Canada: Energy @ Gowlings - July 22, 2011

Last Updated: July 26 2011

Edited by Paul Harricks

Alberta Land Stewardship Amendment Act

The Alberta Land Stewardship Amendment Act, S.A. 2011 c.9 ("Amendment Act") was passed on May 10, 2011 and came into force on May 13, 2011.

The Alberta Land Stewardship Act, S.A. 2009, c. A-26.8 ("ALSA") was originally intended to:

  1. provide a means by which the Government of Alberta ("Government") could direct and lead with respect to identifying the economic, environmental, and social objectives of the Province;
  2. provide the legislative authority to plan for the future, recognizing the need to manage activity to meet the reasonably foreseeable needs of current and future generations of Albertans, including Aboriginal peoples; and
  3. provide legislation and policy that will promote sustainable development by taking into consideration, and responding to, the cumulative effects of human endeavours and  development.

ALSA provided the legal authority for the implementation of a "Land-use Framework," which is a comprehensive approach for managing public and private lands, and natural resources. ALSA was also designed to provide, under a Land-use Framework, regional plans to address Alberta's rapidly growing economy and population. The Land-use Framework is divided into seven planning regions that are aligned with major watersheds: Lower Peace, Upper Peace, Lower Athabasca, Upper Athabasca, North Saskatchewan, Red Deer Region, and South Saskatchewan. Prior to ALSA, Alberta did not have either formalized regional level planning or coordination of provincial and municipal land use decisions.

Since the introduction of ALSA in 2009, one of its most controversial aspects has been the possibility that certain rights of landowners could be negatively impacted by regional plans. In response to this particular issue, as well as other areas of concern, the amendments address title holder rights, concerns about compensation, and a landowner's ability to object to regional plans. The Amendment Act clearly states that the legislation respects existing property rights and is committed to transparency as regional plans are developed. The Amendment Act potentially affects all Albertans, but is of specific importance to title holders impacted by the regional planning process.

The most substantive changes resulting from the amendments to ALSA are as follows:

1. Amending the clause identifying the "Purposes" of ALSA

The Amendment Act adds an additional purpose to ALSA. In this regard, the Act specifically provides that the Government "must respect the property and other rights of individuals and must not infringe on those rights except with due process of law and to the extent necessary for the overall greater public interest." This is the overarching theme and purpose of the Amendment Act. The amendments are, for the most part, aimed at explicitly stating that private property rights are to be respected and compensation is to be payable in the event that those rights are negatively impacted by the Land-use Framework and regional plans.

2. Clarifies definition of "statutory consent"

A statutory consent is defined as any permit, licence, registration, approval, authorization, disposition, certificate, allocation, agreement or instrument issued under or authorized by an enactment or regulatory instrument. The government issues a number of statutory consents for individuals to use public resources like land, water and air. For example, statutory consents include water licenses for irrigation under the Water Act or permit for a confined feeding operation under the Agricultural Operations Practices Act. The Government has the ability to cancel or change some statutory consents if doing so is in the public interest. Under section 11 of ALSA, the Government can affect, amend or rescind a statutory consent or the terms or conditions of a statutory consent for the purpose of achieving or maintaining an objective or a policy of a regional plan.

The Amendment Act adds a clause to section 2 to clarify what is not included in the definition of a statutory consent. The amended definition of a "statutory consent" restricts the effect of section 11 by excluding "any permit, licence, registration, approval, authorization, disposition, certificate, allocation, agreement, or instrument issued under or authorized by the Land Titles Act, Personal Property Security Act, Vital Statistics Act, Wills Act, Cemeteries Act, Marriage Act, or any enactment prescribed by the regulations." This amendment is significant because by specifying what is excluded in the definition, clear protection is provided to title holders under these Acts, as their titles cannot be affected, amended or rescinded without compensation.

Furthermore, this particular amendment addresses and avoids possible interpretations of ALSA that were never intended. Prior to this amendment, there was an argument that the definition of a statutory consent was broad enough to confer power on the Government to extinguish land title rights. This amendment makes it clear that land titles are not included in the definition of statutory consents. The amendment also adds the provision that nothing in the Act is to be "interpreted as limiting, reducing, restricting, or otherwise affecting the compensation payable or rights to compensation provided for under any other enactment or in law or equity."

3. Broadens compensatory framework of ALSA

One of the most substantive changes introduced by the Amendment Act is the creation of the concept of a "compensable taking." The Amendment Act adds section 19.1 which gives individuals the right to compensation for compensable takings, defined as "diminution or abrogation of a property right, title or interest giving rise to compensation in law or equity." In addition, the definition of registered owner has been broadened to include a person registered in a land titles office as owner of an estate in fee simple in private land or freehold minerals. This amendment clarifies that ALSA respects registered owner rights and that the Government is under an obligation to provide compensation in the event of "compensable takings."

The creation of a compensable taking is significant in understanding ALSA and the legislation's intention to protect private property interests. This new provision allows registered owners affected by regional plans to: (1) apply to the Crown for compensation in accordance with the regulations; and (2) if this compensatory application remains in dispute, apply to the Compensation Board for determination of the compensation payable to the registered owner. The amount to be paid in compensation will be determined on the same basis as the quantum determined under a conservation directive. Under a conservation directive, a title holder is entitled to that compensation calculated as the sum of: (a) the amount of the decrease in the market value of the estate or interest in land resulting solely from the express declaration of the conservation directive, determined as of the date the conservation directive became effective, (b) damages for injurious affection as a result of the conservation directive, and (c) damages for any other loss specified in the regulations as a result of the conservation directive.

In addition to the Compensation Board, registered owners will now  have recourse to the Court of Queen's Bench of Alberta for the determination of compensation matters. Under section 19.1(6), the Court of Queen's Bench can make a determination on compensation matters in dispute, notwithstanding the fact that there is a process outlined for the Compensation Board to determine such matters. The amendment will allow registered owners of land the opportunity to directly apply to the Court of Queen's Bench for compensation, which may well result in more judicial resolution of compensation matters when property rights, titles or interests are diminished or abrogated.

4. Allows title holders to apply for a review of regional plan 

Under the new section 19.2(1) of ALSA, individuals who are directly and adversely affected by a regional plan can request a review of that plan. The Stewardship Minister must establish a panel to review the regional plan, then make recommendations to Cabinet. The amendment does not, however, specify the subsequent steps that will be taken by the Minister or how the results of a panel review will be implemented. The new section states that the outcome of the review must be made publicly available in accordance with regulations, but the Amendment Act does not specify any other action that would have to be taken in consequence of the review. As the Amendment Act does not  contain a process or give a threshold for applications requiring review, there is uncertainty in the legislative framework. There is the potential for an increased volume of review applications to the Minister and the lack of process in ALSA may lead to increased ministerial discretion and less predictability of outcome. 

5. Allows title holders to apply for a variance in an implementation of a regional plan

The Amendment Act creates a new provision that allows land title holders to request a variance in respect to any restriction, limitation or requirement under a regional plan such that the plan does not apply to a particular property. The Stewardship Minister has authority to grant this variance if the application: (1) is consistent with the purposes of ALSA, (2) is not likely to diminish the spirit and intent of the regional plan, and (3) if refused will result in unreasonable hardship to the title holder without an offsetting benefit to the overall public interest. The procedure for variance applications will be prescribed by regulation, and until such regulation is promulgated, there will be uncertainty to what extent this new provision will impact regional plans. The provision is worded to give the Minister generous discretion which may lead to less certainty as to the circumstances when variances will be granted or the degree to which regional plans may affect land title holders before a request for variance will be viewed favourably. 

6. Attempts to clarify which parts of a regional plan are legal in nature

The Amendment Act attempts to clarify which portions of a regional plan are legal in nature and have binding legal effect, and which parts do not. The new section 13 (2.1) states that "a regional plan may provide rules...specifying which parts are enforceable...and which parts are statement of public policy or a direction of the government that is not intended to have binding legal effect."  Although the intention of this amendment is to clarify which parts of the regional plan are legally binding, the amendment appears vague and uses permissive rather than mandatory language. The provision states that  a regional plan (emphasis added), "may provide rules of application and interpretation", but absent mandatory language, this provision is unlikely to have any effect in clarifying the distinction between policy and legally binding portions of a regional plan. 


In the oil and gas industry, including the oil sands,  regional plans can affect holders of statutory consents, which have the potential to be modified or cancelled by regional plans. The amendments are unlikely to alleviate this impact. The amended definitions and broadened compensatory framework will not apply to holders of statutory consents in the oil and gas industry, including the oil sands. Crown oil sands leases as well as petroleum and natural gas leaseholders are classified as agreements under the Mines and Minerals Act, which would therefore continue to qualify as a statutory consent under ALSA. Crown oil and gas or oil sands rights would therefore still be subject to section 11 of ALSA, and as such these statutory consents can be affected, amended or rescinded for the purpose of achieving or maintaining an objective or a policy of a regional plan. In addition, the new section 19.1 in ALSA, which broadens the compensatory framework, applies only to registered owners, which are defined as "owners of an estate in fee simple or freehold minerals", and does not include persons counterparty to Crown agreements such as Crown oil sands leases or petroleum and natural gas leases. Crown oil and gas or oil sands rights are acquired on terms that make it clear that these rights are subject to the Mines and Minerals Act and its related regulations, which also stipulate the recourse to compensation for amended or rescinded statutory consents. It would appear that persons holding these statutory consents will not have the protection of the new amplified rights in ALSA which apply only to a "registered owner."

As mentioned, one of the objectives of ALSA is to take into account and respond to the cumulative effect of human endeavours and other events that can adversely impact the environment. Regional plans are a means for the Government to address sustainable growth and manage a growing economy. The Amendment Act provides clarity on what is included in the compensatory framework and provides guidance for the regulatory process, which registered owners and title holders could initiate if the Government's regional planning impacts their interests. Notwithstanding this added clarity, there is still uncertainty with respect to the process that regional plan reviews or variances will be handled by the Stewardship Minister. 

The Alberta Land Stewardship Amendment Act attempts to clarify concerns about the balance between private rights and public land use management, but it remains to be seen how these amendments will be interpreted by Compensation Boards and the Alberta Courts. The Amendment Act seems to augment private property rights of registered owners when they conflict with regional plans. A transparent, participatory, and accountable regional planning system is in the best interest of Alberta and its people, and these amendments go some way to address uncertainty with the original legislation but may bring with them their own level of uncertainty on some specific, but important, areas. 

Report On The 7th Annual China Nuclear Energy Congress

Terry McNally, Head of Gowlings' Nuclear Initiatives, Robert Armour OBE, Senior Counsel in Gowlings' London office and David Mc Fadden, Chair of Gowlings International  attended the 7th Annual China Nuclear Energy Congress which took place in Beijing on May 12 & 13.

Robert Armour delivered a keynote address on the first day of the congress on the subject "Nuclear's International Renaissance:  Where Now?" Click here for the keynote presentation. 

David Mc Fadden served as Chair on the second day of the Congress.  The Congress brought together executives from the Chinese nuclear industry together with participants from firms in he nuclear industry in Europe, North American and to other parts of Asia.

We were very impressed during the proceedings of the Congress and at meetings following the conclusion of the Congress with the strength and commitment of China to nuclear energy.  Currently, China's operating nuclear facilities have an installed capacity of 10,000 MW which meets 2% of the country's energy consumption.  By the end of 2015, China will have approximately 40,000 MW of nuclear generation which will account for 4% of the Chinese energy demand.  This will then rise to 70,000 MW by 2020 and account for 5% of China's energy consumption.  Looking ahead, China is targeting to have 400,000 MW of nuclear in service by 2050 which would meet 15% of the country's projected energy requirements.

One topic of discussion throughout the Congress was the impact of Fukushima.  In March in reaction to the Fukushima disaster, Chinese Premier Wen Jiabao announced at a meeting of the State Council that China would carry out a general safety inspection of all of the country's nuclear facilities.  The Premier emphasized that the development of nuclear power in China must follow the principle of "safety first".  While it is clear that the Chinese nuclear program will be subject to an added level of scrutiny in relation to power plant safety and reliability, it would appear that China is intent on moving ahead with its nuclear program to help deal with both the country's energy demands and concerns about green house gas emissions.

The critical energy situation faced by China was emphasized during our visit by headlines in the Chinese news media warning of power shortages and potential rationing in various parts of the country during the summer. 

A key decision being made by China is the nuclear technology which will be used in the years to come.  Currently, China employs nuclear technology from the Untied States, Japan, France, Russia and Canada.  For purposes of both efficiency and safety, China is planning to reduce the nuclear generation technology being used in future development to one or two.  The lead technology will clearly be the AP1000 likely followed by EPR.  The best hope for Canadian nuclear technology seems to be niche applications arising from the two CANDU nuclear reactors which are now in service in China especially in connection with China's use of thorium and other alternate nuclear fuel products.  China continues to explore the commercial and technical feasibility of these potential nuclear fuel products under a joint research project with AECL.

An interesting presentation on China's developing fast reactor and fast breeder reactor programs clearly indicated that China is approaching nuclear generation with a long term perspective.  While countries such as Germany are moving to terminate their nuclear programs, it would appear that China sees nuclear energy as an important part of its power generation sector for decades to come.

Regulation and Governance in Canada's Electricity Sector

The "politicization" of electricity in Ontario has been a concern for some time. The restructuring of Ontario's electricity sector at the start of the last decade was intended, in part, to remove the politics from power. Ironically, provincial government intervention in the sector has, if anything, been increasing since that time.

Professor Guy Holburn, Director of Energy@Ivey, Richard Ivey School of Business (University of Western Ontario), has been studying the matter. On June 2nd, the Council for Clean & Reliable Electricity, in co-operation with Gowlings, hosted an invitational luncheon for the presentation by Professor Holburn of his research results.

Contrasting the current legislative framework in Ontario with a more traditional regulatory/policy making model, Professor Holburn observed the unusual prominence of recent Ontario Energy Ministers in electricity policy implementation. Professor Holburn considered the increasing frequency of Ministerial directives issued since 2004, as a number of Ministers succeeded to the portfolio. In contrast to how electricity policy has been made and implemented in recent years in Ontario, Professor Holburn identified the importance of policy consistency and stability to renewable energy companies surveyed. The survey respondents expressed the concern that Ontario electricity policy has been increasingly unstable.

Following Professor Holburn's presentation discussion was led by Dr. Jan Carr, the first CEO of the Ontario Power Authority and currently a member of the Board of Directors of the Alberta Electricity System Operator. Participants from academia, the public service, the legal community, NGOs and the utility sector agreed that policy stability favours "depoliticization" of the sector, and that Ontario's electricity sector is anything but depoliticized. The question at hand was what could and should be done. The topic promises to be one that gets continuing attention through the Provincial election in October and during the next provincial government mandate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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