Evraz Inc. NA Canada Applicant - v. -, 2012 ABQB 173

Court of Queen ’ s Bench of Alberta Citation: Evraz Inc. NA Canada v. Alberta, ABQB 173 Date: 20120313 Docket: 1103 13410 Registry: Edmonton Between: Evraz Inc. NA Canada Applicant - and - Her Majesty the Queen in Right of Alberta, the Lieutenant Governor in Council, The Minister of Municipal Affairs and the City of Red Deer Respondents _______________________________________________________ Reasons for Judgement of the Honourable Madam Justice L.

Darlene Acton _______________________________________________________ I Introduction [ 1 ] This case is about whether the Applicant, Evraz, is entitled to the tax credit it was granted in 2010 for its 2010 taxes by the City of Red Deer, following annexation by the City from the County of Red Deer. In 2011, the City purported to rescind the tax credit following 2010 amendments to the annexation order-in-council, which the City argues was intended to ensure that only property which experienced an over-all tax increase would be entitled to the tax credit. II The Annexation Order and its Amendments

[ 2 ] In this case, three orders- in-council were made by the Lieutenant Governor in Council (the LGIC): 1. the initial Annexation Order, on the terms recommended by the Municipal Government Board (MGB),o n October 28, 2009, effective September 1, 2009; 2. an Amending Order, on recommendation by the Minister of Municipal Affairs (the Minister), dated December 16, 2010, effective September 1, 2009; and 3. a second Amending Order, on recommendation by the Minister, dated March 23, 2011, effective January 1, 2010. (These two Amending Orders are referred to in these Reasons collectively as the Amending Orders).

The relevant portions of the MGB’s Orders and the orders-in-council are reproduced in Appendix A to this Decision. [ 3 ] The purported effect of these amendments was to deprive Evraz of the tax credit. Evraz argues that the subsequent orders-in- council are invalid because of their retroactive effect, because they interfere with vested rights, and because the Minister and the LGIC breached the duty to be fair. Further, Evraz argues that the tax notices sent on the basis of the amended orders are invalid because they are out of time, and further that the correct

interpretation of the orders-in-council do not exclude it from receiving the tax credit. III Facts [ 4 ] The City annexed a portion of the County of Red Deer in which Evraz Inc. NA Canada (Evraz) owned a pipe manufacturing plant. The Municipal Government Act , RSA 2000, c. M-26 ( MGA ) requires the MGB to conduct hearings into proposed annexations, and to then advise the LGIC and the Minister on annexation details, which are then promulgated by Orders In Council.

The MGB’s recommendations dealt with a number of issues including property tax and assessments and rejected the City’s position that a one time tax credit only be granted to residential properties – Board Order No. MGB 083/2009 (1 st MGB Order). The 1 st MGB Order explicitly recommended that the tax credit be extended to all industrial and commercial properties being expropriated. These recommendations were then appended to its Order in Appendix C.

Based on those recommendations, on October 28, 2009, the LGIC ordered the annexation of the land effective September 1, 2009 on the terms recommended by the MGB, and incorporating Appendix C into the order-in-council ( O/C 531/2009 - the Annexation Order). [ 5 ] During the time the property was within the County of Red Deer, Evraz was assessed property taxes on two different classes of property – “non-residential” and “machinery and equipment” (M & E). [ 6 ] The City raised three concerns about the Annexation Order: 1.

The Annexation Order used the terms “industrial and commercial properties”, which is inconsistent with the language in the MGA , which refers to “non-residential” property; 2. The Annexation Order provided double compensation to farm residences. Farm residences were included in the “residential” property class, which received the one-time tax credit intended for properties that would experience an increased mill rate on annexation, but the Order also provided that farm land, farm residences, and farm buildings would continue to receive the lower County mill rate for 25 years; 3.

The County taxed M & E, but the City did not; thus an owner of non-residential property might see its tax bill decrease on annexation even though its taxes on the non-residential class would increase, because there would be no M & E tax.

[ 7 ] Of particular relevance to this application, the City argued in its letter to Municipal Affairs that non-residential properties that also have M & E taxes assessed while in the County should not be granted the tax-credit, because their over-all taxes would go down on annexation. The Minister instructed the MGB to prepare a report and an analysis of these three questions. [ 8 ] A hearing was held on April 20, 2010, and the MGB issued a decision on May 7, 2010 (2 nd MGB Order) recommending amendments to the annexation order (the relevant recommended changes are reproduced in Appendix A).

In that Order, the MGB clarified that its use of the phrase “industrial and commercial properties” was intended to exclude railway and linear property and that it had erred regarding the double compensation for farm residences. However, it expressly found that it had made no error in the 1 st MGB Order when it decided that non-residential properties with M & E should receive the tax credit on the non-residential component. It stated: The City characterized the elimination of the obligation to pay M & E as a form of compensation to the owners of those annexed properties with an M & E component.

In the MGB’s view, this characterization is incorrect. No property owners in the City of Red Deer pay M & E tax because the City has chosen to collect the amount of its budget that it is to be derived from property tax using a different tax structure than that employed by the County. Accordingly, the elimination of the obligation to pay M & E tax is not equivalent to a protective transition provision such as that which benefitted similar properties in the 2004 annexation.

It is important to recognize however, that in calculating the amount of the one-time credit, the assessed value of M & E should not be included. To this end, the MGB recommends a change in the wording of section 2(2) of Appendix C of Order in Council 531/2009 for the purposes of clarification. [ 9 ] In the meantime, on May 28, 2010 the City issued two 2010 property tax notices to Evraz, providing for property taxes of $275,997.72 on non-residential class property, and applied a credit equal to that amount, eliminating the property tax payable for 2010.

The May 28 letter did not say whether the credit was the total credit to Evraz under the Annexation Order, but internally the City had calculated the credit to be approximately $320,000, and in subsequent documents the City calculated the amount to be $632,602.91, assuming the exclusion of M & E. The remaining tax credit not yet granted would have, in the ordinary course, been applied to each successive year’s taxes until the credit was exhausted. [ 10 ] The City, according to Evraz, then approached the Minister, without notice to Evraz, seeking to amend the Annexation Order.

On December 16, 2010, on recommendation by the Minister, the LGIC amended the Annexation Order by substituting a new Appendix C. The order-in-council did not adopt the same language recommended by the MGB, but passed O/C 477/2010. The City relies on s.2(1.1) of the Amended Order to justify rescinding the tax credit; it reads:

(1.1) For the non-residential properties referred to in subsection (1), the one-time, non-refundable tax credit will be restricted to those properties that experience an actual increase in the amount of their taxes that would be payable in the year of annexation based upon the fact that the property is now located in the City of Red Deer.

I note at this point that the LGIC accepted the changes to (2) recommended by the MGB (see Appendix A). [ 11 ] On March 10, 2011 Evraz was informed by the City that O/C 477/2010 had removed the tax credit for its properties and reissued tax notices dated March 11, 2011, purporting to require payment of the 2010 property taxes of $275,997.72 (Reissued Tax Notices). [ 12 ] Again without notice to Evraz, the Minister recommended to the LGIC a further amendment to Appendix C. On March 23, 2011, O/C 103/2011 amended s. 2 of O/C 531/2009, as amended by O/C 477/2010, effective January 1, 2010 (see Appendix A).

IV The Parties ’ Submissions A. Evraz

[ 13 ] Evraz seeks judicial review on the following grounds: A. The Amending Orders are ultra vires the MGA ; B. The Amending Orders discriminate between owners of property in the same class in the municipality – non-residential property; C. The Amending Orders were issued in breach of the duty to be fair, because Evraz was not given notice of the Minister’s or the LGIC’s intention to consider an order that would deprive Evraz of the tax credit, and because Evraz was not given an opportunity to be heard in respect of that order; D. The Reissued Tax Notices were ultra vires , void and invalid; E.

The effect of the amended s. 2(1.1) of the Annexation Order was to allow the tax credit for Evraz’s property. i. Issue A [ 14 ] On the first issue, Evraz notes that the Amending Orders are subject to the common law presumption against retroactivity and the presumption against interfering with vested rights. The presumption against retroactive operation of legislation is very strong, and although it is clear by the language used that the LGIC intended that the Amending Orders operate retroactively, Evraz points to three relevant principles: 1.

Legislation permitting retroactive application must be read to minimize retroactive application; 2. Subordinate bodies exercising delegated legislative powers may only do so if it authorized by Parliament or the Legislature; and 3. Retroactive legislation should be presumed to not affect vested rights unless expressly provided. [ 15 ] The Court of Appeal in CNG Producing Co. v.

Alberta (Provincial Treasurer) , 2002 ABCA 207 noted the following (at paras 28-29 and 32): As retroactive legislation frequently interferes with vested rights, the court presumes that, if the Legislature intended to interfere, it would have said so clearly. A statute will not be given retroactive construction unless it is clear that the Legislature intended such a construction: Hornby Island Trust , supra . The presumption against the retroactive operation of statutes, therefore, may only be rebutted by clear language in the statute.

If the wording of an enactment is such that the Legislature must have intended to prescribe a new legal regime to a set of facts entirely concluded prior to the coming into force of the enactment, the enactment is retroactive and the presumption against retroactive operation is rebutted... The presumption against interference with vested rights and the presumption against retroactivity are closely related. The presumption against retroactivity is based on the reluctance of courts to accept interference with vested rights.

Dickson J., writing for the majority in Gustavson Drilling , supra , makes it clear that all enactments and amendments, retroactive and prospective, interfere with rights and expectations which may have existed prior to their enactment. He concluded at 282-83: It is perfectly obvious that most statutes in some way or other interfere with or encroach upon antecedent rights, and taxing statutes are no exception. The only rights which a taxpayer in any taxation year can be said to enjoy with respect to claims for exemption are those which the Income Tax Act of that year give him.

[16] Evraz relies on ss. 125, 137 and 138 of the MGA for its argument on whether the LGIC has the statutory authority to makeorders that retroactively interfere with vested rights. (Appendix B to these Reasons reproduces the relevant legislative provisions.)

Section 137 provides the LGIC with broad discretion to order annexation and to include terms and conditions in the annexation order todeal with a wide variety of issues. Section 137(3) authorizes the LGIC to amend an annexation order.

Section 138(1) authorizes theLGIC to make an order under this Part retroactive; s.138 (2) provides that an order may be retroactive to a date in the year immediatelybefore the calendar year in which the order was made; and s. 138(3) provides that any error in any order under this Part may be correctedas of the date of the original order or some later date. [17] Based on the principles underlying the presumption against retroactivity, Evraz argues that provisions permitting retroactivedelegated legislation should be interpreted narrowly, particularly where the legislation is confiscatory.

It argues that s.138(3) rebuts thepresumption against retroactivity, but only to the extent of providing for the correction of errors. It further submits that “error” should beread as reference to a “genuine mistake” akin to courts correcting orders nunc pro tunc or under Rules of Court or inherent jurisdiction tocorrect clerical or manifest errors in the expression of a court’s intention and decision.

It argues that there was no error here; the MGBintended that the tax credit be applied to all non-residential properties and the Amending Orders were not intended to address an error. [18] Further, Evraz argues that the LGIC expressly indicated that it was making the Amending Orders under ss. 125 and 138, andtherefore the provisions of s. 137 do not apply.

However, even if they do, Evraz argues that s. 138(1) cannot apply to s. 137(3) to permita retroactive amendment because s. 138(1) applies to the original order, not a subsequent amending order and nothing in s. 137(3)contemplates retroactive amendments. [19] Evraz further argues that vested rights accrue when they are “tangible”, “concrete” and “materialized”: Dikranian v. Quebec(Attorney General), 2005 SCC 73 at paras 39-40. Moreover, Evraz argues that there is a presumption that the legislature does not intendto delegate a power to retroactively interfere with vested rights.

Here, at a minimum the first tranche of the tax credit was tangible,concrete, and fully materialized by May 2010 when it received the tax notice relieving it of the obligation to pay any property taxes in2010, and it should be presumed that the legislature did not intend to authorize the LGIC to interfere with the vested rights to a tax creditalready granted. There is nothing in ss. 137 or 138 that expressly provides that the LGIC can retroactively take away a tax credit alreadygranted.

Moreover, there is nothing in the language of the Amending Orders that purports to authorize revoking tax credits alreadygranted. ii. Issue B [20] Evraz asserts that there is a common law rule prohibiting municipalities from enacting discriminatory legislation, unless suchdiscrimination is expressly authorized: United Taxi Drivers Fellowship of Southern Alberta v. Calgary (City), 2002 ABCA 131 (at para72) (“municipal bylaws may not discriminate in their application”) (rev’d 2004 SCC 19 on other grounds); Jonas v Gilbert (1881), 1881CanLII 36 (SCC), 5 SCR 356; Bramalea Ltd. v.

British Columbia (Assessor for Area 9 (Vancouver)), (BC CA), 76DLR (4th) 53, 52 BCLR (2d) 218 (BCCA) (“existence of a duty to assess properties at values which are fair and just in relation to thevalues at which others are assessed”); Telus Communications Inc v Opportunity (Municipal District No. 17), 1998 ABQB 895(“municipalities in levying taxation or exempting properties therefrom cannot discriminate between the same class of tax payers withinthe municipality unless the legislative authority to do so is clear and explicit.”); C & C Holdings Inc v British Columbia (Assessor ofArea No 4 - Nanaimo-Cowichan), 2003 BCSC 230 (“ It is an accepted principle of property taxation that taxing authorities must dealeven-handedly with all taxpayers in a municipality or rural area and that all taxpayers within a class be treated in the same way”). [21] Evraz also relies on the decision by the Supreme Court of Canada in Forget v (Québec) Procureur général, (SCC), [1988] SCJ No 68, in which the Supreme Court noted that the power to regulate does not necessarily include the power todiscriminate (para. 30).

At issue was whether the empowering legislation, either expressly or by necessary implication, gave the Officede la langue francaise the right to discriminate between classes of professional candidates. In Forget, the Court concluded that by givingthe Office the discretion to establish by regulation various methods of assessing knowledge of French, the legislature gave the Office thepower to discriminate among classes of candidates. [22] In additional submissions following the hearing of this application, Evraz also cited Brown v.

British Columbia (AttorneyGeneral) (Drew) , (BC SC), [1997] BCJ No 1832, 41 BCLR (3d) 265 (BCSC); Grace v. British Columbia(Lieutenant Governor in Council), 2000 BCSC 923. In Drew, the Court noted (at para 35): ...the Lieutenant Governor in Council could not enact regulations which are contrary to the provisions of the parent statute. I think that ifa regulation did draw a distinction or exclude a class of persons not contemplated by the parent statute, an argument could be made thatthat distinction was ultra vires.

[23] In Grace, the issue was whether the LGIC could make regulations denying income assistance to persons with outstandingcriminal warrants. The Court noted (at para 71-72): Although s. 24(4)(

c) appears to give the Lieutenant Governor in Council broad discretion to make different regulations for differentgroups, the power is not unlimited. Distinctions cannot be drawn that discriminate unreasonably. A distinction will be unreasonablewhere it draws lines between groups or classes, or members of a class, arbitrarily, or for purposes unrelated to the objects and purposes ofthe Act.

Aside from the common law requirement that regulations be reasonable, in the sense that they not draw arbitrary or discriminatorydistinctions between classes or members of a class; the power to make regulations under the three Acts in issue in these Petitions isspecifically circumscribed by the reference in the enabling provisions to s. 41 of the

Interpretation Act. [24] Evraz argues that these principles are equally applicable to the LGIC when making orders in council, and that it makes nodifference that discrimination occurred by an order-in-council made at the City’s request. Evraz argues that it has not been treated in anequal and consistent manner by the Amended Orders because it has been treated differently from other members of the same class - thenon-residential property owners. Evraz owns two distinct classes of property - non-residential and M & E. The MGA requires that thesebe assessed separately (ss. 297(4)(a.1) and (

b) carves out M & E from the non-residential class under s. 297). Evraz’s property tax hasincreased on its non-residential property with the annexation – $63,260.29 more than it would have been in the County of Red Deer. [25] But, Evraz argues, the Amending Order purports to deprive Evraz of the tax credit afforded to all other non-residentialproperty. The fact that it is also separately assessed for M & E is not relevant; other non-residential property that contains no machineryor equipment would be entitled to the credit. The discrimination is not expressly authorized and therefore is not permissible. iii.

Issue C [26] Evraz argues that a duty of procedural fairness exists in the circumstances at issue here. The Minister should have givenEvraz notice that the City was requesting an amendment to the Annexation Order, that the Minister was considering making theAmending Orders, and that Evraz had a right to be heard.

It was clear that the Amending Orders would significantly affect Evraz’srights. [27] The doctrine of procedural fairness is a fundamental component of Canadian administrative law: Canada (Attorney General)v Mavi, 2011 SCC 30; Nicholson v Haldimand-Norfolk Regional Board of Commissioners of Police, (SCC), [1979] 1SCR 311; and Cardinal .

Director of Kent Institution, (SCC), [1985] 2 SCR 643 (at p. 653): ... there is, as a general common law principle, a duty of procedural fairness lying on every public authority making an administrativedecision which is not of a legislative nature and which affects the rights, privileges or interests of an individual. [28] Evraz asserts that the duty of procedural fairness extends to decisions made by the LGIC when making orders in council,citing Mossman v. Nova Scotia (Attorney General) (1995), (NS SC), 140 NSR (2d) 321 (NSSC).

In that decisionthe Nova Scotia Supreme Court concluded that the duty of procedural fairness extended to Cabinet’s decision to designate property as abeach by order-in-council, noting that the general principles of procedural fairness applied (at paras 30-31): Further clarification of circumstances that give rise to the duty, and the flexible gradation of procedural fairness, is provided in thereasons of Dickson, J. in Martineau v. Matsqui Institution Disciplinary Board, (SCC), [1980] 1 S.C.R. 602 at pp.628-629:

The authorities, in my view, support the following conclusions: 1. Certiorari is available as a general remedy for supervision of the machinery of government decision-making. Theorder may go to any public body with power to decide any matter affecting the rights, interests, property, privileges, or liberty of anyperson. The basis for the broad reach of this remedy is the general duty of fairness resting on all public decision-makers. 2.

A purely ministerial decision, on broad grounds of public policy, will typically afford the individual no proceduralprotection, and any attack upon such a decision will have to be founded upon abuse of discretion. Similarly, public bodies exercisinglegislative functions may not be amenable to judicial supervision. On the other hand, a function that approaches the judicial end of thespectrum will entail substantial procedural safeguards.

Between the judicial decisions and those which are discretionary andpolicy-oriented will be found a myriad decision-making processes with a flexible gradation of procedural fairness through theadministrative spectrum. That is what emerges from the decision of this Court in Nicholson. In these cases, an applicant may obtaincertiorari to enforce a breach of the duty of procedural fairness. [29] Evraz also cites the decision of this Court in Alberta Teachers' Assn. v.

Alberta, 2002 ABQB 240 for the assertion that adecision by the LGIC that falls at the administrative, rather than legislative, end of the spectrum is subject to judicial review.

I note, atthis point, that the ATA decision concerned not the requirements of procedural fairness, but compliance within the ambit of itsempowering statute. [30] The factors that must be considered in determining whether a duty of procedural fairness is owed are: 1. the nature of the decision 2. the relationship between the body and the individual , and 3. the effect of that decision on the individual’s rights (Knight v Indian Head School Division, No 19, (SCC),[1990] 1 SCR 653 at para 24. [31] The nature of the decision involves an assessment of whether the decision is legislative.

In Mossman the Court relied on thefollowing statement of the law by Professor J.M. Evans, in de Smith: Judicial Review of Administrative Action, (4th ed.) (London :Stevens, 1980) (at para 31 of Mossman): A distinction often made between legislative and administrative acts is that between the general and the particular.

A legislative act isthe creation and promulgation of a general rule of conduct without reference to particular cases; an administrative act cannot be exactlydefined, but it includes the adoption of a policy, the making and issue of a specific direction, and the application of a general rule to aparticular case in accordance with the requirements of policy or expediency or administrative practice." [32] The Court also referenced the following passage from Attorney General of Canada v.

Inuit Tapirisat of Canada, (SCC), [1980] 2 S.C.R. 735 (at p 758): The answer is not to be found in continuing the search for words that will clearly and invariably differentiate between judicial andadministrative on the one hand, or administrative and legislative on the other.

It may be said that the use of the fairness principle as inNicholson, supra, will obviate the need for the distinction in instances where the tribunal or agency is discharging a function withreference to something akin to a lis or where the agency may be described as an 'investigating body' as in the Selvarajan case, supra.Where, however, the executive branch has been assigned a function performable in the past by the Legislature itself and where the res orsubject matter is not an individual concern or a right unique to the petitioner or appellant, different considerations may be thought toarise. [33] Evraz argues that the Amending Orders are not legislative, but particular and specific; they are not directed to the creation ofpolicy or a general rule of conduct.

The decision was made to revoke a specific property tax credit afforded to a specific and identifiableindividual – Evraz. The decision was also final and affected the interests of a particular party. It did not apply to the general public. Theeffect on the individual’s rights is also precisely calculable – $632,602.91.

iv. Issue D [ 34 ] Evraz refers to ss. 284 , 305 and 338 of the MGA in support of its arguments that the City had no authority to issue the Reissued Tax Notices. (These sections are reproduced in Appendix B). [ 35 ] Evraz argues that under ss. 305 and 338 there must be an “error, omission or misdescription” before any of these provisions apply. There was no error here; rather the Amending Orders changed the Annexation Order. Therefore, there is no authority in MGA to permit sending the Reissued Tax Notices after the end of the 2010 tax year.

Further, Evraz relies on the Court of Appeal decision in Amoco Canada Petroleum Co. v. Alberta , 1998 ABCA 407 (at para 9 ): Therefore, if errors are discovered in the assessment and tax rolls, ss. 305 and 330 restrict correction to the current year only. These sections are intended to give taxpayers as much certainty and finality as possible with respect to their tax liability. This intention is also clear in other sections of the taxation portions of the Act (ie. ss. 302, 327, 310, 335). [ 36 ] As a result, Evraz argues, the Reissued Tax Notices are invalid. v.

Issue E [ 37 ] Evraz further argues that the correct

interpretation of the amended portion of Annexation Order is that M & E are not be taken into account in calculating whether the property taxes are higher than they would have been in the County of Red Deer.

For clarity s. 2(1.1) (as ultimately amended) is reproduced here: (1.1) Subsection (1) applies to a non-residential property only if, as a result of that property being annexed to the City of Red Deer, the taxes for that property in the year of annexation are higher than they would have been if the property had remained in Red Deer County. [Emphasis added] [ 38 ] Evraz, anticipating the City’s response that the reference to “property” includes “improvements”, which in turn includes M & E under s. 284(1)(r), submits that the clause begins with a reference to “non-residential property” and the later reference to “that property” must mean that the credit would apply as long as the taxes on the “non-residential property” increased as a result of the annexation. [ 39 ] Evraz goes on to concede that the extrinsic evidence in the record, the speaking notes for Minister Goudreau, demonstrates that the LGIC’s intention was that “only those M & E properties that experienced a tax increase would benefit from the one-time tax credit.” [ 40 ] Evraz goes on to note, however, that its taxes were assessed under two different roll and owner numbers; its non-residential land was assessed under City roll number 9700310 and owner number 674693 and its non-residential buildings and structures and M & E were assessed under City roll number 9700315 and a different owner number.

It notes that, at the very least, the non-residential land, assessed separately, should be entitled to the tax credit if its taxes increased as a result of the annexation. There is no intention expressed in the Annexation Order, as amended, to suggest that all non-residential land and improvements, including M & E, be aggregated together. [ 41 ] It notes that if Evraz’s mill site was owned by a third party and leased to Evraz under a land lease, the third party owner would be entitled to the tax credit since that owner would have no non-residential property with an M & E component.

[42] Evraz concludes that at least that portion of the its property under roll # 9700310 should be entitled to the tax credit. B. Her Majesty the Queen, the LGIC and the Minister of Municipal Affairs [43] I will refer to the above Respondents as Alberta. [44] Alberta argues that Issues D and E are dispositive of the application and should be addressed first, and if decided in favour ofEvraz, there is no need to address the validity of the Amended Orders.

However, if the issues of validity must be addressed, Albertaargues that the Amended Orders are valid based on clear statutory language and the applicable administrative law principles. [45] Alberta limits itself to addressing the issues raised in A, B, and C, concluding that Issues D and E are more appropriatelyaddressed by the City. i. Standard of review [46] Only Alberta addressed the standard of review. This is unfortunate.

The Court is required to address the standard of reviewwhenever it reviews a decision by a statutory tribunal. [47] Alberta submits that Issue A is a question of vires and therefore subject to the correctness standard: United Taxi Drivers'Fellowship of Southern Alberta v Calgary (City), 2004 SCC 19 (at para. 5). Issue B addresses whether the Amending Orders arediscriminatory. Alberta suggests that if this ground is available against a Cabinet order-in-council, it is subject to the standard ofegregiousness or at least reasonableness.

Issue C raises questions of procedural fairness, and therefore no standard of review applies. b. Issue A [48] Alberta argues that there is a fundamental difference among the parties as to which sections of the MGA apply here. Evrazhas argued that the O/Cs cite ss. 125 and 138, but Alberta notes that the Supreme Court of Canada has held that such references are notcontrolling when determining vires: British Columbia (Milk Board) v. Grisnich (c.o.b. Mountainview Acres), (SCC), [1995] 2 SCR 895 at paras 2-9.

See in particular para 8 (Iacobucci J’s majority reasons): In sum, the only requirement is to possess jurisdiction, not to specify it on the face of every order. In any event, such a specification canvery well be meaningless, since jurisdiction must actually exist and not merely be stated to exist. [49] Alberta notes that the LGIC has three distinct powers: 1. the power to annex by O/C under s. 125 2. the power to amend that annexation under ss. 138(3), 137(3) and s. 125 in combination with s. 25(4) of the

Interpretation Act,RSA 2000, c. I-8; and 3. the power to make such an amending O/C retroactive under s. 138(1). [50] Section 25(4) of the

Interpretation Act reads:

(4) If in an enactment a power is conferred to make regulations, the power shall be construed as including a power exercisable in a similar manner, and subject to a similar consent and conditions, if any, to repeal or amend the regulations and to make others. (Regulations include orders passed under statutes or by the LGIC (

Interpretation Act , s. 1(1)(c).) [ 51 ] The power to make retroactive orders is found only in s. 138(3), but, Alberta submits there is nothing that limits the application of this power, and further submits that s. 138(3) could apply to either or both ss. 137(3) and ss. 125 plus s. 25(4) of the

Interpretation Act . Even if the Court accepts Evraz’s argument that s. 138(1) cannot apply to s. 137(3) because s. 138(1) applies to the original order, not a subsequent amending order, the combination of s. 125 and 25(4) of the

Interpretation Act is a complete answer. [ 52 ] In any event, Alberta argues that: 1. the LGIC may amend an O/C under s. 137(3); 2. an amending O/C may be made retroactive under s. 138(1); 3. the amending O/Cs are therefore intra vires ; 4. the presumption against retroactivity does not apply. [ 53 ] In support of this argument, Alberta notes that the modern approach to statutory

interpretation applies to taxation statutes; that is “...the words of

an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament...”... Although there is a residual presumption in favour of the taxpayer, it is residual only and applies in the exceptional case where application of the ordinary principles of

interpretation does not resolve the issue: Notre-Dame de Bon-Secours , at p. 19. Any doubt about the meaning of a taxation statute must be reasonable, and no recourse to the presumption lies unless the usual rules of

interpretation have been applied, to no avail, in an attempt to discern the meaning of the provision at issue. Placer Dome Canada Ltd v Ontario (Minister of Finance) , 2006 SCC 20 at paras 21 and 24 . [ 54 ] Alberta submits that reading ss. 137(3) and 138(1) together, one must conclude that an order under s. 137(3) must be included in an order referred to under s. 138(1). To conclude, as Evraz argues, that only the initial annexation order may be retroactively amended, renders the

section virtuallyimpotent. Further, Alberta submits that a purposive

interpretation leads to the same result, as the retroactive power is widely worded as applying to any order under

Part 4. Practically speaking, if Evraz’s position was correct and the LGIC could not amend an amended order back to the date of annexation, then the complex issues often raised by annexation could only be retroactively remedied once, even if further issues arise. Thus, there would be inconsistent results, since one set of legal rules would govern the interim period between the initial O/C and the amending O/C and the rules thereafter.

That, Alberta argues, could not have been the Legislature’s intention. [ 55 ] Further, the Legislature considered what restrictions should be placed on the retroactivity power and expressly imposed a temporal restriction (s. 138(2)) that orders-in-council can only go back to a date in the previous year. [ 56 ] Alberta further submits that if the Amending Orders do not offend the presumption against retroactivity, then they cannot offend the presumption against interfering with vested rights. iii. Issue B

[57] Alberta takes the position that a claim of discrimination is not maintainable against a Cabinet order-in-council. Albertaconcedes that municipalities have an obligation to exercise their taxation power in a fair and equitable manner, but submits that the sameprinciples do not apply to the LGIC. The two entities are not comparable and there is no authority that suggests that the LGIC mustensure that annexation conditions are equitable. [58] Annexation is different from general principles of municipal taxation.

When land is transferred from one municipality toanother, transitional inequities and anomalies may often occur. The purpose of allowing the LGIC to incorporate conditions intoannexation orders is to permit it to ameliorate those impacts for adversely affected taxpayers.

Section 137 gives the LGIC wide powersto craft a tailored set of conditions, responsive to the particular situation.

Citing Brown and Evans, Judicial Review of AdministrativeAction in Canada (Toronto : Canvasback Publishing, 1998) at 15:2441, Alberta submits that such a broad grant of discretionary powerauthorizes discrimination unless it is contrary to public policy. [59] Further, Alberta submits that if annexation orders-in-council are subject to the requirement of equitable treatment, then manywould be invalid, since the whole point of many of the conditions in annexation orders is to ensure that similar properties within a newlyexpanded municipality can be treated differently.

The statutory purpose is to allow owners of similar, but recently annexed, properties toadjust to the new tax structure. Thus a similar property already in the City would pay more tax than similar, but newly annexed,property. [60] Section 2(1.1) of the Amending Orders applies to all taxpayers in the non-residential class, but the provision will producedifferent results for individual tax payers. Different results are not discriminatory in themselves. iv. Issue C [61] Alberta submits that no duty of fairness attaches to a Minister who simply makes a recommendation to Cabinet.

Further,Cabinet decisions, according to Alberta, can only be challenged on narrow grounds, not on the basis of fairness. [62] In Thornes Hardware Ltd v R, (SCC), [1983] 1 SCR 106, at p 111 noted: Decisions made by the Governor in Council in matters of public convenience and general policy are final and not reviewable in legalproceedings.

Although, as I have indicated, the possibility of striking down an order in council on jurisdictional or other compellinggrounds remains open, it would take an egregious case to warrant such action. [63] In Brown and Evans, the authors noted that the powers conferred on the LGIC, including powers to enact subordinatelegislation through orders-in-council is an exception to the principle that the Courts will review delegated legislation, and that it is notthe function of the courts to investigate the motives of Cabinet, only to ensure that statutory conditions precedent to the exercise of thepower have been satisfied (at para 15:3262). [64] Alberta submits that the decisions in Mossman and Township of South-West Oxford v.

Attorney-General for Ontario et al. (1985), (ON SC), 50 OR (2d) 297 (Ont HCJ)[1] are anomalous and inconsistent with Canadian law. [65] Alberta notes that Alberta case law has held that there is no duty of fairness on a Minister bringing a recommendation toCabinet, relying on Tsuu T'ina Nation v. Alberta (Environment), 2008 ABQB 547 (paras 49-54). There LoVecchio J held that thedecisions of the Minister was simply to place a matter and a recommendation before Cabinet.

He held that to suggest that the Courtcould impose a duty on the Minister about what can or cannot be brought to Cabinet for consideration would be “an unwarrantedinterference with the proper functioning of the Alberta Cabinet”. Further, the Court will only quash a determination or decision, not arecommendation. Slatter JA in R. v. Lefthand, 2007 ABCA 206 noted (at para 38):

It would be an unwarranted interference with the proper functioning of the House of Commons and the Provincial Legislatures to requirethat they engage in any particular processes prior to the passage of legislation. The same is true of the passage of regulations andOrders in Council by the appropriate Executive Council.

Enactments must stand or fall based on their compliance with theconstitution, not based on the processes used to enact them. [Emphasis added] [66] Alberta submits that the Minister made no decision here, was acting legislatively, and exercising discretion, none of which aresubject to the duty to be fair. Further, applying the factors in Baker v. Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 SCR 817 leads to the conclusion that there is no significant level of fairness required.

The nature of the decision bythe Minister was merely to make a recommendation, the statutory scheme has no express provision for the Minister to bringrecommendations to Cabinet, the Minister’s decision, by itself, did not affect Evraz in a significant way, there were no legitimateexpectations that led Evraz to conclude that the Minister would give it a right to prior consultation, and the Minister followed establishedprocedures. C. The City [67] The City responded to Issues D and E. i. Issue D [68] The City argues that Evraz has incorrectly analyzed the MGA provisions dealing with issuing amended tax notices.

It assertsthat the Revised Tax Notices were validly prepared to comply with the Amended Orders. [69] In particular, the City points to the differences under the MGA between tax notices and tax rolls. In particular, the Citysubmits that the limitation period for sending an amended tax notice under s. 330(1) applies only when there is an error in the tax roll;here there was no error in the tax roll, as tax credits are not mandated to indicate tax credits (s. 329). The authority to issue an amendedtax notice is found in s. 338, which contains no time limitation.

According to the City, this raises the question of what time limitationexists for the issuance of an amended tax notice. [70] The City argues that the legislation must be read as a whole.

Since s. 137 authorizes the LGIC to make orders in council inrelation to annexation, including matters affecting taxation, and it may, under s. 138(2), make those orders retroactive to a “date in theyear immediately before the calendar year in which the order was made”, s. 338 should be read as permitting a municipality toimplement any such amending order by issuing an amended tax notice. [71] Further, the City argues it had a legal obligation to comply with the LGIC’s intention that tax relief only be available to thoseproperties whose total taxes, including M & E, rose as a result of taxation. ii.

Issue E [72] The City disputes that because the property appears as two separate assessments, on two separate roll numbers and tax notices,the tax credit should be calculated separately. It notes that s. 304 of the MGA provides that all improvements to a property should beidentified on the assessment roll, together with the land.

The fact that this property, in fact three parcels of land, is identified on twoseparate roll numbers and tax assessments is not material to the intention of the LGIC that the tax credit would be applied only to non-residential properties, including an M & E component, that incurred an increase in taxes. [73] In particular, the City relies on the speaking notes of Minister Goudreau, which provide: This proposal meant that most non-residential properties with a machinery and equipment (M&

E) component would benefit from both a

tax decrease and the one-time tax credit. [ 74 ] The speaking notes further provide: Therefore, the final amendment I am proposing is that only those M & E properties that experienced a tax increase would benefit form the one-time tax credit . [Emphasis in original] V Analysis A. Standard of Review [ 75 ] I accept the standards of review posited by Alberta in relation to issues A, B, and C. [ 76 ] Issues D and E involve questions of statutory

interpretation of the MGA and of the Annexation Order, as amended and as implemented by the City of Red Deer. The City, however, is a party, not a tribunal in the traditional sense of judicial review. It did not make a decision per se ; in fact it submits that it is merely meeting its obligation to follow the requirements of the LGIC and its orders-in- council. [ 77 ] While framed within the context of a judicial review, I see Issues D and E raised in the application as more akin to an application under R. 3.2(2) of the Rules of Court, the successor to Rule 410 under the former Rules of Court.

In particular, I note that the relief sought by Evraz in regards to Issues D and E is not to quash a decision, but for declarations. This is consistent with an application for the determination of the rights of a party depending upon the construction of a statute and order-in-council. [ 78 ] I conclude that no standard of review is applicable to Issues D and E. B. Issue D: Are the Re-issued Tax Notices ulta vires and invalid [ 79 ] This question is essentially one of statutory

interpretation. Can a municipality validly issue revised tax notices in a year other than the year in which the taxes were imposed? The City argues that if the MGA permits the LGIC to retroactively amend annexation orders, then the MGA must also be interpreted to permit a municipality to retroactively implement the changes in the retroactive annexation order. [ 80 ] This argument would be more persuasive if the orders-in-council dealt only, or primarily, with issues of taxation, but s. 137(1) also deals with assessment, property, employees, and includes the very broad provisions of (

d) and (e), including “any matter required to properly effect or deal with annexation and the application, addition, change or substitution of this or another enactment to give effect to the annexation order.” Given the general nature of the kinds of orders that can be made under s. 137, principles of statutory

interpretation require a more nuanced review of the sections in question. [ 81 ] As the City notes, the Act has two different provisions for errors in tax rolls and errors in tax notices – s. 330 and s.

Section 330 provides that the municipality may correct an “error, omission, or misdescription” in the tax roll “for the current year only” and then send an amended tax notice. Thus, a tax notice amended under s. 330 could only be amended in the current year as well. [ 82 ]

Section 335 provides that tax notices “must be sent before the end of the year in which the taxes are imposed.”

Section 338 provides that if there is an “error, omission, or misdescription” in any of the information on a tax notice, the municipality may send an amended tax notice. The City notes that s. 338 sets out no express time limits for when an amended tax notice can be sent.

[83] Following the modern approach to statutory

interpretation the Court must consider the words of a provision in their entirecontext and in their grammatical and ordinary sense, harmoniously with the scheme of the Act, the object of the Act, and the intention ofParliament: Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 SCR 27, at para 21. [84] In my view, the ordinary meaning of these sections, read together, is that tax notices, either initial tax notices or amended taxnotices, must be issued before the end of the year in which the taxes are imposed.

This is consistent with s. 330 that says that tax rolls,and hence tax notices amended as a result, may only be amended in the current year. The importance of the date of the tax notice isreinforced by s. 336 which requires a designated officer to certify the date the tax notice is sent. I note also s. 330(2) provides that if it isdiscovered that no tax was imposed on a taxable property, a tax notice may only sent for the current tax year.

I conclude that s. 335governs the issuance of amended tax notices under s. 338. [85] Further, the intention of these provisions is to provide certainty to tax payers, as noted by the Court of Appeal in Amoco. InAmoco the Court of Appeal found that a Ministerial order under s. 605 of the MGA validly extended the time to 1997 for correcting the1996 rolls and sending out the amended 1996 notices. Unlike the Amended Orders at issue here, the order in Amoco expressly extendedthe time for determining tax liability.

The Court noted that the Orders did not interfere with vested rights pre-dating 1996, but permittedthe extra time necessary to properly assess the property. At para 13, the Court went on to note: The Orders do not interfere with the intention of finality and certainty with regard to tax liability that is contained in ss. 305 and 330. Theappellants were advised before the end of 1996 that their tax liability was not settled for 1996.

The reassessment began in 1996, wasfinished early in 1997, and the appellants were free to appeal those assessments on their merits. [86] Unlike the order in question in Amoco, the Amended Orders did not purport to extend the time limits in s. 335, and Evraz wasnot told that its tax liability was not settled. It was entitled to rely on s. 335 that tax notices would be sent by the end of the year. Iconclude that the Reissued Tax Notices were not validly issued. C. What is the correct

interpretation of s. 2(1.1)? [87] As a preliminary matter, I wish to address the evidentiary value to be given to the Minister’s speaking notes, contained inAlberta’s “Record of the Proceedings”. Counsel for Alberta noted in the Record: Although there is no positive evidence that the Minister actually read these out at the Cabinet meetings, they are the only record of whathe might have said.

Cabinet meetings consist mainly of oral discussions. [88] In light of this concession, I can give only minimal weight to this document; it is not contained in an affidavit swearing thatthese comments were made and there is no indication beyond the above statement that it might have been read out. The Court of Appealhas recently commented on the value of evidence such as this in Lameman v.

Alberta, 2012 ABCA 59 (at para 50): What is even more serious, fairly often the information given here is in an unsworn document such as a letter, and the affidavit attaching the document does not even swear to a belief in its truth. That is not evidence atall. (Emphasis added) [89] Moreover, while the principles of statutory

interpretation include some consideration of extrinsic evidence such as Hansard todetermine the purpose of legislative enactments (Reference re Securities Act, 2011 SCC 66 at para 64), in my view this document doesnot rise to the reliability of Hansard, a solemn affirmation, as in Quebec (Attorney General) v. Lacombe, 2010 SCC 38, or the minutes ofparliamentary committees Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31.

[ 90 ] Further, although the parties’ submissions allege the City approached the Minister to complain about the MGB decision, the Recommendation for Order-in-Council dated December 3, 2010 states only that the amendment is to “address concerns raised by the City of Red Deer concerning assessment and taxation conditions set out in the original Order in Council”.

That adds nothing more to the record than the discussion in the MGB’s 2 nd Order that the City had expressed concerns about assessment and taxation in the original Annexation Order. [ 91 ] The Record also includes a copy of a letter to the City from Mary Anne Jablonski, Minister and MLA for Red Deer North, and Cal Dallas, MLA for Red Deer South. In that letter, the authors say: We are happy to inform you that following significant consideration of the City’s request for clarification on your recent annexation Order in Council 531/2009 ( sic ). The following amendments have been made: ...

The onetime tax credit for non-residential properties has been restricted to properties that will experience an increase in taxes as a result of moving from the County to The City... [ 92 ] Again, this letter has limited evidentiary value, but beyond that it does not say that the amendment was made to either remove Evraz’s tax credit or to exclude properties with M & E from the tax credit. [ 93 ] Accordingly, s.2 of Appendix C in the Amended Orders must be interpreted on the plain wording, informed by the fact that the language used in the orders-in-council differs from the recommendation in the MGB’s 2 nd Order.

The first amendment to s.2 (O/C 477/2010) reads: 2(1) If the Red Deer County mill rate is less than the City of Red Deer mill rate in the year of annexation, the City of Red Deer must provide all residential properties and all non-residential properties excepting linear and railway properties a one-time, non-refundable tax credit.

(1.1) For the non-residential properties referred to in subsection (1), the one-time, non-refundable tax credit will be restricted to those properties that experience an actual increase in the amount of their taxes that would be payable in the year of annexation based upon the fact that the property is now located in the City of Red Deer.

(2) To calculate the tax credit referred to in subsection (1) for a property, the City of Red Deer shall determine the difference between the City of Red Deer and Red Deer County mill rates that would be applicable to the property in the year of annexation. The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer County for the purposes of taxation in the year of annexation excluding the assessed value of machinery and equipment .

The result multiplied by ten (10) is the one time, non-refundable credit for the property . [ 94 ] The provision amended by O/C 103/2011 now reads: 2(1) If the Red Deer County mill rate is less than the City of Red Deer mill rate in the year of annexation, the City of Red Deer must provide all annexed residential properties and all annexed non-residential properties excepting linear and railway properties a one-time, non-refundable tax credit. (1.1) Subsection (1) applies to a non-residential property only if, as a result of that property being annexed to the City of Red Deer, the taxes for that property in the year of annexation are higher than they would have been if the property had remained in Red Deer County.

(2) To calculate the tax credit referred to in subsection (1) for a property, the City of Red Deer shall determine the difference

between the City of Red Deer and Red Deer County mill rates that would be applicable to the property in the year of annexation. The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer County for the purposes of taxation in the year of annexation excluding the assessed value of machinery and equipment. The result multiplied by ten (10) is the one time, non-refundable credit for the property. [ 95 ] In my view, the differences between the two versions are not material.

Both versions of s.2(1.1) reference the non-residential property in s.2(1), and provide that the tax credit in (1) only applies if “those properties” experience an actual increase in taxes or if the taxes in the year of annexation are higher for “that property”. The property in (1) is “non-residential property”, with no mention of M & E. Moreover (2) expressly provides that the value of the property, as determined by the County of Red Deer, is to exclude the assessed value of M & E.

In my view, reading this provision as whole, the tax credit is applicable to non-residential property that experiences an increase in taxes after annexation, excluding the assessed value of M & E. [ 96 ] What inference should be drawn from the fact that the Amending Orders differed from the 2 nd MGB Order?

The Amended Orders differed in three respects; the orders: 1. added a clause to s.2 (1) – “If the Red Deer County mill rate is less than the City of Red Deer mill rate in the year of annexation; 2. added s.2 (1.1); and 3. slightly changed the wording of the last sentence in s.2(2). [ 97 ] Of significance is the fact that both Amending Orders adopted the MGB’s recommended change in s.2(2): “ The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer County for the purposes of taxation in the year of annexation excluding the assessed value of machinery and equipment .” [Emphasis reflects the change between the Annexation Order and the Amended Orders]. [ 98 ] The changes to (1) merely puts back the language the MGB originally used in the 1 st MGB Order to add clarity.

The differences between the MGB’s version and the Amended Orders’ version of s.2 (2) simply reduce two sentences to one; there is no substantive difference. [ 99 ] The only possible material change is found in (1.1). Subsection (1) addresses differences in mill rates, while s. (1.1) is addressed to increase in taxes. Yet the

section does not say it is meant to apply to non-residential properties with M & E. [ 100 ] Section (1.1) in the first Amended Order says that the tax credit is only available to the non-residential properties referred to in s.(1) that experience an actual increase in their taxes. The properties referred to in s. (1) are “all non-residential properties”, with no mention or exclusion of non-residential properties that also have assessed M & E. The final version of s. (1.1) says that the tax credit in s.(1) applies to a non-residential property only if the taxes for that property are higher.

There is no mention of, or inclusion of, M & E. Thus, on the plain and ordinary language of the sub-section, there is nothing to suggest that when calculating if there is an increase in taxes, M & E should be considered. [ 101 ] Moreover, s.2(2) expressly says that when calculating the tax credit, the value of the property as determined by Red Deer County should exclude the assessed value of M & E. That clause was recommended by the MGB in its 2 nd Order, when it rejected the City’s submissions that annexed non-residential property with M & E should not receive the tax credit.

It is clear that the MGB recommended this change to address that argument. The LGIC accepted that recommendation. [ 102 ] As a result, the City’s argument that the Amended Orders took away the tax credit must fail. Legislation must be read to avoid inconsistency, incompatibility, and absurd results: Rizzo Shoes (at para 27 ). Subsection (1.1) cannot be read as disqualifying non- residential property with M & E from the tax credit when (2) expressly provides that the calculation of who is entitled to the tax credit expressly excludes the assessed value of M & E.

Therefore, s. (1.1) does not disentitle Evraz from the tax credit and the Reissued Tax Notices were issued without authority and are void.

D. Conclusion on Issues D and E [103] I conclude that the Reissued Tax Notices were invalid and that the City could not issue tax notices for 2010 taxes in 2011 andthat, in any event, the Amended Orders did not remove the tax credit. If I am wrong on either or both these issues, I will address IssuesA, B, and C. E. Are the Amending Orders ultra vires? [104] Evraz argues that the LGIC did not have authority under the MGA to make the orders retroactive or that affected affect vestedrights.

Evraz argues that s. 137(3) can only apply to the original order for annexation and that s. 138 only applies to permit retroactiveorders in council if there is an order. [105] It may be that s. 137(3) only applies to the original annexation order, but I do not accept Evraz’s submission that s. 138(1) and(2) are restricted to errors as set out in (3).

Section 138 does not refer to the original order; it is more general than s. 137(3) as it refers to“An order ... under this Part”. Further (1)(

a) says expressly that such an order may provide “for the retroactive application of the orderor any of its provisions” without any qualification except that set out in (2) “an order or any of its provisions may only be maderetroactive to a date in the year immediately before the calendar year in which the order is made”. [106] Interpreting this legislative provision requires consideration of the structure of the section. The first subsection permitsretroactive orders, but only within a calendar year. Then s.138(3) raises the question of error in the original order.

Practically speakingerrors, as opposed to substantive changes, have a different impact. An error may take some time to become apparent, while thelegislation intends that substantive changes be limited in time. In my view, s.138(3) allows for a correction of an error effective the dateof the original order, and that date may be further back than the limit on retroactivity set out in s.138(2). [107] I agree with Alberta that to conclude, as Evraz argues, that only the initial annexation order may be retroactively amended,renders the

section impotent. Moreover, practically speaking, given the complex issues that are often raised by annexation, it makes nosense to say that only the original order can be amended retroactively. [108] If it were necessary, I would also conclude that Alberta is correct that the combined effect of s. 25(4) of the

Interpretation Actand s. 125 and 137 of the MGA authorize the retroactive amendments. F. Is a claim of discrimination available against the Amending Orders? [109] Most of the cases relied on by Evraz in support of its position that an order-in-council cannot discriminate deal with situations inwhich the impugned decisions were made by municipal authorities, and are thus distinguishable. [110] Its additional authorities include the decision by the Supreme Court of Canada in Forget, dealing with the ability of the Officede la langue francaise to make regulations which discriminated among classes of professionals.

The Supreme Court there reviewed theadministrative law principle that the power to regulate does not include the power to discriminate, unless the empowering legislation,either expressly or by necessary implication granted the authority to discriminate (in the “neutral sense of the word”). The Court notedthat the legislation granted the Office broad discretion to determine by regulation various methods of assessing applicants’ knowledge ofFrench, and that this broad discretion, by implication, conferred on the Office the power to draw distinctions among classes. Thus thequestion is one of legislative

interpretation. Subordinate legislation may discriminate if the empowering legislation so permits. [111] Importantly, the question is not one of addressing Cabinet’s intentions or purposes. As noted by Alberta, the Court will notinquire into the motives of a Cabinet decision (Thorne's Hardware Ltd. v. The Queen, (SCC), [1983] 1 SCR 106 at112-113): It is neither our duty nor our right to investigate the motives which impelled the federal Cabinet to pass the Order in Council,

Attorney-General for Canada v. Nallet & Carey Ld., (UK JCPC), [1952] A.C. 427, at p. 445; Reference re ChemicalRegulations, (SCC), [1943] S.C.R. 1, at p. 12... I agree with the Federal Court of Appeal that the government's reasons for expanding the harbour are in the end unknown.

Governmentsdo not publish reasons for their decisions; governments may be moved by any number of political, economic, social or partisanconsiderations. [112] As noted by Alberta, part of the purpose of orders in council under s. 137 is to discriminate among similar properties in order toprovide a transition for properties experiencing changes in tax structure as a result of annexation. The authority granted to the LGIC isbroadly worded and I conclude that, by implication, the LGIC was granted the authority to discriminate among classes of property. TheAmending Orders are not ultra vires under this ground. G.

Was there a breach of the duty to be fair? [113] In Baker v. Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 SCR 817, L’Heureux-DubéJ noted (at para 20): The fact that a decision is administrative and affects “the rights, privileges or interests of an individual” is sufficient to trigger theapplication of the duty of fairness: Cardinal v. Director of Kent Institution, (SCC), [1985] 2 SCR 643, at p. 653. [114] The concept of procedural fairness is variable and that the parameters of what constitutes procedural fairness will changedepending on the context of the case.

L’Heureux-Dubé J held (at para 21): The existence of a duty of fairness, however, does not determine what requirements will be applicable in a given set of circumstances. AsI wrote in Knight v. Indian Head School Division No. 19, (SCC), [1990] 1 S.C.R. 653, at p. 682, “the concept ofprocedural fairness is eminently variable and its content is to be decided in the specific context of each case”. All of the circumstancesmust be considered in order to determine the content of the duty of procedural fairness... [115] Those factors may be summarized as follows: 1.

The nature of the decision being made and the process followed in making it (The more important the decision and thecloser the process resembles a judicial process, the greater the requirement of procedural fairness.) 2. The nature of the statutory scheme and the terms of the statute pursuant to which the body operates (Greater proceduralprotections are required where the governing statute provides limited protection, for example, where the decision is final and there is noappeal.) 3. The importance of the decision to the individual(

s) affected (The more important the decision, the greater the need for proceduralfairness.) 4. The legitimate expectations of the person(

s) challenging the decision (If there is a legitimate expectation that a certain procedurewill be followed, the duty is greater.) 5. The choice of procedure made by the administrative body itself (Does the statute give the administrative body the ability tochoose its procedure? Does the body have special expertise?)

[116] The first question to be asked is whether the duty to be fair applies in these circumstances. Courts have held that the duty doesnot extend to Cabinet decision that are legislative in nature: Inuit Tapirisat of Canada (at 758-59): It may be said that the use of the fairness principle as in Nicholson, supra, will obviate the need for the distinction in instances where thetribunal or agency is discharging a function with reference to something akin to a lis or where the agency may be described as an'investigating body' as in the Selvarajan case, supra.

Where, however, the executive branch has been assigned a functionperformable in the past by the Legislature itself and where the res or subject matter is not an individual concern or a rightunique to the petitioner or appellant, different considerations may be thought to arise. [Emphasis added] [117] Dickson J also addressed this question in Martineau (at 628-29): A purely ministerial decision, on broad grounds of public policy, will typically afford the individual no procedural protection, and anyattack upon such a decision will have to be founded upon abuse of discretion.

Similarly, public bodies exercising legislative functionsmay not be amenable to judicial supervision. On the other hand, a function that approaches the judicial end of the spectrum will entailsubstantial procedural safeguards. Between the judicial decisions and those which are discretionary and policy-oriented will be found amyriad decision-making processes with a flexible gradation of procedural fairness through the administrative spectrum. That is whatemerges from the decision of this Court in Nicholson.

In these cases, an applicant may obtain certiorari to enforce a breach of the duty ofprocedural fairness. [118] Brown and Evans, in Judicial Review of Administrative Action in Canada, discuss the characteristics that must be considered indetermining whether Cabinet is exercising a legislative power. The first is the element of generality: “the power is of general applicationand when exercised will not be directed at a particular person.” (7:2330).

The second is that “its exercise is based essentially on broadconsiderations of public policy, rather than on facts pertaining to individuals or their conduct.” (7:2330). The authors further note thatgenerally when the exercise of a power takes the form of making a regulation, a by-law, or order-in-council, the power is legislative innature.

However, the form of the instrument will not be determinative, as the context will be important in determining whether theaction is more legislative or more judicial. [119] Examples where a duty of fairness applied include a rezoning by-law enacted to resolve a dispute between a property owner andneighbours (Wiswell v Winnipeg (City), (SCC), [1965] SCR 512); a condominium conversion resolution power by citycouncil was not legislative because the decision was limited to one specific condominium conversion application (P.J.D. Holdings Inc.v.

Regina (City), 2010 SKQB 386); and a rezoning by-law that had both quasi-judicial and legislative components (Petherbridge v.Lethbridge (City), 2000 ABQB 699). [120] Here, I conclude that the orders in council are legislative in nature. Although Evraz argued that the Amending Orders wereintended to apply primarily to it, since it represented 84% of the assessed value of the properties in question, this is not evidence that thatwas the intention of the Amending Orders, only that the effect would be greater for Evraz.

The MGB hearing may have been akin to a lisbetween parties, but its ultimate decision was based on policy grounds, not a determination of rights between the City and particularproperty owners. The LGIC did not accept all the MGB’s recommendations, but we have no reliable evidence as to why that was. TheCourt will not inquire into Cabinet motives, particularly where the decision is policy oriented.

There may be many factors at play insuch decision, but they are not justiciable. [121] The language of the Amending Orders, like the Annexation Order, are broad and general in nature; they apply to all propertyowners who fall within the category identified in the orders. Evraz argues that the rights of a limited number of persons were directlyaffected by the decision. The effect of the orders may be primarily experienced by Evraz, but that is different than an order that isdirected at a specific person or entity.

The duty must arise from the nature of the decision, not the numbers of persons affected by it. [122] Even if the decision by the LGIC falls closer to the administrative/quasi-judicial end of the spectrum than to the legislative end,I find that the content of procedural fairness to be applied would be minimal. The nature of the decision is more legislative thanadjudicative, reflecting policy decisions. Moreover, the statutory scheme gives the LGIC broad discretion to make orders dealing withannexation, including issues of taxation and assessment.

While the decision may have a significant financial effect on Evraz, in light of

the other factors, this is not determinative. Further, Evraz had no legitimate expectation that it would have notice or an opportunity to address Cabinet and Cabinet procedure is not adjudicative. [ 123 ] Finally, the Minister made no decision, and therefore it cannot be said that he owed Evraz a duty to be fair. VI Conclusion [ 124 ] I have concluded that the Reissued Tax Notices were invalid and further that the Amended Orders, properly interpreted, do not revoke the tax credit.

As a result, Evraz was entitled to the tax credit for the full amount of the difference between the mill rate of the County of Red Deer and the City, times ten, without consideration of the M &E property assessment. [ 125 ] If I am wrong about either of these conclusions, I have concluded that the Amended Orders were validly enacted by the LGIC. The MGA authorized it to make such amending orders retroactive and to discriminate among classes of property owners. Finally, neither the LGIC or the Minister owed Evraz a duty of procedural fairness.

VII Remedy [ 126 ] Evraz seeks a Declaration that the Reissued Tax Notices were invalid and an Order compelling the City to return to Evraz any monies wrongfully collected. [ 127 ] I therefore grant the following relief: 1. A Declaration that the re-issued Tax Notices were invalid and contrary to the provisions of the Annexation Order and the Amended Orders; and 2. Order the City to return the monies wrongfully collected under the Reissued Tax Notices. Heard on the 1 st and 2 nd day of December, 2011 Dated at the City of Edmonton, Alberta this 12 th day of March, 2012 L. Darlene Acton J.C.Q.B.A.

Appearances: Leonard D. Andrychuk, Q.C. MacPherson Leslie & Tyerman LLP 1500 - 1874 Scarth Street Regina, SK S4P 4E9 for the Applicant Tim Hurlburt, Q.C. Alberta Justice 9 th Floor, Peace Hills Trust Tower 10011 109 Street Edmonton, AB T5R 3S8 for the Respondent - Her Majesty the Queen in Right of Alberta, the Lieutenant Governor in Council, The Minister of Municipal Affairs Donald J. Simpson Chapman Riebeek LLP 300, 4808 Ross Street Red Deer, AB T4N 1X5 for the Respondent - City of Red Deer Appendix A [1] The contested portions of the order-in-council appear in Appendix C of both the Municipal Government Board (MGB) order and the relevant orders-in-council.

Section 2 of Appendix C in O/C 531/2009 (the Annexation Order) was identical to that recommended by the MGB in its Order. It provided: 2(1) If the Red Deer County mill rate is less than the City of Red Deer mill rate in the year of annexation, the City of Red Deer must provide all residential, industrial and commercial properties a one-time, non-refundable tax credit.

(2) To calculate the tax credit referred to in subsection (1) for a property, the City of Red Deer shall determine the difference between the City of Red Deer and Red Deer County mill rates that would be applicable to the property in the year of annexation. The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer county for the purposes of taxation in the year of annexation. The difference is to be multiplied by ten. The result is the one time, non-refundable credit for the property.

(3) A tax credit determined for a property under this

section must be applied first to any arrears and then to any other amount owing under a tax notice for the property. Any remainder is to be retained by the City and applied against future tax notices for the property until the credit is exhausted. The first application of the tax credit must occur after September 1, 2009 and before April 1, 2010. [2] In the 2 nd MGB Order, the MGB recommended two relevant changes to Appendix C of the Annexation Order.

The first was to replace s.2(1) with the following language: 2(1) The City of Red Deer must provide all residential properties and all non-residential properties excepting linear and railway properties a one-time, non-refundable tax credit. And the second would replace 2(2) with the following:

(2) To calculate the tax credit referred to in subsection (1) for a property, the City of Red Deer shall determine the difference between the City of Red Deer and Red Deer County mill rates that would be applicable to the property in the year of annexation. The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer County for the purposes of taxation in the year of annexation excluding the assessed value of machinery and equipment. The difference is to be multiplied by ten (10).

The result is the one time, non-refundable credit for the property. [Emphasis reflects recommended changes to the language from the Annexation Order] [3] In December 2010, s. 2 of Appendix C in O/C 531/2009 was amended by O/C 477/2010 (the 2010 Amending Order) as follows: 2(1) If the Red Deer County mill rate is less than the City of Red Deer mill rate in the year of annexation, the City of Red Deer must provide all residential properties and all non-residential properties excepting linear and railway properties a one-time, non- refundable tax credit.

(1.1) For the non-residential properties referred to in subsection (1), the one-time, non-refundable tax credit will be restricted to those properties that experience an actual increase in the amount of their taxes that would be payable in the year of annexation based upon the fact that the property is now located in the City of Red Deer.

(2) To calculate the tax credit referred to in subsection (1) for a property, the City of Red Deer shall determine the difference between the City of Red Deer and Red Deer County mill rates that would be applicable to the property in the year of annexation. The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer County for the purposes of taxation in the year of annexation excluding the assessed value of machinery and equipment. The result multiplied by ten (10) is the one time, non-refundable credit for the property .

(3) A tax credit determined for a property under this

section must be applied first to any arrears and then to any other amount owing under a tax notice for the property. Any remainder is to be retained by the City and applied against future tax notices for the property until the credit is exhausted. The first application of the tax credit must occur after September 1, 2009 and before April 1, 2010. [Emphasis added to illustrate amended terms]

[4] In March 2011, s. 2 of Appendix C in O/C 103/2011 (the 2011 Amending Order) amended O/C 531/2009, as amended by O/C 477/2010, effective January 1, 2010: 1. Appendix C is amended ... (

b) in

section 2 (

i) in subsection (1) by striking out “all residential properties and all non-residential properties” and substituting “all annexed residential properties and all annexed non-residential properties”; (ii) by repealing subsection (1.1) and substituting the following: (1.1) Subsection (1) applies to a non-residential property only if, as a result of that property being annexed to the City of Red Deer, the taxes for that property in the year of annexation are higher than they would have been if the property had remained in Red Deer County. [5] As a result of the last amendment, s. 2 of Appendix C reads: 2(1) If the Red Deer County mill rate is less than the City of Red Deer mill rate in the year of annexation, the City of Red Deer must provide all annexed residential properties and all annexed non-residential properties excepting linear and railway properties a one- time, non-refundable tax credit. (1.1) Subsection (1) applies to a non-residential property only if, as a result of that property being annexed to the City of Red Deer, the taxes for that property in the year of annexation are higher than they would have been if the property had remained in Red Deer County.

(2) To calculate the tax credit referred to in subsection (1) for a property, the City of Red Deer shall determine the difference between the City of Red Deer and Red Deer County mill rates that would be applicable to the property in the year of annexation. The difference between the two mill rates is to be applied to the assessed value of the property as determined by Red Deer County for the purposes of taxation in the year of annexation excluding the assessed value of machinery and equipment. The result multiplied by ten (10) is the one time, non-refundable credit for the property.

(3) A tax credit determined for a property under this

section must be applied first to any arrears and then to any other amount owing under a tax notice for the property. Any remainder is to be retained by the City and applied against future tax notices for the property until the credit

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