A-1057-90
Attorney General of Quebec (Appellant)
v.
National Energy Board (Respondent)
INDEXED AS: QUEBEC (ATTORNEY GENERAL) v. CANADA (NA-
TIONAL ENERGY BOARD) (CA.)
Court of Appeal, Pratte, Marceau and Desjardins
JJ.A.—Montréal, June 10, 11, 12, 13, 14; Ottawa,
July 9, 1991.
Energy — NEB granting Hydra -Québec licences to export
electricity to U.S.A. on condition EARPGO complied with —
Hydro -Québec appealing condition — Indians appealing
granting of licences — NEB lacking jurisdiction to impose
conditions as to energy production in export licence — Board
did not err in considering recent statutory amendments, aimed
at deregulation, which lay down less strict conditions in ruling
on export applications — Natural justice rules not breached
— Board finding former export price requirements met —
While no direct evidence as to cost recovery, there was evidence
supporting Board's finding as to feasibility.
Environment — NEB granting licences for electricity export
to U.S.A. on condition EARPGO complied with — Condition
struck down as NEB lacking information to impose conditions
as to energy production in export licence — Board concerned
only with environmental consequences of sending power from
Canada — Authorities other than NEB responsible for serious
environmental questions raised by construction of electrical
energy production facilities.
In September 1990, the National Energy Board granted
Hydra -Québec seven licences authorizing the export, over some
twenty years, of 1,450 megawatts of electricity to the United
States, generating income of close to $25 billion. The licences
were all subject to the same conditions which had the effect of
requiring Hydro-Quebec to comply with the EARP Guidelines
Order. The Attorney General of Quebec and Hydro -Québec
seek to have those conditions vacated while the Grand Council
of the Crees and the Cree Regional Authority object to the
licences being granted at all.
Held, the principal and related appeal with respect to the
conditions should be allowed and the conditions vacated. The
appeals with respect to the decision granting the licences should
be dismissed.
It is clear from the Board's reasons that it imposed the
conditions affecting the construction of production facilities on
the basis that it was bound by the EARP Guidelines Order and
that the Hydro -Québec applications were covered by that
Order.
The Board does not have jurisdiction to make the granting of
an export licence subject to conditions pertaining to production.
The factors which may be relevant in considering an applica
tion for leave to export electricity and the conditions which the
Board may place on its leave cannot relate to anything but the
export of electricity. As it is understood in the Act with respect
to electricity, export does not cover production itself. The only
question can be as to the environmental consequences of the
export. Authorities other than the Board are responsible for the
serious environmental questions raised by the construction of
electrical energy production facilities. The conditions imposed
herein cannot stand, but since they can be dissociated from the
licences themselves, the quashing of the conditions does not
entail quashing the decision itself.
Contrary to what was argued by the Grand Council of the
Crees, the Board did not err in law by applying the provisions
of amendments to the National Energy Board Act which came
into effect in June 1990, before the decision was rendered but
after the hearing had taken place and the applications taken
under advisement. The new statutory provisions were enacted
with a view to deregulation and placed less strict conditions on
the exercise of the Board's discretion in considering applica
tions to export electricity. The Board was bound by the new
Act rather than by the provisions concerning cost recovery in
force when the licence applications were made. The application
of the new Act was not contrary to the rules of natural justice
since the Grand Council of the Crees had complete latitude at
the hearing to act on the understanding that the coming into
effect of the new Act could affect the decision to be rendered.
In any case, the application of the new provisions would not be
a basis for reopening the hearing or holding a special additional
hearing. Furthermore, even if the argument were valid, it lead
nowhere since the Board had chosen to analyse the evidence in
light of the old Act and decided, in accordance with its
obligations, thereunder, that the Hydro -Québec applications
met the traditional requirements of an export price that was
just and reasonable in relation to the public interest.
Hydro -Québec had objected to openly disclosing its detailed
estimate of certain costs for fear of injury in its business
dealings with its neighbours. The Indians were, therefore,
correct in noting that the Board had no direct evidence on
which to base its conclusion that the export price would recover
the appropriate share of the costs incurred in Canada. There is,
however, nothing which requires the Board to decide only on
direct evidence. There was evidence which, while not direct in
all respects, carried a strong persuasive force in determining
feasibility. The Court therefore could not dispute the Board's
conclusion on that basis.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to amend the National Energy Board Act and to
repeal certain enactments in consequence thereof (Bill
C-23), S.C. 1990, c. 7.
Department of the Environment Act, R.S.C., 1985, c.
E-10, s. 6.
Environmental Assessment and Review Process Guide
lines Order, SOR/84-467.
Federal Court Rules, C.R.C., c. 663, R. 1307.
Government Organization Act, 1979, S.C. 1978-79, c. 13,
s. 14.
Hydro -Québec Act, R.S.Q. 1987, c. H-5.
National Energy Board Act, R.S.C., 1985, c. N-7, ss. 2,
22, 118 (as am. by S.C. 1990, c. 7, s. 32), 119.06(2)(b)
(as enacted idem, s. 34), 119.08(2) (as enacted idem),
119.09(2) (as enacted idem).
National Energy Board Part VI Regulations, C.R.C., c.
1056, ss. 6(1),(2)(z),(aa), 15(m).
CASES JUDICIALLY CONSIDERED
APPLIED:
Consumers' Ass'n (Can.) v. Ontario Hydro [No. 11,
[1974] I F.C. 453; (1974), 2 N.R. 467 (C.A.).
COUNSEL:
Jean-K. Samson, Robert Monette, Alain
Gingras, Jean Robitaille for Attorney Gener
al of Québec.
Bernard A. Roy, Pierre Bienvenue, Jean G.
Bertrand for Hydro -Québec.
Robert Mainville, James O'Reilly, Johanne
Mainville for Grand Council of the Crees of
Quebec and Cree Regional Authority.
Jean-Marc Aubry, René Leblanc, James
Mabbutt, F. Jean Morel for National Energy
Board and Attorney General of Canada.
William G. Lea for Maritime Electric Co.
Ltd.
Harvey Morrison, John K. Poirier for Nova
Scotia Power Corp.
SOLICITORS:
Bernard Roy & Ass., Montréal, for Attorney
General of Québec.
Ogilvy Renaud, Montréal, for Hydro -Québec.
O'Reilly, Mainville, Montréal, for Grand
Council of the Crees of Quebec and Cree
Regional Authority.
Deputy Attorney General of Canada for Na
tional Energy Board and Attorney General of
Canada.
Campbell, Lea, Michael, McConnell & Pigot,
Charlottetown, for Maritime Electric Co. Ltd.
Nova Scotia Power Corp., Halifax, for Nova
Scotia Power Corp.
The following is the English version of the
reasons for judgment rendered by
MARCEAU J.A.: On July 28, 1989 Hydro -Qué-
bec applied to the National Energy Board for leave
to export a certain quantity of electricity. The
purpose of its applications, made in accordance
with the provisions of Part VI of the National
Energy Board Act, R.S.C., 1985, c. N-7, were:
first, the issuing of a licence authorizing export to
the New York Power Authority of two blocks of
power and energy guaranteed for a twenty-year
period; second, the issuing of six licences authoriz
ing the export to Vermont Joint Owners of seven
blocks of power and energy guaranteed for periods
ranging from five to twenty-two years.
The mission of Hydro -Québec, an agent of the
Crown in right of the province created by the
Hydro -Québec Act, R.S.Q. 1987, c. H-5, is to
anticipate and to supply demand for energy in
Quebec, and to this end it is empowered to pro
duce, acquire, sell, transport and distribute energy.
Hydro -Québec in fact operates a vast network in
the province, consisting of production facilities and
facilities for the transport and distribution of elec
trical energy, the capacity of which is now over
30,000 megawatts (MW). In order to meet con
stantly rising demand, Hydro -Québec has pre
pared a development plan for its equipment which
it expects to implement in the coming years, and
this plan contemplates the sale outside of Quebec
of a certain quantity of electricity produced by its
facilities as a whole. The purpose of the two
applications to the Board was to give effect to two
agreements, negotiated and signed shortly before,
which covered a total quantity of 1,450 MW and
would provide income of nearly $25 billion.
The Hydro -Québec applications gave rise to a
lengthy public hearing in which a number of per
sons took part and which continued until March 5,
1990. On September 27, 1990 the Board made
public the decision it had taken a few days earlier
and published the reasons for that decision. Sub
ject to the approval of the Governor in Council
approval which was in fact given soon afterwards
— the Board granted the seven licences requested,
except that it made them all subject to the same
conditions, among which were the following two,
Nos. 10 and 11:
10. This licence remains valid to the extent that
(a) any production facility required by Hydro-Quebec to
supply the exports authorized herein, for which construction
had not yet been authorized pursuant to the evidence pre
sented to the Board at the EH-3-89 hearing that ended on
5 March 1990, will have been subjected, prior to its con
struction, to the appropriate environmental assessment and
review procedures as well as to the applicable environmental
standards and guidelines in accordance with federal govern
ment laws and regulations.
(b) Hydro -Québec, following any of the environmental
assessment and review procedures mentioned in subcondi-
tion (a), will have filed with the Board
(i) a summary of all environmental impact assessments
and reports on the conclusions and recommendations aris
ing from the said assessment and review procedures;
(ii) governmental authorizations received; and
(iii) a statement of the measures that Hydro-Quebec
intends to take to minimize the negative environmental
impacts.
I I. The generation of thermal energy to be exported hereunder
shall not contravene relevant federal environmental standards
or guidelines.
The Board's decision seemed questionable to
many. In October 1990 first Hydro -Québec and
then the Attorney General of Quebec both applied
to this Court, pursuant to section 22 of the Na
tional Energy Board Act, for leave to appeal the
decision with respect to these conditions 10 and 11,
while the Grand Council of the Crees of Quebec
and the Cree Regional Authority also took steps to
object to the licences even being granted. Leave to
appeal was granted to the three parties and the
first notice of appeal entered was, pursuant to the
Rules of the Court [Federal Court Rules, C.R.C.,
c. 663], designated the principal appeal, the others
related appeals.
Maritime Electric Company Limited, which had
appeared before the Board, and Nova Scotia
Power Corporation intervened in the appeal pursu
ant to Rule 1307 of the Rules of practice of the
Court, both in support of the objection by Hydro -
Québec and the Attorney General of Quebec to
the imposition of conditions 10 and 11.
Two observations should be made on the reasons
for judgment I am about to render.
The hearing of the principal and related appeals
lasted for five days and gave rise to lengthy argu
ment submitted with a host of authorities. The
setting out of my views and my conclusions will be
nowhere near reflecting the importance and com
plexity of the arguments presented. As I will
explain in a moment, several of the arguments
made were only made alternatively by counsel and
it will not be necessary for me to consider them.
Furthermore, I will first examine the challenge
to the imposition of conditions 10 and 11. The
reason is not only that it originates with the appli
cant to the Board, Hydro -Québec, is supported by
three of the four other appellants and interveners
and was argued before the other one at the hear
ing, but also that by disposing of it first I feel I can
simplify my analysis as a whole.
Challenge by Attorney General of Quebec and
Hydro -Québec to imposition of conditions 10 and
11
It is clear from reading the introductory "whe-
reases" to each of the licences' and the lengthy
reasons published in support of the decision that
the Board imposed conditions 10 and 11 because it
felt it was bound by the Environmental Assess
ment and Review Process Guidelines Order, SOR/
84-467, adopted on June 22, 1984 on the recom
mendation of the Minister of the Environment
pursuant to subsection 6(2) of the Government
Organization Act, 1979, S.C. 1978-79, c. 13, s.
14 2 (hereinafter the "EARP Order"), and it con
sidered that the Hydro -Québec applications were
covered by the EARP Order. This obvious connec
tion between the imposition of the conditions and
compliance with the EARP Order raises the ques
tion of the application of that Order, first to the
Board itself, and then to the promoter Hydro -Qué-
bec as an agent of the Crown in right of the
province, and even ultimately its constitutional
validity. It is these problems, raised among the
appellants' grounds of challenge, which required
the most extensive analysis; however, as I have just
said, they were only mentioned alternatively, and I
will explain why.
While the connection between imposition of the
disputed conditions and the EARP Order is not
formally stated in the formal text of the conclu
sions of the decision (a fact which the Attorney
General of Canada relied on as a basis for dis
sociating the validity of the conditions as such
from questions of the implementation and consti
tutionality of the EARP Order, a pointless effort
in my opinion), the very wording of the conditions
indicates that they relate to production facilities.
The Board made the licences subject to conditions
10 and 11 because it felt it could, and under its
legal mandate had to, be concerned about the
' Including the following two:
AND WHEREAS pursuant to the Environmental Assessment
and Review Process Guidelines Order ("EARP Guidelines
Order"), the Board has performed an environmental screen
ing of the application by considering the evidence gathered
during the above-mentioned public hearing;
AND WHEREAS the Board has determined, subject to the
undertaking of appropriate environmental reviews prior to
the construction of production facilities used in part to
support the proposed exports, that the requirements of the
EARP Guidelines Order will have been fulfilled ....
2 Now section 6 of the Department of the Environment Act,
R.S.C., 1985, c. E-10.
environmental consequences that might be caused
by the eventual construction of production facili
ties. This explains the first question that arises,
namely whether the Board's jurisdiction in fact
extends to facilities for the production of goods for
export, or in other words, whether the Board can
make the granting of a licence to export certain
goods subject to conditions pertaining to their
production. Clearly, a negative answer to this
question will make any question about the EARP
Order academic; and I do feel that the answer
should be negative.
Naturally, the Board derives its authority and
jurisdiction from its enabling Act, the National
Energy Board Act, which prohibits anyone from
exporting electricity without leave of the Board. At
the time the Hydro -Québec applications were
filed, that leave necessarily took the form of a
licence and certain of the factors which the Board
had to take into account were expressly mentioned.
Now, since the coming into effect on June 1, 1990
of Bill C-23, An Act to amend the National
Energy Board Act and to repeal certain enact
ments in consequence thereof, S.C. 1990, c. 7
("Bill C-23"), the leave may consist of a permit or
a licence and the criteria the Board must consider
are not the same. We will see below that applying
the new provisions to the Hydro -Québec applica
tions then pending created a problem; however, in
any case the Board's jurisdiction still is and has
always been the granting of leave to export elec
tricity. The factors which may be relevant in con
sidering an application for leave to export electrici
ty and the conditions which the Board may place
on its leave clearly cannot relate to anything but
the export of electricity. Section 2 of the Act
defines what is meant by export (in French
"exportation") in the case of electricity:
2. ...
"export" means, with reference to
(a) power, to send from Canada by a line of wire or other
conductor power produced in Canada ...
It seems clear that, as it is understood in the Act
with respect to electricity, export does not cover
production itself, and it is only reasonable that this
should be so. Of course, anyone wishing to export
a good must produce it or arrange for it to be
produced elsewhere, but when he produces it or
arranges for its production elsewhere he is not
exporting it, and when he is exporting it he is not
producing it.
I do not think anyone would dispute for a
moment that in considering an application for
leave to export electricity, the Board must be
concerned about the environmental consequences,
since the public interest is involved. The Board's
function in this respect is in any case confirmed in
several enactments.' However, the only question
can be as to the environmental consequences of the
export, namely the consequences for the environ
ment of "[sending] from Canada ... power pro
duced in Canada". It might be possible to conceive
of a situation in which a production facility was so
much a part of export operations that it would be
possible to bring the use of that facility within the
Board's jurisdiction — though I do not see how
such a situation could arise, and I even strongly
doubt whether the consequence I am assuming
would follow — but it is clear that there is nothing
of the kind here. Some of the Hydro -Québec con
struction projects will be moved up by several
years to meet the needs of the export contracts,
but the carrying out of these projects is not in any
way connected with the exports, which will be
supplied by the network itself and which only
affect a small fraction of its total capacity.
It is clear that the construction of electrical
energy production facilities raises serious environ
mental questions which must be considered and
resolved, but those questions are the responsibility
of other authorities besides the Board, and those
authorities have no need of the Board's support in
3 First, it should be noted that this function is based on ss.
119.06(2)(b), 119.08(2) and 119.09(2) of the National Energy
Board Act (R.S.C., 1985, c. N-7, as amended by An Act to
amend the National Energy Board Act and to repeal certain
enactments in consequence thereof, S.C. 1990, c. 7, s. 34), and
on ss. 6(2)(aa), 15(m) of the National Energy Board Part VI
Regulations, C.R.C., c. 1056, as amended, and to this might be
added the Canadian Electricity Policy of September 1988 and
the Guidelines of the National Energy Board of December
1988, although this Policy and these Guidelines have not been
given legislative or regulatory form.
order to act, nor in any case is it the Board's
function to lend such support.
By imposing conditions 10 and 11, in my opin
ion, the Board clearly exceeded the limits of its
jurisdiction and its authority. Such an imposition
cannot stand. Does it then follow that the decision
itself is vitiated and the Board must reconsider the
matter? I do not think so. These conditions can
clearly be dissociated from the licences themselves,
and there is nothing in the reasons for the decision
to suggest that, within the limits of its jurisdiction,
the Board had reasons for refusing to grant the
applications made to it. The quashing of these two
conditions therefore should not entail quashing the
decision itself.
However, the decision may be void on other
grounds.
Challenge by the Grand Council of the Crees of
Quebec and the Cree Regional Authority to grant
ing of licences themselves
The Grand Council of the Crees of Quebec and
the Cree Regional Authority (hereinafter "the
Grand Council of the Crees") argued that by
deciding the Hydro -Québec applications as it did,
the Board did not observe the requirements of its
mandate and that its decision is void because it
was not made in accordance with the provisions of
the Act. Their argument is based on two
propositions.
1. First, the Grand Council of the Crees argued
that the Board erred in law by applying to the
Hydro -Québec applications the new provisions of
An Act to amend the National Energy Board Act
and to repeal certain enactments in consequence
thereof, supra ("Bill C-23"), which as we have
seen above came into effect on June 1, 1990, that
is well before the decision but after the hearing
had taken place and the applications been taken
under advisement.
It must be recalled that, with a view to deregu
lation, Bill C-23 placed less strict conditions on the
exercise of the Board's discretion in considering
applications to export electricity. Section 118 of
the National Energy Board Act read as follows
before June 1990:
118. On 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:
(a) satisfy itself that the quantity of oil, gas or power to be
exported does not exceed the surplus remaining after due
allowance has been made for the reasonably foreseeable
requirements for use in Canada having regard, in the case of
an application to export oil or gas, the trends in the discovery
of oil or gas in Canada;
(b) satisfy itself that the price to be charged by an applicant
for power exported by the applicant is just and reasonable in
relation to the public interest; and
(c) where oil or gas is to be exported and subsequently
imported or where oil or gas is to be imported, have regard to
the equitable distribution of oil or gas, as the case may be, in
Canada.
and the National Energy Board Part VI Regula
tions, under the heading "Information to be Fur
nished by Applicants for Licence to Export Pow
er", echoed this obligation contained in paragraph
(b) by stating:
6. (1) Every applicant for a licence for the exportation of
power shall furnish to the Board such information as the Board
may require.
(2) Without restricting the generality of subsection (I), the
information required to be furnished by any applicant described
in subsection (1) shall, unless otherwise authorized 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,
(ii) would not be less than the price to Canadians for
equivalent service in related areas ...
With the coming into effect of Bill C-23 in June
1990, section 118 simply reads:
118. On an application for a licence, the Board shall have
regard to all considerations that appear to it to be relevant and
shall
(a) satisfy itself that the quantity of oil or gas to be exported
does not exceed the surplus remaining after due allowance
has been made for the reasonably foreseeable requirements
for use in Canada having regard to the trends in the discov
ery of oil or gas in Canada; .. .
and a new subsection 119.08(2), dealing with the
factors to be considered in issuing a licence, merely
states:
119.08.. .
(2) In deciding whether to issue a licence, the Board shall
have regard to all considerations that appear to it to be
relevant.
The Board was wrong, the Grand Council of the
Crees said, to take into account the provisions of
Bill C-23, which led it to neglect or at least to not
apply in the same way the criteria of price in the
Act as it stood at the time the Hydro -Québec
applications were made and taken under advise
ment, in particular the first criterion of cost recov
ery, defined in subparagraph 6(2)(z)(i) of the
Regulations.
It is true that the Board considered it was bound
by the new Act, but I think it was quite right in
this respect and its reasoning seems to me to be
faultless:
The Board shares the opinion of parties with respect to the
application of the principle of non-retroactivity of legislation to
Bill C-23, and can only say that none of the provisions of the
Bill which apply to the export of electricity constitutes an
express exception to this principle. The Board also believes that
the provisions of Bill C-23 must begin producing their effects
from the moment the bill came into force, on 1 June 1990, in
accordance with the general principle of the immediate effect
of legislation.
The substantive provisions of Bill C-23 dealing with electricity
are essentially aimed at modifying the criteria which the Board
must consider when authorizing exports, and the scope of the
Board's jurisdiction in certain cases. Other provisions modify
the procedure relating to applications for licences to export
electricity. None of the provisions of the Bill deals with the
manner in which the Board should handle pending applications,
nor do they suspend the immediate effect of the amendments to
section 118 of the NEB Act or to any other rules previously
applicable to the export of electricity.
The Board believes that procedural amendments should have
an immediate effect, but that the immediate application of
substantive amendments should not affect vested rights, obliga
tions acquired or responsibilities incurred before these amend
ments came into force.
Counsel for the Grand Council of the Crees
tried to show that application of the new Act to
the pending applications could be contrary here to
the rules of natural justice applicable to their
clients as interested parties opposed to the grant
ing of the licences. However, I admit that I am
somewhat baffled by the argument since the
Grand Council of the Crees had complete latitude
at the hearing to act on the clear understanding
that the coming into effect of the new Act could
affect the decision to be rendered, and in any case
the easing of the requirements resulting from
application of the new provisions certainly would
not be a basis for reopening the hearing or holding
a special additional hearing.
That is by no means all. Even if the argument
were valid, it leads nowhere. It appears from the
reasons for the decision that once it had stated its
conclusion that the new Act applied, the Board
freely chose to analyse the evidence presented in
light of the first price criterion of the old Act and
decide in accordance with the obligation it had
under the old Act. At page 29 of its decision, the
Board wrote the following:
The coming into force of Bill C-23 on 1 June 1990 has removed
these considerations as explicit criteria to which the Board is
obliged to have regard under the new review procedures appli
cable to electricity export applications. Nonetheless, under the
Amended Act, there is nothing to preclude the Board from
having regard to such considerations, either in making a recom
mendation to the Governor in Council to designate a proposed
export application for licensing procedures or in deciding
whether to issue a licence.
In view of the fact that the application was filed prior to the
removal of the surplus and price criteria from the Act by Bill
C-23, these considerations have been afforded some importance
in the Board's examination of the application.
Applications for export
The Board has given careful consideration to all the evidence
and submissions presented and has reached the following
conclusions.
6.1 Export Price
In assessing whether the price to be charged by an applicant is
just and reasonable in the public interest, the Board has used
the following two criteria: (a) the export price should recover
the applicable costs incurred in Canada and (b) the export
price should not be less than the price for an equivalent service
to Canadian customers.
Indeed, as can clearly be seen from reading the
Board's analysis and commentary on the first cri
terion of price, the Board decided that the Hydro -
Québec applications had to meet the traditional
requirements dating from prior to June 1990.
Clearly, it was by reference to the information
provided by Hydro -Québec in compliance with the
requirements of subparagraph 6(2)(z)(i) of the
Regulations that the Board said it felt certain that
the export price was just and reasonable in relation
to the public interest. The new provisions of Bill
C-23 had no influence in this regard. The first
proposition of the Grand Council of the Crees is
untenable.
2. Even though the Board said it intended to
take into account the first criterion of price in
subparagraph 6(2)(z)(i) of the Regulations, the
Grand Council of the Crees went on in its second
alternative proposition, it could not validly arrive
at the conclusion that the price "would recover
(the) appropriate share of the costs incurred in
Canada", because it had no direct evidence of this
before it.
The proposition can only be understood taken in
context. Hydro -Québec had shown that exports of
power and energy would come from its network as
a whole, but in order to meet the additional needs
resulting from the two contracts, as mentioned
above, it would have to move up the date on which
certain hydro-electric facilities contemplated in its
development plan were brought on line. The Board
thus concluded that the recoverable costs under
the first criterion of price should include all mar
ginal production costs, opportunity costs for the
part of the exports taken from existing facilities
and in particular the cost of bringing forward
proposed new hydro-electric facilities. At the time
its evidence was filed, Hydro -Québec nevertheless
objected to openly disclosing with all supporting
documentation its detailed estimate of the cost of
bringing forward the production facilities, arguing
that the disclosure of these costs would cause it
serious injury in its business dealings with its
neighbours. The Board did not feel it should insist
and allowed Hydro -Québec to submit its evidence
by indirect means, namely by filing the testimony
of a chartered accountant, who after an audit was
able to say, first, that the costs used in making the
profitability studies were in fact the cost of the
equipment used by Hydro -Québec, and second,
that the methodology used by Hydro -Québec in
determining the profitability of the exports
allowed it to arrive at the results stated regarding
the importance of recovering the costs involved.
The Grand Council of the Crees was thus right in
saying that the evidence was not direct in all
respects.
However, why should the evidence be direct in
all respects? There is nothing that requires the
Board to decide only on direct evidence. The
Board had before it the testimony of a series of
witnesses and the abundant documentary evidence
submitted by Hydro -Québec on the question of
profitability. It also had before it the important
statement that the Government of Quebec had
approved the contract because of the clear benefit
the province would derive from it. At the same
time, it was able to get the comments and note the
lack of interest of those responsible for adjacent
Canadian networks connected with Hydro -Québec
(which use sources of electrical production based
much less on hydraulic energy and whose produc
tion costs are thus higher) regarding electricity to
be sold at the price contemplated. All this evidence
may not have been direct in all respects, but it
certainly carried a strong persuasive force in deter
mining feasibility.
The Board held that it was persuaded by this
evidence, and I do not see on what basis this Court
could undertake to dispute its conclusion. An
appeal filed under section 22 of the National
Energy Board Act can be concerned only with
questions of law and jurisdiction. It cannot be
concerned with the way in which the Board arrived
at its opinion in light of the facts established
before it. The oft-cited remarks of Jackett C.J. on
this point in Consumers' Ass'n (Can.) v. Ontario
Hydro [No. 1], [1974] 1 F.C. 453 (C.A.), at pages
457 and 458, are worth repeating:
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 speaking, 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 refute the Board's opinion based on the
facts established before it. See Northwest Utilities Ltd. v. The
City of Edmonton, Union Gas Company of Canada, Limited v.
Sydenham Gas and Petroleum Company, Limited and
Memorial Gardens Association (Canada) Limited v. Colwood
Cemetery Company. 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 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 purpose 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 considerations by which the Board is
to be governed in exercising its administrative discretion ...".
See Bell Telephone Co. v. Canadian National Railways per
Duff C.J.C. (giving the judgment of the Supreme Court of
Canada) at page 21.
The second proposition put forward by the
Grand Council of the Crees in support of its
appeal has no more foundation than the first.
Conclusion
Thus, for all the reasons I have just stated, I
consider that the Court should dismiss the related
appeal filed by the Grand Council of the Crees of
Quebec and the Cree Regional Authority, but
allow the appeal of the Attorney General of
Quebec and the related appeal of Hydro -Québec.
It should thus vacate conditions Nos. 10 and 11
imposed by the National Energy Board on licences
EL-179, EL-180, EL-181, EL-182, EL-183,
EL-184 and EL-185 which it issued to Hydro -
Québec, and at the same time find those licences
to be valid.
PRATTE J.A.: I concur.
DESJARDINS J.A.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.