Osler scores important win for oil sands project proponents seeking timely decisions from government

Sander Duncanson, Sean Sutherland

Feb 18, 2020

In an important win for Osler and the Alberta oil and gas industry, an Alberta Court judge ordered the Alberta Provincial Cabinet to decide within 10 days whether to approve Prosper Petroleum Ltd.’s Rigel Oil Sands Project.

The Alberta Energy Regulator conditionally approved the Project and found it to be in the public interest of Alberta in June 2018. This put the ball in the Provincial Cabinet’s court for a final decision. However, 19 months later, the Provincial Cabinet has not yet issued a decision nor explained its delay to Prosper.

On February 18, 2020, the Court of Queen’s Bench of Alberta found the Provincial Cabinet’s delay to be “abusive” and ordered the Provincial Cabinet to make a decision within 10 days. The Court confirmed that the Provincial Cabinet has a duty to issue a decision under the Oil Sands Conservation Act within a reasonable time period based on typical or average timelines for such a decision. Here, the Court found that the Provincial Cabinet breached that duty by delaying for 19 months, without explanation. Therefore, the Court ordered a mandatory interlocutory injunction and/or order in the nature of mandamus directing the Provincial Cabinet to issue a decision.

The decision confirms that oil sands project proponents are entitled to timely decision-making from government. Where governments fail to act, project proponents may seek a court order requiring a decision within a reasonable time period. This certainty is critical for project proponents investing tens to hundreds of millions of dollars to advance projects through increasingly complex and lengthy regulatory processes.

Osler lawyers Sander Duncanson (Regulatory) and Sean Sutherland (Litigation) successfully represented Prosper in the oral hearing of this matter and have also appeared at the Court of Appeal and on leave to appeal to the Supreme Court of Canada in other Project-related litigation. Osler lawyers Maureen Killoran, QC  (Litigation), Jessica Kennedy (Regulatory) and Devin Aman (Litigation) also played key roles assisting Prosper in this application.