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74-A-304
Consumers' Association of Canada and Pollution Probe at the University of Toronto (Applicants)
v.
The Hydro-Electric Power Commission of Ontario, and The National Energy Board, and Her Majesty the Queen in right of the Province of Ontario (The Minister of Energy for Ontario)
(Respondents)
[No. 1]
Court of Appeal, Jackett CJ., Pratte and Heald JJ.—Ottawa, March 19, 1974.
Practice—Leave to appeal from decision of National Energy Board—Written application considered—Leave granted to bring on application for oral argument—National Energy Board Act, R.S.C. 1970, c. N-6, ss. 18(1), 82(1)(a), 83(b) and Part VI Regulations, s. 6(2).
The applicants sought leave to appeal from a decision of the National Energy Board to grant the respondent Power Commission of Ontario a licence for the exportation of power. The Board had dispensed with the requirement that the Commission furnish the detailed information specified in section 6(2) of the Board's Part VI Regulations. The allega tion of the present applicants (intervenors before the Board) that the social cost of associated air pollution damages would exceed the net profit on the power export, was rejected by the Board.
Held, the submission of the applicants that the Board had erred in law in granting a licence to the respondent Power Commission, did not, on the basis of the written submis sions, disclose a fairly arguable point of law on the validity of the Board's decision. The Court, however, permitted the applicants to bring on the application for oral argument within thirty days.
Magnasonic Canada Ltd. v. Anti-dumping Tribunal [1972] F.C. 1239; Northwest Utilities Ltd. v. City of Edmonton [1929] S.C.R. 186; Union Gas Company of Canada, Limited v. Sydenham Gas and Petroleum Com pany, Limited [1957] S.C.R. 185; Memorial Gardens Association (Canada) Limited v. Colwood Cemetery Company [1958] S.C.R. 353 and Bell Telephone Co. v. Canadian National Railways (1939) 50 C.R.T.C. 10, considered.
APPLICATION. COUNSEL:
No one appearing—written application under Rule 324.
SOLICITORS:
Andrew J. Roman, Ottawa, for applicants.
Weir & Foulds, Toronto, for The Hydro Electric Power Commission, respondent.
F. H. Lamar, Ottawa, for National Energy Board, respondent.
Morris Manning, Toronto, for the Queen in right of Ontario, respondent.
Deputy Attorney General of Canada for the Queen in right of Canada.
JACKErr C.J.—This is an application on behalf of "Consumers' Association of Canada, and Pollution Probe at the University of Toron- to" for leave to appeal under section 18 of the National Energy Board Act' from "a decision of the National Energy Board dated November 1973 to issue licence EL 76, and communicated to the applicants on the 7th day of January 1974."
Section 18 of the National Energy Board Act reads as follows:
18. (1) An appeal lies from a decision or order of the Board to the Federal Court of Appeal upon a question of law or a question of jurisdiction, upon leave therefor being obtained from that Court upon application made within one month after the making of the decision or order sought to be appealed from or within such further time as that Court or a judge thereof under special circumstances allows.
The applicant has filed, in support of the application for leave to appeal, an affidavit to which is attached "a decision of the National Energy Board dated November 1973 to issue licence EL 76", which is apparently a licence for the exportation of power such as is contem plated by sections 82 and 83 of the National Energy Board Act which read in part as follows:
82. (1) Subject to the regulations, the Board may issue licences, upon such terms and conditions as are prescribed by the regulations,
(a) for the exportation of power or gas, and
1 There is a reference in the Notice of Motion also to section 29 of the Federal Court Act but this does not seem to operate to authorize an "appeal" to this Court.
83. Upon an application for a licence the Board shall have regard to all considerations that appear to it to be relevant and, without limiting the generality of the foregoing, the Board shall satisfy itself that
(b) the price to be charged by an applicant for gas or power exported by him is just and reasonable in relation to the public interest.
It appears from the decision and the material attached to it that, in accordance with a request made when the application for the licence was made by the Hydro-Electric Power Commission of Ontario, the Energy Board dispensed with a requirement that it furnish the detailed informa tion specified in section 6(2) of the Board's Part VI Regulations, which, according to the appli cant, reads, in part, as follows:
6. (2) Without restricting the generality of subsection (1), the information required to be furnished by any applicant described in subsection (1) shall, unless otherwise author ized by the Board, include
(z) evidence to demonstrate that the price to be charged by the applicant for electric power and energy exported by him is just and reasonable in relation to the public interest, and in particular that the export price
(i) would recover its appropriate share of the costs incurred in Canada,
(aa) evidence on any environmental impact that would result from the generation of the power for export.
The report on which the Energy Board's deci sion that is under attack was made deals with "Interventions" in a section that reads in part as follows:
Pollution Probe and the Consumers' Association were represented by one counsel. The case of these two interven- ors was basically that Ontario Hydro's assessment of net benefits considered the costs to itself only, that if the social costs of producing the power for export were quantified and subtracted from the benefits a net loss would result, that the export price of the power was therefore inadequate, and finally that producing power from coal is a dirty method of generation which should be discouraged unless absolutely essential.
The disposition of such intervention recom mended by the report is found in the following part thereof:
An important feature of the hearing was the heavy empha sis on environmental matters, brought about by the interven tion of Pollution Probe and the Consumers' Association. The case put forward by these intervenors, that the social costs of associated air pollution damages would exceed the net profit on the power export, was the main argument against the granting of the application. I shall therefore deal with this matter first.
In the decision on a previous export application where air pollution was involved (NEB Report to the Governor in Council on the application of The New Brunswick Electric Power Commission, July 1972, page 33), the Board formu lated its environmental responsibilities as being twofold: "Firstly, it should satisfy itself that the production of any power it may licence for export would not cause pollution in excess of the limits set by those agencies with primary responsibility.
Secondly, it should examine the anticipated benefits from the export of the power in relation to any likely adverse environmental impact on the community, to satisfy itself that the export would result in a net advantage, not merely to the Applicant, but also to Canada."
In considering the present application, I see no reason to deviate from this framework of NEB responsibilities.
The first of the Board's two expressed responsibilities is satisfied: the evidence shows that Ontario Hydro operates its thermal generating stations in accordance with the regula tions of the Ontario Ministry of the Environment.
Disregarding for the moment the unquantified benefits of interconnection, the Board's second environmental responsi bility would appear to be unsatisfied if the Pollution Probe- Consumers' Association assessment of the social costs of the increased pollution at $8.5 million per year is valid. Its validity would mean that air pollution damages would cost the community more than the profit which Ontario Hydro would derive from the export. If this were the case, it would indicate that the export prices were too low. The satisfaction of the second responsibility, therefore, resolves itself into an examination of whether the estimate of $8.5 million is correct.
In spite of the extensive explanations of the intervenors' witnesses and the persuasive arguments of their counsel, my analysis of the evidence leads me to the conclusion that the estimate is not acceptable as a basis for rejecting the application. My finding stems from a number of reasons, some of which will now be discussed.
The principal attack that the applicants desire to make on the Board's decision seems to be that set out in their written submissions of Feb- ruary 6, 1974, as follows:
(a) The Board erred in law in that it granted the license to the Respondent Power Commission (hereinafter referred to as "Hydro"), notwithstanding that Hydro had failed to prove its case. Hydro failed or declined to adduce evi dence of social costs incurred in Canada and of environ mental impact as required by virtue of section 83(b) of the National Energy Board Act, section 6(2Xz) and (aa) of the Board's Part VI Regulations, and as required by virtue of the Board's principles as enunciated in the Board's deci sion re the New Brunswick Electric Power Commission (July 1972—p. 33: 11. 13-18 and p. 21: 11. 17). The submission of sufficient evidence from which the requi site findings of fact can be made is a condition precedent to the granting of any license. In the absence of this condition being fulfilled, the Board has no power to grant such license.
Magnasonic Canada Ltd. v. Anti-dumping Tribunal, [1972] F.C. 1239, 30 D.L.R. (3d) 118.
Having regard to the disposition of this motion that I intend to propose, I desire to refrain from expressing any concluded opinion on the matter. I content myself with saying that, on the best consideration that I have been able to give the matter on the basis of the applicants' written submissions, I have not been able to recognize, in the above paragraph, a fairly arguable attack in law on the validity of the decision attacked. Section 83(b) calls for a determination by the Board as to whether the price to be charged is "just and reasonable" in relation to the public interest. Generally speak ing, as it seems to me, where Parliament leaves it to a tribunal to decide "fair and reasonable" or "just and reasonable" rates or prices or public convenience and necessity, the tribunal has a discretion to decide in what manner it will obtain information and the Courts have no right to review the Board's opinion based on the facts established before it. See Northwest Utilities Ltd. v. The City of Edmonton, 2 Union Gas Company of Canada, Limited v. Sydenham Gas and Petroleum Company, Limited 3 and Memori al Gardens Association (Canada) Limited v. Colwood Cemetery Company 4 . Furthermore, where a tribunal adopts a rule of practice to guide it in the exercise of its statutory functions, the question whether it properly appreciates its
2 [1929] S.C.R. 186.
3 [1957] S.C.R. 185.
4 [1958] S.C.R. 353.
own rule cannot be a question of law. Nor "can the question whether in a given case the Board has properly appreciated the facts for the pur pose of applying the rule be such a question. This is so because ... there is no statutory rule and there is no rule of law that prescribes the considerations by which the Board is to be governed in exercising its administrative discre tion ...". See Bell Telephone Co. v. Canadian National Railways 5 per Duff C.J.C. (giving the judgment of the Supreme Court of Canada) at page 21. As it seems to me, before this applica tion can be granted, the Court must be able to see a specific question of law or jurisdiction the answer to which may lead to the setting aside' of the decision or order attacked. That may be a question as to whether the decision or order was made by the Board in disregard of a statutory provision or other rule of law. It may be that the decision or order was based on a finding of fact that cannot be sustained having regard to the Board's statutory mandate. It may fall in some other area that does not occur to me. In any event, as already indicated, I fail to recognize any such specific question of law in the para graph of the applicants' supporting submissions set out above.
While the considerations above set out may not apply to all the other questions of law or jurisdiction put forward for consideration by the applicants' submissions, I find myself, on the consideration that I have been able to give to the matter, unable to recognize any specific question of law or jurisdiction the decision of which would lead to a judgment interfering with the decision of the Energy Board that the appli cants desire leave to attack by the proposed appeal and, in my opinion, leave to appeal should not be granted in a case of this kind
(1939) 50 C.R.T.C. 10.
simply to enable the proposed appellants to take the Court browsing through the record in quest of some basis in law for setting the decision aside.
However, I recognize that the matter is com plicated and, therefore, not free from doubt and that an oral presentation of the application might make me see the matter differently.
I, therefore, propose that the applicants be permitted to bring the application on for oral argument within thirty days. (For this purpose, the applicants should discuss with the Registry of the Court, and with counsel for the other parties who were before the Board, an appropri ate time and place for such oral argument, and when, as a result of such discussions, a time and place have been fixed by the Court, it should give at least 10 days' notice thereof by regis tered mail to all parties of record.) If the application is not brought on for oral argument within thirty days, the application should, on the expiration of that period, stand dismissed.
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PRArrE J.—I agree with the order proposed by the Chief Justice.
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HEALD J.—I also agree with the order pro posed by the Chief Justice.
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