Permission to Appeal – Coal Exploration
Application
The applicant, the Municipal District of Ranchland No. 66 (“Ranchland”), sought permission to appeal a decision of the Alberta Energy Regulator (“AER”) that accepted three applications by Northback Holdings Corporation (“Northback”) for coal exploration permits in Grassy Mountain located within the municipal district, including the decision to refer the applications for a hearing before the AER.
Decision
The Alberta Court of Appeal (“ABCA”) granted permission to appeal on the following questions:
- Did the AER improperly fetter its authority in accepting Northback’s applications?
- Did the AER err by relying on a letter from the Minister of Energy while interpreting the Ministerial Order?
- Did the AER err in its interpretation of the term “advanced coal project” in the Ministerial Order?
Pertinent Issues
Background
The regulation of coal mining in Alberta is governed by, inter alia, Ministerial Order 002/2022 (“Order”) issued by the Minister of Energy (“Minister”) under s 67 of the AER’s home statute, the Responsible Energy Development Act (“REDA”). The Order prohibits the AER from accepting new coal applications on Category 3 and 4 lands, as defined in “A Coal Development Policy for Alberta (1976),” unless the lands were subject to an “advanced coal project.” Grassy Mountain is located on Category 4 lands.
Northback’s previous application for a proposed coal mine on Grassy Mountain was rejected by the AER. The Order came into effect following the release of that decision. The following year, Northback submitted new coal exploration applications to the AER related to Grassy Mountain and Ranchland submitted a statement of concern (“SOC”) to the AER about the applications. After the applications were filed, the AER received a letter from the Minister (“Letter”) explaining that the purpose of the Letter was to provide his interpretation regarding the appropriate application of the definition of “advanced coal project” under the Order. According to the Minister, four projects met the definition of “advanced coal project” under the Order, one of which was Grassy Mountain.
The AER accepted the three applications by Northback and scheduled a hearing. The AER explained that s 67 of REDA allowed the Minister to provide, by order, guidelines to the AER to follow in the carrying out of its powers, duties and functions. The AER held that the Letter clarifying the application of the Order carried significant weight and that the Category 4 lands upon which application activities had been proposed were subject to an “advanced coal project.”
Appeal Grounds
Ranchland argued that the AER committed multiple errors of law or jurisdiction by: improperly delegating its decision-making power to the Minister and fettering its discretion; contravening the principles of procedural fairness by failing to consider the evidence of the applicant and other affected parties, and by relying on improper and irrelevant evidence; and incorrectly finding that the term “advanced coal project” in the Order includes projects that were previously rejected by the AER.
The Test
In determining whether to grant permission to appeal, the ABCA considers four factors:
- whether the applicant has demonstrated a question of law or jurisdiction of general importance, rather than of interest only to the immediate parties;
- whether the issue is significant to the underlying administrative proceeding, or is merely interlocutory or collateral, or may not affect the ultimate outcome of the proceeding;
- whether the appeal raises a serious, arguable point of law; this factor considers the standard of review to be applied and is balanced with the importance of the issue; and,
- whether an appeal will unduly hinder the underlying proceedings.
The weight attached to the factors depends on the circumstances and, in essence, involves an overall consideration of whether an issue of law is presented with sufficient importance to justify an appeal.
Analysis
Ground 1: The AER erred by improperly delegating the decision to the Minister or fettered its discretion in making the decision
Ranchland argued that the AER failed to engage in any meaningful, independent analysis of the definition of an “advanced coal project” in the Order and relied excessively on the Minister’s interpretation that Grassy Mountain met that definition.
The ABCA held that, in its decision, the AER confirmed that it is vested with the authority to consider if the application lands are subject to an “advanced coal project” and whether to accept Northback’s applications. Reading the AER’s decision as a whole and in context, the ABCA concluded the AER did not treat the Letter as a “binding direction.”
The ABCA, however, determined that Ranchland raised an arguable issue about the AER fettering its discretion because there was no independent analysis of whether Grassy Mountain met the definition of an “advanced coal project” when it decided to accept Northback’s applications. The ABCA held that the AER did not explain why a project it previously rejected continues to be an “advanced coal project” or why a rejected project continues to be a “project” under the Order at all.
The ABCA granted permission to appeal on this ground as it determined that it raises an arguable point of law, having general importance.
Ground 2: The AER erred by failing to consider relevant issues, facts and arguments
Ranchland argued that the AER failed to provide procedural fairness by relying solely on the Letter as the basis for its decision, while disregarding other submissions, including those of entities or individuals who submitted an SOC about the project proposal.
Given the absence of any requirements under the Alberta Energy Regulator Rules of Practice to consider Ranchland’s SOC at the application acceptance stage of the regulatory proceeding, and the lack of detail about any arguments the AER purportedly failed to consider, the ABCA held that Ranchland did not demonstrate a serious, arguable issue on this proposed ground of appeal.
Ground 3: The AER erred in finding that the Minister’s letter constitutes “written notice” or “guidelines” as contemplated by the Ministerial Order and
Ground 4: The AER relied on improper or irrelevant evidence by giving “significant weight” to the Minister’s opinion as expressed in his letter
Ranchland asserted that the AER’s decision concluded that the Letter was either guidelines for the AER, as contemplated by s 67 of REDA, or a “written notice” within the scope of the Order by which the Minister was ending the suspension for the acceptance of project applications.
The ABCA found that both contentions involved questions of fact or mixed fact and law, with no extricable issue of law. The ABCA concluded it had no jurisdiction to entertain an appeal on that basis.
Ranchland also contended that the AER may not take guidance from the Minister about the interpretation of Ministerial orders through extrinsic evidence where the Order itself should be varied to provide the necessary direction.
The ABCA agreed and concluded that Ranchland raised a serious, arguable issue on this point of law, which has general importance to the use and interpretation of Ministerial orders more generally, both under REDA and otherwise, and granted permission to appeal on this point of law.
Ground 5: The AER erred in finding that the term “advanced coal project” includes projects which have been rejected by the AER
Ranchland argued that the AER gave the term “advanced coal project” an incorrect interpretation and that this error involves a question of law. Ranchland contended that once an application for exploration or development was rejected, as it was here, the “project” ceased to exist. A new application involving the same lands is not the same project. The AER’s decision did not address this alternative interpretation.
The ABCA found that a serious, arguable issue was established. The issue had importance beyond the immediate parties because three other “projects” or lands were potentially affected by this interpretation of the exception to the suspension. Moreover, the AER’s interpretation invited the possibility of a sequence of applications involving each of the four identified projects or lands over many years, which could repeatedly affect multiple parties and stakeholders with an interest in either supporting or opposing a new application. Consequently, the court granted permission to appeal on this question of law.
