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.
* * *
PRArrE J.—I agree with the order proposed
by the Chief Justice.
• *
HEALD J.—I also agree with the order pro
posed by the Chief Justice.
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