The Guide to Energy Market Manipulation

Administrative Law Principles

22 February 2018

Queen’s University

Introduction

The two Canadian dedicated energy market manipulation regimes are statutorily based. As such, they operate in the shadow of Canadian administrative or public law principles. Those principles can place substantive limits on the powers conferred under those regimes on various statutory bodies and officials. Equally, administrative law principles bear upon the procedures by which those statutory bodies and officials exercise their respective powers.

In this chapter, I commence with a general overview of Canadian administrative law principles with an emphasis on the law governing the obligation of decision makers to provide or hold some sort of hearing. When does that obligation arise? When it does arise, what considerations dictate the level or intensity of procedures that the decision maker must afford affected parties?[2] In the second part of the chapter, I provide context for the general principles through a discussion of three aspects of the functioning of those responsible for the regulation and policing of energy market manipulation – the application of the principles requiring unbiased and independent decision-making, the scope of powers conferred in aid of the investigative functions of the Alberta Market Surveillance Administrator and the Ontario Energy Market Surveillance Panel[3] and, following from this, the specific authority of the administrator and the panel to not investigate on the basis of overlapping jurisdiction with other bodies or because a complaint or reference is trivial or vexatious. I would, however, enter the caution that to the extent that neither of the regimes has yet been subject to judicial scrutiny, some of my analysis and conclusions are necessarily conjectural.

General administrative law principles

Administrative law principles are found in or derived from a variety of sources. Primarily, at least in terms of bulk or quantity, these principles, both substantive and procedural, have their content in the administrative structures and operational parameters laid out in the regime’s constitutive statute or statutes – the primary legislation from which the regime derives its powers. Even greater detail is contained in a range of subordinate law authorised by that primary legislation ranging from formal legal instruments such as regulations, by-laws, and certain forms of binding directives to soft law as exemplified by policy statements and advisory opinions. This subordinate law is enacted or imposed not by Parliament or a provincial or territorial legislature but most commonly by the Crown representative in Council (or colloquially ‘the cabinet’) and, with increasing frequency, by the administrative agency or tribunal that exercises the relevant powers conferred by the primary legislation.

The most obvious constraint on these specifically conferred powers and processes is the very language or terms in which those powers and processes are created or conferred, a constraint that operates through the lens of the various canons of statutory interpretation, including common law derived presumptions. However, on occasion, though, I suspect, rarely in the case of the Alberta and Ontario energy market manipulation regimes,[4] there are limitations on the exercise of power that operate in the name of higher law: Canada’s constitutional imperatives as found in the Constitution Act 1982 (and particularly the division of powers between the federal Parliament and the provincial and territorial legislatures),[5] the Canadian Charter of Rights and Freedoms,[6] and other constitutional norms such as the constitutional duty to consult and, where appropriate, accommodate the rights, interests and claims of indigenous peoples.[7] Where applicable, these higher laws will trump the terms of not only subordinate legal instruments but also primary legislation itself. Moreover, by reference to both constitutional principle and the canons of statutory interpretation, all forms of subordinate legislation must find their legal justification in the empowering primary legislation. More particularly, they must be authorised by not only the constitution but also the specific terms of the primary legislation conferring authority to enact subordinate legislation.

Particularly in the domain of procedural obligations, principles of administrative law found in the common law will serve as a gloss on the terms of statutory grants of power. In the face of statutory regimes that are silent or limited as to procedural requirements, the common law will on occasion ‘supply the omission’[8] of the legislature and require some sort of hearing as a condition of the exercise of a specific power. As well, even where a hearing is statutorily required, the common law principles of procedural fairness may supplement the procedural content or components of that hearing. Common law conceptions of the importance of unbiased and independent decision-making also act, in the absence of overriding primary legislation, as a stand-alone check on the qualification of those responsible for making decisions under various statutory regimes

Typically, responsibility for policing these various constraints rests primarily (though on occasion after an internal form of appeal) in the provincial[9] and territorial superior courts, as well as, with respect to most matters within federal legislative competence, the Federal Court and Federal Court of Appeal under authority conferred by the Federal Courts Act.[10] Thereafter, the Supreme Court of Canada operates as Canada’s highest court with access, save with respect to certain criminal offences, conditioned on the granting of leave to appeal.

Hearing obligations – the common law

In closely regulated domains such as the Alberta and Ontario energy market manipulation regimes, the occasions on which the common law will be the primary source of hearing obligations are limited. Rather, the procedures specified in the primary legislation or developed in subordinate rules promulgated under that legislation will be the focus of any inquiry into allegations of procedural deficiency. Indeed, those procedures may in many instances go further than the common law itself would require. On other occasions, it may be the converse situation in the sense that the constitutive legislation provides fewer protections than would be normal if left entirely to the common law. Statutory regimes in both jurisdictions may also be subject to the procedural requirements of general administrative procedure statutes: the Ontario Statutory Powers Procedure Act[11] and the Alberta Administrative Procedures and Jurisdiction Act.[12] Nonetheless, the common law does provide an important backdrop to understanding not only the structure and detail of legislated hearing processes but also the perspectives that reviewing and appellate bodies will bring to the assessment and interpretation of the procedural rules and rulings of the various statutory bodies and officials operating under those regimes.

The decision-making contexts within which the two energy market manipulation regimes operate are many and varied. For present purposes, however, there are five species of decision-making or official action that merit attention: rule-making, policy elaboration, monitoring, investigation and reporting, and adjudication (including internal appeals). The Canadian common law of procedural fairness concentrates primarily on the latter two of these five categories: investigative and adjudicative functions. There is no general common law principle that attaches procedural obligations to general rule-making or policy elaboration (let alone monitoring).[13]

Only where rule or policy-making has as its focus sufficiently discrete or limited individual targets will the possibility of an entitlement to procedural fairness arise.[14] In the face of silent or ambivalent statutes and subordinate legislation, the common law will impose hearing requirements on final decision-making where the rights, privileges and interests of individuals are at stake provided the function in question is not legislative or primarily policy-making in nature.[15] In other words, the contrast is between functions that are ‘administrative and specific’ as opposed to ‘legislative and general’.[16]

On occasion, by reference to the doctrine of legitimate expectation,[17] hearing obligations may also arise out of the representations or conduct of the agency or official charged with the exercise of the relevant power. Nevertheless, exposure to the direct threat of the imposition of sanctions on a market participant whether by way of financial penalty or modification of the terms of market participation would normally attract such an entitlement to procedural fairness.[18]

In contrast, where the statutory body or official is engaged in non-final action such as an investigation the results of which are reported to another body with or without recommendations for action, there is in effect a presumption against the triggering of an obligation of procedural fairness.[19] However, this presumption loses traction where the findings of the investigative body are either decisive or bear heavily on the actions of the statutory body or official charged with the final disposition of the matter.[20] Procedural fairness obligations may also arise where it is clear from the statutory scheme that the primary location of any procedural fairness entitlements should be at the investigative or inquiry rather than final-decision-making level. Moreover, as with the Alberta Market Surveillance Administrator and its investigative capacities, the threshold issue may be resolved directly or explicitly by statute. Section 40 of the Alberta Utilities Commission Act[21] directs the administrator to ‘carry out its mandate in a fair and responsible manner’.

The level of, as opposed to the threshold for procedural entitlements required by common law principles may also be influenced by whether the function in issue is final or non-final with more flexibility the norm in the instance of non-final decision-making. More generally, the extent to which an affected party may demand close adherence to the levels of procedural fairness commonly associated with the conduct of civil or criminal trials in the regular courts depends on a range of contextual factors, including the particular statutory setting, the nature of the issues that are stake (and particularly their amenability to resolution by trial-type processes), and the seriousness of the impact of the proceedings on the affected person’s rights, privileges and interests.[22]

Another increasingly important factor in the evaluation of the merits of demands for trial-like procedural rights (such as representation by counsel, cross-examination rights, an in-person rather than written hearing and, perhaps most importantly, extensive disclosure and discovery entitlements) is the procedural choices made by the statutory body or public official, particularly where there has been an explicit conferring of discretion as to the procedures to be followed either generally or in specific instances. In such situations, by reference to considerations of expertise or field sensitivity, reviewing bodies (and especially the courts) will be inclined to defer to the choices made by the regulatory body.[23]

Generally, this has not yet reached the level of formal deference as reflected in the reasonableness standard of review deployed very commonly in the review of the substantive rules and rulings of statutory authorities.[24] Nonetheless, it does recognise the entitlement of statutory bodies and officials to room for manoeuvre in the development of procedural rules and the making of procedural rulings, as well as the context sensitivity of any inquiry into what procedural fairness demands as a matter of detail in any situation.[25]

This has special resonance in the domain of energy market manipulation to the extent that the statutory authorities and officials implicated in the two provincial regimes have authority over the development of procedural rules appropriate to the exercise of their varying powers or, indeed, the making of procedural rulings in the context of specific proceedings. Indeed, not surprisingly, restrained intervention may extend beyond the actual rules and rulings of front-line decision-makers to the evaluation of any cabinet-made subordinate legislation respecting the procedures to be followed by those empowered under the relevant statutory provisions.

Application of the principles in energy market manipulation regimes: selected examples

Bias and lack of independence

The normal judicially developed standard for assessing whether a decision maker is disqualified for bias is that of reasonable apprehension.[26] However, what makes an apprehension of bias reasonable for a right-minded person in possession of all the readily ascertainable and easily verifiable facts depends on the context.[27] For example, for investigative functions (such as characterise the Alberta Market Surveillance Administrator and the Ontario Energy Board’s Marker Surveillance Panel), even though the proceedings are concerned with the conduct of market participants and may ultimately lead to the imposition of sanctions by another agency, the applicable standards will be somewhat less rigorous than is the case with statutory bodies and officials that have final decision-making authority.[28] What constitutes a reasonable apprehension of bias will be informed by the specific role played by the decision-maker under scrutiny.

More generally, for economic regulators the decisions of which are heavily suffused with policy considerations and industry- or regulatory-context-specific facts, the Supreme Court of Canada accepts that prior experience and engagement with the issues at stake are to be valued, not denigrated. Even public pronouncements by members of the regulatory agency on pending issues of policy may be acceptable.[29] Disqualification simply based on a known attitude towards the matters in issue will be rare except in the context of adjudications involving the imposition of sanctions on a market participant. Provided that a panel member or individual decision maker does not exhibit prior to a hearing a ‘completely closed mind’[30] or, put in another way, is ‘no longer capable of persuasion’,[31] there will generally be no concern.

What, however, will be problematic is too recent a connection with a participant in the proceedings that is either business, familial or, more generally, personal. This includes prior involvement with the specific application or matter that the regulator must address. For these purposes, prior involvement includes external engagement with the matter on behalf of a party before appointment to the regulator[32] as well as participation within the agency itself, such as conducting a preliminary investigation or determining whether there is sufficient justification for proceeding to hearing,[33] though such overlapping of functions within an agency may be legislatively authorised.[34] It also almost goes without saying that pecuniary interests in the outcome that are not trivial or too remote[35] will be automatically disqualifying.

Section 4.3.1(3) of the Ontario Energy Board Act 1998[36] anticipates some of these disqualifying attributes in specifying ineligibility criteria for membership on the Board’s Market Surveillance Panel:

(3) No person shall be appointed as a member of the Market Surveillance Panel if he or she has any material interest in a market participant or is a director, officer, employee or agent of

(a) a generator, distributor, transmitter or retailer;

(b) a person who sells electricity or ancillary services through the IESO-administered markets or directly to another person who is not a consumer;

(c) a market participant;

(d) an industry association that represents a person referred to in clause (a), (b) or (c);

   …

(f) the IESO; or

(g) an affiliate of a person listed in clause (a), (b), (c) or (f).

As well as bias arising out of matters external to the hearing, behaviour at the actual hearing, either independently or in conjunction with other bias indicators, may give rise to disqualification. Problematic here is conduct on the part of panel members and even lawyers or staff acting for the decision maker that manifests inappropriate hostility or favouritism towards a party, a party’s witnesses or legal representatives, or the position or arguments of that party.[37]

Independence as a separate requirement has several dimensions. In an institutional sense, independence is concerned with the financial security and security of tenure of an agency’s members as well as the agency’s autonomy with respect to administrative decisions relating to the fulfilment of its legislative mandate.[38] However, to the extent that these matters are dealt with in the agency’s constitutive or a general statute, there is no legal basis for a challenge on any of these bases[39] unless a pre-emptive constitutional right is involved in the face of which deficient legislation must give way.[40]

In addition to concerns based on the independence of the agency and it members from external influences, the internal functioning of an agency may also give rise to challenge unless once again authorised statutorily. For example, the personal independence of agency members may be compromised by the existence of internal protocols or practices that subject members or a panel to pre-release or finalisation vetting or approval of their decisions by the chair, other members of the agency, or lawyers and staff to the agency.[41]

When parties to proceedings become aware that there is a possible basis for an application for the recusal of a member or panel presiding at a hearing, it is generally the responsibility of the relevant party to raise the matter as soon as the potentially disqualifying circumstance becomes known. Not to do so will normally result in the denial of any subsequent challenge because of waiver.[42]

Where such a challenge attacks the continued participation of all members of the sitting panel, the panel as a whole deals with the recusal application. Where the challenge is to a single member of a multi-member panel, the better position seems to be that the individual member should answer the challenge.[43] In responding to such challenges, as a matter of principle, members or panels should not recuse themselves too readily. Assigned members have a responsibility to fulfil their public responsibilities and too ready a willingness to recuse may encourage inappropriate forum shopping by the parties.

Where an application for recusal is denied and the challenging party indicates an intention to seek judicial review, the agency is not under any obligation to suspend its hearing pending the disposition of the application for judicial review[44] though prudence might suggest doing so where the challenge is not frivolous and continuation with a hearing or investigation would involve significant waste of time and resources were a reviewing court to ultimately sustain the challenge.[45]

Investigative tools

A critical component of the Alberta and Ontario energy market manipulation regimes is the investigative authority of the Market Surveillance Administrator and the Market Surveillance Panel. Both the Alberta Utilities Commission Act and the Ontario Energy Board and Electricity Acts provide the administrator and panel with extensive coercive powers typical of Canadian investigative regimes. These include powers of entry, search and seizure, compulsory production of books, records and documents, and compelled attendance and testimony. However, there are protections. Court sanction or approval is required in certain circumstances.

Under the Alberta legislation, the target of any such court order cannot resist on the basis that the testimony or records ‘might tend to incriminate the person or subject the person to penalty and forfeiture’;[46] however, there is a subsequent use protection except for a prosecution or other proceeding in respect of perjury or the giving of contradictory evidence.[47] The Act also contains detailed provisions respecting the handling of claims of solicitor-client privilege.[48]

The Ontario Electricity Act provisions are somewhat different. Section 37(5) specifically preserves the right to resist compulsory testimony on the basis of ‘any privilege to which the person is entitled’. Section 37.3 then provides that any fruit of the coercive powers contained in Sections 37 or 37.1 is not admissible in evidence in any other proceeding except a review by the board of a panel report on the investigation or where the panel itself acting under Section 37.3(3) has made a disclosure order by reference to the public interest. Before making such a public interest disclosure order, the panel is obligated to provide a hearing to the person from whom the information or material was obtained as well as any other person who, in the opinion of the panel, is ‘an interested party’.

The making of public interest disclosure orders under Section 37.3(3) has direct links with the Act’s confidentiality provisions. Information obtained pursuant to Sections 37 or 37.1 which is not otherwise public is, subject to very limited exceptions, confidential. Presumably, one of the considerations that will be relevant in determining whether such an order is in the public interest will be the procedural fairness demands for access from the subject of an investigation.

Confidentiality is also protected under the Ontario Act to the extent that Section 37(17) deems any panel report to the ISEO, the Ontario Energy Board or any other person as coming within the Freedom of Information and Protection of Privacy Act’s law enforcement, inspections and agency investigation exemption.[49]

Under the Alberta Market Surveillance Regulation,[50] any record provided to or obtained by the Authority is presumptively confidential unless it has otherwise been made public or disclosure is permitted by the regulation itself, some other enactment, or the rules of the Commission or the Court.[51] There then follows a very detailed regime respecting the kinds of information that the Authority can release publicly,[52] including the criteria relevant to any such determination[53] and an opportunity for a market participant to object to a proposed release[54] with access to the Alberta Utilities Commission for final determination.[55] The Investigation Procedures policy[56] issued by the Authority provides further elaboration identifying the province’s Freedom of Information and Protection of Privacy Act[57] as one of those other enactments that may require release of information in the possession of the Authority.[58] However, reference is made to exemptions under that Act with a statement to the effect that the Authority ‘will assert all appropriate exemptions’. One of the examples provided is Section 20(1), the law enforcement provision under which there is a discretion to refuse to release information relating to a ‘law enforcement matter’.[59]

While Section 8 of the Canadian Charter of Rights and Freedoms enshrines the right to be secure from ‘unreasonable search or seizure’, it is very likely that these two regimes would pass muster, particularly as the sanctions that can flow from findings of unlawful market manipulation are not of a truly criminal nature.[60]

Competing jurisdictions and frivolous and vexatious complaints

Under each of the Alberta and Ontario energy market manipulation regimes, there are provisions dealing with jurisdictional overlap with reference to the investigative roles of the Alberta Market Surveillance Administrator and the Ontario Energy Board Market Surveillance Panel.

If after commencing an investigation, the Alberta Market Surveillance Administrator determines that the matter ‘is within the jurisdiction’ of the Alberta Utilities Commission, the federal Competition Act regime[61] or another body, Section 45(1) of the Alberta Utilities Commission Act requires the MSA to give notice of that to the body or bodies in question. There follows in Section 45(2) a discretionary power to discontinue an investigation subject to the provision of reasons for so doing to the person who made the complaint or referral on which the investigation was based. Alternatively, the MSA may nonetheless continue the investigation either alone or in collaboration with the other body or bodies.

The Ontario Energy Board Market Surveillance Panel By-Law 3[62] has equivalent but somewhat different provisions. The Panel’s authority is an ongoing one. It may decline to even commence an investigation if it ‘determines that … the subject matter of the complaint or referral is within the jurisdiction of another person, board, agency or tribunal’.[63] The same power continues to exist ‘once it has commenced an investigation’.[64] However, in contrast to the Alberta regime, when the Panel has exercised its powers in either of those circumstances, the chair of the Ontario Energy Board, to whom the Panel must give notice with reasons,[65] may nonetheless direct the Panel to commence or resume an investigation as the case may be.[66] There is no equivalent to the Alberta provision for collaborative continuation of an investigation with the jurisdictionally overlapping body or bodies.

Both regimes also confer authority to dismiss a complaint or reference that is ‘frivolous, vexatious or trivial or does not otherwise warrant investigation’ (Alberta)[67] or ‘is frivolous, vexatious or otherwise not material’ (Ontario).[68] In each instance, the power exists both at the point of determining whether to commence an investigation and at any time during an investigation.

Given the potential for jurisdictional overlap, it is obviously sensible that the regulatory regimes make specific provision for the way in which such issues should be handled. The respective regimes also contain some limited procedural fairness protections for those whose complaint or referral is being rejected or discontinued.

In Alberta, the rejection or discontinuance of a complaint on the basis that it is frivolous or vexatious requires the giving of reasons to the complainant or person making the referral.[69] Reasons are also required before the Market Surveillance Administrator (MSA) discontinues an investigation because the matter is within the jurisdiction of another body.[70] However, after the event reasons for a decision, while serving as some check on the way the MSA deals with these matters is not the same as engagement with a complainant before deciding not to investigate or to discontinue an investigation. Indeed, it also seems significant that the Act requires the MSA to notify any other body that it determines also has jurisdiction seemingly before deciding what to do about the overlap. This certainly contemplates the possibility of an exchange on the issue with the other body but significantly there is no mention of complainant engagement in that process. This lack of regard for the person complaining or referring is also underscored by Section 7(1) of the Market Surveillance Regulation, which directs the MSA to ‘make public the procedures to be used in its interactions with market participants during investigations’. Perhaps not surprisingly, the MSA’s investigative procedures policy produced in response to that direction does not make any further provision for interactions with the person complaining or making a referral. Instead, the only reference to the rights of complainants or those making a referral, under the heading ‘Communication with the Person who Made Complaint or Referral’,[71] is a discretion to keep that person informed of the status or progress of any investigation and an obligation to communicate the outcome of the investigation including a discontinuation.

Under the Ontario Market Surveillance Panel By-Law 3, the Panel has discretion to seek further information from the person making the complaint or the referral before deciding whether to commence or discontinue an investigation.[72] In addition to this discretionary form of engagement or process, the Panel must also report with reasons to the chair of the Ontario Energy Board on any such refusal to investigate or decision to terminate an investigation.[73] The chair is then obliged to give notice to the person making the complaint or the referral as well as the subject of any complaint or referral whose conduct has been called into question.[74] Given that the chair also has the power to direct the Panel to proceed to investigate, implicit in this structure may also be an obligation of engagement with the maker of the complaint or referral.[75] In a sense, the role of the Chair may approximate that of an appellate body.

From a substantive perspective, under both regimes, the termination of a complaint or a referral on either jurisdictional grounds or because it is frivolous and vexatious gives rise to the possibility of judicial review at the suit of the person or body that made the complaint or refusal. However, given the breadth of the discretion conferred on the respective investigative bodies and the fact-driven nature of any decision not to investigate or to terminate an investigation, it is inevitable that a reviewing court will be extremely reluctant to intervene.[76] With one possible exception, the standard of review will be that of unreasonableness,[77] not correctness, and, while the Canadian courts do not explicitly recognise a sliding scale of intensity within reasonableness review,[78] the reviewing court will accord the regulator very considerable room for manoeuvre or ‘a margin of appreciation’ in the exercise of these powers.[79] Indeed, the same holds for the converse situation, one in which there is a challenge by the subject of an investigation to a decision to commence or continue with an investigation, including in Ontario a directive to so proceed issued by the chair of the Ontario Energy Board.

The one possible exception to the deployment of a reasonableness standard of review is where the challenge is to a determination respecting overlapping jurisdiction. To the extent that determination involves a pure question of law and especially the interpretation of legislation conferring authority on another agency or tribunal, there may be room for correctness review. While Canadian judicial review law has a strong presumption in favour of unreasonableness review where a decision maker is interpreting its home or constitutive statute,[80] that presumption does not extend to the interpretation of other statutes that the decision maker confronts rarely or irregularly.[81] Indeed, there is also a presumption of correctness review in the domain of competing and overlapping jurisdictions.[82]

As for issues of procedural fairness, as identified already, the statutory provisions respecting the two investigative regimes contain limited procedural fairness obligations with respect to both the rejection of complaints or referrals and the decision to discontinue an investigation. There is therefore the possibility that the common law may supplement the relevant legislation. Nonetheless, the common law has not played a significant role in teasing out additional procedural fairness obligations out of statutory complaint and investigative settings. The silence of the legislation will almost certainly be seen as conferring a wide discretion as to how to actually proceed in any particular case. At most what might be expected is a willingness on the part of the court to demand somewhat more than is explicit in the legislation respecting written engagement with those making a complaint or a referral.

There is, however, another potential problem under the Ontario regime. This emerges from the by-law-based powers of the chair of the Ontario Energy Board over the Market Surveillance Panel. Given that these powers exist in subordinate not primary legislation, the possibility exists of a challenge based on a lack of institutional independence. The relevant provisions of the Act[83] itself confer investigative authority on the Market Surveillance Panel without any suggestion of contemporaneous[84] oversight or review of particular investigations. This gives some credence to an argument that the independence of the Panel inappropriately compromises the conferral by by-law of authority to in effect override the Panel’s determination not to undertake an investigation or to terminate an ongoing investigation.

Conclusions

As exemplified by two of the three procedural issues that are covered in this chapter, the principal legal sources relevant to the determination of procedural claims that arise under the Alberta and Ontario energy market manipulation regimes are the governing statute and subordinate legislation and rules, policies and directives issued under that legislation. The common law principles of procedural fairness will have only a subsidiary role to play in the resolution of any contested issues of procedure. However, save to the extent that the Ontario legislation places restrictions on eligibility for appointment to the Market Surveillance Panel, challenges based on the bias or lack of independence will be determined by reference to the relevant common law principles. As both regimes mature, it remains to be seen how the procedures provided for statutorily as supplemented by the common law work in practice and, more particularly, in aid of what the Alberta Act describes in relation to its MSA as the obligation to ‘carry out its mandate in a fair and responsible manner’.

Notes

 

[1]  David J Mullan is an emeritus professor of law at Queen’s University, Kingston, Ontario, Canada and a freelance consultant.

[2]  For a comprehensive discussion, see Grant Huscroft, ‘From Natural Justice to Fairness: Thresholds, Content and the Role of Judicial Review’ in Coleen Flood and Lorne Sossin (eds.), Administrative Law in Context (Toronto: Emond Montgomery Publications, 2nd ed., 2013) at page 147.

[3]  This paper does not include direct discussion of the processes and sanctioning powers of the Alberta Utilities Commission to which the Market Surveillance Administrator reports or of the Ontario Energy Board and the Independent Electricity System Operator (IESO) to which the Market Surveillance Panel reports. However, the general principles discussed in the paper apply (with even greater intensity) to these processes given that, save for limited exceptions under the Alberta legislation (Section 52), it is those bodies that have authority to sanction abuses of market power in various ways: modification and revocation of licences and the imposition of financial penalties including restitution orders. (Under Section 52, the Market Surveillance Administrator has limited sanctioning power.)

[4]  To the extent that the effective operation of the two provincial energy market manipulation regimes depends on broad powers of entry, search and seizure, there is always the possibility (discussed below) that they may be challenged as overreaching with respect to Section 8 of the Canadian Charter of Rights and Freedoms and its guarantee of freedom from ‘unreasonable search or seizure’. Another source of constitutional concern is the possibility of a challenge under Section 91 of the Constitution Act 1982 based on impermissible trenching upon the federal anticompetition regime.

[5]  And Sections 91 and 92 in particular.

[6]  And particularly in administrative law settings, Section 7 and its ‘fundamental justice’ protection for decisions that affect ‘life, liberty and security of the person’. However, Section 7 does not guarantee protection for purely economic rights: see the discussion in Gus Van Harten, Gerald Heckman, David J Mullan and Janna Promislow, Administrative Law: Cases, Text and Materials (Toronto: Emond Montgomery Publications, 7th ed., 2015) at pages 207-14 (Van Harten).

[7]  Arising primarily out of the protections for the rights of aboriginal peoples recognised in Section 35 of the Constitution Act 1982. The foundational judgment in an administrative law setting is Haida Nation v. British Columbia (Minister of Finance), 2004 SCC 73, [2004] 3 SCR 511. For recent elaborations, see Clyde River (Hamlet) v. Petroleum Geo-Services Inc., 2017 SCC 40 and Chippewas of the Thames First Nation v. Enbridge Pipelines, 2017 SCC 41.

[8]  Cooper v. Board of Works for Wandsworth District (1863), 14 C.B. (N.S.) 180, at page 194 (Byles J).

[9]  In Alberta, either by an application for judicial review in the Court of Queen’s Bench or generally in energy matters by way of statutory appeal to the Court of Appeal from the regulator with the leave of that Court and restricted to questions of law and jurisdiction: see Alberta Utilities Commission Act, SA c A-37.2, Sections 29 and 30, the latter of which excludes applications for judicial review. In Ontario, generally by way of an application for judicial review under the Judicial Review Procedure Act, RSO 1990, Chapter J.1, to the Divisional Court of the Ontario Superior Court. However, Section 33(1) of the Energy Board Act, 1998, SO 1998, Chapter 15, Sched. B, Section 33(1), provides for a right of appeal from Energy Board decisions to the Divisional Court. As for the decisions of IESO, they are subject to a right of appeal to the Energy Board (Electricity Act, 1998, SO 1998, Chapter 15, Sched. A, Section 36(1)) from which there is the further right of appeal to the Divisional Court. However, Section 36(2) requires exhaustion of the specific dispute resolution mechanisms of the IESO before any appeal to the Ontario Energy Board.

[10] RSC 1985, Chapter F-7 (as amended).

[11] RSO 1990, Chapter S.22. Subject to modifications in the Board’s constitutive statutes, the Act in general applies to proceedings before the Ontario Energy Board. However, it does not apply to proceedings before the IESO: see Electricity Act, 1998, SO 1998, Chapter 15, Sched. A, Section 25.7. To the extent that the Market Surveillance Panel is an investigative body, it probably does not apply to it: see Section 1(1) defining ‘statutory power of decision’ and Section 3(2)(g) excluding investigative bodies as defined. It is also perhaps significant that, while the Board’s authority over the IESO under Sections 36.2 and 36.3 of the Electricity Act is, by Section 36.4, designated as a ‘statutory power of decision’ for the purposes of the Statutory Powers Procedure Act, there is no similar provision with respect to the powers of the Board in response to a Market Surveillance Panel investigative report on abuse or possible abuse of power under Section 38(1) of the Electricity Act.

[12] RSA 2000, Chapter A-3, as amended by SA 2005, Chapter 4. However, the Act no longer applies to the Alberta Utilities Commission and has never applied to the Market Surveillance Administrator. See Authorities Designation Regulation, Alta. Reg. 64/2003, promulgated under Section 2(2) of the Administrative Procedures and Designation Act.

[13] See Canadian Association of Regulated Importers v. Canada (Attorney General), [1993] 3 FC 199 (TD), rev’d [1994] 2 FC 247 (FCA).

[14] See Homex Realty v. Wyoming, [1980] 2 SCR 1011.

[15] Cardinal v. Director of Kent Institution, [1985] 2 SCR 643, at Paragraph 14.

[16] Wells v. Newfoundland, [1999] 3 SCR 199, at Paragraph 61.

[17] See Canada (Attorney General) v. Mavi, 2011 SCC 30, [2011] 2 SCR 504, at Paragraph 68. As opposed to the situation under English law, there is no basis under the Canadian version of the legitimate expectation doctrine for the assertion of substantive rights; it is confined to an assertion of procedural rights in situations where the common law would not impose any procedural requirements or where the applicant for relief is asserting greater procedural entitlements than the common law would otherwise impose. However, the Supreme Court of Canada has recognised that such procedural claims may arise out of not just representations and regular practices respecting procedures but also ‘substantive promises’, presumably also including regular substantive practices: Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817, at Paragraph 26 (Baker).

[18] See Everett v. Canada (Minister of Fisheries and Oceans) (1994), 169 NR 100 (FCA).

[19] Starting with cases such as Guay v. Lafleur, [1965] 2 SCR 12. More recently, see Knight v. Indian Head School Division No. 19, [1990] 1 SCR 653, at Paragraph 26: ‘A decision of a preliminary nature will not in general trigger the duty to act fairly.’

[20] Re Abel and Advisory Review Board (1979) 97 DLR (3d) 304 (Ont. Div. Ct.), aff’d (1981), 119 (3d) 101 (Ont. CA).

[21] SA 2007, c A-37.2 (as amended).

[22] Baker, at Paragraphs 21-28.

[23] Baker, at Paragraph 27.

[24] See Moreau-Bérubé v. New Brunswick Judicial Council, 2002 SCC 11, [2002] 1 SCR 249, at Paragraph 74 (standard of review has no relevance to procedural issues) and Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 SCR 339, at Paragraph 43 (correctness, not reasonableness is the standard of review for procedural challenges).

[25] Mission Institution v. Khela, 2014 SCC 24, [2014] 1 SCR 502, at Paragraph 89; Council of Canadians with Disabilities v. VIA Rail Canada, 2007 SCC 15, [2007] 1 SCR 650, at Paragraphs 230-31; and Travailleuses et travailleurs unit d’alimentation et du commerce, local 503 c. Systems’ Techno-pumps inc., 2017 QCCA 997, at Paragraphs 19-29.

[26] Committee for Justice and Liberty v. National Energy Board, [1978] 1 SCR 369, at pages 394-95 (Committee for Justice and Liberty). The formulation is found in the dissenting judgment of de Grandpré J. However, it was subsequently endorsed by the Court in Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 SCR 3, at Paragraph 81.

[27] A ‘reasonably well-informed person’: Old St. Boniface Residents’ Association v. Winnipeg (City), [1990] 3 SCR 1170, at page 1198 (Old St. Boniface Residents’ Association). Where an allegation of bias focuses on the structures of an agency’s decision-making processes, or institutional as opposed to personal bias, the test is that of whether a ‘fully informed person’ would have a reasonable apprehension of bias ‘in a substantial number of cases’: R. v. Lippé, [1991] 2 SCR 114, at page 144.

[28] See Pelletier v. Canada (Attorney General), 2008 FC 803, 333 FTR 190, at Paragraphs 65-71 for an excellent discussion of the issue.

[29] Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 SCR 623 (Newfoundland Telephone).

[30] Newfoundland Telephone, at Paragraph 26

[31] Save Richmond Farmland Society v. (Township), [1990] 3 SCR 1213, at Paragraph 24.

[32] As exemplified by Committee for Justice and Liberty.

[33] E.A. Manning Ltd. v. Ontario Securities Commission, (1994), 18 OR (3d) 97 (Div. Ct.), aff’d (1995), 23 OR (3d) 257 (CA).

[34] Brosseau v. Alberta Securities Commission, [1989] 1 SCR 301.

[35] See Energy Probe v. Canada (Atomic Energy Control Board) (1984), 8 DLR (4th) 735, aff’d (1984) 15 DLR (4th) 48 (FCA).

[36] SO 1998, Chapter 15, Sched. B.

[37] See Van Harten at pages 444-45.

[38] Valente v. The Queen, [1985] 2 SCR 673.

[39] Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), 2001 SCC 52, [2001] 2 SCR 781.

[40] Such as Sections 7 and 11(d) of the Canadian Charter of Rights and Freedoms. However, these are unlikely sources of a challenge in the context of energy market manipulation regimes given that Section 7’s fundamental justice protection where ‘life, liberty and security of the person’ is at stake does not reach purely economic rights and Section 11’s requirement of an ‘independent and impartial tribunal’ applies only to decision-making that has ‘true penal consequences’ (R. v. Wigglesworth, [1987] 2 SCR 541), an attribute rarely recognised in the case of market regulators even where they have authority to impose hefty fines and restitution orders as well as deny or restrict continued market participation (Guindon v. Canada, 2015 SCC 41, [2015] 3 SCR 3).

[41] 2747-3174 Québec Inc. v. Quebec (Régie des permis d’alcool), [1996] 3 SCR 919; Tremblay v. Québec (Commission des affaires sociales), [1992] 1 SCR 952 (where the issue was treated as one of institutional bias).

[42] For a comprehensive discussion, see Rothesay Residents Assn. Inc. v. Rothesay Heritage Preservation Review Board, 2006 NBCA 61, 299 NBR (2d) 369.

[43] Communications, Energy and Paperworkers Union of Canada, Local 60N v. Abitibi Consolidated Co. of Canada, 2008 NCLA 4, 273 Nfld & PEIR 17.

[44] See Section 25(2) of the Ontario Statutory Powers Procedure Act, RSO 1990, Chapter S.22. In contrast, where there is a statutory right of appeal from decision makers subject to the Act, the launching of an appeal does operate to stay the proceedings unless a court orders otherwise or there is provision to the contrary in other legislation. However, the Ontario Energy Board Act does provide that appeals to the Divisional Court from decisions of the Board do not operate as a stay unless the Board or the Divisional Court otherwise orders: see Sections 33(6) and (7). Section 36(4) of the Electricity Act also provides that an appeal to the Board from the IESO does not operate as a stay. For the equivalent Alberta Utilities Commission provisions, see Sections 29(6) and (7) of the Alberta Utilities Commission Act, SA Chapter A-37.2.

[45] As exemplified by Committee for Justice and Liberty.

[46] Section 48(1).

[47] Section 48(2).

[48] Section 50.

[49] RSO 1990, Chapter F.31, Section 14. See also Sections 4.3.1(7) and (8) of the Ontario Energy Board Act giving the Panel authority to designate information as coming within law enforcement (Section 14) and commercial secrets (Section 17) provisions of the Freedom of Information and Protection of Privacy Act.

[50] Alberta Regulation 266/2007.

[51] Section 6(1).

[52] Section 6(2).

[53] Sections 6(3) & (4)(a) and (b).

[54] Sections 6(4)(c) and 5-7.

[55] Sections 6.7(b)-(11).

[56] Required by Section 7(1) of the Regulation. See dated 11 August 2016: albertamsa.ca/uploads/pdf/Archive/0000-2016/2016-08-10%20Investigation%20Procedures%200016%20(2).pdf.

[57] RSA 2000, C F-25.

[58] 1.3 Confidentiality of Communications.

[59] 1.3.

[60] See Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), [1990] 1 SCR 425.

[61] RSC 1985, Chapter C-34.

[62] Oeb.ca/oeb/_Documents/About%20the%20OEB/OEB_bylaw_3.pdf.

[63] Section 5.1.4(b).

[64] Section 5.1.5(b).

[65] Section 5.1.7.

[66] Section 5.1.8.

[67] Section 43(1).

[68] Sections 5.1.4(a) and 5.1.5(a).

[69] Section 43(2).

[70] Section 45(2)(a).

[71] At 4.2.

[72] Section 5.1.6.

[73] Section 5.1.7.

[74] Section 5.1.7.

[75] Section 5.1.8.

[76] See generally on the choice of standard of review Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 SCR 190 (Dunsmuir) and Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 SCR 654 (Alberta Teachers).

[77] Under Canadian common law, there are currently only two standards of review: correctness and unreasonableness.

[78] See Wilson v. Atomic Energy of Canada Ltd, 2016 SCC 29, [2016] 1 SCR 770, at Paragraph 73, in effect reiterating Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 SCR 339, at Paragraph 59 and Alberta Teachers, at Paragraph 47.

[79] Dunsmuir, at Paragraph 47.

[80] Alberta Teachers, at Paragraph 39.

[81] Dunsmuir, at Paragraphs 55 and 60.

[82] Dunsmuir, at Paragraph 61.

[83] Sections 37 to 37.3.

[84] As opposed to the subsequent role of the Ontario Energy Board (and the ISEO) on receipt of a report on an investigation.

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