Canada: Case Law Summaries – Administrative Law

ARCELORMITTAL EXPLOITATION MINIÈRE CANADA C. TRIBUNAL ADMINISTRATIF DU TRAVAIL, 2018 QCCS 1730

In this case, ArcelorMittal Exploitation minière Canada sought judicial review of the decision of the Tribunal administratif du travail (TAT) in an action for wage claims under the Act Respecting Labour Relations, Vocational Training and Workforce Management in the Construction Industry (Act) brought by the Commission de la construction du Québec.

In the decision under review, the TAT concluded that the extension of ArcelorMittal's rail line and other works are construction works within the meaning of the Act.

Applying a standard of reasonableness, the Court dismissed ArcelorMittal's application for judicial review. The Court held that the TAT's interpretation of the Act was consistent with decades of existing jurisprudence: the TAT applied the criteria set out in the jurisprudence to determine whether the railway is a "civil engineering work" as defined in paragraph (f) of the first subparagraph of s. 1 of the Act. One of these criteria concerns the general utility of the work. This criterion must be interpreted broadly and liberally. A work may be both of private utility in some aspects and of general utility in others. The TAT concluded that this was the case for the ArcelorMittal railway and that it must therefore be considered a "civil engineering work." The Court decided that the TAT's conclusions "are a perfect example of consistent and intelligible reasoning."

The Court also rejected the argument that the TAT had confused the notions of "utility" and public "interest." Further, it held that the TAT was justified in using a 1961 construction decree as an indicator of the legislator's intent: at the time, railways were not excluded from the scope of the construction industry. If the legislator's intention was to exclude them, it would have done so expressly as it did for other types of works: "The decision is justified, intelligible, reasoned and reasonable."

FORT HILLS ENERGY CORPORATION V. ALBERTA (MINISTER OF ENERGY), 2018 ABQB 905

In this case, the Alberta Court of Queen's Bench reviewed an Alberta Department of Energy decision concerning the calculation of the prior net cumulative balance (PNCB) of the Fort Hills Oil Sands Project under the Oil Sands Royalty Regulation (Regulation).

The Crown in Right of Alberta owns 97% of oil sands mineral rights in the province of Alberta. Pursuant to the Regulation, the Crown shares in the risk of development by taking only a minimum royalty until the point in time where cumulative revenues equal cumulative cost. Approvals issued under the Regulation permit an oil sands project to participate in this royalty regime. The Regulation also provides for recovery by the developer of PNCB, which is comprised of certain eligible start-up costs incurred prior to approval.

The Fort Hills Project (Project) was approved in 2002, with amendments to that approval in 2005 and 2009. When oil prices dropped significantly in late 2008, certain aspects of the Project were slowed. The mining portion of the Project remained on hold through Suncor's merger with Petro-Canada in 2009 and plans to continue the Project were not finalized until early 2011. In November of that year, the Project operator submitted an oils sands royalty application under the Regulation, which sought an effective date of November 1, 2011 and PNCB of more than C$1.8 billion. Alberta Energy approved the application, but revised the claimed PNCB to C$33,024,321, subject to audit. Alberta Energy completed its audit in 2015, and reduced the PNCB to nil.

On judicial review, the Court considered the reasonableness of the Minister's interpretation of certain sections of the Regulation, which had resulted in the exclusion of amounts from the PNCB, including s. 15(3)(a) (i) which provides for the exclusion of costs incurred during periods where a project was substantially suspended or abandoned. Alberta Energy had relied on this provision to deny C$947,627,057 in incurred Project costs on the basis that the Fort Hills Project was "substantially suspended" in the 2008 to 2011 period. Alberta Energy made this determination on the basis of, among other things, slowed spending on the Project in 2008 through 2011 and a November 2008 announcement of the suspension of the Sturgeon Upgrader and Sanction Extension. The Court found Alberta Energy had misconstrued the latter announcement as a suspension of the Fort Hills Project. The Court also found that a number of steps were taken, and significant expenditures made, in respect of the Fort Hills Project from 2008 to 2011, which were inconsistent with suspension of the Project's development.

In the result, the Court remitted the matter back to the Minister to determine the Project's PNCB in accordance with the Regulation.

MUNICIPALITÉ RÉGIONALE DE COMTÉ DE MATAWINIE C. MINISTRE DE L'ÉNERGIE ET DES RESSOURCES NATURELLES, 2018 QCCS 4054

This case involved a judicial review of a decision by Québec's Minister of Energy and Natural Resources to renew an exclusive operating lease. In 2010, the Minister entered into an agreement to delegate to the Municipalité régionale de comté de Matawinie (MRC) certain of its powers under the Mining Act (Québec) including the granting, renewal and revocation of sand and gravel leases.

In 2011, the MRC granted an exclusive operating lease to 9212-220 Québec Inc. In 2016, the MRC refused to renew this lease. But the following month, the Minister overruled the MRC and renewed the operating lease. The MRC commenced judicial review proceedings to challenge the Minister's decision to overrule it and renew the lease. 9212-220 Québec inc. filed a separate appeal of the MRC's decision, in accordance with s. 295 of the Mining Act which provides that any holder of a mining right affected by a decision has a right of appeal.

The MRC argued that the Minister cannot exercise a power that it has delegated and cannot substitute its own decision for a decision of the MRC in an area where the Minister has delegated authority to the MRC. Thus, in the MRC's view, the renewal issued by the Minister was void.  The Minister argued that even where it has delegated power, it remains free to impose its standards, guides, guidelines and procedures on the exercise of delegated authority. The Minister also maintained that it is open to the Minister to revoke delegated authority if a delegate does not follow the Minister's standards, guidelines and procedures.

The Superior Court of Québec allowed the MRC's appeal. The Court held that the question of whether or not the Minister had the authority to consent to the renewal of the lease must be assessed on a standard of correctness. The Court concluded that the Minister did not have the power to substitute its decision for that of the MRC and thus to renew the lease, because the delegating legislation did not specifically provide the Minister with such authority. The Court pointed out that where a delegating authority retains the power to overrule a delegate's decision-making, that authority is typically clearly articulated in the delegating legislation or agreement. The Minister's decision was therefore ultra vires, and the renewed lease null and void.

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