By: Jonnette Watson Hamilton
Case Commented On: Hok v Alberta, 2016 ABQB 651 (CanLII)
Hok v Alberta is an unusual vexatious litigant decision for three reasons. First, the Minister of Justice and Solicitor General of Alberta made submissions in a brief of law. Second, those submissions were purely about the law governing vexatious litigant orders. The submissions had no more to do with the facts of this particular case than they did with the facts of any and every other vexatious litigant case. Because these legal issues apply broadly, this November 2016 decision is worth noting and I will focus on the legal issues exclusively. Third, there appears to be a challenge in this decision to the Court of Appeal’s jurisprudence on vexatious litigant orders and, specifically, to its doubts about the inherent jurisdiction of the Court of Queen’s Bench to issue broad orders restraining abusive conduct in all forums and against all persons in all future litigation.
Three legal issues were raised by the Minister and dealt with by Justice Verville in response to what he called the “unsettled nature” of the Court of Appeal jurisprudence (at para 47).
The first had to do with the fact that the Minister appeared. This appearance was the result of Justice Verville applying a two-step process adopted by the Court of Queen’s Bench in response to the Court of Appeal decision in Lymer v Jonsson, 2016 ABCA 32 (CanLII). Hok v Alberta is the first time the second step in the new two-step process has been taken.
Second, the Minister raised concerns about the proper scope or breadth of vexatious litigant orders. Based on the Court of Appeal decision in RO v DF, 2016 ABCA 170 (CanLII), the Minister submitted that such orders should be narrowed to a defined group of targets where that group can be identified by the litigant’s history. The Minister also argued that these orders should normally be restricted to future actions brought before the court making the order, unless there is evidence that the litigant has acted or would likely act in a vexatious manner in some other court.
Third, the Minister raised what the Court of Appeal identified in Pawlus v Pope, 2004 ABCA 396 (CanLII) as an open question about the source of Alberta superior courts’ authority to restrict litigants’ access to the courts. Is that authority dependent upon the legislature and only found in the Judicature Act, RSA 2000, c J-2, sections 23-23.1 and the Family Law Act, SA 2003, c F-4.5, section 91? Or does the Court of Queen’s Bench, as a superior court, have an inherent jurisdiction to restrict litigant access that co-exists with and is not limited by the statutory authority?
In its 2016 decision in Lymer v Jonsson (which I commented on in “On Its Own Motion”: Section 23.1(1) Judicature Act), the Court of Appeal held that the rules of natural justice that require courts to provide an opportunity to be heard to those who will be affected by a decision apply to vexatious litigant orders. While the sufficiency of notice will be assessed in the context of the proceedings, failure to provide an opportunity to be heard will be fatal to the order and it will be set aside.
In response to Lymer v Jonsson, the Court of Queen’s Bench adopted a two-step process when dealing with persons against whom court access restrictions are being considered (Hok at para 10). A judge who observes problematic conduct by a litigant is to first assess that conduct to determine if it is an abuse of court process or a sign of vexatious conduct that might require restrictions on court access. If the judge does decide that restrictions are potentially required, then the second step is necessary. The litigant is given an opportunity to make submissions about whether restrictions on their court access are appropriate and about the form that those restrictions should take.
Although the first step has been taken in two Court of Queen’s Bench reported decisions, neither proceeded to the second step. Hok v Alberta is therefore the first case to include the second step of the new two-step process. The first step can be seen in the June 2016 decision in R v Hok, 2016 ABQB 335 (CanLII), at para 105. Justice Verville directed that a copy of his reasons be given to the Minister as notice of the court’s intention to determine whether Ms. Hok was a vexatious litigant and invited both the Minister and Ms. Hok to make written submissions within 30 days of receiving that notice. Both did so. This November 2016 decision is the result of that notice.
In commenting on the new two-step process, Justice Verville noted that the process is not an absolute requirement (at para 11). As already pointed out, Lymer v Jonsson held that the sufficiency of notice will be assessed in the context of the proceedings. The test appears to be: Would the litigant be taken by surprise if the Court issued a vexatious litigant order on its own motion? (at para 12).
Justice Verville went on to point out a difficulty in evaluating what facts will satisfy what he called the Court of Appeal’s “‘no surprise’ rule” (at para 13). The Court of Appeal in Lymer v Jonsson (at para 6) stated that there was nothing in the record to suggest that Mr. Lymer was not taken by surprise when Justice Donald Lee issued a vexatious litigant order in November 2014 in Lymer (Re), 2014 ABQB 696 (CanLII)). However, Mr. Lymer had made submissions about whether his applications in the same case were frivolous or vexatious before Master Smart in June 2014: see Lymer (Re), 2014 ABQB 674 (CanLII) at para 13. Because there seemed to be no surprise in the context of the 2014 bankruptcy proceedings as a whole, Justice Verville thought it difficult to know what would satisfy the test. However, because Master Smart looked at Mr. Lymer’s conduct in the context of a contempt application and Justice Lee did not give notice that he was considering a vexatious litigant order and did not give Mr. Lymer an opportunity to address the vexatious litigant issue, it seems that Justice Verville is reading the “‘no surprise’ rule” too literally.
Should orders restricting a litigant’s access to the courts be limited to that litigant’s usual target group of defendants? And should it be limited to the level of court making the order, for example, in this case, to future litigation in the Court of Queen’s Bench? These were the two questions raised by the Minister.
Both questions were based on the 2016 decision of the Alberta Court of Appeal in RO v DF, 2016 ABCA 170 (CanLII). As I mentioned in a previous post, Vexatious Proceedings Distinguished from Vexatious Litigants, RO v DF appeared to establish that vexatious behaviour confined to one case or one respondent will not justify the broad response of a typical vexatious litigant order under section 23.1 of the Judicature Act, which requires “persistent” improper conduct. Vexatious behaviour confined to one case will justify bringing the vexatious proceeding to an end and an order forbidding the commencement of further proceedings against the same individual. But a broad vexatious litigant order will require a history of vexatious behaviour in more than one case or against more than one person (except possibly in exceptional circumstances such as those found in Henry v El, 2010 ABCA 312 (CanLII)).
Justice Verville began his discussion of the principles that guide the scope of court access restrictions on future litigation by noting the “culture shift” brought about by Hryniak v Mauldin, 2014 SCC 7 (CanLII) (at para 26). Instead of the “historic over-emphasis on procedural rights and exhaustive formality,” that case called for a new emphasis on efficiency and proportional procedures. Justice Verville noted (at para 27) that this new emphasis on efficiency and proportionality applied “especially” to court proceedings involving self represented parties, according to the Supreme Court of Canada in Trial Lawyers Association of British Columbia v British Columbia (Attorney General), 2014 SCC 59 at para 110 (CanLII). Chief Justice McLachlin had explained, in Trial Lawyers Association of British Columbia at para 47, that measures that deter frivolous or vexatious cases “may actually increase efficiency and overall access to justice”.
Justice Verville then discussed (at para 30) the impact of a vexatious litigant order, acknowledging first that a person cannot be denied access to Canadian courts, but pointing out that there was, as Trial Lawyers Association of British Columbia put it (at para 47), “no constitutional right to bring frivolous or vexatious cases.” He noted (at para 31) that Trial Lawyers Association of British Columbia had indicated that barriers to court are unconstitutional because they impede access to justice only if those barriers “effectively deny” people access to courts and that “undue hardship” is the measure for whether access is effectively denied.
How is this applied to vexatious litigant orders? Justice Verville observed that the standard order only required the vexatious litigant to obtain leave to commence an action (at para 33). The pre-filing leave application is a screening mechanism (at para 32). Typically, the vexatious litigant must provide an unfiled copy of their proposed statement of claim, motion, or application and an affidavit establishing the evidence and arguments they plan to make. There is no cost to make the application because the documents are not filed. In Justice Verville’s opinion, because any legitimate litigant has to know the evidence they can muster and the arguments they can advance, and because transforming that into an affidavit is a comparatively minor additional step, there is no “undue hardship” (at para 33).
These discussions of the Hryniak “culture shift” and the constitutionality of the typical “evidence mustering” requirement of a vexatious litigant order lead to Justice Verville’s analysis of the Minister’s submission about the scope of these orders. These discussions do not seem that apropos to the scope issue; they seem to be more relevant to expanding the understanding of the inherent jurisdiction of a superior court. Nevertheless, the points raised led him to determine that the balance between the low cost to the litigant’s rights and the benefits of efficiency will favour the granting of vexatious litigant orders as “prospective case management steps” (at para 37). Therefore, the court should focus on anticipated abuses when granting these orders.
Justice Verville concludes that the key questions with respect to the scope of the vexatious litigant order are (at para 36):
When he applies the third question in this particular case, although Justice Verville identified past misconduct in all three levels of Alberta courts and thought it highly likely that the litigation abuse would continue in the Court of Appeal (at paras 45, 47), he did not extend his vexatious litigant order to the Court of Appeal. He did not do so “in light of the jurisprudence that addresses court participant access for that institution” (at para 53).
The Minister had pointed out that it is an open question whether the province’s superior courts have an inherent jurisdiction to restrict litigant access or whether their authority must be found in legislation, i.e., the Judicature Act, RSA 2000, c J-2, sections 23-23.1 and the Family Law Act, SA 2003, c F-4.5, section 91. The Minister cited the Court of Appeal’s 2004 decision in Pawlus v Pope as raising but not resolving the issue. As I mentioned in a post last year (Sources of Superior Courts’ Jurisdiction to Declare Litigants to be Vexatious), there are a number post-Pawlus conflicting Alberta decisions in the civil law context, including Lymer (Re), 2014 ABQB 696 (CanLII) at para 12, Shreem Holdings Inc. v. Barr Picard, 2014 ABQB 112 (CanLII) at para 29, and Re Sikora Estate, 2015 ABQB 467 (CanLII). And Hok v Alberta can now be added to that list.
There is no question that the inherent jurisdiction of superior courts to control the particular proceedings before them is not limited by the statutory vexatious litigants provisions; see section 23.1(9) of the Judicature Act and the Law Reform Commission of Nova Scotia (LRCNS), Vexatious Litigants Final Report (April 2006) at 15. The question is whether that inherent jurisdiction includes the ability of superior courts to prevent a vexatious litigant from commencing different legal proceedings against different people in different courts in the future. After reviewing case law and scholarly opinion, the LRCNS report concluded (at 11) that it did not:
At best, it might be suggested there is some case law support for expanding the concept of inherent jurisdiction to empower a court to prevent a known vexatious litigant from commencing a legal proceeding. This would, however, be at odds with the traditionally-understood nature of inherent jurisdiction.
The difference between the two exercises of the court’s power is the difference between their control of vexatious proceedings and their much broader and forward-looking control of vexatious litigants. This difference is the focus of the LRCNS report (at 7-11), which relied upon the oft-cited article by I.H. Jacob, “The Inherent Jurisdiction of the Court” (1970) 23 Current Legal Problems 23. That article identified (at 43) the conceptual gap between courts’ ability to control the actions of people appearing before them and their inability to prevent people from starting actions “which may turn out to be vexatious”. Unfortunately, Justice Verville does not discuss either the LRCNS summary of the law nor Jacob’s article.
What Justice Verville does discuss, albeit in connection with the scope of vexatious litigant orders, is the Hryniak “culture shift” and the constitutionality of the typical “evidence mustering” requirement of a vexatious litigant order. Those discussions may have justifications for expanding the traditionally understood nature of inherent jurisdiction.
Justice Verville does mention that the issue is not free from doubt in those Commonwealth jurisdictions which received their law from the United Kingdom when they were colonies (at para 17). He also discusses three Alberta Court of Appeal decisions that recognized the inherent jurisdiction of both their court and the Court of Queen’s Bench to restrict future litigation by an abusive litigant (at paras 19-20, 23-24). He concludes his discussion of the source of the Court of Queen’s Bench’s authority with the following odd remark (at para 25, emphasis added):
The Alberta Court of Queen’s Bench, a superior court of inherent jurisdiction, has at least the same authority to restrict court access as the Alberta Court of Appeal, especially since the Court of Appeal derives its authority and power from legislation: Court of Appeal Act, RSA 2000, c C-30.
Why compare the Court of Queen’s Bench as “a superior court of inherent jurisdiction” to the Court of Appeal as a court “deriv[ing] its authority and power from legislation”? Is Justice Verville claiming that the Court of Appeal has no inherent jurisdiction to control their own processes and procedures?
I am not sure why Justice Verville pointed out that “the Court of Appeal derives its authority and power from legislation: Court of Appeal Act”. Section 2(1) of that statute states: “The Appellate Division of the Supreme Court of Alberta is continued as a superior court of civil and criminal jurisdiction styled the Court of Appeal of Alberta.” That is all that Act says about the Court of Appeal’s power and authority. The Court of Queen’s Bench Act, RSA 2000, c C-31, says much the same about that court in section 2(1): “The Trial Division of the Supreme Court of Alberta is continued as a superior court of civil and criminal jurisdiction styled the Court of Queen’s Bench of Alberta.”
It is the Judicature Act, RSA 2000, c J-2, which in Part 1 sets out the “Jurisdiction of the Court”, with “Court” defined in section 1 to mean “the Court of Queen’s Bench or, on appeal, the Court of Appeal” (except in Part 2.1 where it is even more inclusive; section 23(1)(b)).
The Judicature Act says almost the same things about the powers of the Court of Appeal that it says about the powers of the Court of Queen’s Bench. It says, for example, that both have “all the jurisdiction, powers and authority that … were … vested in, or capable of being exercised within, Alberta by the Supreme Court of the North-West Territories” (section 2(1)). It says the judges of both courts have “all the powers, rights, incidents, privileges and immunities of a judge of a superior court of record” as fully as those were enjoyed in England by judges of “the Superior Courts of Law or Equity” and other superior courts or courts of record (section 4). Specifically, with respect to “the administration of the law”, both courts “possesses, in addition, … the jurisdiction that on July 15, 1870, was in England vested in (a) the High Court of Chancery, as a common law court as well as a court of equity, including the jurisdiction of the Master of the Rolls as a judge or master of the Court of Chancery, and any jurisdiction exercised by the Master of the Rolls in relation to the Court of Chancery as a common law court” and other superior courts or courts of record (section 5(1)). I am afraid I do not see why it matters to the discussion of inherent jurisdiction that “the Court of Appeal derives its authority and power from legislation: Court of Appeal Act”.
In the LRCNS report, the commissioners noted:
The concept of inherent jurisdiction is an ancient one. It is part of the legal heritage … received from England, where inherent jurisdiction has been associated with superior jurisdiction courts since their beginnings. In Halifax (Regional Municipality) v. Ofume, [(2003), 218 N.S.R. (2d) 234 at 242 (N.S.C.A.)], Saunders, J.A. … confirmed, “…jurisprudence in this country clearly establishes that Canadian courts of superior jurisdiction maintain a general inherent jurisdiction, which includes the discretion to control their own process. (emphasis added)
The LRCNS relied (at 7) upon the English procedural law authority, I.H. Jacob, in “The Inherent Jurisdiction of the Court” (1970) 23 Current Legal Problems 23 at 25- 26 for the basis of inherent jurisdiction. Jacob wrote that “the juridical basis of this jurisdiction is therefore the authority of the judiciary to uphold, to protect and to fulfill the judicial function of administering justice according to law in a regular, orderly and effective manner”.
Jacob was of the opinion (at 43) that “the court has no power, even under its inherent jurisdiction, to prevent a person from commencing proceedings which may turn out to be vexatious.” (emphasis added). The problem, according to the LRCNS and Jacob, is not a lack of inherent jurisdiction, but a lack of an inherent jurisdiction that includes prospective vexatious litigant orders.
There appears to be some dissatisfaction within the Court of Queen’s Bench about the Court of Appeal’s recent handling of vexatious litigant cases and what Justice Verville referred to as “the unsettled nature” of its jurisprudence (at para 47).
The state of the Court of Appeal’s “jurisprudence that addresses court participant access for that institution” (at para 53), is the reason Justice Verville gives for excluding litigation in the Court of Appeal from the vexatious litigant order he issued in this case, even though he believed “it is highly likely that Ms. Hok’s abuse will continue in that court” (para 47). He extended his broadly-worded vexatious litigant order to the Provincial Court as well as the Court of Queen’s Bench (at paras 47, 49, 51, and 53). He explicitly stated that he made the vexatious litigant order under the authority of both the Judicature Act and the court’s inherent jurisdiction (at paras 48, 51and 53). He even invited tribunals who lacked the power to restrict the vexatious litigants’ access to apply to the Court of Queen’s Bench for protection, again citing the court’s inherent jurisdiction as the source of the court’s power to restrict the abuse of those tribunals’ processes (at para 54). It is only the Court of Appeal that he left to fend for itself.
It would appear that the Court of Queen’s Bench has thrown down the proverbial gauntlet. It will be interesting to see how the Court of Appeal responds to the challenge.
This post may be cited as: Jonnette Watson Hamilton “The Vexing Question of Authority to Grant Vexatious Litigant Orders” (23 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_JWH_HokvAlberta.pdf
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By: Elliot Holzman
Case Commented On: R v Vallentgoed, 2016 ABCA 358 (CanLII)
Following the recent Alberta Court of Appeal decision in R. v. Vallentgoed, 2016 ABCA 358 (CanLII), it appears that Canada’s impaired driving laws may be before the Supreme Court of Canada (SCC) once again – this time, only four years removed from the last major case to be decided by the SCC in this area: see R. v. St-Onge Lamoureux, 2012 SCC 57, (CanLII).
Vallentgoed featured two separate cases that were tried together as “test” cases: both Mr. Vallentgoed and Mr. Gubbins were charged with impaired driving and requested various maintenance records as part of their disclosure requests from the Crown. The question before the Court on both appeals pertained to the Crown disclosure obligations of certain maintenance records for the breathalyzer instruments (also called “approved instruments”) used every day in impaired driving investigations across the country.
In a split 2-1 decision, with Justice Rowbotham dissenting, the Court of Appeal held that while time-of-test records of the approved instruments are clearly relevant and must be disclosed to an accused person, historical maintenance records of the instruments are not subject to the same disclosure obligations. Justice Rowbotham found that an instrument’s maintenance log (which is a summary of all the work/repairs done on an instrument since it was brought into use) constitutes first party disclosure and must be disclosed as part of the standard disclosure package sent by the Crown. The majority (Justices Slatter and Berger) held it was third party disclosure, and not subject to the Crown’s Stinchcombe disclosure obligations (see R. v Stinchcombe,  3 SCR 326, 1991 CanLII 45 (SCC)). As the Court of Appeal was split in its decision, there will be an appeal as of right to the SCC, should the appellant wish to exercise that right.
Relevant Statutory Provisions
Canada’s impaired driving legislation is set out in sections 253 to 258 of the Criminal Code, RSC 1985, c C-46. Section 253 states:
253 (1) Every one commits an offence who operates a motor vehicle or vessel or operates or assists in the operation of an aircraft or of railway equipment or has the care or control of a motor vehicle, vessel, aircraft or railway equipment, whether it is in motion or not,
(a) while the person’s ability to operate the vehicle, vessel, aircraft or railway equipment is impaired by alcohol or a drug; or
(b) having consumed alcohol in such a quantity that the concentration in the person’s blood exceeds eighty milligrams of alcohol in one hundred milliliters of blood.
Section 253 sets out two separate offences for impaired driving (although an accused person cannot be convicted on both, based on the rule against multiple convictions for offences arising out of the same transaction, set out in Kienapple v. R.,  1 SCR 729, 1974 CanLII 14 (SCC)).
The Vallentgoed decision, like many before it, is concerned with the instruments that are used to convict under section 253(1)(b) of the Criminal Code. The Code contains certain statutory provisions related to these instruments. In section 254, the Code defines an “approved instrument” as being any instrument of a kind that is designed to receive and make an analysis of a sample of the breath of a person in order to measure the person’s concentration of alcohol in their blood.
In section 258, the Code states that if the Crown can prove that certain preconditions have been met, the “evidence of the results of the analyses so made is conclusive proof that the concentration of alcohol in the accused’s blood both at the time when the analyses were made and at the time when the offence was alleged to have been committed was, if the results of the analyses were the same, the concentration determined by the analyses and, if the results of the analyses are different, the lowest of the concentrations determined by the analyses…” Thus, the reading displayed by the instrument is presumptively reliable and is essentially incontrovertible, barring evidence being tendered to show that the machine was malfunctioning and that the malfunctioning caused the machine to give an inaccurate reading.
Thus, in understanding the statutory “shortcut” that the Crown is given through section 258 of the Code, and the underlying presumption of reliability of the instrument readings, one can see why the maintenance records of these instruments is relevant in criminal proceedings. If we are going to rely on these readings as being presumptively accurate, then we had better be sure that these machines are working properly.
The Long, Windy Road to Vallentgoed
As the Court noted in para 2, there has been considerable uncertainty and inconsistency in trial court decisions on the obligation of the Crown to disclose maintenance records for approved instruments, especially following the SCC’s decision in St-Onge Lamoureux, which is discussed below.
By way of historical background, in 1969 Parliament made it a criminal offence to operate or have care or control of a motor vehicle while one’s blood alcohol level exceeded .08 (over 80) and made it mandatory under the Code to provide breath samples for analysis. Parliament further introduced presumptions (of accuracy and identity) that would apply if certain preconditions were met. This had the effect of making it easier for the Crown to prove that a person had operated or had care or control of a motor vehicle while their blood alcohol exceeded .08.
The presumption of accuracy took the form of a certificate by the breath technician who was present when the samples were taken. The certificate, which contains the readings on the approved instrument, was presumed to provide an accurate determination of a person’s blood alcohol content at the time the breath samples were taken. In 1997, Parliament established a second presumption that a blood alcohol level that exceeds .08 at the time of analysis is presumed to have exceeded .08 at the time when the offence is alleged to have been committed. This presumption was upheld in R. v. Boucher, 2005 SCC 72 (CanLII).
Prior to amendments to section 258 in 2008, the provision stated that the presumptions could be rebutted by producing “evidence to the contrary”, which the Ontario Court of Appeal interpreted as meaning that the evidence of the accused person, in combination with an explanation by a toxicologist as to the implications of that accused person’s consumption, could be tendered as “evidence to the contrary” in order to raise a reasonable doubt about the results of the breathalyzer readings: see R. v. Carter, 1985 CanLII 168 (ON CA). This came to be known as the “Carter defence”, and was employed frequently to “beat the test.”
The strategy for this approach was that an accused person would testify, for example, that alcohol had been consumed just prior to the test (known as “bolus drinking”), which would lead to a reading that was unrepresentative of their blood alcohol content at the time of driving. Moreover, a toxicologist would also testify that the blood alcohol content of the accused person given their consumption, weight, drinking habits, etc., was lower than the instrument displayed. The toxicologist would run a test with reproduced conditions in a controlled environment and the findings would be then tendered as “evidence to the contrary.”
In 2008, Parliament largely cut out the “Carter defence” by amending section 258 to require an accused, who wishes to rebut the presumption of accuracy of the instrument reading, to (1) raise a reasonable doubt as to the malfunctioning of the instrument, (2) show that the malfunction affected the readings, and (3) show that their blood alcohol content would not have exceeded the legal limit at the time. Thus, while the “Carter defence” could still be relevant for point #3, an accused person still has the burden of presenting evidence on the first two points. But how could an accused person have information on the functional capabilities of the machine they blew into? In St-Onge Lamoureux, the Court held: “The accused can request the disclosure of any relevant evidence that is reasonably available in order to be able to present a real defence.” (at para 78)
Thus, following the decision in St-Onge Lamoureux, the maintenance records of these approved instruments were more frequently requested by accused persons to rebut the presumption of accuracy contained in section 258. In Alberta, the Court of Queen’s Bench held in R. v. Kilpatrick, 2013 ABQB 5 (CanLII) at para 81 that the instrument’s maintenance logs are “fruits of the investigation” and thus constitute first party disclosure that must be disclosed by the Crown where an approved instrument is utilized. The Court of Appeal denied the Crown’s leave to appeal in Kilpatrick, (2013 ABCA 168 (CanLII)), because the evidentiary record in the case was sparse and there was a lack of expert evidence to challenge the findings in the court below.
The Vallentgoed Decision
What Records Were at Issue in this Case?
Following the Kilpatrick decision, Alberta Justice began regularly disclosing time-of-test records related to the instruments as part of their Stinchcombe disclosure obligations. These time-of-test records are often voluminous, including documents that provide details of the actual breath samples conducted, test records, the certificate of analyses, an affidavit of service of the certificate of analyses, and certificates of annual maintenance, among other documents. At issue in Vallentgoed was whether the Crown was obliged to also disclose historical maintenance records of the approved instruments.
The Real Issue – Are Records Other Than Time-of-Test Ones First Party or Third Party Disclosure?
Both the majority judgment and dissenting opinion spent considerable time discussing whether historical maintenance records constituted first party disclosure – which must be disclosed as part of the Crown’s Stinchcombe obligations – or third party disclosure, which are subject to a separate application by the defence.
The majority judgment confirmed that it has been clear since Stinchcombe that a person charged with a crime is entitled to disclosure of non-privileged documents that are relevant to making full answer and defence to the charge (at para 32). The appeals turned on whether these historical maintenance records constituted “fruits of the investigation”, where the onus lies on the Crown to disclose the relevant documents. The majority held that: “It follows that only maintenance records for the approved instrument that are contemporaneous with the criminal charge are part of the “fruits of the investigation”…” (at para 47, emphasis added). The majority interpreted St-Onge Lamoureux as follows:
On a proper reading, St-Onge Lamoureux does not hold that maintenance records are relevant and therefore disclosable, it assumes that they might be relevant. The prospect of there being relevant information on malfunctioning of the instrument that the accused could use to raise a full answer and defense was sufficient to make the provision constitutional. If, in a particular case, it is demonstrated that the records are not relevant, or not sufficiently probative, they need not be disclosed. St-Onge Lamoureux found the section to be constitutional on the basis that the accused could prove malfunctioning of the equipment with relevant evidence. If the evidence turns out to be irrelevant, it could not raise a reasonable doubt, and it is therefore not necessary that it be disclosed in order to enable a full answer and defense. Irrelevant evidence cannot assist the accused. The Supreme Court did not intend to rule that, as a matter of law, irrelevant evidence must be disclosed in order to maintain the constitutionality of the section. (at para 53, emphasis in original)
Turning to the issues raised in these appeals, the majority held (at para 72) that the uncontradicted expert evidence was that the historical maintenance records were irrelevant to proving the accuracy or inaccuracy of any particular test. The majority was satisfied that the instruments contained so many checks and balances that were built into them that the chances of an undetected malfunction was “extremely remote” (at para 75). Thus, the majority dismissed the appeals and concluded that the standard disclosure package, which disclosed time-of-test records, was sufficient to discharge the Crown’s Stinchcombe obligations.
I found Justice Rowbotham’s dissenting opinion particularly interesting, as she seemed to disagree on two central findings made by the majority. The first related to what St-Onge Lamoureux actually decided. In relation to the relevance of maintenance records, Justice Rowbotham disagreed that the discussion of maintenance records was “peripheral” to the Court’s opinion in St-Onge Lamoureux (at para 101). In her view, the SCC’s specific reference to “maintenance” of the instrument, which is distinct from “operation” insofar as maintenance suggests matters prior to or after the operation of the instrument, was a signal by the SCC that the relevance of the maintenance records was an integral part of its analysis. In St-Onge Lamoureux, the SCC held that an accused person may request the disclosure of any relevant evidence that could include a maintenance log that shows the instrument was not maintained properly or on admissions by a technician that there had been erratic results on that instrument (at para 78). Justice Rowbotham interpreted this passage to infer that the SCC’s decision in St-Onge Lamoureux “opened the door” to the disclosure of some maintenance records (at para 105) that went beyond solely the disclosure of time-of-test records.
The second point related to statements made in para 78 of the majority judgment related to whether disclosure of historical maintenance records would create a slippery slope where “requesting disclosure of the maintenance logs will only generate requests for more irrelevant records…” In that same section, the majority rejected the argument that because the production of the historical maintenance records did not involve much effort on the part of the Crown, they should therefore be produced.
Justice Rowbotham examined both the Stinchcombe decision and the SCC’s later ruling in R. v. McNeil, 2009 SCC 3 (CanLII), to find that the Crown has a duty to make reasonable inquiries when put on notice of material in the hands of police or other Crown entities that is potentially relevant to the prosecution or the defence. While the Crown argued that the historical maintenance records were in the possession of a third party and not the Crown, Justice Rowbotham stated (at para 120):
It seems that whether applying paragraph 48 of St-Onge Lamoureux or the bridging the gap principle from McNeil, there is a logical result: the Crown is obliged to provide as Stinchcombe disclosure the maintenance log of the approved instrument. The maintenance log is a short document. There are fewer than 200 approved instruments in Alberta. The task is not monumental and, as the appeal judge noted, requiring an O’Connor application in each case “would entail delay and consume significant Crown and defence resources … [which] cannot be in the interests of justice”: para 39. It may be that the maintenance logs could be maintained and updated electronically, and made available as required.
In her dissenting opinion, Justice Rowbotham did not find that all historical maintenance records constituted first party disclosure, but that the maintenance log, which summarizes all the maintenance that has been done to the approved instrument in the preceding years, is relevant and required so that an accused person may try to rebut the presumption of accuracy contained in section 258 of the Code.
Where To From Here?
Based on Justice Rowbotham’s dissenting opinion, there will be an appeal as of right for Mr. Vallentgoed, though she only allowed Mr. Gubbins’ appeal in part, and therefore it remains to be seen whether there will be an appeal to the SCC. Earlier this year, the SCC denied leave to appeal from the Ontario Court of Appeal’s decision in R. v. Jackson, 2015 ONCA 832 (CanLII), which dealt with the same issue of disclosure of maintenance records of an approved instrument in Ontario. The Ontario Court of Appeal rejected Mr. Jackson’s appeal for similar reasons as the majority used in Vallentgoed. On June 30, 2016, the SCC dismissed Mr. Jackson’s application for leave to appeal with no reasons given: David A. Jackson v. Her Majesty the Queen, et al., 2016 CanLII 41073 (SCC). It remains to be seen whether there will be an appeal to the SCC in Vallentgoed and whether the Court will flesh out what it meant in St-Onge Lamoureux regarding the relevance of various maintenance records in impaired driving cases.
This post may be cited as: Elliot Holzman “When the Courts Close One Door, They May Open Many More: Maintenance Logs and the Potential Implications of an Appeal in R v Vallentgoed” (22 December, 2016), online: ABlawg,
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By: Nigel Bankes
Case Commented On: Canada v Courtoreille, 2016 FCA 311 (Can LII)
In Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council (2010 SCC 43 (CanLII) at para 44), the Supreme Court declined to answer the question of whether legislative action might trigger the duty to consult and, where appropriate, accommodate Aboriginal groups. This question was front and centre in Canada v Courtoreille, 2016 FCA 311 (Can LII), which involved the omnibus budget bills of the Harper administration (2012). The majority (Justices de Montigny and Webb) answered (at para 3) that “legislative action is not a proper subject for an application for judicial review … and that importing the duty to consult to the legislative process offends the separation of powers doctrine and the principle of parliamentary privilege.” Justice Pelletier offered concurring reasons which are somewhat more nuanced as to the possibility of intervention in the legislative process. He would give effect to the duty to consult in a particular, and narrow set of cases, but still concludes that, in most cases, the duty to consult has no place in the legislative process.
The background is well summarized at paras 5 & 6 of the judgement:
In 2012, the Minister of Finance introduced Bill C-38, enacted as the Jobs, Growth and Long-Term Prosperity Act, 1st. Sess., 41st Parl., 2012 (assented to 29 June 2012), S.C. 2012, c. 19 and Bill C-45, enacted as the Jobs and Growth Act 2012, 1st. Sess., 41st Parl., 2012 (assented to 14 December 2012), S.C. 2012, c. 31. These two omnibus bills resulted in the repeal of the Canadian Environmental Assessment Act, S.C. 1992, c. 37; the enactment of the Canadian Environmental Assessment Act, 2012, S.C. 2012, c. 19, s. 52 (CEAA, 2012); as well as in amendments to the Fisheries Act, R.S.C. 1985, c. F-14, the Species at Risk Act, S.C. 2002, c. 29, the Canadian Environmental Protection Act, 1999, S.C. 1999, c. 33 and the Navigable Waters Protection Act, renamed the Navigation Protection Act, R.S.C. 1985, c. N-22 (NPA).
Mikisew Cree alleges that the omnibus bills reduced the types of projects that were subject to federal environmental assessment, reduced the navigable waters that required federal approval to build obstructing works on them, diminished the protection of fish habitat, and reduced the requirements to approve effects on species at risk. Since environmental assessments and other federal approval mechanisms typically allow First Nations to voice their concerns about effects on its treaty rights to hunt, fish and trap, and have those rights accommodated, the Mikisew Cree argue that this reduction in oversight may affect their treaty rights and accordingly, the Crown should have consulted with it during the development of that legislation and upon its introduction in Parliament. The Mikisew Cree sought declaratory and injunctive relief against the Crown before the Federal Court.
It bears emphasising that the Mikisew Cree First Nation (MCFN) was positioning itself to attack the preparatory steps leading up to the introduction of the legislation rather than the legislative process in Parliament.
Justice Hughes granted the application in part. This was an appeal and cross-appeal from that judgement.
The majority suggested (at para 16) that the appeal gave rise to four issues:
The majority found it unnecessary to address issues 3 & 4 since it was able to dispose of the appeal by answering the first two questions in the affirmative. In fact, the majority (at para 39) could have disposed of the appeal with its affirmative answer to the first question. Technically therefore everything after that is simply obiter. Justice Pelletier also confined his analysis to the first two questions.
Did the Judge Err in Conducting a Judicial Review of Legislative Action Contrary to the Federal Courts Act?
For the majority, the MCFN application was an application for judicial review, but as a statutory Court the Federal Court could only consider the matter if it had jurisdiction to do so under the Federal Courts Act, RSC 1985, c. C-7 (FCA). The majority was of the view that in order to establish that, MCFN had to show two things (at para 23): “First, that there be an identifiable decision or order in respect of which a remedy is sought. Second, that the impugned decision or order be made by a ‘federal board, commission or other tribunal’.”
The majority was of the view that the MCFN could not meet either of these criteria. As to the first, the majority found it difficult to identify any particular decision that was the target of MCFN’s application (or indeed any particular decision that Justice Hughes had identified) (at para 24): “It is not clear, however, what particular decisions [were being referenced]. If it is the decision to move forward with a policy initiative with a view to bringing proposed legislation to Cabinet for approval and eventually, to Parliament for adoption, it would presumably not meet the requirement for a formal decision as it would be inchoate in nature and not formally recorded.” But even if the target could be something a bit more amorphous than a decision (e.g. a ‘matter’) as suggested by s.18.1 of the FCA and some of the relevant case law, there was still the difficulty that the matter had to fall within the purview of administrative law rather than legislative action. While the majority at this point may well be trespassing into the second question, for the majority (at para 21) it was still grounded in the proposition that the Federal Court only had jurisdiction over administrative action and not legislative action. Thus (at para 26) “To the extent, therefore, that the ministers and the Governor in Council were acting in their legislative capacity in developing the two omnibus bills, as argued by the appellants, judicial review would clearly not be available.”
If there was no decision or even a relevant matter, it was equally clear to the majority that there was no ‘federal board, commission or other tribunal’. The question of whether an entity is a ‘federal board, commission or other tribunal’ turns largely on the source of that entity’s authority. If that authority (here the authority to develop and present legislation to Parliament) is sourced in federal legislation, then the entity would be amenable to judicial review. MCFN seems to have argued that in developing new legislation a Minister would be acting under the relevant departmental legislation (e.g. Department of the Environment Act, RSC 1985, c. E-10) at least with respect to the development or consultation phase of that legislation and was thus amenable to judicial review during that phase.
The majority considered that there were two main obstacles to this approach. First, as a matter of text, nowhere does the relevant departmental legislation refer to the responsibility to develop legislation for introduction to Parliament. If the Minister had such a responsibility then (at para 28) such a responsibility “flows from the Constitution itself and from our system of parliamentary democracy, and not from a delegation of powers from Parliament to the executive.” Second, the majority was obviously not persuaded that there was a clear or workable distinction between the administrative or executive elements of the development of legislation and the legislative process itself. Rather (at para 29) “the legislative process is a fluid exercise involving many players, both at the political and at the government officials level. It would be artificial to parse out the elements of a minister’s functions associated to either its executive or legislative functions for the purpose of drawing a red line between the dual roles of the members of Cabinet.” That was probably enough to dispose of the matter but the majority did go on to reference s.2(2) of the FCA suggesting (at para 32) that Justice Hughes had offered a restrictive interpretation of that section. Section 2(2) provides that: “(2) For greater certainty, the expression ‘federal board, commission or other tribunal’, as defined in subsection (1), does not include the Senate, the House of Commons, any committee or member of either House ….”.
In light of that the majority concluded as follows on the first issue (at para 38): “The source of the power that the appellant ministers exercised and which is the true object of the respondent’s complaint was … legislative in nature and derived from their status as members of Parliament. Therefore, the matter is not a proper subject for an application for judicial review under the Federal Courts Act.”
Justice Pelletier, concurring in the result, side-stepped much of the analysis under this first heading. Justice Pelletier reasoned (at paras 66 – 82) as follows: (1) MCFN’s application was largely a request for a series of declarations, (2) a declaration can be sought either by way of an action or on application, (3) an action under s.17 of the FCA is an action against the Crown and need not be against a ‘federal board commission or other tribunal’, and (4) since the Court has a broad jurisdiction to correct procedural irregularities the failure to proceed against a ‘federal board commission or other tribunal’ could not be fatal.
Did the Judge Err by Failing to Respect the Doctrine of Separation of Powers or the Principle of Parliamentary Privilege?
The majority recognized (at para 40) that “there is a clear tension in the case law between the doctrine of the separation of powers and the duty to consult”. The “separation of powers doctrine is not explicitly entrenched in the Canadian Constitution” but “courts have frequently recognized” its “normative value”. In resolving that tension in this case, the majority came down firmly in favour of the separation of powers, the sovereignty of Parliament, and the related principle that the courts cannot impose additional procedural obligations on the legislative process. This did not mean that MCFN was without a remedy and the majority mentioned three avenues of relief that might be available. Two of these avenues were extra-judicial. First, the majority suggested that Ministers of the Crown might (and perhaps should) consult as a matter of public policy. Second, First Nations like MCFN might take advantages of opportunities to participate in the legislative process such as by appearing before parliamentary committees. And third, a First Nation might attack either the resulting legislation or the subsequent statutory decisions based on that legislation. Here is what the majority had to say about that (at para 63):
To the extent that the impugned decisions directly derive from the policy choices embedded in a statute, the validity of such a statute may be called into question and consultation prior to the adoption of that statute will be a key factor in determining whether the infringement of an Aboriginal or treaty right is justified. But courts cannot and should not intervene before a statute is actually adopted. To come to the opposite conclusion would stifle parliamentary sovereignty and would cause undue delay in the legislative process. This is the very vehicle through which many reform initiatives, including those necessary for the proper development and recognition of Aboriginal rights and interests, are adopted.
As noted in the introduction, Justice Pelletier was somewhat more nuanced. He agreed that in this particular case the development of the omnibus legislation did not trigger a duty to consult because (at para 91) it was “legislation of general application whose effects are not specific to particular Aboriginal peoples or to the territories in which they have or claim an interest. The origin and development of the duty to consult does not support the view that it requires the Crown to consult with Aboriginal peoples in cases where the governmental action is aimed at the whole of the territory of Canada and all of its peoples.” In such a case “The duty must be found in the decisions by which such legislation is operationalized.” However, in comments that were clearly obiter Justice Pelletier suggested that he might see matters differently if the legislation in question was, for example, project specific approval legislation (not unknown in many Canadian jurisdictions and particularly common at one time in Newfoundland and Labrador) (at para 87):
Putting the matter another way, the duty to consult would undoubtedly be triggered by the executive’s approval of a project which adversely affected a First Nation’s interest in a given territory. Can it be said that the duty to consult would not be triggered if the same project were approved and set in motion in a special law passed for that purpose? While this is not the case we have to decide, it does highlight the point that the argument that the legislative process is indivisible, from policy development to vice-regal approval, may be problematic in other circumstances.
This idea however could not be applied more broadly for fear of paralyzing the legislative process (at para 92):
The duty to consult cannot be conceived in such a way as to render effective government impossible. Imposing a duty to consult with all Aboriginal peoples over legislation of general application would severely hamper the ability of government to act in the interests of all Canadians, both Aboriginal and non-Aboriginal. Consultation takes time and the more groups there are to be consulted, the more complex and time-consuming the consultations. At some point the ability to govern in the public interest can be overwhelmed by the need to take into account special interests.
There are three parts to these comments. The first section discusses the scope or breadth of application of the decision. The second section discusses the majority’s comments as to the three forms of recourse said to be available to indigenous communities in the absence of importing the legal duty to consult into the legislative process. The third section suggests that we need to re-imagine the relationship between the doctrine of the sovereignty of Parliament and the duty to consult in light of the goal of reconciliation.
This decision is very much a decision about the (non) application of the duty to consult in the parliamentary process (and in the provinces, the legislative assembly process); it does not speak more generally and inclusively to that category of decisions known as delegated legislative decisions, i.e. rule-making whether in the form of regulations, rules, adoption of land use plans etc. While there is conflicting authority as to whether or not the duty to consult applies to such decisions, there is little if anything in this judgement to support the view that delegated legislative decisions do not attract the duty to consult. Such decisions cannot benefit from arguments of parliamentary privilege and such decisions are in principle subject to judicial review in the ordinary course – albeit not usually on procedural grounds: see Att. Gen. of Can. v. Inuit Tapirisat et al,  2 SCR 735, 1980 CanLII 21 (SCC); Homex Realty v. Wyoming,  2 SCR 1011, 1980 CanLII 55 (SCC).
Available Recourse: Fact or Fiction?
The majority offered MCFN the consolation that it would still have some level of recourse even if it did not have a right to be consulted as part of the legislative process. But none of the options identified seem very realistic. The first two depend upon the political commitment of governments to engage rather than a legal commitment to do so and the reference to parliamentary committees seems particularly hollow (and indeed almost insulting) in relation to the Bills in question. These Bills were deliberately presented by the government of the day as omnibus bills and characterized as money bills in order to escape scrutiny by the specialized House standing committees. Furthermore, confining indigenous communities to this sort of engagement serves to categorize indigenous communities as mere stakeholders rather than communities with constitutionally protected rights. It is as if the majority had completely forgotten that it was these bills that triggered the Idle No More Movement and significant engagement of civil society across Canada. These particular applicants needed no reminder from the Court of other avenues of civic engagement.
The final recourse offered is recourse to the courts after the legislation has passed, potentially questioning the validity of the statutes or statutory amendments as an unjustifiable infringement of aboriginal or treaty rights. I think that there are several difficulties here. The first is that any indigenous community taking on this issue would face a huge evidentiary challenge which would of necessity be based on the counter factual: i.e. it would involve a comparison with what the situation would be under the previous state of the law versus the position under the impugned statutes. This will be a monumental task – far harder than proving that the cumulative effect of the Crown’s taking up activities constitutes a breach of treaty hunting rights. Second, and even more seriously, this solution is far too reactive. It contemplates breach of duty and then justification of that breach rather than a deliberative process aimed at responding to concerns (‘demonstrable integration’) and avoiding breach. The case law from R. v. Sparrow,  1 SCR 1075, 1990 CanLII 104 (SCC) to Tsilhqot’in Nation v. British Columbia, 2014 SCC 44 (CanLII), shows a welcome movement from breach and reaction towards more proactive and creative approaches that seek to avoid infringements of constitutionally protected rights. This judgement, if upheld, reverses that trend.
As a statement of the law of Canada as it stood in 1982 before the enactment of s.35 of the Constitution Act, 1982, this decision is clearly doctrinally correct. But we have moved on from the Constitution as Bagehot (quoted at para 31) knew it. The relevant questions are thus two-fold: first, is this understanding still good law, and, even if it is good law, is the decision consistent with a reading of the Constitution that is sensitive to the ideas informing the Report of the Truth and Reconciliation Commission and the need to decolonize Canadian law. Surely one must be suspicious and questioning of a decision that relies so heavily on the sovereignty of Parliament (see references at paras 12, 52, 54, 57, 59, 60, 63) at the same time as the Supreme Court instructs that the purpose of s.35 of the Constitution Act, 1982 and the duty to consult and accommodate is to bring about a reconciliation of Aboriginal peoples to the acquisition of sovereignty by the Crown: Mitchell v. M.N.R.,  1 SCR 911, 2001 SCC 33 (Can LII); Haida Nation v. British Columbia (Minister of Forests),  3 SCR 511, 2004 SCC 73 (Can LII).
As to the first question (is it still good law?) this is ultimately a question for the Supreme Court of Canada. The Court ducked the question in Rio Tinto but perhaps now the question needs an answer. The majority puts the question in terms of the conflict or tension between “the doctrine of the separation of powers” and the judicially developed duty to consult. And perhaps therein lies the difficulty. Words like ‘conflict’ or ‘tension’ suggest that these two ideas or constitutional principles are in opposition and that one must inevitably trump the other. But that is not a necessary understanding; a different understanding would suggest that the challenge is that of how to read these different parts of the Constitution together. This is pre-eminently a challenge for the Supreme Court of Canada. The Court rose to that challenge in 1990 in its Sparrow decision. There the Court quoted with approval Noel Lyon’s statement to the effect (at 1106) that s.35 “renounces the old rules of the game under which the Crown established courts of law and denied them to question sovereign claims made by the Crown”. The Court itself went on (at 1106) to “sketch the framework for an interpretation of the words ‘recognized and affirmed’.” In much the same way the challenge for the Court now is to sketch an approach to the interpretation of, and reconciliation between, the separation of powers and the duty to consult.
The principal problem with the doctrine of the separation of powers is that it simply doesn’t recognize a role for indigenous peoples; they are not comprehended in the terms legislative, judicial and executive branches of government. The Court needs to find a way to read that doctrine in a way that recognizes a role for indigenous peoples. The absence of explicit language in s.35 on this point should no more deter the Court in this interpretive exercise than it did in Sparrow. As the Court noted in Sparrow (at 1109):
There is no explicit language in the provision that authorizes this Court or any court to assess the legitimacy of any government legislation that restricts aboriginal rights. Yet, we find that the words “recognition and affirmation” incorporate the fiduciary relationship referred to earlier and so import some restraint on the exercise of sovereign power. Rights that are recognized and affirmed are not absolute. Federal legislative powers continue, including, of course, the right to legislate with respect to Indians pursuant to s. 91(24) of the Constitution Act, 1867. These powers must, however, now be read together with s. 35(1). In other words, federal power must be reconciled with federal duty and the best way to achieve that reconciliation is to demand the justification of any government regulation that infringes upon or denies aboriginal rights.
The challenge for counsel on appeal will be to sketch a vision of how it might be possible (short of amending the Constitution) to operationalize consultation obligations within the legislative process. In doing so it will be necessary to keep in mind that the Court is unlikely to be prescriptive. Past decisions (see especially Haida) make it clear that it is up to the governments to structure an appropriate consultation process that allows the Crown to discharge its obligations.
The Court of course may choose to affirm the early line of authority notwithstanding the change in the constitutional order wrought by the 1982 amendments. But even if it does, that will not let governments off the hook because they at least need to ask whether this hoary principle (what Charles Wilkinson, Crossing the Next Meridian: Land, Water, and the Future of the West (1982) might refer to as one of the “Lords of Yesterday”) is consistent with the ideas underlying the Report of the Truth and Reconciliation Commission. In this context it may be worth looking at the consultation procedures adopted in Norway in 2005 (reproduced below) as part of a political agreement between the Saami and the government of Norway. The procedures lay out a framework for consultation between state authorities and the Saami Parliament. There is no equivalent to the Saami Parliaments of the Nordic countries in Canadian law and polity and careful thought would have to be given to who might be parties to such arrangements. This would undoubtedly be difficult and perhaps divisive as some will recollect from the Charlottetown Accord negotiations, see Native Women’s Assn. of Canada v. Canada,  3 SCR 627, 1994 CanLII 27 (SCC), (where NWAC was denied a seat at the negotiations to advocate for the ongoing application of the Charter to Aboriginal governments). But it may be worth a try. The proposition that there is no duty to consult in setting the most basic of ground rules for environmental protection because it is: (1) an infringement of the privileges of Parliament (read settler state), and (2) too difficult, is inconsistent with the goal of reconciliation and it is ultimately unacceptable.
In addition to considering the parties to the arrangements it will also be necessary to consider the scope of such arrangements. The guidelines from Norway suggest that while “The consultation procedures apply in matters that may affect Sami interests directly”, “[m]atters which are of a general nature, and are assumed to affect the society as a whole shall in principle not be subject to consultations”. This perhaps echoes, at some level, the distinction that Justice Pelletier makes in his judgement; but in thinking about the appropriate test we should not forget that apparently neutral rules of general application may have a disproportionately disadvantageous effect on indigenous communities: Dick v R,  2 SCR 309, 1985 CanLII 80 (SCC).
Thanks to my colleagues Jennifer Koshan, Shaun Fluker and Martin Olszynski for their comments on an earlier draft.
Published under: Stoltenberg’s 2nd Government
As an indigenous people, the Sami have the right to be consulted in matters that may affect them directly. In order to ensure that work on matters that may directly affect the Sami is carried out in a satisfactory manner, the Government and the Sami Parliament agree that consultations between State authorities and the Sami Parliament shall be conducted in accordance to the annexed procedural guidelines.As an indigenous people, the Sami have the right to be consulted in matters that may affect them directly. In order to ensure that work on matters that may directly affect the Sami is carried out in a satisfactory manner, the Government and the Sami Parliament agree that consultations between State authorities and the Sami Parliament shall be conducted in accordance to the annexed procedural guidelines. Oslo, 11 May 2005 Erna Solberg
1. The Objective
The objective of the procedures for consultations is to:
2. The Scope
4. Public disclosure
5. Regular meetings
6. General provisions concerning the consultation procedures
8. The need for studies/knowledge base
9. Consultations with other affected Sami entities
This post may be cited as: Nigel Bankes “The Duty to Consult and the Legislative Process: But What About Reconciliation?” (21 December, 2016), online: ABlawg,
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Provisions Commented on: Sections 83.02, 83.03 and 83.04, Criminal Code, RSC 1985, c C-46
Editor’s Note: This is the third in a series of three posts on Reviewing Canada’s National Security Framework.
This law reform proposal is focused on the “Financing of Terrorism” provisions in the Criminal Code of Canada, RSC 1985, c C-46. The government is currently engaged in public consultations and substantive review of the controversial aspects of Bill C-51, the Anti-terrorism Act, 2015. The purpose of this post is to consider the structural problems within the Criminal Code and the current anti-terrorism financing regime, discuss the apparent shortcomings in bringing prosecutions under this regime and provide recommendations to improve the efficacy of these provisions.
The particular provisions of the Criminal Code which prohibit terrorism financing – sections 83.02, 83.03 and 83.04 – were neither enacted nor varied by Bill C-51. These provisions came into force as part of the Anti-terrorism Act, SC 2001, c 41, in response to the terrorist attacks of September 11, 2001 and the following UN Resolution 1373 on the financing of terrorist acts. Despite the fact that the provisions are not anchored to Bill C-51, it is still a good opportunity to revisit these provisions and restructure this part of the Code.
Why the Need to Review Terrorist Financing Laws?
The financing of terrorist organizations and terrorist activities is foundational to the development of terrorism as a viable pursuit. With access to money, terrorists’ organizations can provide support and training to recruits, provide safe houses and execute attacks. Restricting the flow of money into terrorist organizations is arguably one of the most effective counter-terrorism measures, providing that the state can effectively do so. The recruiting, training, communication resources and support leading up to a terrorist attack costs terrorist groups money. Terrorist attacks have been questionably labelled “inexpensive” when you do not calculate those external costs (see Shima D. Keene, Threat Finance: Disconnecting the Lifeline of Organised Crime and Terrorism (Burlington: Gower Publishing Company, 2012) at 96).
Attacks therefore become more difficult to plan and execute when resources are limited and monitored appropriately by the state.
Further to the government’s desire to review and address Bill C-51, there are other political aspects which indicate an interest in this issue:
Terrorist organizations are often compared to other organized criminal groups, such as mobs and gangs. But the financing of terrorism is different from traditional crimes. Terrorists collect money and property and use it in order to execute their crimes, but the crime itself yields no personal benefit. Traditional crimes executed by other organized criminal groups, such as fraud or the sale of drugs, results in ‘proceeds of crime’ whereby the purpose of the crime is to obtain money. Historically, Canada has not prosecuted the accumulation of money unless the money was obtained by criminal means. It is now our political and international obligation through UN Resolution 1373 to have criminalization specific to the funding of terrorism. This key difference in the crime requires specific criminal provisions in the Criminal Code, which address the accumulation of materials to support tactical terrorist activities.
Unfortunately, prosecutions have been limited in regards to terrorism financing. The current Criminal Code provisions which prohibit financing of terrorists, terrorist groups or terrorist activities are ineffective and are in part unconstitutional. If we can change these provisions so that our police and investigative services can effectively intercept funds going to terrorist groups, it affects the ability of the group to recruit and radicalize individuals and prevents them from being able to plan, prepare and execute terrorist attacks.
Jurisprudence in Canada
The limited history of jurisprudence in Canada is indicative of an issue with the current anti-terrorism financing regime. This is due to a plethora of issues, from jurisdictional problems with tracking money, to lack of resources, oversight and investigative capabilities, to a burdensome amount of financial information to review.
In the fifteen years since the “Financing of Terrorism” section of the Criminal Code was established, there have been two successful terrorism financing cases:
R v Khawaja, 2012 SCC 69 (CanLII), A Canadian Muslim became associated with a terrorist cell in the United Kingdom and provided financial support, inter alia, for their activities. Convicted at trial under section 83.03(a) in 2009.
R v Thambaithurai, 2011 BCCA 137 (CanLII), A Canadian of Tamil (Sri Lankan) origin was fundraising and collecting money for the World Tamil Movement that was destined for the Liberation Tigers of Tamil Eelam (a “listed entity”, part of the definition of “terrorist group” in section 83.01). Plead guilty to an offense under section 83.03(b) in 2010.
After review of the provisions and the case law, we have identified two key areas of concern in particular which contribute to a poor prosecution record in Canada for terrorism financing.
(1) Investigations by FINTRAC
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is the financial intelligence unit in Canada responsible for investigating, inter alia, terrorism financing. FINTRAC reports disclosing 287 cases related to terrorist financing between 2007 and 2011, increasing regularly to 337 disclosures in the 2014-2015 year according to their 2015 Annual Report. Although FINTRAC is increasing their efforts to track funds and disclose concerning financial details, the results of these efforts seem to be non-existent or at best simply difficult to discern due to lack of transparency (see Vassy Kapelos, Why so few terror financing charges and convictions? Good luck finding out). Despite vast amounts of investigative detail, Canada’s investigative structure through FINTRAC has not yielded any traceable, successful prosecutions. The lack of prosecutions is key, as that is one way for the public to be able to measure outcomes of FINTRAC’s mostly secretive work. Criminal prosecution is also often relied upon as deterrence mechanism (see Government of Canada, Mandatory Minimum Penalties: Their Effects on Crime Sentencing Disparities, and Justice System Expenditure), which is obviously unable to work if any interception by FINTRAC is of a secretive nature. Of the two cases listed above, it appears neither had investigative material sourced from FINTRAC. And it is not possible to ascertain whether any other benefit has arisen from these disclosures.
FINTRAC and police services work in close cooperation, but that close cooperation should be working to ensure disclosures are resulting in charges that can be prosecuted. There should be more transparency and collaboration between these institutions so we – the public – can identify how these investigations are contributing to Canadian security, and so that we can ensure that our government is addressing the crime of terrorist financing as a foundational issue to all terrorism activities. These details should also be used to validate the ongoing work of FINTRAC, who – for at least the purposes of this review – has shown to be of no evidentiary value.
(2) Drafting Language of the Criminal Code Provisions
The main criticisms of the language of sections 83.02 to 83.04 is that they are ineffective, lacking clarity, duplicitous or redundant, and partially unconstitutional, all of which arguably contribute to how rarely they are used. In their current form they create hurdles for police and investigative bodies to be able to bring charges that can be prosecuted. The text of these provisions is as follows:
Providing or collecting property for certain activities
83.02 Every one who, directly or indirectly, wilfully and without lawful justification or excuse, provides or collects property intending that it be used or knowing that it will be used, in whole or in part, in order to carry out
(a) an act or omission that constitutes an offence referred to in subparagraphs (a)(i) to (ix) of the definition of terrorist activity in subsection 83.01(1), or
(b) any other act or omission intended to cause death or serious bodily harm to a civilian or to any other person not taking an active part in the hostilities in a situation of armed conflict, if the purpose of that act or omission, by its nature or context, is to intimidate the public, or to compel a government or an international organization to do or refrain from doing any act,
is guilty of an indictable offence and is liable to imprisonment for a term of not more than 10 years.
Providing, making available, etc., property or services for terrorist purposes
83.03 Every one who, directly or indirectly, collects property, provides or invites a person to provide, or makes available property or financial or other related services
(a) intending that they be used, or knowing that they will be used, in whole or in part, for the purpose of facilitating or carrying out any terrorist activity, or for the purpose of benefiting any person who is facilitating or carrying out such an activity, or
(b) knowing that, in whole or part, they will be used by or will benefit a terrorist group,
is guilty of an indictable offence and is liable to imprisonment for a term of not more than 10 years.
Using or possessing property for terrorist purposes
83.04 Every one who
(a) uses property, directly or indirectly, in whole or in part, for the purpose of facilitating or carrying out a terrorist activity, or
(b) possesses property intending that it be used or knowing that it will be used, directly or indirectly, in whole or in part, for the purpose of facilitating or carrying out a terrorist activity,
is guilty of an indictable offence and is liable to imprisonment for a term of not more than 10 years.
Section 83.03(b) of the Criminal Code
Key to the discussion of the modernization of the Criminal Code and the review of anti-terrorism laws is a consideration of the definition of “terrorist group”. “Terrorist group” is an essential element of the section 83.03(b) offense and is defined in section 83.01(1). Terrorist group includes in its definition “a listed entity”. The listing of an entity means that the entity is regarded as a terrorist group.
The process of how a group becomes a listed entity is explained in section 83.05. In theory, deeming an entity to be a terrorist group through the listing process simplifies investigations and prosecutions under section 83.03 because the prosecutor does not need to independently prove that the individual or group is a terrorist group. However, currently listings are not required to be proven on a beyond a reasonable doubt standard. The standard to have an entity listed is “reasonable ground to believe”. This is a much lower standard than the standard for criminal conviction and yet is being applied to an essential element of terrorist offences to seek criminal convictions, thereby sidestepping the high standard of proof that would otherwise be required.
The process for listing also has no procedural requirement to notify the group or individual, and as a result they also have no opportunity to respond. In the September 2016 Green Paper on National Security, the Government defended its approach to listing, maintaining that the secrecy involved in the listing process prevents the entity from removing its Canadian assets from Canada before they are frozen by the listing (at 48). This is also problematic, as it bristles against constitutional rights to liberty and the potential for infringement of section 7 Charter rights (see Craig Forcese & Kent Roach, “Yesterday’s Law: Terrorist Group Listing in Canada” (2016) WP2016-34 Social Science Research Network 17). To mitigate potential impacts of the listing process on the Charter rights of individuals and groups, the government permits the listed entity to apply to be de-listed. In the event that the de-listing application is refused, the listed entity may seek judicial review. This redemption is impractical and disproportional, and harks of guilty until proven innocent.
The Green Paper seemed to indicate that the government does not view a serious issue with the listing of terrorist entities (at 48). Canada can continue to risk an unconstitutional finding by the courts and rely on the listing to streamline prosecutions and strengthen other Acts outside of the Criminal Code, but including the “terrorist group” term in the “Financing of Terrorism” provision leaves this area of the Code at greater risk in an area already fraught with failure. In the present era when Canada is under scrutiny for unnecessarily curtaining civil liberties under Bill C-51, continued commitment to the listing of entities will likely create ongoing criticisms of the government in addition to the prosecutorial issues.
To ensure a better chance of success with prosecutions, the unconstitutional elements of section 83.03(b) should be removed. However, simply removing the term “terrorist group” from this one section does not address the ramifications a wrongfully listed group would face once their name has been tarnished by the listing, and does not adequately protect Charter rights elsewhere.
We expect that the government will be very hesitant to remove the listing of terrorist entities, but there is nothing in our current jurisprudence that shows we should keep the listing, especially within the terrorism financing provisions. In the Thamabaithurai terrorist financing case, the funds were going to a listed entity, but Thambaithurai plead guilty – there was no streamlining of the prosecution and likely the Tamil Tigers would have been admitted in the Agreed Statement of Facts as a terrorist group if that was a required element. Similarly, in Khawaja, the prosecutor did not rely on the listed entity option either. Certainly, it cannot be argued that it is a high burden on the Crown to prove that established terrorist groups are actually terrorist groups. And logically, most of the financial dealings will be with third parties that are unlisted as it was in Thambaithurai with the World Tamil Organization. Generally, in all of the 26 terrorism prosecutions to date in Canada, only six have relied on listings (Forcese & Roach, “Yesterday’s Law” at 8). This means that the listings are used rarely and do not provide a great strength to our prosecution service from an efficiency standpoint, and the prosecutors are relying on a low threshold of proof to prove their case which is contrary to our rule of law and constitution. There is not a strong argument for keeping the listings and a very worrisome constitutional question to answer if reliance continues.
Section 83.02 of the Criminal Code
Section 83.02 includes a higher mens rea requirement of specific intent in the chapeau of the provision, which increases the burden on the Crown:
83.02 Every one who, directly or indirectly, wilfully and without lawful justification or excuse, provides or collects property intending that it be used or knowing that it will be used, in whole or in part, in order to carry out…
This includes two mens rea or mental element components – that the accused “willfully” provided the property and that the accused knew it was to be used for a terrorist activity, etc. The issue of knowing how the property would be used (also found in sections 83.03 and 83.04) has been identified in American jurisprudence as an obstacle to prosecuting terrorism financing provisions. There have been cases in the United States where courts have interpreted statutory language that is very similar to ours to mean that the provision of property had to be given with a specific intent to facilitate a terrorist activity (i.e. “in order to carry out”). It has been recommended by scholars on the subject that the language be amended so that “the government is not required to prove that the defendant intended to further the aims of a foreign terrorist organization by the provision of material support” (see Jimmy Gurule, Unfunding Terror: The Legal Response to the Financing of Global Terrorism (Massachusetts: Edward Elgar Publishing, Inc, 2008) at 387). This does not mean that terrorism financing must be a strict liability offense, but restructuring the language to ensure courts do not interpret a higher level of intent than what the legislature really intends to be the threshold.
If it is easier to prove the mens rea element of the offense, it is more likely that we will be able to bring more successful prosecutions to court. It could also strengthen the bargaining power of the police and investigative bodies when disrupting financing activities, even if they are not seeking a prosecution, since the risk of a successful prosecution will be greater. Further, the mens rea component is different and of a higher level in section 83.02 than the following two sections, meaning that it would be foolish to charge under section 83.02 where the burden is greater on the prosecutor. There seems to be no reason to create this distinction. The provisions should thus be drafted to be more consistent in the mens rea component.
Section 83.03 of the Criminal Code
The final issue with the current terrorist financing provisions is the duplicity surrounding three supposedly discrete offenses. Besides the difference in mens rea between sections 83.02 and 83.03, these provisions would seem to capture the same criminal activity (notwithstanding the inverse of “provide” and “collect” between the two sections). Consider you are a terrorist and have property available for use for your terrorist cell. Should the Crown proceed under section 83.03, which is collecting/providing property, or under section 83.04, which is using/possessing property? We assume they will not proceed under 83.02 due to the higher mens rea burden, but likely it would be difficult and confusing and require judicial acrobatics to determine whether or not the activity is captured by the criminal offense of providing or using the property. Consideration should also be made as to whether you could convict someone under both provisions for likely the same activity and whether this would an issue of “double jeopardy”, contrary to section 11 of the Charter. The confusion and redundancy of these provisions do not help prosecutions. Certainly there is a counter argument here that these provisions capture discrete activities, but the fact that it is questionable provides doubt and confusion in an area already fraught with prosecutorial hurdles. Clarity surrounding these charges is required so that prosecutions can be clear and linear.
These provisions should be re-drafted to maximize the likelihood of prosecutorial success.
The Standing Committee on Finance, under the previous Conservative government, released a review of Terrorist Financing in Canada and Abroad: Needed Federal Actions in June 2015. That committee review yielded 15 recommendations. In coordination with our above analysis, we would recommend that the new Liberal government consider many of these recommendations. Particularly, we find it important to continue working on strengthening the terrorism financing prosecutorial process from investigation to conviction, acknowledging that terrorism financing is a serious concern in our society. Further to the recommendations provided, we believe it is essential to create new criminal provisions which give police the ability to lay charges against individuals who have been investigated and disclosed by FINTRAC. Key to success is a full review by government of FINTRAC’s service to assist them in making disclosures which can be prosecuted, removing the unconstitutional listing of entities, creating a consolidated terrorism financing provision which has a reasonable level of mens rea to capture the offense, is consistent in its use of language and is constitutional. An effective anti-terrorism financing regime requires an ability to enforce laws and collect and share real-time intelligence evidence (see Anne L. Clunan, “US and International Responses to Terrorist Financing” in Jeanne K. Girald and Harold A. Trinkunas eds, Terrorism Financing and State Responses (California: Stanford University Press, 2007) at 261). This is something for Canada to strive for in creating new laws to combat terrorism financing but certainly not where we stand today.
This post may be cited as: Hayleigh Cudmore, Elliot Holzman, Andrea Mannell & Sarah Miller “Anti-Terrorism Law Reform: Required Changes to the Terrorism Financing Provisions” (12 December, 2016), online: ABlawg,
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Editor’s Note: This is the second in a series of three posts on Reviewing Canada’s National Security Framework.
A recent Federal Court ruling, which has been referred to in the media as the “Metadata Case”, has renewed questions about the secrecy of judicial warrants granted to the Canadian Security Intelligence Service (CSIS) as well as CSIS’s duty of candour to the Court (see In the Matter of an Application by [REDACTED] for Warrants Pursuant to Sections 12 and 21 of the Canadian Security Intelligence Act, RSC 1985, c C-23 and In the Presence of the Attorney General and Amici and In the Matter of [REDACTED] Threat-Related Activities,(2016) FC 1105). This post will discuss the specific difference between review and oversight in Canadian national security law, provide an overview of recent Federal Court decisions related to CSIS judicial warrants, and look to future options related to CSIS judicial warrants.
In this post, we suggest that a robust system of real-time operational oversight is needed throughout Canada’s national security agencies, including CSIS, in order to improve the coordination and effectiveness of these agencies and to ensure the protection of citizens’ civil liberties. Particularly, we will be focusing on the oversight needed in the CSIS judicial warrant architecture. We propose the return of the Office of the Inspector General – which was eliminated in 2012 – that would act as an active, expert, and full-time oversight body over CSIS and handle real time oversight of judicial warrants. We also suggest the introduction of a special advocate regime within the judicial warrant process to act for the targets of CSIS warrants.
Distinction between “Review” and “Oversight
The terms “review” and “oversight” are often used interchangeably in the context of Canadian national security. However, these terms refer to two fundamentally different processes. Review is a retroactive check by an independent body on whether the agency in question carried out its functions in accordance with the law. Oversight is real-time operational control providing coordination of security and intelligence services. Canada has traditionally focused on review with agencies like the Security Intelligence Review Committee (SIRC) to provide after the fact review of intelligence activities.
Background of CSIS Judicial Warrants
Canada’s primary intelligence service, CSIS, is empowered under s 12 of the Canadian Security Intelligence Service Act, RSC 1985, c C-23 (the CSIS Act), to “collect, by investigation or otherwise, to the extent that it is strictly necessary, and analyse and retain information and intelligence respecting activities that may on reasonable grounds be suspected of constituting threats to the security of Canada….” Under s 21 of the CSIS Act, CSIS may seek a warrant from the Federal Court where it “believes, on reasonable grounds, that a warrant under this section is required to enable the Service to investigate a threat to the security of Canada.”
CSIS warrants are adjudicated in secret, with only the governmental body being represented. The target of the warrant will not only likely never know that they were the target of such a warrant, but they will also have no one advocating for their rights or for any limitations to authorized breaches of their privacy. Due to the secret nature of this process, there is not much known about the manner in which CSIS warrants operate.
Bill C-51, the Anti-terrorism Act, 2015, introduced an additional provision to the CSIS Act, s 12.1(3), which allows the authorization of Charter breaches by obtaining a judicial warrant. The section provides as follows:
The Service shall not take measures to reduce a threat to the security of Canada if those measures will contravene a right or freedom guaranteed by the Canadian Charter of Rights and Freedoms or will be contrary to other Canadian law, unless the Service is authorized to take them by a warrant issued under section 21.1.
This power is unprecedented because no other government body has ever been granted powers to obtain pre-authorization to infringe upon the privacy and Charter rights of citizens.
The issue in the Metadata Case stemmed from “third party information” that CSIS had been collecting relating to individuals who were currently under investigation. The judgement defines “third party information” as “information unrelated to the threat”, and noted that such information “is frequently collected through the operation of warrants” (Metadata Case at para 31). This information was stored at the Operational Data Analysis Centre (ODAC), however the Court was not informed of this storage (at paras 11, 12). This situation was reported by SIRC in its 2014-15 Report and brought about strong comments from Justice Noël about the duty of candour CSIS owes to the Court (Metadata Case at paras 86-108). In the case of Re: X (In the Matter of an application by [REDACTED] for a warrant pursuant to Sections 12 and 21 of the Canadian Security Intelligence Service Act, RSC 1985, c C-23; And In the Matter of [REDACTED], 2013 FC 1275 (Can LII) at para 118), Justice Mosely also had strong words for CSIS and their duty to the Court.
Why We Need Oversight of Judicial Warrants
It is of the utmost importance to have accountability of government organizations, and this extends to oversight for the judicial warrants that CSIS seeks. As observed in the above example, CSIS has been known to act beyond the exact specifications of their warrants by taking and retaining information that is outside the scope of what was granted to them through the warrant. Also, CSIS does not have a pristine record with respect to candour with the courts and sharing of information with SIRC.
These incidents have resulted in some criticism from both the SIRC and the courts. Implementing strong oversight mechanisms within the judicial warrant system may bring this process onto firmer grounds. One of the key issues with the judicial warrant process is its secretive nature and the tendency for CSIS to keep much of its information confidential in the interest of protecting national security information. By implementing an oversight system with unfettered access to all CSIS activities, CSIS could not only be held accountable, but there would be a better understanding of how to keep them from breaching the subsequent warrant. Having oversight would help make the system much more honest, effective, and efficient and would allow the Canadian public, other intelligence agencies, and the courts to have more confidence and trust in CSIS itself and in our intelligence organizations as a whole. This would allow CSIS to operate with less suspicion, thereby enabling them to focus more on intelligence gathering and action instead of needing to justify their every move.
As noted above, under s 12.1(3) of the CSIS Act, CSIS may contravene Charter rights in taking measures to reduce threats to the security of Canada where they obtain a warrant allowing them to do so. Under s 12.1(1) of the Act, there must be reasonable grounds to believe that “a particular activity constitutes a threat to the security of Canada”; if that threshold is met, then CSIS may take measures to reduce the threat either inside or outside of Canada. These actions are limited to those that are reasonable and proportional for the circumstances (CSIS Act, s 12.1(2)). Additionally, CSIS may not cause intentional death or bodily harm, willfully attempt to obstruct justice or violate the sexual integrity of the target of the threat disruption (CSIS Act, s 12.2).
The portion of Bill C51 adding s 12.1(3) to the CSIS Act attracted much attention in regards to the potential uses of this provision and the dangers of pre-authorizing Charter-breaching activities. While SIRC has stated that general “threat disruptions” have occurred (see SIRC Annual Report 2015-2016: Maintaining Momentum at 9), there have not been any warrant applications of this kind since the legislation’s assent in June of 2015.
The Metadata Case is an example of a successful SIRC review. However, the cost of using only a review body is that SIRC is always looking at the previous conduct of CSIS. In terms of time periods, SIRC may be looking at incidents from one week ago to one year ago, but always after the event has taken place. In the Metadata Case, it was shown that CSIS was able to collect metadata for a period of time before SIRC became aware of the unauthorized retention of data. Once the warrant is issued, the only mechanism currently in place to ensure the actions of CSIS are compliant with the warrant is SIRC, and they did not find the breech immediately but after this data had already been collected. When looking specifically at “threat disruption powers”, the warrants associated with Charter infringing activities have the potential to be problematic. This can be explored through the use of the example the government provided in the 2016 National Security Green Paper, Our Security, Our Rights (at 22):
CSIS identifies a website that has videos supporting terrorist groups and promoting extremism. The website is posted outside of Canada and contains videos on how to make explosives. CSIS applies for a threat reduction warrant through the Federal Court to modify the content related to making explosives on the website. CSIS would then “replace some of the terrorism related details with misinformation that will make the devices fail.”
Certain questions arise from this hypothetical, such as: how specific will the modifications be? Will other aspects of the website be modified? Are contingencies in place if the individuals of interest discover the changes? Once the warrant is issued then the next opportunity to evaluate the operation would be through SIRC’s annual review of CSIS activities. This would be the best case scenario in that SIRC catches the breach, as any organization with limited resources could potentially miss something during review. While the use of threat disruption through judicial warrants hasn’t yet occurred, there remain important considerations given the recent Federal Court decisions discussed above. Future warrant applications may require a form of oversight to ensure that throughout the intelligence gathering process, CSIS maintains compliance.
SIRC has proven to be an effective review body when judged in light of the limitations of its resources and access to information. And yet, SIRC has raised concerns in recent annual reports that they encountered significant delays and problems with respect to documentation provision by CSIS (see SIRC Annual Report 2013-2014: Lifting the Shroud of Secrecy at 19). In the most recent report to the Minister, SIRC noted that the lack of a clear process for seeking legal opinions within CSIS “can create scenarios where legal clarity on certain matters is jeopardized.” (see SIRC Annual Report 2015-2016: Maintaining Momentum under Findings).
The Office of the Inspector General served as a full time watchdog that provided an “early warning system” to point out issues to the Minister in an expedited manner (see “Axing CSIS watchdog ‘huge loss,’ says former inspector general”, CBC News). The previous government scrapped the position in 2012 as part of an omnibus budget implementation bill (see Craig Forcese, Fewer Eyes On The Spies: Going Backwards On Accountability). The budget for the staff of eight only amounted to about $1 million. Compared to the potential layer of oversight this Office could provide, that is a bargain to the taxpayer – as Forcese argues, consider that the Arar Commission cost over $20 million (plus a $10 million settlement with Mr. Arar).
The reintroduction of the Inspector General’s office would certainly result in an infusion of oversight with an immediate impact. There was very little evidence to suggest that the role of the Inspector General was redundant with SIRC’s functions. The reintroduction of the Inspector General provides an opportunity to have an active, expert, and full-time oversight body that could handle real time oversight of judicial warrants. Not only could the Office of the Inspector General facilitate this potentially complex procedure, they could also serve as an ongoing oversight mechanism to preclude another Metadata fiasco, for example.
In addition to the reintroduction of the Inspector General model, it is also necessary to provide a greater system of checks and balances within the overall process of granting judicial warrants. As mentioned earlier, the current regime of granting judicial warrants is carried out in secret court hearings, where no counsel is provided to advocate for the rights of the individual target against whom the judicial warrant is being sought. In order to address the issues with the current process, a special advocate regime, similar to the one provided for by section 85 of the Immigration and Refugee Protection Act, SC 2001, c 27 should be adopted.
A special advocate regime should be adopted in order to give the individual against whom the judicial warrant is being sought, a voice through an advocate protecting their rights in the secret hearing process. This is a very important element because unlike in a criminal process, where the accused has the opportunity to go to trial and challenge the infringement of their freedoms directly, during the judicial warrant process the individual in question is unaware of their freedoms being infringed. Thus, the special advocate regime would provide that much needed voice and opportunity to challenge the infringement of the rights and freedoms of an individual who is not even aware that such a situation is taking place. This regime would also give CSIS a form of legitimate pushback during secret hearings in order to test the strength of their evidence and determine whether there is enough information to obtain a warrant against the individual in question. This barrier to obtaining a judicial warrant may also be just enough to require CSIS to think twice about the necessity of using measures that require obtaining a judicial warrant due to the pushback they will receive. Instead, they may become more inclined to consider alternative measures that can stand to achieve their intended goal without unnecessarily infringing an individual’s rights and also avoiding a potentially lengthy and unsuccessful secret hearing process. In cases where oversight or review of CSIS behavior may fall short, this potential hurdle to the process of obtaining a judicial warrant may help provide yet another interim safeguard against unauthorized or abusive use of power by CSIS.
The current government’s proposed creation of the National Security and Intelligence Committee of Parliamentarians (NSICOP) in Bill C-22 would neither conflict with the reintroduction of the Office of the Inspector General nor with the proposed special advocate regime during the judicial warrant process. NSICOP’s mandate will be to provide oversight of all 17 federal agencies involved in security issues and to give elected officials more access into the world of national security. The Inspector General fulfills the real-time operational oversight role needed in CSIS and could effectively liaise with the NSICOP to ensure an objective flow of specifically CSIS related information. In addition, the special advocate regime would be a precursory tool, which only stands to add to the oversight powers of NSICOP. Therefore, these suggestions would work in conjunction with NSICOP’s mandate to oversee the patchwork of Canadian national security organizations, specifically in dealings with CSIS.
Bill C-51 gave CSIS unprecedented powers. With great power comes great responsibility. Thus, it is now more important than ever to ensure that we have effective oversight mechanisms embedded within our national security framework so that we do not risk civil liberties in the name of national security or any other interest for that matter. If we are giving an agency the power to circumvent fundamental civil liberties, including even those protected by the Charter, then we need to make sure that CSIS does not overstep. We also need to make sure that whoever we task with this oversight role has the experience, skills, access, and power necessary to intervene and stop any acts that may violate citizens’ rights or may not actually be in the best interests of Canada’s national security. The proposed return of the Office of the Inspector General and the introduction of a special advocate regime in the judicial warrant process could help provide this salient oversight function needed to counter emerging threats to Canada while maintaining overall public confidence in not only CSIS, but all of our national security organizations.
This post may be cited as: Navreet Bal, Tim Horon, Tiana Knight, Ryan Shudra, & Jessie Sunner “Acting Out of Order: The Need for Real Time Oversight of CSIS Judicial Warrants” (19 December, 2016), online:
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PDF Version: ABlawg’s Clawbie Nominations for 2016
Like many of our colleagues at law schools across the country, this year the University of Calgary Faculty of Law has been working towards developing our response to the Calls to Action of Canada’s Truth and Reconciliation Commission. In the spirit of the Commission’s significant work, our nominations for the Clawbies this year are law blogs that have made us think deeply and creatively about reconciliation:
We encourage our readers to submit your nominations for the Clawbies by following the instructions here.
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PDF Version: ABlawg’s Year in Review, 2016
ABlawg is pleased to provide this compilation of highlights from 2016, consisting of some statistics and synthesis of our bloggers’ contributions in substantive areas of law this past year.
ABlawg has published one hundred and fifty (150) posts so far in 2016, with more to come before we take our annual holiday hiatus. The post that generated the most hits this year was Nigel Bankes’ The Termination of Power Purchase Arrangements in Alberta: What is the Legal Position and What are the Implications of Termination?, with 6071 views overall, showing the appetite for informed public policy discussions in Alberta. The runners-up were three posts on the Ghomeshi trial: Joshua Sealy-Harrington’s Mastery or Misogyny? The Ghomeshi Judgment and Sexual Assault Reform, with 5178 views overall, Jennifer Koshan’s Reflections on Week One of the Ghomeshi Trial, with 3798 views overall, and Alice Woolley’s What Ought Crown Counsel to do in Prosecuting Sexual Assault Charges? Some Post-Ghomeshi Reflections, with 2827 views overall. “Mastery or Misogyny” also established a new record for daily hits to ABlawg, with 2989 views of our site the day it was posted.
The post that spurred the most comments in 2016 was Martin Olszynski’s Northern Gateway: Federal Court of Appeal Applies Wrong CEAA Provisions and Unwittingly Affirms Regressiveness of 2012 Budget Bills. This post led to an intense debate on the proper interpretation of the Canadian Environmental Assessment Act, 2012, with Martin’s position being recently adopted by both the appellant and respondent before the Supreme Court of Canada, as discussed in his most recent comment on that post.
Alberta was the source of at least two important judgments from the Supreme Court of Canada in administrative law during 2016. The Supreme Court reversed the Alberta Court of Appeal in Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd, 2016 SCC 47 (Can LII), a case involving property tax assessment in Alberta. Shaun Fluker’s post The Supreme Court of Canada (By a Slim Majority) Confirms the Presumption of Deference in Alberta explores what the Court’s 5:4 split reveals for the presumption of deference which has dominated substantive judicial review since the Court’s 2008 decision in Dunsmuir. Alice Woolley’s The Dangers of Inconsistency (and Consistency) in Supreme Court Jurisprudence examines the Supreme Court’s decision in Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53 (CanLII), a case involving solicitor-client privilege to refuse the production of documents under freedom of information legislation, and comments on the Court’s recent struggle for coherency in its standard of review jurisprudence. Shaun’s post Does Judicial Review Apply to Decisions Made by Religious Groups? suggests the Supreme Court may soon be returning to Alberta if it grants leave to appeal in Wall v Judicial Committee of the Highwood Congregation of Jehovah’s Witnesses, 2016 ABCA 255 (CanLII), where the Court of Appeal purported to extend the scope of judicial review to decisions made by non-statutory entities who are not exercising powers sourced in legislation.
As noted in our post commemorating the National Day of Remembrance and Action on Violence Against Women on December 6, ABlawg published several posts this year dealing with gender-based violence. We are also in the midst of a series of posts on Bill C-51, the Anti-terrorism Act, in which Michael Nesbitt and his students in the Criminal Law & Policy Lab: Terrorism Law & Reform report on their submissions to the federal government’s review of Bill C-51 (see here, here and here). Erin Sheley posted on a range of criminal law topics, from the sex offender registry to animal cruelty law to jury trials. And Lisa Silver wrote a series of posts exploring what it means to be “modern” in our approach to criminal law, including commentary on the Supreme Court’s decisions in R v DLW (involving the Criminal Code’s bestiality provisions; see also Joshua Sealy-Harrington and Evan Choate’s post on that case here); R v Villaroman (involving the assessment of circumstantial evidence); and R v Anthony-Cook (involving joint sentencing submissions and the community’s sense of justice.
Constitutional / Human Rights Law
ABlawg published a number of posts in 2016 on the constitutional right to assisted dying, from Elliot Holzman’s post considering the Supreme Court’s decision granting the federal government more time to amend the Criminal Code in Carter II, to Jennifer Koshan’s posts on interim applications for judicial authorization of constitutional exemptions (here and here), and a comment on Bill C-14, An Act to amend the Criminal Code and to make related amendments to other Acts (medical assistance in dying).
We also published a number of posts dealing with freedom of expression issues, with Emily Laidlaw examining defamatory Facebook posts; Hasna Shireen considering publication bans and privacy rights, Ola Malik, Jeff Watson and Holly Wong writing about municipal regulation of hate speech, and Linda McKay-Panos exploring the application of protest rights here and here.
Natural Resources, Energy and Environmental Law
This proved to be an important and busy year in the electricity sector in Alberta. Nigel Bankes’ popular backgrounder on The Termination of Power Purchase Arrangements (PPAs) was followed up with his post on the Attorney General’s application for a declaration of invalidity with respect to the “more unprofitable” language of the so-called “Enron amendment”. November brought a flurry of changes in energy policy and energy markets which Nigel followed with posts on Bill 27, The Renewable Electricity Act, the proposal to add a capacity market to Alberta’s energy-only market, and some PPA arbitrations.
Climate change was also an area that attracted a great deal of attention from the courts and the legislatures this year. Sharon Mascher posted on the Federal Court of Appeal’s Syncrude v Canada decision (which demonstrated just how far the federal government can go with the criminal law power to regulate greenhouse gases), and Nigel Bankes provided detailed analysis of the new oil sands emissions legislation.
Martin Olszynski and Sharon Mascher joined forces to tackle the complex legal issues raised in Gitxaala Nation v Canada, 2016 FCA 187 (CanLII), dealing with the Northern Gateway pipeline approval. In his post, noted above, Martin analyzed the Federal Court of Appeal’s approach to the Canadian Environmental Assessment Act, 2012 – an approach which led to the substantive challenges brought against the Joint Review Panel’s report, and consequently the Cabinet’s determination, being dismissed. Sharon’s post focused on the Federal Court of Appeal’s reasoning in the Gitxaala decision relating to the duty to consult. This aspect of the decision is of lasting significance as it provides substantive guidance on what meaningful consultation with Aboriginal people looks like.
Evar Oshionebo contributed two posts on developments at the Alberta Court of Appeal on contract law (see here and here), and Nickie Nikolaou and Jonnette Watson Hamilton wrote several posts on property law, involving issues from adverse possession to restrictive covenants to matrimonial property rights. Nigel Bankes contributed several posts on oil and gas contracts and leases, including posts on royalty agreements, rights of first refusal, knock-for-knock mutual indemnity provisions, and a post (with LLM student Heather Lilles) on a case dealing with the gap between law and practice in an oil and gas joint venture subject to the CAPL Operating procedure. Nigel also contributed to the debate on two Queen’s Bench decisions (both of which are under appeal): the Redwater decision (dealing with the constitutionality of the AER licensee liability program (LLR)) and the GSI decision (dealing the issue of intellectual property in seismic data). The Faculty of Law also welcomed new faculty member and blogger Rudi Tscherning this year, who wrote his first post in the area of private international law on international child abduction under the Hague Convention.
This year was an important one for residential tenancy law reform in Alberta. Jonnette Watson Hamilton wrote a series of posts on deficiencies in the Residential Tenancies Dispute Resolution Service that worked to the disadvantage of tenants, starting just before the new year with Setting Aside Residential Tenancy Dispute Resolution Service Orders for Problems with Service: It Can’t Be Done, and continuing in early 2016 with For Shame: An Obvious and Fundamental Breach of Natural Justice by the Residential Tenancies Dispute Resolution Service (RTDRS) and Don’t Think Twice: The Residential Tenancies Dispute Resolution Board’s Power to Correct for Procedural Unfairness. The “For Shame” post was cited by Master Robertson in Hewitt v Barlow, 2016 ABQB 81 (CanLII). The posts also formed the basis of the inaugural project of the law school’s Public Interest Law Clinic: advocating for access to justice and procedural fairness for tenants in Alberta by suggesting needed changes to the government in April. Subsequently the government’s Legislative Review Committee decided to review the Residential Tenancy Dispute Resolution Service Regulation and the Public Interest Law Clinic participated in the consultation process in the fall of 2016.
In addition to the residential tenancies work of the Public Interest Law Clinic and the Bill C-51 posts from students in the Criminal Law & Policy Lab, Clinic and other students blogged on issues related to access to justice (see here, here, here, and here), prisoners’ rights (see here and here), and environmental law matters (see here and here). Other students contributed to ABlawg this year on work they performed as research assistants for various faculty members: Stephen Armstrong and Kristin Barham reported on their research with Anna-Maria Hubert on the right to science (here and here), and Kyle Gardiner posted on his work with Jonnette Watson Hamilton, Jennifer Koshan, and Saul Templeton on tax and equality here.
In sum, this was another productive year for ABlawg. Thanks to our readers for following us!
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Provision Commented On: Section 83.221 of the Criminal Code, RSC 1985, c C-46
Bill C-51, the Anti-terrorism Act, 2015, sailed through Parliament and received Royal Assent on the 18th of June, 2015, amidst much political debate. One of the more controversial provisions was a new advocating terrorism offence contained in what is now s 83.221 of the Criminal Code, RSC 1985, c C-46. The provision criminalizes knowingly advocating the commission of terrorism offences in general and being reckless as to whether such offences are actually carried out. This post will address the political dynamics and constitutional issues with respect to the new advocating offence and make suggestions for how the Government of Canada should move forward.
Interestingly, our group was divided on the best approach to addressing the issues with respect to the provision. Meagan and Jordan were in favour of repeal, whereas Stephen and Kiran favoured amending the provision. We present the case for both repeal and amendment below and leave it to the reader to reach their own conclusions.
The text of the provision is as follows:
83.221 (1) Every person who, by communicating statements, knowingly advocates or promotes the commission of terrorism offences in general — other than an offence under this section — while knowing that any of those offences will be committed or being reckless as to whether any of those offences may be committed, as a result of such communication, is guilty of an indictable offence and is liable to imprisonment for a term of not more than five years.
“Terrorism offence” is defined in s 2 of the Criminal Code as:
(a) an offence under any of sections 83.02 to 83.04 or 83.18 to 83.23,
(b) an indictable offence under this or any other Act of Parliament committed for the benefit of, at the direction of or in association with a terrorist group,
(c) an indictable offence under this or any other Act of Parliament where the act or omission constituting the offence also constitutes a terrorist activity, or
(d) a conspiracy or an attempt to commit, or being an accessory after the fact in relation to, or any counselling in relation to, an offence referred to in paragraph (a), (b) or (c).
The Politics of the Thing
There are important political considerations that make the repeal or the reform of the advocating offence both legally important and politically smart. The current administration has recently asked for an in-depth review of the Criminal Code with a particular focus on new counter-terrorism legislation:
We are moving forward on our commitment to repeal the problematic elements of former Bill C-51, the Anti-terrorism Act, 2015. Input from Canadians on this Act, and more broadly on Canada’s national security framework, will help inform the development of laws and policies in this important area. Our goal is to ensure the safety of Canadians, while protecting our rights and freedoms.
(See Public Safety Canada, Government of Canada launches public consultation on national security)
From a political perspective, dealing with this provision speaks to Prime Minister Trudeau’s publically announced objectives. In his Mandate Letter to the Minister of Public Safety and Emergency Preparedness and his Mandate Letter to the Minister of Justice and Attorney General, Prime Minister Trudeau wrote that a top priority for the Minister would be to:
work to repeal, […] the problematic elements of Bill C-51 and introduce new legislation that strengthens accountability with respect to national security and better balances collective security with rights and freedoms.
The Prime Minister may not specifically address the advocating offence, but he draws attention to “overly broad provisions”, a category within which s. 83.221 might easily fall. The advantages of repealing or reforming this provision are that it would clearly show that the government has listened to and taken seriously the feedback expected to be received through public consultation. It will also show the willingness of the government to make significant changes to legislation without sacrificing any of the important national security interests that brought about Bill C-51 in the first place. As before, and even since the creation of this provision, law enforcement will be able to continue to charge people under other provisions of the Criminal Code that have been successfully tested in constitutional challenges, as we discuss later.
While the advocating offence potentially creates issues with respect to the principles of fundamental justice under s 7 and freedom of religion under s 2(a), we will focus on whether the offence unjustifiably violates freedom of expression under s 2(b) of the Charter. We conclude that it does.
Violence and Freedom of Expression
Freedom of expression protects all non-violent activity intended to convey meaning (see Irwin Toy v Quebec (Attorney General),  1 SCR 927, 1989 CanLII 87 (SCC) at paras 42-43 and 54). Violence and threats of violence are excluded from the scope of s 2(b), because violence subverts the values underpinning freedom of expression, namely truth-seeking, self-fulfillment and political discourse (see R v Khawaja, 2012 SCC 69 (CanLII) at para 71). The actus reus of the advocating offence is communicating statements which advocate or promote the commission of terrorism offences in general. This is inherently expressive. The question is whether advocating terrorism offences in general constitutes violence or threats of violence such that the expression is excluded from the scope of s 2(b).
In R v Khawaja, the Supreme Court of Canada held that counselling, conspiracy, and being an accessory in respect of a terrorist activity is violent expression excluded from the scope of s. 2(b) (at para 71). Counselling violence is not far enough removed from violence itself to be included in the scope of free expression. However, counselling a terrorist activity is much different than advocating in general the commission of a terrorism offence.
The advocating offence criminalizes expression which can be multiple levels removed from the underlying violence of a terrorist act. For example, a terrorism offence includes counselling the commission of an indictable offence which also constitutes a terrorist activity. A terrorist activity includes counselling or threatening to commit a violent terrorist act (see Criminal Code, s 83.01(1), “terrorist activity”). The advocating offence therefore criminalizes advocating in general that a second person counsel a third person to attempt a violent act. The person criminalized is several steps removed from actual violence. Multiple such examples can be dreamt up (see Craig Forcese and Kent Roach, False Security: The Radicalization of Canadian Anti-Terrorism (Toronto: Irwin Law, 2015) at 331).
Further, a mens rea of mere recklessness as to whether a terrorism offence is actually carried out as a result of the statement means the speaker does not need to intend for any violence to occur. Additionally, the phrase “in general” is meant to cover a statement which counsels the commission of an offence, but is unspecific as to exactly what type of violent act should be committed, or is unspecific as to the who, when or where of the offence (see Government of Canada, Our Security, Our Rights: National Security Green Paper, 2016 at 42; Department of Justice Canada, Criminalizing the Advocacy or Promotion of Terrorism Offences in General). This lack of specificity and intention further distances the expression caught by the provision from violence.
Expression that is so far removed from actual violence is unlikely to be excluded from the protected scope of free expression, because that kind of expression borders on being merely upsetting or undesirable speech instead of truly violent expression. Even speech that exposes people to hatred is constitutionally protected expression (see R v Keegstra,  3 SCR 697, 1990 CanLII 24 (SCC); Saskatchewan (Human Rights Commission) v Whatcott, 2013 SCC 11 (CanLII)). To conclude, the advocating offence criminalizes non-violent expression. This is clearly caught within the purpose and/or effect of the provision and therefore prima facie infringes freedom of expression and must be justified under s 1 of the Charter.
A Reasonable Limit?
Without conceding the issues of vagueness, rational connection or minimal impairment, this section will focus on whether the advocating offence strikes a proportionate balance between its deleterious and salutary effects, as required by R v Oakes,  1 SCR 103, 1986 CanLII 46 (SCC).
The advocating offence is a recent addition to the pre-existing Criminal Code framework addressing various kinds of violent speech. As such, the proportionality inquiry is properly aimed at the marginal benefit of this new offence as against its deleterious impact on individuals and society (see generally the majority’s approach in R v KRJ, 2016 SCC 31 (CanLII)). The advocating offence addresses a gap in the criminal law by going after people who incite terrorist violence, but cleverly parse their words to avoid penal liability (see Green Paper at 42). However, beyond articulating the existence of a gap in the law, the government has not put forward any compelling reason for why the gap ought to be closed. Evidence must be put forward as to the pressing need to close the gap. Unless and until this occurs, the marginal benefit of the provision is merely speculative.
The criminalization of non-violent expression that is not even intended to encourage violence is antithetical to the very idea of a free and democratic society. The breadth of speech covered by the advocating offence has the ability to significantly hinder free-wheeling debate on public issues, especially on matters of foreign policy, religious belief and injustice. To the extent that this is the case, the values underpinning free expression – political discourse, human flourishing, and truth-seeking – are undermined. The deleterious effects on society are substantial.
As the law presently stands, we are of the view that the deleterious effects of the advocating offence far outweigh its salutary ones. The offence is unconstitutional.
The Case for Repeal
In its current form, the advocating offence is counter-productive due to its chilling effect on free expression. It undermines the effectiveness of counter-radicalization efforts by pushing radicalized individuals monitored and subject to these programs underground. In addition, if those convicted of this offense are jailed, further radicalization of a person who falls on the outskirts of this provision could easily occur in a prison setting (see Forcese and Roach, False Security at 348).
The type of speech prohibited by s 83.221 is encompassed by existing provisions. Hate propaganda is already prohibited under s 319(2) of the Criminal Code and s 319(2) survived Charter challenge in Keegstra. Section 83.18 of the Code was challenged in Khawaja, and the Supreme Court in 2012 found that the provision targeted acts or threats of violence, or acts connected with violence, which were not protected by s 2(b). Sections 83.18, 319(2), 264.1 (uttering threats) as well as s 83.19 (facilitating a terrorist activity), and others, could all theoretically be applied to the same type of speech captured by the advocating offence, and most of these provisions are tried and true. The case for keeping the advocating provision is difficult bearing in mind that the benefits are speculative and the harm to freedom of expression is quite clear.
Further to this argument, the use of this kind of provision could be directly counter-productive to Canada’s stated counter violent extremism strategy (CVE). There is clearly a “need for a demand-reduction strategy: a holistic and evidence-based multidisciplinary approach towards CVE. Unfortunately, the new and unnecessary speech offence in Bill C-51 could be a barrier to such a strategy.” (Forcese and Roach, False Security at 357) Empirical data shows that the internet radicalization this provision was aimed at is often a ‘primer’ to radicalization as opposed to a method of radicalization in itself. Radicalization more often occurs in situations where the ‘radicalizer’ is a close friend or personal relation of the ‘radicalizee’; these people are unlikely to be stopped by a provision such as this one (Craig Forcese and Kent Roach “Criminalizing Terrorist Babble: Canada’s Dubious New Terrorist Speech Crime” (2015) 53 Alta L Review 35 at 43).
Further, jailing people who have been ‘primed’ as opposed to truly radicalized can lead to further radicalization in the highly emotionally charged and societally isolated prison environment. In speaking to the goal of this type of provision, it might be better to use less intrusive methods to deal with online material, such as working with private industry to make offending material harder to find for the average person, which allows for monitoring and collecting of data which might then be used to incite further criminal prosecution or quash terrorist plots (“Criminalizing Terrorist Babble” at 45). As Forcese and Roach explain:
…an open source electronic bread crumb trail may be the best means of unraveling conspiracies and of detecting ‘lone wolf’ terrorists in the making, and may provide both intelligence and evidence for further state action. (at 57)
The Case for an Amendment
The best way to achieve a better balance between ensuring public safety and safeguarding constitutionally protected rights is to amend the advocacy provision instead of repealing it. This provision is currently overbroad and poses potential restrictions on the freedom of expression. An amendment could clean up the constitutional problems highlighted above, while maintaining law enforcement’s ability to employ this provision.
Human rights and civil liberties groups have particularly criticized this provision for being unduly restrictive of free speech (see Amnesty International Canada, Insecurity and Human Rights: Concerns and Recommendations with Respect to Bill C-51, The Anti-Terrorism Act, 2015; British Columbia Civil Liberties Association, Submission to the Standing Committee on National Security and Defence; Canadian Civil Liberties Association, Submission to the Standing Committee on Public Safety and National Security regarding Bill C-51). This offence has value in that it addresses a gap in the criminal law relating to the general encouragement of violent terrorism offences, and it has a deterring and denunciatory effect on the promotion of terrorist views. Nevertheless, these public criticisms have merit and should form the basis for amendments.
There are three main elements of this provision that are problematic (1) Advocating or promoting; (2) Terrorism offences in general; and (3) Recklessness.
There is an important difference between simply advocating or promoting something that may be harmful, and actually inciting a harmful result. We believe that the latter should be criminalized and the former remain protected under our constitutional freedom of expression. To criminalize mere advocacy or promotion would be problematic because of its chilling effects on speech, especially for media reporting. The media has a professional responsibility to inform the public about terrorist threats and activities (see Toby Mendel, Organization for Security and Co-operation in Europe, Legal Analysis of the Proposed Bill C-51, the Canadian Anti-terrorism Act, 2015 at 2). However, such forms of reporting could be viewed as “advocating or promoting” depending on how one might view it. Therefore, the provision should be narrowed to incitements of terrorism only; otherwise there is a real risk that individuals not associated with terrorism may be captured under this provision.
Terrorism offences are already defined in the Criminal Code as being fairly narrow, but adding the phrase “in general” creates great uncertainty for how this provision will be interpreted. It is unclear as to why legislators included this phrase or what impact they intended for it to have. One can only surmise that the phrase “in general” would capture a wider array of expression than prior existing terrorist provisions. There is a concern that this broader scope will drive more extremist dialogue underground, which will make it more difficult for the Canadian Security Intelligence Service (CSIS) and the Communications Security Establishment (CSE) to monitor such dialogue and identify developing threats. Additionally, CVE community outreach initiatives that engage local leaders involve a free-ranging discussion of radical views (Forcese and Roach, False Security at 341-342). This broad interpretation of the provision could potentially criminalize such discussion and undermine these preventative measures. Given these problems, we propose that the phrase “in general” be removed from s 83.221.
Recklessness is a very low mens rea requirement for an indictable offence such as this. Again, given the severity of punishment, this will create a wide chilling effect for speech. Moreover, it captures people who may indirectly contribute to the activities of a terrorist group or activity, regardless of whether any terrorist activity had been carried out. Therefore, recklessness risks criminalizing expression that is multiple levels removed from actual violence. The previous example about media reporting could fall into the category of recklessly advocating or promoting terrorism, which is surely something the government does not want to capture. Therefore, only direct and intentional incitements of terrorism should be included in the provision, not recklessness.
As it stands, s 83.221 is very unlikely to survive constitutional challenge unless amendments are made to it. Legislators cannot rely on law enforcement to properly interpret and employ these provisions if the plain word meanings are not clarified. Another way to further clarify and amend this provision could be to enumerate statutory defences similar to those found in s 318(3) on hate propaganda (see Green Paper at 45).
Based on all of these recommendations, the amended provision would read as follows:
Every person who, by communicating statements, knowingly incites the commission of terrorism offences — other than an offence under this section — while knowing that any of those offences will be committed as a result of such communication, is guilty of an indictable offence and is liable to imprisonment for a term of not more than five years.
In conclusion, this post has laid out the case for either repealing or amending the advocating offence in s 83.221 of the Criminal Code. The constitutional and political issues have been considered, and what should be clear in reading this analysis is that something must be done in order to address the problematic nature of the advocating provision.
This post may be cited as: Kiran Fatima, Meagan Poitier, Jordan Szoo & Stephen Armstrong “Curtailing Free Expression: A Barbaric Cultural Practice? A Critical Comment on Section 83.221 of the Criminal Code” (15 December, 2016), online:
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By: Michael Nesbitt
PDF Version: Reviewing Canada’s National Security Framework
This term, the University of Calgary, Faculty of Law offered for the first time a new Criminal Law & Policy Lab: Terrorism Law & Reform. The idea behind the course was, in part, to follow along with the Government of Canada’s “National Security Framework” public consultations and consider the legal, political and social issues that arose in real-time. (For more background on the Government’s public consultations and its relationship to the course, see my earlier ABlawg post).
Students were split into three groups and asked to negotiate, amongst themselves, three different areas that they thought were of the most importance to Canada’s national security framework review. Put another way, the students chose the three topics that they agreed were most ripe for review and consideration by the government. (For an overview of the course and its broader purpose, see here).
By the end of term, students were asked to produce ABlawg posts on their findings and recommendations on these three topics. The students also submitted research memoranda to the government as part of its public consultations. Today, we release the first of these three posts, Curtailing Free Expression: A Barbaric Cultural Practice? A Critical Comment on Section 83.221 of the Criminal Code.
I would like to stress the importance of the students’ hard work. These are topics that our students – young, well-informed, and passionate about the law and policy – thought most meritorious of review by the government. As the next generation of lawyers in Canada, but also just the next generation, it is vital that their voices be heard. For it is these students who will live with the consequences of our national security decisions for years to come, even while they will largely be shut out of the political and bureaucratic processes by which the decisions are made. It is for this reason that the government’s public consultations are so important and should be commended, and likewise why it is important to listen to and take seriously the opinions of our students expressed in these posts.
The students and I are pleased that through ABlawg, we can put these important interests out into the ether and contribute to the discussion on national security in Canada – a discussion that is in desperate need of more (and younger) participants. We hope you enjoy and engage!
This post may be cited as: Michael Nesbitt “Reviewing Canada’s National Security Framework” (15 December, 2016), online: ABlawg,
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By: Hasna Shireen
Case Commented On: R v Canadian Broadcasting Corporation, 2016 ABCA 372 (CanLII)
In two previous ABlawg posts (see here and here), I commented on the decisions in R v Canadian Broadcasting Corporation, 2016 ABQB 204, overturned 2016 ABCA 326 (CanLII), in which Alberta courts dealt with the issue of whether the Canadian Broadcasting Corporation (CBC) should be able to retain identifying information about a youthful homicide victim on its website. A majority of the Court of Appeal granted the Crown’s application for a mandatory injunction banning the continued publication of this material. In a follow-up decision, Mr. Justice Berger granted a Stay of Enforcement of the majority judgment pending an application for leave to appeal to the Supreme Court of Canada (see R v Canadian Broadcasting Corporation, 2016 ABCA 372 (CanLII) at para 14).
The Crown requested a publication ban and the Chambers Judge ordered a mandatory ban under s 486.4(2.2) of the Criminal Code, RSC 1985, c C-46 respecting the identity of the youthful victim. However, prior to the non-publication order being made, the CBC had posted articles to its website disclosing the identity of the young victim. The CBC declined to remove the historical postings though they agreed not to make any further postings. The Crown brought an application for contempt and for removal of the historical postings, and then brought an application for an interim mandatory injunction requiring the immediate removal of the historical postings.
The Court of Queen’s Bench of Alberta in R v Canadian Broadcasting Corporation, 2016 ABQB 204 (CanLII) (CBC QB) denied the interim mandatory injunction and allowed CBC to retain past posts with identifying information of the youthful victim on its website. The Crown appealed the denial of the interim mandatory injunction, which was granted by a majority of the Court of Appeal (2016 ABCA 326 (CanLII), (CBC CA).
CBC then made an application for a stay of execution of the interim mandatory injunction. CBC relied on the test under s 65.1(2) of the Supreme Court Act, RSC 1985, c S-26, which authorises the Court appealed from to order a stay of execution before the filing and service of an application for leave to appeal to the Supreme Court. The appellate Court may exercise this power if it is satisfied that the applicant intends to apply for leave to appeal, and delay would result in a miscarriage of justice (at para 4).
CBC advised the Court that it intended to file the leave application and had instructed its legal counsel and notified the Crown of this intent. The CBC argued that without the benefit of the stay, it was required to comply with the Court of Appeal judgment and, if ultimately successful on appeal to the Supreme Court of Canada, reposting the information would expose it to criminal liability in light of the publication ban (at para 5).
The test for a stay of a non-money judgment in an application for injunctive relief is:
Mr. Justice Berger was swayed by the consideration that irreparable harm was established if the threshold of an arguable appeal was met. He stated that if the CBC’s appeal is successful, that would amount to an arguable denial of its freedom of expression (at para 7). He also assessed the balance of convenience threshold and decided that he favoured granting the stay if irreparable harm was established (at para 8).
The Crown argued that the integrity of the administration of justice is harmed when a mandatory non-publication order is violated (at para 10, citing CBC CA at para 50). The Crown emphasized the mandatory nature of a non-publication order and focused on the majority’s conclusion that interim measures to enforce such an order can be taken without proof of harm.
Justice Berger considered the dissenting judge’s opinion at the Court of Appeal, that when the youthful victim passed away, the non-publication order was rendered trivial and the postings caused no harm. On the other hand, the Crown relied on the majority’s declaration that the Chambers Judge erred in stating that “the policy objectives of encouraging young victims to come forward are largely not present here” (at para 11, citing CBC QB at para 54).
Justice Berger noted that the arguability of the appeal was dependent on the interpretation of the phrase “published in any document or broadcast or transmitted in any way” found in s 486.4 of the Criminal Code. He also considered the majority opinion that “while either position is arguable, it cannot be said that the Crown does not have a strong prima facie case” (at para 13, citing CBC CA at para 10). However, referring to CBC QB at para 49, he also stated that whether an appeal is arguable is a low threshold, and the CBC had raised a serious question, which on its merits was neither frivolous nor vexatious (at para 13). Based on these considerations, Justice Berger decided to grant a Stay of Enforcement.
In my blog post on the Court of Appeal judgment in this case, I criticized the Court of Queen’s Bench decision because it gave priority to freedom of expression of the media over a deceased young victim’s privacy rights. One of the major purposes of a publication ban is to protect a child victim’s privacy and thereby ensure future victims will come forward with the assurance of anonymity. The Court of Appeal majority decided that the Chambers Judge erred in stating that “the policy objectives of encouraging young victims to come forward are largely not present here” as the young victim had died (CBC CA at para 11). The Chambers Judge seemed reluctant to acknowledge the privacy interests of the deceased victim and her family as a potential harm to the administration of justice. Ordering the CBC to remove the offending articles would prevent further victimization of this deceased child and her family. However, the recent Stay of Enforcement order by Justice Berger again favoured freedom of expression over the privacy interests of the deceased child’s family, and may discourage future victims from coming forward.
This post may be cited as: Hasna Shireen “Freedom of Expression Versus Privacy Rights: Stay of Enforcement of an Interim Mandatory Injunction in the Context of Publication Bans” (14 December, 2016), online: ABlawg, <http://ablawg.ca/wp-content/uploads/2016/12/Blog_HS_CBC_StayofEnforcement.pdf>
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By: Alice Woolley
Matter Commented On: Canadian Judicial Council Inquiry Committee Report Regarding Justice Robin Camp
What role should empathy have in a system of laws? What does an empathetic legal system look like? In a recent article on the Robin Camp case, Brenda Cossman raised concerns about the Canadian Judicial Council Inquiry Committee recommendation that Justice Camp be removed from the bench. She raised, in particular, the concern that removing rather than educating Justice Camp facilitates a growing “post-empathy” culture:
I worry even more about the impulse to punish in light of the recent rise of a powerful backlash against any and all equality-seeking groups. We have moved into a new postempathy era, where more people are prepared to stand defiantly and unapologetically in favour of discrimination, sexism, and racism. I worry that we dismiss the possibility of education and move to punish those who are genuinely remorseful (“For Judge ‘knees together’ Camp: Education is Power”, Globe and Mail, December 1, 2016).
I am not entirely sure what Professor Cossman meant, but I think that her point is that the absence of empathy in those who seek to remove Justice Camp encourages by example the absence of empathy in those who “stand…in favour of discrimination, sexism, and racism”. Our own insufficient empathy creates and empowers the post-empathy culture, which in turn creates the very sexism and discrimination that we seek to prevent.
Not surprisingly given my role in initiating the Camp complaint, and my publicly stated support for the outcome, I disagree with Professor Cossman’s specific position on that matter. But I am nonetheless intrigued by her analysis, and I want to explore it further. Because I certainly agree with her underlying proposition: empathy matters. Indeed, I would argue that a legal system that fails to be empathetic fails to accomplish the moral function of legality and, specifically, respect for the dignity of those governed by laws. That is, it fails as law. But that then leads to the obvious follow-up: what does empathy require of law? What does empathy mean in a legal context?
The dictionary definition of empathy is the ability to understand and share the feelings of others (here). For the purposes of law, though, I think empathy requires something a bit more specific. I think it requires accounting for a person’s personal perspective on an event or experience – i.e., how they themselves experienced or perceived it – rather than considering only an external assessment of that event or experience – i.e., how it is perceived from an independent and impartial point of view. Empathy in law requires that our external assessments of a person’s behaviour consider and account for the personal perspective.
To use a non-law example, I might externally label the behaviour of a customer at a store as rude but if I consider the customer’s personal perspective, I will account for the bad day he’d had at work, the financial troubles that he can’t seem to escape from, and the fight he just had with his girlfriend. Doing so may not make the behaviour any less rude – any independent and impartial observer would judge his conduct to have been rude – but it does see and account for the full humanity of the customer, rather than reducing him only to the observation of his rudeness. And it may shift the external assessment – at least to allow for the possibility that even if what he did that day was rude, the customer is not a rude person. To be legitimate and accurate, my external assessment must account for the personal perspective of the person being judged.
In the case of Robin Camp, this sort of empathy requires considering what led him to act as he did during the Wagar trial, what experiences in his life might have explained his attitude to the complainant and the accused. It requires accounting for the ignorance or lack of education that may explain his antipathy to the law and his reliance on discredited myths and stereotypes. It also requires recognizing that Robin Camp is not only what he did during the Wagar trial. He is a human being, with a wife and a family who supported him during the proceedings, and professional colleagues who did so as well. He was said during the Inquiry Committee proceedings to have been an effective lawyer with a commitment to social justice. Empathy also requires seeing and appreciating the personal consequences to him not only of the potential removal from the bench, but from the international media storm that his conduct has generated.
The law systemically accounts for the personal perspective, most obviously in the procedures it affords to people whose conduct the law has put at issue. The information about Robin Camp in the prior paragraph arises from the testimony and evidence he presented during the CJC Inquiry Committee hearing. This is also true in criminal trials, particularly in relation to sentencing, where we systemically take into account factors that may shade or even shift how we assess or judge the person whose conduct is at issue. The system is structured to ensure that external assessments only occur after the personal context has been taken into account.
In law empathy also requires that we test accounts that other people or the state give about a person’s behaviour, particularly where those accounts are not independent or impartial. The law does not allow claims to be made about a party to a legal proceeding unless those claims can be proven in some way; it preserves respect for personal perspective by requiring that claims from outside that perspective be proven before they are treated as true. In the criminal context, we go so far as to assume that the external claims are false – that is, we presume the innocence of the accused – until those claims are established as true. Ironically enough, the cross-examination of witnesses in a criminal case, including a complainant in a sexual assault case, expresses this type of empathy. We recognize the personal perspective of an accused person by choosing not to believe accusations brought against that person until they have been properly proved, including by testing them through cross-examination.
The law requires that cross-examination be respectful and not abusive. A lawyer cannot demean or degrade a witness, because doing so would deny the personhood and dignity of a witness in order to preserve the personhood of an accused, and our system’s rules and procedures – our constitution – preclude that trade-off. But within that boundary, when a lawyer vigorously but respectfully cross-examines a witness, however difficult and even horrible that cross-examination is for the witness subject to it, she preserves the empathy necessary for the functioning of the legal system; she does not contravene or undermine it.
Empathy in law allows for the personal perspective to shift the external assessment of a person’s conduct as wrongful. We allow reasonable but mistaken belief in consent as a defence to a charge of sexual assault; the defence has an external element, in that it must be plausible when viewed from another point of view (the mistaken belief must be reasonable and the accused must have taken steps to ascertain consent). But it rests significantly on the personal perspective of the accused – because the defence necessarily contemplates that, if the conditions of the defence are satisfied, the accused may be acquitted based on his own erroneous belief. The mistaken personal belief precludes the external judgment that the accused committed sexual assault, even though the accused did in fact have unconsented to sexual contact with the victim.
There are, though, things that empathy in law does not require. Most of the time, a person’s own perspective does not alter how the law assesses the person’s behaviour. An unreasonable mistaken belief in consent, no matter how deeply held or believed, will not prevent an accused’s conviction for sexual assault. A person who deliberately and intentionally kills someone (i.e., commits murder) will not escape conviction and a life sentence because the person otherwise made positive contributions to the community, or because we can understand the weakness and jealousy that led to that event. We can read Othello or Macbeth and pity the tragic heroes because the plays reveal their personal perspectives – their weaknesses and vulnerability – but we still see them as wrongdoers. A properly functioning legal system will do the same. We empathize, but we still judge. The personal perspective has to be accounted for, and can shift the external point of view in some cases, but it does not eliminate the possibility or need for an independent and impartial external point of view.
In the case of Robin Camp, his personal perspective invites empathy and compassion, and allows for the possibility that he is more than what he did in Wagar. It is possible that with less serious misconduct a judge’s ignorance or apology would be sufficient to excuse his conduct. But on the information provided to them, the CJC Inquiry Committee could – as it did – determine that in this case, Justice Camp’s personal perspective did not alter its assessment of his conduct. It did not undo the identification of the injury to the administration of justice, to public confidence in the administration of justice, to the Wagar complainant or to the Wagar accused, which his behavior created. The question for the CJC Inquiry Committee – for the legal system – was not what consequence befits Robin Camp the man, as understood fully and with account for his humanity and personal perspective. The question was what consequence befitted the external assessment of his wrongdoing, an assessment reached after consideration of his personal perspective.
In my view, the Inquiry Committee was correct to answer that question with a recommendation for removal. Not because Robin Camp is a bad person. Not because his personal perspective is irrelevant or unworthy of consideration. It was considered. But because, independently and impartially assessed, the wrongs that his conduct created are fully and properly addressed only by that consequence. The consequence is not imposed in order to punish him, or to judge him unworthy (although of course personally it will feel that way to him). It is to preserve the administration of justice, confidence in the administration of justice, and to recognize the wrong done to the Wagar complainant, the accused, and ultimately the public. It is a hard consequence, but not a post-empathetic one.
This post was originally published on Slaw.
This post may be cited as: Alice Woolley “Empathy in the Law: Does the Robin Camp Inquiry Committee Recommendation Encourage a ‘Postempathy era’?” (9 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_AW_Empathy.pdf
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By: Alice Woolley
Case Commented On: Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53 (CanLII)
I can’t decide whether I am more excited that the Supreme Court issued a decision dealing with two legal issues of great interest to me – administrative law standard of review and statutory incursions into solicitor-client privilege – or irritated that the Court’s handling of both issues is so annoying. Because it is the end of term, and I’m as grumpy as any other professor at the end of term, I am mostly irritated. Irritated because on standard of review the Court seems literally incapable of a consistent and practical approach, while on solicitor-client privilege the Court has been so consistent that it risks fetishizing the significance of solicitor-client confidentiality to the point of jeopardizing other important legal interests.
On standard of review the Court needs to stop. It needs to stop trying to articulate and apply a set of rules for judicial deference to administrative decision-makers. It should instead let administrative judicial review be a matter of practice and the appropriate judicial attitude, one of respectful attention to any decision-maker’s reasons for a particular decision, while recognizing that judges provide a sober second thought through judicial review, particularly on matters of legal interpretation. Along with significantly shifting every decade or so, the rules identified end up being misleading at best and unhelpful at worst, failing to capture the basic and in the end relatively straightforward idea that standard of review reflects. The Court’s attempt to articulate rules governing standard of review is like a baseball coach trying to develop a set of rules for players to use when deciding whether to swing, when the appropriate advice is both simple and incapable of more precise articulation: swing at a strike; don’t swing at a ball (or, alternately, swing at a pitch you have the skill to hit, and leave the rest alone).
On solicitor-client privilege, the Supreme Court can certainly claim to have been consistent: solicitor-client privilege is generously defined and strenuously protected. On the whole, that seems to me a good thing. But this decision raises the possibility that that consistent and vigorous protection may go beyond what is necessary for protection of the privilege, and may occur at the expense of other values of importance to the legal system.
The specific legal issue in this case was whether, pursuant to s 56(3) of the Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25, (FOIPP), the Alberta Privacy Commissioner could compel the University of Calgary to produce documents over which the University claimed solicitor-client privilege, in order for the Commissioner to assess the legitimacy of that claim.
The Court unanimously dismissed the Privacy Commissioner’s appeal of the judgment of the Alberta Court of Appeal, agreeing with the Court of Appeal that the Commissioner ought not to review documents over which the University had claimed privilege. All of the judges agreed that the University had sufficiently justified its claim to privilege such that it was improper for the Privacy Commissioner to seek to review the documents pursuant to s 56(3) of FOIPP, whether or not that provision permitted it to review a public body’s claims to solicitor-client privilege (at para 70, Côté J for the majority; para 127, Cromwell J, concurring; para 137, Abella J, concurring). The Court divided, however, both on the question of the appropriate standard of review of the Privacy Commissioner’s decision and on the question of whether s 56(3) of FOIPP did in fact permit the Privacy Commissioner to review documents to assess the legitimacy of a public body’s claim of solicitor-client privilege.
Writing for the majority, Justice Côté held that FOIPP does not empower the Privacy Commissioner to require a public body to produce documents with respect to which it has claimed solicitor-client privilege (at para 2). She held that the Commissioner’s decision that it had the power to compel production was reviewable on a standard of correctness because the question was one of “central importance to the legal system as a whole” (at para 20). Solicitor-client privilege is fundamental to the legal system and has constitutional dimensions, and the assessment of “what statutory language is sufficient to authorize administrative tribunals to infringe solicitor-client privilege is a question that has potentially wide implications on other statutes” (at para 20). Specifically, determining whether the phrase “privilege of the law of evidence” in s 56(3) includes solicitor-client privilege “necessitates an inquiry into both the substantive and evidentiary qualities of the privilege” (at para 25). The Commissioner also had no special expertise with respect to privilege (at para 22).
Section 56(3) of FOIPP provides:
(3) Despite any other enactment or any privilege of the law of evidence, a public body must produce to the Commissioner within 10 days any record or a copy of any record required under subsection (1) or (2).
Justice Côté held that this language was not sufficient to compel production of documents claimed to be privileged. Statutes purporting to set aside privilege will be “interpreted restrictively” and the legislative intent must be “clear and unambiguous” (at para 28); an inference is not sufficient. Imposing this standard does not involve “strict construction” of FOIPP and is consistent with the “modern approach to statutory interpretation;” it simply assumes “legislative respect for fundamental values” (at para 29).
Although s 56(3) only requires production to the Commissioner, not to the party applying for information, it still “constitutes an infringement of the privilege” (at para 35), particularly because the Commissioner is “not an impartial adjudicator of the same nature as a court” (at para 36). The question is: does the statutory language allow the Privacy Commissioner to require production of documents over which a public body claims solicitor-client privilege?
Justice Côté said no: the phrase “privilege of the law of evidence” is “not sufficiently clear and precise to set aside or permit an infringement of solicitor-client privilege” (at para 37). Solicitor-client privilege is a substantive rule with quasi-constitutional status, not merely a law of evidence (at para 38). Further, the evidentiary aspect of the privilege is not engaged here; the FOIPP regime produces documents without connection to any ongoing legal proceeding (at para 42). The substantive privilege should be “as close to absolute as possible and should not be interfered with unless absolutely necessary” (at para 43).
Justice Côté also noted that the statutory context supported this position, and in particular the legislation’s reference to “legal privilege” in the provision allowing a public body to refuse to disclose privileged information – i.e., “information that is subject to any type of legal privilege, including solicitor-client privilege” (at para 52, citing FOIPP s 27). That the power of the Privacy Commissioner to require disclosure uses different language than the power of the public body to refuse production is significant, and suggests that the provisions “must be understood to have different meanings” (at para 53). Solicitor-client privilege is a legal privilege but, here, is “not clearly a ‘privilege of the law of evidence’”, with the result that a public body may refuse to disclose documents over which it claims solicitor-client privilege, and the Commissioner cannot require that they be disclosed for the Commissioner to review (at para 57). Justice Côté noted that while it was possible that under British Columbia’s parallel legislation “privilege of the law of evidence” could include solicitor-client privilege, the differing statutory contexts meant that interpretation could not be “imported into the Alberta statute with equivalent effect” (at para 65).
In his concurring reasons, Justice Cromwell rejected Justice Côté’s interpretation of s 56(3), holding that solicitor-client privilege is both a legal privilege and a privilege of the law of evidence, and that no principle of statutory interpretation requires a different approach to seeing the privilege as within both of those terms (at para 73). The legislature intended to allow the Commissioner to assess claims of solicitor-client privilege in appropriate cases; that intention can be identified from the “grammatical and ordinary meaning of the words ‘any privilege of the law of evidence’” and from contextual factors (at para 79). Solicitor-client privilege has a substantive component, but it is also an evidentiary issue, and it is the evidentiary aspect that is raised by s 56(3) (at para 81); the public body is seeking “protection from disclosure required by legal authority, a matter falling squarely within the evidentiary privilege” (at para 87). The use of the phrase “legal privilege” in the statute does not preclude the interpretation of solicitor-client privilege as a privilege of the law of evidence elsewhere in the statute; all privileges of the law of evidence are legal privileges (at para 92). The Commissioner may not share information it reviews and identifies as properly subject to privilege, but it has the power to rule over claims of privilege (at para 104). Justice Cromwell also viewed the legislative history as supporting this interpretation.
Justice Cromwell “assume[d] without deciding” that correctness review applied to the decision in this case (at para 75). Justice Abella disagreed in her concurring reasons. In her view, this case was fundamentally a matter of statutory interpretation; that it touched on an important legal question did not put make it one of the exceptional cases to which correctness review ought to apply (at para 130). Ultimately, the Privacy Commissioner was not explaining “the content of solicitor-client privilege for the whole legal system, she is being asked to apply it in the context of one provision” (at para 136); that decision is properly reviewed deferentially.
Standard of review
The Court’s discussion of standard of review in this case, and the application of the correctness standard by the majority, should be seen in the context of the recent 5-4 split on the Court in Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd, 2016 SCC 47 (Can LII) (discussed by Shaun Fluker here, by Paul Daly here and by Leonid Sirota here). Together the two cases suggest that a part of the Court – here the majority – is uncomfortable with the presumption of reasonableness that in recent years has been granted to administrative tribunals interpreting their own statutes. Because, with all due respect to Côté J’s argument that the issue in this case relates to a matter of general importance to the legal system as a whole (solicitor-client privilege), it is hard to accept the characterization of this decision as about solicitor-client privilege, rather than about the interpretation of the Privacy Commissioner’s home statute. In her own decision, Côté J rejects the relevance of the British Columbia statute for interpreting Alberta’s, and relies significantly on inconsistent language used within the Alberta statute to justify her interpretation of the wording of s 56(3). Her decision is, for the most part, a straight up exercise in statutory interpretation.
It is true that to interpret its statute the Privacy Commissioner had to consider whether solicitor-client privilege falls within the expression “privilege of the law of evidence” as that term is employed in FOIPP s 56(3). But that decision has only as much relevance to the legal system as a whole as would any administrative decision that considers or employs legal terms used more generally in the legal system when interpreting or applying its statutory mandate. Fundamentally, the question here was the proper interpretation of s 56(3) of FOIPP. It was not “what does solicitor-client privilege mean”. That the meaning of solicitor-client privilege was relevant to the interpretation of s 56(3) of FOIPP did not make the question something other than a matter of statutory interpretation.
The decision may end up having broader significance for interpretation of statutes other than FOIPP, but that is because it is a decision of the Supreme Court of Canada, not because of the nature of the issue. A decision by the Privacy Commissioner on this question seems likely to have had few consequences for anything other than the meaning of s 56(3) of FOIPP. The broader significance – the general importance to the legal system as a whole – arises from the Supreme Court’s judgment. And surely the fact of judicial review cannot make a matter of statutory interpretation something of general significance, or every administrative decision that went to the Supreme Court would have to be reviewed on a correctness basis.
Don’t get me wrong. My point (here at least) is not to object to the use of a correctness standard in cases such as this one. My point is that doing so seems irreconcilable with the presumption of reasonableness for interpretation of a decision-maker’s home statute. At best, the Court continues to be inconsistent and unpredictable in its identification of the standard of review in specific cases and, at worst, the Court may be about to re-articulate again how the standard of review is to be identified. This judgment and Edmonton East (Capilano) suggest a Court at the brink of a major reconsideration of the issue. Further, the Court’s inconsistency and disagreement on the presumption of reasonableness exist alongside the observation that, even when the Court does consistently identify a deferential standard, how it and other courts “do deference” in any given case varies significantly (see Shaun Fluker on this point here and Paul Daly here). The Court has not truly settled on when a deferential standard ought to be applied or, when it is, what deference should look like.
And yet what does this confusion give us? Does it elucidate the fundamental tension? Does it yield insights beyond those offered by Dickson J (as he then was) back in 1979 in CUPE v New Brunswick Liquor Corporation,  2 SCR 227, 1979 CanLII 23 (SCC)? From the perspective of an administrative law dabbler and teacher like myself, the answer feels like “no, not at all”. I am literally at a loss as to how I can give my students any sort of useful understanding of administrative law when I teach it next term. And, yet, it feels like the confusion is unnecessary. Why can’t the answer be, simply, that a court should always pay attention to what an administrative decision-maker knows and the answers that it gives, but that it should do so critically, with awareness that the court also has knowledge that it should bring to bear to matters brought before it on judicial review, particularly when they involve interpretation of the law.
A court shouldn’t need a formula, a series of “factors” to consider, a set of presumptions or rules, or even a requirement that sometimes the standard of review is correctness and sometimes it is reasonableness. As a judge, just look at what you’ve been asked to consider in light of the relative knowledge of you as a judge and the administrative body as a decision-maker, always give respectful attention to the administrative body’s reasons for decision, and then decide whether the administrative body’s decision ought to stand given its statutory authority and the matter at issue in the case. If all judges did that, they’d be fine, and a lot less judicial and academic ink could be spilled in the process. Maybe sometimes courts would interfere when they shouldn’t, and maybe sometimes courts wouldn’t interfere when they should – but that happens now despite all the drama of standard of review; it’s not like we’re preventing it. And after all, appellate courts review trial judgments without so much hassle and confusion; I just do not accept that administrative law couldn’t be the same.
Now I have to acknowledge that I may be – in fact I’m likely to be – wildly off base in this suggestion. A question that the Supreme Court has struggled with for decades seems unlikely to be resolved by the end-of-term grumpy ramblings of a legal ethics professor who dabbles in administrative law. But I do believe that there is something to my basic point, which is that more of the same – more rules, formulas, factors or tests – is unlikely to fix the conundrum of standard of review. And it is certainly unlikely to make the thought of teaching administrative law next term any more palatable.
On solicitor-client privilege, the Court has no such doubts or backtracking. Its approach is generally entirely consistent, Justice Cromwell’s dissent on this issue notwithstanding: solicitor-client privilege is a central aspect of the legal system and fundamental justice; it must be jealously protected and rarely interfered with; legislative incursions on solicitor-client privilege are subject to constitutional scrutiny where s 7 or s 8 of the Charter are at play (for a more fulsome discussion, see Adam Dodek’s terrific book, Solicitor-Client Privilege (Toronto: LexisNexis Canada, 2014)).
Generally speaking, I agree with the Court’s approach to solicitor-client privilege (see chapter 5 of Understanding Lawyers’ Ethics in Canada, 2d ed (Toronto: LexisNexis Canada, 2017)). But given both this case and the Court’s 2015 decision holding that money-laundering legislation was unconstitutional in part due to its effect on solicitor-client privilege (Attorney General (Canada) v Federation of Law Societies, 2015 SCC 7 (Can LII); my blog post here), I do worry whether the Court is losing perspective on what truly constitutes an interference with solicitor-client privilege and confidentiality.
In this case, what would allowing s 56(3) to apply to solicitor-client privilege actually do? It would mean that when a public body did not provide sufficient detail to support a claim to solicitor-client privilege, the Privacy Commissioner could review the documents to determine whether or not they were legitimately classified as privileged. Assuming that the Privacy Commissioner does not exercise that power unlawfully (which I think has to be assumed in assessing the law’s interpretive scope), how much of an incursion on the solicitor-client relationship would this really be? The point is not to deprive the public body of solicitor-client privilege. The point is only to require the public body to properly justify its claims to privilege, and to provide some check on abuse by a public body that claims privilege improperly or dishonestly. I confess that I find it difficult to see that mild incursion as requiring the kind of handwringing that the Court engages in here, and see the Court’s imposition of an onerous approach to statutory interpretation for a legislature to justify that sort of mild incursion on the privilege as a bit overwrought.
If s 56(3) applied to solicitor-client privilege I do not think officials of a public body would be more reluctant to confide in their lawyers. I do not think that privileged communications would improperly fall into the public domain – I am willing to assume the Privacy Commissioner will generally act lawfully. I do think that public bodies would be more careful to provide appropriate justification for privilege claims. And that, it seems to me, is an important aspect of the general legislative scheme that received insufficient attention from the majority of the Court.
In the case of privilege, the Court’s consistency has, I think, clouded its ability to see that not every incursion into the privilege is the same, and that protecting the privilege to this extent has real consequences for other legitimate concerns of the legal system. And I worry that the Court’s approach may lead to an unhealthy counter-reaction to the power this gives to lawyers and their clients to obfuscate the truth – particularly if those clients are powerful and dishonest. The University of Calgary properly justified its claim to privilege. But if another public body does not do so, the Privacy Commissioner will, presumably, have only the recourse of an application to the court to address that deficiency. That result seems unfortunate and unwarranted by the harm (if any) prevented by the Court’s approach to s 56(3).
This post may be cited as: Alice Woolley “The Dangers of Inconsistency (and Consistency) in Supreme Court Jurisprudence” (7 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_AW_PrivacyCommissioner.pdf
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Matter Commented on: National Day of Remembrance and Action on Violence Against Women
December 6 is the National Day of Remembrance and Action on Violence Against Women in Canada. This date marks the anniversary of the murders of fourteen women at the École Polytechnique massacre in Montreal. A memorial service is being held at the University today, and people may also wish to visit the moving sculpture by artist Teresa Posyniak, Lest We Forget, in the Faculty of Law across from the law library.
ABlawg has published several posts on gender-based violence this year, which we have gathered below. These posts analyze the treatment of gender-based violence by the courts and legislatures, in criminal, constitutional and other contexts, drawing to attention those bodies’ varying levels of understanding of and commitment to preventing violence. It is worth noting that the Inquiry Committee of the Canadian Judicial Council into the conduct of Justice Robin Camp recently stated as follows with respect to the role of judges in cases involving gender-based violence:
The Intervener Coalition submitted that, conceptually, the reasonable person “must include the perspective of survivors of sexual assault, and marginalized women generally, as they are entitled to a judiciary that rejects sexual myths and stereotypes and understands and respects equality.” We agree. A judge performs a unique role in society and his or her capacity to continue in the execution of that role cannot be judged without regard to the perspective of those who would most likely be affected by the Judge remaining in office. That is not to say that such a perspective is the sole or the dominant one in evaluating public confidence, but it is one that should be included, and must be understood. (at para 252)
With that in mind, we encourage our readers to reflect on the various approaches to gender-based violence captured here:
Stephen Armstrong, Taking Proportionality Seriously in Charter Adjudication: R v KRJ
Drew Yewchuk, Ostensible Consent: Reality and Legal Reality Case
Joshua Sealy-Harrington, Mastery or Misogyny? The Ghomeshi Judgment and Sexual Assault Reform
Alysia Wright, Access to Legal Services in Women’s Shelters
Jennifer Koshan, Reflections on Week One of the Ghomeshi Trial
Jennifer Koshan, Sexual Assault and Choking – Making Sense of the Legal Consequences (No subject)
By: Ola Malik, Jeff Watson and Holly Wong
Case Commented On: American Freedom Defence Initiative v Edmonton (City), 2016 ABQB 555 (Can LII )
Our Canadian courts are jealous guardians of the freedom of expression, which the Canadian Charter protects in section 2(b). The rationale for protecting freedom of expression is that society should be free to discuss and decide what is true, what is right and what is good. As with most things Canadian, we have accepted that the way in which we speak to one another should be politely regulated. Our courts have accepted that for expression to be truly valued, our public square must provide everyone with the opportunity to speak as equals, where no one is made to feel marginalized or devalued. How very Canadian, indeed! To a large extent, how we speak to one another is as important as what we say, and that, in our view, is a good thing. Defining the limits of appropriate speech isn’t just an exercise in legal abstractions, nor does it just involve lawyers. Rather, it goes to the heart of how all of us live together in a peaceful community with our neighbours and what we, together as a community, aspire to be.
Those of us who practice municipal law and who are interested in freedom of expression issues have been eagerly awaiting the case of American Freedom Defence Initiative v Edmonton (City), 2016 ABQB 555 (AFDI). Indeed, we were so intrigued by the issues this case raises that we commented on them long before trial, here, and in a companion piece titled “Controversial Advertising on City Buses – Are Municipalities Ready for What’s To Come?” (2015) 7:5 DMPL (2d) 1-6.
The American Freedom Defense Initiative (AFDI) applied for a declaration that the City of Edmonton’s removal of an ad from the exterior of Edmonton buses constituted an infringement on its freedom of expression and further, sought an order enjoining the City of Edmonton from violating its freedom of expression in the future. Initially, AFDI had been approved by Edmonton Transit to post an ad which read:
Girls Honor Killed by Their Families. Is your Family Threatening You?
Is Your Life in Danger? We Can Help: Go to FightforFreedom.us
AFDI subsequently submitted a revised ad, which contained photos of seven Muslim women who were murdered as a result of honour killings along with the following caption:
Muslim Girls Honor Killed by their Families.
Is Your Family Threatening You? Is There A Fatwa on You Head?
We can help: go to Fightforfreedom.us
Paid for by the American Freedom Defense Initiative
The ad included the logo for the American Freedom Defense Initiative and the logo for an organization called “SIOA” which stands for “Stop Islamization of America”.
Pattison Outdoor Group (Pattison), the agency contracted by the City of Edmonton to manage all of Edmonton Transit’s advertising, notified AFDI that this second ad had been approved for posting but that Edmonton Transit reserved the right to remove the ad if it received public complaints. Within the first week or so of the ad appearing, a manager for Edmonton Transit received a call from a city councillor advising that he had received numerous complaints regarding the ad. Edmonton Transit conducted an internal review and, after meeting with several people who had been offended by the AFDI ad, ordered that it be removed.
At trial before Justice J.J. Gill of the Alberta Court of Queen’s Bench, AFDI argued that its freedom of expression under section 2(b) of the Charter had been infringed and could not be saved by section 1 of the Charter because this infringement (1) was not a limit “prescribed by law”; and because the infringement (2) was not a demonstrably justified limit in a free and democratic society.
At trial, the City of Edmonton conceded that its decision to pull the ad infringed upon AFDI’s freedom of expression. Arguably, this was an appropriate concession to make given Justice Deschamps’ decision in Greater Vancouver Transportation Authority v Canadian Federation of Students, 2009 SCC 31 (CanLII) (GVTA), that advertising space on municipal buses was a type of public space which attracted the protection of section 2(b) (at paras 37-47). Consequently, in the AFDI case, the analysis moved to whether the infringement was saved by section 1.
In this post, we quickly summarize the first issue, whether removal of the ad was “prescribed by law”, and move to the second, more interesting issue, whether the City of Edmonton’s infringement upon AFDI’s freedom of expression was a demonstrably justified limit in a free and democratic society.
The Applicable Contractual Provisions and the Canadian Code of Advertising Standards
Edmonton Transit, like most other large municipalities, does not engage directly with advertising customers; rather it contracts this service out to third parties, in this case, Pattison. The agreement between the City of Edmonton and Pattison with respect to advertising services contains two important contractual conditions which regulate advertisement:
Clause 16.1 Any advertisement to be placed in or on the Buses … shall be of a moral and reputable character and the Contractor agrees that it will forthwith remove from any…Bus…any advertisement which the City…determines is contrary to this Clause.
Clause 16.3 The contents of advertising material shall comply with the Advertising Standards Council of the Canadian Advertising Advisory Board [emphasis added].
There are also agreements which are entered into between Pattison and its advertising customers. The Production Agreement provides as follows:
Pattison reserves the right to not display any advertising which is considered to be in violation of the Canadian Code of Advertising Standards or which Pattison deems may be offensive to the moral standard of the community, or which Pattison believes negatively reflects on the character, integrity or standing of any organization or individual [emphasis added].
A clause in the Pattison Transit Advertisement Agreement stipulates that:
Pattison reserves the right to reject or remove any Advertising Material which does not… in Pattison’s sole opinion, comply with the standards set by the Canadian Advertising Foundation or the applicable Transit Authority…[emphasis added]
The Canadian Code of Advertising Standards (Code) sets out the criteria for advertising standards. It was created and is administered by Advertising Standards Canada, a self-regulating group of private advertisers and other various media agencies. Provision 14 of the Code addresses “Unacceptable Depictions and Portrayals” and is worth reproducing here in full:
Clause 14: It is recognized that advertisements may be distasteful without necessarily conflicting with the provisions of this Clause 14; and the fact that a particular product or service may be offensive to some people is not sufficient grounds for objecting to an advertisement for that product or service. Advertisements shall not:
a) Condone any form of personal discrimination, including that based upon race, national origin, religion, sex or age;
b) Appear in a realistic manner to exploit, condone or incite violence; nor appear to condone, or directly encourage, bullying; nor directly encourage, or exhibit obvious indifference to, unlawful behaviour;
c) Demean, denigrate or disparage one or more identifiable persons, group of persons, firms, organizations, industrial or commercial activities, professions, entities, products or services, or attempt to bring it or them into public contempt or ridicule;
d) Undermine human dignity; or display obvious indifference to, or encourage, gratuitously and without merit, conduct or attitudes that offend the standards of public decency prevailing among a significant segment of the population.
Was the Infringement Prescribed by Law?
In the AFDI decision (at para 59), Justice Gill reproduced the rationale behind requiring that government limits on rights and freedoms be prescribed by law, which Justice Deschamps had set out in GVTA:
…The requirement that a limit on rights be prescribed by law reflects two values basic to constitutionalism or the rule of law: 1) in order to preclude arbitrary or discriminatory action by government officials, all official action in derogation of rights must be authorized by law; 2) citizens must have a reasonable opportunity to know what is prohibited so that they can act accordingly.
Justice Gill held that the criteria for determining whether an ad would be permitted to be posted on Edmonton Transit property were limits prescribed by law (at paras 71-73):
…the City in this case exercised its discretion to prohibit advertising which it found to be of an immoral or irreputable character, offensive to the moral standards of the community, or which it believed negatively reflected on the character, integrity or standing of any organization or individual. I note that these bases for the City’s discretion, described in different ways in the contractual documents, are in keeping with various standards contained in the Code, most notably s. 14.
Pattison in turn communicated to prospective advertising clients that it would abide by the standards referred to in the contractual documents…Those wishing to advertise are the only ones who might experience a restriction of their freedom of expression in this context. They were apprised of this information. Clients choosing to advertise signed agreements recognizing that Pattison would apply these standards.
In my view, those potentially or actually affected by the restrictions were given a reasonable opportunity to know the standards which would apply and could act accordingly.
In the result, Justice Gill found that the City of Edmonton’s advertising policies and criteria were limits prescribed by law which satisfied the first step of the section 1 analysis. We agree in all respects with Justice Gill’s decision on this point.
Was the Infringement Reasonable and Demonstrably Justified?
Justice Gill held that the City of Edmonton’s objective for its advertising policies – to provide a safe and welcoming public transit system – was a sufficiently important objective to warrant placing a limit on AFDI’s freedom of expression (at paras 83-86) (as Justice Deschamps had similarly held in GVTA). Of importance was Justice Gill’s observation that the section 2(b) freedom must be interpreted consistently with the preservation and enhancement of multiculturalism values, as protected in section 27 of the Charter (at para 90).
Justice Gill also held that a rational connection existed between the City of Edmonton’s decision to restrict advertising which it felt was offensive to the moral standards of the community, or which negatively reflected on the character, integrity or standing of any organization or individual, and its objective of providing a safe, welcoming public transit system (at para 88). This is very similar to the conclusions in the GVTA decision, where the Court held (at para 76) that:
…It is not the political nature of an advertisement that creates a dangerous or hostile environment. Rather, it is only if the advertisement is offensive in that, for example, its content is discriminatory or it advocates violence or terrorism – regardless of whether it is commercial or political in nature – that the objective of providing a safe and welcoming transit system will be undermined.
With respect to the question of minimal impairment, Justice Gill concluded (at para 94) that the AFDI ad was not intended to provide help for victims of religious extremism but rather, was designed to:
…bring the Muslim population of Edmonton, including Muslim/Islamic Faith in general into public contempt or ridicule. This purpose is clear from a review of the AFDI website as well as the SIOA’s website. The aim is to encourage Muslim individuals to leave Islam and convert from their Muslim faith, or alternatively to advocate special treatment of Muslims and their exclusion from non-majority Muslim countries.
Justice Gill described the purpose of the ad as follows (at paras 95 and 100):
If one reads the advertisement in a light most favourable to AFDI, it simply encourages possible victims of religious extremism to self-report victimization. However, the logos of AFDI and SIOA are a significant and prominent part of the advertisement. The incorporation of the logos is a promotion of the AFDI and its SIOA initiative. The invitation in the advertisement to “go to FightforFreedom.us” directs the audience to further content. It suggests that there is more information to be shared beyond the words and images that appear on the advertisement. In my opinion, such things as logos, website addresses and the websites referred to are properly considered by the City in applying its policy. To find otherwise would be to allow form to triumph over substance. It would allow advertisers to incorporate references to draw the audience, without impunity, to discriminatory or otherwise unacceptable content.
In fact, the AFDI’s advertisement might reasonably be viewed as a ruse to further what appears to be one of its true objectives, which is to target Muslims. The phrase “dog whistle politics” comes to mind, whereby coded messaging is understood by a portion of the population who might support the objectives of the advertiser, in this case AFDI and SIOA.
Consequently, Justice Gill had no difficulty concluding that the City of Edmonton’s restrictions minimally impaired AFDI’s section 2(b) freedom of speech (at para 107).
Finally, Justice Gill held that the City’s objective of providing a safe and welcoming transit system far outweighed the deleterious effects of its refusal to permit the posting of offensive or discriminatory ads on its buses. (at paras 110-114). Justice Gill ultimately concluded that the infringement upon AFDI’s freedom of expression was in all respects justified under section 1 of the Charter and dismissed AFDI’s applications against the City of Edmonton (at paras 115-117).
How Do You Judge a Message?
In our earlier blog post here, we examined the background of the AFDI organization and its blatantly xenophobic, anti-Muslim views. If you go to the SIOA, AFDI and FightforFreedom.us websites here, here, and here, you can you see for yourself what the true policy objectives of these organizations are.
This raises an interesting question. How far should a court go to determine the contextual meaning or intent of a controversial advertisement or advocacy message? Read textually, (without referring to these websites), the AFDI ad could be interpreted as a concerned, public service announcement. However, the City of Edmonton was rightly concerned about the impact upon its citizens of allowing an arguably hateful organization to promote what was in substance an anti-Muslim advocacy message. We believe that the City was absolutely correct to peer beyond the literal meaning of the AFDI ad and consider its true intent as reasonably inferred from the clearly troubling advocacy positions of the AFDI, SIOA and FightforFreedom organizations. Justice Gill’s decision sends a clear message that the underlying intent and purpose of a message is as important to consider as its plain textual meaning. Excluding organizations which promote discrimination, hate, and xenophobia under the guise of innocent advocacy from our public squares is a good thing and is consistent with the values which underlie a free and democratic society under section 1 of the Charter.
Should We Apply a Community Moral Standard Test to Controversial Messaging?
Justice Gill found that the City of Edmonton properly exercised its discretion to pull the AFDI ad pursuant to the various contractual advertising agreements and Code provisions which did not permit the posting of an advertisement if it was “offensive to the moral standards of the community”, “negatively reflects on the character, integrity, or standing of any organization or individual”, or was not of a “moral and reputable character”. While we don’t quibble with the ultimate outcome of Justice Gill’s decision, we have concerns about whether these evaluative criteria, agreed to by Pattison and the City of Edmonton, can appropriately be applied to controversial advocacy messaging.
Firstly, criteria which evaluate a message based on whether it: (1) offends the moral standards of a community; (2) negatively reflects on a person; or, (3) is of an immoral or irreputable character, are unhelpfully vague and subjective. This is especially so when the criteria are applied to controversial advocacy messaging, where the person evaluating the message in accordance with these criteria is going to have to make the judgment call, based on their own prejudices and biases. In short, these criteria are very difficult (if not impossible) to apply in any objective, consistently reliable way and the danger is that they yield highly unpredictable results from one case to the next, depending on the particular issue.
We do not believe that any of these criteria were necessary given the values and principles which underlie a section 1 analysis. In R. v Oakes,  1 SCR 103, 1986 CanLII 46 (SCC), Dickson C.J. discussed the contextual assessment to be given to a section 1 analysis and noted that the core values and principles which form part of a free and democratic society include:
…respect for the inherent dignity of the human person, commitment to social justice and equality, accommodation of a wide variety of beliefs, respect for cultural and group identity, and faith in social and political institutions which enhance the participation of individuals and groups in society.
These criteria are much easier to define and understand than concepts that reference morality, character, reputation and community acceptance. They are also consistent with the values which underlie the protection of expressive activity, which Justice McLachlin (as she then was) identified in Irwin Toy Ltd. v Quebec (Attorney General),  1 SCR 927, 1989 CanLII 87 (SCC) (at para 243):
(1) seeking and attaining the truth is an inherently good activity; (2) participation in social and political decision-making is to be fostered and encouraged; and (3) the diversity in forms of individual self-fulfilment and human flourishing ought to be cultivated in an essentially tolerant, indeed welcoming, environment not only for the sake of those who convey a meaning, but also for the sake of those to whom it is conveyed.
Secondly, it was in the GVTA case that Justice Deschamps opened the door to a community standard test for advertisements, albeit with a very important caveat (at para 77):
…While a community standard of tolerance may constitute a reasonable limit on offensive advertisements, excluding advertisements which “create controversy” is unnecessarily broad. Citizens, including bus riders, are expected to put up with some controversy in a free and democratic society. [Emphasis added]
It is likely that Justice Deschamps raised the community standard test because the advertising policy being considered in GVTA prohibited any advertisement which was “…likely, in the light of prevailing community standards, to cause offence to any person or group of persons or create controversy” (at para 74, GVTA). Justice Deschamps spent no more time discussing this test and we wonder whether these comments were intended to have further broader application.
The Supreme Court of Canada has for some time been gradually moving away from a community standard of tolerance test to a harms-based test in the context of obscenity and indecency law in cases such as R. v Butler,  1 SCR 452, 1992 CanLII 124 (SCC); R. v Mara,  2 SCR 630, 1997 CanLII 363 (SCC); and Little Sisters Book & Art Emporium v Canada (Minister of Justice)  2 SCR 1120, 2000 SCC 69 (CanLII). A strict application of the community standard of tolerance test as applied in this context had come under increasing criticism for imposing a majoritarian sexual morality on minority sexual norms and for failing to recognize changing societal mores and a growing acceptance of what were once considered deviant sexual conduct and behavior.
The critique of the community standard of tolerance test was acknowledged by a majority of the Supreme Court of Canada in R. v Labaye,  3 SCR 728, 2005 SCC 80 (CanLII), which adopted a harms-based test for determining whether conduct (in this case, a sex club in Montreal which permitted people to meet each other for group sex) could be described as indecent pursuant to the Criminal Code. Writing for the majority, McLachlin CJC stated as follows with respect to the community standard of tolerance test (at para 18):
How does one determine what the “community” would tolerate were it aware of the conduct or material? In a diverse, pluralistic society whose members hold divergent views, who is the “community”? And how can one objectively determine what the community, if one could define it, would tolerate, in the absence of evidence that community knew of and considered the conduct at issue?…
For the majority in Labaye, the new test (which we won’t discuss at length here) focused on the nature of harm of the impugned behavior and whether the risk of harm from engaging in that behavior was so great that it was incompatible with the proper functioning of society (at paras 33 and 56):
…The inquiry is not based on individual notions of harm, nor on the teachings of a particular ideology, but on what society, through its fundamental laws, has recognized as essential…Unlike the community standard of tolerance test, the requirement of formal recognition inspires confidence that the values upheld by judges and jurors are truly those of Canadian society. Autonomy, liberty, equality and human dignity are among these values.
Incompatibility with the proper functioning of society is more than a test of tolerance. The question is not what individuals or the community think about the conduct, but whether permitting it engages a harm that threatens the basic functioning of our society. This ensures in part that the harm be related to a formally recognized value, at step one. But beyond this it must be clear beyond a reasonable doubt that the conduct, not only by its nature but also in degree, rises to the level of threatening the proper functioning of our society.
If you’re employed with a municipality and have an application before you from an advertiser which may raise objections or cause controversy, how can you reasonably be expected to decide, with any consistency, whether the ad is “offensive to the moral standards of a community”, as required by the agreement between the City of Edmonton and Pattison? Can your community have several, or even competing, community standards – and if so, how do you choose? Which criteria do you use – public complaints? And if so, how many public complaints does it take to decide that a message offends a community’s moral standard?
Evaluating controversial advocacy messaging in accordance with a community standard of tolerance test which incorporates notions of morality, reputation, or character, rather than harm in the sense described in Labaye, is inherently subjective and creates the spectre of patchwork application. Minority interests may be over-represented through paternalism or under-represented because they lack a political voice, rather than having a uniform application of Charter principles. While there are sure to be small, rural or isolated communities in Canada which require special considerations, aren’t major metropolises representative of our world’s cultures, religions, and all the challenges these bring with them?
Should Advertising on Municipal Property be Considered Differently?
As we’ve discussed, the Supreme Court majority in Labaye overlooked the community standard of tolerance test in favor of an objective, harm-based assessment. Of interest is whether a controversial advocacy message placed on municipal advertising space requires a different assessment of harm than other forms of expressive activity. Here are some reasons why controversial messaging advertised on municipal property raises unique concerns:
There is a very high threshold before speech is found to be discriminatory and hateful under human rights legislation. In the case of Saskatchewan (Human Rights Commission) v Whatcott 2013 SCC 11 (Can LII), Mr. Whatcott was found to have contravened the Saskatchewan Human Rights Code by distributing homophobic flyers that exposed LGBTQ persons to hatred and ridicule. He argued that the Code’s hate speech provisions infringed his freedom of expression.
The unanimous Supreme Court of Canada upheld the Code’s ban on hateful expression, but significantly narrowed the scope of the provision. According to the Court, only the most extreme expression that objectively exposed persons to hatred or contempt fell within the constitutionally protected ambit of the Code (at para 109). The Court set out a stringent and high threshold for what constitutes hate speech:
It’s important to note that in Whatcott, the Supreme Court of Canada was asked to rule on the constitutionality of the Saskatchewan Human Rights Code’s provisions as they pertained to Mr. Whatcott’s freedom to express himself, as well as whether imposing restrictions on Mr. Whatcott’s speech was justified by section 1 of the Charter. What is striking about the Whatcott decision is the high threshold required to prove hateful speech.
Contrast the high threshold found in Whatcott with the much lower test required to find “Unacceptable Depictions and Portrayals” in Clause 14 of the Code, which focuses on advertisements that condone discrimination or violence, lead to public contempt or ridicule, or undermine human dignity. While we’ve expressed our doubts regarding the applicability of the Code to controversial advocacy messaging here, we wonder whether Clause 14 might be appropriate to the unique context of controversial advocacy messaging on municipal advertising space.
The important point here is that an assessment of harm necessarily depends on context. While it would likely be very difficult to restrict someone’s freedom to pass out flyers criticizing a political party or religious belief, it may be easier to restrict someone’s freedom to post an image on city property depicting the image of a bloody aborted fetus. Should we make it easier, not harder, for municipalities to restrict the rights of advertisers to post controversial advocacy messaging on municipal property? Are the psychological assaults caused by offensive advocacy messaging on a city bus or on the side of a city building more deleterious to the proper functioning of society? We think so. And we think that Justice Gill’s decision helps us.
This post may be cited as: Ola Malik, Jeff Watson & Holly Wong “No Offence, But I Hate You: American Freedom Defence Initiative v. Edmonton (City)” (5 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_OM_etal_AFDI.pdf
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By: Nigel Bankes
PDF Version: Arbitrations Added to the PPA Soup
Case Commented On: TransCanada Energy Ltd v Balancing Pool, 2016 ABQB 658 (CanLII)
The power purchase arrangements (PPA) dispute in the Province continues to evolve along a number of different tracks. As noted in a previous post, the negotiation track seems to be producing some positive results with a number of tentative settlements announced. As a second track, ENMAX has its application to determine the effective date of termination of the Battle River PPA (this application is discussed at para 5 of the current decision). This application had been adjourned sine die but ENMAX has recently applied to have the application set down for a hearing. As a third track, the Province, through the Attorney General (AG), continues to maintain its judicial review application. The decision that is the subject of this post reveals a fourth track, that of arbitration actions commenced by some of the PPA buyers (although perhaps some of these arbitrations might be withdrawn under the terms of the tentative settlements referenced above). This decision of Chief Justice Neil Wittmann deals with whether or not the arbitrations were properly commenced (i.e. had a dispute crystallized?) and the interaction between the judicial and arbitral tracks.
TransCanada Energy (TCE) and the ASTC Power Partnership (ASTC) are buyers under various PPAs: TCE for Sundance A, Units 1 and 2 and Sheerness, and ASTC for Sundance B Units 3 & 4. On March 7, 2016 both parties advised the Balancing Pool that they had determined that they were entitled to terminate and were terminating their respective PPAs pursuant to the change of law clause in these arrangements and its notorious Errata (i.e. the addition of the “or more unprofitable” language, see discussion here) and on account of the increased charges that fall on generators under the Specified Gas Emitter Regulation, Alta Reg 139/2007 and that was passed on to them as buyers under the terms of the PPAs. The Balancing Pool (BP) advised TCE and ASTC that it would conduct an investigation under sections 2(1)(g) and (h) of the Balancing Pool Regulation, Alta Reg 158/2003. These provisions contemplate that in the event of a claimed “extraordinary event” (defined to include “termination” in accordance with the terms of a PPA) the BP shall investigate the matter, participate in any dispute resolution pertaining to the matter and commence making payments as if the PPA were terminated pending resolution. The BP’s response triggered a further notice from TCE and ASTC to the effect that there was now a deemed dispute between the parties under Article 19 of the PPA (the dispute resolution procedure) which ultimately led TCE and ASTC to refer the matter to arbitration in July. TCE and ASTC consider that there is both a dispute and a deemed dispute in their relations with the BP. The dispute relates to the timing or termination; the deemed dispute relates to the question of whether or not TCE and ASTC were in a position to terminate.
Given that there were a number of PPAs at issue, TCE and ASTC commenced no less than three arbitrations and appointed their three nominees: Marshall Rothstein and Ian Binnie (both former judges of the Supreme Court of Canada) and Clifton O’Brien (a former judge of the Court of Appeal of Alberta). The BP failed to make any of its appointments to the panels and accordingly TCE and ASTC were bringing this application to have the Court make the appointments. The BP contested the application and also, in the alternative, brought a cross-application to have the arbitration stayed pending the outcome of the AG’s application. The AG was granted leave to file argument in support of the BP’s cross-application.
The BP’s argument on the merits was effectively that the issue was premature and had not yet ripened into a dispute since it still had the matter under active consideration. The BP’s argument on the stay was that the matters at issue in the AG’s application go to the heart of the issues that the arbitration panels would have to determine.
Chief Justice Wittmann granted the applications of TCE and ASTC and denied the BP’s cross-application. He found (with no further assessment of the record) that there was a deemed dispute. He denied the application for a stay because he simply disagreed with the BP’s assertion that (at para 67) “it would be manifestly unfair to the BP to require it to participate in arbitration while the AG Application is outstanding.” Chief Justice Wittmann reasoned as follows (at para 67):
There are sufficient built-in mechanisms within the PPAs’ dispute resolution process – specifically section 19.4(i) – for the question of law to be referred to the court. Section 19.4(i) of the PPAs allows either party to “refer a question of law to a court of competent jurisdiction for final and binding determination notwithstanding that it may be part of a dispute before the board of arbitrators.” Very able arbitrators have been appointed. The arbitration panels may or may not decide the Errata question of law is necessary for their decision. The Errata question of law can be decided by the arbitrators if they see fit. But in any event, a party may refer the Errata question of law to this Court.
Clause 19.4(i) of the PPAs referenced in this quotation reads as follows: “either Party may refer a question of law to a court of competent jurisdiction for final and binding determination notwithstanding that it may be part of a dispute before the board or arbitrators.” Counsel for the BP had indicated to Chief Justice Wittmann while his decision was under reserve that the BP would take advantage of this provision were the arbitrations to proceed. The availability of this course of action seems to have been important to the Chief Justice. However, there may be more uncertainty here. Reference to a court under cl.19.4(i) will not work an automatic stay of the arbitrations and Chief Justice Wittmann certainly seems to think that the panels may have to consider the Errata question. In the face of parallel proceedings, section7 of the Arbitration Act, RSA 2000, c. A-43 clearly favours staying the court proceeding so as to allow the arbitration to continue and it is not clear to me how this presumption will interact with cl.19.4(i) of the PPAs. Certainly the matter would be much cleaner were the arbitral proceedings to be stayed pending the outcome of the AG’s application.
If the arbitrations do proceed they will proceed as three separate arbitrations with the result that we may get conflicting decisions. This has happened before with PPA arbitrations (see the discussions in Transalta Generation Partnership v Capital Power PPA Management Inc, 2015 ABQB 793 (CanLII) and Enmax Energy Corporation v TransAlta Generation Partnership, 2015 ABCA 383 (CanLII)) and points to the difficulty if not absurdity of allowing and even favouring arbitration in these sorts of circumstances (standard form contracts/statutory arrangements imbued with a public interest). Section 8(4) of the Arbitration Act authorizes consolidation of arbitrations but only on the application of all of the parties. So again we have inconsistent arbitral awards as well as a decision. In international law this is referred to as the problem of fragmentation (see the Fragmentation Report of the International Law Commission). It is perhaps an inevitable part of international law given its horizontal nature. The hierarchical nature of domestic law allows us to minimise or avoid the problem; but in the case of the PPAs we have deliberately re-introduced the problem.
Given the history of PPA arbitrations, the one thing that I looked at first in the draft term sheet for the contracts for difference arrangements to be developed by the AESO under Bill 27, the Renewable Energy Act (see post here), was the dispute settlement clause. I am happy to report that it contemplates resolution of disputes by the courts and not by way of arbitration. Clause 33 provides as follows:
In the event of a dispute, the parties’ representatives will attempt to resolve the dispute within 10 days after a request by either party, failing which either party may commence litigation.
I hope that it survives in this or a similar form. It is in the public interest that we have consistent and authoritative interpretations of these standard form contractual arrangements.
This post may be cited as: Nigel Bankes “Arbitrations Added to the PPA Soup” (2 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_NB_PPA_Arbitrations.pdf
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By: Elysa Hogg
PDF Version: Bill S-3: A rushed response to Descheneaux
Matters Commented On: Bill S-3 “An Act to amend the Indian Act (elimination of sex-based inequities in registration); Descheneaux c Canada (Procureur General), 2015 QCCS 3555 (CanLII)
*Note on terminology: “Indian” is used to describe a person defined as such under the Indian Act, and is not intended to carry any derogatory connotations.
In the early days after the 2015 election, Prime Minister Trudeau was honoured by the Tsuut’ina First Nation with a traditional headdress and an indigenous name which translates to “the one that keeps trying.” Trudeau and the Liberals will have to keep trying, as they made an extraordinary commitment to address First Nations issues during the campaign, and set multiple deadlines for action within the next few years. One of the first deadlines to come due is an amendment of the Indian Act, RSC, 1985 c. I-5 necessitated by a recent Quebec Superior Court ruling.
In Descheneaux c Canada (Procureur General), 2015 QCCS 3555 (CanLII) (Descheneaux) the court held that several provisions of the Indian Act surrounding who is considered a ‘Status Indian’ violated the principles of equality protected by Section 15 of the Charter of Rights and Freedoms.
After withdrawing an appeal of the decision in February 2016, the federal government has commenced a two-stage response to this ruling. Stage one is Bill S-3 “An Act to amend the Indian Act (elimination of sex-based inequities in registration)”, while stage two is a collaborative process between the government and First Nations leadership to identify and implement further reforms.
This post will briefly summarize the issues and findings in Descheneaux, and assess how these are impacted by Bill S-3. It will also examine some of the testimony given at the Senate’s Standing Committee on Aboriginal Peoples meetings held last week on these issues. Finally, it will briefly look at how Deschaneaux fits into the Liberal government’s progress on implementing the many campaign promises it made to First Nations’ people.
Background – Status and the Indian Act
Section 6 of the Indian Act RSC 1985, c I-5 sets out rules for entitlement to Indian registration (Status), based on an individual’s descent from a person registered or eligible to be registered as a ‘Status Indian’.
Whether or not a Canadian is granted Status, a concept based on 19th century ideas of racial essentialism (and, many would argue, white supremacy), dictates who can be recognized as an Indian person by the Canadian government. This finding has enormous implications for the individual involved, from their ability to live on reserve, to their access to government programs. Being denied Status can block indigenous peoples from participating in important aspects of indigenous life and exclude them from various rights and forms of government support offered to Status Indians (see helpful descriptions of these issues here, here, and here). Despite its problematic implications, Status is often seen as a necessity if one wishes to access any of the government funded programs for First Nations people and participate fully in reserve or band life.
Section 6(1) v Section 6(2)
Within the broader category of Status Indians, there is a further distinction between persons who have Status under section 6(1) of the Indian Act, and those who have Status under 6(2). While this is a gross over-simplification, the main distinctions between the two are:
A person’s 6(1) or 6(2) Status is in many cases affected by whether their mother or grandmother was denied Status based on their gender, a historically common occurrence.
Gender and Status
Historically several provisions of the Indian Act worked to exclude women from various rights by terminating their Status, or ‘enfranchising’ them. Originally, the Indian Act held that a Status Indian woman who married a non-Indian man would cease to be an Indian. She would lose her Status and all associated rights. Conversely, if an Indian man married a non-Status woman, he would maintain his Status, and it would be conferred on his wife.
After extensive litigation, the most overtly discriminatory provisions of the Indian Act were amended in 1985 and 2010. These amendments allowed women who had lost their Status by marrying non-Status men to regain it. However, as Jennifer Koshan summarized here, these legislative changes have left many residual problems, as illustrated by the plaintiffs in Descheneaux.
Descheneaux c Canada (Procureur General)
In Descheneaux the Plaintiffs, Stephane Descheneaux and Susan and Tammy Yantha, claimed that section 6 of the Indian Act violates the equality guaranteed in 15(1) of the Canadian Charter of Rights and Freedoms by creating discriminatory and differential treatment in regards to who is or is not a Status Indian. These claims of discrimination arose from two factually specific contexts:
Stephane Descheneaux maintains that he is deprived of 6(1) status because of sex discrimination (at para 55). Mr. Descheneaux’s grandmother lost her status in 1935 after marrying a non-Status Indian. This meant that under the version of the Indian Act in force at the time that her child, Mr. Descheneaux’s mother, had no Status at birth. Mr. Descheneaux’s mother also married a non-Indian and then gave birth to Mr. Descheneaux, who was thus deprived of status due to his grandmother and mother’s marriages (at para 56). The amendments to the Indian Act passed in 1985 and 2010 allowed both his grandmother and mother to regain Status. However, as the child of a Status Indian and non-Status Indian, Mr. Descheneaux’s mother held 6(2) Status. As discussed above, this meant that by marrying a non-Status Indian she could not pass her Status onto her child Mr. Descheneaux.
If it had been Mr. Descheneaux’s grandfather who married a non-Status Indian on the other hand, both of Mr. Deschaneux’s mother’s parents would have held Status, and Mr. Deschaneux’s mother would have been a 6(1) Indian from birth, meaning that she would have passed Status onto Mr. Descheneaux.
He alleges that the distinction based on the sex of an Indian grandparent is discriminatory in that it:
…perpetuates a stereotype whereby the Indian identity of women and their descendants are less worthy of consideration or have less value than that of Indian men and their descendants, and by having the effect that Stéphane Descheneaux’s children cannot have Indian status passed down to them or enjoy certain attendant benefits… (at para 59)
Susan & Tammy Yantha
The version of the Indian Act in force in 1954 held that illegitimate daughters of Status Indian men and non-Status Indian women would not have Status, while illegitimate sons would have 6(1) Status. Susan Yantha was born in 1954 as the illegitimate daughter of an Indian man and a non-Indian woman. In 1972, she had a child, Tammy Yantha, with a non-Indian man. After the 1985 amendments, Susan obtained 6(2) status (at para 62) since only one of her parents had Status. Tammy is prevented from obtaining Status due to her mother’s 6(2) classification and her father not holding Status.
Susan was denied status at birth based purely on her sex. If she had been a male, she would have held 6(1) Indian from birth and her daughter Tammy would have 6(2) Status.
Susan and Tammy argue that the distinctions in terms of registration based on Susan’s sex are discriminatory because they:
“perpetuate a stereotype whereby the Indian identity of women and their descendants does not have the same value or importance as that of Indian men and their descendants.” (at para 65)
Findings by the Court
The Court declared that sections 6(1)(a),(c), and (f) and subsection 6(2) of the Indian Act unjustifiably infringe section 15 of the Canadian Charter Rights and Freedoms and are inoperative (at para 244). The Court suspended the effect of the judgment for eighteen months, providing a deadline of February 3, 2017 for Parliament to remedy the provisions (at para 244). In obiter, the court instructed Parliament to go beyond the facts in Descheneaux in their drafting of legislation to consider all sex discrimination arising out of the Indian Act (at para 143).
The Government’s Response Stage I – Bill S-3
To comply with the Descheneaux ruling, the government introduced Bill S-3, which addresses three discreet issues of sexism in the Indian Act:
The government claimed that consultation of the bill would be inclusive of First Nations, beginning in Summer 2016 and ending in the Senate committees in Fall of 2016.
The Government’s Response Stage II – A Collaborative Process to Examine the Broader Issues Relating to Indian Registration and Band Membership (2017-2018)
Stage II is meant to build upon the submissions of First Nations and other indigenous groups from the 2011-2012 study “Exploratory Process on Indian Registration, Band Membership and Citizenship”. By working collaboratively with aboriginal groups, the government aims to create a jointly designed process for identifying areas for future reform, and the processes that such reform will require.
Response to Bill S-3 and its Potential Impacts
In two meetings last week*, the Senate Committee on Aboriginal Peoples solicited feedback from the Descheneaux Plaintiffs, representatives of the Minister of Indigenous and Northern Affairs Canada (INAC) office and various First Nations and First Nations’ organizations from across the country.
There were several common themes amongst the submissions:
Chief Perry Bellagarde of the Assembly of First Nations (AFN) requested that Minister Bennett apply to the Superior Court of Quebec for an extension to the February 3, 2017 deadline in order to more fully engage in consultation in order to assess the effects of section 6.
President of the Native Women’s Association Canada (NWAC), Francyne Joe, stated that her organization was provided with only half a day to review the proposed bill and a short two-hour window with representatives from the Minister’s office to address the bill. Francyne urged more fulsome consultation that would respect the struggles that NWAC’s membership has endured with regards to citizenship.
Drew Lafond, a representative of the Indigenous Bar Association (IBA), stated that the IBA was disappointed to be “participating in a dialogue which is ultimately premised on tinkering with a formula that is used to determine who is or who is not an Indian under the Indian Act.” Lafond argued for an alternative ‘nation to nation’ approach in which First Nations across Canada could take control of band citizenship outside of the archaic constructs found in the Indian Act. The IBA was particularly concerned with the inequitable treatment of the illegitimate children of women versus men, as highlighted by the Yantha Plaintiffs in Descheneaux.
On its website, INAC sets out what it believes to be the immediate effects if Bill S-3 is passed:
While not surprising that a Ministry would use an occasion such as this to argue that it requires more funding, it is clear that any increase in the number of Status Indians in the wake of Bill S-3 will require additional resources for INAC.
The completion of the government’s two-stage response to Descheneaux gives it yet another First Nations related deadline to meet within the next few years. It joins:
Each of these commitments is going to require increased funding and a great deal of time and effort. It is thus far unclear whether the Trudeau government is willing to make these commitments.
Descheneaux revealed that despite decades of litigation and several amendments to the Indian Act, residual issues of sexism continue to effect the question of who is a Status Indian. Bill S3 will help with some of the people who have fallen through the cracks of past reforms. The reaction of many First Nations groups though is that continued tinkering with the Indian Act, a document many people find inherently racist, is a waste of time. What is needed in their view (and this author’s) is a full scale reinvention of the relationship between First Nations people and the Canadian government. This relationship would be based on ideas of equality, as opposed to being based on an Act imposed on First Nations people without their consent nearly 150 years ago.
There are encouraging signs that the government wants such a relationship, as borne out by its many promises to First Nations people. Whether or not it is willing to make the commitments of time, money and political capital necessary to achieve it remains to be seen. It is gratifying to see the Deschaneaux Plaintiffs and other like them granted justice, but enactments like Bill S-3 are like fixing cracks in a foundation that badly needs replacing.
This post may be cited as: Elysa Hogg “Bill S-3: A rushed response to Descheneaux” (1 December, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/12/Blog_EH_BillS3Descheneaux.pdf
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By: Erin Sheley
Case Commented On: R v Ndhlovu, 2016 ABQB 595 (CanLII)
It has become conventional wisdom in public discourse that sex offenders are uniquely likely to repeat their crimes. This assumption, combined with the heinous nature of sex offences (particularly those involving child victims), has motivated law enforcement and legislators to adopt unique measures to solve and prevent sex offences. In the United States the FBI maintains a searchable sex offender database compiled from the data of the various state jurisdictions. A user may conduct a geographic search to quickly access the name, photograph, and rap sheet of any sex offender living in their neighborhood. (Eligibility for the database varies substantially by state, both in terms of seriousness of the triggering offence (in some states public urination qualifies), duration of time on the database (in many jurisdictions it is for life), and existence of judicial discretion to require registration (in most jurisdictions it is automatic upon conviction for a triggering offence)).
Canada’s approach has been somewhat more moderate. Under the original incarnation of the Sex Offender Information Registration Act, SC 2004, c 10 (SOIRA), sex offenders subject to a judicial order were required to report within 15 days of the order and provide information for collection in a database, intended to “help police investigate crimes of a sexual nature.” Unlike the publicly available FBI database, SOIRA only authorized specific law enforcement personnel to access this information for use in their investigations. In its original form, adopted in 2004, SOIRA allowed the Crown to make an application for such an order, which the sentencing judge had discretion to deny in cases where its effects on the offender’s privacy or liberty interests would be grossly disproportionate to the public interest in protecting society. In 2011, amendments to the Criminal Code tightened up the application of SOIRA. (See Protecting Victims from Sex Offenders Act, SC 2010, c 17 (the Amending Act)).
In the first place, the Amending Act removed judicial discretion to refuse an order, rendering registration mandatory upon conviction. Second, it expanded the purposes for which authorized personnel could consult the database, from “investigating” to “preventing or investigating” sex crimes. Third, it imposed additional reporting requirements, including the requirement that offenders must report changes to contact information for their employer within 7 days, rather than the 15 days stipulated by the 2004 act. Finally, the Amending Act required offenders with more than one sexual offence to remain on the registry for their lifetimes (subject to an application process the offender may initiate at the 20 year mark). The forward-looking purpose to the Amending Act suggests that Parliament intended to move closer to the American approach to sex offender registration. Indeed, the U.S. Supreme Court has upheld the sex offender registry on the theory that it does not constitute punishment at all but, rather, serves an administrative public safety function, similar to involuntary commitment of the dangerously mentally ill. See, e.g., Smith v Doe, 538 U.S. 84 (2003).
The assumption that most sex offenders are recidivists, however, may be overly simplistic. In one meta-analysis conducted for Public Safety Canada, Andrew J.R. Harris and R. Karl Hanson found recidivism rates among sex offenders to be about 24% -rather less than the overall recidivism rate of 37.1%, calculated by Correctional Service Canada for all criminals. That said, Harris and Hanson report that their 24% figure contains alarming sub-categories of offenders. While rapists repeat offend at an average rate of 24%, child molesters with male victims repeat at a rate of 35%. Considering the seriousness of these sorts of offences, and the lessened relevance of obvious structural economic factors motivating the property and drug crimes included in the overall figure for crimes generally, these numbers are indeed disturbing. Harris and Hanson also observed that recidivism rates decreased as the age of the offender increased, and that prior offences were predictive of future recidivism.
These data show that, on the one hand, we should indeed be concerned about repeat sex offenders, particularly taking into account that empirical studies necessarily omit unreported and unsolved offences. Yet they also suggest that we risk being overly punitive in adopting a one-size-fits-all approach to sex offender databases. In R v Ndhlovu, the Alberta Court of Queen’s Bench found that, for these reasons, the current incarnation of SOIRA runs afoul of the Charter.
Eugene Ndhlovu was a 19-year-old attending a Jersey Shore-themed party thrown by a friend. After drinking with the two victims and other party goers for many hours, Mr. Ndhlovu groped one of them on the thighs and rear end (at para 17). The other victim, RD, woke up in the middle of the night, to find Mr. Ndhlovu penetrating her with his fingers (at para 18). After she told him to stop he tried again, telling her it would “feel good.” When she pushed him away the second time he left (at para 18).
Mr. Ndhlovu, who has no other criminal history, plead guilty to one count of sexual assault against each victim, testified that he was so intoxicated he had no memory of the night’s events, and expressed remorse during sentencing. He was sentenced to six months in jail, three years of probation and, according to SOIRA, ought to have automatically been placed on the sex offender registry (at para 20). Mr. Ndhlovu moved that SOIRA’s application to his case violated his rights under sections 7 and 12 of the Charter.
In considering the accused’s section 7 claim, the Court first determined that the reporting requirements of SOIRA do constitute a deprivation of liberty (at para 44). Given the amount of information required by the registry, the in-person reporting requirements, the requirement that the registrant report trips of seven days or more, and the fact that the registrant is subject to random follow-up visits from law enforcement, this conclusion is fairly unsurprising. In arriving at this conclusion the court also noted that the 2011 revisions had increased the registry’s impact on an offender’s liberty interest by expanding its potential access by law enforcement beyond the original sphere of cases where the state has “reasonable grounds to suspect that the crime being investigated is of a sexual nature” (at para 60).
One issue of significant debate between the parties on appeal was whether the registry itself affected his liberty interests in a psychological manner, by creating “a stigma in his own mind constantly reminding him of his status as a sex offender” (at para 73). The Crown’s argument, which the Court rejected, was that any stigma in the accused’s mind arises not from the registry but from the original conviction.
The more complicated question before the Court was the second part of the section 7 analysis, which was whether the deprivation of Mr. Ndhlovu’s liberty interest was contrary to the principles of fundamental justice. Based upon the language of SOIRA and its Amending Act and the associated Parliamentary debates, the Court defined the state’s legislative objective as protecting “vulnerable people, including children, in society, by allowing police quick access to current information on convicted sex offenders” (at para 87). To determine whether the current incarnation of the Act violates section 7 the Court considered whether mandatory SOIRA orders are arbitrary, overbroad, or grossly disproportionate relative to that objective.
As to the question of arbitrariness the Court does not come to a clear conclusion. It notes that there is a connection between providing police with up-to-date information on prior offenders and the goal of investigating and preventing sex offences (at para 92). Without getting into the empirical data it also notes that “[t]here is, no doubt, a statistical probability that a sex offender will offend again” (at para 92). On this point it concludes that “statistical probabilities cannot protect individuals who will not probably find themselves on that statistical curve ever again,” yet stops short of holding that SOIRA is constitutionally arbitrary.
As to the claims of overbreadth and gross disproportionality, however, the Court is very clear. As to overbreadth it cites the SCC in Carter v Canada for the proposition that “a law that is drawn broadly to target conduct that ‘bears no relation to its purpose’ in order to make enforcement more practical may therefore be overbroad” (at para 94, citing 2015 SCC 5 (CanLII) at para 85). The Crown attempted to argue that mandatory inclusion for all sex offenders was connected to SOIRA’s purpose because “there is no way to reliably know in advance which offenders will reoffend and which ones will not” (at para 105). Relying on precedent, the Court held that such concerns about practical distinction are appropriate to a section 1 analysis of whether a section 7 violation is justifiable, but not relevant to the determination of whether the law is overbroad as a matter of fundamental justice. Therefore, it did not consider those arguments in concluding that the current SOIRA regime is overbroad insofar as it captures offenders (such as Mr. Ndhlovu) who are unlikely to reoffend in the first place.
In considering whether the SOIRA regime is grossly disproportionate, the Court cited the test announced by the SCC in Bedford, which balanced “the negative effect on the individual against the purpose of the law, not against societal benefit that might flow from the law” (at para 121, citing Bedford v Canada (Attorney General), 2013 SCC 72 (CanLII) at para 121). The court notes the significant effect on a registrant of SOIRA’s random compliance checks, including, in particular, the possibility that law enforcement could inadvertently disclose the registrant’s status to unauthorized third parties during such checks (at para 124). (As an example, the Court cites Mr. Ndhlovu’s ongoing concern that officers could come to perform such a check at his church (at para 122).)
The Court therefore concluded that “the law as it stands will now place Mr. Ndhlovu on police radar for the rest of his life anytime a sexual offence is committed by a black man of average height in his neighborhood” (at para 132). It relied on its own factual findings at sentencing that Mr. Ndhlovu was a low-risk offender due to his lack of criminal history, his remorse, and his testimony that he no longer drank alcohol after the incident in question. Therefore, it concluded that the mandatory reporting regime currently prescribed by Section 490.012 of the Criminal Code unjustifiably infringes section 7 of the Charter, allowing the Crown to proceed with a section 1 hearing to determine whether the infringement can be justified and the provisions saved. (Having resolved the appeal under section 7, the Court did not address Mr. Ndholovu’s section 12 argument (at para 131)).
This holding is consistent with the SCC’s approach in other areas of criminal procedure, which have shown that section 7 issues of overbreadth can be resolved where the trial court has discretion to determine on a case-by-case basis whether a procedural requirement violates a specific defendant’s Charter rights. For example, in R v Corbett,  1 SCR 670 (CanLII) the SCC read trial court discretion into section 12 of the Canada Evidence Act, which allows the Crown to introduce an accused’s prior criminal history as impeachment evidence where the accused takes the stand. While the Court does not cite the empirical literature on recidivism, its holding implicitly acknowledges the reality that not all sex offenders fit the repeat offender model. While its reasons make it seem unlikely that the Court will find that SOIRA is saved by section 1, the hearing will present an important opportunity for the parties to make submissions that will educate courts and Parliament about what we actually know about sexual offender recidivism. To the extent that SOIRA should be amended to reintroduce discretion, trial courts will benefit from information about how best to wield it in a way that balances victim protection against the liberty of the accused.
It is worth noting, however, that despite the constitutional—and practical—benefits to the ABQB’s approach in Ndhlovu, its reasons for judgment raise some concerns about the fact-finding at trial. First off, in its statement of facts the Court notes that the victim “personally insisted on Mr. Ndholovu’s attendance at her party” which was “‘advertised’ on [her] Facebook page as a highly sexualized Jersey Shore DTF (down to fuck) party and was to have a stripper pole available” (at paras 14-15). While these observations hardly rise to the level of Justice Camp’s now-famous commentary, their seeming irrelevance to the accused’s undisputed conduct in manually raping the hostess calls into question the court’s conclusion that Mr. Ndhlovu is an unlikely repeat offender. (One would assume that a party-goer should be on notice that an invitation to a Jersey Shore party does not constitute consent by the hostess to every party-goer who stumbles upon her while asleep). Indeed, Mr. Ndhlovu’s conduct—manual penetration of an unconscious woman after both had been drinking together at a party—is identical to that of Brock Turner’s, whose light sentence by a California court has become emblematic of inappropriate use of sentencing discretion by trial courts in sexual assault cases.
Second, the Court seems to place a fair amount of emphasis on the fact that Mr. Ndhlovu’s “offences related to alcohol consumption and he testified that he had since stopped drinking” (at para 133). While it is certainly relevant to the risk of re-offence that an accused who offends while drinking has stopped drinking, it does not sound as though the Court conducted any fact-finding on that question. In the absence of such fact-finding, the trivializing of sexual offences committed while drunk undermines the policy of section 273.2 of the Criminal Code, which prevents an accused from arguing mistaken belief in consent where it arose from self-induced intoxication. In amending the law in this manner Parliament sought to protect victims from the moral hazard of sexual assailants being able to rely on exactly the circumstances in which sexual assaults are most likely to occur. In minimizing the role of alcohol in this case for SOIRA, the ABQB seems to be making a bit of an end-run around this policy.
In other words, appropriate constitutional scrutiny of sex offender databases is a double-edged sword. In the United States, the legal fiction that such databases do not constitute “punishment” has shielded them from scrutiny under the Eighth Amendment prohibition on cruel and unusual punishment, and eased their defence under the Due Process clauses. If Canadian courts are, as they should, going to require a more nuanced analysis on a case-by-case basis, that analysis should not run afoul of existing principles in the substantive law of sexual assault. Judicial discretion is only constitutionally valuable if it is wielded appropriately.
This post may be cited as: Erin Sheley “The Constitutional Limits of the Sex Offender Registry”(30 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_ES_NDhlovu.pdf
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By: Nigel Bankes
Documents and press releases commented on:
(1) Press Release, Electricity Price Protection, November 22, 2016;
(2) AESO, Alberta’s Wholesale Electricity Market Transmission Recommendation, dated October 3, 2016, released November 23, 2106, accepted by the Province;
(3) Press Release: Alberta Announces Coal Transition Action, November 24, 2016 and related letter from Terry Boston to the Premier of Alberta (dated September 30, 2016, released November 24, 2016).
The week of November 21, 2016 will go down as a significant week in the evolution of Alberta’s electricity market. Having introduced Bill 27, the Renewable Electricity Act on November 3, 2016 (see post here) the provincial government followed that up this last week with a number of significant initiatives.
First there was the announcement on Tuesday November 22 that the province was going to cap electricity prices in the retail market. Second, on Wednesday November 23, the province announced that it planned to accept the recommendations of the Alberta Electric System Operator (AESO) to introduce a capacity market in Alberta to supplement the existing energy only market and then, third, on Thursday November 24 there was the announcement that the province had reached a settlement with the owners of the six coal generating facilities with useful lives beyond 2030 who will be required to cease burning coal at those facilities by then. And later that same day, the province announced tentative settlements with most of the parties affected by the province’s efforts to question the ability of the buyers under power purchase arrangements (PPAs) to turn responsibility for those arrangements over to the Balancing Pool. “Black” Friday was almost quiet, except for the morning’s announcement that, as of January 1, 2017, the province would “prohibit unsolicited door-to-door selling of energy products to protect people from misleading high-pressure sales tactics.”
This is a very positive package of measures. It offers comfort to consumers that they will be protected at least in the short term from excessive price volatility on the upside. It offers a realistic strategy for obtaining the investment that the province needs to build combined cycle gas generation to replace the coal fleet and thus addresses potentially very serious energy security concerns. It offers comfort to coal generators that they are being treated fairly in relation to stranded assets and gives them both the wherewithal and reason to invest in the construction of new generation. And finally it splits the difference between the province and the PPA buyers in their dispute on the terms of the PPAs. This was an important package to put together. Without it the transition from coal would be more risky (in energy security terms) and likely more expensive (increased cost of capital). While a significant change in market structure such as this is not without its own risks (a perception of continuing change will deter investors) most agreed that an energy only market was not going to deliver on the energy security front.
While just about everybody is a winner in this brave new world there will be some losers; topping that list will likely be electricity retailers but also incumbent renewable generators; and there may still be a spoiler. As of the time of writing, Enmax had not joined its fellow PPA buyers in settling with the province in the province’s bid to strike out the “more unprofitable” language from the PPAs. Finally, in most cases, the details of the above initiatives have yet to be worked out. But now at least we have something that look like a plan. It might have been dribbled out over the course of a few days, if not weeks, but this looks like a coherent plan for getting off coal and keeping the lights on. This is a significant achievement.
Capping Electricity Prices
The cap on electricity prices for consumers will be implemented using the Regulated Rate Option (RRO). While Alberta has competition at both the wholesale level (implemented through the power pool operated by AESO) and the retail level (through competition between retailers), Albertans do not have to participate in the retail market by signing a contract with a retailer. Instead, the default is the so-called regulated rate option which must be offered by the distributor or its designate (see Regulated Rate Option Regulation, Alta Reg 262/2005). The RRO is only available to certain customers including residential, farm and irrigation customers. The RRO has been much criticized as inconsistent with the ethos of market based approaches to pricing electricity (see Power for the People Report) but even a string of conservative governments committed to market pricing proved to be unwilling to take the political risk of forcing consumers to make their own contracts for electricity and natural gas. Apparently we can choose our contract providers for pretty much anything else but not electricity or natural gas (and here I confess that my household is on the RRO – inertia being the principal reason!).
The main consequence of using the RRO as the vehicle for delivering the price cap is that RRO customers are the only parties that will benefit from the price cap. The price cap will not affect generators. Generators will continue to receive the pool price. Neither will the cap affect the RRO provider. The government is committed to keeping the RRO provider whole. The parties that will most likely be adversely affected are the retailers offering a competitive service. Their offerings will not be subject to a cap. Hence, if customers perceive a risk that contract prices will exceed the RRO cap then we can expect these customers to migrate en masse back to the RRO. While the risk of this should be present in the minds of customers holding contracts over the longer term, in the shorter term there is little risk of getting anywhere close to the cap with the present oversupply forecast to continue for a number of years and current prices far below the 6.8 cents\kwh of the cap. But still there must be a chilling effect on switching away from the RRO and it is hard to imagine new retailers entering the competitive market in these circumstances.
Compensating the Coal Fired Generators
Three companies, TransAlta, Capital Power and ATCO Power, will each receive compensation based on the operating lives of assets which had predicted end-of-life dates between 2036 and 2061. The payments have an overall value of $1.1 billion (2016) and will be made over a period of up to 14 years.Facility Owner End-of-life Keephills 3 Capital Power & TransAlta 2061 Genesee 1 Capital Power 2044 Genesee 2 Capital Power 2039 Genesee 3 Capital Power & TransAlta 2055 Sheerness 1 Atco Power and TransAlta 2040 Sheerness 2 Atco Power and TransAlta 2036
The compensation formula was developed by Terry Boston who was retained by the province. Boston’s letter to the premier suggests that “The criteria are based on net book value of the assets – which is fully auditable and transparent – pro-rated by the years stranded by the policy decision to account for depreciation, and discounted for the probability some of the components of the assets can be re-used.” Boston suggested aiming to have about half of the existing coal facilities changed over to gas rather than constructing all new combined cycle gas plants. This will be both cheaper and produce a generation fleet with more diverse vintages.
The PPA settlement
I have described the PPA dispute in two previous posts here and here. The judicial review application launched by the province has the two-fold objective of striking the “more unprofitable” language from the change of law provisions of the PPAs and quashing the decision of the Balancing Pool to accept an assignment of one of the PPAs. The overall goal of the province in launching the application was to protect consumers from being saddled with the economic burden of the unprofitable PPAs.
The province appears to have reached settlements on this litigation with Capital Power, TransCanada and AltaGas. Thus far there has been no similar announcement with respect to Enmax. Enmax is a wholly owned subsidiary of the City of Calgary and Mayor Nenshi has been unrestrained in his criticism of the province for having the temerity to question this unorthodox backdoor “amendment” of the PPAs.
Although, so far as I am aware, no details of the settlement have been released, the reports in the press suggest that the conceptual underpinning of the settlement is that the Province will cover the incremental costs associated with the carbon levy while the PPA buyers continue to bear the market risks. That makes sense since it would be consistent with the basic understanding in the PPAs which was that the buyers were picking up the market risk but should be shielded from the risk of changes in law. The arguably unlawful addition of the “more unprofitable” destroyed that basic bargain by allowing the buyers to transfer market risk back to government, carried on the back of a change of law.
That conceptual underpinning would be easier to see if the buyers were to keep the PPAs and if monetary compensation were to flow from government to the buyers. But that is not what is happening. It seems that the buyers will get to “terminate” (i.e. assign the balance of the term of the PPAs to the Balancing Pool) but in return must pay the estimated (perhaps guess-timated) discounted market losses to the BP, since upon taking the assignment it is the BP that will bear the market risk. (See Capital Power Press Release, November 24, 2016, stating that Capital Power and its syndicate partners have agreed to pay the Balancing Pool $39 million). There are probably a number of good reasons for structuring the saw-off this way. One reason, as the events of this week amply demonstrate, is that we are going to see more changes in law coming down the pike. And it would be unfortunate indeed if we were to keep- re-playing this record over the next few years. Having the BP hold the PPAs avoids that scenario.
I think that this is a reasonable saw-off because I think it respects the basic bargain. The amendment to the change of law clause was at the very least improper if not simply unlawful. It was clearly not a house-keeping measure, since, as noted above, it changed the basic structure of the bargain by allowing the buyers to transfer market risk to the government\consumers under cover of a change of law. With this addition, the clause was no longer a “normal” change of law clause. And for that reason the amendment was also procedurally flawed since the significant change never went through the public review that was contemplated for the terms of the PPA. But this was hardly the time for the government to put this all this at issue. The province would likely have faced limitations problems in making its case, but of more practical significance, the litigation was sending all the wrong messages at a time when the province needed to be able to attract significant capital investment in the power sector. Whether Enmax will come to the table or whether the matter will still proceed through the courts remains to be seen.
One final thing. There has been some talk about the Notley government acting like a “banana republic” (Adam Legge, Calgary Chamber of Commerce, see Calgary Herald Article here) in the way that it has approached these issues, even threatening to undo the amendment by targeted retroactive legislation. Apart from the odious nature of Mr. Legge’s terminology (Mayor Nenshi to his credit has chosen his words more carefully he simply refers to the government as “absolutely nuts”), these accusations miss the mark. If anything the litigation was attempting to uphold the rule of law in the face of what looks like backroom cronyism of the worst kind. And as for the retrospective legislation I think that all that it would have done was to restore the basic balance to the change of law clause as discussed above. And it would not have been unprecedented. Newfoundland has tried for years, indeed decades, to restore the basic balance to the deal struck for the development of Churchill Falls and has been thwarted only by the technical argument that the contract in question in that case was found to be “located” outside the province and therefore beyond the reach of the legislative assembly of Newfoundland and Labrador: Reference re Upper Churchill Water Rights Reversion Act,  1 SCR 297 (CanLII). Unfortunately for Enmax it is crystal clear that these PPAs are located right here in Alberta.
The Capacity Market
The AESO report to government confirms what many had been saying over the last year which is that Alberta’s energy only market (EOM) will not be able to deliver energy security; perhaps not under any circumstances but certainly not without creating tremendous price volatility which customers, and therefore ultimately politicians, would not tolerate (with or without a consumer retail price cap). While some argue that new developments in energy storage will help firm up the capacity of renewable sources at this stage that seems quite speculative. There is no doubt some political advantage for the opposition parties to argue that it is the NDP government that has broken the energy only market, the reality is that such a market will probably only work for so long as there is steadily rising demand (load). Such a market probably cannot deliver energy security (lights on) in the face of multiple uncertainties including low oil prices (and therefore lower growth in load), changing government carbon policies and general economic uncertainty.
But if we conclude that EOM is broken there is still the question of what to do about that. The AESO Report considered four options: (1) stay the course (i.e. retain the commitment to the EOM), (2) introduce a capacity market, (3) long term contracting, or (4) a return to cost of service regulation. The AESO report comes down heavily in favour of introducing a capacity market having evaluated the options against a number of criteria: reliable and resilient system, environmental performance, reasonable cost to consumers, economic development including job creation, and orderly transition (costs and risks). The report offers a nice summary of the need to provide two streams of earning to generators (energy and capacity earnings) as follows (at 40):
As more and more renewables are added to the supply mix, Alberta is moving into an environment where it will be energy rich but capacity limited, due to the non-dispatchable nature of a significant portion of the generators in its electricity system. With additional intermittent renewable resources the electricity system will have sufficient or even excess energy at times; however, due to the intermittent, low-reliability capacity value of the resource, supply adequacy cannot be guaranteed. The price signal provided by the current energy-only market increasingly will not signal for new investment. In order to ensure that new generation capacity is developed in a timely and orderly manner, Alberta needs to put a specific value on the attribute of “capacity.” A capacity market will accomplish this. A capacity market will ensure reliability by maintaining supply at a targeted level, something which the current energy-only market structure does not do.
From a legal perspective perhaps the most interesting part of the report is the analysis of the costs and risks of an orderly transition for the four options. With respect to the introduction of a capacity market the AESO acknowledged that the design and implementation process would be time consuming and likely take about three years with some risk (given current rule making processes (including appeals) (see Electric Utilities Act, SA 2003, c E-5.1 ss.20 – 26)) that it might not be achieved in a timely manner and thus might require “a more prescriptive approach (AESO Report at 33) – which I take to be code for legislation. The report went on to note (at 33):
The role of regulatory oversight in the capacity market will need to be established, with a particular focus on clarifying roles, responsibilities and methods to ensure the reasonableness of capacity costs and determine their allocation. This may require minor legislative changes but should not impact the overall role and mandate of existing electricity agencies. In addition, other design decisions must be made early in the design process. Changes to transmission, hydro or intertie policy, as well as treatment of coal generation and renewables, can be incorporated into a capacity market. Design of the capacity market would proceed more efficiently if these policy directions were established upfront, while changes introduced later may result in delays to capacity market implementation.
Unlike the non-market structures [cost of service regulation and long term contracts] there should be fewer claims for compensation with this structure change.
During the transition period while a capacity market is being implemented, it is highly likely that a “bridging mechanism” will be required to ensure reliability before new supply supported by a capacity payment is added to the system (the period from 2021-2024). No investments in new supply are expected until the details of the capacity market are determined. Bridging mechanisms may range from contracts with specific loads to curtail during supply shortages to interim (five year) capacity-like contracts with new generation supply. These contracts would be entered into with the understanding that the new supply will eventually need to compete in the capacity market. In addition to the cost of entering such arrangements, there is some risk that market participants will push to have these contracts extended and continued, thus defaulting to an unintended, alternative market structure [long term contracts].
The bridging would be required because the new scheme will likely take three years to fully implement meaning that the first capacity auctions would be held no sooner than 2019 or 2020 while the time required to build new gas generation is five to seven years.
Also of interest is AESO’s assessment of how the capacity market will fit with other elements of the province’s climate leadership plan. Here the AESO assured government that its renewables program will not be compromised although to the extent that generation has two streams of earning, one would expect energy prices to be lower. This will mean that payments under the contracts for difference approach that the province has adopted will be larger. It may also mean that (at 38) “A portion of the renewable support may be transitioned into a capacity market by carving out volumes for renewables with capacity value.” Furthermore there should be a good fit with coal generation phase-out since (at 38) “a competitive auction for capacity [held] in concert with a retirement schedule provides transparency, mitigates supply adequacy concerns, and can be used to smoothly reduce the volume of coal that can depart from service in any given period.” There might also be a good fit with energy efficiency policies (at 39) to the extent demand curtailments could be brought in to a capacity market. Presumably as well the capacity market approach offers some flexibility to accommodate future technological developments in relation to storage and distributed generation.
Those who will be negatively impacted by the change in approach may include incumbent renewable generation and perhaps incumbent co-generation facilities. Incumbent renewable will be negatively impacted since the introduction of a stream of capacity payments should serve to depress prices in the energy market. Since most renewables will not be able to earn capacity credits because most are non-dispatchable unless matched with storage (hydro and biomass-fueled generation will be the key exceptions) their overall revenue stream will decline. Some co-generation “may actually prefer the revenue upside offered by a more volatile and higher energy price” for their surplus generation.
For those who were thinking of a return to the good old days of cost of service regulation the AESO report carried the warning that this would be like putting Humpty back together again (vertically integrated utilities); a Herculean task creating all sorts of winners and losers with claims for compensation by the losers, a process (at 34) that “would involve legal challenges and take significant time.”
Market Design Issues
The capacity market will operate alongside the energy market. The AESO recognizes that the details of market design matter a lot. These details will have to be worked out (negotiated) with the industry over the next few years. Appendix D to the report discusses some key design considerations for a capacity market including: (1) The method for determining the volume of capacity required. (Elsewhere the report suggests (at 39) that the amount of capacity to be purchased to give an appropriate security margin would be 15% higher than expected peak load.) (2) The question of who holds the obligation to procure capacity? The ISO or load serving entities? (3) The contract term, delivery period and frequency of procurements? Here the report notes that (Appendix D at 1):
Typically, capacity contracts are between one and five years in duration but other durations are possible. New resources often receive longer contract terms than existing resources. In addition to contract duration, it must be determined how far ahead of time before the contract start date the contract should be procured. Typically, procurement is done one to four years ahead of the contract start date but other options are possible. The potential and timing of subsequent procurements after the initial procurement for rebalancing of volume procured must also be established. How often a procurement process is held and how many procurements are conducted for a delivery period must be established.
(4) Resource eligibility. Here the relevant considerations include:
(5) Delivery requirements and performance assessment and incentives. (6) Market mechanics (e.g. price caps and floors, market power mitigation, and secondary markets). (7) Allocation of capacity costs amongst load.
In sum it is evident that much remains to be done and there will be a very active debate as to manner of these variable. And somebody will have to act as the umpire. Will that be the AESO itself or the Alberta Utilities Commission?
Terry Boston’s four page letter to the premier is well worth reading for its strategic advice to the province. Three of his recommendation stood out for me. I have already referred to his comments on coal-to-gas conversions for some existing coal plants. Boston also noted that this might require some relaxation in proposed federal carbon standards for gas generation. Second, he suggested that there should be more exploration of demand side management measures to manage peak demands rather than building simple cycle peaking plants. And finally, Boston makes a big pitch for hydro not only because of its capacity and flexibility benefits but also because of its benefits to Alberta’s economy insofar as “Around 80 per cent of capital dollars for new hydroelectric development will be spent in Alberta as opposed to construction of other renewable resources (which use mostly imported equipment, resulting in less than 20 per cent of the investments for wind and solar being spent in Alberta’s economy).” This will no doubt ignite an active debate about the pros and cons of significant hydro developments in Alberta a debate that will need to involve First Nations and Metis communities as well as environmental interests.
A final comment on process. The public record suggests that the AESO took the initiative in deciding to study how an energy only market might perform under changing condition and what the alternatives might be. It did so in a very non-public way. The process from here on in will be public, but the decisions to start the process, to consider options, to recommend to government and ultimately the government’s decision to adopt a capacity market approach were all made behind closed doors. The consultants retained by AESO spoke to a select number of market participants about the issues but there was no broad, open and transparent consultation. I find that surprising from this government. As I have said before I have been hoping that this government might do thing differently, that it might proceed by publicly considering and assessing options and developing white papers and the like before settling on a particular approach. But on matters involving electricity that seems not to be the case. Why is that? It may the need to act quickly and resolutely, but the Leech report process suggests that it might be possible to achieve those goal and engage in a more public consideration of alternatives.
This post may be cited as: Nigel Bankes “Finally, a Plan (albeit drip-by-drip) to Phase Out Coal and Keep the Lights On” (29 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_NB_CoalTransition.pdf
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By: Jonnette Watson Hamilton
Case Commented On: R v 954355 Alberta Inc (The Fast Lane), 2016 ABPC 229 (CanLII)
The Fast Lane, a used car dealership in Calgary, was charged with three offences under the Fair Trading Act, RSA 2000, c F-2. It was found guilty of misleading and deceiving the customer by representing that the 2006 Mazda she bought was in roadworthy condition, but not guilty of the other two offences. The Fast Lane had argued in its defence that it had relied upon the Mechanical Fitness Assessment required by the province’s Vehicle Inspection Regulation, Alta Reg 111/2006. Judge Heather Lamoureux concluded The Fast Lane’s representation of roadworthiness was not intentionally misleading. However, she held that the used car dealer could not rely on the Mechanical Fitness Assessment for its opinion on roadworthiness because that Assessment did not speak to roadworthiness. A car buyer should not rely on that Assessment either. The Mechanical Fitness Assessment is yet another disappointment in the operation of the troubled Alberta Motor Vehicle Industry Council (AMVIC), which regulates motor vehicles, including their sale and repair, as well as the licensing of dealer and repair facilities in Alberta.
In June 2015, the customer who eventually purchased the 2006 Mazda, which had 240,000 kilometers on it, visually inspected the car and took it for a short test drive. She received a Mechanical Fitness Assessment from the salesperson she dealt with, who noted that three items were said to be “non-compliant” on that Assessment: the wheels, the ball joints, and the windshield. The salesperson told the customer the Mazda was “in roadworthy condition” and “safe and roadworthy” (at paras 3, 18). The customer assumed that The Fast Lane had performed a vehicle inspection and took responsibility for ensuring the fitness of the vehicle. Therefore, she assumed that she did not need to get an independent assessment. She was wrong.
The day after she bought the Mazda, the car would not start. The battery was the original one and a new battery was needed. Just two weeks later, after driving about 900 kilometers, the Mazda suddenly stopped and would not start again. After unsuccessfully trying to give the car back to the Fast Lane, the customer parked the car. A month later, in August 2015, the customer was moving and tried to drive the Mazda from her old home to her new home. There was a sudden bang, oil spilled all over the road and the engine quit. The Mazda was towed to her new home and never driven again; it does not start and is not driveable. A piece of metal was found in the engine block and an independent mechanic told the customer a new engine was needed. The end result was that the customer spent $4,350 to go about 900 miles.
Judge Lamoureux found that at the time of the sale the Mazda was not roadworthy and was not fit for the purpose for which it was intended (at para 9).
The only assessment of the vehicle that was done before it was sold by The Fast Lane was the Mechanical Fitness Assessment (at para 6). An officer from AMVIC testified that the Mechanical Fitness Assessment is a condition precedent to sale of a used vehicle by a licensed dealer to a consumer. It is required by section 15(1) of the Vehicle Inspection Regulation, Alta Reg 111/2006, which states:
15(1) Subject to subsection (2), a dealer in used motor vehicles shall, before entering into a contract to sell a motor vehicle, give to the buyer a used motor vehicle mechanical fitness assessment that contains the following:
(a) a statement identifying the type of motor vehicle as a truck, motorcycle, bus, van, light truck, automobile or other type of motor vehicle;
(b) a statement showing the make, model, year, vehicle identification number, odometer reading in kilometres or miles, licence plate number and province of registration of the vehicle;
(c) the name and address of the dealer selling the vehicle and the name of the technician who issued the mechanical fitness assessment;
(d) a statement that the mechanical fitness assessment expires 120 days after the date on which it was issued;
(e) a statement certifying that at the time of sale the motor vehicle
(i) complies with the Vehicle Equipment Regulation (AR 122/2009), or
(ii) does not comply with the Vehicle Equipment Regulation (AR 122/2009) and containing a description of the items of equipment that are missing or do not comply with the Vehicle Equipment Regulation (AR 122/2009);
(f) the signature of the technician who conducted the mechanical fitness assessment;
(g) the date the mechanical fitness assessment was issued.
The Mechanical Fitness Assessment is completed by a certified journeyman technician and prepared for the dealer and, eventually, the buyer. AMVIC created the mandatory report form that is to be used for the Mechanical Fitness Assessment. That one-page form, which is available here, provides spaces to input all of the information required by section 15(1). The form appears to list numerous parts of a vehicle and state whether each part “complies” or is “non-compliant”.
Judge Lamoureux agreed that, on its face, the Mechanical Fitness Assessment purports “to be a representation as to the road worthiness of a motor vehicle” (at para 10). However, she stated that there are “fundamental flaws and omissions” in the Mechanical Fitness Assessment and section 15(1) of the Vehicle Inspection Regulation which requires it (at para 10). According to Judge Lamoureux:
the regulation itself omits any requirements to undertake a roadworthiness assessment of the powertrain, accelerator, fuel system, exhaust, transmission, clutch, fluid levels for the power steering and brakes, the CV joints and the front/rear/spindle axles ? all of the fundamental operating aspects of a vehicle. (at para 10).
The Mechanical Fitness Assessment form does require an assessment of the components of the powertrain that Judge Lamoureux listed, but not the engine. All of listed parts of the powertrain do have to be assessed as “complies” or “non-compliant”. The problem which Judge Lamoureux pointed out is that the Vehicle Inspection Regulation does not set any standards for judging the powertrain components.
The same is true of the section of the form titled “Electrical”, which includes wiring, battery, switches and alternator. Those electrical components also must be assessed as “complies” or “non-compliant” but the Vehicle Inspection Regulation sets out no criteria for assessing them. Why the 10-year-old battery in this case was assessed as complying, and with what it was supposed to comply with, is not specified.
The Vehicle Inspection Regulation certainly does set standards or criteria for assessing many of the things listed on the form: all of the various lamps, some instruments, the brakes, the steering, the suspension, the diagnostic codes, the frame and body, the tires and the wheels. For example, section 53(1) adopts SAE Standard J1703 and SAE Standard J1705 for hydraulic brake fluids. See sections 4 to 83 of the Vehicle Inspection Regulation for the entire list of standards and criteria.
The AMVIC website says that “The standards to be utilized when conducting a vehicle Mechanical Fitness Assessment is to use the original equipment manufacturers specified wear limits for compliance” (at para 13). However, there is nothing on that form or in the regulations that requires compliance with the manufacturer’s wear limits.
Because of the peculiar disconnect between the Vehicle Inspection Regulation and the Mechanical Assessment form, Judge Lamoureux determined that the Mechanical Fitness Assessment is not a representation that the engine and the powertrain of the vehicle are roadworthy or fit for the purpose of operating on a highway (at para12).
The Fast Lane was found guilty not because it relied upon the Mechanical Fitness Assessment and, by giving it to the customer, induced her to rely on it as well. They were found guilty because their salesman told the customer that the Mazda was “in roadworthy condition” and was “safe and roadworthy.” Therefore, the customer relied on both the Mechanical Fitness Assessment and The Fast Lane’s representations of roadworthiness. And it was the latter representations that were misleading and deceptive and therefore contrary to section 6(4)(a) of the Fair Trading Act.
For used car dealers, the lesson to be learned from this case is that they should not make any representations about the roadworthiness of their used cars. Not to be too cynical, but they should simply hand their customers the legally-required Mechanical Fitness Assessment and rely on that form’s long and official-looking list of “complies” and “non-compliant” components to give customers the impression their vehicles are fit for the purpose of being driven on the road. (And they should rely on a sales contract that excludes liability under the Sale of Goods Act, RSA 2000, c S-2, section 16(2), which would otherwise imply a condition into the contract that the goods sold are reasonably fit for the particular purpose for which the goods are required.)
For customers buying vehicles from used car dealers, they should not be taken in by the seeming comprehensiveness and meaningfulness of the Mechanical Fitness Certificate. They should have an independent assessment done by their own mechanic. The Vehicle Inspection Regulation and the Vehicle Equipment Regulation do not provide much in the way of protection for the buyer of an ordinary used vehicle (not out-of-province and not salvage).
Why would AMVIC create a Mechanical Fitness Assessment form that must be completed and given to used car dealers and their customers and that includes powertrain and electrical components for marking as “complies” or “non-compliant” without stating what those components must comply with? The AMVIC is supposed to be the government’s watch dog. According to information on its website (here), the AMVIC is a not-for-profit organization that was incorporated in 1999 “for the purpose of administering motor vehicle industry regulations as outlined in the Fair Trading Act”, RSA 2000, c F-2. There is nothing in the Fair Trading Act about AMVIC and nothing in the Fair Trading Act that is specific to motor vehicles. However, under section 136(5) of the Fair Trading Act, the Director of Fair Trading may “delegate to a regulatory board any or all of the Director’s powers, duties or functions under this Act and the regulations, except the power to approve bylaws”. The delegation to AMVIC is made under Part II of the Automotive Business Regulation, Alta Reg 192/1999 that is made under the Fair Trading Act. AMVIC operates through “a delegation agreement with the Minister of Service Alberta”, doing the government’s job.
However, it has not been doing the government’s job very well for quite a few years now. See, for example, Charles Rusnell, “Alberta Motor Vehicle Industry Council sued for negligence: Class-action lawsuit involves failed consignment sales company”, CBC News, 22 June 2015. The class action law suit claims AMVIC failed to effectively regulate the auto industry’s business practices. More interestingly, as Charles Rusnell notes, the lawsuit makes a broader claim that Service Alberta failed to properly oversee AMVIC when it did not make sure that AMVIC corrected the serious deficiencies in its policies and operational conduct identified in previous government reviews. The lawsuit claims that AMVIC failed to implement the recommendations made by Service Alberta in March 2009, February 2013 and August 2014. See also Charles Rusnell and Jennie Russell, “LuAnne Sirdiak abruptly leaves Alberta Motor Vehicle Industry Council: Investigations manager left council on Thursday”, CBC News, 3 April 2015; Charles Rusnell and Jennie Russell, “AMVIC director acted like ‘tyrant,’ internal draft review says: Review says John Bachinski, Alberta Motor Vehicle Industry Council director, bullied staff”, CBC News, 22 April 2015. The Investigative Review Findings of the Operational Review of Investigative Practices begun in August 2014 is available from Service Alberta here.
AMVIC is now being reviewed for the fourth time in seven years, but this time by the province’s new NDP government. See David Boushy and Tony Tighe, “Province announces review of Alberta Motor Vehicle Industry Council” Global News, 11 August 2016; Reid Southwick, “Alberta launches review of how well auto sales watchdog protects consumers”, Calgary Herald, 11 August 2016.The government has appointed former mayor of Spruce Grove, George Cuff to conduct a review of AMVIC. The review is expected to take three to four months and then Cuff will recommend what, if any, changes the province should make to AMVIC. Whether this review by the NDP will lead to better results than did the previous three reviews by the Progressive Conservative government remains to be seen.
This post may be cited as: Jonnette Watson Hamilton “You Can’t Rely on a Motor Vehicle’s Mechanical Fitness Assessment ”(28 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_JWH_Fastlane_Nov2016.pdf
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By: Nigel Bankes and Heather Lilles
PDF Version: Making Sense of Nonsense? Or Perhaps Not
Case Commented On: Eon Energy Ltd v Ferrybank Resources Ltd, 2016 ABQB 585 (CanLII)
What happens when two oil and gas companies enter into a joint operating agreement (JOA) to which is attached the 1981 CAPL Operating Procedure and the PASWC Accounting Procedure and then proceed to operate the properties according to a completely different set of arrangements? As one might expect, things are fine for so long as each perceives some benefit from these de facto arrangements. But when relations deteriorate it’s a mess; and then both counsel, and ultimately the Court, have to try and make sense of what has happened. And in this case that evidently proved difficult for all concerned and likely, very, very expensive. The hearing of this case took 16 days and then Justice Kim Nixon took two years to render this judgement. There were also interlocutory injunctive proceedings (unreported) and there will be a series of accounting issues to be addressed as a result of this judgement. The result is extremely unedifying. The judgement is long (53 pages), meandering, fact laden, and convoluted. Perhaps the best that can be said for it is that it might serve as a salutary warning to be used by lawyers acting for junior oil and gas companies: “this is what happens when you make things up as you go along and act as if the written agreement is a mere inconvenience.” The case is also another illustration of the hard reality that co-ownership is a messy business and fundamentally an institution for those who can get along together. Sometimes the costs of maintaining and fighting about the relationship are not worth the benefits to be obtained.
In one of the more enigmatic paragraphs of her decision Justice Nixon suggests that the parties are asking her to re-write their agreement (at para 260 and again at para 397). But the question all along is which agreement? The written agreement? Or the agreement evidenced by the conduct of the parties?
In what follows we will do our best to distill the essential facts and legal reasoning from Justice Nixon’s judgement.
The written agreements between the parties
Ferrybank Resources Ltd. (Ferrybank) and Eon Energy Ltd. (Eon) entered into a Confirmation of Interests and Joint Operating Agreement (the JOA) on February 1, 2001 in respect of six wells (three of these wells were later sold leaving the 2-01, 4-07 and 6-07 wells in dispute). The agreement confirmed that Ferrybank held a 10% working interest and Eon held a 90% working interest in all petroleum substances. There was a 1981 CAPL Operating Procedure (the 1981 CAPL) and a 1983 Petroleum Accountants Society of Canada (PASC) Accounting Procedure appended to the JOA. The JOA appointed Ferrybank as the “Initial Operator”, well-licensee, and the party responsible for entering into marketing agreements with third parties. (at paras 13-15, 247) It would ordinarily follow from these arrangements that Ferrybank and Eon would each be responsible for their proportionate share (10:90) of the costs, expenses and liabilities associated with the properties and also be entitled to the same proportionate share of production and revenues.
The JOA and annexes contained two express provisions with respect to operator fees. The same clause of the JOA (cl. 8(b)) by which Ferrybank appointed Eon “as its sole agent for the purposes of managing the operations on the Joint Lands” also provided that Ferrybank would not be charged its share of operating overhead but would instead receive from Eon ‘$200 per well per month to perform its [functions as the] registered and designated operator of the Assets.” (at para 173) We will refer to this as the administrative fee. The second provision purported to be an election for overhead expenses in the PASC accounting procedure which provides for a $225 per month per producing well operator fee (at paras 176-179). We will refer to this as the PASC well fee.
The same parties acquired a joint interest in four additional wells in the same percentages in October 2001. There was no executed written agreement with respect to these additional wells (at para 6) although the terms of the agreement were set out in a letter from Ferrybank to Eon (at paras 83-84).
The de facto arrangements between the parties
The de facto arrangements between the parties were significantly at variance from the terms of their written agreements. The differences included the following: (1) Eon was the de facto operator of all of the wells; (2) with the exception of the 6-25 well and solution gas production from the 4-07 and 6-07 wells for the first ten years, Ferrybank neither contributed its 10% share of costs and expenses nor received the reciprocal revenues, (the solution gas expenses and revenues for the listed wells were dealt with in accordance with the JOA (at para 18) although with very tardy accounting processes); (3) as of 2004 the parties agreed to share the 6-25 well 50:50 on the condition that Ferrybank repair the pump on the well at its sole risk and expense. The 6-25 well was one of the second groups of wells acquired by the parties. (4) As for the operator fees, the record demonstrated that Ferrybank never billed Eon for the administrative fees provided for under cl. 8(b) of the JOA (at para 194) for ten years. (5) Although the CAPL operating procedure requires the operator to keep the joint accounts neither party (at para 255) kept a joint account for any of the wells.
The reasons for the variances
The underlying reason for the dissonance between the written agreements and the actual conduct of the parties or their de facto arrangements seems to have been to game the Licence Liability Rating Program (LLR program) of the Alberta Energy Regulator (AER). Under that scheme an oil and gas licensee in the province must maintain a positive ratio of deemed assets to deemed liabilities for the wells for which it is the licensee. In the event of a negative ratio a licensee is required to make good the shortfall with a deposit. Non-productive wells have a negative effect on the ratio. The calculation does not take account of the beneficial ownership of the wells. A licensee is deemed to have a 100% interest. The practical effect of having Ferrybank as licensee was that Ferrybank’s other producing wells would generate a positive ratio (and fitted in with Eon’s principal’s plans to move his operations to British Columbia). Section 91(2) of the Oil and Gas Conservation Act, RSA 2000, c O-6 (OGCA) prescribes that a licensee or approval holder that is resident outside of Alberta must appoint an agent within Alberta to carry out the licensee’s or approval holder’s duties and other responsibilities under the OGCA and perhaps the parties were trying to avoid that complication. However, this also meant that it was Ferrybank that was principally responsible to the regulator. Over time, Ferrybank also became concerned that it might need to make a security deposit with the AER as its own LLR declined; and indeed it was required to make such a deposit (at para 241) when the 6-25 well stopped producing in 2010 for the second time and following changes to the LLR program.
The disputes between the parties
Justice Nixon canvasses the many disputes that arose between the parties as a result of the above arrangements and the souring of their relationship. We will refer to five main issues: (1) issues with respect to purported variations in the size of the working interests, (2) issues with respect to operator fees, (3) issues related to foregone production from the 6-25 well, (4) change of operator issues, and (5) the right to take in kind.
(1) The working interest ownership issues
The court held that the parties held 10% (Ferrybank) and 90% (Eon) working interests in all of the properties still held by them. This was what the executed written agreement provided for in the case of the original six wells. This agreement included an entire agreement clause which also precluded any amendment except by agreement in writing signed by both parties (at para. 71). However the parties could, by oral agreement, apply the same rules to the four wells subsequently acquired. We agree with this finding (at para 86) but would have added that such an oral agreement, insofar as it deals with interests in lands would also have had to comply with the Statute of Frauds which requires that the agreement be evidenced in writing signed by at least the party against whom it is to be enforced (or otherwise evidenced by sufficient acts of part performance.) That said, we note that a party must expressly plead the Statute of Frauds and perhaps it was not pled in this case. There was at least some evidence (at paras 83 to 85 and indeed scattered throughout the judgement) of the sufficiency of the necessary evidence in writing but there is no assessment of that evidence in the judgement nor any assessment of issues of part performance (although there are analogous estoppel considerations). See the many discussions on ABlawg of the status of the rules relating to part performance in Alberta by Professor Jonnette Watson Hamilton, most recently here.
For Justice Nixon it also followed that the arrangements between the parties as to the subsequently acquired four wells, including the 6-25 well, could also be amended orally (at para 97). This is less obvious to us (after all, the arrangements now include a set of provisions that require that any amendments be in writing); and again we would argue that, at the very least, any such amendments would also have to comply with the Statute of Frauds as above.
The implications of the subsequent conduct of the parties
If the 90:10 arrangements with respect to the originally acquired wells could not be amended without the written agreement of the parties what should be the consequences of that? It would seem to follow that, subject to the Limitations Act, RSA 2000, c. L-12, Eon should have to account to Ferrybank for 10% of revenues but should be able to recover 10% of the costs. In practice, given the limitations period, this would only apply to the period commencing two years from when the action was begun.
This seems to us to be a rather simple conclusion and not obviously unjust to either party – although there is some unfairness to Eon since it bore the sole risk of continued operations (but there does not seem to be much evidence that the risks were high).
However, the parties (and Justice Nixon) preferred a much more complicated solution drawing on estoppel. The conclusion seems to have been that since the parties were agreed that oral amendments could be effective, each must be estopped from resiling from that oral amendment (at para 95). On the evidence (which is painfully discussed from paras 100 – 150), the oral agreement was not an agreement whereby Ferrybank gave up its 10% interest but was instead an agreement whereby the parties agreed to suspend the usual sharing obligations as to costs and revenues associated with a proportionate working interest. Thus, Eon could keep 100% of production while paying 100% of the costs (quaere what would the parties have said about Ferrybank’s liability if something had gone seriously awry). As for the form of estoppel, the parties apparently canvassed proprietary estoppel, estoppel by convention, and promissory estoppel (at para 153). Justice Nixon plumped for estoppel by convention without indicating why the other forms of estoppel were not available. The estoppel served to suspend the sharing obligations of the JOA until Ferrybank served its counterclaim on Eon. Justice Nixon set out the elements of estoppel by convention (at para 157) relying on the Supreme Court of Canada decision in Ryan v Moore, 2005 SCC 38 (CanLII) (at para 59):
(1) The parties’ dealings must have been based on a shared assumption of fact or law: estoppel requires manifest representation by statement or conduct creating a mutual assumption. Nevertheless, estoppel can arise out of silence (impliedly) [emphasis in original]
(2) A party must have conducted itself, i.e. acted, in reliance on such shared assumption, its actions resulting in a change of its legal position.
(3) It must also be unjust or unfair to allow one of the parties to resile or depart from the common assumption. The party seeking to establish estoppel therefore has to prove that detriment will be suffered if the other party is allowed to resile from the assumption since there has been a change from the presumed position.
Perhaps the most difficult of these criteria to fill on the facts was the third criterion and here Justice Nixon seems somewhat equivocal, concluding as follows (at para 160):
Having left Eon to pay 100% of these costs and expenses and take 100% of the risk with respect to the operations, it would be unfair to permit Ferrybank to resile from the parties’ shared assumption with respect to oil revenues. Ferrybank cannot claim oil revenues retrospectively. However, there is no evidence Eon took any specific risks with respect to the operation of these wells that would make it unjust for Ferrybank to receive oil revenues net of costs and expenses from the time it served its Counterclaim.
On the other hand, Justice Nixon concluded that waiver would not be available since waiver applied to a situation where one party intentionally and unequivocally relinquishes a right which it holds under the contract (at para 162).
The principal practical difference between simply applying the contract (subject to the limitations rules) and applying estoppel rules is that under the estoppel approach the written agreement re-establishes itself as of the date of service of the counter claim; the contract approach would restore the pre-eminence of the written arrangement two years earlier.
The subsequently acquired wells including the 6-25 well
The analysis was different in relation to the subsequently acquired wells (including the 6-25 well) since, as noted above, Justice Nixon found that there was no limit on the ability of the parties to vary the original oral agreement by further oral amendments and that the evidence confirmed that they had done so in relation to the 6-25 well. Recall as well that it seems as if Ferrybank is both de jure and de facto operator of this well on the basis of its commitment to replace the pump for that well.
Referring (at para 208) to Powermax Energy Inc v Argonauts Group Ltd, 2003 ABQB 71 (CanLII), at para 117 citing Bank of Nova Scotia v Société Générale Canada), 1988 CanLII 166 (AB CA), 87 AR 133; Adeco Exploration Company Ltd v Hunt Oil Company of Canada Inc, 2008 ABCA 214 (CanLII) at para 68, citing Erehwon Exploration Ltd v Northstar Energy Corp, 1993 CanLII 7238 (AB QB) Justice Nixon recalled that each party had a duty to account to the other as a fiduciary for any production revenues it received in relation to the jointly owned wells. Ferrybank “is not entitled to withhold revenues from Eon in anticipation of a possible LLR deposit” or “on the basis that the LLR is a ‘regulatory burden’ on each well” (at para 212).
The court ordered an audit with respect to the “records of the other relevant to their joint venture” (at para 215) to be paid for by both parties in accordance with their respective working interest; the auditor to “have a charge on the production of the defaulting party to recover any unpaid share of costs.” (at para 219)
(2) Operator fees
As noted above, the written agreements (at least with respect to the first group of wells) contained two sets of provisions with respect to operator fees. These gave rise to at least two interpretation problems as a matter of the text. The first question (not necessarily the order of issues as discussed by Justice Nixon at paras 172 – 183) was whether the arrangement actually contemplated both fees; the second was the question of who was the operator for the purposes of the PASC well fee. The commercial context for both questions undoubtedly included the rather unusual arrangement in which one party was the operator of record for official purposes and another party was the de facto operator for the physical operation purposes (but not all commercial purposes). In the end, Justice Nixon seems to have concluded that the agreements between the parties did contemplate both the administrative fee and the PASC well fee but with a different beneficiary in each case. The beneficiary of the administrative fee was Ferrybank; the beneficiary of the PASC well fee was Eon. While the former was not subject to prorating, the PASC well fee was, but in this case cl.8(b) of the JOA expressly relieved Ferrybank of its liability for its 10% share. We agree with this analysis of this rather unusual arrangement.
As a result of this interpretation Ferrybank should be able to recover the administrative fee payable by Eon (subject only to any time bar imposed by the Limitations Act) – unless the parties had varied the terms of the contract by oral agreement or by their conduct in a manner that was binding notwithstanding the entire agreement\no amendment except in writing clause of the JOA. Justice Nixon concluded that the evidence did not establish an oral amendment – indeed (at para 192) “There was a dirth (sic) of evidence about fees.” However, (at para 198) “Ferrybank’s long failure to include fees in the accounts it submitted to Eon constitute a waiver”. Ferrybank was entitled to withdraw that waiver prospectively and upon reasonable notice. Ferrybank did this when it started billing Eon in December 2010 for its fees under cl.8(b). Justice Nixon does not explain (or refer to) how waiver operates in light of cl. 2001 of the 1981 CAPL which provides as follows:
No waiver by any party of any breach of any of the covenants, provisos, conditions, restrictions or stipulations herein contained shall take effect or be binding upon that party unless the same be expressed in writing under the authority of that party and any waiver so given shall extend only to the particular breach so waived and shall not limit or affect any rights with respect to any other or future breach.
There was no estoppel that would preclude recovery:
Estoppel by convention does not apply to fees as it did to oil revenues because there was no joint understanding between the parties with respect to fees. As there was no detrimental reliance by Eon on Ferrybank’s failure to claim or to bill for fees, neither of the other two other forms of estoppel raised by Eon, propriety estoppel and promissory estoppel, apply either.
(at para 204)
(3) Foregone production from the 6-25 well
As noted above, the 6-25 well ceased production for the second time in 2010 at which time the parties disagreed as to what action to take. There were competing independent operations notices and court injunctions preventing either party working on the well until Ferrybank secured a court order (at para 242) permitting it to repair the pump on the 6-25 well at its sole expense. That operation was successful and production resumed in September 2013 after a three year hiatus. Ferrybank claimed damages from Eon based on the foregone production and perhaps also for losses it suffered as a result of having to make an LLR deposit with the AER due to the loss of the 6-25 well as a producing well in Ferrybank’s LLR ratio calculations.
The Court rejected this claim (at para 244) on the basis that the above facts did not demonstrate a cause of action. We agree. There is no duty upon co-owners to agree as to how they shall use or operate the property just as, without more, co-owners do no owe each other a fiduciary duty: Kennedy v De Trafford,  AC 180 (HL E).
(4) Change of operator issues
Both parties seem to have had an interest in changing the status of the other under their working arrangements but different rules apply to the removal of the de jure operator and the de facto operator. The operating procedure provides the rules for removing or changing Ferrybank’s status as the de jure operator or operator of record. Eon’s status as the de facto operator is governed by Ferrybank’s delegation of that authority under cl 8(b) of the JOA.
Proposed removal of Eon as the de facto operator
In seeking to terminate Eon’s position as the de facto operator Ferrybank seems to have argued that the arrangement should be terminated because Eon was in breach of its fiduciary obligations as agent of Ferrybank or otherwise in breach of its duties of good faith in relation to the contract, or in breach of various court orders. These arguments all failed. Justice Nixon goes so far as to say (at para 280) that Eon was not an agent and therefore owes no fiduciary duty to Ferrybank; and later she reaches the flat conclusion that “Ferrybank is not entitled to remove Eon” from its de facto role. (at para 317) But we wonder why Ferrybank needed to show breach of any duty to terminate the “agency” or Eon’s de facto role. Cl.8(b) is nothing more than a declaration of an initial appointment. Unless there is something else in Cl.8 of the JOA that requires this appointment to continue it is not clear to us why it was not open to Ferrybank simply to terminate that appointment on reasonable notice. In other words there was perhaps a preliminary interpretive issue which seems to have been glossed over.
Proposed removal of Ferrybank as de jure operator
Justice Nixon considered Eon’s claim to have Ferrybank removed as operator under three headings: (1) breach of fiduciary duty, (2) clause 202 of the operating procedure, and (3) the challenge provisions.
The CAPL operating procedure does not list “breach of fiduciary duty” as a ground for replacing an operator but that was Eon’s argument and Justice Nixon examined it on that basis. Her conclusion was that Ferrybank was manifestly in breach its fiduciary obligations by failing to account for revenues received in relation to the 4-07, 6-07 and 6-25 wells (at paras 290 – 296) but that that did not entitle Eon to remove Ferrybank as operator because “Eon is not eligible to be the named Operator” (at para 298) and had no right to nominate a third party to so act. However, Ferrybank’s chronic failures did “disentitle” it (at paras 392, 308, 330 & 384) from performing any operator functions in relation to these wells. Justice Nixon does not disclose why Ferrybank’s breaches result in this “disentitlement”.
The CAPL Operating Procedure (cl.202) does provide for removal of an operator on account of insolvency. Ferrybank was insolvent and therefore should be removed but it was not necessary to so order in this case because (at para 321) Eon was already the de facto operator. All that it was necessary to do in this case was to remove Ferrybank from its de facto operator roles in relation to the 4-07, 6-07 and 6-25 wells. The Court went on to confirm (at para 239) that it would be Eon’s responsibility as the de facto operator to prepare and maintain the joint accounts. It’s hard to know what to make of this solution. It offers a practical resolution to the inter-party problems posed by insolvency by making sure that Ferrybank never gets its hands on the cash flow; but on the other hand, perpetuating the parties’ end run around the LLR program and leaving an insolvent party as the operator and licensee of record with the AER hardly seems to be a good outcome from a public policy perspective.
The arguments in relation to the challenge provisions are even more bizarre. The challenge concept is simple. A joint operator (Eon in this case) asserts (by a concrete proposal) that it can do the job more cheaply than the current operator (Ferrybank). Unless the operator agrees to operate on those terms it is deemed to have resigned. Eon claimed to have triggered these provisions. There were just a couple of problems with this assertion. First, Eon’s fees look to be higher (at para 340) (and surely a proposed deduction in the penalty fee for independent operations does not count as better terms because it has nothing to do with the function of operator). And second because “Eon doesn’t seek to become named Operator itself as it is ineligible to be such.”[!!] (at para 334)
Justice Nixon was clearly of the view that the challenge notice was ineffective because it did not propose more favourable terms but she still went on to consider Ferrybank’s argument that the notice was also ineffective on other grounds – namely because Eon was not “ready, able and willing to conduct operations” (at para 343) as required by Clause 203. One might have thought that the analysis here would turn on whether Eon’s extraprovincial status would be an impediment but instead it turns out to be a post-mortem of Eon’s actual performance as operator over the previous years. Yes, dear reader, that is correct. Ferrybank’s argument is that Eon can’t succeed with its challenge notice to be the de jure operator because Eon has done such a poor job of serving as the de facto operator. Thus, while the Court examines these issues under the heading of Eon’s challenge of Ferrybank, in this surreal and twilight world of de jure and de
facto operators Justice Nixon’s assessment of why Ferrybank’s attack on the substance of Eon’s challenge notice (which is to remove Ferrybank as operator) must fail concludes as follows:
In summary, Ferrybank’s complaints about Eon’s actions do not support the conclusion that Eon failed to conduct well operations properly. They do not support removal of Eon from well operations.
(at para 377)
The complaints that Justice Nixon assessed included allegations of an improper workover of the 4-07 well, safety issues with the 2-01 well, and instructing third party contractors to deal with Eon not Ferrybank. A good number of these issues became arguments about the relative roles of de jure and de facto operators and the relationship between the written agreement and the agreement as varied by conduct. Thus, Ferrybank’s argument with respect to the 4-07 workover was that Eon should have provided it with an AFE or an independent operations notice. Justice Nixon concluded that neither was required. An AFE was not required if the operation was under the $25,000 because Eon was conducting the operation as the (de facto) operator; if it was over $25,000 there was still no need for an AFE “because Ferrybank was not contributing anything towards expenses.” (at para 350) And round and round we go. Equally, Eon could give directions to the third party contractors and have them deal with Eon as the de facto operator rather than Ferrybank as the de jure operator because “Eon, not Ferrybank, is the party authorized to manage, and to carry out operations on, the wells.” (at para 376)
(5) The right to take in kind
Clause 601 of CAPL 1981 authorizes each party to take in kind. However, the JOA provided that in the event of a conflict between the JOA and the Operating Procedure the JOA would prevail. Eon’s joint venture accountant took the view that there was a conflict between the two agreements (we don’t have the text but apparently the JOA requires Ferrybank to issue directions to oil and gas marketers (at para 383)). It seems surprising that either JV accountant was permitted to opine on the issue of a potential conflict between the two agreements but Justice Nixon agreed with Eon’s expert’s assessment. We are not in a position to assess that conclusion without examining the text of the JOA but the right of a joint operator to market its own share of production is one of the fundamental rights of a co-owner which the CAPL forms address in some detail. One would expect clear language in the JOA to set aside this right over the entire term of operations on the joint lands (just as one might expect clear language to justify the conclusion that the delegation of de facto operator responsibilities is irrevocable for the duration of the contract).
This post may be cited as: Nigel Bankes and Heather Lilles “Making Sense of Nonsense? Or Perhaps Not” (25 November, 2016), online: ABlawg, http://ablawg.ca/wp-content/uploads/2016/11/Blog_NBHL_Ferrybank_Nov2016.pdf
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