Environmental Regulation Is Not “Constructive Expropriation”

On April 4, 2024, the Alberta Court of Appeal released its decision in Altius Royalty Corporation v Alberta, 2024 ABCA 105 (CanLII).

The appellants own a royalty interest in a coal mine. In 2014 they acquired royalty interests in the Genesee coal mine. This coal fuels the Genesee power plant in Alberta.
By 2012 federal performance standards, the end of life of the three coal-fired plants was determined to be 2039, 2044 and 2055 (para 3).

They claim their interest was constructively expropriated (paras 2 and 5) when the government of Canada amended the regulations to require the performance standard for coal-fired plants to be met no later than 2030 and the government of Alberta introduced its Climate Leadership Plan to phase out coal-fired electricity generation emissions by 2030 (para 4).

“In 2018, the appellants filed a statement of claim against the respondents, Canada and Alberta, alleging they had constructively expropriated their royalty interest without compensation.” (para 5)

The application was summarily dismissed; see: Altius Royalty Corporation v Alberta, 2021 ABQB 3 (CanLII).

That decision was upheld on appeal to a chambers judge; see: Altius Royalty Corporation v Her Majesty the Queen in Right of Alberta, 2022 ABQB 255 (CanLII).

“At issue in this appeal is the first requirement in the CPR/Annapolis test: an acquisition of a beneficial interest in the property or flowing from it, or as stated in Annapolis, an acquisition of an advantage in respect of private property. Here, the appellants assert the advantage flowing to governments is “avoided healthcare and environmental expenses”. They seem to say that because the governments assigned a dollar figure to the healthcare and environmental benefits, the alleged advantage is a proprietary one.” (Appeal, para 29)

Ultimately, the Court of Appeal upheld the lower courts’ decisions, stating:
“Like Canada, Alberta received no advantage flowing from the appellants’ property. The appellants submit Alberta received benefits of the sort described in Canada’s Regulatory Impact Analysis Statement. But for the same reasons set out above, such public benefits do not satisfy the requirement that the Crown in right of Alberta acquired an advantage resulting from its actions.” (para 40).

Ecojustice was party to the appeal and has commentary explaining the trial decision and the appeal decision.

They also note that another “constructive expropriation” case is awaiting a ruling from the Supreme Court of Canada brought forward by the Lynch family of Newfoundland on a water regulation matter:
City of St. John’s v Wallace Lynch, et al (judgement reserved or rendered with reasons to follow, 16 November 2023, 40302).