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Remembering Professor George Anastaplo

Fri, 02/21/2014 - 9:30am

By: Maureen T. Duffy

PDF Version: Remembering Professor George Anastaplo

Since I have become a law professor, I often find myself remembering my own law school experiences, as comparisons are unavoidable. Because I teach Constitutional Law, I have been reminded recently of my own time as a Constitutional Law student in a class taught by Professor George Anastaplo at Loyola University Chicago School of Law. I have been planning for some time to write to him to tell him that I am now teaching Constitutional Law in Canada, and to thank him for inspiring me.

Sadly, I just learned that I will not be able to do so. Professor Anastaplo passed away last week.

He was a truly remarkable man, who is well known in my hometown of Chicago and beyond. Much is likely to be written about him in the weeks to come, and I would not try to eulogize him here.

It occurs to me, though, that Professor Anastaplo provided an unusual example of dedication to constitutional values, which certainly resonates today, and which applies equally in Canada and in the United States. Although he was a prolific scholar and a truly unique teacher, he is most widely known for what he did before becoming a professor.

Professor Anastaplo sought admission to the Illinois Bar during the McCarthy Era. He was denied admission, based on some of his stated views on constitutional principles, and on his refusal to answer questions about his political affiliations and religious beliefs, including whether he was a member of the Communist Party. His refusal was based on his belief that requiring potential lawyers to answer such questions violated their constitutional rights to free speech and free association. After he was refused admission, he sued, and the case ultimately came before the Supreme Court of the United States, in the case of In re Anastaplo, 366 U.S. 82 (1961). Professor Anastaplo litigated the case himself and ultimately lost in a 5-4 decision. He never was admitted to the Bar, in later years by his own choice, but he became famous for his courageous defense of constitutional rights at great personal cost, and in the face of the oppressive McCarthy Era.

Although Professor Anastaplo lost the Supreme Court case, Justice Hugo Black wrote a powerful dissent, in which he said about him, among other things:

[T]he entire course of his life, as disclosed by the record, has been one of devotion and service to his country — first, in his willingness to defend its security at the risk of his own life in time of war and, later in his willingness to defend its freedoms at the risk of his professional career in time of peace. The one and only time in which he has come into conflict with the Government is when he refused to answer the questions put to him by the Committee about his beliefs and associations. And I think the record clearly shows that conflict resulted, not from any fear on Anastaplo’s part to divulge his own political activities, but from a sincere, and in my judgment correct, conviction that the preservation of this country’s freedom depends upon adherence to our Bill of Rights. The very most that can fairly be said against Anastaplo’s position in this entire matter is that he took too much of the responsibility of preserving that freedom upon himself.

[The record] shows not only that Anastaplo has followed a high moral, ethical and patriotic course in all of the activities of his life, but also that he combines these more common virtues with the uncommon virtue of courage to stand by his principles at any cost. It is such men as these who have most greatly honored the profession of the law …

Justice Black felt so strongly about this dissent that he requested that parts of it be read at his funeral.

Professor Anastaplo died at the age of 88, and he continued teaching through the Fall 2013 term. I remember a friendly, smiling, soft-spoken man who had no qualms about stating his view, or about challenging his students on the most provocative issues. He continued, throughout his career, to hold steady to his beliefs in the primacy of fundamental rights, recently, for example, criticizing the U.S. Government for its use of drones to kill terrorism suspects. He has had a significant influence on me, and on so many others, through his teachings, his writings, and his courageous personal example.

I wish I could have told him that. He will be missed.

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Unlawful Delay in the Preparation of Recovery Strategies under SARA and New Questions about Northern Gateway

Wed, 02/19/2014 - 9:00am

By: Shaun Fluker

PDF Version: Unlawful Delay in the Preparation of Recovery Strategies under SARA and New Questions about Northern Gateway

Case commented on: Western Canada Wilderness Committee v Canada (Fisheries and Oceans), 2014 FC 148

 The federal government is failing to adhere to legislated timeframes for implementing recovery strategies under the Species at Risk Act, SC 2002, c 29 (SARA). In Western Canada Wilderness Committee v Canada (Fisheries and Oceans), 2014 FC 148, the Federal Court has declared this to be unlawful conduct by the Minister of Fisheries and Oceans and the Minister of the Environment in relation to 4 species at risk: the pacific northwest humpback whale; marbled murrelet; woodland caribou (southern population); and Nechako river white sturgeon. Readers may recall that I referred to these proceedings in my recent post concerning the Northern Gateway pipeline recommendation. The failure by the Ministers to adhere to SARA timelines was never in dispute here, the argument of the parties and the decision by the Honourable Madam Justice Mactavish instead focuses on the legal consequences this failure.

The obligation to prepare and finalize recovery strategies for species listed as endangered or threatened under SARA and the timeframe in which this occurs is set out in sections 37 to 44 of SARA. Simply put, section 37(1) states that the relevant Minister must prepare a recovery strategy. The recovery strategy is an essential step towards engaging the legal protections given by SARA to listed species at risk, including the identification of critical habitat.  Depending on certain circumstances, the Minister has up to 4 years to publish a proposed recovery strategy (SARA, section 42). Once a proposed recovery strategy is published, SARA provides for a 60 day comment period and stipulates that a final recovery strategy be published 30 days thereafter (SARA, section 43). Justice Mactavish notes these timelines expired between 2007 and 2009 for the 4 species in question here (at paras 23-33).

The record before the Court demonstrated that recovery planning work had been done for these species, but that recovery strategies were not formally proposed for a variety of reasons, including a desire by the Ministers to consult with stakeholders, organizational capacity shortcomings, and challenges in properly identifying critical habitat (at paras 49-55). The evidence before the Court indicated that express decisions were made by federal officials to delay proposed recovery strategies even after SARA timelines had passed (at para 75). This decision also continues the recent trend of the Federal Court to observe the precautionary principle stated in section 38 of SARA that the preparation of a recovery strategy should not be postponed for a lack of full scientific certainty (at paras 71-73).

Justice Mactavish acknowledges an appreciation for the complexities of recovery planning under SARA, but she rules that none of the explanations offered by the Ministers provide lawful justification for the failure to meet SARA timelines. What I think is more noteworthy than the ruling itself are the statements made along the way. I’ve already noted the reference to the precautionary principle. Justice Mactavish also observes that the failure to post a recovery strategy significantly limits the application of SARA protection for species at risk, particularly against harm to critical habitat from industrial activity (at paras 56-60). Northern Gateway is very much in the picture here and many would add this proposed new project to the list of reasons why recovery planning for these 4 species was delayed.  Justice Mactavish reminds us that the rule of law ensures that government officials comply with their SARA obligations. My colleagues Professor Bankes and Professor Olszynski have previously commented on similar statements by the Federal Court in SARA cases (see here and here).  While Justice Mactavish does not reach back to the 17th century Bill of Rights as Mainville JA does in Canada (Fisheries and Oceans) v David Suzuki Foundation, 2012 FCA 40 (at paras 71-100), Justice Mactavish does find support (at paras 66, 90-92) in the remarkable dissenting opinion of Alberta Court of Appeal Chief Justice Fraser in Reece v Edmonton (City), 2011 ABCA 238. As an aside, it is nice to see Fraser CJA’s dissent receive some attention in the SARA jurisprudence.

One of the arguments by the Ministers here was that declaratory relief is not available to the applicants because there is no longer a dispute. In the time which elapsed between the application for judicial review in September 2012 and the hearing of argument before the Court federal officials had in fact published the proposed recovery strategies in question.  Justice Mactavish rejects this argument, citing the discretionary power of the Court to issue declaratory relief where appropriate, and finds the rule of law demands such relief is warranted here (at paras 65-66). In addition to the findings throughout her judgment that I’ve already noted, Justice Mactavish observes that federal officials have failed to comply with SARA recovery strategy timelines for another 167 listed species at risk (at para 85).The words chosen by Justice Mactavish to conclude her ruling suggest that the objective of SARA also had considerable influence here:

To state the obvious, the Species at Risk Act was enacted because some wildlife species in Canada are at risk. As the applicants note, many are in a race against the clock as increased pressure is put on their critical habitat, and their ultimate survival may be at stake.

The timelines contained in the Act reflect the clearly articulated will of Parliament that recovery strategies be developed for species at risk in a timely fashion, recognizing that there is indeed urgency in these matters. Compliance with the statutory timelines is critical to the proper implementation of the Parliamentary scheme for the protection of species at risk (at paras 100-101)

(Emphasis in original)

Accordingly, Justice Mactavish declares that the Ministers acted unlawfully in failing to post proposed recovery strategies for the pacific northwest humpback whale, marbled murrelet, woodland caribou (southern population), and Nechako river white sturgeon, within the timelines prescribed by SARA. The Court retained jurisdiction to hear submissions, if necessary, on compliance with final recovery strategy timelines for 3 of these 4 species (the final recovery strategy for the humpback whale has been published).

As I noted above, the Northern Gateway pipeline is lurking about in these proceedings. One very large question that remains is whether this declaration will have any legal effect on the Northern Gateway regulatory process. Recall that these 4 species and their habitat will be affected by the pipeline and its associated activities. The joint review panel concluded there would be no significant adverse effects on these species at risk, but did so in the absence of recovery strategies, a critical component of protecting species at risk under SARA. The absence of these recovery strategies in the regulatory process is the result of conduct that has now been declared contrary to law. Had the federal government complied with the law, these recovery strategies would have been placed before the Northern Gateway panel. Does the law require the panel to consider the content of these recovery strategies in its report? Can the Governor in Council lawfully make a decision on whether the Northern Gateway pipeline can go ahead when the recommendation before it is based on an incomplete record and fails to take into account these recovery strategies?

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Summary of Papers and Proceedings from a Workshop on Key Issues in the Design of Carbon Management Policies and Regulations in Alberta, Calgary, January 27 & 28th, 2014

Tue, 02/18/2014 - 9:00am

By: Nigel Bankes and Elizabeth Wilman, Workshop Co-Chairs

PDF Version: Summary of Papers and Proceedings from a Workshop on Key Issues in the Design of Carbon Management Policies and Regulations in Alberta, Calgary, January 27 & 28th, 2014

Regulation commented on: Specified Gas Emitters Regulation, Alta. Reg. 139/2007

Background and Format

Largely because of its role as a global energy supplier, Alberta is the largest emitter of greenhouse gases among the Canadian provinces. In 2007 Alberta passed the Specified Gas Emitters Regulation (SGER), Alta. Reg. 139/2007, which is due for renewal in 2014. The purpose of the workshop, Key Issues in the Design of Carbon Management Policies and Regulations, was to provide input to Alberta Environment and Sustainable Resource Development (AESRD) to assist in updating and revising the Regulation.

After consultation with an Advisory Committee, consisting of Jaclyn LaBerge (Trans Canada), J.P. Jepp (Shell), Don Wharton (TransAlta), Heather Carmichael and Justin Wheler (Government of Alberta), Janet Peace (Center for Climate and Energy Solutions), Nathan Maycher (Conoco Phillips), Tom Goddard (Government of Alberta), Andrew Leach (University of Alberta), Keith Driver (The Prasino Group) and Matt Horne (Pembina Institute), it was decided that the workshop would focus on: what can be learned from the current regulatory framework;  international experience relating to offsets; the use of the Climate Change and Emissions Management Fund; the treatment of cogeneration;  and overarching issues related to Alberta’s role as a producer of both energy and greenhouse gas emissions.

The workshop papers were preceded by remarks from the keynote speaker, the Honourable Robin Campbell, Minister of Environment and Sustainable Resource Development.  Following the Minister’s remarks, Justin Wheler (Climate Change Specialist, Regulation and Mitigation, AESRD) gave a presentation on the first six years of the SGER. Then five commissioned papers were presented and discussed.

    • Carbon revenue:  Recycling versus Technology Incentives
      • Authors: Marissa Beck, Ph.D. Program in Global Governance, Basillie School of International Affairs, Wilfrid Laurier University, and Randall Wigle, Professor, Basillie School of International Affairs and School of Business and Economics, Wilfrid Laurier University
      • Presenter: Randall Wigle
      • Discussant: Len Coad, Director, Centre for Natural Resources, Canada West Foundation
    • Offsets: Lessons Learned from the Clean Development Mechanism
      • Author and Presenter: Janet Peace, VP, Markets and Business Strategy, Center for Climate and Energy Solutions
      • Discussant: Keith Driver, Managing Partner, The Prasino Group
    • Cogeneration and Carbon Management
      • Author and Presenter: Paula McGarrigle, Managing Director, Solas Energy Consulting
      • Discussant: Michal Moore, Area Director, Energy and Environmental Policy, School of Public Policy, University of Calgary
    • Advancing the Integrity of the Climate Change and Regulatory System in Alberta
      • Author and Presenter: Christine Schuh, President, Consulting Corp
      • Discussant: Oliver Bussler, Director, Sustainable Development, TransAlta
    • Leave it in the Ground?: Incorporating the Social Cost of Carbon into Unconventional      Fossil Fuel Development.
      • Authors: Andrew Leach, Enbridge Professor of Energy Policy, Alberta School of Business, and Branko Boskovic, Alberta School of Business, University of Alberta
      • Presenter: Andrew Leach
      • Discussant: Simon Dyer, Director, Alberta and the North, Pembina Institute

Keynote Address (Honourable Robin Campbell, Minister of Environment and Sustainable Resource Development) (available here)

The Minister’s remarks concentrated on the goals of any changes to the Regulations, and on possible changes. The goals included: future regulatory stability, flexibility, short and long term emission reductions across industries, and working with other jurisdictions. Reflecting these goals, possible changes include: lowering the regulatory threshold to include smaller emitters, using differential emission intensity reduction targets for different categories of emitters, raising the levy, and enhancing collaboration with other jurisdictions, particularly in the area of offset supply.

During the discussion participants asked about the timing of the government’s decisions and suggested that a white paper would facilitate public discussion of the proposed changes. There was also a question about the future of the carbon price. Would it be raised significantly, and would there be a ladder specifying its longer-term path?

SGER History (Justin Wheler)

Alberta’s Specified Gas Emitters Regulation (SGER) came into effect on July 1, 2007 and expires in September 2014. It covers large final emitters (facilities emitting more than 100 kt CO2 e annually) (LFEs). The regulation is intensity based, requiring a facility to reduce its emissions by 12% of its baseline. A facility’s baseline is historic. For new facilities, reductions are phased in at 2% per year. There is a great deal of flexibility with respect to compliance options. Facilities can undertake onsite reductions. One of the onsite reduction options, cogeneration, is given special treatment. Facilities can purchase and retire offset credits from non-regulated projects. They can purchase and retire emission performance credits (EPCs) from regulated facilities that have been able to reduce emissions intensity beyond the required 12%. Finally, they may pay into the Climate Change and Emissions Management Fund (CCEMF) at a rate of $15 per tonne.

The SGER reduces emissions by an average of 7Mt per year from business as usual. $398 million has been paid into the CCEMF. Of that, $213 million has been allocated to 51 clean technology projects. With leveraging from other sources, the total investment is over $1 billion.  The target emissions intensity reduction declared in Albertans and Climate Change, Taking Action (2002) was a reduction in emissions intensity by 2010 of 12%, or 20 Mt. This target has been realized through reductions under SGER which include EPCs, cogeneration and offsets.

Alberta’s emissions profile shows that LFEs account for more than half of the Province’s emissions.  A variety of sectors are covered. Most sectors exhibit stable emissions, but oil sands emissions are growing. In a Canada wide context, Alberta has the largest and fastest growing CO2 e emissions. Canada is not on target to meet its 2020 Copenhagen emissions target of 612 Mt (an absolute reduction of minus 17% of 2005 emissions by 2020). With current measures, it is projected to be 122 Mt. over target.

The successes of SGER include: significant emission reductions and investments in emission reduction technologies, improved quantification methods and data systems, a functioning offset market, a regulatory assurance system, and successful flexible management of a complex industrial sector.

Possible changes to the SGER include lowering the regulatory threshold, changing the $15 price, changing the intensity target, and tightening or relaxing some of the compliance options. Lowering the regulatory threshold to 50 kt would bring 40% more facilities under the regulation and 16% more emissions.  The 12% intensity reduction target drives the demand for compliance options, and the $15 per tonne price is a major determinant of how expensive they can be.  Because emissions intensity can vary considerably from year to year, the need for compliance options will also change.  Overall, there has been a fairly even mix of compliance options used.  Facility specific historic baselines add flexibility, but require considerable effort to establish.

Cogeneration does not fit well into the SGER, but the policy issues affecting it are not unique. Other facilities have multiple products, and offset projects, such as wind generation projects, also produce credits by displacing other generation and thereby avoiding the emissions associated with more carbon intensive forms of generation. The treatment of cogeneration is based on stand-alone alternatives for the two products, heat and electricity. There is no emissions intensity reduction target for electricity generation associated with cogeneration facilities. Emissions associated with steam generation are calculated as total emissions from the cogeneration facility net of emissions from electricity generation, where the electricity is assumed to be generated from a natural gas combined cycle electricity plant with a greenhouse gas intensity of 0.418 tonnes per MWh. The baseline for heat generation is a conventional boiler operating at 80% efficiency. As a result of this treatment, regulated entities that include cogeneration facilities allow the facility’s emissions intensity to fall below its baseline emissions intensity and generate EPCs.

The conclusion is that SGER is working and achieving real reductions. Investments are being made to achieve future reductions. The Climate Change Strategy renewal and Regulation review is underway. Possible changes are reflected in Minister Campbell’s comments.

Carbon Revenue: Recycling versus Technology Incentives (Marissa Beck and Randall Wigle)

Since its 2007 inception, a $15 per tonne levy paid in to the Climate Change and Emissions Management Fund (CCEMF) has been one of the options for compliance under the SGER. The CCEMF’s purposes are to support the development and applications of new technologies to reduce emissions, and to improve Alberta’s adaptation capabilities. Since 2007, about $400 million has been deposited into the Fund, with about $200 million allocated to projects.

Since any levy or tax on emissions results in revenue flowing to government, in Alberta’s case into the CCEMF, the use of these revenues is an important consideration. This becomes even more salient if changes in the Regulation result in an increase in the levy.

Beck and Wigle first presented the options for the use of carbon revenue. These include the commonly recommended approach of revenue recycling under which revenues from a carbon tax are used to replace revenue lost when other more distorting taxes are reduced.  Other options include the whole range of investments in new technologies, from supporting basic R&D to adoptions subsidies.

Revenue recycling provides what is known as the double dividend from a carbon tax. The first dividend is the carbon emission reduction, the second is that the harm caused by more distorting taxes, such as an income or corporate profits tax, is reduced when those taxes are reduced. For example, income tax reductions could be focused on lower income households, where it is most likely that a reduction in income tax would reduce harm by increasing work incentives and purchasing power.  The benefits of revenue recycling can be substantial.

The benefits of supporting new technology are potentially very large, but can be compromised by the difficulties associated with picking winners, free-riding, and lock-in.  Public investment in R&D should be focused on projects for which the returns to private investors are small. At the other end of the spectrum, adoptions subsidies may not be as effective as suggested by some of their proponents. Education funding for scientists and engineers is another option that is not always considered. Transparency and credibility are important characteristics of funding policies and, because technology development can be a long-term process, so is time consistency in both public sector funding and environmental policies. Funding decisions must both be, and be seen to be, impartial. Finally, a carbon tax should reduce emissions regardless of whether or not the funds are used to support technology. The role of technology support is to complement the emission reducing effect of a carbon tax, not to be a substitute for it.

The CCEMF’s investments seem to have been focused on commercialization and technology push. More emphasis on early R&D would better address free-riding externalities. While the carbon tax itself constitutes a major incentive for adoption, adoption subsidies may still be worthwhile. Finally, revenue recycling, through allowing corporate tax cuts, could positively influence technology investments in the private sector.

The discussant, Len Coad, pointed out that revenue recycling versus technology support should not be viewed as an either/or choice. If we are to manage the changes required, we need to pursue both pathways. With respect to revenue recycling Coad suggested that redistributing the fees paid into the CCEMF by 106 LFEs to all personal or corporate tax-payers has allocation implications that need to be further explored.  British Columbia, which uses revenue recycling, has a much broader based tax, and a broader range of mitigation approaches. While picking winners (or losers) is difficult, Coad suggested that the CCEMC has a clear and careful process to ensure that the decisions it makes are based on scientific evidence, and not on who pays into the fund. The decisions won’t necessarily result in emission reductions. Since the fund grows when emitters can’t find ways to reduce their emissions, a technology fund at least helps to find ways to reduce emissions. Beck and Wigle’s conclusion that the CCEMC has to date focused on demonstration and commercialization technologies, exposes a gap in innovation funding for more basic R&D.

The discussion focused on two issues: access to the CCEMF, and the types of projects funded. A member of the CCEMC Board emphasised that its approach is impartial and that it funds a broad portfolio of projects. Another participant suggested that, while revenue recycling is hard to apply in Alberta given the low revenue cap, it is worth considering as a longer-term strategy. There was a division of opinion in the room as to CCEMC’s application requirements. Some found them very time consuming, expensive and cumbersome. Others took the view that the requirements were no more demanding than for any business proposal seeking financing.

Offsets: Lessons Learned from the Clean Development Mechanism (Janet Peace)

In light of Minister Campbell’s remark that enhanced cooperation with other jurisdictions may well take place in the area of offset supply, the Peace paper on the Clean Development Mechanism (CDM) was very relevant. Offsets schemes provide an incentive to reduce GHG emissions in sectors or countries that are not mandated by regulation to reduce.  The motivation for reduction in an unregulated sector or country is that the reductions can be sold into the regulated sector to offset more costly emission reductions. The regulated sector creates the demand for offsets. The price for offsets, and the quantity supplied into the regulated market, depend on both the demand by the regulated market and the supply from outside that market. Limited demand, combined with a large supply, has caused the recent price for CERs (CDM offsets) to be very low.

While the offsets market may soon be expanded, regulated emitters in Alberta are currently constrained to use offsets generated in Alberta and thus cannot use CERs for compliance purposes. Regardless of their source, offsets need to be of high quality, constituting real, credible reductions. In addition an offset program must not impose unnecessarily high costs on participants (it must be efficient), and participants must have confidence that their investment will pay off.  Peace addressed offset quality, program efficiency and participant confidence in the context of CDM with lessons for Alberta. Her presentation emphasised three themes: credibility, efficiency and certainty.

Offset quality requires a credible baseline. Under the CDM, the project developer identifies the baseline. It is made available for public comment, and then validated by an independent auditor. An important principle in baseline establishment is conservativeness, ensuring that emission reductions relative to the baseline are not overestimated. Once a project is validated, and implemented, a different auditor verifies that the emissions reductions have been attained.

An adequate supply of well-trained auditors is essential, and the incentives for these auditors need to be aligned with the objectives of the CDM.  While the project developer currently retains and pays for the audits one suggestion is that auditors should be hired and paid for by the CDM Board, according to a pre-set fee schedule.

Program efficiency means minimizing the transaction costs associated with CDM projects without diminishing their quality.  Standardization of baseline methodologies and verification procedures promotes efficiency, and aggregating many small projects can also reduce transaction costs (programmatic CDM).

The discussant, Keith Driver, reiterated the importance of rigour in supplying quality offsets, and of efficiency and transparency. He also emphasised the need for harmonization across jurisdictions and the sharing of best practice. The engagement of the unregulated sector, and reducing abatement costs, were both cited as important benefits provided by the inclusion of offsets in a regulatory system. Driver also emphasised that Alberta’s work in developing offset protocols had gone largely unnoticed internationally, perhaps because of the unique features of the SGERs (baseline and credit and emissions intensity).

An issue that was raised in the discussion was that of using indirect emission reductions to create offsets, for example wind generation. This concern extends further into energy efficiency programs that reduce the demand for energy. Offset credits are assessed by specifying standard grid factors. Other issues raised in the discussion included validation and certification. One participant noted that Alberta’s scheme does not make provision for project validation and asked whether this might be changed. Others noted that the absence of governmental certification of offset credits created uncertainty for purchasers as did the risk of retrospective changes in offset protocols. In response Peace suggested that the absence of certification might be a more significant obstacle to investment if the price of carbon increases; it may also be an obstacle in developing linkages with other jurisdictions.

Cogeneration and Carbon Management (McGarrigle)

As pointed out in Justin Wheler’s presentation, cogenerations accounts for a large portion of compliance under Alberta’s SGER. Cogeneration is combined heat and power production (CHP). The SGER defines electricity as a by-product and does not impose an emissions intensity target on the electricity from cogeneration. The growth in cogeneration in Alberta has been driven by three main factors: regulatory changes, reduced cost, and demand growth. The regulatory changes include full retail competition and industrial site designation (ISD) under the Hydro and Electric Energy Act, RSA 2000, c. H-16 which allows sites to be billed for transmission services only on the difference between on-site generation and the on-site load. This reduces the ancillary costs associated with power generation. Federal tax changes allow accelerated capital cost depreciation, and special treatment under the SGER allows cogeneration to generate substantial emission performance credits. The growth of steam assisted gravity drainage (SAGD) in oil sands extraction has increased the demand for both heat and power, and improved the economics of cogeneration. For new capacity, cogeneration has a levelized cost below other power sources, but higher than Alberta’s forward power pool price. While electricity deregulation and ISD designation have had a large impact in promoting cogeneration, the SGER seems not to have had a big influence. An important question raised by this presentation is whether cogeneration is really business-as-usual.

The discussant, Michal Moore, took a broader view of cogeneration. He stressed the related roles of economics, system efficiency, and long-term public policy in motivating cogeneration. He also stressed that the regulatory system needs to promote the integration of cogeneration as part of a carbon strategy. To promote cogeneration you need long-term, predictable, regional public policy.

The question of whether and how to provide credit for cogeneration came up in the discussion. While there is some level of discomfort in the way in which we recognize cogeneration it is clear that cogeneration is less emissions intensive than on-grid power and therefore should be encouraged. This suggests the need for further consideration of the effectiveness and transparency of crediting for cogeneration.

Advancing the Integrity of the Climate Change Act and Regulatory System in Alberta (Christine Schuh)

Schuh views the regulatory system as a management system in which the regulator establishes targets, ways of measuring the degree to which the targets are met, and a process for evaluating, reacting and updating.  The goal of the regulated emitters is compliance with the regulations, and providing the data that documents their compliance. Verification and audits are part of the regulator’s tool kit. Of course, the devil is in the details. Challenges to the existing system include: ensuring that the interests of the intermediaries who construct offset protocols and perform verification are aligned with the regulator; ensuring quality data through things like reviews, audits, accreditation requirements; ways of dealing with the inherent uncertainty in the system, including discounting, holding back or disallowing offsets; fungibility with other systems such as cap and trade;  and baseline determination or additionality  (project level or industry level).

The discussant for the Schuh paper, Oliver Bussler, pointed out that SGER has provided an impetus for the development of expertise in the regulated industries, among consultants, and in government. On the issue of fungibility he speculated on whether the era of economy wide emissions trading systems has passed. There are now a number of different systems (California/ Quebec cap and trade, British Columbia carbon tax, the Regional Greenhouse Gas Initiative), raising the question of which system Alberta might wish to link with.

The discussion of the Schuh paper dealt with validation, training and education and the certification of personnel. On validation Schuh expressed the view that validation is most useful where there is uncertainty as to whether a project complies with the protocol. This becomes less important as projects become more routine. Participants emphasised the need for better training and education and perhaps professional licensing bodies so as to improve the quality of the application of carbon accounting rules and thereby provide assurance to investors and improve the overall level of confidence in the system.

Leave it in the Ground? Incorporating the Social Cost of Carbon into Unconventional Fossil Fuel Development (Andrew Leach and Branko Boskovic)

The Leach and Boskovic paper looked at the influence of the SGER on the decisions of Alberta oil sands producers’ decisions to develop a new project or not. Hence the title “Leave it in the Ground?” The authors find that the current SGER has very little effect on the costs of such projects or on the decision about whether to develop the project. The current SGER only taxes emissions from oil sands production (upstream emissions), not emissions from the downstream combustion of the product. The authors also find that increased stringency of the regulation and/or tax on production emissions would have little effect on the profitability of the oil sands projects.  They include estimates by the U.S. Environmental Protection Agency on the social cost of carbon (SCC). The SCC is presumed to have some legitimacy as a measure of the damages from global warming. They find that the returns to oil sands projects are not greatly affected. In fact, the returns are robust to carbon taxes on production emissions of up to $100 per tonne. Then they include a regulation or tax on combustion emissions of the resulting product applied in another jurisdiction and find impacts of far greater magnitude than the production only tax. This leads them to conclude that if we are worried about the future of oil sands projects, the coverage of carbon tax matters at least as much as the size of the tax. A change in the stringency of the current Alberta framework which only applies to production emissions is unlikely to have much negative influence on oil sands projects. The real carbon risk for oil sands producers lies beyond the province.

The discussant for this paper, Simon Dyer of the Pembina Institute, provided some additional perspectives on the question considering both an SCC tax and other regulatory policies. How are such factors as catastrophic events, extinction of species, or the appropriate intergenerational discount rate, accounted for in the SCC? The SCC may be far too low. Perhaps what we should do is look at what SCC, or what regulations, are required to get on a path such as the IEA 450 scenario (International Energy Agency, World Energy Outlook, 2013). Dyer agrees that oil sands projects are likely to remain profitable under a strengthened SGER, and that it is likely to be stronger global climate policy that will most negatively influence the viability of such projects.


Overall, the papers and proceedings of the Workshop are enlightening with respect to the successes of carbon policies and regulations in Alberta, and the challenges that remain. The successes include emission reductions and investments in new technologies that would otherwise not have occurred, improved measurement and data management systems, development of an offset market, and a functioning regulatory system. There is evidence that the system can be made considerably more stringent, without unduly affecting profits and competitiveness.  However, this should be done in a way that provides a high degree of regulatory certainty for the future. This would mean a timetable for increases in fees and reduction targets so as to provide clear guidance to investors. Increased stringency is likely to mean more revenue for the CCEMF. This raises the questions of whether Alberta should consider revenue recycling as an option, and/or how to allocate support for the various technology fund options as revenue increases.

One of the challenges of the Alberta system is that it can be complex and opaque. This makes it difficult to manage and to assess effectiveness. The choice of a baseline and credit system (which focuses on emissions intensity on a facility by facility basis, and makes it necessary to deal with multiple products and indirect emissions), implies complexity. It also invites scrutiny of whether the establishment of project specific baselines reduces the incentive to adopt the most efficient technologies from the outset. The treatment of cogeneration is certainly opaque, and its effectiveness is questionable. Expanding the offset market seems attractive. Acceptance of CERs within the Alberta system may be seen as a contribution to international solidarity and engagement with the global community. Any decision to reduce the 100 Mt regulatory threshold must clearly weigh the benefits of doing so against the regulatory costs.

Regulatory systems in other jurisdictions will affect Alberta at some point. There may be a need for fungibility that will include more than offset markets.  Since most other systems do not have a regulation that is both intensity and facility based, there will be some challenges. Even ignoring fungibility, the fact that Alberta’s fossil energy exports create emissions whenever and wherever they are combusted, will mean that global regulations limiting or taxing combustion emissions will affect Alberta.

Funding for the workshop was provided by Carbon Management Canada. Thanks and acknowledgements to Salimah Janmohamed, Mikaela McQuade and David Poulton for their summaries of the presentations and resulting discussion.

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And Now Some Good News for a Change: The Energy Safety and Security Act

Fri, 02/14/2014 - 9:00am

By: Martin Olszynski

PDF Version: And Now Some Good News for a Change: The Energy Safety and Security Act

Legislation Commented on:  Bill C-22, An Act respecting Canada’s offshore oil and gas operations, enacting the Nuclear Liability and Compensation Act, repealing the Nuclear Liability Act and making consequential amendments to other Acts (Energy Safety and Security Act), Second Session, Forty-first Parliament, 62 Elizabeth II, 2013-2014

At the end of last month, while all eyes were fixed on the U.S. State Department’s release of the Final Supplemental Environmental Impact Statement (EIS) for TransCanada’s Keystone XL pipeline (discussed by my colleague Professor James Coleman here), the federal government quietly introduced Bill C-22, the Energy Safety and Security Act (ESSA), for first reading in the House of Commons. Bill C-22 has two parts, the first dealing with offshore oil and gas operations, the second with the liability regime applicable to nuclear incidents. This post focuses on the changes to the offshore liability regime and then briefly considers what ESSA tells us about the development of effective environmental laws and policies in Canada.

The Energy Safety and Security Act: From Laggard to Leapfrog?

It is sometimes suggested in certain matters of national policy, including energy and the environment, that Canada is of necessity a follower, not a leader.  Certainly, this is the view of the current federal government with respect to climate change (for a contrary view, see here).  But Canada’s record as a taker – if not a laggard – in the environmental context goes back at least forty years.  It was just over forty years ago that the United States enacted their endangered species legislation, while Canada’s Species At Risk Act, SC 2002, c 29 (SARA) is barely a decade old. Similarly, the U.S. environmental assessment (EA) legislation, the National Environmental Policy Act, 42 USC 4321 et seq. (pursuant to which Keystone XL was assessed) is widely regarded as the progenitor of all EA laws, including Canada’s.  In the offshore oil and gas liability context, the minutiae of the regimes make generalizations difficult but overall Canada appears late to the game here too; the U.S. Oil Pollution Act (OPA), 33 USC 40, which contains many of the provisions discussed below, was passed over two decades ago (in 1990 following the Exxon Valdez oil spill). As discussed below, however, ESSA represents a rare opportunity for Canada to leap ahead of the U.S. in this context.

Assuming it is passed without major amendment, Part I of ESSA will amend the Canada Oil and Gas Operations Act, RSC 1985, c O-7 (COGOA), the Canada Petroleum Resources Act, RSC 1985, c 36, the Canada-Newfoundland Atlantic Accord Implementation Act, SC 1987, c 3 (CNAAIA), and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, SC 1988, c 28 (CNSOPRIA). As described in a backgrounder prepared by Natural Resources Canada, “[t]he proposed changes focus on four main areas — prevention, response, accountability and transparency — and they help to further strengthen safety and security to prevent incidents and ensure swift response in the unlikely event of a spill.”

This post focuses on accountability, with respect to which ESSA does five principle things:

  1. References the “polluter pays” principle explicitly in legislation;
  2. Maintains and reinforces that liability is unlimited where fault or negligence is proven;
  3. Raises the absolute liability (i.e. where there has been no fault or negligence) to $1 billion from $30 million (Atlantic offshore areas) or $40 million (Arctic);
  4. Establishes a basis for governments to seek environmental damages;
  5. Establishes that authorization holders are liable for the actions of their contractors.

ESSA accomplishes this by amending the relevant liability provisions of the above-noted Acts.  Thus, paragraphs 26(1)(a) and (b) of COGOA will be amended as set out here (underlining is from text of Bill C-22 as found on the Parliament of Canada’s website; see also new paras 167(1)(a) and (b) of the CNSOPRAIA and new paras 162(1)(a) and (b) of the CNAAIA).

Thus, point 2 (unlimited liability in the case of negligence or fault) is maintained through new para. 26(1)(a). Point 3 (increased absolute liability) is achieved through the combined operation of new para. 26(1)(b) and new subs. 26(2.2) (in contrast to the current regime, whereby limits are contained in regulations, subs. 26(2.2) sets out statutory limits (e.g. $1 billion) although a new subs. 26(2.3) will allow these to be amended by regulations).  Point 4 (environmental damages) is achieved through new subpara. 26(1)(a)(iii), which refers to the loss of “non-use value relating to a public resource that is affected by a spill.” (See the new section 26(2) for similar changes with respect to losses caused by debris).  Of all these changes, it is arguably the increases in absolute liability that put ESSA ahead of the U.S. OPA (see §2704).

With respect to point 4, some readers might reasonably be wondering what exactly “non-use value” is, and how those words translate into “a basis for governments to seek environmental damages.” “Non-use value” is a term borrowed from environmental economics to describe environmental values that are derived not from the environment’s actual use (these are unimaginatively referred to as “use value”) but rather from its mere existence. The Supreme Court of Canada actually discussed both of these kinds of value in Canadian Forest Products v. British Columbia, [2004] 2 SCR 74 (at para 138), widely regarded by both academics (see e.g. Jerry V. DeMarco et al., Opening the Door for Common Law Environmental Protection in Canada: The Decision in [Canfor]” (2005) 15(2) J Env L & Prac 233) and the private bar as having “opened the door” to common law liability for environmental damages in Canada:

“Use value” includes the services provided by the ecosystem to human beings, including food sources, water quality and recreational opportunities.  Even if the public are not charged for these services, it may be possible to quantify them economically by observing what the public pays for comparable services on the market.

“Passive use” or “existence” [non-use] value recognizes that a member of the public may be prepared to pay something for the protection of a natural resource, even if he or she never directly uses it.  It includes both the psychological benefit to the public of knowing that the resource is protected, and the option value of being able to use it in the future.

Although the wording could be clearer, it is arguable that COGOA already establishes liability for lost “use values” through its definition of “actual loss or damage,” which subsection 24(3) currently defines as “include[ing] loss of income, including future income, and, with respect to any Aboriginal peoples of Canada, includes loss of hunting, fishing and gathering opportunities.” Thus, ESSA’s primary contribution here is to explicitly expand the scope of environmental liability to include non-use values, the significance of which can be gauged relatively simply by considering that the minimum estimated value of lost non-use values following the Valdez oil spill was $2.8 billion (US) (see Richard T Carson et al, “Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill” (2003) 25:3 Envtl & Resource Econ 257 at 278; there do not appear to be any publicly available estimates of lost non-use values associated with BP’s Deepwater Horizon spill in the Gulf of Mexico, although these too will undoubtedly be substantial).

There are other aspects of the ESSA that are noteworthy, and still others that could be improved.  For example, the U.S. OPA authorizes not only federal and state governments to recover what are referred to there as “natural resources damages”, but also Indian tribes (see §2706(a)(3)). ESSA limits the right to recover non-use values to the federal, provincial and (through operation of s 35 of the Interpretation Act, RSC 1985, c I-21) territorial governments (see new section 26(2.6)), which seems strange in light of the focus, with respect to “actual loss or damage,” on what are essentially Aboriginal use-values, and in light of the fact that several First Nations have Aboriginal title claims in coastal waters (see e.g. Ahousaht Indian Band v. AG of Canada, 2007 BCSC 1162 (CanLII)). The OPA also authorizes the promulgation of regulations with respect to the assessment of damages, compliance with which creates a rebuttable presumption of accuracy in the event of litigation (see § 2707), but no such regulations are contemplated by ESSAESSA also raises the financial capacity requirements of operators, which is to say proof of sufficient financial resources now to pay for any future liability (new subsections 26.1(1) and (2)), but these are limited by the absolute liability caps (new section 26(2.2)) and the National Energy Board “is not required to consider any potential loss of non-use value relating to a public resource that is affected by a spill” when determining those amounts (new subsection 26.1(3)).

Finally, ESSA continues the trend set by the federal government’s 2009 Environmental Enforcement Act, SC 2009, c 14 (EEA), which is to incorporate environmental damages assessment (through the inclusion of the terms “use and non-use value”) into the regulatory offences context, authorizing judges to consider the loss of such values when determining the sentence to be imposed where an offence has been committed (for COGOA, see new subsections 60(3) to (7)). On this front, however, it should be pointed out that five years on and notwithstanding the fact that the EEA amended several of Canada’s more prominent environmental laws, including the Canadian Environmental Protection Act, 1999, SC 1999, c 33, there is still not a single reported decision where environmental damages have been assessed and quantified for the purposes of sentencing (University of Alberta professor and environmental economist Peter Boxall and I have recently prepared a paper on this state of affairs that we will be presenting at the Canadian Institute for Resources Law’s Environmental Law Symposium in Halifax, N.S. next week).

While there are still more aspects of ESSA worth considering (some are discussed here), it seems clear that overall, and in contrast to almost every other piece of federal environmental legislation in the last couple of years, ESSA is a good news story. Below I briefly offer one possible explanation for this outcome, which is also relevant to another recent development in the Canadian environmental law and policy landscape.

The Commissioner of the Environment and Sustainable Development (CESD): Objective Research and Analysis

What does the CESD have to do with ESSA? As it turns out, a lot.  As noted in the NRCan backgrounder cited above, the ESSA’s provisions are intended to “address recommendations from the [CESD] in his fall 2012 report” (Exhibit 2.4 of that report, Canada’s offshore oil and gas absolute liability regime as compared with other countries, is particularly relevant to the discussion above).

The CESD is an environmental watchdog position within the Office of the Auditor General of Canada whose job is to provide parliamentarians with “objective, independent analysis and recommendations on the federal government’s efforts to protect the environment and foster sustainable development.” This is accomplished by conducting performance audits and overseeing an environmental petitions process (for more information on the CESD’s mandate, see here), something that the previous Commissioner, Scott Vaughn, did with exceptional rigour and professionalism for five years until moving on to the International Institute for Sustainable Development last year.  If you want to debate Canada’s environmental record, whether in the classroom or at the pub, then you need to read the CESD’s Reports to Parliament, which include chapters on:

For those readers still not inclined to use these easy-to-follow links but willing to take my word for it (spoiler alert), I am being generous when I say that in most of these areas the federal government’s performance has been less than stellar.  But while such news may not be welcome to the government of the day (you can get a flavor for that here and here), the fact that parliamentarians – and Canadians generally – have access to this kind of information should be.  Just like the Auditor General’s more conventional (and similarly unpopular with sitting governments) financial audits, there can be no accountability and no improvement without such information.

This is not to suggest that the mere existence of such reports automatically leads to better policies and legislation. Such information is merely enabling; it must be acted upon. Herein, then, lies one explanation as to why ESSA is a good news story; unlike the environmental legislation contained in the omnibus budget bills of 2012 (see e.g. this post by Professor Arlene Kwasniak regarding the changes to the Fisheries Act, RSC 1985, c F-14), its provisions are based on objective research and analysis (honorable mentions should also go to the Eighth report of the Standing Senate Committee on Energy, the Environment and Natural Resources, 2010, released shortly after the Deepwater Horizon spill).  ESSA is, in other words, an example of evidence-based policy.

It is for this reason – the invaluable service provided by the CESD – that I couldn’t help notice last week’s announcement regarding the appointment of a new Commissioner.  According to that announcement, Ms. Julie Gelfand will bring a diversity of experience to the position, having served for over fifteen years as president of Nature Canada but also as Chief Advisor at Rio Tinto Canada and Vice-President of Sustainable Development at the Mining Association of Canada (MAC). When asked about how she might approach her new position in a recent interview with soon-to-be-former Postmedia News energy and environment reporter Mike De Souza, Ms. Gelfand talked about bringing different perspectives on environmental sustainability and “as much balance as possible.”  I don’t know how “different perspectives” and “balance” fit within a mandate to provide objective and independent analysis and advice, but I do know that Canadians would not be well-served by a “kinder, gentler” CESD. I can think of countless positive words to describe former Auditor General Sheila Fraser, for example, but those two are not among them.

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Accommodation is a Challenging Issue for Employers, Employees and Human Rights Commissions

Thu, 02/13/2014 - 9:20am

By: Linda McKay-Panos

PDF Version: Accommodation is a Challenging Issue for Employers, Employees and Human Rights Commissions

Case commented on: Robinson v Edmonton (City), 2014 ABQB 29

It is perhaps only logical that since physical disability is the most common ground and employment is the most common area for discrimination claims in Alberta, accommodation would be a recurring issue in this context (see Alberta Human Rights Commission, Annual Report 2012-13). Employers (as well as service providers, landlords, etc.) have a duty to accommodate employees who experience discrimination to the point of undue hardship.

Employers’ duties are set out in an interpretive bulletin provided by the Alberta Human Rights Commission (see here). Once it is determined that the request for accommodation falls under the areas and grounds protected under the Alberta Human Rights Act, RSA 2000 c A-25.5, some of the key responsibilities include the following (summarized from the AHRC bulletin reference above):

    • Respecting the dignity of the person requesting the accommodation;
    • Respecting the privacy of the person requesting the accommodation and abiding by applicable privacy legislation;
    • Listening to and considering the needs of the person seeking accommodation and their suggestions for accommodation;
    • Reviewing the medical or other information provided to support the request for accommodation;
    • Being willing to take substantial and meaningful measures to accommodate the needs of the person seeking accommodation;
    • Consulting a human resources officer or lawyer if more information is needed to assess the request;
    • Being flexible and creative when considering and developing options;
    • Discussing the options with the person seeking accommodation;
    • Taking reasonable steps to accommodate the person to the point of undue hardship. If full accommodation is not possible without undue hardship, suggesting options that may partially meet the needs of the person seeking accommodation;
    • Replying to the request for accommodation within a reasonable period of time;
    • Making a formal written agreement with the person seeking accommodation and ensuring that the accommodation is given the chance to work;
    • Providing details that justify any refusal to accommodate because it poses an undue hardship or because of a bona fide (good faith) occupational requirement; and
    • Being willing to review and modify the accommodation agreement if circumstances or needs change and the agreement is no longer working.

The factors that will be considered when determining whether it is an undue hardship to accommodate an employee include the following (also summarized from the above bulletin):

    • Financial costs are so substantial that they would affect productivity or efficiency of the employer;
    • Size and resources of the employer and cost of modifying premises or equipment;
    • Disruption of operations and inconvenience to carrying out essential business;
    • Morale of other employees brought about by the accommodation (e.g., negative impact of increased duties);
    • Substantial interference with rights of other individuals or groups;
    • Ability of employer to relocate employees to other positions on a temporary or permanent basis; and
    • Health and safety concerns.

Accommodation, however, is a two-way process. Employees (as well as service recipients, tenants, etc.) also have duties. Once the person seeking accommodation has determined that the concern falls under the areas and grounds protected by the AHRA, he or she has the following responsibilities (summarized from the bulletin):

    • Informing the employer about the need for accommodation, preferably in writing – explain why accommodation is required, include supporting documents, provide medical information, suggest appropriate accommodation measures, and indicate how long accommodation is required;
    • Allowing the employer a reasonable period of time to reply to the accommodation request;
    • Listening to and considering any reasonable accommodation options proposed by the employer; employees have a duty to accept a reasonable accommodation, even if it is not one that the person prefers;
    • If the employer indicates that there is an undue hardship, requesting the details of the factors that create the undue hardship and provide more information if that would be helpful;
    • Consulting human resources consultant, union representative or lawyer for assistance in determining if the proposed options are reasonable;
    • Once the accommodation is provided, making a formal written agreement;
    • Cooperating to make the agreement work;
    • Advising the employer when accommodation needs have changed and providing necessary medical documentation;
    • Being willing to review and modify the accommodation agreement if the circumstances or needs have changed; and
    • Telling the employer if the need for accommodation has ended.

Thus, communication and ongoing dialogue between employer and employee are very important to effective accommodation.

The recent decision of Robinson demonstrates some of the challenges faced by employers and employees in achieving effective accommodation. Susan Robinson complained that her employer, the City of Edmonton, failed to accommodate her disability, which interfered with her ability to perform her duties as an Edmonton Transit bus driver (2014 ABQB 29, para 1).

Ms. Robinson had an environmental disability, in which exposure to fumes, such as diesel fumes or perfumes, caused hives and other reactions. The treatment for these reactions involved the use of antihistamines and this caused drowsiness, which rendered it unsafe for Ms. Robinson to drive a bus (para 3). The City of Edmonton acknowledged that this was a disability and that Ms. Robinson could not work as a bus driver because of the disability.

From 1995 until 2009, Ms. Robinson was frequently absent from work and was on short-term disability at times. Sometimes, her husband, who was a bus driver, worked her shift.  Her disability was accommodated in this way. In the fall of 2009, Ms. Robinson applied to the City’s long-term disability insurer for long-term disability benefits. She was refused. The insurer had obtained information that she had the seniority to drive a LRT (Light Rail Transit), which would limit her exposure to fumes. Once the City knew about this possibility, it set out to consider the arrangements necessary to achieve it (paras 4 to 6).

Although she was advised by the disability management person to see her supervisor, after Ms. Robinson was denied long-term disability, she decided to resign (para 7). There was a conflict in the evidence as to whether Ms. Robinson was aware of the LRT option when she resigned. She admitted that she knew that the LRT option was available before she was denied long-term disability, but argued that once she was denied, she was not advised of the LRT option. She understood that she was being instructed to return to work as a bus driver (para 8). On the other hand, the City argued that Ms. Robinson was instructed to report to her supervisor in order to work out the details regarding training for the LRT option (para 9).

The Human Rights Tribunal held that it was most likely that Ms. Robinson had discussed the LRT option after she was denied long-term disability. This conclusion was consistent with her doctor’s chart notes, the City’s internal documentation and the wording she used in her human rights complaint. Ms. Robinson’s testimony about all of this was unclear (para 10). Her supervisor had advised both Ms. Robinson and her husband that she could appeal the denial of long-term disability (paras 12-13). The Tribunal concluded that this was not a case of a denial of disability or a refusal to accommodate. The City had taken all reasonable steps to accommodate Ms. Robinson (para 16). She had preempted and prevented the City from fulfilling its duty to accommodate any further because she opted out of the process by resigning (para 17).

Ms. Robinson appealed the Tribunal’s dismissal of her complaint to the Alberta Court of Queen’s Bench. She argued that if the City intended to seriously facilitate a trial of the LRT option, it failed to communicate its intention to her, such that she reasonably concluded that she had no option but to resign (paras 19, 25). Ms. Robinson’s counsel argued that the Tribunal had not applied the correct legal principles regarding the employer’s duty to accommodate (para 18).  Justice B.R. Burrows disagreed, and held that these arguments were actually challenges to the Tribunal’s finding of facts. He concluded that, based on a standard of review of either reasonableness or correctness, the Tribunal’s decision was not only reasonable, it was correct (para 25). He dismissed the appeal.

This case demonstrates the role of both parties in effective communication in the accommodation process. It also shows what can occur if the communication breaks down. It is likely with our aging population the issue of accommodation will continue to challenge employers, employees and Human Rights Tribunals.

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The Utilities Commission and the Court are Powerless to Prevent Unjustly Discriminatory Rates; The Fat Lady is Singing – Loudly

Wed, 02/12/2014 - 9:00am

By: Nigel Bankes

PDF Version: The Utilities Commission and the Court are Powerless to Prevent Unjustly Discriminatory Rates; The Fat Lady is Singing – Loudly

Case commented on: Williams Energy (Canada) Inc v Alberta Utilities Commission, 2014 ABCA 51

The Court of Appeal has confirmed that the scheme of the Gas Utilities Act, RSA 2000, c. G-5 (GUA) reserves to the Lieutenant Governor in Council the exclusive authority to determine which gas utilities will be subject to regulation by the Alberta Utilities Commission (AUC). Thus, while the AUC may make declaratory findings that an entity is a gas utility and that the utility is charging unjustly discriminatory rates, such declaratory findings are empty remedies for the customers of that utility unless and until the Lieutenant Governor in Council can be persuaded to make an Order in Council (OC) bringing that utility under full rate regulation.

I have posted on the long-running Ventures pipeline saga before (here) and I refer readers to that previous post for the background to the current proceeding before the Court of Appeal. Essentially the Court had already ruled on all of the above in those previous proceedings. The issue before the Court in this case was whether the Commission had correctly decided whether the AUC might be able to intervene on the basis of a provision in the GUA’s Gas Utilities Exemption Regulation (Alta Reg 53/99) to the effect that no OC would be required in “proceedings under section 36 or 45 of the Act in relation to NOVA Gas Transmission Ltd.”. Of course that was not quite the issue since Williams first had to deal with the standard of review and thus ultimately the question became whether the Commission acted unreasonably in concluding that this provision was inapplicable.

The Commission had decided that this provision was not available in this case since Ventures was not NOVA but an affiliate of NOVA. Justice O’Ferrall, this time referring to his gatekeeper role as a single judge hearing a leave application (see my recent post on another leave decision of Justice O’Ferrall here) granted leave on that question (see 2013 ABCA 146; scroll down to the comment section of the earlier post to see my comment on that leave decision).

In this case the Court concluded that the standard of review was reasonableness and not correctness (at paras 13 – 14). Once that decision was made it was pretty clear what the outcome was going to be. In fact, the Court does little more than quote long passages from the Commission’s decision before adding its own concluding paragraph:

[30]… the construction given to the regulatory provision by the Commission does not, in our opinion, defeat the legislative purpose. The legislative objective may to some fly in the face of earlier sustained findings of discriminatory practice predicated on unreasonable rates. At the end of the day, however, the economic and fiscal considerations were expressly reserved for the executive branch of government, the effect of which limits the exercise by the Commission of its jurisdiction to fix rates. The Commission is prohibited from fixing rates under s. 36 without sanction from the Lieutenant Governor in Council in the form of either an Order in Council or in the form of an exemption as set out in the Gas Utilities Exemption Regulation. It is significant that the Commission has itself requested an Order in Council for the Ventures Pipeline in accordance with s. 5 of the Gas Utilities Act. No such Order in Council has been forthcoming.

This was probably going to be the outcome whatever the standard of review but it is worth questioning whether the standard here should have been correctness rather than reasonableness. There is a strong sense in which this was a true jurisdictional question – since the answer to the question determined whether the AUC had the authority to set just and reasonable rates for this pipeline. In deciding that the standard of review was reasonableness the Court places great weight on its earlier decision in this set of proceedings, TransCanada Pipeline Ventures Ltd. v. Alberta (Energy and Utilities Board) 2008 ABCA 55, where the issue was whether the Ventures Pipeline was a “gas utility”:

[14] This was a “threshold issue” to jurisdiction, yet this Court found at paras. 18 – 20 that the standard of review was reasonableness. It was up to the Commission to decide what was a “gas utility”. Here the issue is what is an “exempt gas utility”. The same result follows: the standard of review is reasonableness.

But it is not clear to me that the two situations really are comparable. The definition of “gas utility” is at the heart of the GUA and the AUC’s jurisdiction. The same cannot be said of this Exemption Regulation which, I am guessing, rarely if ever fell to be interpreted by the Commission.

In any event, this must now be the end of the road for Williams unless it is able to get its Order in Council; but one suspects that if that was going to happen it would already have happened.

The only question now is just what is the fat lady singing? Perhaps I can persuade our blog coordinator Jennifer Koshan to come up with a prize for wittiest answer. Send your entries using the comment function or, if you prefer, directly to  We would like to encourage some more reader participation in ABlawg!

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The More Things Change…. A Post-McKercher Conflicts Case

Tue, 02/11/2014 - 9:00am

By: Alice Woolley

PDF Version: The More Things Change…. A Post-McKercher Conflicts Case

Case Commented on:  MTM Commercial Trust v Statesman Riverside Quays Ltd. 2014 ABQB 16

In his decision in MTM Commercial Trust v Statesman Riverside Quays Ltd. Justice Macleod determined whether Bennett Jones LLP could act for Matco Group, a client of many years, in a dispute with the Statesman Group, for whom Bennett Jones acted on a very limited retainer, and who had been advised that Bennett Jones would act for Matco in the event of a future dispute between the two clients.  Somewhat surprisingly, Justice Macleod held that Bennett Jones could not represent Matco.  In this comment I will suggest that this judgment supports the position I set out in an ABlawg post in 2011, that “in actual cases judges are less concerned with carefully articulating the applicable rules, and more concerned with reaching the right outcome on the facts, all things considered” (The Practice (not theory) of Conflicts of Interest; see also Conflicts of Interest and Good Judgment).

The Judgment                         

Bennett Jones LLP has represented the Matco Group of Companies for many years.  In 2006, Matco entered into a joint venture with the Statesman Group to develop a property in Inglewood.   Matco owned the land, and Statesman was to provide the “building expertise and the interim financing”, as well as credit guarantees (para 8). Along with other arrangements, the two groups created a general partnership in which they each had a 50% interest.  

In 2008 a lien had been filed by a third party, and Bennett Jones represented the general partnership with respect to the building lien issues.  In addition, it filed a defence for the Statesman group (para 5).  Because, however, Bennett Jones had acted for Matco for many years it sent an e-mail to in-house counsel at Statesman “purporting to preserve the Law Firm’s right to act for the Matco group in any disagreement with the Statesman group notwithstanding the acceptance of the retainer” (para 6). The e-mail stated that it was to confirm that in the “unlikely event of disagreement between [Matco] and the Statesman group” Statesman would “take no objection to our continued freedom to act for Matco” (para 6).

Unfortunately, by 2010 relations between the Matco group and Statesman had deteriorated.  After consulting with Bennett Jones in May and June, on June 21, 2010 Matco served a “Notice of Default and Notice of Termination” on the general partner (para 10).  On July 8, 2010 it served an Originating Notice to commence an oppression action (para 10).

Although the law firm had continued to act for Statesman, it did not disclose to Statesman that it was acting against its interests until the service of the Notice of Default and Notice of Retainer.  After that point in time the firm no longer acted for Statesman, and Statesman and Matco embarked on litigation that was  “extremely personal and highly charged emotionally” (para 11).  And as part of that litigation Statesman sought a declaration that the law firm “was in a conflict of interest and an order that it not act for the Matco group” and which also sought damages for breach of fiduciary duty (para 16).  At that point Bennett Jones stepped aside as counsel for Matco in the litigation, but the conflicts action continued, and Bennett Jones sought to have it resolved because were the Court to find that there was no conflict the firm might “be able to act on behalf of the Matco Group notwithstanding that it is itself a party to the litigation” (para 17).

In his judgment Justice Macleod began by reviewing the applicable provisions of the Law Society Code of Conduct.  He then reviewed the common law on conflicts of interest, including the decision by the Supreme Court in Canadian National Railway Co v McKercher LLP, 2013 SCC 39 (which I discussed in an earlier ABlawg post here).  He noted that the judgment affirmed the bright line rule, which prevents a lawyer from representing “one client whose interests are directly adverse to the immediate interests of another current client” (para 30).  He stated that where a firm “acts simultaneously for and against a client in legal matters, this will breach the bright line rule in most cases” (para 31).  He also noted the principle from McKercher that a conflict will not arise “where it will not be reasonable for a client to expect a firm to refrain from acting against it in unrelated matters”, but that this is “the exception” (para 33).

Justice Macleod also noted the cases dealing with advance consent, and the case law which indicates that an advance consent will only be sufficient if it anticipates the type of conflict that later arose.  That law means, he suggested, that one had to consider whether the “generic consent obtained from Statesman” was sufficient to justify Bennett Jones’ later representation of Matco against Statesman in related litigation (para 40).

Justice Macleod held that it did not.  He noted the “unenviable dilemma” of the firm in having a long-term client want to take steps that were adverse to the interests of another client to the point of “eliminating the Statesman Group from the project”, while also being unable to advise the other client of what was going on (para 41).  He also noted that the advance consent could not have led Statesmen to understand that Bennett Jones would be acting for Statesman’s interests in relation to the project, while simultaneously acting “for the Matco Group to effect the elimination of the Statesman Group from that very same project” (para 42).  To do so was a breach of the firm’s duties to Statesman.  As a consequence, the firm was disqualified from acting further in that matter.


One of the striking things about Justice Macleod’s judgment is that it spends a significant amount of time summarizing the law governing conflicts of interest, but only two paragraphs discussing the application of that law to the facts of Bennett Jones’ two retainers.  That division means that it is not entirely clear how the legal doctrine cited informs the result.

The decision cites, for example, the lawyer’s duty of candour to a client, but does not say whether or not Bennett Jones violated that duty in not disclosing the pending lawsuit to Statesman.  It cites the bright line conflicts rule from McKercher, which prohibits a lawyer from acting for one client against another, “even if the two mandates are unrelated” [emphasis in original], but does not discuss the significance, if any, from the fact that the matters in this case were related, not unrelated (para 30). It cites the principle that the bright line rule does not apply where it would be unreasonable for a client to expect it to apply, and that such cases are an exception, but does not say how that applies to the expectations of Statesman here.  That is, it does not say that the issue here is that Statesman could reasonably have expected Bennett Jones not to act against it.  It notes that a law firm should not “summarily and unexpectedly drop a client simply in order to avoid conflicts of interests” (para 34) but, again, does not say whether Bennett Jones acted in that way (and given that the firm did not drop the client, it is not obvious why one would have concluded that it did so). Further, the judgment notes the two key decisions on advance consent in conflicts cases, which require that the subsequent retainer be contemplated by the advance consent.  Yet it does not explain why the statement “we do not disqualify ourselves from assisting Matco in what I trust is the unlikely event of disagreement between it and the Statesman group in the future” (para 6) was not sufficient to alert Statesman of the possibility of the type of retainer which Bennett Jones subsequently accepted for Matco.  It is true that the later retainer was very adversarial, but there is no particular reason to expect that a “disagreement” between the parties wouldn’t be adversarial; legal disagreements tend to have that quality.

Ultimately it appears that two things caused problems for Bennett Jones: that it did not tell Statesman that it had taken a retainer from Matco significantly adverse to Statesman’s interests, and the severity of the impact on Statesman of Matco’s allegations in the litigation.  The legal relevance of those principles would perhaps be the violation of the duty of candour, and a reasonable supposition that there is a greater likelihood of a substantial risk on a representation where the two matters are related and highly adversarial.  However, as a matter of law, one also has to note the very limited nature of the prior representation of Statesman, that that representation would almost certainly be overtaken by these subsequent events, that Bennett Jones did not improperly withdraw from that representation, and the unreasonableness of Statesman expecting Bennett Jones not to act for Matco given the clear wording of the advance consent.

Perhaps the key point is this: Bennett Jones could have advised Statesman, or have withdrawn in an orderly fashion from that retainer.  Likely that would not have been the preferred course of action for Matco, but Bennett Jones could also have asked for and obtained consent from Matco for taking those steps.  There was nothing in law to prevent it from taking steps to advise Statesman of what it was doing.  That means that its failure to do so raises some doubt as to the propriety of the firm’s conduct.  And, as noted at the outset, doubt as to propriety tends to be highly significant in predicting the outcome in a conflicts case.  If the law firm has acted in an up front and candid way, then it is likely to avoid problems, even if its conduct might be considered a conflict of interest on a strict application of the law.  Conversely, if there is any sense that the firm has not been up front and candid, it will run into problems, even if it has a reasonable argument that it is not in a conflict.

The unfortunate thing for the firm here is that in many ways it had been candid with Statesman.  Its e-mail regarding the advance consent was pretty blunt as to what it was trying to do.  But the lesson may be that there is very little judicial tolerance for an absence of candour in situations of conflict; a little bit of candour won’t do.

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Pushing Back, Lock[e], Stock and Barrel on the Availability of Summary Judgment in Oil and Gas Lease Cases

Mon, 02/10/2014 - 9:00am

By: Nigel Bankes

PDF Version: Pushing Back, Lock[e], Stock and Barrel on the Availability of Summary Judgment in Oil and Gas Lease Cases

Case commented on: P. Burns Resources Limited v Locke, Stock and Barrel Company Ltd., 2014 ABCA 40 

This decision of the Court of Appeal confirms that it will be a rare case in which the lessor of an oil and gas lease will be able to obtain summary judgment on the validity of the lease during its secondary term, especially where the third proviso offers a number of circumstances in which “time shall not be counted” against the lessee. In this case the third proviso read as follows:

[I]f at any time after the expiration of the said term production of the leased substances has ceased and the Lessee shall have commenced further drilling or working operations within ninety (90) days after the cessation of said production, then this Lease shall remain in force so long as any drilling or working operations are prosecuted with no cessation of more than ninety (90) consecutive days, and if such drilling or working operations result in the production of the leased substances or any of them, so long thereafter as the leased substances or any of them are produced from the said lands, provided further that notwithstanding anything hereinbefore contained or implied to the contrary, if drilling or working operations are interrupted or suspended as the result of any cause whatsoever beyond the Lessee’s reasonable control or if any well on the said lands or on any spacing unit of which the said lands or any portion thereof form a part, is shut-in, suspended or otherwise not produced for any cause whatsoever which is in accordance with good oil field practice, the time of such interruption or suspension or non-production shall not be counted against the Lessee.

This case involved a low productivity well which failed to produce for extended periods. The lessor sought summary judgment seeking an order that the lease had terminated. In order to defeat that application the lessee would need to provide some evidence: (1) that there had been drilling or working operations on the lands within 90 days of the cessation of production, (2) that any drilling or working operations if interrupted were interrupted for reasons beyond the lessee’s reasonable control, or (3) if a well on the land was not being produced it was not being produced for a reason in accordance with good oilfield practice. These options are alternatives. The availability of some evidence in relation to any one of these headings should be enough to require a trial.

In this case the lessor succeeded before the master and before Justice Bensler. However, on the appeal de novo before Justice Bensler the lessee had filed additional expert evidence which tended to show that the lessee was acting in accordance with good oilfield practice in trying to obtain production from a well of this type. Counsel for the lessee argued that Justice Bensler gave this expert evidence little if any weight and in doing so effectively made findings on the ultimate issue and therefore failed to assess whether the lessor had proven that there were no genuine issues to be tried. The Court of Appeal agreed with those contentions and set aside the summary judgment terminating the oil and gas lease.

I commented on Justice Bensler’s judgment here. On the basis of her account of the available evidence I found her conclusion reasonable. But that just goes to show that one really cannot assess whether a decision to grant summary judgment is appropriate unless one is able to assess the totality of the evidence. And for related posts on the appropriateness of summary judgment in an oil and gas lease case see here and here.

My colleague Professor Jonnette Watson Hamilton has drawn my attention to two recent Supreme Court of Canada decisions on the subject of summary judgment in Ontario: Hryniak v Mauldin, 2014 SCC 7 and Bruno Appliances and Furniture, Inc v Hryniak, 2014 SCC 8 in which the Court examines the role of summary judgment in ensuring access to justice at a reasonable cost. These cases both deal with the amended (2010) Rule 20 of the Ontario Rules of Civil Procedure. The Court, per Justice Karakatsanis, in the Mauldin decision describes the effect of the new rules as follows:

[43] The Ontario amendments changed the test for summary judgment from asking whether the case presents “a genuine issue for trial” to asking whether there is a “genuine issue requiring a trial”. The new rule, with its enhanced fact-finding powers, demonstrates that a trial is not the default procedure. Further, it eliminated the presumption of substantial indemnity costs against a party that brought an unsuccessful motion for summary judgment, in order to avoid deterring the use of the procedure.

[45] These new fact-finding powers are discretionary and are presumptively available; they may be exercised unless it is in the interest of justice for them to be exercised only at a trial; Rule 20.04(2.1). Thus, the amendments are designed to transform Rule 20 from a means to weed out unmeritorious claims to a significant alternative model of adjudication.

(Emphasis added)

I will leave it to others to comment on how relevant and applicable these comments are to the new Alberta Rules.

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What is the Test for Leave to Appeal from the Decision of a Regulatory Tribunal in Alberta?

Fri, 02/07/2014 - 9:00am

By: Nigel Bankes

PDF Version: What is the Test for Leave to Appeal from the Decision of a Regulatory Tribunal in Alberta?

Case commented on: Judd v Alberta Energy Resources Conservation Board, 2014 ABCA 41

The provincial legislature has chosen to “channel” judicial supervision of the decisions of Alberta’s energy regulators to the Alberta Court of Appeal. The legislature achieves this channeling through two linked provisions in the relevant legislation. The first is a strong privative clause which purports (I say purports because such a measure can never be completely successful for constitutional reasons: Crevier v Attorney General of Quebec, [1981] 2 SCR 220, Dunsmuir v New Brunswick, 2008 SCC 9) to exclude ordinary judicial review applications. Then, having purported to close the door, the legislature cracks it open again with a provision that allows an aggrieved party to appeal the regulator’s decision on a point of law or jurisdiction, but only with leave. The leave application is heard by a single judge who is charged with assessing whether the matter should be heard by three of his or her colleagues on the merits of those alleged points of law or jurisdiction. The relevant provisions of the Energy Resources Conservation Act, RSA 2000, c E-10 in force at the time read as follows:

41(1) Subject to subsection (2), on a question of jurisdiction or on a question of law, an appeal lies from the Board to the Court of Appeal.

(2) An application for leave to appeal must be filed and served within 30 days from the day that the order or direction sought to be appealed from was made, or within a further period of time granted by the judge where, in the opinion of the judge, the circumstances warrant it.

(3.2) On leave to appeal being granted by a judge of the Court of Appeal, the appeal shall proceed in accordance with the practice and procedure of the Court of Appeal.

42 Subject to section 41, no proceedings of or before the Board may be restrained by injunction, prohibition or other process or proceedings in any court nor are they removable by certiorari or otherwise into any court.

The legislation affords no guidance to the single judge as to how to exercise his or her discretion. But several things seem obvious. The first is that the decision ought not to depend upon how that particular judge “feels” about the application or what sort of morning he or she might have been having. This is, after all, notwithstanding the realists and the crits, a scheme that should at least adhere to the forms of the rule of law and the idea that no discretionary power is unconstrained and free of its context. Second, except in the most obvious cases, the single judge ought not to be deciding the ultimate question, the point of law or jurisdiction, that the putative appellant seeks to advance. If that were the case the legislature would not have created a two step system. And third, given this relative void in legislative guidance it should be open to the Court of Appeal to develop its own guidance as to how it might exercise this discretion. No doubt this will be an iterative process but it did seem for a while as if the Court was progressing towards giving the regulatory bar and interested parties this sort of guidance. In particular, Justice Slatter in Berger v Alberta (Energy Resources Conservation Board), 2009 ABCA 158 seemed to have enunciated a test that was finding support in subsequent decisions.

In that case Justice Slatter suggested (at para 2) as follows.

(a) Is the proposed issue a question of law or jurisdiction? This is a condition precedent to the granting of leave: Energy Resources Conservation Act, R.S.A. 2000, c. E-10, s. 41.

(b) Is the issue of general importance? This factor is sometimes stated to be whether the issue is “of significance to the practice”, but the reference here is to industry or commercial practice, not just court procedures. The point is whether the issue is only of interest to the immediate parties, or whether it has a wider relevance.

(c) Is the point raised of significance to the action itself? If the issue is merely interlocutory or collateral, or tangential to the action, leave may not be granted, particularly if a determination of the issue will not affect the ultimate outcome of the proceedings.

(d) Does the appeal have arguable merit? Leave is less likely to be granted when the appeal appears to have little chance of success. This factor is balanced with the importance of the issue. If the issue is of lesser importance, a more compelling argument must be shown than if the issue is of great public importance.

(e) What standard of review is likely to be applied? This factor is a corollary of .

(f) Will the appeal unduly hinder the progress of the action? This factor assumes that the action is still ongoing, and has or will be delayed by any appeal.

The first paragraph repeats the language of the statute and is a true condition precedent to proceeding to the next stage. The subsequent paragraphs all seek to provide additional guidance on whether leave should be granted assuming that the applicant has met the requirements of the first paragraph. For similar but less extensive statements of relevant considerations see: ATCO Midstream Ltd v Energy Resources Conservation Board, 2008 ABCA 231 (CanLII), 2008 ABCA 231, 171 ACWS (3d) 454 at para 20 and Atco Electric Ltd v Alberta (Energy and Utilities Board), 2002 ABCA 45 (CanLII), 2002 ABCA 45, 299 AR 337 at para 17.

Now one might cavil with Justice Slatter’s list of criteria. There is clearly some overlap and interaction between the different elements of the test; and the test may be difficult to apply in different contexts. And there may be additional criteria to be added. But it is a start and more than a start. And, as noted above, the decision seemed to be attracting some support: Métis Nation of Alberta Region 1 v Joint Review Panel, 2012 ABCA 352 (per Berger JA), Prince v Alberta (Energy Resources Conservation Board), 2010 ABCA 214 at para. 9 (per Watson JA).

But this sort of test and the quest for at least a modicum of certainty will only work if it is refined and applied in subsequent cases. I am not sure that this is still happening; the individual members of the Court no longer seem to be applying this test in any rigorous manner. I commented on this here in Justice Slatter’s own recent decision in Fort McKay First Nation v Alberta Energy Regulator, 2013 ABCA 355 (and more recently Andre v Evergreen Gas Co-op Ltd. 2014 ABCA 29, also per Slatter JA).

But I see an even more egregious departure from any effort to apply this test (or alternatively refine it) in Justice O’Ferrall’s lengthy decision denying leave in Judd. In this case it looks to me as if Justice O’Ferrall has effectively decided the very issues that Mr. Judd and his counsel sought to put before the Court (i.e. a panel of three). That is not the gatekeeper role of the single judge on a leave to appeal application unless the issues are so clear and obvious that a single judge should decide them. Justice O’Ferrall arrives at this result without so much as referring to Berger or any other leave case for the test to be applied.

For a completely different take on the Judd leave application see Jordan Hulecki, Regulatory Process Protects Landowners’ Rights: Alberta Court of Appeal, here.

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Celibate, Awake, and Alone: The Hallmarks of a Credible Sexual Assault Victim?

Thu, 02/06/2014 - 9:00am

By: Joshua Sealy-Harrington

PDF Version: Celibate, Awake, and Alone: The Hallmarks of a Credible Sexual Assault Victim?

Case commented on: R v FY, 2013 ABQB 694

This post discusses a recent decision from the Alberta Court of Queen’s Bench which acquitted the accused of an alleged sexual assault. In that decision, the court adopts a problematic approach to assessing consent which creates unrealistic standards that women must satisfy to maintain credibility in a sexual assault trial.

1. Background                                                    

In R v FY, 2013 ABQB 694 [FY], the accused (Mr. FY) was charged with sexually assaulting the complainant (Ms. EP), his first cousin, in contravention of the Criminal Code, RSC 1985, c C-46, s 271 (at para 1). EP resided at an undisclosed First Nation (undisclosed, because of an identification ban) with her five children (at para 13).

At trial, the only evidence was the testimony of the complainant adduced by the Crown (at paras 11-12). EP testified to the following:

On the evening of April 20, 2001, EP went on a “bar run” with others to purchase liquor and bring it back to her home. They returned within a half hour (at para 15). While on this bar run, Mr. KL (who was present during EP’s later assault) arrived at her home. KL is a former husband of EP. He is also, like FY, one of her first cousins (at paras 1 and 16).

Between the afternoon/evening of April 20 and 5:00 a.m. on April 21, EP consumed 14 beers. She testified that both she and KL were drunk (at para 18).

Then, at 10:30 a.m. on April 21, EP and KL went to a bar where they joined a group of acquaintances including the accused, FY (at paras 19-20). At the bar, EP consumed approximately 8 more drinks (at para 21). Between 2:30 p.m. and 2:45 p.m. EP left the bar with KL and FY. At this point, all 3 were intoxicated. They were driven back to the reserve by an acquaintance (at para 22).

EP was dropped off first. When entering her home, she was unaccompanied by KL and FY. She immediately went to bed after using the washroom. She was fully clothed in bed and pulled the sheets up over her head (at para 23). Five hours later she awoke, completely naked, and with the accused, FY, having sex with her. Seated on a nearby chair, KL was consuming crack. EP remained silent for the following five minutes as FY finished having sex with her. Then, EP asked KL “if he wanted a chance too,” inhaled some crack, and had sex with him (at paras 23-29). Both men left the house about thirty minutes after EP first awoke (at para 31).

2. The Key Facts

Justice TW Wakeling provides a comprehensive timeline summarizing EP’s testimony regarding the events surrounding her alleged assault ranging from the day before to 7 years later (at paras 13-39). However, before discussing the forest, I begin with the trees – a few key paragraphs from the complainant’s testimony which, if true, undoubtedly substantiate a sexual assault of EP:

[24]     Ms. EP woke up at dusk the same day. The sun was setting. There was still some daylight.

[25]     She noticed that Messrs. FY and KL were in her bedroom.

[26]     The complainant was shocked to discover that the accused was having sexual intercourse with her. She had no clothes on and had no recollection of having removed her clothes.

(Emphasis added)

This is a sexual assault. The absence of consent is an element of that offence, and under the Criminal Code, s 273.1(2)(b), no consent is obtained where “the complainant is incapable of consenting to the activity.” According to the complainant, she awoke to the accused having sexual intercourse with her. She therefore lacked capacity to consent to the sexual activity that occurred before she awoke. As a majority of the Supreme Court ruled in R v JA, 2011 SCC 28:

[66]      It is not possible for an unconscious person to satisfy this requirement, even if she expresses her consent in advance. Any sexual activity with an individual who is incapable of consciously evaluating whether she is consenting is therefore not consensual within the meaning of the Criminal Code.

(Emphasis added)

Consequently, unless there is a reasonable doubt about the complainant’s account, there is no room for claiming that she consented to being sexually touched while unconscious. Put differently, Justice Wakeling’s finding of a reasonable doubt about the absence of consent requires first that he had a reasonable doubt about her claim of being unconscious while sexually touched and second that he had a reasonable doubt about her claim of not consenting to that (purportedly conscious) sexual touching.

The only evidence at trial was EP’s testimony, and Justice Wakeling’s basis for discrediting that testimony is flawed in several ways.

3. The Illegitimate Basis for Discrediting the Complainant

Justice Wakeling presented three primary reasons for not believing the complainant’s assertion of non-consent. I will address each of those reasons and demonstrate why his basis for discrediting the complainant imposes unreasonable expectations on victims of sexual assault.

(a) Celibate: The “sexual history” argument  

Justice Wakeling summarizes his first reason for discrediting the complainant as follows:

[7]     First, when the accused finished having sex with the complainant, she said to KL, a person who was sitting on a chair in the complainant’s bedroom while the accused and Ms. EP were having sex, “Do you want a chance too?”. He did. Ms. EP’s communication with Mr. KL can reasonably be characterized as an invitation from Ms. EP to Mr. KL to have sex with her. That she may have consented to having sex with Mr. KL minutes after having had sex with the accused, leaves the Court with a reasonable doubt as to whether Ms. EP consented to a sexual act with Mr. FY.

(Emphasis added)

This first reason for having a reasonable doubt about the absence of EP’s consent is the fact that she subsequently had sex with KL. Presumably, the reasoning goes that her willingness to have sex with another person shortly after her alleged assault discredits the claim that she did not consent to sex with the accused.

The timeline here is somewhat unique since the “sexual history” evidence in question follows the alleged assault (unlike the more common scenario of sexual history evidence preceding the assault). Nevertheless, Justice Wakeling’s reasoning still amounts to an inappropriate use of sexual history evidence to discredit the complainant.

Section 276 of the Criminal Code regulates the admission of sexual history evidence for certain improper inferences. It reads as follows:

276. (1) In proceedings in respect of an offence under section [...] 271 [...] evidence that the complainant has engaged in sexual activity, whether with the accused or with any other person, is not admissible to support an inference that, by reason of the sexual nature of that activity, the complainant

(a) is more likely to have consented to the sexual activity that forms the subject-matter of the charge; or

(b) is less worthy of belief.

A plain reading of this provision makes it applicable to sexual history evidence relating to sexual activity either before an alleged sexual assault (pre-assault sexual activity) or after an alleged assault (post-assault sexual activity). The provision is silent with respect to the order of the sexual history evidence and “the sexual activity that forms the subject-matter of the charge.” Consequently, there is no basis for reading in further qualifications that narrow the scope of the provision. To demonstrate the provision’s application to post-assault sexual activity, Justice Wakeling’s reasoning need only be transposed into the language of the provision. He is using “evidence that the complainant has engaged in sexual activity” (her post-assault sexual activity) “with any other person” (KL) “to support an inference that [...] the complainant is more likely to have consented [...] or is less worthy of belief.”

Furthermore, a purposive reading of the provision similarly recognizes that both pre- and post-assault sexual activity qualify as sexual history evidence. Regarding the purpose of s 276, Justice Russell opined the following in R v Brothers (1995), 30 Alta LR (3d) 300 (CA) (available on QL):

[26]     The section is intended to eradicate negative stereotyping associated with the myth that a person who has been sexually active is less virtuous, and more likely to consent to other sexual activity, or be less credible.

The purpose of the provision – counteracting stereotypes that discredit sexually active women –applies to both pre- and post-assault sexual activity. How could it be legitimate to discredit a woman because of her sexual activity after an assault, but not before, when the consent inquiry is only concerned with the assault itself: “the voluntary agreement of the complainant to engage in the sexual activity in question” (Criminal Code, s 273.1(1) [emphasis added]). In either case, the reasoning relies on myths about the ongoing state of consent that sexually active women purportedly operate within. While most cases considering s 276 of the Criminal Code address pre-assault sexual activity evidence, there are cases that have applied the provision to evidence of post-assault sexual activity as well (see e.g. R v KO, [2008] OJ No 4193 (SC) (QL)).

Policy implications also demand an expansive view of sexual history evidence that includes both pre- and post-assault sexual activity. Discrediting sexual assault complainants because of their subsequent sexual activity would have profound implications, in particular, for victims in ongoing relationships. If such evidence was considered relevant, women in committed relationships, once assaulted, would seal the fate of any sexual assault complaint where they engaged in any further sexual activity with their partners. Such a consequence is untenable, especially within the context of committed relationships in which it is entirely plausible for two partners to vary in a destructive cycle between consensual and non-consensual sexual activity long before the victim gains an appreciation of the assaults she has experienced and the courage to make a complaint. This is especially concerning given the prevalence of intimate partner sexual violence – a topic addressed by Jennifer Koshan in an earlier ABlawg post, here (for an example of post-assault sexual history evidence being used to undermine an intimate partner’s credibility see R v Tait, 2008 ONCJ 629 at para 30 (QL)).

Justice Wakeling presents the sexual history evidence of EP as self-evidently conclusive of a reasonable doubt about the absence of consent notwithstanding a statutory mandate to the contrary. Such evidence may be admitted and considered under s 276(2) of the Criminal Code. However, its admission turns on a balanced consideration of multiple factors including “society’s interest in encouraging the reporting of sexual assault offences” (s 276(3)(b)) and “the need to remove from the fact-finding process any discriminatory belief or bias” (s 276(3)(d)). Justice Wakeling’s reliance on this evidence, with no discussion about his rationale for how it is legitimately related to the complainant’s consent to sex with FY, suggests that he may have been relying on problematic reasoning that the Criminal Code is committed to counteracting. In so doing, his reasoning reinforces problematic myths about sexual consent and is incorrect in law.

Admittedly, this case is particularly unique because of the brief timeline over which the alleged assault and subsequent sexual activity took place. According to her own testimony, EP made what is ostensibly an invitation for sexual activity to KL shortly after her assault by FY (my hesitation to label EP’s sexual activity with KL as genuinely consensual stems from the fact that she denied it to be. See para 30). While it may seem odd for EP to consent to sex with KL shortly after her assault by FY, it is important to recognize the speculative nature of this reasoning, and how speculation could just as easily explain how her conduct was consistent with having experienced a sexual assault.

Awaking to being sexually assaulted would be immensely traumatic. Even just awaking to two grown men in your bedroom would be traumatic. Consequently, EP’s subsequent conduct could be explained as her attempt to cope with her trauma. For example, being sexually assaulted while unconscious is an extreme form of exploitation and lost control over one’s body. Perhaps, by engaging in sexual activity with KL immediately after her assault, EP felt as though she was restoring her autonomy by taking control of her body and the traumatic situation she found herself in. Perhaps, by presenting herself as a woman exercising her consent, she was able to downplay the trauma she had just experienced which was predicated on her non-consent. Perhaps, in a state of confusion upon waking up to being sexually assaulted, EP was still processing the trauma she had experienced and acted inexplicably due to that confusion. This is all speculative, but so is Justice Wakeling’s finding that EP’s subsequent sexual activity with KL raises a reasonable doubt about her consent to sex with FY. Further, Justice Wakeling’s speculation feeds into the myth that a women’s consent with one partner increases her likelihood of consent with another, which the Criminal Code specifically opposes.

The fact that speculation can both support and oppose a finding of consent in this case does not prove beyond a reasonable doubt that EP was assaulted. Recall, though, that the evidence which is purportedly calling her credibility into question is itself presumptively inadmissible to support such inferences under s 276 of the Criminal Code. Thus, none of this speculation should be happening in the first place.

If judges continue to consider sexual history evidence as self-evidently conclusive of a reasonable doubt about the absence of consent, then it is imperative on the Crown to lead expert evidence on the experience of assaulted women to counteract such reasoning. With expert evidence, a complainant’s testimony regarding her post-assault conduct could be characterized as reflective of her trauma, rather than conclusive of her lacking credibility. Other unfounded speculation about the post-assault conduct of credible sexual assault victims, such as the failure to immediately report the assault, has presented immense barriers to effective prosecution. Subsequent sexual activity may be yet another speculative myth to be disposed of.

Sexual history evidence can, on rare occasion, be relevant (as an alternative explanation of physical evidence of sexual activity, for example. See R v Seaboyer; R v Gayme, [1991] 2 SCR 577 at para 52 (cited to QL)). Regardless, Justice Wakeling’s reasoning is inadequate and should have extended beyond the bare assertion that sexual history evidence was conclusive of a reasonable doubt about the absence of consent in this case.

(b) Awake: The “poor memory” argument

Justice Wakeling’s second reason for discrediting the complainant is summarized as follows:

[8]     Second, Ms. EP testified that she went to bed sometime in the afternoon on April 21, 2001 fully clothed. She swore at trial that when she woke up she was completely naked. She was unable to recall when, why or how she shed her clothes. Her inability to recall these events, which occurred before the accused had sex with Ms. EP, causes the Court to ask if she might have consented to have sex with the accused in this same time frame? This fact, combined with her invitation to Mr. KL to have sex with her, causes the Court to entertain a reasonable doubt on the consent issue.

(Emphasis added)

In essence, Justice Wakeling’s second reason for having a reasonable doubt about the absence of EP’s consent is her limited memory from the time she went to bed to the beginning of her assault – which should be unsurprising, given that she stated that she was unconscious during this time.

The ability for a sexual predator to exploit a vulnerable individual while she is unconscious is hardly a legitimate basis for finding a reasonable doubt about consent. Again, s 273.1(2)(b) of the Criminal Code states that no consent is obtained where “the complainant is incapable of consenting to the activity.” If an accused credibly claims to have been assaulted while unconscious, having no memory of that assault by virtue of unconsciousness (whether from intoxication or otherwise) should in no way exculpate the accused. This too has implications for victims of intimate partner violence who may be more likely to be assaulted while unconscious. If a complainant cohabits with her partner, she is presumably unconscious each night next to them and therefore vulnerable to both unconscious assaults and problematic credibility findings such as this.

Even if EP were conscious before the sexual activity in question, the evidence that she consented to sex is questionable. Put more precisely, Justice Wakeling’s timeline – based on EP being intoxicated from when she left the bar “up until the time Messrs. FY and KL had sex with her” (at para 40) – seems inordinately convenient for the accused. This finding bears the unfortunate consequence of using EP’s state of intoxication against her throughout her assault. Before her assault, she is purportedly too
intoxicated to remember both removing her clothes and consenting to sex with FY. Then, at the moment sex with FY begins, she is no longer intoxicated, which eliminates any concerns about her incapacity to consent while also explaining her sudden ability to only now recall what was happening. It would seem far more likely that she was unconscious prior to her assault, which would most plausibly reconcile her lack of memory at the beginning of her assault with her ability to recall what occurred once she awoke.

Again, it being “more likely than not” that EP was unconscious during part of her assault falls below the standard of proof beyond a reasonable doubt. It is open to Justice Wakeling to doubt EP’s claim of being unconscious for a variety of reasons: her demeanour on the stand, inconsistencies in her testimony, etc. But to doubt her claim of being asleep when initially assaulted because she cannot recall the beginning of her assault (a fact that necessarily follows from being asleep) is unsupportable. Not believing that a complainant was asleep because she cannot remember what happened during sleep is equivalent to not believing that a complainant had 10 drinks because she was drunk.

(c) Alone: The “still friends” argument

Finally, Justice Wakeling’s third reason for discrediting the complainant was summarized as follows:

[9]     Third, some of Ms. EP’s post April 21, 2001 conduct is inconsistent with her evidence that she wanted to have as little to do with the accused as possible because of their non-consensual sex. She initiated contact with him in a number of occasions over an extended period of time. For example, in 2005 she gave him a painting and in 2008 she asked him to forgive her.

(Emphasis added)

In essence, Justice Wakeling’s third reason for having a reasonable doubt about the absence of EP’s consent is the fact the she failed to completely cut ties with FY, a family member, following her assault.

The encounters Justice Wakeling relies upon are the following:

  1. In June 2001, EP saw FY at a Sundance celebration (at para 38).
  2. In July 2005, EP visited FY’s home and gave him a painting she had done (at para 50).
  3. Sometime before 2006, EP encountered FY at her parents’ home. At the time, EP was living at her parents’ home and FY was doing chores there. She asked him to do a task in her bedroom, and may have requested some cigarettes (at para 53).
  4. Sometime after 2006, EP had called FY on behalf of others and (while possibly driving her children) stopped and gave him a ride while he was walking along the same road (at paras 38 and 51).
  5. In 2008, while working at the reserve’s daycare centre, EP asked FY to forgive her (at      para 38).
  6. In the 12 years since her assault, EP “saw the accused infrequently at family celebrations”  (at para 38).

In light of these encounters, Justice Wakeling opines the following:

[49]     In spite of her apparent dislike for Mr. FY, an emotion which would be completely understandable if he forced himself upon her, she willingly initiated contact with him on several occasions over an extended period of time under circumstances which belie her evidence that she has a strong antipathy to the accused.

Using the above examples as a basis for discrediting the complainant’s claim of being sexually assaulted is questionable.

Some of the examples are surely mischaracterized as EP “willingly initiat[ing] contact” with FY. EP’s presence at Aboriginal ceremonies, her work, family celebrations, and her own home are flawed grounds to discredit her assertion of non-consent when cultural pressures, familial ties, and necessity demand (or at least, strongly favour) her presence at these locations and events independent of her views on FY.

With those particularly flawed examples disposed of, all that remains is the exchange of a painting, a ride in her car, and some phone calls on behalf of others: a couple of in-person meetings and rare contact over the phone in the 12 years since her assault. Apparently, “strong antipathy” would demand even less contact with a family member who lives on the same reserve.

Notably, most of the examples would be difficult for EP to avoid without disclosing her assault to others. The difficulties in explaining her absence from significant religious or family celebrations is self-evident. Those same difficulties apply to the phone calls and picking up FY in her car when her kids may have been present because both involve third parties seemingly unaware of her assault. If a friend asked her to call FY, or if her kids saw FY on the road walking in the same direction as they were driving, it is probable that it would be perceived as odd, even rude, to not make the call or offer the ride. Caught between disclosing her traumatic experience to her children or friends and tolerating a brief exchange with FY, it is not surprising that she took what was likely the path of least resistance.

Finally, it bears repeating that this line of reasoning, like Justice Wakeling’s sexual history and poor memory arguments, has profound implications for victims of intimate partner sexual violence. Women who suffer from domestic sexual violence often live in terror – to demand that they abandon their home and families to prove it is unjustifiable.

4. Conclusion

Credibility is a finding of fact over which a trial judge deserves deference. But their findings are not immune to scrutiny. In particular, findings of consent in sexual assault cases – which have often failed to treat women fairly, inordinately rely on myths about ideal victims, and continue to contribute to underreporting – demand proper treatment from trial courts. Furthermore, all three of the arguments raised by Justice Wakeling in FY disproportionately undermine the ability for intimate partners to seek justice when they experience sexual assaults because intimate partners are more often sexually active with, asleep next to, and in ongoing relationships with, those who assaulted them.

An alternative lens through which to critique the reasoning presented by Justice Wakeling asks the question: in light of FY, what strategies must a woman employ to maintain her credibility in a sexual assault trial? Abstain from sex with others, for fear of undermining your purported trauma; remain awake, for fear of being assaulted while unconscious and not remembering when you may have consented; avoid further interaction with the man who assaulted you, for fear of undermining your claimed antipathy towards him. In other words: be celibate, awake, and alone – otherwise, who could possibly believe you?

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Get Ready For a Whale of a Time: Northern Gateway and Species at Risk

Wed, 02/05/2014 - 9:00am

By: Shaun Fluker

PDF Version: Get Ready For a Whale of a Time: Northern Gateway and Species at Risk

Decision commented on: Report of the Joint Review Panel for the Enbridge Northern Gateway Project

In December 2013 federal authorities recommended the construction of the Enbridge Northern Gateway pipeline to transport bitumen from the Alberta oil sands to the west coast.  Professor Martin Olszynski has previously commented on Northern Gateway here, and my comment adds to his by investigating in particular how species at risk factor into the Northern Gateway report. But prior to getting there, I can’t resist a few general remarks.

There is little doubt the scale of bitumen mining, processing and transportation now has very significant socio-ecological effects which are experienced and observed far beyond the boundaries of a mine or the right of way of a pipeline.  Years from now when others look back on this era I think they will be astounded by our willingness to throw caution aside and go ahead with such a magnitude of projects despite the local and widespread consequences of developing massive carbon-based energy resources for worldwide distribution.  It was all about the $$$ for the overall good of society they will say.  Or was it?  Why then does Alberta struggle to fund basic public goods like health care and education despite having access to such an economically valuable resource?  Clearly we are open for business as the discount warehouse for global energy shoppers.

The scale of bitumen mining also polarizes discussion about its merits into a ‘friend or foe’ confrontation or a ‘with us or against us’ clash.  Even the rhetoric can strain relationships. So it can be difficult to have reasoned debate about the oil sands. Or is it tar sands? Our government and associated legal institutions are supposed to provide the procedural tools we need to overcome these difficulties. But as we see here even our government leaders have succumbed to the ‘with us or against us’ rhetoric.

We establish regulatory institutions – in this case the Northern Gateway Joint Review Panel – with authority and obligation to consider the socio-ecological effects of a project in an objective manner supposedly removed from partisan politics and individual preferences.  We have rules backstopped with the force of law to ensure these regulators perform their role.  The public law is concerned with the process by which a recommendation or decision is made – taking into account whether the process was fair, impartial and otherwise in accordance with fundamental justice – as well as ensuring the recommendation or decision itself is reasonable and justified.  But law and politics are never far from each other in disputes concerning resource development and environmental protection.

Just before the Northern Gateway review panel commenced formal hearings in January 2012, the federal Minister of Natural Resources issued an open declaration that Canada needs more access to Asia-Pacific markets for resource exports and that the regulatory process takes too much time because of environmental and other ‘radical’ groups who participate only to stall projects.  In the words of Minister Oliver himself:

These groups threaten to hijack our regulatory system to achieve their radical ideological agenda.  They seek to exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects.  They use funding from foreign special interest groups to undermine Canada’s national economic interest. They attract jet-setting celebrities with some of the largest personal carbon footprints in the world to lecture Canadians not to develop our natural resources.  Finally, if all other avenues have failed, they will take a quintessential American approach:  sue everyone and anyone to delay the project even further. They do this because they know it can work.  It works because it helps them to achieve their ultimate objective: delay a project to the point it becomes economically unviable (See his Open Letter here).

Amendments to applicable federal legislation followed, which were intended to reduce regulatory review time for resource projects and keep out the ‘radicals’ – including a complete overhaul of federal environmental assessment legislation.  These politics alone make one question how the Northern Gateway panel could objectively consider and assess the Enbridge application.

The Northern Gateway pipeline project consists of two pipelines approximately 1200 kilometers in length connecting Bruderheim, Alberta with Kitimat, British Columbia, as well as associated infrastructure such as storage tanks, pumping stations and a marine terminal.  One line will carry diluted bitumen west to Kitimat for loading onto tankers, and the other line will carry condensate east to Bruderheim.  The project is designed to access Asia-Pacific markets with estimates of more than 200 tanker ships berthing in the Douglas Channel near Kitimat annually to receive bitumen.

While the risk of pipeline ruptures and the linear disturbance associated with pipeline construction and operation is cause for concern, the notion of another pipeline moving oil products across Alberta does not seem very alarming in the grand scheme of things.  Likewise the construction of the Bruderheim terminus in what Alberta calls its ‘Industrial Heartland’ is unlikely to find many detractors.  Indeed, the Northern Gateway Panel Report states no person objected to this location (Panel Report volume 2 at 180).  The fight to preserve the rich agricultural lands along the North Saskatchewan River in the Bruderheim region was lost years ago.

The politics of Northern Gateway is more firmly placed in British Columbia where the line crosses more undisturbed public land, the risk of a marine oil spill weighs heavily, and the economic benefits are more elusive and indirect. Indeed the imbalance between environmental risks and economic benefits led the BC government to initially oppose construction of the line and demand certain conditions be met (See here). The volume of tanker traffic that will berth in the Douglas Channel near Kitimat to receive bitumen or deliver condensate will have significant socio-ecological impacts on the region.  History shows the tar sands have drastically changed every socio-ecological system they’ve encountered.  That being said, Kitimat itself is no stranger to heavy industry.  It was incorporated in the mid-20th century as a planned town for employees of a smelter constructed and operated by Alcan Aluminum (now owned by Rio Tinto). The presence of abundant hydro power and the deep waters of the Douglas Channel have and will continue to attract heavy industry to the region (As an aside, Eden Robinson wrote an excellent novel based in this region that I highly recommend: Monkey Beach (Alfred A Knopf, 2000)).

The Northern Gateway Panel conducted its environmental assessment review under both the National Energy Board Act, RSC 1985, c N-7 (NEBA) and the Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52 (CEAA 2012). The panel was responsible for making a recommendation under section 52 of NEBA as to whether the Northern Gateway pipeline should receive regulatory approval from the Governor in Council, having regard for its socio-ecological effects and including an assessment of the environmental effects listed in section 5 of CEAA 2012.  The panel was to include any terms or conditions on construction or operations necessary in the panel’s view to mitigate adverse socio-ecological effects of the project and to ensure the pipeline is in the public interest.  The panel issued its recommendation for project approval on December 19, 2013. The matter of legal approval now rests with the Governor in Council (i.e. the federal cabinet) who pursuant to section 54 of NEBA and section 31 of CEAA 2012 is the authority that decides whether the project is likely to cause significant adverse effects and if so whether such effects are justified in the circumstances such that the project can go ahead subject to the terms and conditions set by the panel.

Early in the process the panel heard submissions on and ultimately set the issues for consideration in its May 2011 Hearing Order. Public participation in the process was extensive – presumably some ‘radicals’ managed to get in – with several options available to interested persons to give evidence to the panel and question Enbridge.  The panel began to hear oral evidence in January 2012 and concluded the hearing in Terrace, British Columbia on June 24, 2013. In sum, the panel reports that there were 206 formal intervenors, 12 government participants (e.g. Fisheries and Oceans and Environment Canada), and 1179 oral statements before it. The panel received over 9000 letters of comment. The hearing itself consisted of 180 days, of which 72 days were for hearing oral statements and evidence.  Hearing locations were spread across the pipeline route in British Columbia and Alberta.  The entire hearing record is available on the National Energy Board website.

The key preliminary step in assessing project impact on species at risk is selecting the spatial and temporal scope of the assessment. The applicant provides its preferred or chosen spatial and temporal boundaries to the regulator, these are open to question, and ultimately the regulator agrees or disagrees with the applicant and sets the boundaries of assessment which govern evidence and analysis on species impacts. For the Northern Gateway pipeline, spatial considerations include the location of the terminus and marine terminal, pipeline routing, and tanker approaches.

Enbridge identified 4 temporal phases for assessment: baseline pre-construction; construction; operations; decommissioning.  There can be – and was in this case – extensive disagreement amongst participants on what information on species impacts is needed and/or relevant within each temporal phase, however baseline information seems most contentious because an accurate assessment of incremental project impacts depends on accurate baseline data.  For example, many participants including the federal Department of Fisheries and Oceans argued that Enbridge failed to conduct an adequate or proper survey of marine mammals to accurately assess project impacts such as vessel strikes from tanker traffic.  Enbridge asserted it would conduct more detailed surveys and gather more baseline data on marine mammals if the project receives regulatory approval (Panel Report volume 2 at 231). Similarly, several participants and Environment Canada argued that Enbridge failed to conduct an adequate survey of marine birds, and Enbridge committed to conduct further surveys prior to construction (Panel Report volume 2 at 254).

Baseline information also provides the applicant with a basis upon which to decide which species to consider in its project application. It is generally accepted to be impractical to require a project proponent to assess every known species that may be affected by a project, so it is typical for an applicant to select key indicator species for assessment individually and as proxies for the ecosystems as a whole.  These selections can be subject to disagreement – as was the case here where intervenors questioned the rigour and suitability of species chosen by Enbridge as key indicator species (Panel Report volume 2 at 183). The choices made by Enbridge were accepted by the panel, although intervenor questions did lead Enbridge to commit to further species monitoring during the preconstruction phase which may lead to additional species assessments (Panel Report volume 2 at 185).

It is noteworthy to observe that Enbridge selected some species at risk as key indicator species for ecosystem effects, and that the panel endorsed this methodology with positive remarks including a statement that this method reflects a precautionary approach to the assessment (Panel Report volume 2 at 185).  I think this illustrates the growing importance of identifying the presence of endangered species in or near the footprint of a resource development project in resource project assessments. Failure to do so may require a project proponent to subsequently redesign its project.

The regulatory assessment must also have a methodology to provide guidance to the applicant and other participants on the type of evidence concerning project impacts that the regulator deems relevant. For the Northern Gateway pipeline and its impact on species at risk, the evidence and assessment of project impacts is categorized by the panel as impact on species habitat and impact on species mortality.

There is no provision in the Species at Risk Act, SC 2000, c 29 (SARA) that prohibits a federal authority from approving or authorizing an activity that will jeopardize the existence of a species at risk or adversely harm its habitat. Section 77 of SARA does, however, require federal authorities to consider harm to critical habitat in issuing a project authorization and to be of the opinion that all reasonable alternatives to the project that would reduce the impact have been considered, the best solution has been adopted, and all feasible measures to reduce the harm to a critical habitat will be taken. But one of the legislative amendments that followed Minister Oliver’s open declaration in 2012 was to exempt the National Energy Board from these obligations concerning a pipeline approval under NEBA (of course, here there is yet to be an approval).

Section 79 of SARA requires the panel to identify adverse project impacts to listed species at risk and ensure measures are taken to mitigate those impacts as well as monitor them. The following table summarizes the panel findings in this regard.  I’ve also included a cross reference to critical habitat provisions in an applicable recovery strategy (if any since section 79 of SARA also requires mitigation measures to be consistent with an applicable recovery strategy (See table here).

By my count the panel considered 34 SARA listed species, and of those, 20 species are listed as either threatened or endangered.  An ‘endangered’ species is one facing imminent risk of extinction; a ‘threatened’ species is one likely to become endangered if nothing is done to halt its demise (SARA, s 2).  Remarkably, the panel concludes that after taking proposed mitigation measures by Enbridge into account there will be no significant project impacts for any of these species except for woodland caribou.

Another observation is the high number of threatened or endangered species for which there is no recovery strategy and/or no identified critical habitat.  The federal government is failing to adhere to the legislated timeframes for implementing recovery strategies (up to 4 years after listing – SARA, s 42) which identify critical habitat, the key measure of protection under SARA. In September 2012 several environmental groups and foundations commenced proceedings seeking a mandamus order from Federal Court requiring federal authorities to file recovery strategies for 4 of the species affected by the northern gateway project: humpback whale; marbled murrelet; woodland caribou (southern population); Nechako river white sturgeon.

The legal battle between northern gateway and species at risk will be fought over species with established recovery planning. In the table above, these species include whales, the Nechako river sturgeon, and woodland caribou. The panel report makes little work of recovery strategies (both proposed or final), placing considerable doubt on whether the northern gateway panel complied with its SARA s 79 obligation to ensure mitigation measures for species at risk are consistent with recovery strategies.  In January 2014 several environmental groups and foundations commenced legal proceedings seeking, among other remedies, an order from Federal Court declaring that the panel erred by failing to comply with section 79 of SARA.

The most intense legal battle between the northern gateway pipeline and species at risk will likely occur in identified critical habitat for the North Pacific Humpback Whale. This is because the tanker route into the Kitimat terminal goes through identified critical habitat for the humpback whale. You can see the overlap on waters surrounding Gil Island by comparing the tanker route on page 179 of the Panel Report with the critical habitat map on page 34 of the Recovery Strategy for the whale (See here). Avoidance of humpback whale critical habitat would not appear to be an option for the project with a terminal in Douglas Channel.

It is important to recall that critical habitat is defined in section 2 of SARA as habitat that is necessary for the survival of the species, and also that critical habitat includes the biophysical functions, features and attributes of habitat (Environmental Defence Canada v Canada, 2009 FC 878 at para 54). So in the case of the humpback whale, these functions or attributes include adequate prey (e.g. herring), adequate physical space, and the absence of underwater noise pollution in the identified areas.  These whales – like all other marine mammals – are also vulnerable to vessel strikes and toxic pollution (for threats to individuals and critical habitat see pages 16-23 and 35-42 of the Recovery Strategy).  Humpback whale critical habitat identified in the Recovery Strategy (both geophysical and attributes) is under federal jurisdiction and will be protected by a Ministerial protection order under section 58 of SARA because legal protection under SARA means mandatory protection rather than protection under the discretionary powers of Fisheries and Oceans (David Suzuki Foundation v Canada, 2012 FCA 40 at paras 110-125).

It is obvious from reading pages 230-244 of the Panel Report where the impacts of the project on marine mammals are discussed that this issue was a focal point of disagreement between Enbridge and various participants.  Enbridge submitted that knowledge on whales is sparse, vessel strikes and other impacts on whales are unavoidable, and that if the project goes ahead it will conduct more research to confirm the presence of whales in the waters affected by the project and implement a marine mammal protection plan to manage and minimize project impacts on whales. The panel accepted these submissions to conclude the project would not have a significant adverse impact on the humpback whale.

Is this a reasonable and justifiable conclusion in light of the evidence heard by the panel and the applicable law?  I think not.

In my view the panel erred by accepting that known threats to the humpback whale will occur from tanker traffic in critical habitat and by concluding that this will not be a significant adverse effect on the species. It is unreasonable to rely on further studies by Enbridge to manage and mitigate these known project impacts on a threatened species.  It is unreasonable because the panel fails to have due regard for the threatened status of the humpback whale and the location and attributes of its critical habitat under SARA. This is particularly so in light of the evidence that persons who conduct these activities (foreign tankers) will be difficult to prosecute under SARA when (not if) their ships strike individual whales or otherwise harm critical habitat in violation of sections 32 and 58 of SARA. The foreseeable difficulties we will face prosecuting foreign tankers under SARA further emphasizes the importance of real legal protection for critical habitat now. Management and mitigation does not amount to legal protection of critical habitat, and it is an error in law to conclude otherwise.

The panel purports to have taken a precautionary approach and applauds Enbridge for doing likewise. But how is it precautionary to accept harm to a threatened species and its critical habitat? A species categorized in law as likely to become endangered if nothing is done to halt its demise.  It is hardly precautionary to then recommend more activities which are known to inflict harm to the species. And how is it precautionary for the panel to wrap up proceedings before the humpback whale recovery strategy is published, knowing full well from the evidence placed before it that the project will have unavoidable impacts on the threatened species?

I suspect the conflict between protecting humpback whale critical habitat and approving Northern Gateway has been apparent to federal officials and Enbridge for years. It is hard not to link this conflict to the 2012 amendments to SARA that exempt federal authorities from having to opine that all reasonable alternatives to the project that would reduce the impact to critical habitat have been considered and the best solution has been adopted. Because a reasonable alternative and the best solution for the humpback whale is a different marine terminal location – requiring perhaps the more costly Prince Rupert terminal alternative identified at the hearing. But then again, law and politics are never far from each other in disputes concerning resource development and environmental protection.

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Alberta Government Considers Strategies to Address Bullying—Is Legislation the Answer?

Tue, 02/04/2014 - 9:00am

By: Linda McKay-Panos

PDF Version: Alberta Government Considers Strategies to Address Bullying—Is Legislation the Answer?

Event commented on: Rocky Mountain Civil Liberties Association Discussion on Anti-bullying Legislation

On January 30, 2014, the Rocky Mountain Civil Liberties Association (RMCLA) hosted a panel discussion on anti-bullying legislation in Alberta. The panel members were Sandra Jansen, Calgary-North West MLA, and Associate Minister of Family and Community Safety; Peter Brown, current Mayor of Airdrie; and Derek From, a constitutional lawyer from the Canadian Constitution Foundation.

Sandra Jansen spoke about the cross-ministerial initiative to address bullying, cyber bullying, family violence and sexual exploitation. She has been working on the new initiative for a few months and has been looking at what other provinces, such as British Columbia, are doing about these issues. There is a great deal of public interest in addressing bullying in Alberta, perhaps through provincial legislation. Alberta’s new Education Act, SA 2012, c E-0.3, section 1 (effective 2015) defines bullying as:

(d) “bullying” means repeated and hostile or demeaning behaviour by an individual in the school community where the behaviour is intended to cause harm, fear or distress to one or more other individuals in the school community, including psychological harm or harm to an individual’s reputation . . .

When Albertans (age 16 and over) were surveyed by IPSOS Reid in 2012, 93% indicated that they have a personal responsibility to reduce bullying in their community, and 87% indicated that bullying prevention should be an urgent government priority (see Government of Alberta, Alberta Children and Youth Services: Albertans’ Perceptions of Family Violence and Bullying Survey 2012 at 3).

Ms. Jansen stated that the Alberta Government had undertaken a number of initiatives, which included preparing three bullying prevention websites, instituting a 24-hour help line (available in over 170 languages), sponsoring anti-bullying advertising campaigns, and initiating partnerships with six schools to address bullying. She also consulted youth from other jurisdictions about how bullying awareness was addressed in their communities. There are also anti-bullying projects being implemented in communities across Alberta.

The conclusion Sandra Jansen has drawn thus far is that bullying is often related to mental health issues (both in the bully and later in the victims). Support and resilience efforts need to be provided for all children in order to address bullying behavior. The emphasis is that we are concerned with bullying behavior by people and not “bullies”.

While there is anti-bullying legislation in Nova Scotia, British Columbia, Manitoba and in some municipalities in Alberta, Sandra Jansen wonders whether provincial legislation will ultimately protect victims, and change people’s attitudes and behaviours. She believes that the intent behind this legislation is commendable, but that the issue needs more analysis and debate. Any legislation would have to respect division of powers issues (e.g., the federal government has jurisdiction over criminal law) and Canadian Charter of Rights and Freedoms issues, such as limits on freedom of expression.

Finally, Sandra Jensen is aware that parents struggle with their children being exposed to bullying and cyber bullying, but believes that any government approach to these issues has to address public attitudes, the role of bystanders and the response of victims.

Airdrie Mayor, Peter Brown, discussed a new by-law amendment that was passed by Airdrie Council. A father of four children, he is aware that there are children, seniors, and workers who are bullied. The Anti-Bullying Bylaw, Bylaw B-22/2013, amends the Public Behaviour Bylaw No. B-09/2007. The key provisions read:

NOW THEREFORE the Municipal Council of the City of Airdrie in Council duly assembled enacts as follows that:

1. Section 2.1 be amended to include:

a) “‘bullying’ means repeated and hostile or demeaning behaviour by an individual in the municipality, either directly or through any medium whatsoever, where the behaviour results in harm, fear or distress to one or more individuals in the municipality including, but not limited to, physical harm, psychological harm or harm to an individual’s reputation.”

2. The following section be inserted before the section entitled “FIGHTING”:


3.1 No person shall bully any person in any public place.

3.2 No person shall participate in or encourage by verbal or public means the bullying of any person in any public place.

3.3 Any person who contravenes sections 3.1 or 3.2 is guilty of an offence.”

3. Section 8.5 be added to read:

“With respect to any person who contravenes the section entitled  ‘BULLYING,’ the Court may order the person with or without their legal guardian to attend an anti-bullying counselling session(s) or educational program recommended by the prosecutor. Successful completion of the anti-bullying counselling session(s) or educational program recommended by the prosecutor will result in a reduced fine as outlined in this Bylaw.”

5. Schedule “A” be amended to include:


“3.0 Bullying

(a) First offence* $500.00

(b) Second and subsequent offences $1000.00

*The fine for the first offence will be reduced to $125.00 if the offender successfully completes an approved anti-bullying counselling session(s) or educational program.

Although Mayor Brown was initially opposed to the proposed by-law, he eventually became convinced that it will serve an educational function with respect to intolerance. The focus of the by-law is the provision of community resources to address both the victim and the bullying behavior ($50,000 has been allocated towards these resources). Mayor Brown believes that Airdrie had jurisdiction to pass the by-law under the Municipal Government Act, RSA 2000 c M-26, section 7, which permits councils to pass by-laws for municipal purposes for matters of safety, health and welfare of the people and the protection of people and property, among other matters. He asserts that the by-law has dual emphases on public safety and education. Interestingly, Mayor Brown believes that there won’t be many tickets and fines issued under the new by-law in the next few months. He is more interested in seeing the resources allocated to the RCMP, community, professionals and schools for counselling put to use.

The third speaker, Derek From, has written an article about several smaller centres in Alberta passing anti-bullying by-laws. (See “Alberta’s Municipal Anti-Bullying Laws are Deeply Flawed” (24 September 2013) Huffpost Alberta). In the article, he reviews by-laws from Consort, Grand Prairie, Rocky Mountain House and Hanna, and, he also commented on Oyen’s by-law at the presentation. (The other presenters noted that there is a by-law in Red Deer, too. See Bylaw No. 3383/2007). While Derek From complimented Mayor Brown and Airdrie’s by-law as being “the best I’ve seen in Alberta”, he argued that this by-law, together with the by-laws in the other centres, are outside of the municipality’s jurisdiction, because they attempt to restrict freedom of expression. He further states that under the Constitution Act, 1867, provincial laws may only incidentally restrict expression provided the laws are otherwise within provincial jurisdiction. For example, Grande Prairie’s by-law defines bullying as an “objectionable or inappropriate comment, conduct or display” directed at an individual “which causes or is likely to cause physical or emotional distress.” (City of Grande Prairie Bylaw C-1103).  He is also concerned that the by-laws are redundant (they address already illegal behaviour), vague (poorly drafted) and too subjective (e.g., how do you determine whether a statement is likely to cause emotional distress?). While the local anti-bullying message is important, it should not be made with laws that are illegal. This diminishes respect for the rule of law.

All of the speakers agreed that bullying is not acceptable and that by-laws do get this message across. However, where they part ways is in whether the by-laws (or provincial legislation) are the best method for addressing bullying. Sandra Jansen is concerned about spending resources and time passing a law that would be found to be unconstitutional and would not necessarily address the complexities of the issue—reducing or eliminating bullying behavior and its effects on all parties concerned (including by-standers).

I was glad to see the Alberta government taking time to examine what other jurisdictions are doing before deciding on the best approach(es) for dealing with bullying. Any approach should be sustainable and multi-faceted (i.e. not just legal). And, any legal approach should be constitutional. RMCLA hosted a very informative panel discussion.

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Keystone XL Final Supplemental Environmental Impact Statement: Next Steps & Climate Impact

Mon, 02/03/2014 - 9:00am

By: James Coleman

PDF Version: Keystone XL Final Supplemental Environmental Impact Statement: Next Steps & Climate Impact

Report commented on: Keystone XL, Final Supplemental Environmental Impact Statement

On January 31, the United States State Department issued its Final Supplemental Environmental Impact Statement (EIS) on the Keystone XL pipeline, which is designed to transport oil sands bitumen from Hardisty, Alberta to Steele City, Nebraska.  The environmental impact statement was issued to comply with the National Environmental Policy Act, 42 U.S.C. 4321 et seq., which requires agencies to consider the environmental impact of major federal actions.

As noted in a previous post on ABlawg, President Obama raised the stakes for this environmental impact statement in June when he stated that he would only approve the pipeline if it would “not significantly exacerbate the problem of carbon pollution.”  As described below, the final EIS suggests that Keystone XL meets this standard, but does not entirely rule out a contrary decision.

Now President Obama must decide whether the pipeline is in the “national interest” under Executive Order 13337, which governs cross-border pipelines.  But first there will be 105 days of comment periods for federal agencies and the public.  A further wildcard is that the State Department’s Inspector General is imminently expected to issue a report on whether the independent contractors that performed the environmental impact assessment on Keystone XL had a conflict of interest.

The President’s decision on the pipeline is delegated to Secretary of State John Kerry.  If other US federal agencies object to his decision, then the President will have to decide himself whether to overrule Secretary Kerry’s decision.  If the pipeline is approved, environmental groups will challenge this decision in U.S. court.

State Department’s Analysis of the Greenhouse Gas Impact of Keystone XL

The State Department concludes that Keystone XL, like “any one crude transport project . . . is unlikely to significantly impact the rate of extraction in the oil sands” and thus unlikely to increase greenhouse gas emissions.  (State Department, Final Supplemental Environmental Impact Statement at ES-16).  And it goes further, stating that even if “new east-west and cross-border pipelines were both completely constrained, oil sands crude could reach U.S. and Canadian refineries by rail.”  (State Department, Final Supplemental Environmental Impact Statement at ES-12).  As a result, the State Department estimates that rejecting the pipeline would actually lead to higher greenhouse gas emissions than approving it, due to the higher energy requirements of shipping crude by rail—“28 to 42 percent” higher.  (State Department, Final Supplemental Environmental Impact Statement at ES-34 &Table ES-6).

The State Department’s estimate that rejecting the pipeline would mean 28 to 42 percent higher emissions due to rail is a significant increase from its earlier assessment that rejecting the pipeline would increase emissions by “about eight percent.”  (State Department, Draft Supplemental Environmental Impact Statement 5.1-26).  That being said, the State Department’s conclusion that the pipeline is “unlikely to significantly impact” oil sands extraction is a slight retreat from its Draft report, which concluded there would be “no substantive change in global GHG emissions.”  (State Department, Draft Supplemental Environmental Impact Statement 4.15-107).  And the State Department also acknowledged that, if global oil prices fell significantly (West Texas Intermediate under $75 a barrel), then rejecting the pipeline could decrease greenhouse gas emissions because “higher transportation costs could have a substantial impact on oil sands production levels.”  (State Department, Final Supplemental Environmental Impact Statement at ES-34 &Table ES-12).

Moving forward, a crucial question will be if other U.S. federal agencies support the State Department’s analysis.  When the State Department released its draft environmental impact statement, the U.S. Environmental Protection Agency critiqued its treatment of crude-by-rail.  It requested “a more careful review of . . . rail transport options,” because it thought that, if the pipeline was not approved, high crude-by-rail costs might slow oil sands production and thus, greenhouse gas emissions.  (U.S. EPA Keystone XL Project Comment Letter (Apr. 22, 2013)).  In response, the State Department expanded its climate change, oil market, and rail transport analysis.  (State Department, Final Supplemental Environmental Impact Statement at ES-34 &Table ES-1).  It remains to be seen whether agencies like the Environmental Protection Agency will be satisfied with the expanded analysis or remain skeptical of the State Department’s mostly unaltered conclusions.

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

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Supreme Court Denies Leave to Appeal in Alberta Cases

Fri, 01/31/2014 - 2:00pm

By: Admin

PDF Version: Supreme Court Denies Leave to Appeal in Alberta Cases

Cases commented on: R v Alcantara, 2013 ABCA 163; R v Hanna, 2013 ABCA 134; Young v National Money Mart Company, 2013 ABCA 264

On January 30, 2014 the Supreme Court denied leave to appeal in three Alberta cases that gave rise to four separate leave applications. The Court’s summaries of the cases, and their dispositions, are below. Jonnette Watson Hamilton posted a comment on the Money Mart decision here.

35580       John   Reginald Alcantara v. Her Majesty the Queen (Alta.)(Criminal)    (By Leave)

Charter of   Rights – Remedy –   Criminal law – Evidence – Disclosure – Can a court of appeal decline to order   a new trial under s. 24(1) of the Charter when the Crown has failed to   provide timely disclosure that affected trial fairness and violated the   applicant’s right to make full answer and defence – Does the three-part   framework in R. v. Grant for the exclusion of evidence under s. 24(2)   of the Charter apply to an application for a stay of proceedings under   s. 24(1) – s. 24(1) of the Charter.

The   evidence at trial included a number of intercepted communications which were   recorded pursuant to judicially approved authorizations. It was a term of the   authorizations that certain classes of intercepted conversations be “live   audio monitored”.  After the applicant was convicted, the Crown   disclosed that the intercepted conversations had not all been “live   monitored” and that a “put away” feature had also been used.  The   applicant appealed his conviction and argued that his Charter rights   were violated by the failure to continuously “live monitor” the   interceptions, and by the failure of the Crown to disclose in a timely way   the use of the “put away” feature.  The applicant’s appeal from   conviction was dismissed.

Coram: McLachlin / Cromwell / Wagner: The motion for an extension of time to serve and file the application for leave to appeal is granted.  The application for leave to appeal is dismissed without costs.


35615    Dwayne   Daryl Hanna v. Her Majesty the Queen (Alta.) (Criminal) (By Leave)

Criminal   law — Sentencing — Fitness of sentence — Accused guilty of dangerous driving,   driving while disqualified and breaching two recognizances — Accused alleged   police used excessive force during arrest but trial judge found no police   misconduct — Accused sentenced to five years and six months incarceration —   On appeal, sentenced varied to four years and nine months — Whether Court of   Appeal erred in declining to further reduce sentence? — Whether Court of   Appeal erred in limiting itself to sentencing judge’s analytical approach,   having found palpable and overriding error in portion of judge’s analysis? —   Whether Court of Appeal erred in considering effect of police misconduct,   which trial judge failed to identify, when Court of Appeal deemed itself   otherwise bound by judge’s analysis of totality principle? — Whether five   year sentence for driving while disqualified unduly excessive and harsh where   court deducts only nine months for police misconduct?

The   applicant, Mr. Hanna, was charged with dangerous driving, driving while   disqualified, assault with a weapon and breaching two recognizances.    After observing Mr. Hanna driving in excess of the speed limit, a sheriff   followed Mr. Hanna’s vehicle to a farmyard. Just as the sheriff was   preparing to exit his vehicle, Mr. Hanna gunned his engine and sped by the   sheriff’s vehicle, clipping the driver’s side door with his mirror.    Following a spin-out, Mr. Hanna’s vehicle came to rest in a ditch.  A   police dog was used to apprehend Mr. Hanna.  Mr. Hanna took the position   that the charges should be stayed because the police used excessive force   during the course of his arrest.  The trial judge found Mr. Hanna guilty   of dangerous driving, driving while disqualified and breaching two   recognizances, but not guilty of assault with a weapon because the Crown   failed to establish that Mr. Hanna intended to hit the sheriff’s vehicle or   to threaten the sheriff.  Considering the circumstances, releasing the   police dog without warning Mr. Hanna first was not excessive, nor were the   punches administered by the police.  Mr. Hanna was sentenced to   five years and six months incarceration and a seven year driving   prohibition.  A majority of the Court of Appeal, however, found that Mr.   Hana should receive a sentence of three years and six months on the offence   of driving while disqualified.  On the offence of dangerous driving, the   majority concluded that the trial judge’s consecutive sentence of two years   should be subject to a deduction of nine months for the police’s   misconduct.  Therefore, the majority concluded that the final sentence   was four years and nine months, less the 382 days credit for pretrial custody   and the seven year licence suspension would remain as imposed.  Berger   J.A. (dissenting) would have allowed the appeal and substituted a sentence of   three years and three months imprisonment less the 382 days credit for   pretrial custody.

Coram: Abella / Rothstein / Moldaver: The motion for an extension of time to serve and file the application for leave to appeal is granted.  The application for leave to appeal is dismissed without costs.


35564      National Money Mart Company carrying on business under the name and  style “Money Mart” v. Gareth Young, as representative Plaintiff, H. Craig Day, as representative Plaintiff (Alta.) (Civil) (By Leave)

Contracts   – Class actions – Stay of proceedings – Are class action waiver clauses in   consumer contracts enforceable if they operate independently of any   arbitration provision? – If the language of a class action waiver clause is   clear and unambiguous, on what grounds or in what circumstances should a   court decline to enforce a class action waiver clause? – Are class action   waiver clauses in consumer contracts are unconscionable per se, or   presumed to be unconscionable, or must be proven to be unconscionable, or   contrary to public policy, or inconsistent with the scheme and purpose of   class action statutes.

As   representative plaintiffs, Day and Young claim that the fees charged by the   applicant Money Mart for short term or “payday” loans are unlawful.  The   written loan documentation contained clauses requiring the arbitration of any   disputes relating to the loan contract.  There were separate clauses   with respect to class action litigation.  The most recent version reads   in part:

Each party also agrees not to commence or   participate in any class action either as    a representative Plaintiff or as a   member of a Plaintiff class, and to opt out of any class action, if the class   action involves, directly or indirectly, any Claim.

The   applicants brought a motion to dismiss or stay the proceedings on the grounds   that the representative plaintiffs had agreed in writing to proceed with   mediation or arbitration of the disputes against Money Mart, and that they   had also agreed in writing not to participate in class actions.  These   motions to stay were dismissed, as were the subsequent appeals to the Court   of Appeal for Alberta.

Coram: Abella / Rothstein / Moldaver: Dismissed with Costs


35565      1008485 Alberta Ltd., 815028 Alberta Ltd., and 632758 Alberta Ltd. v. H. Craig Day, as representative Plaintiff (Alta.) (Civil) (By Leave)

Contracts – Class actions – Stay of proceedings – Are class action waiver clauses in     consumer contracts enforceable if they operate independently of any arbitration provision? – If the language of a class action waiver clause is     clear and unambiguous, on what grounds or in what circumstances should a court decline to enforce a class action waiver clause? – Are class action waiver clauses in consumer contracts are unconscionable per se, or presumed to be unconscionable, or must be proven to be unconscionable, or contrary to public policy, or inconsistent with the scheme and purpose of class action statutes.

As representative plaintiffs, Day and Young claim that the fees charged by the applicant Money Mart for short term or “payday” loans are unlawful. The written loan documentation contained clauses requiring the arbitration of any disputes relating to the loan contract.  There were separate clauses with respect to class action litigation.  The most recent version reads in part:

Each party also agrees not to commence or participate in any class action either as a representative Plaintiff or as a member of a Plaintiff class, and to opt out of any class action, if the class action involves, directly or indirectly, any Claim.

The applicants brought a motion to dismiss or stay the proceedings on the grounds that the representative plaintiffs had agreed in writing to proceed with mediation or arbitration of the disputes against Money Mart, and that they had also agreed in writing not to participate in class actions. These motions to stay were dismissed, as were the subsequent appeals to the Court of Appeal for Alberta.

Coram: Abella / Rothstein / Moldaver: Dismissed with Costs

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U of C and U of A Law Profs’ Submission to the Law Society of Alberta on Trinity Western University Law School

Wed, 01/29/2014 - 9:00am

By Jennifer Koshan, Jonnette Watson Hamilton and Alice Woolley

 PDF Version:U of C and U of A Law Profs’ Submission to the Law Society of Alberta on Trinity Western University Law School

Commented on: Letter from members of the Faculties of Law at U of C and U of A to the Law Society of Alberta (attach PDF version of letter here)

On January 28, 2014, over 30 law professors and members of affiliated institutes and centres from the University of Calgary and University of Alberta submitted a letter to the president and president-elect of the Law Society of Alberta.  The purpose of the letter was “to express our concerns on the decision making process taken to date for the approval of Trinity Western University School of Law’s program and the eligibility of TWU’s graduates to become students-at-law in Alberta.”  Trinity Western University (TWU) received approval from the British Columbia government on December 18, 2013 to open a law school. The school is anticipated to commence operations with its first class of 60 law students in September 2015. TWU is a private, Christian university which requires its students and staff to abide by a Community Covenant Agreement (available here). It is in this context that these concerned legal academics submitted the following letter:

We would like to begin by commending Mr. Jensen for his statement to members of the legal profession in Alberta on January 14, 2014 [available here]. This statement indicates a concern to ensure the diversity of the legal profession in Alberta and about the impact that TWU’s Community Covenant Agreement would have on gay and lesbian students. It also indicates a willingness “to work together with the other law societies in Canada, through the Federation, to consider amending the law degree approval criteria to address these issues.”

As you know, many members of the public, the legal profession and student groups have also raised concerns about TWU’s Community Covenant and the disciplinary consequences that may flow from a breach of this policy. These concerns extend not only to TWU’s students, but to its faculty and staff as well. TWU’s law school effectively excludes individuals whose sexuality is expressed outside of marriage between a man and a woman. We understand that the Federation of Law Societies has granted preliminary approval of TWU’s proposed law school program based on the Canadian Common Law Program Approval Committee’s decision that the program meets national requirements for law schools. However, it remains open to Canadian law societies to decide whether to accept TWU graduates as students-at-law.

The Law Society of Alberta is a self-regulating body that exercises critical gatekeeper functions in determining the qualifications for becoming a lawyer in Alberta. We understand that in December, 2013 the LSA delegated to the Federation the decision of which Canadian common law programs will meet the academic requirements for its graduates to be admitted as students-at-law in Alberta (see The Rules of The Law Society of Alberta, section 50(2)(a)(ii) [available here]). This amounts to a delegation of the LSA’s decision-making power under section 37 of the Legal Profession Act [RSA 2000, c L-8], to evaluate the academic qualifications of applicants for admission to the Society as students-at-law.

While we understand the position expressed in Mr. Jensen’s statement regarding the harmonization of admission standards across the country in light of mobility interests, we question whether this delegation was authorized under the Legal Profession Act and under administrative law principles concerning delegation. In our view, the fact that the LSA’s benchers are elected by the profession means that they need to remain fundamentally accountable for decisions about the practice of law in Alberta. Although national standards may be desirable, this remains an area of provincial responsibility constitutionally, and not a federal one. Furthermore, the nature of the appropriate qualifications for a person admitted to the LSA may need to take into account specific provincial matters, such as human rights legislation, that cannot be done at the national level.  By way of analogy, we note that the LSA did not delegate to the Federation the decision about the model code of professional conduct; although the LSA did adopt the model code, it was also qualified and amended to reflect practices in Alberta. We also note that section 39(2) of the Legal Profession Act requires that a majority of the Education and Credentials Committee be benchers, showing the intention of the legislature to have these sorts of policy decisions made by the elected governors of the legal profession in Alberta.

Based on the foregoing, we submit that it is appropriate for the Law Society of Alberta to reconsider its decision to effectively delegate its powers to the Federation to evaluate the academic qualifications of applicants for admission to the LSA as students-at-law. We submit that this decision concerning qualifications should be made by the LSA following a full and transparent consultation and decision making process in light of the concerns raised regarding TWU Law School. This process would be in keeping with other national procedures for consideration of the issue of admission of TWU graduates as students-at-law, including those of the Nova Scotia Barristers’ Society Council and the Law Society of British Columbia, both of which have committed to public hearings in connection with this matter.

In the alternative, we would return to the willingness expressed by Mr. Jensen to work together with the other law societies in Canada to consider amending the law degree approval criteria to address the issues raised by TWU Law School and its Community Covenant. We believe that this is an area where the Law Society of Alberta could and should take leadership. The LSA has a long history of leadership on issues concerning the diversity of the legal profession, including the work of the Equity, Equality and Diversity Committee, the Equity Ombudsperson, and the Retention and Re-engagement Task Force. We ask that you hold a full and transparent consultation process in Alberta to inform the question of whether and how the Federation’s law degree approval criteria should be revised in light of the concerns raised by TWU Law School.

We would appreciate your providing a copy of this letter to each of the benchers of the Society.

Thank you for considering our submission.  We look forward to hearing from you.

Sincerely yours,

Members, Faculty of Law, University of Calgary

Members, Faculty of Law, University of Alberta

Faculties of law at the University of British Columbia and Dalhousie University have passed faculty council resolutions urging law societies in their jurisdictions to have an open consultation process on these issues, and students, lawyers, professors, and NGOs across Canada have made submissions to law societies as well (see e.g. here and here). The Law Society of British Columbia has agreed to have public hearings on the matter (see here) and the Nova Scotia Barristers Society has announced a public consultation process as well (here), though in neither of these jurisdictions did the law societies delegate decision making to the Federation.  The Law Society of Upper Canada is still considering its process (see here).

The Alberta letter ultimately asks the Law Society of Alberta to have an open process similar to that in other Canadian jurisdictions, or to take leadership on a national level process. We look forward to their response.

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Canadian Law and Society Association Midwinter Conference

Thu, 01/23/2014 - 9:00am

By Lyndsay Campbell

PDF Version: Canadian Law and Society Association Midwinter Conference

Conference commented on: Canadian Law and Society Association Midwinter Meeting

I recently attended the midwinter meeting of the Canadian Law and Society Association in Toronto. This meeting combines a small academic conference with a board meeting, mid-way between our annual meetings. The program is available here.

The conference was attended by about 30 people, a mixture of university professors and graduate students from law, socio-legal programs, and other academic programs and departments that house scholars concerned about law and social problems and policies. This variety showed itself in the program. A couple of papers by were concerned largely with the circulation of images and the way that images that capture a particular moment may take on a life of their own, for better or for worse. Rashmee Singh and Dawn Moore discussed databases containing photos of victims of domestic violence, photos that can be useful for prosecutorial purposes but can also end up circulating almost as a kind of pornography. Lara Karaian’s presentation considered photos that young women in their teens may take of themselves and “sext” to others and the difficulties inherent in recent efforts, mainly in the United States, to treat these teenagers as criminals for voluntarily putting such images of themselves into circulation.

We had various presentations related to property. Maneesha Deckha presented on our conception of animals as property, with the disturbing treatment of them that this conception enables. Estair van Wagner considered attachments to property that are not manifest as ownership. Sara Seck and Derek McKee explored challenges in international law relating to the environment and state norms. Brenna Keatinge described the conversion of “unused” or “vacant” urban spaces in Boston to commercial agriculture and how those changes have affected the poor communities in which those spaces tend to be located. She identified blindspots in environmental initiatives, such as an effort to encourage recycling by permitting garbage collectors to pick up only a particular kind of garbage bag, which cost about $0.75 each. Poor neighbourhoods became overwhelmed with garbage, as people for whom spending money on special garbage bags seemed economically untenable simply dumped their trash in the streets. Some ideas need a little more thought.

In a roundtable format, we talked about challenges in doing socio-legal research, and we tried to provide some advice and reassurance to graduate students as they move into the field. We discussed concerns about being misunderstood when called upon to be expert witnesses or prepare research for interested parties, such as governments. We discussed getting access to archival sources, government records and some groups of people. We talked about doing research with vulnerable communities who may be glad to be the subject of research but are also concerned about how they will be seen publicly if all of their internal debates are aired. Emily Snyder’s paper, in one of the other panels, examined some of these issues more deeply in the context of First Nations communities.

One theme that emerged, and one particularly interesting to me, concerned the emergence of legal norms and their interaction with positive law. Anna Dolidze’s paper considered how the idea of the trust was the basis of the “mandate” form of government developed after World War I. Natalie Oman talked about ways of incorporating norms put forward by non-state actors into international law. My own paper talked about race in Canadian constitutionalism before 1867.

I am pleased to add that the 2014 annual meeting of the Canadian Law and Society Association will be held in Winnipeg from June 6-8 (and will overlap with the annual meeting of the Canadian Association of Law Teachers (CALT)). I am even more pleased to be able to announce that the annual meeting in 2016 will be held at the University of Calgary, as part of the Congress of the Humanities and Social Sciences. We at the Faculty of Law look forward to dusting off our white hats and rolling out our red carpet for this occasion, which also coincides with the 50th anniversary of our university.

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The Limits to Summary Judgement in Oil and Gas Compensatory Royalty Cases

Wed, 01/22/2014 - 9:00am

By Nigel Bankes

PDF Version: The Limits to Summary Judgement in Oil and Gas Compensatory Royalty Cases

Case commented on: Laird v Sword Energy Inc., 2014 ABQB 13.

This decision of Justice Don Manderscheid confirms that it will a rare case in which a lessor will be able to obtain summary judgement for a claim of compensatory royalties under an offset well clause under an oil and gas lease. As such it casts further doubt on the correctness of Justice Lee’s judgement in 1301905 Alberta Ltd v Sword Energy Ltd., 2013 ABQB 113, which was the subject of an earlier post here.

Three co-owners leased the section 5 lands to Thunder, Sword’s predecessor in interest, in 2003. Sword drilled the 1-5 well on the lands in May and June 2004 and tested the Belly River formation for both coalbed methane and conventional gas. Sword concluded that the well was not capable of production. Commercial production was obtained from the Belly River formation from the offsetting section 32 lands as of 2006.

The lessors served a default notice on Sword on April 23, 2007 stipulating that Sword had an obligation to produce rateably from the section 5 lands and, since it had failed to do so, was obliged to make compensatory royalty payments. Sword advised in return that the leases would expire on their own terms on May 11, 2007. The lessor subsequently re-leased the lands to Quicksilver but no further well had been drilled on the lands as of June 2009. The fact pattern was complicated by a rather bizarre incident in which a representative of the lessors persuaded an employee of Sword to calculate the compensatory royalty that might have been payable were that obligation triggered.

Justice Don Manderscheid denied the lessors’ application for summary judgement. He concluded that there were a number of disputed factual issues between the parties as well as a number of legal issues that were intertwined with those factual issues. Justice Manderscheid identified as many as four sets of triable issues. One set of issues related to the default notice including the question of whether or not Sword had an obligation to respond to a technically defective default notice. A second set of issues related to the precise nature of Sword’s alleged breach. A third set of issues related to the question of whether the termination of the leases in accordance with their own terms qualified as a timely surrender within the meaning of the offset clause. A fourth set of issues concerned the well that Sword had already drilled and tested. Given those activities on the leased lands it was not clear whether Sword could have any outstanding obligations under the offset well clause. All of these issues raised questions which were highly intertwined with the facts of the matter and as such should not be resolved by way of summary judgement.

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Arbitrators Have the Last Word on Procedural or Interlocutory Matters

Tue, 01/21/2014 - 9:00am

By Jonnette Watson Hamilton

 PDF Version: Arbitrators Have the Last Word on Procedural or Interlocutory Matters

Case commented on: Suncor Energy Inc v Alberta, 2013 ABQB 728

Suncor Energy Inc v Alberta is a decision by Chief Justice Neil Wittmann on an appeal by the provincial Crown from an arbitration tribunal’s order on a procedural point. Suncor Energy Inc. began arbitration proceedings in January 2011 to resolve a dispute over royalties to be paid on the production of mined bitumen to the province. The issue before the Chief Justice was a narrow one, namely, whether the refusal of the arbitrators to refer a question of law to the court, concerning the application of section 50 of the Mines and Minerals Act, RSA 2000, c M-17, to the production of records that the Crown received from oil sands producers other than Suncor, was a decision that could be appealed. The Chief Justice decided that the court did not have jurisdiction to hear the Crown’s appeal under either section 17(9) or section 44 of Alberta’s domestic arbitration statute, the Arbitration Act, RSA 2000, c A-3. In doing so he confirmed that the competence-competence principle, which allows an arbitral tribunal to determine its own jurisdiction, underlies sections 17 and 44. While not as explicit on this point as was the recent decision of the Ontario Court of Appeal in Ontario Medical Association v Willis Canada Inc, 2013 ONCA 745 at paras 19-37, the Chief Justice’s decision gives effect to the statutory grant of authority to the arbitration tribunal to have the last word on procedural or interlocutory matters that arise during the course of arbitration.

The Crown objected to producing records that it argued could not be communicated according to section 50 of the Mines and Minerals Act, RSA 2000, c M-17 — financial, production, technical and other records that the Crown received from oil sands producers other than Suncor. The Crown objected even though the arbitration tribunal had adopted portions of the Alberta Rules of Court, Alta Reg 124/2010, including Rule 5.33, which provides for the confidentiality and use of information produced under affidavits of record, to govern its procedure. Suncor applied to the arbitrators for an order compelling production of the disputed records. The Crown counter-applied under section 8(2) of the Arbitration Act, which provides:

8(2) On the application of the arbitral tribunal, or on a party’s application with the consent of the other parties or the arbitral tribunal, the court may determine any question of law that arises during the arbitration.

The Crown wanted the court to determine, among other things, whether the arbitrators had jurisdiction to decide the application of section 50 of the Mines and Minerals Act to the production of the records in issue.

In June 2013, the arbitrators refused to direct the Crown’s questions of law to the Court of Queen’s Bench. In their written reasons, the arbitrators stated (among other things):

[9] Section 17 of the Arbitration Act provides that an arbitral tribunal may rule on its own jurisdiction and may determine any questions of law that arise during the arbitration. It is our view that Section 17 and the case of Jardine Lloyd Thompson Canada Inc. v Western Oil Sands Inc., 2006 ABCA 18 [a decision about a stay of proceedings]… are ample authority for this Panel to determine if production by the Crown of the relevant and material records in its possession is prohibited by Sections 50 and 51 of the Act.

We find that this panel has the jurisdiction and the duty to decide these issues and to determine if the Crown is prohibited by Section 50 and 51 of the Act from producing the relevant and material documents at issue in these applications …

The Rules of Court which govern this Arbitration have by Rule 5.33 codified the implied undertaking prohibiting misuse of produced documents. This panel in carrying out its duties can, like a court, order the parties before it to limited access to and use of the information that is produced.

(ABQB decision)

It was this decision that the Crown promptly appealed. At the hearing of the matter, the parties agreed to limit the issue at the initial stage to the question of whether the decision of the arbitrators was subject to appeal under the provisions of the Arbitration Act. This limited issue was the matter heard by the Chief Justice.

The Crown argued the decision of the arbitrators was subject to appeal under both section 17(9) and section 44 of the Arbitration Act. Section 17, setting out the all-important authority of arbitrators to rule on their own jurisdiction and to determine questions of law, provides in part:

17(1) An arbitral tribunal may rule on its own jurisdiction to conduct the arbitration and may in that connection rule on objections with respect to the existence or validity of the arbitration agreement.

(2) The arbitral tribunal may determine any question of law that arises during the arbitration.…

(9) If the arbitral tribunal rules on an objection as a preliminary question, a party may, within 30 days after receiving notice of the ruling, make an application to the court to decide the matter.

Section 44 provides:

44(1) If the arbitration agreement so provides, a party may appeal an award to the court on a question of law, on a question of fact or on a question of mixed law and fact.

(2) If the arbitration agreement does not provide that the parties may appeal an award to the court on a question of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that

(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal, and

(b) determination of the question of law at issue will significantly affect the rights of the parties.

(3) Notwithstanding subsections (1) and (2), a party may not appeal an award to the court on a question of law that the parties expressly referred to the arbitral tribunal for decision.

The Crown argued that there was nothing in their agreement with Suncor or the Arbitration Act or the Rules of Court that had been adopted that would give the arbitrators jurisdiction to affect the rights of third party oil sands producers. They contended that because any decision on Suncor’s application would necessarily deny these third party oil sands producers their rights to the statutory protections provided by s.50 of the Mines and Minerals Act, the arbitration panel has no jurisdiction to make such a ruling. The Crown cited three authorities in support of their arguments, but Chief Justice Wittmann questioned the relevance of all three:

(1) MJS Recycling Inc. v Shane Homes Ltd., 2011 ABCA 221, where the Alberta Court of Appeal held an arbitrator had exceeded his jurisdiction by affecting the rights of parties who were not before him when he concluded a waste management agreement with a number of builders was at an end in a dispute between the waste management company and one builder. The Chief Justice distinguished this case (at para 19) on the basis that the issue was whether the arbitrator, in his final order, could grant a remedy against non-parties.

(2) Jardine Lloyd Thompson Canada Inc. v. Western Oil Sands Inc., 2006 ABQB 933, an arbitration under the International Commercial Arbitration Act, RSA 2000, c.I-5, where the court decided whether the arbitrators had jurisdiction to order that certain employees and former employees of a third party be examined for discovery. The Chief Justice distinguished this case because the arbitrators’ jurisdiction was governed by a different statute.

(3) Farah v Sauvageau Holdings Inc., 2011 ONSC 1819, where the court held an arbitrator did not have jurisdiction to make an “arbitral-Mareva injunction” which required third party financial institutions to freeze the assets of a party to the arbitration.  The Chief Justice distinguished this case because it was about the jurisdiction to grant a Mareva injunction, which is an extraordinary remedy based in the inherent jurisdiction of superior courts.

The Chief Justice also distinguished (at para 20) all three cases cited by the Crown on the basis that the award in issue in each of them was one that applied directly to non-parties to the arbitration. The order Suncor sought in this case, on the other hand, would bind only the Crown because it sought the production of documents within the possession of the Crown.

The Chief Justice recognized (at para 20) that the records had been provided to the Crown by third party oil sands producers with the assurance of confidentiality in section 50 of the Mines and Minerals Act. However, he found these circumstances were not decisive for three reasons:

(1) the promise of confidentiality in section 50 of the Mines and Minerals Act does not create a privilege over otherwise relevant and material documents;

(2) the arbitration was subject to the implied undertaking of confidentiality and restrictions on the use of information produced in Rule 5.33;

(3) the arbitrators had the same ability that the Court of Queen’s Bench has to make an order that was mindful of the confidentiality interests of the third parties oil sands producers.

However, it was not these specific reasons which appear to have been the primary motivation behind the Chief Justice’s decision, but rather the fundamental principles behind modern arbitration legislation. This is clear because he makes the following comments:

[21] This Court has had a number of opportunities in recent years to consider the general scheme of the Arbitration Act and its appeal provisions, and has concluded that the Legislature clearly intended to limit judicial intervention: Ellsworth v Ness Homes Ltd., 1999 ABQB 287 at para. 13; Frank v Vogel, 2012 ABQB 432 at para. 17; Capital Power Corp v Lehigh Hanson Materials Ltd., 2013 ABQB 413, at para. 42. In Inforica Inc. v CGI Information Systems and Management Consultants Inc., 2009 ONCA 642, Sharpe JA considered the largely identical provisions of Ontario’s Arbitration Act, SO 1991 [c 17], and held:

[14] It is clear from the structure and purpose of the Act in general, and from the wording of s. 6 in particular, that judicial intervention in the arbitral process is to be strictly limited to those situations contemplated by the Act. This is in keeping with the modern approach that sees arbitration as an autonomous, self-contained, self-sufficient process pursuant to which the parties agree to have their disputes resolved by an arbitrator, not the courts…

The Chief Justice found the Inforica decision relevant because it also dealt with an interlocutory or procedural order. In Inforica, the arbitrator had made an award for security for costs which a Chambers Judge set aside on the basis that the arbitrator had no jurisdiction to make the order because it was not merely a matter of procedure. The Ontario Court of Appeal decided that the Chambers Judge did not have jurisdiction to hear the application to set aside the order for security for costs and, in doing so, considered the Ontario equivalent of both section 17 and section 44 on which the Crown relied.

In deciding whether the Chamber Judge had jurisdiction under the equivalent of Alberta Arbitration Act’s section 17, the Ontario Court of Appeal determined:

[16] To establish the application judge’s jurisdiction to entertain Inforica’s application under ss. 17(5), (7) or (8) as an application to set aside the arbitrator’s ruling “as a preliminary question”, Inforica must bring the arbitrator’s ruling that he had jurisdiction to entertain the CGI’s application for security for costs within s. 17(1). Section 17(1) defines the parameters of s. 17, allowing an arbitrator to rule on his “own jurisdiction to conduct the arbitration”. In my opinion, on a fair reading of that language in light of the modern approach that respects the autonomy of the arbitral process and discourages judicial intervention, s. 17(1) is concerned with only the arbitrator’s jurisdiction to entertain the subject matter of the dispute. Asking an arbitrator to decide whether he has jurisdiction to order security for costs does not amount to asking him whether he has jurisdiction to conduct the arbitration. The words “jurisdiction to conduct the arbitration” in s. 17(1) connote jurisdiction over the entire substance or subject matter of the case, not jurisdiction to make interlocutory or procedural orders that do not determine the merits of the dispute and that are made along the way to final resolution of the issues.

Chief Justice Wittmann agreed (at para 23) with this interpretation of the scope of the arbitrators’ jurisdiction with respect to interlocutory or procedural orders under section 17(1). He agreed that section 17(9), upon which the Crown relied, had to be read in the context of section 17(1):

It is the preliminary question of the arbitral tribunal’s jurisdiction to conduct the arbitration that is subject to review under s.17(9), not the tribunal’s determination of procedural issues that arise in the course of the proceedings.

Inforica was also relevant to the Crown’s reliance on section 44. Ontario’s equivalent provisions differ in material ways from Alberta’s, but they share the crucial characteristic of allowing for appeals from an “award”, a term that has a very specific meaning in the context of arbitration. The Ontario Court of Appeal held, with respect to the meaning of “award”:

[29] [T]he arbitrator’s order for security for costs was not an “award” within the meaning of s. 46(1). … The Act does not define the term “award”, but the term has been held to connote the judgment or order of an arbitral tribunal that “disposes of part or all of the dispute between the parties”: Environmental Export International of Canada Inc. v. Success International Inc., supra, at para. 13. J. Kenneth McEwan & Ludmila B. Herbst, Commercial Arbitration in Canada (Aurora, Ont.: Canada Law Book, 2008) state at 9:30.10: “Only decisions determining the substantive issues should be termed ‘awards’. Matters relating to the conduct of the arbitration are not awards but, rather, are procedural orders and directions”.

The Chief Justice also pointed to Mathieu v JR Stephenson Mfg Ltd., 2013 MBQB 64, concerning an arbitrator’s order for the production of documents. Manitoba’s sections 44(1) and 44(2) are identical to Alberta’s similarly numbered sections and the court in Mathieu held:

[56]… applying the principles of statutory construction to s. 44 of the Act, absent express provision in the arbitration agreement to the contrary, no appeal lies under ss. 44(1) or 44(2) of the Act from a decision of an arbitrator unless that decision finally determines all or part of the substantive dispute between the parties. Unless that occurs, an arbitrator’s decision is not an “award,” regardless of what label the arbitrator places on their decision. A procedural or interlocutory order of an arbitrator will typically not amount to an award.

As a result, Chief Justice Wittmann determined (at para 26) that the Court did not have jurisdiction, under either section 17(9) or section 44 of the Alberta Arbitration Act, to hear the Crown’s appeal.  He held that the determination of whether the Crown can be required to produce relevant documents within its possession falls within the scope of the arbitrators’ jurisdiction under the agreement between Suncor and the Crown, the Arbitration Act and the Rules of Court that were adopted. As a result, the Court does not have jurisdiction to hear the Crown’s appeal under section 17(9). As for section 44, the arbitrators’ order was not an “award” and therefore not subject to appeal under that provision. In summary, the arbitrators’ refusal to direct the Crown’s questions of law to the Court of Queen’s Bench was not appealable.

The principle of restricted court intervention in arbitration proceedings governed by the domestic arbitration legislation was also recently affirmed by the Alberta Law Reform Institute in its Final Report 103 (2013) on the Arbitration Act: Stay and Appeal Issues (at paras 19-25). That Report recommends doing away with the parties’ current right to appeal a question of law with leave of the court set out in section 44, leaving the existence of any avenue of appeal to the courts up to the parties and their arbitration agreement (at vi). The Institute summarized the policy arguments for and against appellate access to the courts (at paras 124-132). In favour of the position adopted by ALRI and by the Chief Justice in Suncor Energy Inc v Alberta are the arguments that appeals reduce the speed, finality and confidentiality of arbitration proceedings. While the finality of the arbitrators’ decision to refuse to refer the Crown’s question of law to the court was ultimately upheld in this case, the appeal to the Court of Queen’s Bench did add six months to the hearing of the dispute and did give the public a very small glimpse into an oil sands royalty dispute between a producer and the Alberta government. Thus it did reduce the speed and confidentiality in this one instance, while upholding the finality of arbitration proceedings and providing a precedent for future arbitrations that favours speed, finality and confidentiality in arbitration proceedings.

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Phase 2 of the Implementation of the Alberta Energy Regulator: The Private Surface Agreement Registry

Mon, 01/20/2014 - 9:00am

By Giorilyn Bruno

PDF Version: Phase 2 of the Implementation of the Alberta Energy Regulator: The Private Surface Agreement Registry

Legislation commented on: Responsible Energy Development Act, SA 2012, c R-17.3; Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25

Regulations commented on: Enforcement of Private Surface Agreement Rules, Alta 204/2013.

On November 30, 2013 additional sections of the Responsible Energy Development Act, SA 2012, c R-17.3 (REDA) came into force as part of phase 2 of the implementation of the Alberta Energy Regulator (AER). Under this current phase, the AER assumes jurisdiction over Part 8 of the Mines and Minerals Act, RSA 2000, c M-17, the Public Lands Act, RSA 2000, c P-40, and the Private Surface Agreement Registry. Phase 1 occurred in June 2013 when the REDA largely came into force and established the AER with a new mandate and governance structure. Phase 3, the last one, will occur in Spring 2014 when the AER will take on responsibility for the Water Act, RSA 2000, c W-3 and the Environmental Protection and Enhancement Act, RSA 2000, c E-12 in relation to energy projects. With the implementation of phase 3, the AER will become a full life-cycle regulator for oil, gas, oil sands, and coal developments.

The AER posted two bulletins on its website (AER Bulletin 2013-04 and AER Bulletin 2013-05) describing the main changes and held several sessions to inform stakeholders of those changes. This post focuses on the information and discussion provided at the AER session dealing with the Private Surface Agreement Registry.

What is the Private Surface Agreement Registry?

Part 3 of the REDA and the recent regulations enacted under it (Enforcement of Private Surface Agreement Rules, Alta 204/2013) (Rules), allow a landowner or an occupant of land to register a private surface agreement (PSA) with the AER. Once a PSA is registered, a landowner or occupant may request the intervention of the AER if a company does not comply with a term or condition of the agreement.

The onus to register a PSA is on the landowner or occupant. A company has no responsibility to inform either of this option. The landowner or occupant is also responsible for notifying the AER that the agreement is no longer valid or has been amended. To register a PSA, the landowner or occupier must fill out a registration form (available on the website of the AER, here) and send it with a copy of the PSA to the AER. Once the AER receives the documents, it will review them and assess whether the PSA is eligible to be registered. If the AER makes a positive determination, a copy of the registered PSA will be sent to the company.

Currently, there is no deadline within which an agreement must be registered after it has entered into force. An agreement can be registered at any time. The landowner or occupier need not wait until there is a concern that the company will default. A PSA is eligible to be registered if the AER determines that three requirements are satisfied.

(1) First of all, the party who seeks to register an agreement must be an “owner or occupant of land” as prescribed under s. 63 of the REDA. The other party to the PSA has no right to register the PSA. For the definitions of “owner” and “occupant”, s. 62(1) of the REDA refers respectively to the Land Titles Act, RSA 2000, c L-4 and the Surface Rights Act, RSA 2000, c S-24. An owner “means a person entitled to any freehold or other estate or interest in land, at law or in equity, in possession, in futurity or expectancy”. An occupant means “(i) a person, other than the owner, who is in actual possession of land, (ii) a person who is shown on a certificate of title under the Land Titles Act as having an interest in land, (iii) an operator granted right of entry in respect of land pursuant to a right of entry order, or (iv) in the case of Crown land, a person shown on the records of the department or other body administering the land as having an interest in the land.” For the definition of “land”, s. 62(1)(b) of the REDA provides that “land has the same meaning as in the Land Titles Act, but does not include mines and minerals”. Thus, mines and minerals are excluded from the following definition: “land means land, messuages, tenements and hereditaments, corporeal and incorporeal, of every nature and description, and every estate or interest therein, whether the estate or interest is legal or equitable, together with paths, passages, ways, watercourses, liberties, privileges and easements appertaining thereto and trees and timber thereon, and mines, minerals and quarries thereon or thereunder lying or being, unless any of them are specially excepted”.

(2) To be eligible for registration, the agreement must meet the definition of a PSA provided under the Rules. The Rules define a PSA as “a signed and dated written agreement between a company or an owner or occupant of land that concerns any aspect of the holder’s access to or use of that owned or occupied land for the purposes of an energy resource activity, but does not include an order granted by the Surface Rights Board” (s. 1(d)).

(3) Part 3 of the REDA “applies only to private surface agreements made after the coming into force of this Part” (REDA s. 62(2)). This date corresponds to November 30, 2013. Landowners or occupants who entered into agreements before November 30, 2013 are not eligible to register their PSA. At the information session, the AER clarified that it will be looking at the date in which the agreement was signed to determine whether a PSA is eligible to be registered. Therefore, an agreement that amends an existing PSA signed before November 30, 2013 presumably may be registered if a new PSA is signed after November 30, 2013. The AER has also indicated that a landowner or occupant may be eligible to register just an appendix or a schedule that contains additional conditions to an original agreement that was signed before November 30, 2013, if the parties signed the appendix or the schedule after November 30, 2013. However, it is not clear whether this alternative is practicable because a schedule or appendix without the main agreement may not make sense or be enforceable on its own.

Any agreement that meets the above three requirements may be registered, including a PSA between a city and a company or between a company and a First Nation. Furthermore, as recognized under s. 65 of the REDA, the AER will register an eligible PSA even if it contains a confidentiality clause in which the landowner or occupant agreed not to register the agreement. However, the AER has indicated that agreements concerning geophysical exploration under Part 8 of the Mines and Minerals Act are confidential and not eligible for registration with the AER.

Under s. 5 of the Rules, the AER must cancel the registration of a PSA if it is satisfied that the registration was the result of a mistake, an error, or a false or a fraudulent act. Registration of a PSA with the AER does not make the agreement valid or enforceable and the AER does not have the jurisdiction to carry out a substantive review of the agreement or assess either its validity or its merits.

The Enforcement of Private Surface Agreements

The purpose of registering a PSA with the AER is to allow a landowner or occupant to request an order to comply under s. 64 of REDA if that person has a reason to believe that a company is not complying with a term or condition of the PSA. If a PSA is not registered, the AER will require the landowner or occupant to register the agreement before accepting a request for an order to comply.

A request for an order to comply (see here for a section 64 request form) must be submitted to the AER within one year from the date on which the owner or occupant first knew or ought to have known that the company defaulted (Rules s. 7(2)). The request must “(a) be in writing, (b) indicate the term or condition of the registered private surface agreement that the owner or occupant believes the holder is not complying with, (c) set out the basis for, and provide information that demonstrates the alleged noncompliance, and (d) indicate the AER registration number” (Rules s. 7(1)). Once the AER receives the request for an order to comply and the supporting documents, it will inform the company and seek a response on the alleged noncompliance. The AER may conduct inquiries, direct the parties to provide additional documents or materials, and conduct an examination of the land to which the registered PSA applies in order to understand the alleged noncompliance (Rules ss. 8 and 10). Based on this information, the AER will make a decision.

There are five possible outcomes of a request for an order to comply: (1) the AER determines that a company has failed to comply with a term or condition of the registered PSA and issues an order to comply to the company under s. 64 of the REDA; (2) the AER does not issue an order to comply because compliance of the company is achieved after the request is filed but before the AER makes a decision on the request; (3) the AER dismisses the request because it has no merit; (4) the AER dismisses the request under s. 9 of the Rules because the landowner or occupant failed to file with the AER further information, documents, or materials within the specified period; and (5) the AER decides under s. 12 of the Rules that there is a more appropriate forum to deal with the matter. In this case, instead of deciding the request, s. 12 contemplates that the AER will encourage the parties to settle their dispute through alternative dispute resolution or direct the owner of occupant “to have the matter considered” by a court or the Surface Rights Board. (See post by Nigel Bankes, available here, questioning the decision to give the jurisdiction over the enforcement of private surface agreements to the AER instead of the Surface Rights Board).

If the AER decides to issue an order to comply, it must provide the parties with a copy and publish the decision or otherwise make it available (Rules s. 11). The AER does not have the jurisdiction to order specific performance or an injunction. Thus, an order to comply acknowledges in general that the company has defaulted and orders the company to comply with the PSA. If the company does not comply with the order, the AER does not have the authority to oblige the company to comply with a specific term or condition of the PSA. However, the AER may require the company to pay an administrative penalty for failing to comply with the order (REDA s. 70(b)). The AER may also file the administrative penalty with the Court of Queen’s Bench and have it enforced as a judgment of the Court (REDA s. 75). A decision of the AER, including an order, is appealable with leave to the Court of Appeal on a question of jurisdiction or law (REDA s. 45). Therefore, a company presumably may seek relief on these conditions if it believes that no terms or conditions of the PSA have been contravened provided that it is able to show that the AER has made an error of law. This may not always be straightforward. The interpretation of the PSA may give rise to a question of law but the application of the facts to the clause as interpreted is more likely to be classified as either a question of fact or a mixed question of fact and law.

Public Information

Under s. 13(1) of the Rules, the AER may decide to make public some information concerning a registered PSA. This information may include the name of the holder of the PSA, the date of the agreement, the date of registration, a description of the energy resource activity to which the PSA relates, and the location of the energy resource activity site.

When the AER receives a request for an order to comply, it must place on the public record the registered PSA and all the documents or materials filed with respect to the request (Rules s. 13(2)). In this case, the AER has no discretion because publication is mandatory. The AER has specified that these materials will be published when a request for an order to comply is received and before the AER has reviewed the request. Therefore, the information becomes public even though the request is subsequently deemed without merit.

At the information session, the AER indicated that the Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25 (FIPPA), concerning the right of access of any person to the records in the custody or under the control of a public body, applies to a registered PSA. Therefore, the AER may decide to disclose to any person, upon request, information concerning a registered PSA under s. 6 of the FIPPA. It seems that at least two of the specific exceptions contemplated under the FIPPA may apply to the right of freedom of information concerning a registered PSA: (1) the AER must refuse to disclose to an applicant information that would be harmful to the business interests of a third party (FIPPA s. 16(1)), and (2) the AER must refuse to disclose personal information to an applicant if the disclosure would be an unreasonable invasion of a third party’s personal privacy (FIPPA s. 17(1)). Could the above exceptions under ss. 16(1) and 17(1) of the FIPPA apply also to s. 13(2) of the Rules? In other words, after receiving a request for an order to comply can (or should) the AER refuse to place on the public record the registered PSA or the supporting documents on the basis that this disclosure would be harmful to the business interests of a third party or an unreasonable invasion of a third party’s personal privacy? The exception to disclosure under s. 16(1) of the FIPPA does not apply if “an enactment of Alberta or Canada authorizes or requires the information to be disclosed” (FIPPA s. 16(3)). The language of s. 13(2) of the Rules is unequivocal and requires the AER to place on the public record the registered PSA and all the supporting documents or materials when a request for an order to comply is received. Therefore, the AER presumably must publish the registered PSA and documents even though the disclosure would be harmful to the business interests of a third party. Possibly, the AER may not publish information that would be an unreasonable invasion of a third party’s personal privacy according to the criteria set out in s. 17 of the FIPPA. However, this protection would apply only to “personal information” as defined under the FIPPA, and the AER would still have to publish the remainder of the registered PSA and documents.

There is no definite answer as to whether the AER may accept for registration a PSA that has been redacted to address privacy concerns. Section 4 of the Rules states that the AER may register a PSA if the AER is of the opinion that the PSA “is the current and entire agreement between the parties in respect of the energy resource activity on the land for which the agreement was made” (emphasis added). Perhaps, the AER could decide to accept the registration of a PSA containing minor omissions for security or legal purposes. However, following a request for an order to comply the AER may direct the parties to produce the entire PSA if needed to fully understand the alleged noncompliance. In this case, the entire PSA would become public under s. 13(2) of the Rules. Consequently, if a PSA contains information that the landowner or occupant do not want to disclose they should probably not submit the PSA for registration.

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

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The Curious Case of the Greater Sage Grouse in Alberta

Fri, 01/17/2014 - 9:00am

By Shaun Fluker

 PDF Version: The Curious Case of the Greater Sage Grouse in Alberta

Legislation commented on: Emergency Order for the Protection of the Greater Sage Grouse, PC 2013-2045 

The Greater Sage Grouse is on the brink of disappearing from the Canadian landscape and, in doing so, is leaving its mark on the Species at Risk Act, SC 2002, c 29 (SARA).  Readers may recall that the sage grouse recovery strategy prepared under SARA was the subject of dispute several years back over the extent to which critical habitat for a species listed as endangered or threatened must be identified in the strategy (See Nigel Bankes’ ABlawg post “Is SARA growing teeth?”). The sage grouse recovery strategy has recently been amended (2013) to include all known critical habitat – both mating sites and year-round habitat – in Canada and to identify threats to the sage grouse (see here).  But since the overwhelming majority of sage grouse habitat falls on provincial lands in Alberta, SARA offers little real protection to the sage grouse here in the absence of an Order in Council from federal Cabinet directing that SARA apply to provincial lands.  Cabinet issued an Emergency Protection Order under section 80 of SARA in December 2013 that, to my surprise, applies to Alberta lands and the Order comes into force on February 18, 2014.  This comment discusses the significance of the Order, adding to existing commentary (see Martin Olszynski’s earlier ABlawg post here, Janice Walton of Blakes LLP here and Jason Unger of the Environmental Law Centre here).

This discussion is framed by some important observations (generally taken from the 2013 sage grouse recovery strategy). The first is that government officials estimate that only about 100 individual sage grouse remain in Canada. This estimate is based on a count of male birds at mating sites (leks) during 2012. The sage grouse population has fallen rapidly in recent years – 98% since numbers were first reporting in the late 1960s – and is undisputedly on the brink of extirpation in Canada.  Sage grouse located in Canada occupy the far northern range for the species in North America.  The species is not currently listed as endangered in the United States, although a listing decision is pending in 2015.

Habitat loss is the primary culprit in the demise of the sage grouse, and the species currently remains in only 7% of its historical range in Canada.  The biophysical attributes of known sage grouse habitat include sagebrush cover, above average moisture, minimal human presence, minimal noise, and no higher structures that provide good perch sites for predators. Specific threats to the sage grouse and its habitat include grazing and agricultural activity that results in the clearing of sagebrush and other native vegetation used for food and cover, an alteration of the hydrology in sage grouse habitat such as a new water diversion or climate change induced events such as drought or other inclement weather, and energy development which leads to the construction of structures, roads and other facilities that produce chronic noise in mating sites. The species will certainly disappear unless drastic measures are taken in the short term to prevent further deaths and protect what remains of existing habitat.

It is also important to observe that the purpose of SARA is to protect the sage grouse from being extirpated and to enable necessary action that aids in the recovery of the species.  SARA is the realization of Canada’s international commitment to protect species at risk under the United Nations Convention on Biological Diversity.  In short, it is the end of the line for the sage grouse in Canada and if SARA is to realize its purpose the legislation must be interpreted and applied to backstop the species. The federal government deserves credit for applying the emergency protection measures in an attempt to save the sage grouse in Canada.

The sage grouse is listed as an endangered species under both SARA and the Alberta Wildlife Act, RSA 2000, c W-10. Given that sage grouse habitat largely falls on provincial lands in Alberta, we might expect the Wildlife Act to offer some protection, however the legislation provides only minimal legal protection to sage grouse (for some discussion on this point see here and Shaun Fluker and Jocelyn Stacey, “The Basics of Species at Risk Legislation in Alberta” (2012) 50 Alta L Rev 95). The legal protection afforded to sage grouse under the Wildlife Act is essentially limited to section 36(1) which prohibits the willful disturbance or destruction of its residence and the inability to get a hunting license. This is hardly law with proactive intentions. The Alberta government has chosen to govern endangered species almost entirely with non-binding policy under the rubric of its 2009-2014 Species at Risk Strategy (see here). So, for example, the Alberta government has policy that limits the density of oil and gas activity near sage grouse mating sites, but there are no substantive legal mechanisms under provincial law to protect and recover the sage grouse populations in Alberta. Despite being listed as endangered under Alberta’s Wildlife Act for more than a decade, the sage grouse population has continued to decline rapidly here, faster than scientific predictions, and existing policy is clearly not working. The Alberta government’s refusal to enact meaningful legal protection for the sage grouse is almost certainly the primary reason for the application of federal legislation on provincial lands represented by the Emergency Order for the Protection of the Greater Sage Grouse.

An emergency protection order issued by the federal Cabinet under SARA is reserved for those cases where a listed species faces an imminent threat to its survival.  Specifically, section 80(1) provides federal Cabinet with the power to issue the emergency order. This order is issued on the recommendation of the federal Minister of the Environment who must make such recommendation where he or she forms the opinion that the species in question faces an imminent threat to its survival (section 80(2)). In November 2011 a coalition of petitioners (including, amongst others, the Alberta Wilderness Association, the David Suzuki Foundation, the Society of Grasslands Naturalists, and the Sierra Club – Prairie Chapter) requested the federal Minister to make this recommendation concerning the sage grouse (see here).

The Emergency Order for the Protection of the Greater Sage Grouse is the first emergency order to be issued by federal Cabinet under SARA. The Minister has previously declined to recommend an emergency protection order for the woodland caribou in Alberta. This decision was subject to judicial review and in Athabasca Chipewyan First Nation v Canada (Minister of the Environment), 2011 FC 962, the Federal Court ruled that the Minister failed to give an adequate explanation in light of scientific evidence on the declining status of caribou populations in Alberta.  It would seem that the dire evidence on the sage grouse population left no legal option for the federal Minister other than to recommend emergency protection.  What is perhaps most intriguing here is the political decision by federal Cabinet to issue the Order under section 80(4)(c) and thereby apply SARA to provincial lands.

Section 80(4) of SARA sets out what an emergency protection order may include as measures to protect a species in peril. The legislated parameters of an emergency order vary depending on the same considerations employed throughout SARA: an emergency order has widest application to fish, migratory birds, and other species located on federal lands. In this case, the emergency order applies to non-federal species on provincial lands and section 80(4)(c) provides that such an order may identify habitat necessary for the recovery or survival of a species and include provisions that prohibit activities that may adversely affect the species.

The Emergency Order for the Protection of the Greater Sage Grouse specifies necessary habitat in southeastern Alberta and southwestern Saskatchewan and sets out a number of prohibitions which apply on the specified lands. Schedule 1 of the Order lists the habitat areas covered by the Order. These areas are a subset of the known habitat identified in the 2013 recovery strategy – in particular the Order covers mating areas and surrounding areas habituated by sage grouse between 2007 and 2012. Generally speaking the Order prohibits the killing or moving of sagebrush and other native vegetation used by the sage grouse for cover and food, prohibits the construction of new structures or roads, and prohibits activity that produces chronic noise above 45 decibels during mating season (April-May) between sunset and sunrise. There are, however, a number of exceptions to these prohibitions that accommodate existing residential, agricultural and grazing activities in the specified habitat.  The exceptions do not cover existing or future energy development, so oil and gas operators in the region covered by the Order will be impacted by prohibited new development and alterations to existing practices on current production.

There are undoubtedly a variety of opinions on whether the Order is sufficient to halt the demise of the sage grouse and surely it would be unreasonable for the Order to prohibit all human activity without compensation in some cases. But the exceptions to the prohibited activity do raise an interesting point about whether they belong in the Order at all. They suggest a balance between halting the demise of the sage grouse and maintaining existing activities known to threaten the species.  Given that we are talking about the last 100 individual birds and the purpose of SARA and the Order is to prevent these birds from known threats – some of which are allowed to continue because of the exceptions – it is quite possible the breadth of the exemptions in the Emergency Order for the Protection of the Greater Sage Grouse will compromise the emergency protection effort.

The exceptions come about, in part, as a result of the regulatory impact assessment conducted by the federal government on the implementation of the Order. The Regulatory Impact Assessment Statement (RIAS) – attached to the Order – includes an interesting mix of methodologies to ascertain the costs and benefits of saving the sage grouse in Canada. Jason Unger of the Environmental Law Centre provides a nice overview on the cost/benefit analysis in his post (referenced above).  No doubt the costs of protecting the sage grouse using these methodologies is kept low by the fact that existing grazing and agriculture activities are exempted from the prohibitions contained in the Order.  I also note that the RIAS only values the sage grouse instrumentally in terms of the benefits the species provides to Canadians (existence value) and the ecosystems it inhabits. It is important, I think, to remember that the enactment of SARA was in part to recognize that all species have intrinsic value (see preamble to the legislation). This means that sage grouse and any other species have value apart from whatever benefits they provide to others. However intrinsic value poses a problem for those implementing SARA because assessing it does not allow for cost/benefit calculations and generally is not amenable to quantification. Nonetheless we do not assess our own worth by calculating the costs and benefits of our existence, so why do we insist on doing so for other species – particularly those for which we have accepted an obligation to protect?

Mark Sagoff has published an excellent book that persuasively argues it is a category mistake to apply economic reasoning to endangered species problems (Mark Sagoff, The Economy of the Earth: Philosophy, Law and the Environment 2d ed (Cambridge University Press, 2007)).  Economic reasoning gives us a means to choose between our preferences (what we want).  So, for example, we can use cost/benefit analysis to choose between having a sage grouse population or industrial activity such as grazing, agriculture, and energy development in southeastern Alberta. But SARA obligates us in principle to protect the sage grouse from extirpation in Canada. It is not a matter of preferences, costs and benefits, or choosing between sage grouse and resource development. Protecting remaining sage grouse habitat and preventing any further individual deaths is the reason why SARA was enacted and should be the only concern or purpose under the emergency protection provisions.

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