Taylor Processing Inc v Alberta (Minister of Energy), 2023 ABKB 64

Court of King’s Bench of Alberta Citation: Taylor Processing Inc v Alberta (Minister of Energy), 2023 ABKB 64 Date: 20230201 Docket: 1901 06896, 2001 07670, 2001 07759, 2101 03026 Registry: Calgary Between: 1901 06896 Taylor Processing Inc. Applicant - and – His Majesty the King in the Right of Alberta as represented by The Minister of Energy Respondent And Between: 2001 07670 Nova Chemicals Corporation Applicant - and - His Majesty the King in the Right of Alberta as represented by The Minister of Energy Respondent And Between: 2001 07759 Taylor Processing Inc. Applicant - and - His Majesty the King in the Right of Alberta as represented by The Minister of Energy Respondent

And Between: 2101 03026 Nova Chemicals Corporation Applicant - and - His Majesty the King in the Right of Alberta as represented by The Minister of Energy Respondent _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice O.P. Malik _______________________________________________________ I.

Introduction [ 1 ] There are four separate applications for judicial review before me. [ 2 ] The first (1901-06896) application is brought by Taylor Processing Inc. (“Taylor”) in respect of a Notice of Determination issued by the Royalty Operations Branch of Alberta Energy (the “Department”) on November 16, 2018 (the “First Notice of Determination”) concerning royalty invoices issued for production years 2013-2016 (“JR #1”). [ 3 ] The second (2001-07670) and third (2001-07759) applications are brought by Taylor and NOVA Chemicals Corporation (“Nova”) in respect of a decision made by the Department’s Director of Dispute Resolution (the “DDR”) on March 27, 2020 (the “Final Decision”), which upheld the First Notice of Determination (“JR #2” and “JR#3”, respectively). [ 4 ] The fourth (2101-03026) application is brought by Nova in respect of a second decision by the Department on October 27, 2020 (the “Second Notice of Determination”) made for the same reasons as the First Notice of Determination but in respect of the 2017 production year (“JR #4”).

II. Background A. The Parties and the Harmattan Plant [ 5 ] The applications concern the calculation of royalties to which the province claims it is entitled pursuant to the Mines and Minerals Act , RSA 2000, c M-17 (the “ MMA ”) in respect of gas processing undertaken at the Harmattan Gas Processing Plant (“Harmattan”). [ 6 ] Taylor, a wholly owned subsidiary of AltaGas Ltd. (“AltaGas”) was the operator of Harmattan until January 1, 2016, when it was succeeded by AltaGas. [ 7 ] Harmattan has been operating as a gas plant since 1960.

Originally, it processed only raw gas, which is unprocessed gas delivered from upstream field facilities. Upon being processed, that gas is subject to royalties. Once those royalties are paid, no further royalties are owing. [ 8 ] In 2010, the Energy Resources Conservation Board (the “ERCB”) (now the Alberta Energy Regulator (“AER”)) approved Taylor’s application to expand Harmattan’s operations to include processing co-stream gas. [ 9 ] Co-stream gas is gas that already has been processed elsewhere and upon which royalties already have been paid.

Consequently, by the time it reaches Harmattan, it is royalty exempt. Nova delivers it via the Nova Gas Transmission Line to Harmattan to extract the natural gas liquids for use in its manufacturing operations. [ 10 ] As the operators of Harmattan, Taylor and AltaGas are not responsible for payment of royalties, but only for metering and reporting all gas volumes that are processed for the purpose of calculating royalties.

B. Reporting Gas Volumes [ 11 ] In Alberta, royalties are reserved to the Crown on minerals, including natural gas (

section 33 of the MMA ). As discussed above, royalties are paid only once on the same gas volume; double collection of royalties from the same volume of gas is not permitted ( sections 8 and 9 of the Natural Gas Royalty Regulation, 2009 , Alta Reg 221/2008 (“ Royalty Regulation ”)). [ 12 ] Volumes of gas that arrive at Harmattan must be metered and reported for the purpose of calculating royalties ( sections 22 - 23 of the Royalty Regulation ). Since raw gas is subject to royalties upon processing at Harmattan while co-stream gas is not, the volume of each type of gas delivered to Harmattan is tracked separately.

Raw gas and co-stream gas do not arrive at Harmattan through the same physical inlet. The gas streams are segregated and flow through various pipes and processing equipment before being co-mingled. [ 13 ] Gas volumes arriving at Harmattan are reported electronically through a system called Petrinex. Petrinex is administered by the Department in accordance with the Minister’s directions ( section 6(1) (

a) of the Royalty Regulation ). [ 14 ] Use of Petrinex is mandatory to ensure consistent reporting across the industry and an auditable basis to determine accurate payment of royalties. Petrinex is a critical component of Alberta’s royalty regime since royalties are calculated based on those reported gas volumes. [ 15 ] Gas loses volume during processing. Some is lost through venting and flaring while some, called “fuel gas”, is required to power various processing equipment.

Royalties are calculated based on the volume of gas after it has been processed net of shrinkage rather than on the gross volume of gas when processing commences. [ 16 ] To ensure that co-stream gas re-processed at Harmattan is not subject to further royalties, Taylor was instructed by the ERCB to report co-stream gas volumes net of fuel gas shrinkage to a separate royalty-exempt account called WG99999 (the “WG Account”). This is a code used in Petrinex to report royalty-exempt gas volumes that re-enter the royalty network and that, unless separately reported, would attract royalty charges. 1.

Fuel Allocation Procedure [ 17 ] Since raw and co-stream gas are subject to different royalty treatment, Taylor needed a reporting system that differentiated volumetric reporting for each gas stream. It used a system which it had devised called the “Fuel Allocation Procedure” that was “designed to accurately reflect the specific operations at [Harmattan], including actual measurements and actual usage of fuel gas by the co-stream gas volumes”. [ 18 ] The Fuel Allocation Procedure recognizes that raw and co-stream gas require different processing equipment and fuel inputs.

Since co-stream gas has already been subject to some processing, it uses less fuel gas than raw gas. Nearly half the fuel gas used at Harmattan for gas processing is used in equipment that does not process co-stream gas. Some equipment, such as electric compressors used only to process co-stream gas, does not require fuel gas at all. [ 19 ] Gas volume reporting at Harmattan is fully automated with checks at various stages to monitor accuracy.

Reports are produced and daily balances are reviewed to ensure the system is functioning properly. [ 20 ] Between 2012 and 2016, the Department did not provide Taylor with any indication of any issues with the volumetric reporting of co-stream gas to the WG Account in accordance with the Fuel Allocation Procedure. C. The Department’s Involvement [ 21 ] This changed on April 12, 2016, when the Department provided AltaGas with a spreadsheet containing a reconciliation of gas volumes for the 2015 production year using its own methodology.

The Department applied a strict pro-rata allocation of fuel gas between the volumes of raw and co-stream gas (the “Pro-Rata Fuel Allocation Approach”) rather than the Harmattan-specific Fuel Allocation Procedure, which accounts for the different inputs of fuel gas required to process raw and co-stream gas.

The Department did not identify any specific reporting inaccuracy or misrepresentation with the Fuel Allocation Procedure. [ 22 ] The effect of the Department’s approach is to increase Nova’s royalty payments because increasing the volume of fuel gas attributable to the processing of co-stream gas decreases the amount of royalty-exempt co-stream gas and increases the amount of royalty-payable raw gas. [ 23 ] AltaGas objected to the Pro-Rata Fuel Allocation Approach and maintained that it was incorrect for the Department to allocate the same proportion of fuel gas for processing raw gas as co-stream gas when, at Harmattan, each gas stream requires different amounts of fuel gas.

AltaGas advised it had reviewed the Department’s spreadsheet and explained why the Pro-Rata Fuel Allocation Approach was not reasonable. It requested that the issue be referred to the Department’s director level. [ 24 ] In November 2016, the Department issued a Gas Royalty Operations Information Bulletin (the “IB”) and an accompanying Appendix B titled “WG99999 General Business Rules” (the “IB Rules”) regarding the terms of use of the WG Account. The IB indicates that a party wanting to report to the WG Account must submit an annual application to the Department to establish eligibility.

Eligibility requires “auditable proof” that royalties already have been paid on gas volumes (such as co-stream gas) that re-enter the network. The IB Rules provide that approval for use of the WG Account may be terminated retroactively where the Department determines that a party has over-allocated royalty-exempt volumes of gas to the WG Account or otherwise has not provided accurate reporting information.

The IB Rules permit the Department to impose shrinkage at a predetermined rate where it believes that shrinkage is not being fairly represented. [ 25 ] In May 2017, the Department responded as follows to AltaGas’ objections:

When dealing with a royalty waived stream such as [the WG Account] in determining eligible volumes that can be allocated to [the WG Account], shrinkage is applied. Shrinkage calculation will include the removal of fuel, flare, vent, carbon dioxide, helium and nitrogen. Where shrinkage is not fairly represented for the activities taking place, it may be assigned at a predetermined rate.

All reporting to [the WG Account] must be auditable by the department; volumes must be evidenced by reporting in Petrinex...[C]o-mingled gas stream will have all fuel gas consumed deducted from the purchased gas volumes at the applicant’s operated facilities, prorated calculation will apply to fuel gas when gas passes through a non-operated facility. [ 26 ] As with its April 2016 correspondence, the Department did not specify the basis for its assertion that shrinkage was not being “fairly represented” or elaborate as to why the Pro-Rata Fuel Allocation Approach allocated shrinkage more accurately than the Fuel Allocation Procedure. [ 27 ] AltaGas objected to the Department’s position for the same reasons it had previously and inquired whether the parties could agree on a “fair pre-determined rate”. [ 28 ] AltaGas received no response and sent a follow-up e-mail to the Department in November 2017.

The Department responded by email on November 9, 2017, reiterating its view that shrinkage had not been taken into account in reporting to the WG Account, that “[t]he crown cannot be at a disadvantage therefore a shrinkage must be applied to the volumes”, that “the issue is regarding the shrinkage for fuel and flare”, that “shrinkage must be fairly represented” and that “this shrinkage calculation, which is used on all applications, provides a fair representation for both parties”.

The Department confirmed that its calculation of shrinkage would be applied “for any period that is not statute barred where there has been an over allocation and that any volumes exceeding the shrinkage caps are royalty liable”. [ 29 ] By this point, the parties were at an impasse.

AltaGas requested a further meeting, but the Department responded in an email dated November 15, 2017, that it had “applied the methodology we felt would be the fairest for your reporting scenario”, that it did not believe any further meeting “would be advantageous”, and that AltaGas could forward any “other documentation or reasons that substantiate why we shouldn’t use this calculation method”. [ 30 ] AltaGas was able to

schedule a meeting with the Department on December 6, 2017, and proposed the following agenda: ● The Department to provide history, changes, and rationale for the IB Rules and to confirm if these changes were triggered by changes to the royalty legislation. ● AltaGas to provide a brief overview of the Harmattan operations. ● AltaGas to explain why the Pro-Rata Fuel Allocation Approach is not equitable in this case. ● The Department to provide feedback on the rationale and confirm the process for officially providing backup to support the rationale. ● The Department to confirm when Nova would see changes to its invoice. ● Next steps for escalation.

Are there further options before the official appeal process? [ 31 ] However, the Department cancelled the meeting, stating, “after reviewing the agenda, there is no reason to meet this afternoon.

Please cancel the meeting”. [ 32 ] AltaGas then emailed the Department’s director as follows: My preference is to work with your team to get a solution but I feel that some well-reasoned arguments are not being considered or alternatively the method for us to have those arguments considered and addressed has not been made clear to me. [ 33 ] The director replied on December 7, 2017, stating in part: “[our] team [is] willing to assist you and will consider any new information pertaining to their review; keeping in mind, that the purpose of the review is to ensure proper reporting; that royalties are correctly calculated and that we minimize all potential risks to the Crown.” [ 34 ] In an e-mail exchange between AltaGas and the director on December 13 and 14, 2017, the Department confirmed that it would impose shrinkage caps for the years 2013-2016 based upon its assessment of the actual shrinkage of gas volumes reported into Petrinex and that AltaGas could appeal if it disagreed. [ 35 ] In July 2018, the Department provided AltaGas with its calculations of the annual shrinkage caps for each of the production years 2013-2017 and confirmed that any volumes exceeding those caps would be royalty liable.

D.

The First Notice of Determination [ 36 ] On November 16, 2018, AltaGas received the First Notice of Determination referring to the IB Rules and advising that there were “reporting discrepancies” with respect to the WG Account for each of the 2013-2015 production years, that shrinkage allocations had been over-reported and that shrinkage caps would be applied for each of those years with royalties payable on any volumes exceeding the caps. [ 37 ] Between November 2018 and February 2019, the Department provided Nova with its calculation of royalties totalling $19,530,379.77 owing for volumes exceeding the caps for each of the production years 2013-2016 (though the First Notice of Determination referred only to production years 2013-2015). [ 38 ] In December 2018, AltaGas and Nova wrote to the Department setting out their disagreement with the First Notice of

Determination, seeking an explanation of the Department’s methodology and offering to resolve the parties’ disagreement. [ 39 ] AltaGas asserted, inter alia , that the Department had incorrectly calculated the royalties owing by charging them on all gas volumes for the full month in which the cap was reached rather than only on those volumes that exceeded the annual cap (the “Calculation Errors”). [ 40 ] On January 28, 2019, the Department reiterated its position and informed AltaGas and Nova that if they disagreed with the First Notice of Determination, they could appeal.

What AltaGas and Nova did not know was that on that same day, the Department received an assessment from the AER which confirmed the accuracy of the reporting of gas volumes in accordance with AltaGas’ Fuel Allocation Procedure. E. The AER’s Involvement [ 41 ] The Department had asked the AER in September 2018 to assess the accuracy of the Fuel Allocation Procedure. The AER ultimately was satisfied with the volumetric reporting and described its communication with the Department as follows: There is no specific document that the AER prepared regarding its review of the [Fuel Allocation Procedure].

Details regarding the review and the AER’s satisfaction of the AltaGas fuel allocation process were shared verbally in a conference call with [the Department] on January 28, 2019. Multiple SMEs (subject matter experts) contributed to the discussion regarding acceptability of AltaGas fuel allocation process.

The majority of the process details about the documentation provided were done verbally, relying on each SME to share their own technical knowledge/expertise. [ 42 ] AltaGas and Nova did not discover the AER’s involvement until May 2020, when they received the following information pursuant to a FOIP request: ● The Department requested the AER’s Production Audit, Measurement and Directive staff to meet to discuss “paper gas plants” and how they can be retroactively set up and how they can be identified. ● In November 2018, the AER sent AltaGas a request for clarification and follow-up information and requested to visit Harmattan to review the facility delineation, processes, measurement, and reporting details. ● In November 2018, AltaGas provided the requested information to the AER. ● In December 2018, the AER arranged to meet with the Department and AltaGas to review the facility delineation, processes, measurement and reporting prior to looking at booking a field tour.

All parties accepted the meeting invite. ● On January 10, 2019, AltaGas personnel and AER staff met. The Department declined to attend. ● On January 17, 2019, the AER Production Audit and Measurement staff met to complete a final review of the file and formulate a response to the Department. The AER concluded that it was satisfied with the measurement/reporting aspects of the Fuel Allocation Procedure. ● The AER’s findings were shared with the Department in a telephone conference call on January 28, 2019. F.

Objections to the First Notice of Determination [ 43 ] Taylor and Nova filed objections to the First Notice of Determination (the “Objections”) pursuant to

section 2 of the Mines and Minerals Dispute Resolution Regulation AR 170/2015 (“ Dispute Regulation ”). [ 44 ] The Dispute Regulation sets out several constraints. Section 2(3) requires that, before an objection is made, the amounts allegedly owing must be paid. Section 2(4) requires that an objection may proceed only after the applicant has contacted the Department for the purpose of resolving the dispute. Section 3(2) provides that, so long as the prerequisites for filing an objection have been satisfied, the Minister must give written notice that it will review the objection.

In conducting its review, the Minister may not consider any information that was not already considered by the Department (section 4(2)). There is no appeal from the Minister’s decision in respect of the

interpretation or application of the Dispute Regulation ( section 1(2) ). [ 45 ] The necessary prerequisites were met. Nova paid the royalties claimed and Taylor and Nova provided the Department with an outline of their disagreement with a view to resolving it. As discussed below, this led to the Final Decision. Notwithstanding that procedure, on May 16, 2019, Taylor filed JR #1 with respect to the First Notice of Determination. G.

Events Leading to The Final Decision [ 46 ] In December 2019, Taylor and Nova met with the DDR and presented an explanation of the physical configuration of Harmattan and the reporting methodology underlying the Fuel Allocation Procedure. Taylor explained that 49% of the fuel used at Harmattan is used for equipment processing only raw gas. Taylor further explained that, for the months of July and September 2013, co- stream gas made up only one-third of the total volume of gas being processed but there was only a 2% drop in the volume of fuel gas used.

In August 2013, co-stream processing was entirely shut down, but fuel gas consumption decreased by only 1.4%. [ 47 ] The DDR received the Department’s submissions on February 6, 2020. The Department expressed its concerns with the accuracy of the shrinkage being reported, stating that “it was felt” that using the Pro-Rata Fuel Allocation Approach was “the fairest way to calculate shrinkage”, that the Department determines royalties based upon what is reported to Petrinex, and that the shrinkage rates the Department used in calculating shrinkage caps were “generous” and represented a three-year provincial average.

[ 48 ] The Department did not advise the DDR that it had received the AER’s assessment approving the accuracy of the Fuel Allocation Procedure. The Department did not specify how or where it believed shrinkage was not being fairly represented. Finally, no information was provided to show what parameters were used to calculate the provincial shrinkage average or whether any of those parameters bore any similarity to Harmattan’s configuration. [ 49 ] On March 16, 2020, Nova and Taylor provided the DDR with their Reply.

Taylor’s Reply states in part: the [reasons] are fundamentally unresponsive to the substantive issues raised in the Objections. In particular, [the Department] has provided no substantive response to the key issues of why, how and on what basis it came to the conclusion that [the Fuel Allocation Procedure] methodology does not fairly represent shrinkage at [Harmattan]. Indeed, it appears that [the Department] did not even consider (

i) Taylor’s allocation methodology; (ii) the unique configuration of, and process operations at, [Harmattan]; or (iii) whether the [Pro-Rata Fuel Allocation Approach] of fuel gas between raw gas volumes and co-stream volumes would fairly represent shrinkage at [Harmattan]. Additionally, [the Department’s] [reasons] entirely omits any response to the secondary issues of the manner in which [the Department] (

i) calculated the Caps; and (ii) calculated the royalties owing in respect of gas volumes exceeding the Caps. In short, [the Department’s] [reasons] demonstrate that there is simply no factual or legal justification for the imposition of the Caps, which are arbitrary and, based even on a cursory review of the configuration of [Harmattan], are a demonstrably unfit representation of shrinkage at [Harmattan]. [ 50 ] Further, Taylor asserted that since the Department had not provided any response to the Calculation Errors outlined in the Objections, Taylor’s position thereon must be accepted. H.

The Final Decision [ 51 ] On March 27, 2020, the DDR rendered its Final Decision upholding the First Notice of Determination in respect of each of the production years 2013-2015. The Final Decision did not address what royalties should be paid for production year 2016. The Final Decision is the subject of JR #2 and JR #3. [ 52 ] The DDR found that Nova and Taylor failed to adduce sufficient evidence to support their submission that processing co- stream gas requires less fuel gas than raw gas.

The DDR concludes at para 22 that Nova and Taylor’s evidence, drawn from the adjustment of fuel gas usage for the months of July, September and August 2013 was unpersuasive: Although the reduced or shut-in co-stream production for a few months in 2013 provided some indication that Taylor and Nova’s proposed fuel usage may represent the actual operations at Harmattan, I was not convinced it was enough evidence to support using Nova and Taylor’s proposed fuel gas usage percentages in the column labeled “% of Total”.

Further, in this column there was no way to verify these percentages and the brief descriptions provided in the column labeled “COMMENTS” were insufficient to justify the proposed fuel gas allocations. Further the process diagram referred to in the previous diagram only provided an overview of operations and also did not provide sufficient evidence to support Nova and Taylor’s proposed Shrinkage Make Up.

Accordingly, the Department was justified to conclude that the shrinkage was not fairly represented or that there wasn’t sufficient information to conclude that it was fairly represented. [ 53 ] Consequently, the DDR concludes at para 23 that it was appropriate to apply the shrinkage caps pursuant to the IB Rules: Since I concluded that the Department was justified to conclude that the shrinkage either wasn’t fairly represented or that the information available wasn’t sufficient to demonstrate that it was fairly represented, the IB was clear that a predetermined rate can be assigned. [ 54 ] The DDR further states at para 24 that “given the inability to assess Nova and Taylor’s allocation due to lack of supporting information even if this allocation treats co-stream and raw gas the same, I conclude it was reasonable to use this methodology as a basis for allocations to [the WG Account]”. [ 55 ] At paras 16 and 25, the DDR finds that sections 37 and 38 of the MMA confer upon the Minister broad powers “to request and review information and make determinations related to the collection of royalties” and to: create administrative mechanisms such as the annual cap, to protect the Crown from an artificial reduction in royalty and the annual caps were applied by the Department to all operators.

Further, the annual cap only became an issue when the Department adjusted the shrinkage and subsequent allocation. Consequently, I am not convinced that the application of the annual cap was unreasonable or inconsistent with Departmental practices. [ 56 ] Taylor notes that the DDR did not deal with the Calculation Errors. In response to Nova’s inquiry as to whether his decision included the First Notice of Determination’s adjustments to the 2016 production year, the DDR confirmed that the Final Decision addressed only the 2013-2015 production years. I.

The Second Notice of Determination [ 57 ] On October 27, 2020, the Department provided AltaGas with the Second Notice of Determination regarding shrinkage allocation at Harmattan for the 2017 production year. It is identical in form and substance to the First Notice of Determination dealing with earlier production years. Consequently, the Calculation Errors were repeated for the 2017 production year.

Royalties owing for the 2016 production year were not addressed. [ 58 ] In the spring of 2019, AltaGas learned that the Calculation Errors were caused by a system limitation in Petrinex that could not be overridden, and that the Department had devised a solution (the “Workaround”) with other gas operators to correct royalty overcharges caused by the Calculation Errors. AltaGas asked if it could implement the Workaround for the 2017 production year and the Department agreed. The Workaround resulted in royalties owing by AltaGas for the 2017 production year of $668,958.86 less than what

was invoiced initially. [59] On January 18, 2021, Nova objected to the Second Notice of Determination. [60] On January 26, 2021, the Department advised Nova it had “followed the same methodology as in prior years, that “the sameexplanation previously applies” and that Nova could appeal the Second Notice of Determination by filing an Objection with the DDR. [61] On February 2, 2021, the DDR inquired whether he could hold Nova’s objections in abeyance pending the Court’s finaldetermination of JR #1. No agreement was reached on that issue.

Nevertheless, the DDR advised he would not review Nova’s objectionsuntil JR #1 was judicially determined. [62] Nova then filed JR #4. III. JR #1 [63] For the most part, Taylor and Nova advance similar arguments in support of their judicial review applications in respect of theFirst Notice of Determination, the Final Decision, and the Second Notice of Determination, namely that each of these decisions isunjustified, lacks transparency and intelligibility and does not conform with the Minister’s jurisdiction pursuant to the MMA.

In addition,Taylor argues that the First Notice of Determination should be set aside on the grounds that the Department failed to meet its duty ofprocedural fairness and failed to give adequate reasons. [64] The standard of review on issues of procedural fairness is correctness: Edmonton Police Association v Edmonton (City),2007 ABCA 184 at para 3; Alberta (Securities Commission) v Workum, 2010 ABCA 405 at para 28; Suncor Energy v Alberta(Minister of Energy), [2019] AJ No 1800 at para 24. [65] Taylor cites the well-known principles regarding procedural fairness articulated in Baker v Canada (Minister of Citizenship& Immigration), (SCC), [1999] 2 SCR 817.

At paras 20-28, the Supreme Court of Canada confirmed that the duty offairness is flexible, variable, and contextual and provided a list of non-exhaustive factors to consider in determining the content of theduty. [66] Applying the Baker factors in its written submissions, Taylor recognizes that, because the royalty calculation process isadministrative rather than judicial, the Department’s duty of procedural fairness is minimal and that “AltaGas was not entitled to the fullspectrum of procedural rights that would be afforded in a trial process”.

Nevertheless, it argues that, at minimum, AltaGas and Novawere owed: an opportunity to know the case against it and to present evidence and argument in defence of its position. The principle that the partiesaffected by a decision should have the opportunity to present its case fully and fairly underlies the duty of procedural fairness and isrooted in the right to be heard.

Alta Gas was deprived of this right as [the Department] repeatedly refused to meet with it. [67] Taylor argues that, when reviewing a decision for procedural fairness, a court should “determine the scope of theadministrative decisionmaker’s duty of fairness and then decide if the duty was met”: Edmonton Police Association at para 3. I must ask“whether the proceedings met the level of fairness required by law”: Workum at para 28, and bear in mind that “the process followedwill either be fair in the circumstances, or not”: Suncor at para 24.

But I must also be mindful that, even on a standard of correctness, notevery breach or technical irregularity will amount to a reversible error. Rather, only a “defect in substance that goes to the very core ofthe tribunal’s jurisdiction” will give rise to a breach sufficiently serious that the rules of natural justice are truly engaged: EdmontonPolice Association at para 10. A. Jurisdiction [68] The Minister argues that, as the Final Decision is a reconsideration of the First Notice of Determination, I should not considerJR #1. [69] This argument has some merit.

In the normal course, a party should not be permitted to bring an application for judicialreview in respect of an initial decision that is subject to reconsideration at another level: Allergan Inc v Alberta, 2021 ABCA 32 at paras24 and 25. This avoids multiple proceedings in respect of the same decision: Foster v Alberta, 2006 ABCA 282 at para 22; GFLEnvironmental Inc v Wheatland County, 2019 ABQB 976 at paras 10-11. [70] The Minister notes that Taylor articulated its concerns about procedural fairness to the Department’s director and in itsObjections and that consequently, this issue was before the DDR.

Indeed, Taylor articulated its frustration with the Department’sseeming refusal to engage in meaningful discussions at para 50 of its Objections: The complete lack of procedural fairness shown to Taylor in this matter is made all the worse when it is considered that the foregoingoccurred over a lengthy period of time during which The Department steadfastly refused Taylor’s repeated attempts to meet with thedepartment to provide additional clarity around the various volumetric measurements and allocation processes followed at [Harmattan]. [71] While I agree that Taylor articulated its concerns regarding lack of procedural fairness in the Objections, I do not agree thatthe issue of procedural fairness was before the DDR in any meaningful way.

The focus of the DDR’s review was the Department’sdecision to impose mandatory shrinkage caps. While Taylor may have referred briefly to procedural fairness in its Objections, that wasthe not the main issue before the DDR. In any event, the DDR did not address Taylor’s procedural fairness concerns and I am preparedto address its procedural fairness submissions in respect of JR #1.

B. Procedural Fairness [ 72 ] The Department clearly was suspicious about the much-lower-than-provincial-average shrinkage rates reported at Harmattan and was convinced, based on its review of the data reported into Petrinex, that shrinkage rates were not fairly represented. While Taylor disagrees with the Department’s conclusions, I cannot identify any material information in support of Taylor’s position that the Department refused to receive and consider. [ 73 ] Simply put, the parties were at loggerheads. The Department was not as responsive to Taylor’s position as Taylor may have wanted.

It is understandable that Taylor was frustrated with the Department’s opaque reasons for rejecting its explanation of the Fuel Allocation Procedure and for what it perceived to be the Department’s reluctance to meet directly with Taylor. But it does not follow that there was more Taylor could have communicated that might have changed the Department’s perspective nor that the Department refused to allow Taylor to present further information. [ 74 ] In my view, Taylor was afforded a full opportunity to present its case to the Department, including the director.

Having considered the totality of the parties’ interactions over nearly three years in which little progress was made to narrow the disagreement gap, I am satisfied that the Department met its duty of procedural fairness. C. Adequate Reasons [ 75 ] Taylor contends that the Department failed to provide adequate reasons both in the First Notice of Determination itself and during the dispute resolution process set out in the Dispute Regulation . Taylor argues in its written submissions that the Department’s reasons were inadequate in the following respects:

i) What the “reporting discrepancies” were in the reporting of allocations to the WG Account for the 2013-2015 production years and how it had determined there to be reporting discrepancies; ii) How it concluded that there had been an over-allocation of heat and volumes to the WG Account; iii) Why it was entitled to royalties on the entire month in respect of which the annual caps were imposed; and iv) Its explanation of the Minister’s statutory authority for imposing shrinkage caps pursuant to the IB Rules. [ 76 ] Taylor concedes that the Department’s obligation to provide reasons for its decisions is not absolute as “ courts cannot expect administrative decision makers to ‘respond to every argument or line of possible analysis”: Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 at para 128 .

However, the Department’s reasons must be reasonable having regard to the “evidentiary record and general factual matrix” and must “meaningfully grapple with key issues or central arguments raised by the parties”: Vavilov at paras 126 and 128 . [ 77 ] As addressed below in my reasons on JR #2 and JR #3, I find that the Department failed in its duty to provide adequate reasons. IV. JR #2 And JR #3 A. Principles [ 78 ] The parties are agreed that the standard of review applicable to JR #2 and JR #3 is reasonableness as articulated in Vavilov .

This standard requires a court to exercise judicial restraint and to recognize the “distinct role” of the administrative decision maker: Vavilov at para 75 . The reviewing court’s task is not to reweigh and reassess the evidence: Vavilov at para 125 .

Rather, the court is to consider only “ whether the decision made by the administrative decision maker — including both the rationale for the decision and the outcome to which it led — was unreasonable”: Vavilov at para 84 . [ 79 ] Reasonableness “is concerned mostly with the existence of justification, transparency and intelligibility within the decision- making process”: Vavilov at para 86 . A decision is reasonable when it accords with the applicable law and facts, including “the governing statutory scheme; other relevant statutory or common law; the principles of statutory

interpretation; the evidence before the decision maker and facts of which the decision maker may take notice; the submissions of the parties; the past practises and decisions of the administrative body; and the potential impact of the decision on the individual to whom it applies”: Vavilov at para 106 . [ 80 ] Further, a decision that is reasonable is “based on reasoning that is both rational and logical”; the court “must be able to trace the decision maker’s reasoning without encountering any fatal flaws in its overarching logic and it must be satisfied that there is [a] line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived”: Vavilov at para 102 .

A reviewing court should not assess the decision maker’s reasons against a standard of perfection and must be sensitive to the fact that the reasons may not “include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred”: Vavilov at para 91 . [ 81 ] This does not mean that a reviewing court should simply accept the challenged decision.

Rather, it must engage in a “sensitive and respectful, but robust evaluation of administrative decision” that is intended to ensure “that courts intervene in administrative matters only where it is truly necessary to do so to safeguard the legality, rationality and fairness of the administrative process”: Vavilov at paras 12 and 13 . B. Analysis

[82] For the following reasons, I agree with Taylor and Nova that the Final Decision is unreasonable. 1. Reversed Onus [83] Pursuant to

section 37 of the MMA, the Minister is authorized to take remedial action where, in its opinion, something hasbeen done to reduce the Crown’s royalty entitlement: Artificial or undue reduction in royalty 37. If, in the opinion of the Minister, the result of one or more acts, agreements, arrangements, transactions or operations is toartificially or unduly reduce (

a) the Crown’s royalty share in respect of a mineral, (

b) the amount owing on account of a money royalty, (

c) the amount owing in respect of the disposal of the Crown’s royalty share by an agent, or (

d) the amount owing on account of royalty compensation, the royalty share or the amount owing shall be calculated as if the act, agreement, arrangement, transaction or operation had not takenplace. [84] While the phrase “in the opinion of the Minister” grants some discretion in determining whether

an act meets the abovecriteria, the opinion must be based on reasonable grounds, or at least some objective evidence, rather than merely a “best guess”. Wherelegislation directs an outcome or delegates authority conditioned on “the opinion of the [decision maker]”, the use of the word “opinion”does not connote an unfettered discretionary determination.

Rather, an opinion must be justified by appropriate reasons: R v Holmes,[1931] 3 DLR 218, (SKCA) at para 14, and be the product of an informed mind founded in established facts:Matheson & MacMillan Ltd v Prince Edward Island (Min of Finance & Tourism), 59 Nfld & PEIR189, at para 45;Re Irving Oil Ltd (Re), 34 DLR (4th) 448, at para 13 CL. Moreover, an opinion is not to be conflated with a belief —“an opinion necessarily requires something in the nature of an evidentiary basis, which the formation of a belief does not” Matheson &MacMillan at para 45. [85] The Minister bears the evidentiary onus to establish that

an act falls within

section 37 of the MMA such that royalties arepermitted to be recalculated. [86] Section 16(2) of the Royalty Regulation permits the Minister to recalculate the royalty compensation due where there has beeninformation that has been wrongly reported to Petrinex or where information has been withheld altogether: Payment of Royalty Compensation 16(2) Where the Minister is satisfied that incorrect information in Petrinex or information omitted from Petrinex may affect thecalculation of royalty compensation payable by a royalty client for a production month, (

a) the Minister may, subject to clause (b), calculate the royalty compensation on the basis of one or more assumptions that, whenapplied to the calculation, will ensure that the Crown is not financially prejudiced by the incorrect or omitted information, and (

b) when the incorrect or omitted information is corrected or entered, as the case may be, in Petrinex, the Minister shall recalculate theroyalty compensation accordingly and have any resulting difference reflected in the royalty client’s royalty client account. [87] The Minister bears the evidentiary onus pursuant to section 16(2) of the Royalty Regulation to show what “incorrectinformation in Petrinex or information omitted from Petrinex may affect the calculation of royalty” before it is permitted to recalculateroyalty compensation in accordance with section 16(2)(

a) and (b). [88] I agree with Taylor and Nova that the DDR has not adequately identified any act, agreement, arrangement, transaction, oroperation that unduly or artificially reduced the Crown’s royalty share, or what information has been incorrectly entered into, or omittedfrom, Petrinex. Neither has the DDR explained how AltaGas failed to represent shrinkage allocations fairly. The DDR simply states thathe was “not convinced” Nova and Taylor provided sufficient evidence to demonstrate that shrinkage was being fairly represented andthat there was a “lack of supporting information”.

He asserts that there was “no way to verify the percentages” of fuel gas reductionTaylor provided for the shut-in months in 2013. [89] However, the Department could and should have obtained whatever information it thought was missing or was incompletethrough its audit process. The Department has wide audit powers pursuant to

section 38 of the MMA, including the power to examine anyrecord submitted to it (s 38(2)) and to “conduct any other form of examination” (s 38(5)). The Department also has authority to requestany information it believes to be missing or incomplete. I cannot identify a single instance where Taylor and Nova were unresponsive toa request for information.

The Department could have requested any further information it was missing and its failure to do so should notadversely impact Taylor or Nova. [90] Moreover, I agree that the Department and the DDR failed to provide answers to Taylor’s legitimate questions regarding theirpreference for the Pro-Rata Allocation. AltaGas argues that the Department has not provided any evidence to show that the Pro-RataAllocation more fairly represents shrinkage at Harmattan than the Fuel Allocation Procedure.

Neither the Department nor the DDR hasclearly articulated specific concerns with the Fuel Allocation Procedure or identified misrepresentations in the shrinkage allocation otherthan to say that what was being reported at Harmattan fell well below the three-year provincial average. In my view, the DDR repeatedthe Department’s failure to articulate clearly the factual and evidentiary foundation for their conclusions.

[ 91 ] In failing to identify the evidentiary basis required to establish that Taylor and AltaGas have engaged in

an act such as to artificially or unduly reduce the amount of royalties owing pursuant to

section 37 of the MMA , or that Taylor and AltaGas had not properly reported into Petrinex in accordance with section 16(2) of the Royalty Regulation , the Department and the DDR effectively misplaced the Minister’s onus onto Taylor and AltaGas. I find that this reversal of onus renders the Final Decision unreasonable. 2.

Failure to Consider Relevant Evidence [ 92 ] Next, an administrative decision that does not consider relevant evidence cannot be justified and is unreasonable: Vavilov at para 86 . [ 93 ] When it issued the First Notice of Determination, the Department had asked for, but had not yet received, the AER’s assessment of the Fuel Allocation Procedure. The DDR did not know about the AER’s assessment of the Fuel Allocation Procedure because the AER’s involvement had not been disclosed by the Department. The AER’s assessment was evidence that was directly relevant to the central issue before the Department and the DDR.

The Department has not argued that the AER’s assessment was part of an internal or confidential review such that it should not have been disclosed. Rather, its position is that the Department was not obliged to accept the AER’s view and was entitled simply to ignore it. [ 94 ] I appreciate that neither the Department nor the DDR was legally bound to accept the AER’s assessment and approval of the Fuel Allocation Procedure. The AER does not form part of the statutory scheme of the MMA and it operates as an arm’s-length regulator in respect of its relationship with the Minister.

But I do not understand why, having requested the AER’s involvement, the Department did not inform Taylor and AltaGas that it had done so and why the Department issued the First Notice of Determination prior to receiving the AER’s assessment.

Neither do I understand why the AER’s assessment, or at least disclosure of the AER’s involvement at the request of the Department, was not provided to the DDR. [ 95 ] Throughout its written and oral submissions, the Minister emphasizes that the calculation of royalties is based only on reporting made to Petrinex and that “information outside of Petrinex” such as that reported in accordance with the Fuel Allocation Procedure, is unreliable: Candidly, the Minister does not know of any reason to dispute the information in the Fuel Allocation Procedure – but therein lies the problem: the Minister does not know.

In rendering the Decisions, [the Department] or the DDR could place no confidence in this in this document, or any other Petrinex-external records, being a reliable source of information (para 122 of the Minister’s submissions). [ 96 ] The Minister further points out (and I agree) that the AER has no jurisdiction regarding the calculation of royalties, which properly falls within the Department’s expertise. [ 97 ] Oil and gas operators who report volumetric data into Petrinex must file monthly volumetric data with the AER so that royalties can be calculated and verified: AER Directive 007 , April 8, 2021.

The AER has developed industry-wide standards for volumetric reporting into Petrinex and is the expert regulator qualified to assess the accuracy and methodology of the measurement and reporting of volumetric data from which royalty calculations may be made. Royalty calculations depend on the accuracy of volumetric reporting made to Petrinex, which the AER (and not the Department) has the expertise to assess.

In other words, the AER (which regulates volumetric reporting into Petrinex) and the Department (which calculates royalties based upon reporting into Petrinex) play complementary roles within the larger regulatory scheme. [ 98 ] The Department would not have requested the assessment if it did not believe the AER had the requisite expertise to provide it with a reliable opinion.

The Department has not identified any shortcomings or concerns with the AER’s assessment, which included meeting with AltaGas representatives, conducting an on-the-ground visit to Harmattan and consulting with its various subject matter experts. Notably, the steps taken by the AER to investigate the Fuel Allocation Procedure are what would be required to gather sufficient information to justify a conclusion that could form the basis of a reasonable “opinion” ( Holmes at para 15 ).

Having failed to take similar steps to investigate the Fuel Allocation Procedure itself, the Department’s rejection of the AER’s conclusion and formation of its own conclusion about the Fuel Allocation Procedure render the Minister’s “opinion” under

section 37 of the MMA arbitrary. It is my view that, in the absence of any other credible and substantiated source of information, the AER’s approval of the Fuel Allocation Procedure is conclusive and should have been treated as such. [ 99 ] In rendering the First Notice of Determination prior to receiving the AER’s assessment, the Department chose to ignore critical evidence that should have formed part of its determination and should effectively have satisfied any doubts the Minister says the Fuel Allocation Procedure raises.

Further, the Department’s failure to apprise the DDR of the AER’s involvement effectively precluded the DDR from making a well-informed decision based upon the AER’s assessment, which would have settled conclusively any questions the DDR would have had regarding the reporting of shrinkage at Harmattan. 3. Shrinkage Caps [ 100 ] Nova submits that the Department had no authority to issue the IB and the IB Rules. I disagree.

The Minister has authority to issue non-statutory instruments such as statements or guidelines to inform and guide regulated parties and, through the deployment of various administrative measures, to allow for more effective enforcement of the regulatory scheme: Ainsley Financial Corp v Ontario (Securities Commission) (1994), 21 OR (3d) at paras 11, 12. [ 101 ] The Minister argues that administrative decision makers may rely on non-binding instruments such as policies and guidelines and does not require explicit statutory permission: Canadian Centre for Bio-Ethical Reform v City of Grande Prairie , 2016 ABQB 734 at para 95 and Skyline Roofing Ltd v Alberta , 2001 ABQB 624 at para 78 .

It further argued in its oral submissions that the Department’s authority to issue the IB and the IB Rules are included in the Minister’s broad remedial powers (to recalculate royalty compensation) pursuant to

section 16 of the Royalty Regulation . [ 102 ] I agree that administrative decision makers have broad powers to enact non-binding instruments, but these instruments do not

have the force of law and “cannot impose mandatory requirements enforceable by sanction”, particularly “in the face of contradictory statutory provision or Regulation”: Ainsley at para 14. In other words, “an informal policy can neither be used to fetter a discretion, nor to create legally enforceable rights”: Skyline Roofing at para 78.

The authority conferred on the Department by the IB and the IB Rules cannot exceed the Minister’s jurisdiction under the MMA and, to the extent that they do, they are unenforceable. [ 103 ] I find the Department’s purported authority under the IB Rules to impose shrinkage at a pre-determined rate is inconsistent with the Minister’s remedial authority pursuant to

section 37 of the MMA . There are no criteria for determining what the pre-determined rates should be and the imposition of shrinkage caps at whatever level the Department determines could result in the Crown receiving greater royalties than what

section 37 of the MMA permits. The MMA recognizes the importance to Albertans of the Crown’s entitlement to its royalty share.

However, the Crown is entitled to collect only those royalties that are lawfully due – no more, no less and, even then, only in accordance with what is permitted under the MMA . [ 104 ] AltaGas asserts that the Department’s decision to impose annual shrinkage caps without “any factual or legal justification” produces an “arbitrary and unreasonable result that does not fairly represent actual fuel gas usage at [Harmattan]” and results in Nova having to pay royalties on otherwise royalty-exempt gas.

I agree that the IB Rules, at least potentially, have that result. [ 105 ] I find that the authority the Department granted itself under the IB Rules is inconsistent with the MMA and exceeds its jurisdiction. The First Notice of Determination, based as it is on that authority, is therefore unreasonable: Vavilov at paras 108-109 . In confirming the Department’s authority to set pre-determined shrinkage rates pursuant to the IB Rules, the DDR also acted contrary the Minister’s jurisdiction with the result that the Final Decision is also unreasonable.

Finally, if the Department was duly authorized to impose pre-determined shrinkage rates under the IB Rules, I find its assertion that shrinkage was not being “fairly represented” at Harmattan in the absence of any evidentiary justification and contrary to the AER’s conclusion constitutes an “unfounded generalization” that undermines the rationale for the imposition of the annual shrinkage caps at Harmattan ( Vavilov at para 104 ). 4.

Calculation Errors and 2016 Production Year [ 106 ] The Final Decision fails to address the Calculation Errors and the royalties invoiced for the 2016 production year, despite Nova having paid the adjusted amounts. [ 107 ] The Minister disputes that the Calculation Errors arise from a systems limitation issue in Petrinex (on this point, I am prepared to accept the uncontroverted evidence in para 79 of Kelsey Swanson’s Affidavit affirmed on May 20, 2021) and that the issue could have been resolved by having AltaGas amend its reporting so that the volumes allocated to the WG Account did not exceed the shrinkage caps.

I have some doubt regarding the Minister’s arguments given that it appears the Workaround, which had been utilized by the Department in other similar circumstances, “fixed” the Calculation Errors for the 2017 production year and resulted in less royalties having to be paid than originally assessed. [ 108 ] The DDR’s failure to address these and the royalties owing for the 2016 production year calls into question whether he appreciated those issues and their importance to Nova.

In any event, as it is acknowledged that royalties were incorrectly assessed and the Workaround has not been applied for the 2013-2016 production years (resulting in excessive royalties being charged), the First Notice of Determination and the Final Decision are unreasonable. V. JR #4 [ 109 ] It is common ground that the applicable standard of review for the Second Notice of Determination is reasonableness. For the same reasons that I have concluded the First Notice of Determination and the Final Decision are unreasonable, I also find that the Second Notice of Determination is unreasonable. VI.

Remedies [ 110 ] In the result, the First Notice of Determination, the Final Decision, and the Second Notice of Determination are quashed, leaving the question of the appropriate remedy. [ 111 ] During the proceedings, I became concerned about the possibility of animus between the Department and Taylor, Nova and AltaGas. Determining the Crown’s proper royalty share requires those administrative agencies that exercise the Minister’s delegated authority to perform their functions in a neutral, objective, and transparent manner.

Ultimately, the Department conducts an important fact-finding exercise that allows the Crown’s royalty share to be determined accurately in a manner that furthers the MMA ’s public policy objectives. In my view, the Department’s conduct in this matter casts some doubt upon its motives and objectivity and I was left with some question about its apparent hostility to whatever information Taylor and AltaGas presented in support of their position. In that respect, the Department’s approach seems purely outcome-based rather than evidence-informed.

Nevertheless, I was assured by the parties that there was no concern about animus and I accept their submissions. [ 112 ] Nova asks that I quash the First Notice of Determination, the Final Decision and the Second Notice of Determination, that I set aside each of the invoices for the production years 2013-2017, and that Nova be reimbursed for any sums it has paid thereunder plus interest in accordance with the Royalty Regulation from the date of such payment to the date of repayment. [ 113 ] It argues that remitting the matter for re-consideration by the Department or the DDR would serve no useful purpose given that:

i) I have found the decisions of both the Department and the DDR unreasonable; ii) the parties require a timely resolution without being required to resort to additional administrative processes; iii) the Department and the DDR have had ample opportunities to consider their positions; and iv) it would be costly for the parties and a waste of public resources were this matter to be remitted to the original decision makers.

[ 114 ] Alternatively, Nova proposes that the decisions be quashed and remitted to the Department and the DDR to be considered by new, previously uninvolved personnel, with an extensive list of explicit directions to ensure the reconsideration conforms with the MMA ’s statutory framework, is based upon all available relevant evidence and is justifiable, transparent, and intelligible. [ 115 ] The Minister says that, in the event I find a reviewable error in the decisions of the Department and the DDR, the proper remedy is to quash the decisions and remit them back for reconsideration.

The Minister argues that, given the “complex series of calculations” involved, there is not just one inevitable result, that it is inappropriate for this Court to step into the Department or the DDR’s shoes “to determine how to amend those calculations”, and that in the meantime, any prejudice to Nova can be addressed by repayment with interest. [ 116 ] In determining the most appropriate remedy, I am mindful that the Legislature made a deliberate policy determination that the kind of specialized decision-making entrusted to the Department and the DDR is best addressed administratively rather than by the courts: Vavilov at para 140 .

However, I should not remit a matter back to the original decision-maker where this would result in an “endless merry-go-round of judicial reviews and subsequent reconsiderations”, particularly if a particular outcome is inevitable and remitting the matter back would “serve no useful purpose”: Vavilov at para 142 . [ 117 ] In Dugarte de Lopez v Canada (Minister of Citizenship and Immigration) , 2020 FC 707 at para 32 , the Court aptly observed as follows: ...the discretion of the reviewing courts to not remit an unreasonable decision to the administrative decision maker for reconsideration must therefore be exercised carefully, with prudence and parsimony, and be limited to the rare cases where the context can only inevitably lead to a single result and where the outcome leaves no doubt.

These situations will more likely be exceptions. [Emphasis in original.] [ 118 ] I am loath to quash the decisions of the Department and the DDR without sending them back for reconsideration. I am mindful that the Legislature set up an administrative scheme that relies upon the expertise of various agencies and that replacing the decisions with my own may be viewed as a usurpation of that administrative scheme.

The threshold for quashing an administrative decision without remitting back to the original decision maker is high. [ 119 ] However, I find in this case that it would be pointless to remit the matter back for reconsideration, even to previously uninvolved decision makers given the Minister’s failure to establish an evidentiary basis for imposing the shrinkage caps and the resulting royalty payments. [ 120 ] I disagree with the Minister that a proper resolution of these matters depends on a “complex series of calculations”.

To the contrary, a proper resolution requires a fair and balanced assessment of the available evidence. The AER’s assessment conclusively proves that, at least for the production years 2013-2017, reporting into Petrinex in accordance with the Fuel Allocation Procedure was appropriate. The Minister has failed to meet its burden in accordance with

section 37 of the MMA or section 16(2) of the Royalty Regulation . In the result, it continues to hold significant royalty amounts without lawful authority. These proceedings have already taken a considerable amount of time and public resources.

A reconsideration taking into account the AER’s assessment invariably would lead to a single outcome – that royalties owing by Nova for the production years 2013-2017 at Harmattan are calculable in accordance with volumes reported under the Fuel Allocation Procedure. [ 121 ] Consequently, I order that the First Notice of Determination, the Final Decision, and the Second Notice of Determination are quashed.

The Minister shall repay the sum of $20,196,482.27 plus interest from the payment date to the date of repayment, such interest to be calculated in accordance with the applicable provisions of the Royalty Regulation . [ 122 ] The Applicants are presumptively entitled to their costs. If the parties cannot agree on costs, they may provide written submissions, not exceeding 5 pages each, within the next 30 days. I ask that the parties address McAllister v Calgary (City) , 2021 ABCA 25 in their submissions.

Heard on October 19 th , 20 th , and 21 st of October 2022 Dated at the City of Calgary, Alberta this 1 st day of February 2023. O.P. Malik J.C.K.B.A. Appearances:

Allison Sears for Taylor Processing Inc. and AltaGas Ltd. Karen Salmon, Laura M. Poppel and Taylor Kemp for Nova Chemicals Corporation Doreen Mueller K.C. and Shaheer Meenai for the Minister of Energy