2012 MBCA 1, 2012 MBCA 1

C itation: Manitoba Hydro-Electric Board v. Date: 20120104 Consumers’ Association Docket: AI 11-30-07612 of Canada (Man.) Inc. et al., 2012 MBCA 1 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : ) A. F. Foran and MANITOBA HYDRO-ELECTRIC BOARD ) L. M. Stuhldreier ) for the Applicant Applicant ) ) J. B. Williams ) for the Respondent - and - ) Consumers’ Association ) of Canada (Manitoba) Inc. ) CONSUMERS’ ASSOCIATION OF ) A. F.

Hacault CANADA (MANITOBA) INC., MANITOBA ) for the Respondent SOCIETY OF SENIORS, MANITOBA ) Manitoba Industrial INDUSTRIAL POWER USERS GROUP, ) Power Users Group MANITOBA KEEWATINOWI ) OKIMAKANAK, INC., THE CITY OF ) N. Whyte WINNIPEG, RESOURCE ) for the Respondent CONSERVATION MANITOBA, TIME TO ) Southern Chiefs RESPECT EARTH’S ECOSYSTEMS AND ) Organization SOUTHERN CHIEFS ORGANIZATION ) ) R. F. Peters, (Interveners) Respondents ) A. L. Southall and ) S. T.

Hombach ) for The Public Utilities ) Board of Manitoba ) ) Chambers motion heard: ) September 16, 2011 ) ) Decision pronounced: ) January 4, 2012 HAMILTON J.A. 1 Manitoba Hydro-Electric Board (Hydro) seeks leave to appeal Order No. 95/11 of The Public Utilities Board (PUB) (the Order) issued in the course of an application by Hydro to approve two increases in its rates for service.

The Order dismissed Hydro’s motion to set aside a subpoena issued by PUB and required Hydro to file “forthwith,” in confidence with PUB, copies of power export term sheets and contracts it entered into with three public utilities in the United States (the export contracts). 2 PUB rejected Hydro’s three grounds to set aside the subpoena, which were: 1) the export contracts are commercially sensitive; 2) they are subject to public interest privilege; and 3) they are not incidental to or reasonably required for PUB’s review of its rate application.

With respect to the third ground, Hydro asserted that PUB exceeded its jurisdiction because its purpose in demanding the export contracts for review is to approve, or disapprove, them. 3 Hydro seeks leave to appeal the Order on the basis that PUB exceeded its jurisdiction and made errors of law and fact. It sets out ten grounds of appeal in its notice of motion. 4 If leave is granted, Hydro seeks a stay of the Order pending the appeal.

5 I have concluded that leave to appeal should be granted on three questions, and that a stay of the Order until the appeal is heard is appropriate in the circumstances. Background Legislative Scheme 6 Hydro is a Crown corporation mandated to carry out the purposes and objects of The Manitoba Hydro Act , C.C.S.M., c. H190 (the Act ), as set out in s. 2 : Purposes and objects of Act 2 The purposes and objects of this Act are to provide for the continuance of a supply of power adequate for the needs of the province, and to engage in and to promote economy and efficiency in the development, generation, transmission, distribution, supply and end-use of power and, in addition, are (

a) to provide and market products, services and expertise related to the development, generation, transmission, distribution, supply and end-use of power, within and outside the province; and (

b) to market and supply power to persons outside the province on terms and conditions acceptable to the board. 7 In keeping with s. 2 (

b) of the Act , Hydro enters into contracts to sell power to export markets on the basis of both long-term commitments and short-term commitments, often called opportunity sales. 8 The sale of power outside of Manitoba and the development of new power generation stations require Hydro to obtain the approval of the Lieutenant Governor in Council pursuant to s. 16(1) of the Act : Powers of corporation with approval of L. G. in C. 16(1) With the approval of the Lieutenant Governor in Council the corporation may . . . . . (

g) acquire for use in Manitoba power generated outside Manitoba by the government of any other province, or of any state of the United States, or by any person in that other province or state; (

h) supply power generated in Manitoba to any other province or any state of the United States , or to any person in that other province or state; . . . . . (i.1) develop new power generation stations ; (

j) enter into agreements and do all things proper or necessary for the due exercise of the powers mentioned in this section. [emphasis added] 9 Order in Council No. 437/1996, issued pursuant to s. 16(1) of the Act , authorizes Hydro, from time to time, to enter into sale and purchase contracts with utilities located in the United States provided that:

(

c) no additional generation or transmission facilities are required by Manitoba Hydro due to these purchases and sales. 10 Within the Province of Manitoba, Hydro enjoys a monopoly in the provision of retail power. The rates for services charged by Hydro to consumers are reviewed by PUB and PUB’s approval is required prior to Hydro changing its rates. 11 This review process is mandated by a legislative scheme arising under the Act ,

Part IV of the Crown Corporations Public Review and Accountability Act , C.C.S.M., c. C336 (the Crown Corporations Act ), and The Public Utilities Board Act , C.C.S.M., c. P280 (the PUB Act ). 12

Part IV of the Crown Corporations Act is entitled “Public Utilities Board Review of Rates” and pertains only to Hydro and the Manitoba Public Insurance Corporation. 13 Section 26(1) of The Crown Corporations Act sets out PUB’s rate-setting mandate: Hydro and MPIC rates review 26(1) Notwithstanding any other Act or law, rates for services provided by Manitoba Hydro ... shall be reviewed by The Public Utilities Board under The Public Utilities Board Act and no change in rates for services shall be made and no new rates for services shall be introduced without the approval of The Public Utilities Board. [emphasis added] 14 Section 26(2) of the Crown Corporations Act defines “rates for services” as “prices charged by [Hydro] with respect to the provision of power as defined in The Manitoba Hydro Act .” 15 Section 26(4)(

a) of the Crown Corporations Act sets out factors PUB may consider when reviewing the rates: Factors to be considered, hearings 26(4) In reaching a decision pursuant to this Part, The Public Utilities Board may (

a) take into consideration (

i) the amount required to provide sufficient moneys to cover operating, maintenance and administration expenses of the corporation, (ii) interest and expenses on debt incurred for the purposes of the corporation by the government, (iii) interest on debt incurred by the corporation, (iv) reserves for replacement, renewal and obsolescence of works of the corporation, (

v) any other reserves that are necessary for the maintenance, operation, and replacement of works of the corporation, (vi) liabilities of the corporation for pension benefits and other employee benefit programs, (vii) any other payments that are required to be made out of the revenue of the corporation, (viii) any compelling policy considerations that the board considers relevant to the matter,

(ix) any other factors that the board considers relevant to the matter ; …. [emphasis added] 16 Section 26(3) of the Crown Corporations Act provides that the PUB Act applies to the rate review process: Application of Public Utilities Board Act 26(3) The Public Utilities Board Act applies with any necessary changes to a review pursuant to this Part of rates for services. 17 Sections 24(4) and 27(2) of the PUB Act set out certain powers of PUB: Board to have powers of Court of Queen’s Bench in certain matters 24(4) The board, except as herein otherwise provided, as respects the attendance and examination of witnesses, the amendment of proceedings, the production and inspection of documents, the enforcement of its orders, the payment of costs, and all other matters necessary or proper for the due exercise of its powers, or otherwise for carrying any of its powers into effect, has all such powers, rights, and privileges as are vested in the Court of Queen’s Bench or a judge thereof.

Power to inspect, examine witnesses, documents, etc. 27(2) The board, or any person authorized by the board to make inquiry or report, may, where it appears expedient, (

a) enter upon and inspect any place, building, works or other property; (

b) require the attendance of all such persons as it or he thinks fit to summon and examine and take the testimony of the persons; (

c) require the production of all books, plans, specifications, drawings and documents; (

d) administer oaths, affirmations, or declarations, and summon witnesses, enforce their attendance, and compel them to give evidence and produce the books, plans, specifications, drawings, and documents, which it or he may require them to produce. 18 Section 24(3) of the PUB Act authorizes PUB to make rules of practice “regulating its procedure and the times of its sittings.” Rule 13 of PUB’s Rules of Practice and Procedure deals with confidential information: 13.

(1) Where a document is filed with the Board by a party in relation to any proceeding, the Board shall, subject to subsection (2), place the document on the public record.

(2) The Board may receive information in confidence on any terms it considers appropriate in the public interest,

a) if the Board is of the opinion that disclosure of the information could reasonably be expected (

i) to result in undue financial loss or gain to a person directly or indirectly affected by the proceeding; or

(ii) to harm significantly that person’s competitive position; or

b) if (

i) the information is personal, financial, commercial, scientific or technical in nature; or (ii) the information has been consistently treated as confidential by a person directly affected by the proceeding; and (iii) the Board considers that the person’s interest in confidentiality outweighs the public interest in the disclosure of the information.

(3) Where disclosure of any document is refused due to a claim for confidentiality and a claim for public disclosure of such documents has been made, the Board shall hear such claim on a motion made under Rule 22, and may

a) order the document be placed on the public record, subject to subsection 13(5);

b) order the document not be placed on the public record, with such conditions on access imposed as the Board considers appropriate;

c) order an abridged version of the document to be placed on the public record; or

d) make any other order the Board finds to be in the public interest.

(4) For purposes of hearing a motion in respect of a disputed claim under Subsection (3), the Board may examine the document or other evidence in question to ascertain whether or not the claim for confidentiality or the claim for public disclosure will be sustained.

(5) Where the Board has decided to place on the public record any part of a document that was filed in confidence in accordance with Subsection 13(2) and 13(3), the party who filed the document shall be given an opportunity to request that it be withdrawn prior to its placement on the public record . [emphasis added] Hydro’s General Rate Application 19 On Nove mber 30, 2009 , Hydro filed a General Rate Application (the GRA) in which it sought PUB’s approval of rate increases to take effect on April 1, 2010, and April 1, 2011.

In its written application, Hydro referred to the current “decade of investment” and the subsequent “decade of returns,” noted that it faces a number of risks and explained the importance of maintaining a certain level of retained earnings: The ten-year period to 2020 is being referenced as “the decade of investment” in which major investments, totalling $16.5 billion, are being made to Hydro’s generation, transmission and distribution systems. The decade following 2020 is being referenced as “the decade of returns” in which significant benefits are returned to the energy ratepayers of Manitoba.

During “the decade of investment,” there will be a requirement to increase debt in order to finance Hydro’s investments in new generation, transmission and distribution facilities. While the debt ratio is projected to increase from the current level of 74:26 to a high of 80:20 over the next decade, the ratio quickly recovers in “the decade of returns” …. [Hydro] faces a number of risks in the fulfilment of its mandate. Among those risks, drought continues to be a major risk ….

Of course, the timing of drought is unknown and should [Hydro] experience a repeat of the worst drought on record, the impact on retained earnings could exceed $2.4 billion. It is, therefore, important that [Hydro] maintains an adequate level of retained earnings and that rates be raised gradually even during years of exceptional water flows.

An adequate level of retained earnings also provides funding for capital investments which reduces the need for borrowing and reduces the financing costs that ultimately must be recovered from ratepayers. .… 20 During the extensive pre-hearing process, PUB issued Order No. 17/10, by which it granted intervener status to a number of parties, including Consumers’ Association of Canada (Manitoba) Inc. (Consumers), and Manitoba Industrial Power Users Group (Industrial Group). By Order No. 30/10, PUB granted intervener status to Southern Chiefs Organization (SCO).

Consumers, Industrial Group and SCO are respondents in this leave application. 21 By Order No. 17/10, PUB also ordered a “detailed risk and risk management review”: … [A] detailed risk and risk management review will proceed as part of the GRA. Such a risk review should occur at the beginning of the oral evidentiary hearing, so as to inform the rest of the proceeding, and thus will proceed as scheduled by the [PUB]. A review of the risks faced by [Hydro] will proceed as an integral part of the [PUB’s] rate review and rate setting jurisdiction.

There are a multitude of risks faced by [Hydro] as part of its business activities and plans. While detailed in previous Board Orders, those risks include drought, export markets, interest and exchange rates, labour issues, catastrophic loss of system supply, and changes in accounting standards .... The [PUB] must satisfy itself that these and other risks to [Hydro] are being appropriately managed by [Hydro], as part of the [PUB’s] rate approval mandate.

The [PUB] also needs to be assured that there are no unreasonable risks “lurking” in the future that, if actualized, are likely to result in undue rate implications for [Hydro’s] Manitoba consumers. . . . . . ... [T]he [PUB] is prepared to cooperate with the Manitoba Ombudsman, Office of the Auditor General and other review agencies referred to by [Hydro], to ensure that all requested issues are investigated and reviewed by the [PUB].

Towards this end, the [PUB] will expect and require the cooperation of all parties to conduct a comprehensive review of [Hydro’s] risks and risk management practices. [emphasis added] 22 By Order No. 30/10, PUB required Hydro to file its export contracts and pending term sheets and directed: … [T]hat term sheets are neither to be turned into sales agreements until a proper capital and risk review has taken place, nor full commitment to major capital is to take place until the review has been conducted. 23 The hearing portion of the GRA took 41 days.

It started on January 5, 2011, and ended on June 9, 2011. 24 Hydro’s evidence included information on planned expenditures for new generation and transmission facilities (such as projects known as Conawapa, Keeyask and Bi-Pole III) and projected revenues from export sales, including the export contracts, which are with three different counterparties: Minnesota Power, Wisconsin Public Service, and Northern States Power. 25 The export contracts contain strict confidentiality provisions. Hydro refused to provide copies of the export contracts during the pre-hearing process and during the hearing.

It did agree to provide certain evidence about the export contracts through expert witnesses retained by Hydro and PUB. Hydro granted the experts access to the export contracts after they signed non-disclosure agreements.

26 PUB heard closing submissions on July 4, 5 and 7, 2011. 27 On July 4, 2011, PUB issued the subpoena and served it on Hydro on July 5. The subpoena directed the general counsel and corporate secretary of Hydro “TO PRODUCE and forthwith to deliver” the export contracts to PUB. 28 On July 12, 2011, pursuant to PUB’s Rules of Practice and Procedure, Hydro filed its motion and submission to set aside the subpoena, asserting that: 1. The Export Contracts are Commercially Sensitive ... [The export contracts are] commercially sensitive ....

The disclosure of these contracts may reasonably be expected to cause financial loss to [Hydro] or to harm significantly [Hydro’s] position. . . . . . Compelling production of these documents sets a precedent that will be of concern to counterparties and potential counterparties, resulting in real prejudice to [Hydro’s] position in its ongoing contractual relationships as well as future negotiations. 2. The Export Contracts are Privileged Public interest privilege protects information from disclosure where the disclosure would be contrary to the public interest. . . . . . ....

The export contracts were entered into by Hydro as an agent of the provincial crown and with the approval of the provincial Cabinet. Their disclosure is prejudicial to the economic interest of Manitoba and ...

Hydro. . . . . . … [PUB] does not have the power to assess, approve or otherwise direct [Hydro’s] activities in relation to contracts for the sale of power generated in Manitoba to persons outside Manitoba. . . . . . ... [PUB] does not have the power to compel the production of confidential contracts …. . . . . . ... [PUB] has received ample evidence relating to the aggregate net revenues that [Hydro] is likely to obtain from power exports and the potential impact of the various risks facing [Hydro’s] business in relation to that revenue .... 29 In response to Hydro’s motion, PUB received submissions from the interveners, who claimed a right to further disclosure of the export contracts.

After receiving Hydro’s reply, in which it repeated its concerns about disclosure, PUB issued the Order on July 22, 2011. 30 Hydro filed its motion for leave to appeal and a stay of the Order on July 27, 2011. 31 During the course of the GRA, PUB issued two interim orders which set interim rates for the fiscal years 2010/11 and

2011/12. 32 On July 29, 2011, PUB issued Order No. 99/11, which denied Hydro’s request to finalize the existing interim rates and for a further rate increase, and ordered that “[e]xisting interim rates and [Hydro’s] request for a further 0.9% rate increase will be further considered and may be adjusted on a final basis in a subsequent Order.” Order No. 95/11 Respecting Subpoena of Hydro Export Contracts 33 PUB stated that it would review the export contracts “in confidence,” subject to the following proviso: If PUB determines that any new issues arise on review of the documents which will materially affect the outcome of its rate order, PUB will give notice of those issues to [Hydro] and the Interveners, and allow further submissions on those new issues by all GRA participants, this to take place within a timeline to be set by PUB. 34 PUB explained that by Order No. 17/10 it had ordered that “[a] review of the risks faced by [Hydro] will proceed as an integral part of [PUB’s] rate review and rate setting jurisdiction.” It noted that “[o]ne key additional factor precipitating the risk review was the public pronouncement of serious concerns and allegations by a whistleblower consultant who had done work for [Hydro]” and then stated: …. [The consultant], supported by the Ombudsman, then asked PUB to conduct a review, and PUB determined it was well-positioned; given its jurisdiction and its own prior concerns respecting [Hydro’s] risks, to incorporate a risk review in the GRA process. 35 After explaining that its process is a public one and that receiving materials in confidence is “typically rare,” PUB determined that it “will apply its Practice Rule 13, respecting confidentiality of filings, to the documents to be provided under subpoena.” 36 With respect to the relevance of the export contracts, it stated: PUB has control of its process and may be, and has been, called upon to determine threshold issues of relevance in its rate making capacity. …. 37 PUB referred to ss. 26(3) and (4) of the Crown Corporations Act , ss. 24(4) and 27(2) of the PUB Act , the pre-hearing process and Rule 13.

It then wrote about the connection between the export contracts and Hydro’s development projects: Central to [Hydro’s] application for the rate increases in this GRA is a plan for new hydro electric generating stations and transmission lines, which is directly and inextricably linked to [the export contracts] . Moreover, [Hydro’s] preferred capital development sequence sees completion of the next new generating station, called Keeyask, well in advance of Manitoba’s domestic service needs to facilitate delivery of power under the export contracts.

But for the capital requirements of [Hydro] to build and operate two new generation facilities and a new transmission line (Bi-Pole III) in a period which [Hydro] calls “the decade of investment” (with significant ongoing expenditures occurring), there may be no justification for the rate increases sought by [Hydro] at the present time. [emphasis added] 38 PUB noted that it had received evidence from the expert witnesses who had reviewed the export contracts, but that, “[u]ntil now, PUB, itself, has not been privy to the export agreements, which [PUB] finds directly impact domestic rates.” 39 PUB addressed the public interest and the negative effect of disclosure of the export contracts: ... [P]ublic interest ... includes consideration of the financial viability and wellbeing of [Hydro], as the future of [Hydro] affects the prosperity of all Manitobans and impacts directly on rates charged to rate payers.

PUB has already made a finding in PUB Order 95/10 that it is satisfied that disclosure of terms sheets and [Hydro’s] export contractdetails are likely to cause financial harm and loss to [Hydro].

That ruling stands, and receipt now of the actual export agreements byPUB in confidence is consistent with that ruling. [emphasis added] 40 PUB accepted that it does not have jurisdiction “to approve or direct capital expenditures of [Hydro],” but did not accept thatit had no jurisdiction to review the export contracts: … [The export contracts] are tied to the advanced building of its new hydro electric generating stations and transmission capitalinfrastructure, and that domestic rates are to be directly impacted by the plan as advanced to PUB and as thoroughly examined in theGRA. 41 PUB viewed Hydro’s position as: ... [I]n effect ... telling PUB, as regulator, what it needs to know in order to make its decision.

If it were up to [Hydro] to make the decisions as to what was required by PUB to set rates, there would likely be no need for a ratereview process. However, within the legislative framework established by the Province for rate setting over [Hydro], it is clear to PUBthat it has wide discretion to consider factors which PUB determines are relevant in accordance with

section 26 of [the CrownCorporations Act], and to use its powers as necessary for the conduct of hearings to carry out its mandate. 42 In concluding its reasons, PUB stated that it: …. ... [N]eeds the contracts to assure itself of the adequacy and fairness of rates (rates presumably to be backed by prudent actions). [emphasis added] 43 As for Hydro’s claim of public interest privilege, and its reliance on Manitoba Society of Seniors Inc. et al. v.

Manitoba(1988), (MB CA), 51 Man.R. (2d) 214 (C.A.), PUB was “satisfied that [Manitoba Society of Seniors] is not applicableto the current circumstances” given PUB’s role “has materially changed” from making “recommendations for rates to the Cabinet” tofixing rates.

It concluded that by receiving the export contracts under Rule 13, it “has considered the public interest issue.” Order No. 99/11 44 Order No. 99/11 is entitled “An Interim Order with Respect to Manitoba Hydro’s Application for Increased 2010/11 and2011/12 Rates and Other Related Matters.” Its commentary about the GRA proceedings includes the following: … [PUB] undertook an in-depth review of [Hydro’s] operational business risks and its risk management practices: ....

Unfortunately, in the public hearing that concluded on July 4, 5 and 7 of 2011 (with the closing statements of both interveners and[Hydro]), [Hydro] either refused or failed to provide [PUB] information that the Board considers critical to it reaching a comprehensiveand final perspective on the prudency of [Hydro’s] actions and plans, and the implications for domestic rates of [Hydro’s] operations andplans.

[emphasis added] The Test for Granting Leave to Appeal and Preliminary Matters 45 Sections 58(1) and (2) of the PUB Act set out when a decision of PUB may be appealed: Grounds of appeal 58(1) An appeal lies from any final order or decision of the board to The Court of Appeal upon (

a) any question involving the jurisdiction of the board; or (

b) any point of law; or (

c) any facts expressly found by the board relating to a matter before the board. Leave to appeal 58(2) The appeal shall be taken only (

a) by leave to appeal obtained from a judge of The Court of Appeal; . . . . . [emphasis added] 46 The granting of leave is a matter of discretion. For leave to be granted for a question that falls within s. 58(1) , it must be arguable, in that it has a reasonable prospect of success, and it must raise an issue of sufficient importance to merit the attention of the Court of Appeal. The latter criterion is most often demonstrated by showing that the question is important for determining other similar disputes that are likely to arise in the future.

See Cash Store Financial Services Inc., Re , 2009 MBCA 1 , 236 Man.R. (2d) 29 , and Manitoba Public Insurance Corp. v. Public Utilities Board , 2011 MBCA 87 . 47 The parties to this leave application do not take issue with the foregoing criteria. However, there are two preliminary issues: 1. Is the Order a “final order or decision” as required under s. 58(1) ? 2. If it is a final order, is the leave application premature given that PUB has not issued a final rate order in the GRA? Is Order No. 95/11 a “Final Order or Decision”? 48 Hydro asserts that the Order is a final order.

It says that PUB did not identify the Order as “interim” or “interlocutory” and that its effect is final. 49 It also relies on s. 54 of the PUB Act : Finality of orders 54 Subject only to the right of appeal for which provision is hereinafter made, and to subsection 44(3), every decision or order of the board is final .

[emphasis added] Section 44(3) provides that PUB “may review, rescind, change, alter, or vary any decision or order made by it” and is not applicable tothis analysis. 50 Hydro argues that there is no reason for interpreting the word “final” differently in s. 54 than in s. 58. 51 PUB says that the order is an interlocutory order as the GRA is ongoing. It argues that “[a] final decision is one thatdetermines the issue before the tribunal,” relying on this court’s decision (in chambers) in Avion Services Corp. v.

Unicity Taxi Ltd. et al.,2009 MBCA 56, (at para. 9), 240 Man.R. (2d) 66, and that it has not issued a final order in the GRA. 52 In Avion, PUB was considering a proposed airport shuttle service referred to it by the City of Winnipeg under s. 163(3) ofThe City of Winnipeg Charter, S.M. 2002, c. 39. That

section requires the approval and authorization of PUB for an agreement enteredinto between the City and a provider of a “local transportation service.” The applicants were interveners in that proceeding whochallenged the jurisdiction of PUB to hear the matter. I dismissed the application for leave to appeal for two reasons (at paras. 9-10): First, the right to seek leave to appeal is limited to a “final order or decision.” I am of the view that the decision is not a final decisionwithin the meaning of s. 58(1).

A final decision is one that determines the issue before the tribunal and not a decision dismissing apreliminary motion objecting to the jurisdiction of the tribunal. Secondly, to grant leave at this time would offend the principle that “appeals from interlocutory decisions by administrative tribunalsshould ordinarily be discouraged and will not be permitted except in the most extraordinary of circumstances” (Canadian NationalRailway Co. et al. v. Winnipeg City Assessor (1998), (MB CA), 131 Man.R. (2d) 310; 187 W.A.C. (C.A.), at para.31 (C.A.), Scott, C.J.M.). In Turnbull et al. v.

Canadian Institute of Actuaries et al. (1995), (MB CA), 107 Man.R.(2d) 63; 109 W.A.C. 63 (C.A.), Scott, C.J.M., explained that the administrative process should be allowed to run its course (at para. 29): ... [S]ave for exceptional circumstances, the administrative process should be allowed to run its own course.

This is to avoid bifurcatedproceedings with the attendant further delay, proceedings that may turn out to be redundant or unnecessary, and to give theadministrative tribunal an opportunity to correct its own errors. .... 53 PUB also says that the references to “final” in s. 54 and s. 58 have two different contexts: s. 54 is concerned with theenforcement of orders and s. 58 ensures that a substantive matter is being appealed and not a procedural one. Therefore, s. 54 is notrelevant to the

interpretation of “final order or decision” in s. 58. 54 PUB also points to s. 47(2) of the PUB Act, which contemplates it making interim orders “instead of making an order final inthe first instance,” and says that this underscores its argument that not all decisions are final. 55 Consumers’ adopts the position of PUB. SCO and Industrial Group do not take a position on this issue. 56 At the heart of this preliminary issue is a question of statutory

interpretation: what is the meaning of “final order or decision”in s. 58? At first blush, it would appear that the answer is found in Avion, as argued by PUB. This is consistent with the well-knownfoundational principle in administrative law that courts are reluctant to encourage a multiplicity of proceedings by permitting challengesto interlocutory rulings. See Donald J.M. Brown & The Honourable John M.

Evans, Judicial Review of Administrative Action in Canadalooseleaf (Toronto: Canvasback Publishing Inc., 2011) vol. 1, chap. 1 at para. 1:2241. 57 However, s. 54 was not addressed in Avion, and the preliminary nature of the ruling at issue in Avion is very different fromthe Order issued virtually at the end of the GRA proceeding. I accept that the Order is final in nature in the sense that the compelleddisclosure of confidential documents cannot be undone by a subsequent ruling. 58 In Canada (Canadian Human Rights Commission) v.

Canada (Attorney General), 2011 SCC 53, 337 D.L.R. (4th) 385(Mowat), the Supreme Court recently responded to a question of statutory

interpretation with respect to the meaning of the word“expenses” in a provision of the Canadian Human Rights Act. LeBel and Cromwell JJ., for the court, determined that the use of theword “expenses” in another provision of the same Act had a different meaning. 59 In addition to applying the well-known modern approach to

interpretation, their analysis engaged the following specificprinciples of statutory

interpretation: words must be read in their statutory context; there is the presumption against tautology (words arepresumed to have a meaning and not be superfluous); and a review of the legislative history of the statutory provision can be helpful. 60 I mention Mowat for two reasons: 1) it demonstrates that the same word can have different meanings in the same legislation,depending on the context (as argued by PUB here), and 2) it demonstrates that a question of statutory

interpretation of a single word orphrase can be complex. 61 Another principle of statutory

interpretation that is relevant here is the presumption of consistent expression wheninterpreting a statute. As explained by Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham: LexisNexis CanadaInc., 2008) (at pp. 214-15):

It is presumed that the legislature uses language carefully and consistently so that within a statute or other legislative instrument thesame words have the same meaning and different words have different meanings. Another way of understanding this presumption is tosay that the legislature is presumed to avoid stylistic variation. …. 62 Both ss. 54 and 58 use language that pertains to final orders. So does s. 47(2), as pointed out by Hydro, and s. 125.

However, it is the use of this language in s. 54 and s. 58 that is crucial here. 63 As explained earlier, PUB says that s. 54 is concerned with the enforcement of orders, which it says is a different contextfrom the right to appeal under s. 58. A fair response to that assertion is that an order that can be enforced is final in nature, if not inname, and therefore falls within the scope of “final order or decision” in s. 58. 64 However, it is not necessary to address whether an order that is final in nature is a final order for the purposes of s. 58.

I saythat because I am of the view that s. 54 provides the answer. 65

Section 54 expressly states: “Subject only to the right of appeal for which provision is hereinafter made ….” Therefore, itspecifically adverts to s. 58. The contexts of these sections are not independent, but are interconnected. In my view, this is an importantdistinction from the analysis found in Mowat, and counters PUB’s argument that the contexts of the two sections are different. 66 While not determinative, I think it noteworthy that the relationship between s. 54 and s. 58 is also evident from theirproximity in the PUB Act. Both fall within

Part I, which is entitled “Organization, Procedure and Powers.” Within

Part I, sections aresubdivided under various headings.

Section 54 falls under the heading “Service of Orders,” which contains sections dealing with theenforcement of orders as well as matters of service and the ability of the courts to take judicial notice of orders and other matters that arepublished in the Manitoba Gazette.

Section 58 falls under the heading “Appeal.” 67 The judicial history of s. 54 discloses that prior to April 15, 1961, the

section read as follows: 54 Subject only to the right of appeal hereinafter provided for, and to subsection (3) of

section 44, (

a) every decision or order of the board is final; and (

b) no order, decision, or proceeding of the board shall be questioned or reviewed, restrained, or removed by prohibition, injunction,certiorari, or any other process or proceeding in any court. 68 The historical wording is in the nature of a privative clause which limited the review of orders issued by PUB to the right ofappeal under s. 58, which is a broader right than in many other tribunal constating statutes, given that it permits appeals on questions ofjurisdiction, law and facts, with leave.

The current wording retains this purpose and is of similar effect. 69 Notably, the Legislature did not use explicit language in the PUB Act to limit s. 54 to enforcement matters or to prohibitappeals from interlocutory orders. Rather, it stated in s. 54 that “every decision or order … is final.” Given that, and that s. 54specifically adverts to s. 58, I am of the view that s. 54 informs what is a “final order or decision” for the purposes of s. 58.

Therefore, Iconclude that the Order is a final order for the purposes of Hydro’s leave to appeal application. 70 In reaching this conclusion, I acknowledge that this preliminary issue is complex and that there are reasonable arguments thatsupport a different conclusion (see, for example, Sazant v. McKay et al., 2010 ONSC 4273, 271 O.A.C. 63). Because submissions on theissue were limited at the leave hearing, and because of the importance of the issue for this leave application and for future leaveapplications, I am of the view that it demands further attention from counsel and a full panel of this court.

Normally, the issue ofwhether an order is “final” arises in the leave context and there is no appeal from a dismissal of a leave application or, if leave is granted,the question is not referred to the panel. This is a rare opportunity for a panel of the court to address the meaning of “final order ordecision” in s. 58. 71 I refer the following question of law to the panel: Is Order No. 95/11 a “final order or decision” within the meaning of s. 58of the PUB Act?

Is the Leave Application Premature? 72 The more crucial preliminary issue, in my view, concerns the application of the principle against bifurcating proceedings,except in exceptional circumstances. This principle was explained in Avion, relying on Turnbull et al. v. Canadian Institute of Actuarieset al. (1995), (MB CA), 107 Man.R. (2d) 63 (C.A.) (see para. 52 above). 73 PUB relies on this principle and asserts that the motion for leave to appeal is premature given that the issuance of thesubpoena is just one step in the ongoing GRA process and that there are no exceptional circumstances.

It says that the proposed appealis the type that the Federal Court of Appeal in Groupe Archambault Inc. v. CMRRA/Sodrac Inc. et al., 2005 FCA 330, 357 N.R. 131,characterized as an “application for judicial review of an interlocutory decision on the disclosure of evidence” (at para. 1), and that“[t]here [were] no exceptional circumstances that would warrant this Court’s intervention at this stage” (at para. 8).

74 Further, PUB relies on Insurance Corp. of British Columbia v. Yuan et al. , 2009 BCCA 279 , 272 B.C.A.C. 198 , in which the British Columbia Court of Appeal set out five factors that should be considered when leave is sought during the course of a proceeding. The five factors are (at para. 23): …. 1. Judicial intervention may fragment the tribunal’s proceedings. 2. The tribunal may resolve the dispute to the parties’ satisfaction. 3. The court’s decision may be rendered moot because of the tribunal’s ruling on some other aspect of the proceedings. 4.

It is helpful for the court to have an evidentiary record and the tribunal’s analysis of the dispute, especially in areas where the tribunal has special expertise. 5.

Courts avoid deciding constitutional and Charter issues on hypothetical facts or in a factual vacuum. 75 PUB says that when these factors are analyzed, it is clear that leave should be denied because: the appeal would fragment the GRA hearing; PUB may still resolve the issue of the impact of the export contracts on domestic rates to Hydro’s satisfaction in its final order; and Hydro’s arguments of public disclosure are hypothetical given the confidentiality ordered under Rule 13 and given Hydro could request the return of the export contracts under Rule 13 if there is a decision to disclose the contracts. 76 Hydro acknowledges that the principle against bifurcating proceedings engages the discretion of the court and accepts that the general rule is that the courts are reluctant to grant judicial review in an ongoing proceeding except in exceptional circumstances.

It says that the exceptional circumstance here is the irreparable harm that would flow to the commercial sensitivities and confidentiality of Hydro and the three counterparties to the export contracts from the disclosure of the export contracts. A final rate order, it says, will not alter that. Therefore, without the appeal, Hydro will be forced to provide the export contracts and this cannot be undone by the final order.

It says that the circumstances here are unlike those in Groupe Archambault because the subpoena is not an optional process pursuant to which Hydro has the ability to withdraw from the discovery process. Given the irreparable harm, and that the GRA is virtually at the end of the process, Hydro also distinguishes these circumstances from those in Avion . 77 Hydro relies on Edwards et al. v. Law Enforcement Review Board (Alta.) et al. , 2009 ABCA 383 , 469 A.R. 25 , a chambers decision, to demonstrate that leave may be given on an issue of disclosure.

In Edwards , leave was granted before proceedings were completed on a question about an order to disclose police discipline records to the tribunal for its review, as “gatekeeper” (at para. 4). 78 Hydro also acknowledges the comments of Scott C.J.M. in Turnbull about the need to exhaust all administrative remedies before seeking leave to appeal.

This, Hydro says, was done here, as evidenced by the fact that the Order is in response to Hydro’s request for PUB to withdraw the subpoena. 79 Hydro argues that an analysis of the five factors identified in Yuan supports its position: there is no disruptive fragmentation here since the evidentiary portion of the GRA and final submissions are complete; the process under PUB’s rules to challenge the subpoena are exhausted and there has been no resolution to the parties’ satisfaction; a final rate order will not reverse the Order or render it moot; the evidentiary record is extensive; and PUB has no special expertise in power export contracts. 80 Consumers agrees with PUB that the motion is premature.

Industrial Group endorses Hydro’s position. SCO takes no position on this issue. 81 As will be seen, I am satisfied that Hydro has raised arguable questions of jurisdiction and law. I agree with Hydro that waiting until the final rate order is issued is inappropriate because a final order will not be able to resolve these questions or render them moot, given that the export contracts will already have been disclosed. The resolution of these questions is important not only for Hydro and its current GRA, but also for PUB and future rate-setting proceedings.

As such, it is important in the public interest to resolve the questions now, especially when there is a full evidentiary record for that purpose. 82 In reaching this conclusion, I accept that the crucial consideration must be the potential for irreparable harm to Hydro and the negative economic impact for Manitoba that may flow from the disclosure of the export contracts. As noted earlier, PUB has historically acknowledged this. I am satisfied that this is one of those exceptional cases where leave should be granted before the administrative process is completely at an end.

Hydro’s Motion for Leave to Appeal 83 Hydro asserts ten grounds of appeal by which PUB exceeded its jurisdiction and made errors of fact and law. The full text of the asserted grounds of appeal are set out in the attached appendix.

84 Broadly stated, Hydro raises two fundamental issues: 1) the jurisdiction of PUB to review the export contracts; and 2) theeffect of confidentiality of the export contracts, which calls for a consideration of Hydro’s claim of public interest privilege. 85 Hydro filed a supplementary brief, which contained three letters addressed to its counsel from the three power companies inthe United States who are the counterparties to the export contracts.

PUB and the interveners, understandably in my view, tookexception to this unusual method of augmenting the record, particularly given that these companies had no standing before the court. Idid not consider these letters in reaching my decision. Jurisdiction Hydro’s Position 86 Hydro says that s. 26 of the Crown Corporations Act sets out PUB’s jurisdiction, which is only to approve “rates forservices” for “provision of power” under the Act. It points to s. 2(5) of the PUB Act, that provides, subject to

Part IV of the CrownCorporations Act, the PUB Act does not apply to Hydro and the PUB “has no jurisdiction or authority over Manitoba Hydro.” 87 Hydro acknowledges that evidence pertaining to the likely impact of the export contracts and its capital developments isrelevant to the rate-setting function of PUB for the GRA.

It says that PUB received extensive evidence about this that was subjected tothorough testing, including the evidence through the experts who viewed the export contracts, subject to their non-disclosureagreements. 88 However, Hydro says that PUB has gone beyond its rate-setting function by ordering that the export contracts be filed withPUB so that it can assess the “prudence” of the export contracts as well as Hydro’s approach to the development of new generation andtransmission facilities.

By doing so, it says that PUB is usurping the function of the Lieutenant Governor in Council under s. 16(1) of theAct. 89 Hydro says its position is underscored by a letter dated January 13, 2011, to the Chairman of the Board of Directors of Hydrofrom the Minister Responsible for Manitoba Hydro, in which she confirmed that: ... [For] major new hydro generation projects ... it is the provincial government’s intention to assign responsibility to an independentbody for carrying out an NFAT (Needs for and Alternatives To) assessment of such projects. .... 90 Hydro relies on Manitoba Keewatinowi Okimakanak Inc. v.

Manitoba Hydro-Electric Board (1992), (MBCA), 78 Man.R. (2d) 141 (C.A.), in which Scott C.J.M. (in chambers) wrote (at para. 9): “It must be emphasized at the outset that thejurisdiction of the [PUB] is expressly limited to the fixing of rates ….” It also relies on Public Utilities Board (Man.) v.

Manitoba Hydroet al. (1989), (MB CA), 61 Man.R. (2d) 164 (C.A.), in which the court held that, “[o]n the basis of the legislation as itstands, the Board has no jurisdiction to approve, reject or vary [Hydro’s] major capital projects such as construction of new generatingpower stations or transmission lines” (at para. 7). 91 Hydro argues that PUB is asserting jurisdiction over matters that are expressly reserved to the Lieutenant Governor inCouncil, and it is doing so indirectly under the guise of its rate-setting jurisdiction.

This, it says, is clear not only from its reasons in theOrder, but also from its reference to “prudency” and its expressed “concerns with [Hydro’s] preferred capital expenditures developmentplan” in the following passage from Order No. 99/11: ... [W]ithin the proceeding just concluded, which not only considered [Hydro’s] requests but, also, other related matters, the [PUB]undertook an in-depth review of [Hydro’s] operational business risks and its risk management practices.

This review includedconsideration of the probabilities of occurrence, and possible cost consequences of occurrence, of all identified operational and businessrisks – this in the context of [Hydro’s] planned capital spending and concurrent pursuit of export contracts with American utilities.

Unfortunately, in the public hearing that concluded on July 4, 5 and 7, 2011 (with closing statements of both interveners and [Hydro]),[Hydro] either refused or failed to provide the [PUB] information that the [PUB] considers critical to it reaching a comprehensive andfinal perspective on the prudency of [Hydro’s] actions and plans, and the implications for domestic rates of [Hydro’s] operations andplans. . . . . . In this Order, and based on the evidence available to it, the [PUB] establishes its concerns with [Hydro’s] preferred capital expendituresdevelopment plan. ....

. . . . . ... [D]espite the lengthiest, most complex and certainly most expensive public proceeding ever held by the [PUB] ... the [PUB] concludes that, on an interim basis, it must deny not only [Hydro’s] requests for the finalization of interim rate increases but also approval of a further rate increase at this time. [emphasis added] 92 Hydro says that PUB is trying to “cooper up” the Order by stating in Order No. 99/11 that it cannot fulfill its rate-setting mandate without reviewing the export contracts. It relies on Jacobs Catalytic Ltd. v.

International Brotherhood of Electrical Workers, Local 353 et al. , 2009 ONCA 749 , 255 O.A.C. 201 , in which the Ontario Court of Appeal comments negatively on subsequent “results- based” reasoning (at para. 52). 93 Hydro emphasizes that PUB has historically recognized its limited jurisdiction and has either recommended to the Government of Manitoba that it consider amending the legislation to enlarge PUB’s jurisdiction or suggested that PUB should otherwise be authorized to review and approve power export contracts and capital projects.

See Order No. 116/08 at p. 340, Order No. 146/99 at pp. 74-75, and Order No. 143/04 at p. 95. 94 Finally, Hydro expresses the concern that PUB will attempt to use the export contracts to develop its own versions of long- term financial forecasts based on a variety of scenarios including and excluding the export contracts and/or the capital projects in development. Again, it says that this demonstrates PUB is exceeding its jurisdiction. PUB’s Position 95 PUB responds that there is no issue of jurisdiction given its broad powers in the rate-setting process, as set out in the legislative scheme.

PUB points to the many times in the Order where it explains that the export contracts are needed to fulfill its mandate to set Hydro’s rates and why they are relevant to its assessment of Hydro’s risk. 96 PUB says that Hydro is really challenging PUB’s exercise of discretion with respect to what documents it may seek to review and consider in exercising its rate-setting mandate. It says that there is no true question of jurisdiction here, particularly since courts should hesitate to analyze decisions of tribunals through that lens. See Toronto Hydro-Electric System Ltd. v.

Ontario Energy Board , 2010 ONCA 284 , 261 O.A.C. 306 at para. 24 . 97 While acknowledging that the risk review in this case was more extensive than in past rate hearings, it points out that risk is always a relevant consideration for rate hearings. For example, it says that Hydro’s debt/equity ratio is always considered in the setting of rates, and that the export contracts are part of that consideration. Therefore, PUB will examine the export contracts and determine what is relevant to its rate-setting mandate and it can consider that information, or not, for setting just and reasonable rates.

In doing so, it is not reviewing the export contracts to approve or disapprove them. 98 PUB says that Order No. 99/11 is not appropriately before the court for review and should not be considered in this leave application. 99 PUB emphasizes that its mandate is a public interest one and it is to consider the interests of the ratepayers and look out for the “financial health” of Hydro. See Consumers’ Association of Canada (Manitoba) Inc. et al. v. Manitoba Hydro , 2005 MBCA 55 , 195 Man.R. (2d) 12 at paras. 65-66 (in chambers) .

This mandate gives PUB the power to decide what it wants to consider to meet the public interest. Confidentiality and Public Interest Privilege 100 In 2002, the Legislature enacted s. 10.2 of The Manitoba Evidence Act , C.C.S.M., c.

E150, which sets out a procedure for a claim made by a government “official” for a “protected public interest.” Such an interest is defined as “the defence or security of Canada or Manitoba or its people,” “the health of Manitobans or other Canadians.” As will be seen, PUB asserts that given that economic interest is not a protected public interest under s. 10.2, Hydro cannot assert a claim for public interest privilege. Hydro’s Position 101 Hydro says that it entered into the export contracts as agent of the provincial Crown and with the approval of the provincial Cabinet (the Lieutenant Governor in Council).

As such, common law public interest privilege applies with respect to the disclosure of the export contracts as such disclosure would be contrary to the public interest. 102 Hydro acknowledges s. 10.2 of The Manitoba Evidence Act provides for Crown privilege in certain circumstances that do not

apply here, but says that these provisions do not oust the common law principle, as asserted by PUB. 103 It points to Manitoba Society of Seniors Inc. et al. v. Manitoba (1988), (MB CA), 51 Man.R. (2d) 214(C.A.), in which this court upheld the decision of PUB to quash its own subpoena to senior officials in a government department as a“proper exercise of authority” (at para. 25).

In that case, PUB reversed its decision after the government objected and asserted publicinterest privilege on the basis that the documents sought contained strategic marketing information “which, if released, could beprejudicial to the economic interests of the Province of Manitoba since this information could harm the bargaining position of [Hydro] inits negotiations of export rates with potential customers outside provincial boundaries” (at para. 19). 104 Hydro expresses concern that there will be widespread disclosure of the export contracts, including to the interveners.

Hydrosays that Rule 13 does not provide any comfort in that regard and that PUB was wrong when it said in the Order that the interveners willnot have the same rights as true parties in relation to the disclosure of the evidence, particularly given the stated intention of theinterveners that they wish to seek disclosure. Further, it says that any request by Hydro for the return of the export contracts prior todisclosure is subject to the discretion of PUB. 105 Therefore, it says that PUB erred in law by rejecting Hydro’s assertion of public interest privilege and by relying on Rule 13.

PUB’s Position 106 PUB asserts that all of Hydro’s arguments are speculative given that the Order requires that the export contracts be providedin confidence under Rule 13. In other words, it says that Hydro is seeking a pre-emptive strike for some occurrence that might nothappen. It says that Hydro has provided documents in confidence before and points to its ability to request the return of the documentsunder Rule 13. 107 PUB argues that Hydro cannot claim public interest privilege because its claim does not fall under s. 10.2 of The ManitobaEvidence Act.

It asserts that these provisions exhaustively set out the limited circumstances in which public interest privilege may beclaimed. 108 In any event, PUB says that the wording in the Act that Hydro is “an agent of Her Majesty” does not mean that Hydro is anagent of the Crown, and therefore entitled to claim privilege. It points to the fact that Hydro entered into the export contracts in its ownname and not as agent of the Province. See British Columbia Power Corp. Ltd. v. Attorney General of British Columbia & BritishColumbia Electric Co.

Ltd. (1962), (BC CA), 34 D.L.R. (2d) 25 (B.C.C.A.). 109 It says that Manitoba Society of Seniors is no longer relevant because it was decided in 1988, when PUB’s role was only toprovide non-binding recommendations to the Province. In any event, it says that this case simply demonstrates that deference is owed toPUB by the courts.

Positions of the Interveners on Hydro’s Motion for Leave to Appeal Consumers 110 Consumers agrees with PUB’s position that Hydro has not raised any arguable issue of jurisdiction given the legislativescheme and PUB’s broad mandate to set just and reasonable rates that protect the general public interest. This, it says, requires PUB tohave regard to both the interests of ratepayers and the financial health of Hydro. See Consumers’ and ATCO Gas and Pipelines Ltd. v.Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140.

Therefore, it argues that the export contracts are relevant forPUB’s rate-setting mandate and are particularly relevant with respect to Hydro’s debt/equity ratio. 111 Consumers acknowledges that the legislative scheme does not speak specifically to “risk review,” but says that risk issues arealways relevant and central to the rate-setting process. It relies on Consumers’, where Monnin J.A. denied leave to appeal a decision ofPUB in which it commented on risk issues, including the debt/equity ratio of Hydro.

Consumers says that at the core of that decisionwas what Hydro did with respect to its export delivery obligations during a difficult drought period that affected Hydro’s financialsituation. 112 As for confidentiality, Consumers says that previous PUB orders are evidence that PUB protects Hydro’s information, evenwhen sought by Consumers and other interveners. Therefore, Hydro’s concerns about disclosure are apprehended and not real. 113 As for Hydro’s claim for public interest privilege, it disagrees with PUB that The Manitoba Evidence Act usurps the commonlaw principle.

It says that the common law doctrine, as articulated in Carey v. Ontario, (SCC), [1986] 2 S.C.R. 637,applies in circumstances that are not covered under the legislation. However, it says that it is not clear that Hydro is able to assert theprivilege, noting that Hydro has not provided any authority to suggest that it may assert this immunity as agent of the Crown. Southern Chiefs Organization 114 SCO opposes granting Hydro leave to appeal, asserting that there are no arguable questions of jurisdiction, law or fact.

SCOagrees with the arguments of PUB and Consumers with respect to the broad discretion of PUB to fulfill its rate-setting mandate, its riskmanagement and risk assessment role, and that because the export contracts are linked to new projects, domestic rates are directlyimpacted.

115 SCO represents 32 First Nations in Manitoba, the members of whom are ratepayers of Hydro. SCO states that one of thegoals of its intervention in the GRA “was to ensure that [the 32] First Nations’ Treaty and Aboriginal rights and interests wererepresented, recognized, upheld and honoured through the [GRA] and in the PUB’s determination of the rate and risk review.” 116 SCO says that the GRA proceedings are more than a simple general rate application given that it is also an investigation intoHydro’s risk management and is a risk assessment of Hydro’s integrated power system, management and operations.

As such, SCO saysthat continual disclosure and transparency is required. 117 SCO’s position is that there can be no determination of the reasonableness of any proposed rate increase without a full andproper assessment of the export contracts, which would include the assessment of the contingent liability of Hydro with regard to allenvironmental impacts caused and created by Hydro against the lands, waters and Treaty rights of SCO and its First Nations.

Thus, SCOmust be able to assess the export contracts to determine the full extent of Hydro’s liabilities to them as a result of “flooded, eroded orsaturated” lands. 118 SCO argues that Hydro is agent of the Crown for the purpose of establishing that Hydro is bound by the honour of theCrown. Industrial Group 119 Industrial Group reformulates Hydro’s argument that PUB exceeded its jurisdiction. It focusses on PUB’s decision to issuethe subpoena after the evidence and submissions were completed.

It says that the Order breaches s. 48 of the PUB Act and PUB’s dutyof fairness because the confidentiality aspect of the Order contradicts the full opportunity to be heard contemplated by s. 48 or,alternatively, an analysis under Baker v. Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 S.C.R.817. 120 It takes the further position that PUB never had the jurisdiction to issue the subpoena, given that its role is adjudicative andnot investigative. It says that PUB erred in law when it relied on s. 24(4) of the PUB Act to issue the subpoena given the adversarialnature of the GRA. It says that this

section applies only to inquiries. 121 In my view, Industrial Group is attempting to raise new grounds of appeal not argued by Hydro, which it cannot do because itdid not seek leave to appeal in its own right. As a result, I have disregarded its arguments.

Analysis and Decision 122 As already stated, Hydro’s motion for leave to appeal raises two fundamental issues: 1) the jurisdiction of PUB to review theexport contracts; and 2) PUB’s ruling with respect to their confidentiality. 123 Given that I have concluded that leave to appeal should be granted, it is appropriate that my analysis and commentary belimited to identifying the questions and explaining briefly why I have concluded that they are arguable and important.

It is for the panelwho hears the appeal to decide how to address and answer the questions. 124 Hydro’s motion must be assessed bearing in mind that PUB has broad powers to be exercised within its mandate to set rates tobe charged by Hydro to Manitoba consumers of power. One needs only to look at the factors listed in s. 26(4) of the CrownCorporations Act to know that the financial health of Hydro is a key factor for PUB’s rate-setting role. This includes relevant evidencewith respect to “risk,” such as Hydro’s debt/equity ratio. 125 A great deal of information was provided to me on this leave application.

It included many orders of PUB related to Hydrothat preceded the Order, both within the GRA, and in prior rate-setting applications. Many of these orders dealt with Hydro’s objectionto releasing confidential information, including contracts with power companies outside of Manitoba. In the past, PUB hasacknowledged the public interest importance of maintaining confidentiality of Hydro’s contracts. 126 What appears to have complicated the GRA is the added feature of the risk assessment that PUB agreed to undertake. Suchan inquiry is not specifically mandated by the legislation governing PUB.

Questions arise as to whether the export contracts and therelated evidence are being demanded by PUB for that purpose or for the GRA, or whether it matters. 127 Relevance of evidence is determined by the purpose for which it is sought or provided. The existence of the export contractsand their implications are relevant to PUB’s rate-setting mandate. In the Order, PUB stated that it required the export contracts for ratesetting, but it also stated that the “prudence” of the export contracts must be reviewed. It reiterated that in Order No. 99/11.

When Iconsider, in light of the risk review component of the proceedings, the fact that PUB had extensive evidence about the financialimplications of the export contracts through expert evidence and that the export contracts require the approval of the LieutenantGovernor in Council, I conclude that two arguable questions arise: 1. Did the PUB exceed its jurisdiction when it ordered that the export contracts be filed by Hydro? 2. Did the PUB err at law when it determined that the export contracts were relevant for the rate-setting process?

128 I am also persuaded that Hydro has raised arguable issues with respect to how PUB addressed its claim of public interest privilege, more recently also referred to as public interest immunity. 129 Public interest immunity is a rule of evidence and was previously known as Crown privilege. It only arises when evidence that is relevant is not admitted into evidence because that would be contrary to the broader public interest. As explained by Peter W. Hogg, Patrick J. Monahan & Wade K.

Wright, Liability of the Crown , 4th ed. (Toronto: Thomson Reuters Canada Limited, 2011) (at p. 114): … [E]vidence that is relevant and otherwise admissible must be excluded if its admission would be injurious to the public interest . .... … [T]here is no hard-and-fast rule as to the kind of injury to the public interest that will support a claim of Crown privilege.

It is for the court to which the claim is made to assess the gravity of the risk to the public interest that would be caused by disclosure, and to balance that risk against the risk to the administration of justice that would be caused by denial of the evidence to the litigants. Such a balancing process is inherently discretionary. [emphasis added] 130 Hogg et al. explained the change of the term to public interest immunity from Crown privilege was for two reasons (at pp. 114-15): ….

First, although the doctrine is often invoked by the Crown, the claimant need not be the Crown, and the excluded evidence need not be in the possession of the Crown. Secondly, the doctrine is not a “privilege” of the same kind as other privileges conferred by the law of evidence .... …. Public interest immunity ... exists for the protection of the public interest and may not be waived by any individual .... 131 Whether a Crown corporation may claim public interest immunity calls for an analysis to determine whether the corporation has the requisite “Crown elements” to have standing to invoke the immunity.

An indication in a statute that the corporation is the agent of the Crown is potentially, at least, a relevant factor for that analysis. 132 The common law with respect to public interest immunity is set out in Carey , which concerned public interest immunity respecting Cabinet documents which had been subpoenaed as part of a civil action.

In Carey , La Forest J., for the court, explained the two competing, and shifting, interests that must be addressed: access to all relevant information for the “fair disposition of the issues” (at p. 647); and the need for certain information regarding governmental activities not to be disclosed in the public interest. In explaining this further, he wrote (at pp. 647-48): …. There is ... an obvious difference between information relating to national defence and information relating to a purely commercial transaction.

On the other side of the equation, the need for disclosure may be more or less compelling having regard to the nature of the litigation (e.g. between a criminal and civil proceeding) and the extent to which facts may be proved without resort to information sought to be protected from disclosure. 133 I am not prepared on this leave application to conclude that s. 10.2 of The Manitoba Evidence Act limits when public interest immunity may be asserted given the principle that the common law is not ousted by legislation unless it is clearly stated or is clearly evident. See Sullivan at p. 441.

Whether these provisions create an exhaustive code displacing the common law concept of the public interest immunity is for a panel of this court to decide. 134 I conclude that Hydro has raised the following arguable question: Did the PUB err at law in dismissing Hydro’s assertion of public interest immunity with respect to the export contracts? 135 In reaching my conclusion that Hydro has raised these arguable questions, I assumed that the standard of review is correctness, given that the questions are ones of jurisdiction and law.

However, the panel ultimately determines the appropriate standard of review for each question. See Cash Store . 136 I have already commented on the importance of the questions when addressing the preliminary issue of whether Hydro’s motion was premature. See paras. 73-82 above. I simply state here that because Hydro and PUB are obliged to deal with each other on an ongoing basis, the resolution of these questions is important to them and to all Manitobans. 137 In

summary, I am of the view that the following questions are arguable and are important:

1. Did the PUB exceed its jurisdiction when it ordered that the export contracts be filed by Hydro? 2. Did the PUB err at law when it determined that the export contracts were relevant for the rate-setting process? 3. Did the PUB err at law in dismissing Hydro’s assertion of public interest immunity with respect to the export contracts? 138 I have intentionally kept these questions broadly worded so as not to limit the scope of the arguments that counsel may wish to make. I am specifically not granting leave on grounds 8, 9 and 10 as set out in the appendix.

My intention is that all other grounds in the appendix are encompassed in the three approved questions. Hydro’s Motion for a Stay 139 When Hydro filed its motion to seek leave to appeal, PUB fairly undertook not to enforce the subpoena. This undertaking expires on the release of this decision.

Therefore, Hydro seeks a stay of the Order until the appeal is decided, pursuant to s. 50(1) of the PUB Act : When orders effective 50(1) Every order of the board comes into effect at the time prescribed by the order, and its operation is not suspended by an appeal to The Court of Appeal for which provision is hereinafter made, unless otherwise ordered by the judge granting leave to appeal or by the court on hearing of the appeal; but the board itself may suspend the operation of the order from which appeal is made until the decision of The Court of Appeal is rendered. 140 In support of the stay motion, Hydro filed the affidavit of Andrew Cormie, a senior executive with Hydro.

He was not cross- examined on his affidavit, in which he gives evidence as follows: ... [T]he Export Contracts contain financial information that is commercially sensitive to both [Hydro] and its Counter-parties. The disclosure of these Contracts may reasonably be expected to cause financial loss to [Hydro] and to significantly harm [Hydro’s] bargaining position. . . . . .

Compelling production of the Export Contracts will be of concern to the counter-parties and potential future counter-parties, resulting in real prejudice to [Hydro’s] position in its ongoing contractual relationships as well as future negotiations .... . . . . . If a stay is not granted, the irreparable harm that could be suffered by [Hydro] and the public is so great with the possible loss of future market opportunity and leverage that the loss could easily be in the hundred [ sic ] of millions and [Hydro’s] loss could never be calculated or compensated. . . . . .

The Export Contracts are not inextricably linked to the Rate Hearing. The Rate Hearing only deals with rates for fiscal years 2010/11 and 2011/2012. If the PUB is successful in obtaining the Export Contracts it can revisit the issue in future rate hearings. [Hydro] is expected to file another GRA in November 2011.

Further, by virtue of Order Nos. 18/10 and 49/11 interim rates were set for fiscal years 2010/11 and 2011/12 and [Hydro] has not and isnot seeking retroactive rate increases. 141 PUB opposes the stay, as does SCO. Consumers’ takes no position and Industrial Group supports Hydro’s position. 142 The governing factors for granting a stay are the well-known criteria set out in RJR -- MacDonald Inc. v. Canada (AttorneyGeneral), (SCC), [1994] 1 S.C.R. 311. They are: 1. Is there a serious question to be tried? 2. Will the applicant for the stay (Hydro) suffer irreparable harm if the application is refused? 3.

Which of the parties will suffer greater harm from the granting or refusal of the stay (the balance of convenience test)? 143 My conclusion that Hydro has raised arguable and important questions for which leave to appeal is granted demonstrates thatthere are serious questions to be tried. 144 Given Mr. Cormie’s uncontested evidence in his affidavit, I am satisfied that the potential that Hydro will suffer irreparableharm is great if the stay is not granted, and that such irreparable harm would affect the public interest. 145 The crucial issue on the stay is where the balance of convenience rests.

I accept that there will be some harm to the publicinterest if the stay is granted. The harm is the delay in PUB issuing its final order and providing economic certainty to Hydro’scustomers. However, this harm must be assessed in the context of knowing that the interim orders exist, Hydro will not be seeking aretroactive increase, a final order may be issued at any time by PUB, if it so chooses, and Hydro will be filing a new rate application atany time, if it has not done so already. In my view, the irreparable harm that Hydro has demonstrated through the affidavit ofMr.

Cormie clearly outweighs the harm of any delay in PUB issuing a final rate order in the GRA. 146 For these reasons I conclude that a stay of the Order is appropriate until the decision on the appeal is released. Conclusion 147 I refer the following question of law to the panel hearing the appeal: Is Order No. 95/11 a “final order or decision” within themeaning of s. 58 of the PUB Act? 148 Leave to appeal is granted to Hydro on the following questions: 1. Did the PUB exceed its jurisdiction when it ordered that the export contracts be filed by Hydro? 2.

Did the PUB err at law when it determined that the export contracts were relevant for the rate-setting process? 3. Did the PUB err at law in dismissing Hydro’s assertion of public interest immunity with respect to the export contracts? 149 A stay of Order No. 95/11 is granted until the decision on the appeal is released. 150 I make no order as to costs as the issue was not argued before me. Counsel may argue costs for this motion at the appealhearing, if they wish. J.A. Appendix 1.

The PUB erred in law or exceeded its jurisdiction by ordering that Manitoba Hydro file with the PUB, in the hearing of ManitobaHydro’s 2010/11 and 2011/12 General Rate Application (“GRA”) the documents (“Export Contracts”) or portions thereof described in itssubpoena dated July 4, 2011 (“Subpoena”).

2. The PUB erred in law or exceeded its jurisdiction by determining that its statutory power in relation to the rates which Manitoba Hydro charges to customers in Manitoba extends to a consideration of the prudence of Manitoba Hydro’s contracts relating to the export of power from Manitoba to the United States of America when The Manitoba Hydro Act , CCSM, H 190 (the “Act”) expressly reserves the power to approve such contracts to the Lieutenant Governor in Council. 3.

The PUB erred in law or exceeded its jurisdiction by determining that its statutory power in relation to the rates which Manitoba Hydro charges to customers in Manitoba includes the power to review the prudence of Manitoba Hydro’s proposed development of new generation and transmission facilities related to the Export Contracts when the Act expressly reserves the power to approve the construction of such facilities to the Lieutenant Governor in Council. 4.

The PUB erred in law or exceeded its jurisdiction by demanding the production of Manitoba Hydro’s Export Contracts for the purpose of developing, outside the evidentiary record of the GRA hearing (“GRA Hearing”), its own studies, projections and conclusions in relation to the prudence of Manitoba Hydro’s proposed export activities and proposed capital projects, thereby depriving Manitoba Hydro from the opportunity to test such studies, projections or conclusions in the same manner as similar evidence from witnesses who testified at the GRA Hearing. 5.

The PUB erred in law or exceeded its jurisdiction in finding that the Export Agreements were incidental to, or reasonably required or necessary for the PUB’s review of the rates proposed to be charged by Manitoba Hydro. 6. The PUB erred in law or exceeded its jurisdiction in finding that it had the jurisdiction to consider Manitoba Hydro’s operations and planning independent of its jurisdiction to conduct a general rate hearing. 7.

The PUB erred in law or exceeded its jurisdiction in finding that it had the jurisdiction to conduct a review of the prudence of Manitoba Hydro’s power export activities and proposed capital projects. 8. The PUB erred in law in finding that the Interveners do not have the ability to appeal and attempt to gain access to the Export Contracts. 9. The PUB erred in fact in finding that Rule 13 of the PUB’s Rules of Practice and Procedure is sufficient to protect Manitoba Hydro’s commercial interests in preserving the confidentiality of the Export Contracts. 10.

The PUB erred in fact in finding that Manitoba Hydro’s GRA required the PUB to address the issue of whether the Export Contracts provide sufficient support for Manitoba Hydro’s proposed capital projects to justify those projects and in turn the rate increases requested by Manitoba Hydro.