Planting Beans

Planting Beans

Monday, November 19, 2012

While it may sometimes seem unfair when rules are changed in the middle of a game...

... that is the nature of the game when one is dealing with goverment programs.

That was the statement made by the Ontario Divisional Court in a recent decision dismissing an application for judicial review of actions take (or not taken) by the Ontario Power Authority and the Ontario Minister of Energy in connection with green energy Feed-in-Tariff projects.  A long list of project proponents (118 in total) sought declarations from the Court that the OPA and the Minister "acted unreasonably in failing to process applications in accordance with" the OPA's own rules and that the Minister's new "Directions" in the FIT program are "unfair, discriminatory and ultra vires the enabling legislation".  The Applicants also sought an order requiring the OPA to process their existing FIT applications in accordance with the previous FIT Program Rules.

The complaint was that changes made to the FIT Program Rules were unfair to those project proponents who had already applied under the old rules - the new rules would apply to all outstanding project applications that had not already reached a certain point in the review/approval process.  Included with the new rules were lower prices to be paid for the electricity generated by FIT projects.

The Divisional Court found that the standard of review of the Minister's decision (in making and applying the new FIT rules) was reasonableness; the Court had to give considerable deference to the decision of the Minister.  In the end, the Court did not agree with the Applicants that the decisions in question were unreasonable.  In response to the argument made about legitimate expectations, the Court said:

Turning then to the ground of legitimate expectations, it is perhaps useful to begin with a definition of what the principle of legitimate expectations involves. The principle was set out in Canada (Attorney General) v. Mavi, 2011 SCC 30 (CanLII), [2011] 2 S.C.R. 504 where Binnie J. said, at para. 68:
Where a government official makes representations within the scope of his or her authority to an individual about an administrative process that the government will follow, and the representations said to give rise to the legitimate expectations are clear, unambiguous and unqualified, the government may be held to its word, provided the representations are procedural in nature and do not conflict with the decision maker’s statutory duty.
Once again, I find little to which the applicants can point that would constitute a representation that is “clear, unambiguous and unqualified”. The statements to which the applicants do refer that were made by Ministers Smitherman and Duguid do not, on their face, amount to representations that are unambiguous and unqualified. They are also not directed specifically to the applicants. Rather, they were statements of general application. In addition, the statements were clearly made in relation to the FIT Program itself and have to be read with, and understood in the context of, the detailed requirements and conditions of that program to which I have made reference above. Read in context, the applicants could not reasonably assert a legitimate expectation based on these statements that the criteria for the FIT Program or the process under it would not change.

The Court also disagreed with the Applicants that they had gained any vested rights through their involvement in the FIT program application process.  Likewise, the Court found that there was nothing to prevent the new FIT rules from having retroactive effect.  It was in the course of communicating this conclusion that the Court made its comment about changing the rules of the game mid-course.  As with tax laws, "no one has a vested right to continuance of the law as it stood in the past".  When planning one's affairs based on the current state of legis

Read the decision at: Skypower CL I LP et al. v. Minister of Energy (Ontario) et al.