Introduction

This paper has been ten years in the making in the sense that it represents the current evolutionary state of a background document to a presentation that I have been privileged to make at the annual CAMPUT Canada’s Energy and Utility Regulators Energy Regulation Course. The nature of that presentation and the title to the paper are the inspiration of Gordon Kaiser at whose suggestion I have been focussing for most of those nine presentations on pitfalls that energy and public utilities regulators may encounter in the course of their regulatory work and their hearing processes in particular. It started out as a list of ten rules that should guide those regulators but that list has now grown to seventeen! However, that should not necessarily be read as an indicator that the potholes along the way have become more numerous and larger. Indeed, for most, if not all regulators, many of the precepts of this paper are now so engrained in their consciousness, work habits, and rules of practice and procedure as to constitute them as no more than a reminder not to become lackadaisical and, perhaps more significantly, as a record of how far the energy and utility regulatory process has advanced in sophistication and attention to best practices. That is not, however, to say that new problems have not emerged or that all areas of controversy and doubt have been resolved satisfactorily. Thus, for example, as this paper will make clear, there are still a number of outstanding issues respecting standing to participate at regulatory hearings and the impact on regulatory hearings of the duty to consult aboriginal peoples. Here, almost of necessity, some of my discussion and recommendations are tentative in the sense that clarification of the law, either internally or from the courts, is still awaited.

Let me start with the current list of precepts:

1) Pay   careful   attention   to   identifying the sectors of the public, industry and government to which you should give notice of an impending regulatory hearing.

2) Be aware of the principles and statutory provisions respecting party, intervener, and other forms of status at your hearings.

3) Err on the side of generosity when issues of disclosure arise.

4) Realise the potential, either by reason of your ability to control the proceedings before you or your  rules  of  procedure or practice, for the  sorting  and  refining of issues as well as the simplification of evidence   presentation   through   various forms of prehearing procedures.

5) Do not, however, fall into the trap of over- judicializing the  proceedings  –  you  are a regulator with a policy mandate, not a criminal court.

6) Without becoming too fast and loose, recognize the flexibility that comes with not generally being  bound  by  the  rules of evidence applicable in regular court proceedings.

7) More generally, do not allow the parties to take the conduct of the hearing into their own hands. Impose discipline. Nonetheless, behave at the hearing with decorum, and listen. Behind every testy exchange with counsel and witnesses lies the possibility of a challenge for a reasonable apprehension of bias.

8) Where bias and lack of independence challenges are raised, whether related to your prior involvements and associations, or your behaviour at a hearing, recognize that you are obliged to deal with them. However, conscious of the public interest in participation by experienced adjudicators and the capacity of parties to use bias challenges as a means of “forum shopping”, do not disqualify yourself too readily.

9) Energy regulators are generally meant to be independent of the government that appoints them. As a consequence, be careful not to develop cozy relationships with the Minister or departmental staff, and, in particular, resist any encouragement to discuss pending matters with them.

10) Act preemptively when you are aware of prior involvements and associations that could give rise to concerns on the part of one or more of the participants. Reveal the full facts to the parties and ask whether anyone has objections to your participation.

11) Recognize that the standards respecting bias and a lack of independence may vary depending on the role that an Energy Regulator is exercising. In particular, those standards may be stricter in the case of enforcement or compliance proceedings than they are in the instance of broad public interest regulatory permission hearings.

12) As well as dealing with challenges to your participation based on a reasonable apprehension of bias, you may also have a legal obligation to deal with constitutional (including Charter or aboriginal rights) challenges to your jurisdiction and proceedings, and even to the statutory regime under which you function.

13) Do not hesitate to consult with other members of your agency as well as lawyers to the agency and other staff even in relation to matters that you are currently hearing, but recognize the constraints within which such consultations can take place legitimately.

14) Talking of consultation, be vigilant as to the extent to which your proceedings might affect aboriginal peoples’ rights, interests and claims and the special procedural obligations that may arise in those situations, particularly when the Crown’s constitutional duty to consult is engaged.

15) Pay careful attention to the statutory and common law requirements to provide reasons for your decisions.

16) In particular, take particular care to justify departures from your own previous case law or general principles of regulatory theory.

17) Only resort to the use of grand legal principles where it is absolutely necessary. Where possible,  base  your  decision  on a careful examination of the facts, the intricacies of your own statutory regime, and the law developed by your own tribunal or agency precedents. The courts will generally respect your expertise and apply a deferential standard of review if you remain rooted in those issues.

I will now develop each of these seventeen propositions including references to many of the governing authorities and legislation.

1)   Notice

At the outset of any regulatory initiative with the potential to affect a significant number of people, Energy Regulators will have to face up to the question of how to give notice that will satisfy the requirements of either or both of the common law, and their constitutive statutes and procedural rules.

The case law governing this area dates back almost thirty years to Re Central Ontario Coalition and Ontario Hydro.² There, the Ontario Divisional Court addressed the question of the adequacy of notice provided by a Joint Board (the Ontario Municipal Board and the Environmental Assessment Board) considering a proposal for a significant electricity transmission line project. The Joint Board, in recognition of the number of persons and groups potentially affected by the proposal and also the disparate nature of the impact of the proposal, provided for a combination of personal notice to some individuals and municipalities and notification through newspaper advertisements. While  the  choice of modalities did not cause any problems in the Divisional Court, nonetheless, the Court ruled that there had been a failure to provide adequate notice in the sense that the newspaper advertisement was not only misleading but also not sufficiently informative as to the siting of the proposed transmission lines.³

1657575 Ontario Ltd. v. Hamilton (City)⁴ provides more recent reaffirmation of the dual aspects of the requirement to provide notice of pending hearings – make sure that the notice comes to the attention of those whose interests are significantly affected and also that the notice is sufficiently informative to alert those people as to the nature of what is proposed and its potential impact on their rights and interests. However, what is also clear is that, provided the notice is both accurate and sufficiently informative as to participatory rights, various time lines, and where additional information is available, it will pass muster.⁵

Nonetheless, as will be discussed in greater detail below, special obligations with respect to notice may arise when any application has the potential to affect aboriginal rights and interests, including those that are the subject of as yet unresolved claims. Situations such as this will almost invariably require the relevant Energy Regulator to provide “personal” and specific notice to the affected aboriginal peoples.

2)   Parties, Intervenors, and Standing

Inextricably linked with the issue of notice is the question of who is entitled to status at any hearing as a party, intervenor, or other form of participant.

In Alberta, there has long been a legislated standard. Section 1 of the Administrative Procedures  and  Jurisdiction   Act,⁶ a  general procedural statute still applicable to the Alberta Utilities Commission as well as the Surface Rights Board and the Natural Resources Conservation Board, defines as a party (and therefore entitled to notice and participatory rights) anyone

…whose rights will be affected by the exercise of a statutory power or by an act or thing done pursuant to that power.

However, in the context of hearings that have an impact on the public at large, that definition obviously begs the question: What count as “rights”? The constitutive legislation of the province’s two principal Energy Regulators attempts to give greater precision to this by requiring hearings or according intervenor status generally for those who are “directly and adversely affected” by proceedings before the Alberta Utilities Commission or the Alberta Energy Regulator.⁷ This standard is one that mirrors the traditional test for standing to seek judicial review but, even so, it is not self- applying as the considerable jurisprudence on these provisions makes clear. Indeed, it may well be the most-litigated energy regulation issue in the province.

In Dene Thá First Nation v. Alberta (Energy and Utilities Board),⁸ the Alberta Court of Appeal divided the test into two parts:

First is a legal test, and second is a factual one. The legal test asks whether the claim, right or interest being asserted by the person is one known to law. The second branch asks whether the Board has information, which shows that the application  before the Board may directly and adversely affect those interests or rights. The second test is factual.⁹

This bifurcation is significant in that by classifying the second part of the exercise as factual, the Court denied  itself  the  capacity to review the then Board’s decision at this stage. The right to seek leave to appeal is confined to questions of law and jurisdiction. As a consequence, a major component of any determination of entitlement to notice and to participate is left to the virtually unreviewable discretion of the particular Energy Regulator. Indeed, this may also be the case where the issue of standing involves the determination of a question of mixed fact and law from which a significant legal issue is not readily extricable.¹⁰

As far as the “known to law” aspect of the test is concerned, the Court of Appeal has certainly recognized the rights of landowners whose property rights might be affected adversely by the matter before the Regulator.¹¹ Indeed, in such cases, the requirement may frequently extend to personal notice as opposed to simply notice through an advertisement in a newspaper or other media.¹² Nonetheless, what precisely counts as a property right for these purposes is itself an open question. Certainly, exposure to expropriation in any form, including the creation of rights of way will qualify. Beyond this though, the previous Energy and Utilities Board recognized in EUB Directive 29 that it had a responsibility of specific notification to landowners on the basis of proximity to any proposed project.

The Alberta Court of Appeal has, however, accepted that there are limits on what constitutes a direct and adverse impact in the sense of an interest known to law. Long-term status as an environmental advocate, even one using the land in question for recreational purposes, is not enough.¹³ Indeed, the fact that the regulator has required a proponent to consult with someone is not in itself sufficient to secure standing for the consultee.¹⁴ More generally, the Court has  ruled  that  there  is no  room  for  recognition  of  public  interest standing either within the relevant standing provisions or as an overarching discretionary matter.¹⁵ Beyond that, a generalized assertion of a potential downstream economic impact is insufficient.¹⁶

Also, when it comes to claims such as a potential impact on the health of those living in proximity to the proposed project,¹⁷ the Court has ruled that this is a matter on which those seeking standing have to provide evidence, and that the assessment of that evidence is a question of fact for the regulator not subject to an application for leave to appeal.¹⁸ However, more recently, in the context of another health-based claim to intervenor status before the previous Energy Resources Conservation Board, the Alberta Court of Appeal has signaled that it may be taking a rather more generous view of what constitutes a “direct and adverse effect.” In Kelly v. Alberta (Energy Resources Conservation Board),¹⁹ the Court accepted that the issue of whether a “right” was at stake was not the only pure question of law at play for appeal purposes under the relevant provision.²⁰ It also went on to hold that the test for whether someone was directly and adversely affected was not whether he or she

…would be affected in a different way or to a different degree that members of the public.²¹

The terms of the test did not establish that as the threshold. Moreover, it was not necessary for those seeking intervenor status to prove that they would necessarily be directly and adversely affected. Rather, the Board’s assessment should be one in which it weighed the magnitude of the risk, and not whether the claimant had established that that risk was a certainty. To do otherwise was to not apply the correct legal test.²² That legal test was based on the following principles:

The right to intervene in the Act is designed to allow those with legitimate concerns to have input into the licensing of oil and gas wells that will have a recognizable impact on their rights, while screening out those who have only a generic interest in resource developments (but no “right” that is engaged), and true “busybodies”.²³

Indeed, this more generous conception of the role of the intervenors carried over to the issue of costs. The Board determined at the Court- ordered rehearing of the well licence applications that the intervenors had not demonstrated that their safety interests required the imposition of additional conditions on the grant of well operation licences. As a consequence, the Board also denied the intervenors costs on the basis that they were not directly and adversely affected. However, on appeal,²⁴ the Court of Appeal ruled that the right to costs was not contingent on the intervenors gaining some measure of success at the hearing. On this issue, in remitting the issue of intervenor costs to the Board, the Court summarized its conclusions as follows:

For clarity, a potential adverse impact on the use and occupation of lands is sufficient to trigger entitlement to costs. Further, while the amount of costs lies within the discretion of the Board, the actual outcome of the hearing, and the absence, with hindsight, of any actual adverse effect does not of itself disentitle an applicant to costs.²⁵

While, in Alberta, these issues have been determined in the context of a specific statutory regime, to the extent that that statutory regime reflects generally accepted common law principles governing the entitlement to be heard at regulatory proceedings,²⁶ there is every reason to believe that these precedents have relevance to other Energy Regulators across the country. It is also important to be mindful of the practical dimensions of this issue. There is a balance to be struck between allowing for meaningful participation particularly on the part of those whose rights and interests are affected immediately and directly by a proposal and also members of the public generally, on the one hand, and the importance of Energy Regulators carrying out their mandate in an efficient and timely manner, on the other. Thus, it is not surprising that, where discretion exists with respect to standing, the Courts either by emphasizing the discretionary nature of the exercise, or, as in Alberta, by classifying part of the exercise as a determination of a question of fact, are deferential to the determinations of Energy Regulators.

This concern for the efficient conduct of regulatory  hearings   obviously   motivated the new standing provisions found in the Canadian Environmental Assessment Act, 2012, enacted as part of the 2012 federal budget implementation legislation, the Jobs, Growth and Long-Term Prosperity Act.²⁷ The regime is complex and I will not go into all the details in this context. Suffice it to say, however, that the most controversial and potentially limiting aspect of the standing provisions in the new Act are those relating to hearings by the National Energy Board and Environmental Assessment Review Panels on certain designated projects including, for example, pipeline applications. In relation to such projects, “any interested party” is entitled to a participatory opportunity.²⁸ Critically, section 2(a) defines “interested party” as a person who in the “opinion” of the regulator is

…directly affected by the carrying out of the designated project or … has relevant information or expertise.

Under  the  National  Energy  Board’s  Section 55.2  Guidance  –  Participation  in  a  Facilities Hearing,²⁹   that now requires anyone wanting participatory  rights  at  a  hearing  into  such a designated project to complete a ten page application    form    providing    information designed  to  establish  that  he  or  she  comes within either of the two categories as defined in section 2(a).

While this new legislative regime was in part a response to the over 4000 registrations for participatory rights in relation to the Northern Gateway pipeline hearings, it does, however, remain to be seen whether the new requirements are as restrictive as many environmental groups have predicted. In this regard, three aspects are worth noting: 1. The according of standing is expressed in subjective terms; it will depend on the discretion of the regulator; 2. The first category, unlike the Alberta legislation, does not require the showing of an adverse effect, just a direct effect; arguably it is more generous; and, 3. And, perhaps most importantly, the second category in section 2(a) introduces a potentially expansive concept of participation in the novel (to both statutory regimes and the common law) form of those who have “relevant information or expertise.” Perhaps, ultimately and contrary to what appeared to be the government’s intentions, this statutory formula will expand, not contract participatory opportunities in relation to designated projects!

3)   Discovery and Disclosure³⁰

The common law on disclosure by administrative tribunals and agencies  and, in particular, pre-hearing discovery and disclosure is, perhaps surprisingly, sparse. In the instance of regulatory agencies with a broad policy mandate and engaged in economic regulation, the common law was historically remarkably parsimonious as to the extent to which those kinds of tribunals have to provide pre-hearing disclosure of material under their control  and,  in  particular,  staff  studies  and other position papers.³¹ Indeed, this was true even in the context of regulatory compliance or  enforcement  proceedings.³²  However,  it is almost certainly the case that most major regulatory agencies have finessed issues around pre-hearing disclosure by the development of procedural rules and practices, often with the involvement of stakeholders and generally to the satisfaction of stakeholders.³³ I also assume that access to information requests may often force the issue when there is an initial reluctance to provide full disclosure.

I will therefore not belabour the point, save to point out that the Supreme Court, albeit in a very different context, has more recently taken a strong  position  on  the  importance of statutory authorities facilitating effective participation by providing parties with prehearing access to documents in the decision-maker’s control which are critical in terms of the ability of the parties to address issues central to the tribunal’s task. The case was May v. Ferndale Institution,³⁴   the setting a transfer decision within the penitentiary system, and the documentation in question a scoring chart used in determining an offender’s classification and custodial conditions. While the Court rejected³⁵ the application of  the very  sweeping  disclosure  obligations  placed on prosecutors in the context of criminal charges as established in R. v. Stinchcombe,³⁶ it sustained the contention that the offender was entitled as a component of procedural fairness to the relevant template. While this is a long way removed from regulatory agencies engaged in broad, polycentric decision-making or economic public interest regulation,³⁷ the Supreme Court’s judgment reveals a generous attitude to disclosure rights.

It might also indicate a Court that would be less hospitable to the arguments that in 1980 prevailed in Canada (Attorney General) v. Inuit Tapirisat,³⁸ where, in the context of attempts to secure access to documents for the purposes of participating in a cabinet appeal, the Court seemed to hold that those involved in broadly- based policy making exercises were acting in a legislative capacity and not bound by the normal strictures of the procedural fairness principles. I suspect it would now be unwise to rely on that judgment save perhaps in the very specific context of cabinet appeals. What is also clear is that the Supreme Court is likely to be far more willing to recognize claims for more extensive disclosure where an Energy Regulator is engaged in enforcement or compliance roles leading to the possibility of sanctions, including monetary penalties and loss of licence.

While the issue becomes somewhat more complicated when  the  setting  is  the  use  by a regulatory agency of its  power  to  compel the production of information  (either  on its own initiative or on the application of a party), and the access rights of the parties to that information (as opposed to information generated by the agency itself ), nonetheless, the normal test for an order for the production of such information will be that of relevance.³⁹ Moreover, once that material has been produced, the general presumption will be that other parties and intervenors will be entitled to demand its production in the name of the principles of procedural fairness and access to potentially relevant information.⁴⁰

Support for these propositions in an energy regulation context can be found in Re Toronto Hydro-Electric System Ltd.,⁴¹ where the Ontario Energy Board reviewed the relevant law and, determined that, while Stinchcombe did not apply in the context of a compliance proceeding (not leading to the loss of a licence),⁴² nonetheless, the target of the proceedings was entitled to disclosure of all documents in the Board’s possession directly relevant to the matter and not just the documents Compliance Counsel intended to rely upon. The Board, however, refused an application by the target corporation for an order for the production of further information in the possession of third parties.⁴³ The request was wide ranging and lacked specificity. In so ruling, the Board stated:

There is no question that the Board has jurisdiction to order third parties to produce documents but this is an unusual step to be taken only when the documents identified are clearly relevant and no prejudice or undue burden on the third parties results from the disclosure.⁴⁴

In sum, the fulfillment of broad regulatory mandates will seldom be enhanced by sustained resistance to participant access to relevant documents,  save  where  national   security or other legitimate government and public interest reasons for preserving secrecy are in play or there is some other form of evidential privilege or need  to  protect  the  confidence of information provided by those subject to regulation (such as preventing competitors from access to critical data⁴⁵). One  should also add to the list of exceptions, attempts by parties to the proceedings to secure orders for production that are insufficiently precise or specific, and that, in effect, amount to “a fishing expedition.”⁴⁶

4)   Prehearing Procedures

Prehearing discovery and disclosure regimes are, of course, but one example of methods for facilitating the expeditious conduct of hearings. By virtue of explicit provisions in their empowering statutes and their Rules of Practice and Procedure, provisions in applicable general procedural statutes such as the Ontario Statutory Powers Procedure Act,⁴⁷ and their ability to control their own procedures, Energy Regulators possess the ability to engage in various forms of prehearing  processes  that can contribute to more efficient and more focussed hearings. Pre-filing of evidence and, in particular, experts’ reports, conferences aimed at defining, narrowing and refining the facts and legal questions that are in issue, the settlement of agreed statements of facts, even informal attempts at prehearing resolution of some or all of the matters that are in contention, and setting limits on what is to occur at the hearing both in terms of scope and time – these and other devices can, if deployed judiciously, contribute massively to the effective discharge of a regulatory agency’s mandate.

5)   Over-Judicialization

It may seem somewhat disingenuous to in one breath advocate generosity in terms of disclosure obligations and then in the next to caution against over-judicialization. Nonetheless, there is a difference between providing liberal access to all relevant material prior to and during the course of the hearing and conducting a hearing in a way that recognizes that proceedings of the kind staged by Energy Regulators are not criminal or civil trials and that the issues at stake will often lend themselves to resolution by techniques other than traditional adjudicative-style evidential trials.

Here too, my assumption is that most Energy Regulators have recognized this reality and devised alternative hearing techniques in the context of notice and comment rule-making hearings. Failing that, these design issues are confronted in the course of prehearing planning processes for particular applications.

It may, however, be salutary to suggest that this represents an ongoing challenge particularly when new dimensions emerge such as the procedural entitlements of Aboriginal peoples when their rights and  interests  are  affected by regulatory hearings. Creative, cooperative solutions will always be needed as the regulatory process continues to evolve and, in a very real sense, becomes more complex as different regimes more and more frequently intersect and pressures for intervenor involvement continue to be part of any major regulatory initiative.

6)   Evidence

While it is difficult to generalize as to the evidential rules governing administrative tribunals and agencies, in R. v. Deputy Industrial Injuries Commissioner,⁴⁸ in a passage that has commended itself to the authors of one of Canada’s leading administrative law texts,⁴⁹ Diplock L.J (as he then was) sets out a list of the principles that apply in most contexts:

i) Administrative tribunals are not bound by the rules of evidence applicable in a court of law;

ii) They are not confined to acting on only the “best” evidence;

iii) However, their decisions must be based on material that “tends logically to show the existence or non-existence of facts relevant to the issue to be determined, or to show the likelihood or unlikelihood of the occurrence of some future event the occurrence of which would be relevant”;

iv) Any evidence relied upon must have some probative value;

v) Provided it does not stray from the admonitions in iii and iv, the weight to be attributed to evidence is a matter for the decision-maker.

In practice, this means that, in comparison to the regular courts, administrative tribunals are entitled more readily to admit hearsay evidence, have a greater capacity for taking official notice of facts, are not so committed to the search for the very best or most exact evidence,⁵⁰ can be more flexible in the ways in which evidence is adduced or led, and have greater scope for the use of expert witnesses.

Moreover, while there might be situations, such as professional discipline, where the normal court rules of evidence will have much greater relevance or purchase, the Diplock principles are ones upon which Energy Regulators can almost certainly rely in most  of  what  they do. On judicial review or  statutory  appeal, the courts generally treat evidential questions as matters for the relevant Energy Regulator. This is clear from the following statement from the judgment of Iacobucci J., delivering the judgment of the Supreme Court of Canada in Quebec (Attorney General) v. Canada (National Energy Board):

In carrying out its decision-making function, the Board has the discretion to determine what evidence is relevant to its decision. It has not been shown that, in this case, the discretion was improperly exercised so as to result in inadequate disclosure.⁵¹

Indeed, despite the fact that the Supreme Court of Canada normally takes the position that correctness is the standard for assessment of allegations of procedural unfairness,⁵² it is clear that the Courts do not review the exercise of discretion on evidential issues by that standard. Rather, reasonableness will be the touchstone generally   in   the   post-Dunsmuir   world.⁵³ Moreover, review for unreasonableness does not mean that “the reviewing court [is] to reweigh the evidence.”⁵⁴

This kind of approach is also reinforced statutorily in some jurisdictions either generally or with specific reference to Energy Regulators. For example, under section 9 of the Alberta Administrative Procedures and Jurisdiction Act,⁵⁵ a statute that applies to most of the province’s Energy Regulators (but not the new Energy Regulator), it is provided that evidence need not be given under oath and that decision-makers covered by the Act are not required to adhere to the rules of evidence applicable to criminal and civil proceedings. This is also reinforced by section 18 of the Alberta Utilities Commission Act⁵⁶ and section 47 of the Responsible Energy Development Act.⁵⁷ They provide that neither the Alberta Utilities Commission nor the Alberta Energy Regulator is bound by the rules of evidence that apply to judicial proceedings. In fact, the only other direct references to evidence in the Administrative Procedures and Jurisdiction Act come in section 4, which mandates the provision of a reasonable opportunity to furnish relevant evidence both at large⁵⁸ and in the context of responding  to  material  in the possession of the decision-maker, and section 5 providing the opportunity for cross- examination where it is necessary to answer the case or otherwise deal with the evidence. These provisions aside, the legislature has conferred authority on both the Commission and the Energy Regulator, in sections 76(1)(e) and 61 respectively of their constitutive Acts, power to make rules of practice governing procedure and their hearings.⁵⁹ In exercising this power, the Commission in section 1 of its Rules of Practice, has stipulated that

These rules must be liberally construed in the public interest to ensure the most fair, expeditious and efficient determination of the merits of every proceeding before the Commission.

In Ontario, the Ontario Energy Board is generally subject to the Statutory Powers Procedure Act,⁶⁰ and section 15 of that Act provides in part:

(1)     Subject to subsections (2) and (3), a etribunal may admit as evidence at a  hearing, whether or not given or proven  under oath or affirmation or admissible as evidence in a court,

(a)    any       oral      testimony;     and

(b)    any document or other thing, relevant  to  the  subject-matter of   the proceeding and may act on  such evidence, but the tribunal may exclude anything unduly repetitious.

(2)     Nothing is admissible in evidence at a hearing,

(a)    that would be inadmissible in a court by reason of any privilege under the law of evidence;⁶¹ or that is inadmissible by the statute under which the proceeding arises or any other statute.

(3)    Nothing in subsection (1) overrides the provisions of any Act expressly limiting the extent to or purposes for which any oral testimony, documents or things may be admitted or used in evidence in any proceeding.

All of this coalesces to produce a situation where Energy Regulators normally have a broad discretion with respect to matters of evidence, a discretion the exercise of  which will generally attract deference from reviewing and appellate courts. Nonetheless, there are limits. Thus, there may be more constraints on a tribunal’s discretion where the proceedings are of an enforcement or compliance nature leading to possible sanctions such as  fines and loss of licences and privileges. Moreover, as Diplock L.J. makes clear, concepts such as relevance⁶² and probative value will impose limits on tribunals generally and irrespective of their authority not to adhere to the full panoply  of  evidential  principles  and  rules applicable in court proceedings. These limits may also come in a constitutional or quasi– constitutional form, as exemplified by the rules of evidential privilege,⁶³ and also by possible limitations imposed in the name of “due process”, in sections 1(a) of both the Alberta and Canadian Bills of Rights, on statutory or common law rules that Energy Regulators are not bound by the normal rules of evidence.⁶⁴ More commonly, however, a reviewing court may review a tribunal’s evidential rulings on the basis that they gave rise to a violation of the principles of procedural fairness or such other discrete  administrative  law  wrongs as failing to take account of relevant considerations and taking account of irrelevant considerations.In  an  Energy  Regulatory  context,  Sarg  Oils Ltd. v. Alberta (Energy and Utilities Board)⁶⁵ provides  a  good  example.  In  granting  leave to appeal from an order requiring Sarg Oils to  abandon  wells  and  other  facilities,  Hunt J.A. ruled that there was a “serious arguable point”⁶⁶ that the Board, by refusing to admit certain evidence, had misconceived the thrust of the applicant’s motion and therefore denied procedural fairness.⁶⁷ In other words, there was applicable in court proceedings. These limits a possibility that the Board’s ruling transcende its discretionary authority with respect to evidence and gave rise to both a misconception of the case and a failure to hear the applicant. Suffice it to say, however, that this is not always a bright line distinction and, as a result, the task of differentiating between a discretionary evidential ruling and other forms of error will be both difficult and frequently controversial.⁶⁸

7)   Unruly Counsel, Parties and Intervenors

Being sensitive to the pressures for judicialization and developing procedural techniques that serve as an antidote to those pressures can only take an administrative agency so far. In the movement from the devising of appropriate procedural rules to the actual  dynamics  of the hearing room, another dimension will frequently emerge: the capacity of lawyers particularly, but also witnesses, parties, and intervenors to consciously or unconsciously take over or change the appropriate complexion of the hearing. Without strong leadership and frequently  decisive  intervention  especially on the part of the person chairing the panel, hearings can start to lose the plot in the sense of becoming bogged down in material of marginal or no relevance. One area in particular where there may need to be particular vigilance is in the qualification of experts and keeping expert testimony within appropriate limits. Panels also need to be conscious of the extent to which delays and distractions are the product of insufficient preparation on the part of counsel or, even worse, no particular concern about delays to the process. Here, as in proceedings before many other tribunals, there  are  the  particular  problems  of  dealing with unrepresented participants or participants represented by inexperienced lawyers. All of these are matters that need to be anticipated and strategies developed for dealing with them appropriately and keeping the hearing on the rails.

Dealing with unruly participants can, of course, test the patience of the most Job-like adjudicator.⁶⁹ However, it is equally important to resist the temptation to descend into the pit and take on unruly or unprofessional counsel, parties, intervenors  or  witnesses  on  their own terms. While the examples of successful applications for judicial review resulting from the conduct of adjudicators (or  counsel  to the tribunal, for that matter) at hearings are comparatively few,⁷⁰ nonetheless, courtesy coupled with firmness is almost invariably the best approach. While the odd intemperate outburst might find sympathy or understanding from a reviewing court, sustained hostility towards anyone involved in the hearing will probably not. It is also equally important not to allow lack of sympathy with a particular position or line of argument to show itself in the form of open displays of temper and even irritation and impatience. There is also the flip side of adjudicators whose improper conduct manifests itself in inappropriate forms of favouritism and obsequiousness, as opposed to manifest hostility. In sum, adjudicators have to strive to find an appropriate balance between the need to keep the hearing under control and moving forward at an appropriate pace, on the one hand, and behaving in a manner consonant with the best traditions of a dispassionate, alert, even-handed decision-maker, on the other.

8)   Bias Challenges – Whose Responsibility?

How tribunals deal with challenges to their proceedings based on a reasonable apprehension of bias, as the Newfoundland Court of Appeal pointed out in Communications, Energy and Paperworkers Union of Canada, Local 60N v. Abitibi Consolidated Company of Canada,⁷¹ is a question on which the law has been remarkably uncertain.

In the context  of  Energy  Regulators  sitting in panels, there are two questions: Does the panel have jurisdiction to entertain a bias challenge, and, if so and if the challenge is to the participation of one member of the panel (as opposed to all members of the panel), who makes the determination: the panel or the challenged member?

On the first question, the Newfoundland Court of Appeal, in the context of a tripartite arbitral panel, reflected the balance of Canadian authority when it ruled not only that the tribunal has jurisdiction to determine the merits of the challenge but also that in general it should do so.⁷² Thereafter, it is for the courts on judicial review to determine, on the basis of the record developed by the tribunal on this issue and supplementary affidavit material, whether any ruling of the tribunal (generally denying the recusal motion) should be set aside.⁷³

More problematic for the Court of  Appeal was the question of whether the decision should be taken by  the  panel  collectively or by the individual subject to challenge. After considering competing authority and academic commentary, the Court determined that it was for the individual member to make the  determination.  It  justified  this  in a  labour  arbitration  context   by   reference to considerations of “efficiency and speedy resolution of employee/employer grievances.”⁷⁴

In my view, this is the preferred position for most, if not all tribunal and agency settings. The challenge in such cases is a personal one based on facts pertaining to and within the knowledge of the individual adjudicator, and it is appropriate that that person deal with it at first instance.

Moreover, as demonstrated by SOS-Save Our St. Clair Inc. v. Toronto (City),⁷⁵ the other members of the panel may not be without recourse if they feel unable to go along with the individual member’s ruling. There, in a case involving a challenge to a member of a three-judge panel of the Ontario Divisional Court, the impugned judge rejected the motion for recusal. While the other two members supported his entitlement to make that ruling on his own, because of their disagreement with him on this issue, they determined for conscientious reasons⁷⁶ that they could not continue to serve. The two therefore made an order granting the applicant’s motion.

Absent this kind of disagreement among the members of a panel, any challenge to the decision of the individual adjudicator rests with the courts on judicial review. Moreover, there is no obligation on the tribunal to adjourn its proceedings simply because such an application is foreshadowed or even commenced.⁷⁷ However, as indicated by the facts of Committee for Justice and Liberty v. National Energy Board,⁷⁸ where the challenge is serious and comes at the beginning of a lengthy regulatory process, there may be strong practical reasons for not proceeding until the courts have dealt with the challenge.

In the determination of whether there should be recusal of a member of a panel or an entire panel, for that matter, it is, nonetheless, critical to keep in mind that the interests of administrative justice are not at all served by an overly sensitive approach to the task. The mere assertion that there is bias is clearly not enough, and the standard imposed on the party seeking recusal is a demanding one. The reasons for this are obvious. It is in the public interest that designated decision-makers  not be disqualified from exercising their statutory roles on weak or dubious grounds. There is a public interest in members fulfilling the task for which they have been appointed. Moreover, too ready capitulation in the face of applications for recusal of a member or an entire panel plays into the hands of parties attempting to “forum shop.”

The underlying principles on which these decisions should be taken emerge clearly from the final case involving the Lavesta Area Group and the predecessor of the Alberta Utilities Commission, the Alberta Energy and Utilities Board. Here, the Court of Appeal started off by emphasizing that

[t]he test for an apprehension of bias is high. The standard is the reasonable observer, not one with a very sensitive or scrupulous conscience…. The grounds must be serious, substantial and based on a real likelihood or probability, not suspicion…. Bald assertions are not sufficient…. In light of its legislative mandate, there is a strong presumption that the Commission and its panels will properly discharge their duties and are not tainted by bias….⁷⁹

The Court then went on to criticize the stance taken by the Chair of that Board:

It should be noted that the predecessor Chair not only contemplated disqualifying from future panels those who had sat on previous panels on the subject. He actually contemplated not appointing any existing members of the Board apparently whether they had been involved in any of the prior panels or not. That standard far exceeds any common law standard for a reasonable apprehension of bias.⁸⁰

The implications of these statements for any panel or individual member facing a recusal motion are obvious!

9)      Relationships with the Minister and Public Servants

One of the bedrock rules governing the conduct of hearings by tribunals and agencies is that those presiding should not have ex parte contact with any of the parties or intervenors outside of the confines of the hearing room. That rule takes on the added dimension of a threat to independence when the contact is with an interested Minister or, indeed, public servant, and especially the Minister responsible for the tribunal or agency. Contacts between a tribunal or agency and the responsible Minister especially in relation to a matter being heard or pending before the tribunal or agency raise the spectre of a lack of both institutional and individual independence as first outlined authoritatively by Le Dain J. for the Supreme Court of Canada in Valente v. R.⁸¹

This issue surfaced in Shaw v. Alberta (Utilities Commission).⁸² There, Berger J.A. gave leave to appeal a decision of the Commission on the basis of communications between the responsible Minister and the Chair of and legal counsel to the Commission. These communications gave the appearance that intervention by the Minister may have dictated the Commission’s suspension of its consideration of three projects.

On the material before the Court, Berger J.A., in granting leave to appeal on a question of law, held that it was arguable that this

…would cause a reasonable person to apprehend bias on the basis of interference or influence on the part of a member of the Alberta Cabinet, in this case one who recommends the appointment of persons to sit on the Commission and determines their salaries.⁸³

On the hearing of the appeal, the Alberta Court of Appeal never reached this argument.⁸⁴ Nonetheless, the appropriate strategy is obvious. Absent explicit legislative sanctioning of such interactions between a regulatory agency and the executive branch, avoid communications with the Minister and, indeed, public servants that have the potential to compromise the integrity of a tribunal  or  agency  hearing or,  more  generally,  the  independence   of the tribunal or agency as a whole or that of individual members.

10)     Revealing Circumstances that Could Form Basis for a Challenge

As noted in Proposition 8, from time to time, reviewing and appellate courts  issue the admonition that adjudicators have a responsibility not to recuse themselves too readily. Nonetheless, members of tribunals and agencies should recognize the dangers of suppressing information that might give rise to a challenge on the basis of an apprehension of bias or lack of independence, even where they believe that the relevant information probably does not provide a basis for voluntary recusal. While it is appropriate for the person affected to make the initial determination whether he or she should recuse herself or himself, that should be done on the basis of exposure to the contending points of view. There should also be no encouragement given  to  adjudicators to take comfort in the failure of affected parties to come up with the information on which a possibly credible motion for recusal might be advanced. Often, that information will be within the peculiar knowledge of the adjudicator. However, even in situations where the information might be available on the basis of not too much investigation, it does nothing for the reputation of the member or the tribunal as a whole where the member adopts the attitude that it is the parties’ fault if they do not do the digging and come up with the relevant information. Full and frank disclosure is the only sensible course of action.

Here too, the facts of SOS-Save Our St. Clair Inc. v. Toronto (City) are instructive. In effect, the failure on the part of the judge to provide full and frank disclosure ultimately compounded the problem and caused embarrassment for the other two judges of the Court.⁸⁵

11)  Varying Principles Respecting Unbiased and Independent Decision-making

Over twenty years ago, Cory J., delivering the judgment of the Supreme Court of Canada in Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities),⁸⁶ confronted the issue of how the principles respecting unbiased decision-making applied in the domain of public utilities regulation. At the macro level, he accepted that the standards for such boards were not those that applied to strictly adjudicative boards where the appropriate evaluation standard was that of traditional judicial neutrality. Prior experience and strongly-held views on policy issues rather than being a basis for disqualification should be something to be valued in an appointee to such an agency. As a consequence, at least at the pre-hearing stage of regulatory proceedings, the normal test of a reasonable apprehension of bias should not be the standard. Rather, the test should be “much more lenient.”⁸⁷

[A] challenging party must establish that there has been pre-judgment of the matter to such an extent that any representations to the contrary would be futile.⁸⁸

Thereafter, once the matter reached the actual hearing stage, members of such regulatory agencies were expected to be somewhat more circumspect and comport themselves in a manner consistent with what was normally expected of those conducting hearings.⁸⁹

There is no reason to believe that this conception of regulatory agencies has changed since Cory J. penned this judgment. What has changed, however, as in the domain of the requirements of procedural fairness with respect to disclosure, discovery, and the application of the normal rules of evidence, is the emergence of a sense that there is a difference between the rules and principles that apply when a regulatory agency is engaged in broad public interest regulation and when that same agency is acting in a compliance or enforcement capacity.

As exemplified by Rowan v. Ontario Securities Commission,⁹⁰ there  will  be  few  occasions on which a regulatory agency’s proceedings will be sufficiently penal in nature to engage the protections of section 11(d) of the Canadian Charter of Rights and Freedoms⁹¹ and its guarantee of  the  right  to  a  trial  by an independent  and  impartial  tribunal where someone is charged with an offence. Nonetheless, in the context of regulatory enforcement proceedings, the demands placed on adjudicators by the principles of unbiased and independent decision-making are  likely to be somewhat more stringent and closely approximating the standards applicable to rights adjudicating bodies.

This will be reflected in the extent to which prior involvement with the respondents in regulatory enforcement proceedings and their counsel as well as any history of advocacy of enforcement policies with respect to the matter before the agency will be disqualifying.⁹² However, perhaps more significantly, as the extent (either through legislation, such as the recently enacted Alberta Responsible Energy Development Act, or through agency rules or even practices) to which the enforcement and prosecutorial branches of regulatory agencies are separated from the adjudicative branch becomes more common or even routine, there will not surprisingly be an increased tendency on the part of the courts to treat instances of overlap between those functions as problematic.

The only appropriate conclusion to draw from this is that Energy Regulators on a going forward basis would be well-advised to create appropriate walls between their enforcement and    prosecutorial    branches,    and    their adjudicative personnel.

12)   Dealing with Constitutional (including Charter) Questions

Not only are tribunals and agencies obliged to deal with challenges to their participation based on an allegation of a reasonable apprehension of bias or lack of independence, but  also they are generally required to adjudicate on constitutional questions that arise in the course of proceedings before them. For these purposes, a constitutional question includes issues arising under the Canadian Charter of Rights and Freedoms and extends beyond issues of application and interpretation to challenges to the validity of a tribunal or agency’s constitutive statute or other relevant legislation. It can also include questions of aboriginal rights and entitlements arising under section 35 of the Constitution Act, 1982 and based on the honour of the Crown.⁹³

The  leading  authority  in  this  domain  is Nova  Scotia  (Workers’  Compensation  Board) v. Martin.⁹⁴     There, the Supreme Court held that the Board and the Appeal Board above it had an obligation to deal with a constitutional challenge to the effect that the statutory rules governing  a  particular  category  of  claimant were  invalid  as  discriminatory  in  terms  of section 15 of the Charter. Despite the fact that tribunals and agencies lack the constitutional competence to make binding declarations of constitutional invalidity, and despite the fact that their rulings on constitutional questions of law receive no deference in subsequent judicial review  proceedings,⁹⁵   nonetheless,  in  most situations, they have no choice but to deal with those questions.

The clearest indicator of an almost irrebuttable presumption of competence over constitutional questions is a provision in the tribunal or agency’s empowering legislation giving it authority to deal with any question of law arising in proceedings that come before it. However, even absent that form of legislative signposting, the position after Martin is that this is a responsibility that devolves on almost all adjudicative tribunals, and there is no reason to believe that Energy Regulators are an exception

In 2010, in R. v. Conway,⁹⁶ the  Supreme Court of Canada reinforced the competence of administrative tribunals and agencies in the constitutional realm by applying these same principles to  the  determination  of  whether a tribunal or agency is a “court of competent jurisdiction” for the purposes of awarding remedies under section 24(1) of the Charter. Absent legislative abrogation, if  a  tribunal or agency has the authority to consider constitutional questions, there is a strong presumption that it also has the capacity to award constitutional remedies by reference to section 24(1). However, this does not represent the recognition of an at large or unfettered conferral of remedial jurisdiction. The tribunal or agency will still be confined to those remedies that are part of its armoury under its constitutive statute. Thus, if a tribunal or agency does not have the capacity to award damages or costs under its empowering legislation, it does not acquire that capacity by reference to its status as a tribunal or agency with the power to award remedies by reference to section 24(1).

Martin did not, however, garner universal approval,  and,  in  two  provinces,  Alberta and British Columbia, its holding has been modified. Under the Alberta Administrative Procedures and Jurisdiction Act,⁹⁷ only those tribunals designated by regulation under section 16 have the capacity to deal with constitutional questions⁹⁸ (other than the exclusion of evidence under section 24(2) of the Charter⁹⁹). In fact, under the Designation of Constitutional Decision Makers Regulation, each of the Alberta Energy and Utilities Board, the Alberta Utilities Commission, and the Energy Resources Conservation Board were all given jurisdiction to deal with all constitutional questions, and this has now been extended to the Alberta Energy Regulator.¹⁰⁰ However, it is also the case that, as opposed to the situation under Martin, section 13 of the Administrative Procedures and Jurisdiction Act confers a discretion  on  an  agency  designated  under section 16 to refer any constitutional question to the Court of Queen’s Bench.

In British Columbia, under the Administrative Tribunals Act,¹⁰¹ for the purposes of determining constitutional questions, tribunals subject to that Act are placed in one of three categories: those with jurisdiction  to  decide all constitutional questions (section 43), those with no jurisdiction to decide constitutional questions (section 44), and those with jurisdiction to decide Charter questions (section 45). Both the Mediation and Arbitration Board, under the Petroleum and Natural Gas Act,¹⁰² and the Utilities Commission under the Utilities Commission Act,¹⁰³ are designated as subject to section 44 and therefore have no jurisdiction to deal with constitutional questions. However, as opposed to the situation under the Alberta Administrative Procedures and Jurisdiction Act, the term “constitutional question” is defined more narrowly. By virtue of section 1, it is confined to

…any question that requires notice under section 8 of the Constitutional Question Act.

Section 8¹⁰⁴ specifies that notice must be given where

(a)    the constitutional validity or constitutional applicability of any law is challenged, or

(b)   an  application  has  been  made for a constitutional remedy.

As opposed to the equivalent Alberta legislation, it does not extend to the “determination of any right.”

In Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council.¹⁰⁵ McLachlin C.J., delivering the judgment of a unanimous Supreme Court, held that this did not preclude the Utilities Commission from determining whether the Crown had fulfilled its constitutional obligation to consult aboriginal peoples in relation to an as yet undetermined claim that was potentially affected by a matter that had come before the Commission.

The application to the Commission… for a rescoping order to address consultation issues does not fall within this definition. It is not a challenge to the constitutional validity or applicability of a law, nor a claim for a constitutional remedy under s. 24 of the Charter or s. 52 of the Constitution Act, 1982. In broad terms, consultation under s. 35 of the Constitution Act, 1982 is a constitutional question… However, the [relevant] provisions of [both Acts] do not indicate a clear intention on the part of the legislature to exclude from the Commission’s jurisdiction the duty to consider whether the Crown has discharged its duty to consult with holders of relevant Aboriginal interests. It follows that,  … the Commission has the constitutional jurisdiction to consider the adequacy of Crown consultation in relation to matters properly before it.¹⁰⁶

In all other jurisdictions, Martin applies to Energy  Regulators.  As  a  consequence,  there is no choice but to deal with constitutional questions  and,  where  appropriate,   refuse to apply unconstitutional statutes. In this capacity, the boards in question (and indeed the designated Alberta regulators¹⁰⁷)  should be cognizant of the extent of the relevant provincial statutory obligations to serve notice of any constitutional question on the provincial Attorney General and the Attorney General of Canada.

It is also important to keep in mind one of the principal reasons behind the rule that tribunals and  agencies  have  authority  to deal with constitutional questions:  to  build an evidential record on the basis of which generally non-deferential, correctness judicial review will be facilitated. That suggests the wisdom of tribunals and agencies having special provisions in their procedural rules for conduct of hearings in which constitutional questions are raised. Absent that, individual members and panels should pay particular attention at the prehearing stage of any case in which constitutional questions will be in issue to the crafting of appropriate ways within the existing general procedural rules of the tribunal or agency for handling the resolution of the constitutional issues.

13)   Consulting with Non-Panel Members

In 1993, the Supreme Court of Canada rejected the notion that inconsistency provided an independent or free-standing basis for judicial review of a tribunal or agency’s decisions.¹⁰⁸ The Court of Appeal for Ontario has subsequently reaffirmed that principle¹⁰⁹

However, this does not mean that the Supreme Court does not recognize  the  importance of consistent decision-making within administrative tribunals and agencies. Indeed, in her concurring judgment in Dunsmuir v. New Brunswick,¹¹⁰ Deschamps J. stated, in a judicial review context, that “[c]onsistency of the law is of prime societal importance.” Thus, while there is no formal system of precedent in the tribunal system¹¹¹ and while inconsistency does not give rise to a stand-alone basis for judicial review, the Supreme Court has given encouragement to tribunals and agencies in the devices and processes that they have developed to encourage consistent decision-making among their various members and panels.¹¹²

In fact, Domtar had been preceded in 1990 by International Woodworkers of  America, Local 2-69 v. Consolidated-Bathurst Packaging Ltd.,¹¹³ and in 1992 by Tremblay v. Québec (Commission des  affaires  sociales).¹¹⁴  In  each of these, the Supreme Court endorsed the practice of full membership meetings of administrative tribunals to discuss particular matters in which decisions were pending before particular members or panels of the tribunal. The Court saw these practices as potentially contributing to a greater level of consistency in the decision-making of tribunals and agencies and as of particular value in the case of high volume jurisdiction tribunals. More recently, in 2001, in Ellis-Don Ltd. v. Ontario (Labour Relations Board),¹¹⁵ the Court reaffirmed, even strengthened its recognition of the legitimacy of such practices. It also seems clear that consultations of this kind can take place not simply at the level of whole board or tribunal meetings but also among smaller groups of members, and between presiding members and staff including lawyers.

Nonetheless, the Court has always been conscious of the extent to which such practices can compromise the principles of procedural fairness. In particular, they can constitute a danger to the independence of those actually charged with deciding the particular matter (or, in terms of the old parlance, the principle that the person who hears the case must decide the case). Indeed, it was a failure of this kind in the form of inappropriate intervention by a non- sitting Chair that was part of the downfall of the process before the Court in Tremblay. As well, depending on the nature of the discussions that take place, they can constitute a violation of the principles of procedural fairness relating to notice and the participants’ right to confront the proofs and arguments relevant to the determination of the particular matter.

To meet these concerns, the Supreme Court placed constraints on the conduct of these various forms of consultation. Therefore, while tribunals should be developing these consistency-encouraging practices, it is important that members and Chairs in their executive capacity particularly should be aware of the various constraints.

In terms of the decision-making independence of individual members and panels of tribunals, the Court has made it clear that, while bringing influence to bear is quite acceptable, compulsion is not. Best practices therefore mean that participation in these forms of consultation should be at the option of the presiding member or members, and the discussions should be informal and not involve compulsory attendance on the part of other members, minute taking, or voting. More generally, the Chair or counsel to the tribunal or agency should not exercise a dominant role. More problematic is  the  advisability of the discussions taking place against the backdrop of a draft decision.  In  any  event, the process adopted should be calculated to allow the presiding member or members to arrive at their own final determination of the matter following the consultation. Finally, though it is not mentioned by the Supreme Court in any of the trilogy, in the context of enforcement and compliance proceedings, where there is a statutory or even a self-imposed separation of the decision-making arm of the Energy Regulator from the enforcement or prosecutorial  functions  of  that  Regulator, the discussions of a particular case  should not involve those engaged in enforcement or prosecution.¹¹⁶

As for the preservation of the opportunity of the participants to participate effectively  in the hearing, the Court has insisted that, if the consultations raise any new arguments of law and policy that will be relevant to the final determination, the member or panel is obliged to put those matters to the parties before relying on them in the final decision. The Court has also made it clear that discussions of this kind should never become a vehicle for the introduction of new facts or evidence. Indeed, in Consolidated-Bathurst, the Court went so far as to say that there should be no discussion of the facts. That seems excessive and now has to be read in light of Ellis-Don, where the majority appeared to hold that, at the very least, the consultations could involve discussion of what factual configurations could come within the parameters of a legal test or standard developed by the Labour Relations Board.

In short, consultation practices of this kind can be invaluable but there are natural justice or procedural fairness limits to their legitimacy, limits that tribunals and agencies should respect not only to avoid judicial review for procedural unfairness¹¹⁷ but, more generally, out of consideration for the integrity of the hearing process.

14)        Duty to Consult with Aboriginal Peoples ¹¹⁸

Among the most significant developments in Canadian Administrative Law particularly for Energy Regulators over the past decade has been the evolution of the duty to consult Aboriginal peoples as part of  regulatory processes. The Supreme Court has made it clear that this duty to consult applies not only where a regulatory decision may have an impact on a recognized or existing Aboriginal peoples’ right, be it under treaty or otherwise, but also even where the right in question is inchoate in the sense of asserted but not yet recognized.¹¹⁹

The extent to which this duty to consult might affect  Energy  Regulators  became  clear  in late 2006, when, in Dene Tha’ First Nation v. Canada (Minister of Environment),¹²⁰      Phelan J. of the Federal Court held that it applied to the Ministers involved in the creation of the regulatory and environmental review processes related to the proposed Mackenzie Gas Pipeline. Various regulatory bodies (including the National Energy Board) were involved in the setting up of a Joint Review Panel charged with an environmental assessment of the project. It was at the point of the setting up of that Panel that Phelan J. found that the Ministers had failed in their duty to consult. While the case was ultimately settled, the Federal Court of Appeal held that Phelan J. had made no errors in principle in reaching the conclusion that he did and that the judgment was an application of existing Supreme Court of Canada precedent in this field.¹²¹

While the obligation in this case formally rested with the relevant Ministers who were responsible  for  the  design  of  the  process, the implications for Energy  Regulators seemed obvious. Nonetheless, there remained controversy among regulators and the courts as to whether the duty to consult that is impressed on the Crown extended to independent, quasi-judicial bodies. For those who argued that independent quasi-judicial regulators were not impressed with the obligation to consult Aboriginal peoples, the governing authority was asserted to be Quebec (Attorney General) v. Canada (National Energy Board),¹²² where Iacobucci J., for the Court, rejected an argument to the effect that the Board owed a higher duty of procedural fairness to the affected First Nation than would normally be required by the common law. To the extent that this argument was based on the fiduciary duty owed by the Crown to Aboriginal peoples, the duty was not one that was impressed on independent, quasi-judicial agencies. To do so would impinge on their independence.

Nonetheless, given that the duty to consult and accommodate rests on a broader overarching concept of the honour of the Crown (of which the Crown’s specific fiduciary obligations are just one component), there was some reason to believe that this aspect of the National Energy Board case could no longer be relied upon. What emerged was a body of jurisprudence that at the very least placed the obligation on Energy Regulators to assess whether the duty to consult and accommodate has been met by the Crown in relation to applications before them that have a potential impact on Aboriginal rights, interests, or yet to be established claims.¹²³

In 2009, these two aspects of Energy Regulators’ responsibility in relation to consulting and accommodating Aboriginal peoples’ rights, interests, and claims coalesced in another judgment involving the National Energy Board. In Brokenhead Ojibway Nation v. Canada (Attorney General),¹²⁴   Barnes J. of the Federal Court held that the National Energy Board was an appropriate location for assessing the   adequacy   of   proponents’   consultation with Aboriginal peoples and itself conducting consultation in the form of its hearings. This was in the context of applications involving the use and taking up of land for the purpose of pipeline projects subject to regulatory approval. In the particular circumstances of the matters before the Board and the Federal Court, this satisfied the honour of the Crown in the sense that there was no further obligation on the Governor in Council, in determining whether to approve the relevant projects, to do more. The critical paragraph in Barnes J.’s judgment states:

In determining whether and to  what extent the Crown has a duty to  consult with Aboriginal peoples about  projects or transactions that may affect their interests, the Crown may fairly consider the opportunities for Aboriginal consultation that are available within the existing processes for regulatory and environmental review…. Those review processes may be sufficient to address Aboriginal concerns, subject always to the Crown’s overriding duty to consider their adequacy in any particular situation. This is not a delegation of the Crown’s duty to consult but only one means by which the Crown may be satisfied that Aboriginal concerns have been heard and, where appropriate, accommodated,¹²⁵

Subsequently, however, the Federal Court of Appeal, in the context of the same regulatory proceedings, this time on applications for judicial review of the National Energy Board’s own decisions on these applications (as opposed to the Governor in Council’s approval of those decisions) seemingly took a rather different view of the whole issue. This was in Standing Buffalo Dakota First Nation v. Enbridge Pipelines Inc.¹²⁶ There, the affected Aboriginal peoples argued that it was incumbent on the Board to assess whether the Crown itself had consulted and accommodated sufficiently  with  respect to their outstanding claims. After noting that the Aboriginal peoples were not claiming that it was any part of the Board’s obligation to itself engage in consultation, the Court not only agreed with the concession¹²⁷ but also rejected the Aboriginal peoples’ arguments. Regulators were not implicated in the consultation and accommodation process.¹²⁸   Interestingly, Ryer J.A. (delivering the judgment of the Court) did go on to recognize (once again citing the Iacobucci judgment) that section 35 of the Constitution Act, 1982 created a separate source of obligation to Aboriginal peoples. Recollect its provisions:

35. (1) The existing Aboriginal and treaty rights of the Aboriginal peoples of Canada are hereby recognized and affirmed.

(2) In this Act, “Aboriginal peoples of Canada” includes the Indian, Inuit and Métis peoples of Canada.

(3)  For greater certainty, in  subsection (1)   “treaty  rights”  includes  rights that now exist by way of land claims agreements or may be so acquired.

(4) Notwithstanding any other provision of this Act, the Aboriginal and treaty rights referred to in subsection (1) are guaranteed equally to male and female persons.

However, in this instance, the proponent’s consulting as directed by the Board and the Board’s according of participatory rights to affected aboriginal peoples had satisfied the procedural aspects of that obligation.¹²⁹

All of this led to considerable confusion. Did the duty to consult and, where appropriate, accommodate ever fall on Energy Regulators? What about an obligation to assess whether there has otherwise been adequate consultation and, where appropriate, accommodation? And, to the extent to which there is a separate obligation arising out of section 35, when is it triggered, what are its components, and to what extent does it vary from the duty to consult arising out of the honour of the Crown and any separate or coordinate responsibility to assess whether there has otherwise been adequate consultation?

A number of these matters came to a head in Carrier Sekani Tribal Council v. British Columbia (Utilities Commission).¹³⁰ This  was an appeal from one of two decisions¹³¹  in which the British Columbia Court of Appeal held that the Commission had failed in the context of regulatory proceedings to assess whether there had been adequate consultation and accommodation by one of the parties to those  proceedings,  an  agent  of  the  Crown.

It is also  important  to  read  this  judgment in conjunction with the Court’s subsequent decision in Beckman v. Little Salmon/Carmacks First Nation.¹³⁵ Among the issues raised in that case was the adequacy of consultation efforts engaged in by decision-makers acting under a departmental umbrella. Implicit in this evaluation is an acceptance that these bodies and officials constituted the Crown for these purposes and that they had not only the power (and responsibility) to engage in consultation (as well as the assessment of the consultation efforts of others) but also the ability to meet at least in part the Crown’s overall duty to consult and accommodate. In other words, the holding in Carrier Sekani requiring an explicit or necessarily implicit conferral of power to engage in consultation is probably restricted to independent agencies and tribunals.

This, of course, does not resolve all questions respecting consultations and Energy Regulators. In fact, the Supreme Court seemed to pass up for the moment at least the opportunity to fill the remaining gaps when, shortly after Beckman was released, it denied leave to appeal in the Standing Buffalo Dakota First Nation case, a matter that had obviously been held in abeyance pending the disposition of the two other appeals.¹³⁶ However, it is possible to construct a plausible and reasonably comprehensive version of the relationship between regulatory tribunals and agencies and Aboriginal consultation rights on the basis of the two recent Supreme Court decisions, and the surviving parts of both Brokenhead Ojibway Nation and Standing Buffalo Dakota First Nation:

i) As opposed to public servants  and bodies operating under the umbrella of a government department or agency, regulatory tribunals  and  agencies  do not have the authority to engage in the consultation of Aboriginal peoples except where that power is conferred expressly or arises by necessary  implication  out of primary legislation. At present, there do not appear to be any such examples among Energy Regulators.

ii) In contrast, it appears as though  they will have the power, indeed the duty to inquire in relation to matters before them whether the Crown has a duty to consult, and, if so, whether that duty to consult has been fulfilled.¹³⁷

iii) However, it may well be that this power and duty is subject to explicit legislative exclusion  as  provided  for  in  section 21  of  the  Alberta  Responsible  Energy Development Act, respecting the authority of the newly-minted Alberta Energy Regulator.¹³⁸

iv) Despite 1, in the fulfillment of the Crown’s duty to consult, the Crown can rely on the extent to which the procedures adopted by Energy Regulators (including the consultation requirements imposed on proponents) have sufficiently engaged Aboriginal peoples as to constitute at least a component of the meeting of that responsibility.

v) Irrespective of the Crown’s duty to consult and, where appropriate, accommodate, the common law principles of procedural fairness and, more importantly, the rights recognized in section 35 of the Constitution Act, 1982  impose  on Energy   Regulators   special   procedural responsibilities in relation to Aboriginal peoples when proceedings before those regulators affect the rights, interests, and as yet undetermined claims of Aboriginal peoples.¹³⁹ These responsibilities may in part be fulfilled by assigning responsibility for consultation to proponents.

More recently, in Behn v. Moulton Contracting Ltd., ¹⁴⁰ the Supreme Court affirmed another principle that is critical in not only the conduct of  consultation  by  those  regulatory  agencies with authority to consult but also regulatory agency  assessment  of  consultations  by  the Crown:

The duty to consult exists to protect the collective rights of Aboriginal peoples. For this reason, it is owed to the Aboriginal group that holds the s. 35 rights, which are collective in nature … But an Aboriginal group can authorize an individual or an organization to represent it for the purpose of asserting its s. 35 rights … .

Without such an authorization, regulators only have to concern themselves with identifying the affected Aboriginal people or peoples for the purposes of giving notice and engaging in consultation, and for assessing the consultative efforts of others. While that process of identification may itself be a complicated exercise where there are overlapping or contested (as between or among Aboriginal peoples) rights and claims, it at least narrows the field of those who can call the regulator to account.

Given all of this and, in particular, the obligations to assess  the  consultation  efforts of others and the likely separate section 35 responsibilities of Energy Regulator, the most obvious way to avoid pitfalls in this area is for Energy Regulators to take proactive steps and put in place detailed policies on consultation with Aboriginal peoples.¹⁴¹ It is also important not only to engage Aboriginal peoples in the development of those policies but also to recognize that the duty of consultation may not necessarily be met by simply ensuring that affected Aboriginal peoples have an equal opportunity to participate at any hearings in precisely the same way as all other parties and intervenors. The case law¹⁴² recognizes that the honour of the Crown may very well involve individualized and specially tailored forms of consultation with affected Aboriginal peoples.

Absent the development of policies on consultation, it may fall on particular panels of Energy Regulators to be both alert to the possibility of the potential regulatory impact of proposals on Aboriginal peoples and attuned to the ways in which its own duties can be fulfilled. The potential for front-end failures to generate protracted judicial review proceedings and frustrate regulatory initiatives is enormous.¹⁴³

15)   Reasons

Canadian common law did not recognize the existence of a duty on the part of administrative tribunals and agencies to provide reasons for their decisions until comparatively recently. This came in 1999 in Baker v. Canada (Minister of Citizenship and Immigration),¹⁴⁴ and, even then, the Court did not conceive of it as a universal requirement of administrative decision-making. However, before that, there were statutory obligations to provide reasons contained in the general administrative procedure statutes of at least two provinces: Alberta¹⁴⁵ and Ontario.¹⁴⁶ In each, those general procedural statutes applied to Energy Regulators. There is therefore a reasonably long history of Energy Regulators coping with the demands of  a  statutory  obligation to give reasons. Indeed, as far as I am aware, with possibly one exception discussed in the next section, Energy Regulators have managed to avoid judicial review based on a failure to meet that obligation, whether imposed by the common law or by statute.¹⁴⁷

However, that is no reason for complacency. At the end of the day, what matters most is not whether there is a document constituting the reasons of the agency or tribunal. Rather, it is the quality of the reasons that is critical. A lack of quality can give rise to a challenge to the substantive outcome of a hearing. The Supreme Court of Canada has made this clear recently in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board).¹⁴⁸ There, Abella J., delivering the judgment of the Court, settled a matter that had previously been unsettled: whether inadequate, as opposed to no reasons  gave rise to a free-standing basis for judicial review founded on procedural unfairness. She held that it did not. Nonetheless, a decision not supported by adequate reasons in the sense of reasons that met the standards of “justification, transparency and intelligibility” specified in Dunsmuir v. New Brunswick¹⁴⁹ could expose the decision to review on the basis that the decision was unreasonable.

However, the courts have been conscious of the realities  facing  administrative  agencies and tribunals. Thus, in Judd v. Alberta (Energy Resources Conservation Board),¹⁵⁰ Conrad J.A. conceded:

The requirement of reasons does not call for a tribunal to discuss every single piece of  evidence  that  was  before it and the basis for accepting or rejecting that evidence: Johnston v. Alberta (Energy & Utilities Board) (1997), 200 A.R. 321 at para 10. Taken as a whole, the reasons indicate what evidence the ECRB accepted in arriving at its decision.

Abella J. expressed similar sentiments in Newfoundland and Labrador Nurses’ Union,¹⁵¹ and also  endorsing¹⁵²  an  earlier  statement by Evans J.A. of the Federal Court of Appeal that “perfection is not the standard.”¹⁵³ Even more importantly, she also accepted that, on judicial review, the reasons should not be read in isolation from the evidence, the parties’ submissions, and the process, all of which might provide justifications for a conclusion that appeared possibly unreasonable simply on the face of the reasons.¹⁵⁴ Indeed, this material as well as the reviewing courts’ own evaluation of the outcome in light of the relevant statutory provisions and purposes might serve as a surrogate for fuller and more adequate reasons in sustaining the reasonableness of a decision under attack.¹⁵⁵

Nonetheless, agencies and tribunals should not be overly sanguine on the basis of the Court’s apparent willingness to fill in the gaps and discern justifications that are not readily, if at all apparent on a perusal of the reasons provided. Good public administration, including fairness to the parties in the sense of letting them know why the outcome was reached, provides an independent imperative for taking seriously the obligation to provide adequate reasons. Stratas J.A., of the Federal Court of Appeal, expressed it well in Vancouver International Airport Authority v. Public Service Alliance of Canada when he stated that the reasons

Moreover, even with the Abella qualifications on the need for comprehensible and comprehensive reasons, a reviewing and appellate court doing its own reconstruction exercise might actually not discern a reasonable basis for the decision where adequate reasons would have made that clear. Alternatively, where the discerning of whether the decision is reasonable is not possible even within the broader “evidential” context that Abella J. suggests, the end result will be a remission to the agency or tribunal to provide fuller and better reasons. Neither of these outcomes is in the interests of administrative justice and regulatory efficiency.

As a consequence, the following test developed by Iacobucci J. on behalf of a unanimous Supreme Court of Canada in Law Society of New Brunswick v. Ryan¹⁵⁷ for whether a decision passes muster under the unreasonableness standard of review continues to serve as general guidance to tribunals in evaluating whether their reasons suffice:

A decision will be unreasonable only if there is no line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived.¹⁵⁸

This focus on the existence of a line of analysis in the context of the evidence on the record conveys an obvious message to administrative agencies and tribunals: Make sure your reasons flow logically and find a reference point in the material adduced at the hearing.

More specifically, the litmus test for a tribunal or agency concerned with the production of reasons that not only are technically bullet- proof but also respond to the policy imperatives behind the obligation to give adequate reasons is whether (1) the reasons are comprehensible, (2) address in sufficient detail all of the major issues raised in the course of a hearing, and (3)  provide a basis on which (a) the parties can determine whether to exercise any right of appeal or apply for judicial review, and (b) the reviewing court can assess the correctness or reasonableness of the conclusions reached.

16) Departures from Precedents and General Regulatory Principles

In the context of the discussion of internal consultations,¹⁵⁹ I have already identified that Canadian judicial review law does not recognize inconsistency   as   a    free-standing    ground of judicial review. However, there is some evidence of a tendency on the part of the courts to regard the obligation to provide reasons as more onerous in situations where an agency is departing from its own precedents or general regulatory principles sometimes developed in tandem by a regulator and the courts on either judicial review or statutory appeal.

One of the clearest examples of this is to be found in the dissenting judgment of Rothstein and Moldaver JJ. in Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper Ltd.¹⁶⁰ There, they stated:

Thus, while arbitrators are free to depart from relevant arbitral consensus and march to a different tune, it is incumbent on them to explain their basis for doing so. As this Court has stressed, “reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision making process” (Dunsmuir, [supra, note 109, at] para. 47). Because judges are not mind readers, without some explanation, whether implicit or explicit, for a board’s departure from the arbitral consensus, it is difficult to see how a “reviewing [could] understand why the [board] made its decision” (Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) [supra, note 147] at para. 16). Reasonableness review includes the ability of courts to question for consistency, where, in cases like this one, there is no apparent basis for implying a rationale for inconsistency.¹⁶¹

While this is a dissenting judgment, it is important to note that the majority and the minority in the  Supreme  Court  disagreed as to whether the arbitral jurisprudence was consistent with the decision of the arbitration panel in this case, with the majority in part basing its holding that the decision under review was reasonable on its view that the arbitrator applied “a remarkably consistent arbitral jurisprudence.”¹⁶²

In an energy regulatory context, this sense of a heightened obligation with respect to reasons in cases of divergence from precedent or general regulatory theory emerges most clearly in Power Workers’  Union  (Canadian  Union of  Public  Employees,  Local  1000)  v.  Ontario (Energy Board),¹⁶³ a judgment delivered on June 4, 2013, just ten days before that of the Supreme Court in Irving Pulp & Paper Ltd. This case involved an appeal from a decision of the Ontario Energy Board on  a  general rate application by Ontario Power Generation in which the Board had reduced significantly Ontario  Power  Generation’s  projection   of its revenue requirements to cover its nuclear compensation or wages costs. In  so  doing, the Board treated the compensation items as forecast costs subject to review, under the OEB’s precedents and general regulatory theory, by reference to a range of considerations,  and not as committed costs, presumptively, once again under the Board’s precedents and general regulatory theory, not reducible without a prudence review. Notwithstanding the fact that the compensation costs in question had already been set in place by way of collective agreement, the Board  refused  to  treat  them as committed costs, possibly on the basis of a position that, for these purposes, committed costs were confined to capital costs, as opposed to operating costs. On appeal to the Divisional Court, this conclusion (and  the  reduction in revenue requirements) was sustained by a majority of the Court on the basis that it was reasonable.¹⁶⁴ In reversing that decision and setting aside the Board’s holding on this issue as unreasonable, the Court of Appeal stated:

We say this for two reasons. First, the Board’s approach to these committed costs is contrary to the approach required by its own jurisprudence and accepted [¹⁶⁵] by this court. Second, it is unreasonable to require the OPG to manage costs that, by law, it cannot manage.¹⁶⁶

While I would not  necessarily  go  so  far  as to suggest that this is judicial review for inconsistency through the  back  door,  what it clearly endorses is the sense that regulators have an obligation to grapple explicitly with their precedents and those of the courts before setting out in a new direction. If they fail to do so, reviewing and appellate courts are not going to be all that willing to listen to after-the- decision arguments in support of the departure from previous jurisprudence.

17)  Avoiding Grand Statements of Principle

Ever since Dunsmuir v. New Brunswick,¹⁶⁷ the Supreme Court of Canada has, at the level of theory, been moving more and more in the direction of the predominance of the deferential reasonableness standard of review as the presumptive or default standard. Correctness review is becoming more and more exceptional. In a paper delivered at the Fifth Annual Energy Law Forum at La Malbaie on May 17, 2012, “Recent Developments in Administrative Law Relevant to Energy Law and Regulation”, I detailed this evolution by reference to nine Supreme Court of Canada judgments starting in October 2011. The summary of my conclusions was as follows:

Dunsmuir identified four situations where correctness review would be the norm. In all four instances, subsequent Supreme Court of Canada cases have made it clear that reviewing courts should be alert not to interpret their scope expansively[¹⁶⁸]. This has contributed to a significant expansion of the situations in which deferential unreasonableness review is the requisite standard. Other refinements of Dunsmuir have contributed: the downplaying of expertise as a factor in the standard of review analysis, a willingness to revisit past jurisprudence on the standard of review where there are concerns about whether those precedents determined the standard of review satisfactorily, and acceptance that review should not necessarily become more expansive when a statutory or prerogative decision-maker does not give reasons for its decision especially in situations where there is no common law or statutory obligation to provide reasons. Indeed, even where such an obligation exists, the Court is prepared to look beyond the reasons for justifications for the outcome of the exercise of a statutory or prerogative power. Inadequacy of reasons is not a free-standing ground of judicial review. Most significantly, however, the Supreme Court has sent a very clear message to the lower courts, starting with Smith v. Alliance Pipeline Ltd.,[¹⁶⁹] and reaffirmed with emphasis by Rothstein J. in Alberta (Information and Privacy Commissioner):

[T]he interpretation by the  tribunal of “its own statute or statutes closely connected to its function, with which it will have particular familiarity” should be presumed to be a question of statutory interpretation subject to deference on judicial review.[¹⁷⁰]

Moreover,  in  what  follows,  Rothstein  J. makes it clear that this is a presumption that is not easily rebutted.

However, I then went on to argue that, at the level of the actual assessment of whether a decision is unreasonable, the Supreme Court of Canada has on a number of occasions engaged in what one of my correspondents describes as “disguised correctness review.” Indeed, a now retired member of the Supreme Court of Canada said as  much  in  one  of his final judgments, his concurrence in the result in Alberta (Information and Privacy Commissioner.¹⁷¹ Binnie J.’s primary exhibit was the judgment of LeBel and Cromwell JJ. in Canada (Canadian Human Rights Tribunal) v. Canada (Attorney General).¹⁷²

I make this point here to draw attention to the fact that the promise of deference is not always as comforting to tribunals and agencies as it might be. Particularly on questions of law but even sometimes on questions of fact,¹⁷³ courts, while purporting to apply a deferential standard, will reach deeply into the merits of the decision under review.

What lessons are there in this for administrative tribunals and agencies?

First, recognize that, if you trespass into the domain of the Constitution, the common law, the Civil Code, and statutes with which you are not regularly in contact, the likelihood of correctness, or disguised correctness review inevitably increases.

Secondly, while there may be occasions where such incursions are unavoidable, always consider whether it is possible without violating your responsibilities to confine your decision to your home statute and, where feasible, with reference principally to the facts  on  which the decision is based.¹⁷⁴ Carried to extremes, of course, constantly delivering decisions that are based entirely or largely on facts will get in the way of the development of a coherent body of tribunal precedent. Nonetheless, the reality is that it is the particular facts that carry most cases, so avoid the temptations to make grand pronouncements on general law and indeed regulatory law and policy where factually-based findings will do.

Thirdly, and this is related to the whole issue of how to craft reasons, I believe it is important to take time to explain where there might be room for inappropriate classification of the nature of the question you are confronting; to make it clear that what could appear to be a question of common, civil or general law is in reality a highly context-sensitive issue with the relevant statutory terms taking their meaning from that context and not from common, civil, or general law.¹⁷⁵