Canzinco Ltd. v. Canada (Minister of Indian Affairs and Northern Development), 2004 FC 1264

Date: 20040916

Docket: T-738-03

Citation: 2004 FC 1264

Ottawa, Ontario, this 16^th day of September, 2004

Present:           The Honourable Justice James Russell                                

BETWEEN:

                                                          CANZINCO LIMITED

                                                                                                                                            Applicant

                                                                           and

                                            THE MINISTER OF INDIAN AFFAIRS

AND NORTHERN DEVELOPMENT

                                                                                                                                        Respondent

                                            REASONS FOR ORDER AND ORDER

[1]                 This is an application for judicial review of a decision of the Minister of Indian Affairs and Northern Development ("Minister"). By letter dated April 11, 2003 ("Decision"), the Minister rejected the Applicant's request for review and consideration of the amount of financial security to be provided by the Applicant pursuant to licence NWB1NAN0208 ("Licence") granted by the Nunavut Water Board ("Board") to the Applicant under the Nunavut Waters and Nunavut Surface Rights Tribunal Act ("Act"). Specifically, in the Decision, the Minister refused to accept jurisdiction for the Applicant's request for review and consideration of the amount of financial security to be provided.

BACKGROUND

[2]                The Applicant is a wholly owned subsidiary of Breakwater Resources Ltd., a mining company that has owned and operated the Nanisivik Mine since late 1997. The Nanisivik Mine is an underground zinc, lead and silver mine.

[3]                In order to operate a mine in Nunavut, s. 11(1) of the Act requires that a water licence be issued for water use as well as water disposal that may affect water.

[4]                In October 2001, the Applicant announced the permanent closure of productive operations of the Nanisivik Mine, to be implemented by September 30, 2002.

[5]                Section 57 of the Act requires that a water licence is required for abandonment activities to cover use of water and disposal of waste and the subsequent closure of the mine property.

[6]                During the years that the Applicant operated the mine, it failed to comply with some of the conditions outlined in its 1997 licence. The main non-compliance issue referred to in the 2002 Compliance Report was Applicant's failure to provide a $1 million security deposit increase required in Part B, Item 2 of the 1997 Licence, before the July 31, 2002 due date.

[7]                The Applicant applied to the Board for a renewal of its water licence for the Nanisivik Mine to cover closure and reclamation activities. The Board has jurisdiction to issue the appropriate water use licences in Nunavut.

[8]                On June 5, 2002, the Board held a pre-hearing meeting in Arctic Bay, to discuss the scope of the application and various procedural matters in preparation for the July 2002 hearing. The Applicant, the Minister, the Government of Nunavut, the Department of Fisheries and Oceans Canada ("DFO"), Environment Canada, and Nunavut Tunngavik Incorporated all submitted written interventions prior to the public hearing. Both the Applicant and the Minister provided reclamation cost estimates to the Board as part of their written submissions.

[9]                The Board held a public hearing on July 22, 23, and 24, 2002 in Arctic Bay. The Board heard evidence from the Applicant, the Minister, the Government of Nunavut, DFO, Environment Canada, Nunavut Tunngavik Incorporated, the Hamlet of Arctic Bay and several citizens of Arctic Bay.

[10]            The Board allowed additional submissions and undertakings to be submitted before it made its final decision on the Application. The Applicant was given the opportunity to submit a final rebuttal of all written interventions filed with the Board and the Applicant filed a final rebuttal on August 30, 2002.

[11]            On October 10, 2002, the Board granted the Applicant's renewal request for the Licence pursuant to s. 56(2) of the Act.

[12]            The Board required the Applicant to provide a security in the amount of $17.6 million. The Board also provided written reasons for its decision.

[13]            The renewal was granted in connection with the closure and reclamation activities to be undertaken at the Nanisivik Mine.

[14]            In granting the Licence, the Board imposed a number of conditions on the Applicant. Specifically, Condition 2 of Part B of the Licence stipulates that the Applicant must provide the Respondent with security in a form that is satisfactory to the Minister:

The Licencee shall within thirty (30) days of issuance of the Licence, furnish and maintain a security in the amount of $17.6 million dollars in the form and nature in accordance with the Regulation or that is satisfactory to the Minister.

[15]            In determining the amount of security, the Board rejected the Applicant's estimates and relied on a modified version of the Minister's reclamation cost estimates. In setting the total at $17.6 million, the Board noted that it still had doubts about the financial strength of the Applicant and its parent company, Breakwater. More specifically, the Board was concerned with the Applicant's non-compliance with the requirement (from the preceding licence) of a payment of a $1 million security by July 31, 2002.

[16]            On November 19, 2002, the Minister informed the Board that he had approved the Licence, pursuant to s. 56(2) of the Act. The Minister noted with approval the consideration that the Board gave to the various issues that were raised during the licence renewal process. The record before the Minister included both the Licence and the reasons for the Board's decision.

[17]            Although the Applicant made three requests for a meeting with the Minister, these requests were made after the Minister approved the Licence.

[18]            Section 56(2) of the Act provides that the Minister shall make a decision on whether to approve a licence within 45 days of the Minister receiving the licence. The Licence was issued by the Board on October 10, 2002. It was only on December 11, 2002, after the 45 days had expired, that the Applicant first wrote to the Minister requesting a discussion regarding the amount of security.

[19]            The Applicant has not appealed the decision of the Board pursuant to the appeal process outlined at s. 81 of the Act.

[20]            From the outset, the Applicant has taken the position that the suggestion made by the Board concerning the amount of security to be provided was inappropriate. Accordingly, the Applicant contacted the Minister on numerous occasions to schedule a meeting to explain why the amount of security suggested by the Board was not appropriate and why the Minister should determine it to be unsatisfactory. The Minister declined to meet with the Applicant.

DECISION UNDER REVIEW

[21]            The Applicant submits that, by letter dated April 11, 2003, the Minister refused to accept jurisdiction to review and consider the amount of financial security to be provided by the Applicant under the Licence. It is this letter that gives rise to the present application for judicial review.

[22]            The Minister submits that, in his letter of April 11, 2003, he did not "refuse to accept jurisdiction," as alleged by the Applicant. Rather, he approved the Licence in its entirety pursuant to s.56 of the Act.

PERTINENT LEGISLATION

[23]            Section 76(1) of the Act provides as follows:

[24]            The security established by s.76(1) of the Act, together with the criteria in the applicable Northwest Territories Waters Regulations ("Regulations"), ensures that there is a mechanism in place "...to prevent, counteract, mitigate or remedy any resulting adverse effect on persons, property or the environment...." (s. 89(1)). Where such adverse effects are found, s. 89(1) of the Act allows the security to be used to remedy them. Consistent with this purpose, s. 57(b) of the Act requires "financial responsibility" as a condition for the issuance of licences, and the financial responsibility must be adequate for satisfactory maintenance and restoration in the event of mine site closure or abandonment.

ISSUES

[25]            The Applicant raises the following issues:

Did the Minister err in his interpretation of the Act by determining that he lacked jurisdiction to review or consider the amount of financial security to be provided?

Did the Minister err in refusing to accept jurisdiction, under the terms of the Licence, to review and consider the amount of financial security to be provided?

Did the Minister's refusal to accept jurisdiction to review and consider the amount of financial security to be provided, either under the Act or pursuant to the Licence, amount to a breach of procedural fairness and a denial of natural justice?

ARGUMENTS                      

Applicant

General

[26]            The Applicant says that the Minister has jurisdiction to review and consider the amount of financial security to be provided by the Applicant. The Minster's refusal to acknowledge and accept this jurisdiction, through a misinterpretation of an enabling statute, amounts to an error of law.

[27]            The Applicant says there is no ambiguity in the wording of s. 76(1) of the Act and the clear wording of the section (granting jurisdiction to the Minister) should be given effect.

[28]            Section 76(1) of the Act is remedial in nature in that it provides the Applicant with the benefit of the Minister's review and consideration of the amount of financial security to be provided. As a remedial provision, it must be given a broad and liberal interpretation (Interpretation Act R.S.C. 1985, Chap. I-21, section 12).

[29]            In addition, the Applicant says that the Minister has been granted jurisdiction pursuant to the Licence to review and consider the amount of financial security to be provided by the Applicant. The Minister has refused to accept this grant of jurisdiction. The words in the Licence are as follows:

The Licencee shall within thirty (30) days of issuance of the Licence, furnish and maintain a security in the amount of $17.6 million dollars in the form and nature in accordance with the Regulation or that is satisfactory to the Minister.

[30]            The Applicant goes further and says that, if the Minister contends that he has exercised his jurisdiction to review and consider the amount of financial security to be provided by the Applicant, and that the exercise was completed by simply deferring to the amount suggested by the Board, such a decision was made contrary to the principles of natural justice and the duty of fairness for the following reasons:

1.              the Minister rejected requests by the Applicant to meet with the Minister in order to provide information directly relevant to the Minister's decision;

2.              the Applicant was denied the opportunity to be heard by the Minister prior to his decision; and

3.              in denying the Applicant's request to meet, the Minister has rendered a decision in the absence of relevant information.

See Baker v. Canada (1999), 174 D.L.R. (4^th) 193 (S.C.C.), and Oakwood Developments Ltd. v. St. Francois Xavier (Rural Municipality) (1985), 20 D.L.R. (4th) 641 (S.C.C.)

Standard of Review

[31]            The Applicant says that the standard of review to be applied in the present case is correctness. The Minister is obligated to correctly interpret a provision that serves, in part, as his enabling statute. The Minister's error amounts to an error in law that goes to the heart of his jurisdiction (Gerle Gold Ltd. v. Golden Rule Resources Ltd., [2001] 1 F.C. 647 (C.A.); Echo Bay Mines Ltd. v. Canada (Minister of Indian Affairs and Northern Development), [2002] F.C.J. No. 1306 (T.D.); Moreau-Bérubé v. New Brunswick (Judicial Council), [2002] S.C.C. No. 9)

Respondent

General

[32]            The Minister points out that these proceedings are styled by the Applicant as "an application for judicial review in respect of a decision by the Respondent, the Minister of Indian Affairs and Northern Development, ... [refusing] to accept jurisdiction for the Applicant's request for review and consideration of the amount of financial security to be provided [as a condition of the issuance of water licence NWB1NAN028)]." As identified by the Applicant, this purported exercise of discretionary powers occurred on April 11, 2003, when the Minister wrote a letter to the Applicant, rejecting the Applicant's request to meet.

[33]            Contrary to the position of the Applicant, the Minister says that no discretionary powers were being exercised on April 11, 2003 when the Applicant was advised that "unless and until the security posting requirements of the Licence's Part B are altered by an authority with appropriate jurisdiction, they are in force and binding."

[34]            The jurisdiction to issue, amend, renew and cancel a water licence resides with the Board pursuant to ss. 42 and 43 of the Act. Pursuant to s. 76(1) of that Act, the Board also has the jurisdiction to determine the amount of security required from the Applicant. In issuing a licence, the Act provides a licensee with the opportunity to be heard at several stages in the licensing process. The Applicant was heard at all of the stages.

[35]            Any discretionary powers residing in the Minister relevant to the issues raised in this application are found in s. 56 of the Act which states that the "issuance, amendment, renewal and cancellation of a type ... B licence [is] subject to the approval of the Minister."

[36]            The Minister approved the Licence in its entirety, pursuant to his authority to approve or reject the licence under s.56 of the Act. The Act does not provide for the opportunity for a licensee to be heard by the Minister. Rather, the Act provides at s. 81(1) that the licensee may appeal the decision of the Board to the Federal Court on a question of law or a question of jurisdiction. If it is not a question of law or jurisdiction, the issue can be reviewed through s. 18 of the Federal Courts Act (R.S. 1985, c. F-7). No appeal or request for review was filed.

[37]            If this Court were to review the Minister's decision to approve the Licence on its merits, it is the Minister's position that the Decision should be reviewed on a standard of reasonableness simpliciter, and that the exercise of discretion in this case was reasonable.

[38]            The Respondent submits that, in the event the application is successful, the Court does not have jurisdiction to grant the Applicant's desired remedy of mandamus.

The Minister did not err in his interpretation of the Act.

[39]            The Applicant submits that the Minister erred in his interpretation of the Act.

[40]            The Minister says that he did not err in his interpretation of the Act. Section 76(1) of the Act gives the Board the jurisdiction to determine the amount of the security. It is within the Minister's discretion to require a licensee to provide the amount of security, determined by the Board, in a form or nature that is satisfactory to the Minister.

[41]            Section 76(1) of the Act provides for the amount to be "prescribed by, or determined in accordance with, the regulations." It also provides that the form of security may be determined by the Board, or may be in a form that is satisfactory to the Minister.

[42]            Purposive analysis is the governing principle of statutory interpretation. It is the basis for the provision in the Interpretation Act that reads "every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects" (Interpretation Act (R.S. 1985, c.1-21 ), s. 12).

[43]            The Supreme Court of Canada accepted this principle of purposive analysis in Rizzo & Rizzo Shoes Ltd. (Re) at para. 22 stating:

I also rely upon s. 10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act "shall be deemed to be remedial" and directs that every Act shall "receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".

Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at para. 22

[44]            The provisions of a statute must be interpreted consistently with the purpose of the statute in question. Both legislative evolution and a comprehensive reading of the Act are relevant factors to consider in determining the meaning of s.76(1) of the Act.

Consistent with Predecessor Legislation

[45]            The Minister's discretion with respect to the form of security, and not the amount of security, is consistent with the Act's predecessor legislation, the Northwest Territories Waters Act, s. 17.1 of which reads as follows:

[46]            While the form of security may be determined by either the Board or the Minister, it is clear that the Board has jurisdiction to determine the amount in accordance with the Regulations. These same Regulations also govern the assessment of the amount of security in the successor Act:

[47]            The Respondent says that there are many links between these two statutes, both in their stated purpose, and in each individual section. The continuity of the Regulations between the two statutes, however, provides direct proof of their correlation. The Respondent says that where there is any question regarding the successor legislation, the previous legislation should be used to inform the interpretation of the successor legislation.

[48]            The use of applicable regulations to interpret a statute is an appropriate and often necessary practice, as stated by the Supreme Court of Canada in Canadian Union of Public Employees v. Ontario (Minister of Labour) at para. 29:

In the clearest of cases, the criteria constraining the exercise of a discretion will be spelled out in the legislation itself. In other cases, the relevant factors to consider will be specified in regulations or guidelines.

Canadian Union of Public Employees v. Ontario (Minister of Labour), [2003] S.C.J. No. 28

Consistent with the Act as a whole

[49]            The Minister points out that there is a practical basis for the Minister's jurisdiction with respect to the form of the amount of security set by the Board that does not exist with respect to the amount of security. Pursuant to s. 76(1) of the Act, the security must be "furnish[ed] and maintain[ed] with the Minister." Since it is the Minister, and not the Board, that holds the security, it follows as a practical matter that any discretion as to the form of that security must lie with the Minister.

[50]            That the Minister has discretion with respect to the form of security posted, and not the amount, is consistent with the intent of the Act itself, s. 56 of which limits the Minister's authority to the "approval" of the "the issuance, amendment, renewal and cancellation of a type ... B licence."

[51]            The Minister takes the position that the Board's jurisdiction to determine the appropriate amount of security is a matter of significant importance in the Act. The purpose of the security is to ensure that the objects of the Board can be achieved.

[52]            In this case, the objects of the Board, and in its predecessor legislation, The Northwest Territories Water Act, read as follows:

[53]            The objects of the Board are to provide for the conservation, development and utilization of waters in a manner that will provide the optimum benefit for all Canadians in general and, in particular, for the residents of any part of the Northwest Territories for which the Board is authorized to issue licences.

[54]            As the Board noted in its Reasons for Decision, the "primary purpose of the Board's security requirement is '...to prevent, counteract, mitigate or remedy any resulting adverse effect on persons, property or the environment....'". This stated purpose is a necessary corollary of the objects of the Board. In order to provide for the optimum benefit of conservation of waters to Nunavut residents, it falls to the Board to prevent adverse effects to that same population. The security posted by an applicant is used to prevent any such adverse effects.

[55]            Section 57 of the Act outlines in some detail the assessments the Board must make prior to the issuance of the licence. The most important for this case are the following:

[56]            In addition to preconditions for the issuance of the Licence, the Board must ensure that its determination of the amount of security is in keeping with the Regulations.

[57]            The Act sets out clear standards to determine the amount of security that the licensee is to provide. The Regulations, and the Act itself, clearly state that it is the Board who determines the amount of security to be provided by the licensee.

[58]            There is a factual underpinning to the determination of the amount of security that the Board is required to investigate. The question of financial viability, estimating the cost of the completion of the undertaking, and the assessment of the risks involved in the operation are all fact-based queries.

[59]            The Board is the entity that the Act entrusts with the responsibility of assessing all of these fact-based queries in order to reach its determination of the amount of security. The security will then be applied as against any adverse effects should they occur (see s. 89 of the Act).

[60]            The Minister argues that it would be completely inconsistent with the objects of the Act, and the mandate and jurisdiction of the Board, for the Minister to have jurisdiction to arbitrarily change the amount of the security decided upon by a tribunal that has expertise in the field of conservation and water usage.

The Minister did not err in refusing to accept jurisdiction under the terms of the Licence.

[61]            The Applicant asserts that the Minister has been granted jurisdiction pursuant to the Licence to review and consider the amount of financial security to be provided by CanZinco.

[62]            The Respondent points out that the jurisdiction of the Minister is determined by reference to relevant statutes. Jurisdiction cannot be granted by way of a licence.

[63]            Pursuant to the Act, it is the Board who has jurisdiction to determine the amount of security. The Licence itself notes that, "[t]he Licensee shall within 30 days of issuance of the Licence, furnish and maintain a security in the amount of $17.6 million in the form and nature in accordance with the Regulations or that is satisfactory to the Minister."

The Minister's refusal to accept jurisdiction to review and consider the amount of financial security, did not amount to a breach of procedural fairness and a denial of natural justice.

[64]            The Applicant asserts that the Minister breached principles of natural justice and fairness in "simply deferring to the amount suggested by the Nunavut Water Board." The Applicant also states that this decision to defer "den[ied] CanZinco the opportunity to be heard by the Minister prior to his decision, and [resulted in the Minister] rendering a decision in the absence of relevant information."

[65]            The Minister acknowledges that the Minister has discretion to review the licence. Pursuant to the Act and the Board's jurisdiction, the opportunity for the Applicant to be heard is before the Board. At every stage of the process, the Applicant was heard by the Board. The Act does not provide for the opportunity to be heard by the Minister.

[66]            As the Minister states in his letter of April 11, 2003, the Applicant is "at liberty to seek recourse by any route available under the law." The Act provides for a right of appeal to the Federal Court on a question of law or a question of jurisdiction at s. 81(1). If it is not a question of law or jurisdiction, the issue can be reviewed through s. 18 of the Federal Courts Act.

[67]            The Minister has jurisdiction to approve or reject the Licence in its entirety on any relevant, reasonable basis, including the amount of security. Whether or not the Minister was obligated to grant a request to meet with the Applicant before making his Decision is not relevant since the Applicant did not request a meeting with the Minister prior to the making of the Decision. Indeed, the Applicant did not request a meeting until after the time period for the Minister to make his decision had expired. In any event, the Applicant had every opportunity to be heard in the licencing process.

The Standard of Review

[68]            The Respondent says that the appropriate standard of review for the Minister's exercise of discretion in approving or rejecting the Licence is "reasonableness simpliciter."

[69]            The central inquiry in determining the standard of review exercisable by a court of law is the legislative intent of the statute creating the tribunal whose decision is being reviewed. More specifically, the reviewing court must ask: "[W]as the question which the provision raises one that was intended by the legislators to be left to the exclusive decision of the Board?" (see Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, at para. 26).

[70]            The "pragmatic and functional" approach outlined by the Supreme Court of Canada in Pushpanathan, subsequently applied in Baker, identifies four factors that affect the determination of the appropriate standard of review:

(a)             the presence or absence of a privative clause or the right to appeal;

(b)            the relative expertise of the decision maker;

(c)             the purpose of the Act as a whole, and the provision in particular; and

(d)            the nature of the problem in question, especially whether it relates to a determination of law or fact.

Pushpanathan v. Canada, supra, at paras. 30-38.

Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, para 55-62

[71]            In the case at bar, there is no privative clause. However, the Minister has a broad and specialized expertise. The nature of the Minister's power is discretionary. Finally, the nature of the inquiry in the case at bar is highly fact-based and contextual. In determining whether to approve or reject a licence, the Minister evaluates the evidence before him.

[72]            In the aggregate, these factors signal a high degree of deference. On the spectrum between correctness and patent unreasonableness, the Respondent's submission is that the appropriate standard of review is reasonableness simpliciter.

[73]            The Minister reviewed the amount of security in his decision to approve the Licence in its entirety. The Minister's decision under review was arrived at only after a full examination and consideration of the Licence, and the reasons for the Board's decision.

[74]            In its reasons, the Board outlined its assessment of the factual issues relating to the determination of the amount of security. The reasons included, as an Appendix, the written interventions submitted by the Applicant, the Minister, the Government of Nunavut, DFO, Environment Canada, and Nunavut Tunngavik Incorporated. They also included the submissions to the public hearings of the licence renewal process, and the post-hearing submissions from the Applicant.

[75]            Taking into account all of these factors, the Minister submits that the Minister's decision to approve the Licence in its entirety, and thus approve the amount of security, was reasonable.

Unavailability of Mandamus

[76]            In this application, the Applicant seeks an order of mandamus "requiring the Minister to review and consider the amount of financial security to be provided by the applicant pursuant to the Licence," as well as a direction "that the Minister receive and consider relevant information available from the applicant."

[77]            At common law, it is well established that mandamus does not lie against the Crown (Ominayak v. Canada (Minister of Indian Affairs and Northern Development), [1987] 3 F.C. 174 (T.D.), at 181-182; Grand Council of the Crees v. The Queen (1981), 124 D.L.R. (3d) 574 (F.C.A.), at 576; Minister of Finance of British Columbia v. The King, [1935] 3 D.L.R. 316 (S.C.C.), at 321-322).

[78]            There is one limited exception to the immunity of the Crown from mandamus. Courts have jurisdiction to order mandamus against Crown servants when they are obliged by statute to perform specific duties for the benefit of a third party. In other words, mandamus may be ordered against Crown servants when they are acting not as Crown agents, but in their personal capacity pursuant to a specific legislated duty (Ominayak, supra; Re Central Canada Potash Co. Ltd. et al. and Minister of Mineral Resources of Saskatchewan (1972), 32 D.L.R. (3d) 107 (Sask. C.A.), at 112-114, affirmed [1973] 2 W.W.R. 672 (S.C.C.)).

[79]            Where there is no mandatory duty, there is no basis for mandamus, injunctive or declaratory relief against the Crown. While the Federal Court of Appeal has recently raised the possibility that mandamus may be available in exceptional circumstances such as bad faith, the current state of the law is that mandamus is not generally available (Apotex Inc. v. Canada (Minister of National Health and Welfare) (2000), 181 D.L.R. (4^th) 404 (Fed. C.A.)).

[80]            In any event the Minister says that, while "mandamus may lie to compel a decision where a decision-maker has a range of choices open to him or her, it does not lie to compel a particular decision from among the range that might be available to the decision-maker" (Schwarz Hospitality Group Ltd. v. Canada (Minister of Canadian Heritage), [2001] F.C.J. No. 263 (T.D.) at para. 33). In other words, while it may be possible for a court to issue mandamus against a Minister to require performance of a discretionary duty, it may not dictate how the Minister exercises the discretion Kahlon v. Canada (Minister of Employment and Immigration), [1986] 3 F.C. 386 at 387).

[81]            In the case at bar, the Minister points out that the Minister has no specific statutory duty to determine the amount of security. Rather, the Board has the jurisdiction to determine the amount of that security. The Minister does have the discretionary power to approve or reject the Licence in its entirety. This discretion was exercised by the approval of the Licence.

[82]            As a result, the Minister takes the position that, should this Honourable Court grant the application for judicial review, it cannot grant an order for mandamus.

ANALYSIS

[83]            This case involves a narrow issue of statutory interpretation. The key provision is s. 76(1) of the Act which is reproduced here for convenience:

[84]            The Applicant is of the view that this provision makes the amount of any security required subject to the Minister's discretion. It is easy to see why the Applicant should take this view. On the face of it at least, s. 76(1) appears to say that the form, nature, terms, conditions and amount must conform with the applicable regulation or must satisfy the Minister. Also, s. 76(1) is a fairly recent provision that came into effect when the Act was proclaimed in 2002. Its equivalent in the predecessor statute was s. 17(1) of the Northwest Territories Water Act which, for ease of comparison, is reproduced here:

[85]            Section 17(1) makes it clear that Ministerial discretion extends only to the "form" of the security required and not the "amount." One would think, then, that the changes in wording brought in by s. 76(1) of the Act must have some purpose and reflect some adjustment in the scope of the Minister's discretion.

[86]            But as the Minister points out, there is something decidedly peculiar about the wording of s. 76(1). To begin with, the verb "is" in the final line is singular so that it is difficult to tell how it qualifies the plural list (form, nature, terms, conditions, amount) that precedes it. The Minister thinks that "is" only qualifies "form" and this is why the Minister has no discretion with regard to "amount." In my opinion, however, on the face of the provision, there is no more reason why "is" should qualify "form" than it should qualify "amount." The fact is that the provision bristles with ambiguities.

[87]            Strangely enough, these problems concerning the precise scope of the Minister's discretion under s. 76(1) of the Act came up for discussion at the Committee stage of the bill when Mr. Maurice Vellacott, M.P., suggested an amendment to 76(1) that would make it clear that "only the Water Board has the authority to fix the amount of the security provided by an applicant, licensee, or prospective assignee" (Canada, Parliament, Standing Committee on Aboriginal Affairs, excerpts from Evidence, 37^th Leg. (October 30, 2001)).

[88]            Mr. Will Dunlop (Director, Resource Policy and Transfers Directorate, Natural Resources and Environment Branch, Indian and Northern Affairs Canada), responding to the suggested wording for the amendment said "I think the wording does the same thing as the bill. I defer to the members of the committee, but they're both the same, I hope. They look the same. The effect is the same" (Canada, Parliament, Standing Committee on Aboriginal Affairs, excerpts from Evidence, 37^th Leg. (October 30, 2001)).

[89]            Mr. Vellacott had obviously seen the difficulties inherent in the wording of s. 76(1) because he continued to push his amendment as follows:

Just simply, I think it makes it very clear that the Water Board is the one with the authority to fix that amount, and again, I think it is just synchronizing. It must be a bit of a headache for department officials to wonder if there are some slightly different nuances or things applying in different acts around the country. I would think that by making it conform to those acts, we get some expeditious use of department time, as they know they're dealing with the same situation and they can cross-reference, and there's precedent or whatever in other contexts as well. So I would appeal on that basis.

As the department official indicated, it's not undermining anything there, it's certainly doing no worse, and it's as good. I would still maintain that it's probably a good and wise move and a prudent thing to do.

(Canada, Parliament, Standing Committee on Aboriginal Affairs, excerpts from Evidence, 37^th Leg. (October 30, 2001)).

[90]            But Mr. Vellacott's warnings seem not to have been as persuasive as Mr. Dunlop's hopes. The suggested amendment was voted down. This is a pity because, in light of this application, Mr. Vellacott's concerns look downright prescient. The Applicant and the Court are now left to ponder those "slightly different nuances" that so troubled him.

[91]            Mr. Dunlop himself appears to accept the meaning behind Mr. Vellacott's suggestions because he characterized the amendment suggestion as "perfectly acceptable" and went on to say that "No one's contesting that it's the board that sets the amount of the security, and no one's suggesting that it's other than the Minister who deals with the form of the security ..." (Canada, Parliament, Standing Committee on Aboriginal Affairs, excerpts from Evidence, 37^th Leg. (October 30, 2001)).

[92]            In voting down the amendment, of course, we don't know if the Committee was accepting the clear distinction between "amount" and "form" that Mr. Dunlop makes or whether, in fact, they were approving the "slightly different nuances" that so troubled Mr. Vellacott. All in all, I am inclined to the view that the Committee was accepting Mr. Dunlop's assurances concerning the meaning of s. 76(1) ("I think the wording does the same thing as the bill ... they're both the same, I hope") and that the intention behind the provision was that the Minister would decide the "form" of the security, while the Board would decide the "amount" in accordance with the prescribed statutory and regulatory formula.

[93]            Both the Applicant and the Minister have taken the Court through a purposive analysis of s. 76(1) as articulated by the Supreme Court of Canada in Rizzo. To be blunt, such an analysis does not yield an entirely clear result. There are good arguments on both sides. On balance, however, the history of this legislation and the general scheme of the act suggest to me that the Minister's interpretation of the Minister's discretion concerning the amount of the security that may be required by the Board pursuant to s. 76(1) should carry the day.

[94]            This is not to say that the Applicant can be blamed for taking the interpretation it did. Section 76(1), it seems to me, is highly ambiguous on its face and cries out for clarification.

[95]            My conclusions on this point, however, do not quite settle the matters in dispute in this application. The Decision or matter complained of by the Applicant is the Minister's refusal to assume jurisdiction for the amount of the security under the Licence and to enter into negotiations with the Applicant over that amount. This refusal is contained in the Minister's letter of April 11, 2003 which reads, in part, as follows:

As you are aware, I have approved this water licence in its entirety. The approval was given pursuant to, and in conformity with, section 56 of the Nunavut Waters and Nunavut Surface Rights Tribunal Act - a provision and an Act which were readily available to the licensee, and also to the licensee's legal counsel. Having been so approved, the licence is fully binding as is each of the terms within it. The statement, in licence item B(2), that the licensee is to furnish security in the amount of $17.6 million, is a binding requirement. It is not a mere suggestion from the Nunavut Water Board. The amount cannot properly be the subject of negotiations between the licensee, departmental officials and me.

It is my understanding that the preparation of the water licence was preceded by a public hearing, a technical meeting, and written submissions, and that, via these procedures, the licensee not only had extensive opportunities to present its evidence and views, but also availed itself of those opportunities. If, nevertheless, you were or are of the opinion that the process or the result was in some way flawed, you were/are at liberty to seek recourse by any route available under the law. Furthermore, pursuant to items G(21) and B(3) of the licence, if previously undiscoverable information emerges the licensee will have a periodic opportunity to incorporate that information into a revised estimate of restoration liability. Please note, however, that unless and until the security posting requirements of the licence's Part B are altered by an authority with appropriate jurisdiction, they are in force and binding.

[96]            This letter was the culmination of a correspondence between the Applicant and the Minister in which the Applicant took the position that both the form and the amount of security referred to in the Licence were mere suggestions by the Board and so subject to final determination by the Minister.

[97]            The Minister concedes that s. 56 of the Act means that "the Minister has jurisdiction to approve or reject the licence in its entirety, on any relevant, reasonable basis, including the amount of the security."

[98]            In my opinion, a statutory scheme that reserves the fixing of the amount of the security to the Board but gives the Minister the power to disapprove a licence if the amount of the security is not sufficient produces a somewhat nebulous apportionment of powers between the Board and the Minister as to who has final say over the amount of the security.

[99]            In the present case, the Minister approved the Licence, which included the amount of the security, within the time allowed by the statute and before the Applicant even requested a meeting with the Minister's representatives.

[100]        I have accepted the Minister's interpretation of the Act that it is the Board's responsibility to fix the amount of the security, which means that, when that amount appears in the Licence, it is not a mere suggestion that is subject to the final approval of the Minister. Giving the Minister power to disapprove a licence (even on the basis of a concern over security) is not the same thing as giving the Minister the power to fix the amount of security as part of the negotiations and hearings that lead up to the granting of the licence by the Board. And during that process in this case I am satisfied (indeed the Applicant does not argue otherwise) that the Applicant was given every opportunity to make its case and be heard.

[101]        The Applicant's complaint is that the Minister refused to assume a jurisdiction to negotiate the amount of the security with the Applicant. I believe that the Minister's interpretation of his jurisdiction to review and consider the amount of security under the Licence with the Applicant was correct.

[102]        The Applicant also says, however, that the Minister's refusal to meet with the Applicant amounted to a breach of procedural fairness and a denial of natural justice. This argument is not developed by the Applicant in detail. The Applicant merely says that the Minister's refusal to meet with the Applicant denied the Applicant the opportunity to be heard before the Minister made the decision to approve the Licence and meant that the Minister made a decision in the absence of relevant detail.

[103]        These arguments are not particularly convincing because the Minister made a decision to approve the Licence before the Applicant requested a meeting. That decision was made on the basis of a review of all submissions that had been made to the Board. The purpose of this review by the Minister was merely to decide whether to approve the Licence. It was not intended to give any of the parties to the licencing process yet another opportunity to argue their case before the Minister or to appeal the decision that the Board had made. The Applicant had been given every opportunity to make its case on security and to respond to the positions of the other parties involved. The Applicant had the right and the opportunity to legally challenge the Board's decision. The Applicant chose not to do this but, instead, decided to try and negotiate the amount of the security with the Minister. For the Minister to have acceded to those negotiations would have meant involving all the other parties and, in effect, repeating the process that had already taken place before the Board. The Act clearly does not contemplate this, which is why the Minister took the position with the Applicant that he lacked the jurisdiction to negotiate the amount of the security.

[104]        The criteria by which, in accordance with s. 56 of the Act, the Minister approves or disapproves a licence are not articulated in the Act. The Minister says that "the Minister has jurisdiction to approve or reject the licence in its entirety, on any relevant, reasonable basis, including the amount of security."

[105]        In my view, however, the scope and process of the Minister's powers under s. 56 are not the issue in this case. Here, the Minister approved the Licence and merely refused to assume the jurisdiction to negotiate bi-laterally with the Applicant over the amount of the security that the Board had stipulated. There is no argument by the Applicant that the decision reached by the Board was reviewable or suspect in any way, and the Applicant certainly does not complain that the Minister's decision to approve the licence should be reviewed. So the Applicant's complaint is a narrow one: the Minister should have entered into bi-lateral negotiations over the amount. In my opinion, the Minister was entirely correct to take the position he did. This is not a case where a decision was made without allowing the Applicant to be heard or in the absence of relevant information. The Applicant had been heard in full. This was merely a case where the Applicant wished to re-negotiate directly with the Minister over the amount of the security. As the Minister had no power under the Act to negotiate in this fashion, there was no reviewable error and no breach of procedural fairness or natural justice.

ORDER

THIS COURT ORDERS that:

1.          The Application is dismissed.

2.          The Respondent shall have the costs of the Application

   "James Russell"

JFC

                                     FEDERAL COURT

             Names of Counsel and Solicitors of Record

DOCKET:                  T-738-03

STYLE OF CAUSE: CANZINCO LIMITED

                                                                                              Applicant

- and -

THE MINISTER OF INDIAN AFFAIRS

AND NORTHERN DEVELOPMENT             

Respondent

PLACE OF HEARING:                                 TORONTO, ONTARIO

DATE OF HEARING:                                   TUESDAY JUNE 22, 2004     

REASONS FOR ORDER

AND ORDER BY:    The Honourable Mr. Justice Russell

DATED:                     September 16, 2004

APPEARANCES BY:                                     Mr. Doug Hamilton

                                                                        For the Applicant

Ms. Anusha Aruliah / Ms. Jennifer Roy

For the Respondent

SOLICITORS OF RECORD:                       Mr. Doug Hamilton

McCarthy Tétrault

Barristers & Solicitors

Box 48, Suite 4700,

Toronto Dominion Bank Tower

Toronto, Ontario

M5K 1E6

For the Applicant

Morris Rosenberg

Deputy Attorney General of Canada

For the Respondent

FEDERAL COURT

                               Date: 20040916

    Docket: T-738-03

BETWEEN:

CANZINCO LIMITED

                                          Applicant

- and -

THE MINISTER OF INDIAN AFFAIRS

AND NORTHERN DEVELOPMENT

                                     Respondent

REASONS FOR ORDER

AND ORDER