Shell Canada Ltd. v. Canada ( Attorney General )
A-242-98
Desjardins J.A.
8/10/98
8 pp.
Appeal from Trial Division decision ([1998] 3 F.C. 223) allowing application for judicial review of decision of Minister of Indian Affairs and Northern Development confirming decision by Manager of Indian Oil and Gas Canada (IOGC) who, for years 1983 to 1988, deducted from Shell's claim for costs of processing (gas cost allowance (GCA)), value of investment tax credit (ITC) earned by Shell under Income Tax Act-Manager acted under Indian Oil and Gas Regulations, s. 21(1) and Schedule I, s. 2(4)-Motions Judge concluded Minister had improperly exercised discretion by applying Regulations retrospectively and by denying Shell opportunity to reply to submissions IOGC had transmitted to him-Appeal dismissed-Motions Judge agreed with: Manager improperly exercised his discretion and Minister erred in confirming him-For purposes of calculating royalties on natural gas payable to IOGC in trust for Stoney Indian Band of Alberta, Shell Canada computed its GCA in accordance with applicable guidelines-Shell calculated its GCA using its cost of relevant capital assets-No mention in guidelines of ITC having to be subtracted from costs of processing under Regulations, Schedule I, s. 2(4)-Shell acted in good faith-Statute said to be retrospective not only when it takes away or impairs vested rights, but also when it creates new obligation, imposes new duty or attaches new disability with regard to events already past: Yen Bon Tew v. Kenderaan Bas Mara, [1983] 1 A.C. 553 (P.C.); Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301-While Act silent about retrospectivity, Schedule I, s. 2(4) making it clear Manager shall allow such costs of processing as he may "from time to time consider fair and reasonable"-Courts have interpreted phrase "from time to time" as prospective in nature: A.G. for Alberta v. Huggard Assets, [1951] S.C.R. 427-Therefore, clear indication Regulations prohibited retrospective calculation and that Minister's decision contrary to statutory law-Furthermore, Motions Judge right in finding Shell denied right to be informed of key element (professional advice provided by major accounting firm to IOGC and placed by IOGC before Minister in support of its decision) in decision Manager had taken-Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1-Indian Oil and Gas Regulations, C.R.C., c. 963, s. 21(1), Schedule I, s. 2(4)-Indian Oil and Gas Regulations 1995, SOR/94-753.