ATCO Gas and Pipelines Ltd. v. Energy and Utilities Board (Alta.), (2006) 380 A.R. 1 (SCC)

• Judge: McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish and Charron, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 09, 2006
• Jurisdiction: Canada (Federal)
• Citations: (2006), 380 A.R. 1 (SCC);2006 SCC 4;344 NR 293;AZ-50355224;363 WAC 1;[2006] 1 SCR 140;JE 2006-358;[2006] SCJ No 4 (QL);EYB 2006-100901;380 AR 1;[2006] ACS no 4;[2006] CarswellAlta 139;54 Alta LR (4th) 1;263 DLR (4th) 193;[2006] 5 WWR 1;39 Admin LR (4th) 159;145 ACWS (3d) 725

ATCO Gas & Pipelines Ltd. v. EUB (2006), 380 A.R. 1 (SCC);

    363 W.A.C. 1

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2006] A.R. TBEd. FE.095

City of Calgary (appellant) v. ATCO Gas and Pipelines Ltd. (respondent) and Alberta Energy and Utilities Board, Ontario Energy Board, Enbridge Gas Distribution Inc. and Union Gas Limited (intervenors)

(30247; 2006 SCC 4; 2006 CSC 4)

Indexed As: ATCO Gas and Pipelines Ltd. v. Energy and Utilities Board (Alta.)

Supreme Court of Canada

McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish and Charron, JJ.

February 9, 2006.

Summary:

ATCO applied under the Gas Utilities Act for approval of the sale of certain lands and buildings formerly used for utility purposes. ATCO requested that the sale proceeds be allocated to retire the remaining net book value of the assets and cover disposition costs, with the balance allocated to shareholders. The Energy and Utilities Board approved the sale. Subsequently, the Board allocated $4,070,310 of the net sale proceeds to customers and $2,014,690 to ATCO shareholders. ATCO obtained leave to appeal on, inter alia, the question of the Board's jurisdiction to allocate sales proceeds to customers (ratepayers).

The Alberta Court of Appeal, in a judgment reported (2004), 339 A.R. 250; 312 W.A.C. 250, allowed the appeal and vacated the Board's decision. The allocation was made without jurisdiction. The city, representing ratepayers, appealed. ATCO cross-appealed.

The Supreme Court of Canada, McLachlin, C.J.C., Binnie and Fish, JJ., dissenting, dismissed the appeal and allowed the cross-appeal. The Board had no jurisdiction to allocate any portion of the proceeds of the sale of ATCO's assets to ratepayers. The court set aside the Board's decision as incorrect and remitted the matter to the Board to approve the sale of assets, recognizing that the proceeds of the sale belonged to ATCO.

Public Utilities - Topic 4404

Public utility commissions - General - Jurisdiction - The Supreme Court of Canada stated that "the [Alberta Energy and Utilities] Board's seemingly broad powers to make any order and to impose any additional conditions that are necessary in the public interest has to be interpreted within the entire context of the statutes which are meant to balance the need to protect consumers as well as the property rights retained by owners, as recognized in a free market economy. The limits of the powers of the Board are grounded in its main function of fixing just and reasonable rates ('rate setting') and in protecting the integrity and dependability of the supply system." - See paragraph 7.

Public Utilities - Topic 4404

Public utility commissions - General - Jurisdiction - ATCO applied under the Gas Utilities Act for approval of the sale of certain lands and buildings formerly used for utility purposes - ATCO requested that the sale proceeds be allocated to retire the remaining net book value of the assets and cover disposition costs, with the balance allocated to shareholders - The Energy and Utilities Board approved the sale, finding no harm to the public - Subsequently, the Board allocated $4,070,310 of the net sale proceeds to customers and $2,014,690 to ATCO shareholders - The Alberta Court of Appeal vacated the Board's decision, stating that "there is no express or implied authority in the governing legislation, case law or through the regulatory compact which empowers the Board to allocate the proceeds from the sale of assets, after recovery of the original cost, accumulated depreciation, disposition and related costs, from a sale of a property formerly used in the provision of services to customers when no harm to the public was found at the time the Board approved the sale." - The Supreme Court of Canada held that the Board had no jurisdiction to allocate any portion of the sale of utility assets to ratepayers, who had no property interest in utility assets - Although unnecessary to decide, if the Board had jurisdiction, the court would have found that its decision to exercise its discretion to allocate anything to ratepayers to protect the public interest was unreasonable - See paragraphs 35 to 87.

Public Utilities - Topic 4445

Public utility commissions - Powers - Re sale of utility assets - [See second Public Utilities - Topic 4404 ].

Public Utilities - Topic 4741

Public utility commissions - Judicial review - General - The Supreme Court of Canada held that a ruling by the Alberta Energy and Utilities Board on the issue of its jurisdiction to allocate net sales proceeds from the sale of utility assets to ratepayers was subject to judicial review on the standard of correctness - No deference should be shown for the Board's decision - The Board's expertise was not engaged when deciding the scope of its powers - See paragraphs 21 to 34.

Cases Noticed:

ATCO Gas-North, A Division of ATCO Gas and Pipelines Ltd., Re, Alta. E.U.B. Decision 2001-65, refd to. [para. 10].

TransAlta Utilities Corp. v. Public Utilities Board (Alta.) (1986), 68 A.R. 171 (C.A.), refd to. [para. 11].

TransAlta Utilities Corp., Re, Alta. E.U.B. Decision 2000-41, refd to. [para. 11].

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; 226 N.R. 201, addendum [1998] 1 S.C.R. 1222, refd to. [para. 21].

United Taxi Drivers' Fellowship of Southern Alberta et al. v. Calgary (City), [2004] 1 S.C.R. 485; 318 N.R. 170; 346 A.R. 4; 320 W.A.C. 4; 2004 SCC 19, refd to. [para. 21].

Consumers' Gas Co. v. Ontario Energy Board et al., [2001] O.A.C. Uned. 287 (Div. Ct.), refd to. [para. 26].

Coalition of Citizens Impacted by the Caroline Shell Plant v. Energy and Utilities Board (Alta.) et al. (1996), 187 A.R. 205; 127 W.A.C. 205; 41 Alta. L.R.(3d) 374 (C.A.), refd to. [para. 26].

ATCO Ltd. et al. v. Calgary Power Ltd. et al., [1982] 2 S.C.R. 557; 45 N.R. 1; 41 A.R. 1, refd to. [para. 28].

Dome Petroleum Ltd. v. Public Utilities Board (Alberta) and Canadian Superior Oil Ltd. (1976), 13 N.R. 301; 2 A.R. 453 (C.A.), affd. [1977] 2 S.C.R. 822; 13 N.R. 299; 2 A.R. 451, refd to. [para. 28].

Barrie Public Utilities et al. v. Canadian Cable Television Association et al., [2003] 1 S.C.R. 476; 304 N.R. 1; 2003 SCC 28, refd to. [para. 31].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 37].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 37].

H.L. v. Canada (Attorney General) et al., [2005] 1 S.C.R. 401; 333 N.R. 1; 262 Sask.R. 1; 347 W.A.C. 1; 2005 SCC 25, refd to. [para. 37].

Marche et al. v. Halifax Insurance Co., [2005] 1 S.C.R. 47; 330 N.R. 115; 230 N.S.R.(2d) 333; 729 A.P.R. 333; 2005 SCC 6, refd to. [para. 37].

Contino v. Leonelli-Contino (2005), 341 N.R. 1; 204 O.A.C. 311; 2005 SCC 63, refd to. [para. 37].

Alberta Government Telephones, Re (1984), Alta. P.U.B. Decision No. E84081, refd to. [para. 40].

TransAlta Utilities Corp., Re (1984), Alta. P.U.B. Decision No. E84116, refd to. [para. 40].

TransAlta Utilities Corp., Re, [2002] A.E.U.B.D. No. 30, refd to. [para. 40].

ATCO Electric Ltd., Re, [2003] A.E.U.B.D. No. 92, refd to. [para. 40].

Canadian Pacific Air Lines Ltd. et al. v. Canadian Air Line Pilots Association et al., [1993] 3 S.C.R. 724; 160 N.R. 321, refd to. [para. 46].

Bristol-Myers Squibb Co. et al. v. Canada (Attorney General) et al., [2005] 1 S.C.R. 533; 334 N.R. 55; 2005 SCC 26, refd to. [para. 46].

Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84; 280 N.R. 268; 2002 SCC 3, refd to. [para. 48].

Bell Canada v. Canadian Radio-Television and Telecommunications Commission, [1989] 1 S.C.R. 1722; 97 N.R. 15, refd to. [para. 50].

R. v. McIntosh (B.B.), [1995] 1 S.C.R. 686; 178 N.R. 161; 79 O.A.C. 81, refd to. [para. 51].

Dow Chemical Canada Inc. v. Union Gas Ltd. (1982), 141 D.L.R.(3d) 641 (Ont. Div. Ct.), affd. (1983), 42 O.R.(2d) 731 (C.A.), refd to. [para. 51].

Interprovincial Pipe Line Ltd. v. National Energy Board, [1978] 1 F.C. 601; 17 N.R. 56 (F.C.A.), refd to. [para. 51].

Canadian Broadcasting League v. Canadian Radio-Television and Telecommunications Commission and Kingston Cable T.V. Ltd., [1983] 1 F.C. 182; 43 N.R. 77 (F.C.A.), affd. [1985] 1 S.C.R. 174; 57 N.R. 76, refd to. [para. 51].

Northwestern Utilities Ltd. v. Edmonton (City), [1929] S.C.R. 186, refd to. [para. 63].

Northwestern Utilities Ltd. v. Edmonton (City), [1979] 1 S.C.R. 684; 23 N.R. 565; 12 A.R. 449, refd to. [para. 65].

Gas Utilities Act and Public Utilities Board Act, Re (1984), Alta. P.U.B. Decision No. E84113, refd to. [para. 65].

Union Gas Ltd. v. Ontario Energy Board (1983), 1 D.L.R.(4th) 698 (Ont. Div. Ct.), refd to. [para. 65].

Duquesne Light Co. v. Barasch (1989), 488 U.S. 299, refd to. [para. 69].

Market St. Railway Co. v. Railroad Commission of State of California (1945), 324 U.S. 548, refd to. [para. 69].

Coseka Resources Ltd. v. Saratoga Processing Co. et al. (1981), 31 A.R. 541; 126 D.L.R.(3d) 705 (C.A.), leave to appeal refused [1981] 2 S.C.R. vii; 40 N.R. 172; 34 A.R. 360, refd to. [para. 71].

Consumers' Gas Co., Re (1987), E.B.R.O. 410-II/411-II/412-II, refd to. [para. 73].

Reference Re National Energy Board Act, [1986] 3 F.C. 275; 69 N.R. 174 (F.C.A.), refd to. [para. 77].

Pacific National Investments Ltd. v. Victoria (City) et al., [2000] 2 S.C.R. 919; 263 N.R. 1; 144 B.C.A.C. 203; 236 W.A.C. 203; 2000 SCC 64, refd to. [para. 79].

Leiriao v. Val-Bélair (Ville), [1991] 3 S.C.R. 349; 129 N.R. 188; 43 Q.A.C. 252, refd to. [para. 79].

Hongkong Bank of Canada v. Wheeler Holdings Ltd., [1993] 1 S.C.R. 167; 148 N.R. 1; 135 A.R. 83; 33 W.A.C. 83, refd to. [para. 79].

Canadian Union of Public Employees et al. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539; 304 N.R. 76; 173 O.A.C. 38; 2003 SCC 29, refd to. [para. 92].

Dr. Q., Re, [2003] 1 S.C.R. 226; 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170; 2003 SCC 19, refd to. [para. 102].

Dr. Q. v. College of Physicians and Surgeons (B.C.) - see Dr. Q., Re.

Calgary Power Ltd. v. Copithorne, [1959] S.C.R. 24, refd to. [para. 104].

United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316; 153 N.R. 81; 106 Nfld. & P.E.I.R. 140; 334 A.P.R. 140, refd to. [para. 105].

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1, refd to. [para. 105].

Pezim v. British Columbia (Superintendent of Brokers) - see Pezim v. British Columbia Securities Commission et al.

Memorial Gardens Association (Canada) Ltd. v. Colwood Cemetery Co., [1958] S.C.R. 353, refd to. [para. 106].

Union Gas Co. of Canada v. Sydenham Gas and Petroleum Co., [1957] S.C.R. 185, refd to. [para. 107].

C.T.C. Dealer Holdings Ltd. and Billes et al. v. Securities Commission (Ont.) and Canadian Tire Corp. et al. (1987), 21 O.A.C. 216; 59 O.R.(2d) 79 (Div. Ct.), refd to. [para. 108].

Asbestos Corp., Société nationale de l'Amiante and Quebec (Province), Re, [2001] 2 S.C.R. 132; 269 N.R. 311; 146 O.A.C. 201; 2001 SCC 37, refd to. [para. 108].

Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission) - see Asbestos Corp., Société nationale de l'Amiante and Quebec (Province), Re.

Consumers' Gas Co., Re (1976), E.B.R.O. 341-I, refd to. [para. 115].

Boston Gas Co., Re (1982), 49 P.U.R.4th 1 (Mass. D.P.U.), refd to. [para. 116].

Consumers' Gas Co., Re (1991), E.B.R.O. 465, refd to. [para. 117].

Natural Resource Gas Ltd., Re, RP-2002-0147; EB-2002-0446, refd to. [para. 118].

Yukon Energy Corp. et al. v. Utilities Board (Yukon Terr.) (1996), 74 B.C.A.C. 58; 121 W.A.C. 58 (Yuk. C.A.), refd to. [para. 119].

Arizona Public Service Co., Re (1988), 91 P.U.R.4th 337; 1988 WL 391394 (Ariz. C.C.), refd to. [para. 120].

Southern California Water Co., Re (1992), 43 C.P.U.C.2d 596; 1992 WL 584058, refd to. [para. 121].

Southern California Gas Co., Re (1990), 38 C.P.U.C.2d 166; 118 P.U.R.4th 81; 1990 WL 488654, refd to. [para. 129].

Democratic Central Committee of the District of Columbia v. Washington Metropolitan Area Transit Commission (1973), 485 F.2d 786 (D.C. Cir.), refd to. [para. 130].

Board of Public Utility Commissioners v. New York Telephone Co. (1926), 271 U.S. 23, refd to. [para. 130].

New York Water Service Corp. v. Public Service Commission (1960), 208 N.Y.S.2d 587, refd to. [para. 137].

Compliance with the Energy Policy Act of 1992, Re (1995), 62 C.P.U.C.2d 517; 1995 WL 768628, refd to. [para. 138].

California Water Service Co., Re (1996), 66 C.P.U.C.2d 100; 1996 WL 293205, refd to. [para. 143].

TransAlta Utilities Corp., Re (1984), Alta. P.U.B. Decision No. E84115, refd to. [para. 145].

Statutes Noticed:

Alberta Energy and Utilities Board Act, R.S.A. 2000, c. A-17, sect. 15(1), sect. 15(3) [para. 41]; sect. 26(1), sect. 26(2) [para. 24].

Gas Utilities Act, R.S.A. 2000, c. G-5, sect. 26(2)(d) [para. 41]; sect. 37(2) [para. 66].

Public Utilities Board Act, R.S.A. 2000, c. P-45, sect. 37 [para. 41].

Authors and Works Noticed:

Anisman, Philip, and Reid, Robert F., Administrative Law: Issues and Practice (1995), generally [para. 108].

Black, Alexander J., Responsible Regulation: Incentive Rates for Natural Gas Pipelines (1992), 28 Tulsa L.J. 349, pp. 351 [para. 3]; 356, 357 [para. 63].

Blake, Sara, Administrative Law in Canada (3rd Ed. 2001), pp. 183, 184 [para. 35].

Bouckaert, B., and De Geest, G., Encyclopedia of Law and Economics (2000), vol. 3, pp. 398, 498 [para. 3].

Brown, David M., Energy Regulation in Ontario (2001) (2004 Looseleaf Update, Release 3), pp. 2-15 [para. 38]; 2-16.2 [para. 51]; 2-16.3 [para. 73]; 2-16.6 [para. 60].

Brown, Donald J.M., and Evans, John M., Judicial Review of Administrative Action in Canada (1998) (2005 Looseleaf Update), vol. 1, para. 14:2622 [para. 104].

Brown-John, C. Lloyd, Canadian Regulatory Agencies: Quis custodiet ipsos custodes? (1981), p. 29 [para. 2].

Canadian Institute of Resources Law, Canada Energy Law Service: Alberta (1981) (2005 Looseleaf Update, Release 2), p. 30-3101 [para. 56].

Côté, Pierre-André, Interpretation of Legislation in Canada (3rd Ed. 2000), pp. 308 [para. 49]; 482 to 486 [para. 79].

Cross, Philli S., Rate Treatment of Gain on Sale of Land: Ratepayer Indifference, A New Standard? (1990), 126 Public Utilities Fortnightly 44, p. 44 [para. 120].

Depoorter, Ben W.F., Regulation of Natural Monopoly, in Bouckaert, B., and De Geest, G., Encyclopedia of Law and Economics (2000), vol. 3, p. 498 [para. 3].

Doern, G.B., The Regulatory Process in Canada (1978), p. 94 [para. 2].

Driedger, Elmer A., Construction of Statutes (2nd Ed. 1983), p. 87 [para. 37].

Green, Richard, and Pardina, Martin Rodriguez, Resetting Price Controls for Privatized Utilities: A Manual for Regulators (1999), p. 5 [para. 62].

Kahn, Alfred E., The Economics of Regulation: Principles and Institutions (1988), vol. 1, p. 11 [para. 3].

MacAvoy, Paul W., and Sidak, J. Gregory, The Efficient Allocation of Proceeds from a Utility's Sale of Assets (2001), 22 Energy L.J. 233, pp. 234 [para. 3 et seq.]; 234 to 236 [paras. 29, 76]; 237 [para. 68]; 238, 239 [para. 71]; 244 [para. 67]; 245 [para. 68]; 246 [para. 78].

Milner, H.R., Public Utility Rate Control in Alberta (1930), 8 Can. Bar Rev. 101, pp. 101 [paras. 54, 63, 64]; 102 [para. 60].

Mullan, David J., Administrative Law (2001), pp. 9, 10 [paras. 2, 35].

Netz, Janet S., Price Regulation: A (Non-Technical) Overview, in Bouckaert, B., and De Geest, G., Encyclopedia of Law and Economics (2000), vol. 3, p. 398 [para. 3].

Reid, Robert F., and David, Hillel, Administrative Law and Practice (2nd Ed. 1978), generally [para. 108].

Sullivan, Ruth, Sullivan and Driedger on the Construction of Statutes (4th Ed. 2002), pp. 20 [para. 48]; 21 [paras. 46, 48]; 154, 155 [paras. 50, 59]; 228 [para. 74]; 400 to 403 [para. 79].

Trebilcock, Michael J., The Consumer Interest and Regulatory Reform, in Doern, G.B., The Regulatory Process in Canada (1978), p. 94 [para. 2].

Counsel:

Brian K. O'Ferrall and Daron K. Naffin, for the appellant/respondent on cross-appeal;

Clifton D. O'Brien, Q.C., Lawrence E. Smith, Q.C., H. Martin Kay, Q.C., and Laurie A. Goldbach, for the respondent/appellant on cross-appeal;

J. Richard McKee and Renée Marx, for the intervenor, Alberta Energy and Utilities Board;

George Vegh and Michael W. Lyle, written submissions only, for the intervenor, Ontario Energy Board;

Michael D. Schafler and J.L. McDougall, Q.C., written submissions only, for the intervenor, Enbridge Gas Distribution Inc.;

Michael A. Penny and Susan Kushneryk, written submissions only, for the intervenor, Union Gas Ltd.

Solicitors of Record:

McLennan Ross, Calgary, Alberta, for the appellant/respondent on cross-appeal;

Bennett Jones, Calgary, Alberta, for the respondent/appellant on cross-appeal;

J. Richard McKee, Calgary, Alberta, for the intervenor, Alberta Energy and Utilities Board;

Ontario Energy Board, Toronto, Ontario, for the intervenor, Ontario Energy Board;

Fraser Milner Casgrain, Toronto, Ontario, for the intervenor, Enbridge Gas Distribution Inc.;

Torys, Toronto, Ontario, for the intervenor, Union Gas Ltd.

This appeal and cross-appeal were heard on May 11, 2005, before McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish and Charron, JJ., of the Supreme Court of Canada.

The judgment of the Court was delivered in both official languages on February 9, 2006, and the following opinions were filed:

Bastarache, J. (LeBel, Deschamps and Charron, JJ., concurring) - see paragraphs 1 to 87;

Binnie, J., dissenting (McLachlin, C.J.C., and Fish, J., concurring) - see paragraphs 88 to 149.