctions of this kind [will] always exist. Dissimilarity, in fact, appear[s] to be the order of the physical world and of the moral world, as well as in the political world. But with regard to the objection based on this fact, to the effect that a great nation [can]not be formed because Lower Canada [is] in great part French and Catholic, and Upper Canada [is] British and Protestant, and the Lower Provinces [are] mixed, it [is] futile and worthless in the extreme. . . In our own Federation we [will] have Catholic and Protestant, English, French, Irish and Scotch, and each by his efforts and his success [will] increase the prosperity and glory of the new Confederacy. . . . [W]e [are] of different races, not for the purpose of warring against each other, but in order to compete and emulate for the general welfare.
The diversity of races and religions in Canada has of course changed since 1865, and it is important to note that the diversity of our founding peoples (i.e. First Nations) was not mentioned by Cartier. Quebec’s identification with Catholicism has also evolved since 1865. However, Cartier’s words help us understand the animating values underlying the creation of Canada as a federal state, and how those values would be compromised under Quebec’s proposed Charter.
On the principle of democracy, the Supreme Court referenced (at para 64) R v Oakes,  1 SCR 103 at 136, for its articulation of the values inherent in a free and democratic society:
The Court must be guided by the values and principles essential to a free and democratic society which I believe to embody, to name but a few, respect for the inherent dignity of the human person, commitment to social justice and equality, accommodation of a wide variety of beliefs, respect for cultural and group identity, and faith in social and political institutions which enhance the participation of individuals and groups in society.
As the Court noted in the Quebec Secession Reference (at para 76), the principle of democracy must be considered along with other constitutional principles such as constitutionalism and the protection of minorities. None trumps the others. In that light, democracy means more than majority rule, and it is difficult to see how the democratic values discussed in Oakes would be furthered by Quebec’s proposed Charter.
Further on the subject of minority rights, the Court remarked (at para 81) that although Canada’s record is not spotless, “the protection of minority rights was clearly an essential consideration in the design of our constitutional structure even at the time of Confederation.” Quebec’s proposed Charter, rather than instilling some sort of state neutrality as claimed, is a direct violation of the freedoms of members of religious minorities in that province. As argued by Emmett Macfarlane in the Globe and Mail, the secular Charter “essentially targets religious groups that tend to be comprised of visible minorities, such as Sikhs and Muslims. This is the definition of systemic racism.” Put another way, although the Charter purports to treat everyone in Quebec the same by subjecting them to the same “neutral” values, it targets members of groups whose religions are manifested in visible ways, and adversely impacts persons on the basis of their race and ethnicity.
Quebec did not accept the jurisdiction of the Supreme Court in the Quebec Secession Reference, so the statements from that decision that I am invoking here are not likely to be persuasive to the PQ government. And in any event, Quebec may invoke section 33 of the Canadian Charter of Rights and Freedoms, the notwithstanding clause, to shield its proposed Charter from constitutional attack on the basis of freedom of religion and religious discrimination (sections 2(a) and 15 of the Canadian Charter of Rights and Freedoms). However, the Quebec Secession Reference reminds us that our constitution also includes foundational unwritten principles that I hope will animate public debate about this issue. Those principles certainly animated our discussion of the proposed Charter in class.
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