Executive Summary: Key Legal and Evidentiary Issues

• The central issue was whether the appeal of the Alberta Energy Regulator's January 31, 2025 Reconsideration Decisions — which lifted suspensions of coal exploration program approvals — became moot following the surrender of coal leases by the Coal Exploration Companies.
   
• Applying the two-part Borowski test, the Court found no live controversy remained once the Coal Exploration Companies surrendered their leases and ceased exploration activities under the CEPs.
   
• Ranchland argued the question of whether the 1976 Coal Policy was binding on the AER was not moot, as it could arise again in future coal exploration applications affecting its municipal district.
   
• No true adversarial context remained, as the Coal Exploration Companies did not participate in the appeal, and the industry's perspectives were entirely absent from the proceedings.
   
• Judicial economy weighed against deciding the appeal, as the binding effect of the Coal Policy on the AER had not been substantively decided by the AER itself and remained a live issue for future proceedings.
   
• Costs were not awarded; the Court ordered all parties and intervenors to bear their own costs.

Facts of the case

The Municipal District of Ranchland No. 66 ("Ranchland") appealed three decisions of the Alberta Energy Regulator ("AER") dated January 31, 2025 ("Reconsideration Decisions"), which lifted the suspension of coal exploration program approvals ("CEPs") previously granted to three respondents: Cabin Ridge Project Limited, Elan Coal Ltd., and Montem Resources Alberta Operations Ltd. (the "Coal Exploration Companies"). The CEPs authorized coal exploration work within Ranchland and directed that reclamation work be completed by prescribed deadlines.

Coal exploration in Alberta has been the subject of provincial government policy and public debate for decades. In 1976, the Alberta Government adopted A Coal Development Policy for Alberta ("Coal Policy"), which established four classifications of lands for coal exploration and development. Category 2 lands — the lands at issue — allow for "limited exploration" under "strict control. . . in which commercial development by surface mining will not normally be considered." The CEPs were issued in 2020, during a short period when the Coal Policy was not in effect. They were later suspended from April 23, 2021, until January 31, 2025, by directions in Ministerial Orders.

The suspensions were lifted by the Minister of Energy and Minerals through Ministerial Order MO 003/2025, which directed the AER to "lift the suspensions of all approvals that were suspended under [prior] Ministerial Orders" and to "extend the expiry dates of approvals suspended . . . to account for the period of suspension." The Order also directed the AER to "continue to apply the restrictions in place in respect of the exploration for and development of coal within categories of lands as described in [the Coal Policy] when evaluating coal applications." Ranchland asserted before the AER that the Minister lacked authority to direct the extension of expiry dates, and that the AER was required to conduct a substantive review of the CEPs for compliance with the Coal Policy — including restrictions applicable to Category 2 lands and local areas of high environmental sensitivity. The AER rejected those arguments in the Reconsideration Decisions, lifted the previous suspensions of the CEPs, and extended the expiry dates for both exploration and reclamation work, without engaging with the requirements of the Coal Policy.

Policy terms and regulatory framework at issue

The 1976 Coal Policy was at the centre of the appeal. Permission to appeal was granted on four questions, including whether the AER erred by failing to apply the Coal Policy — specifically the activities permitted under Category 2 lands, and the definition of "local areas of high environmental sensitivity." Ranchland submitted that the Coal Policy binds the AER either because it has the force of law or because it was imposed on the AER by MO 003/2025. Alberta, as intervenor, contended the Coal Policy does not have the force of law because guidelines and policy statements are generally not legally binding unless a functional and purposive approach to their nature reveals them to be a form of law, citing Johnson v Alberta (Director of Vital Statistics), 2008 ABCA 188, and Bell Canada v Canadian Telephone Employees Association, 2003 SCC 36. Alberta further argued that MO 003/2025 directed the AER to apply Coal Policy restrictions only "when evaluating coal applications," and that the Reconsideration Decisions addressed amendments to existing CEPs, not coal applications.

Reasoning and analysis

The Court applied the two-part mootness test from Borowski v Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 SCR 342. The first step required determining whether a "tangible and concrete dispute" between the parties had disappeared and the issues had become academic. The Court found that no live controversy remained. Shortly before the appeal was to be heard, the AER informed the Court that the Coal Exploration Companies had surrendered their coal leases for the lands covered by the CEPs. Montem and Elan Coal's timeframes for exploration had already expired, and Cabin Ridge — while technically authorized to conduct exploration work until June 26, 2026 — had represented to the AER in writing on December 30, 2025, that it had transferred the fee simple lands and surrendered the coal leases to Alberta, and "will not be conducting further exploration work." Rushang Joshi, a former Coal Manager with the AER, deposed that he did not know of any practical reason why any of the Coal Exploration Companies would carry out exploration activities on the relevant lands, given the surrenders. Ranchland acknowledged it had not identified any prejudice it would suffer if reclamation work was completed within the amended timelines.

The second step required consideration of whether the circumstances nonetheless warranted exercising discretion to hear the moot appeal, based on: (a) the presence of an adversarial context; (b) judicial economy; and (c) the Court's sensitivity to its proper law-making function. On adversarial context, the Court found that no true adversarial framework remained. The Coal Exploration Companies did not participate in the appeal, and no entity representing the interests of the coal exploration and extraction industry was before the Court. The AER, as decision-maker, was a limited participant, and the Minister had largely confined his submissions to the vires of the Ministerial Order. As noted in Benga Mining Limited v Alberta Energy Regulator, 2021 ABCA 363, the AER has a limited role in making submissions because it is the decision-maker. The balance of the appeal had "not been fully and vigorously argued."

On judicial economy, the Court noted it would be preferable to wait for the AER to decide the legal nature of the Coal Policy in the first instance, given the AER's specialized knowledge and expertise. The Reconsideration Decisions themselves left the legal effect of the Coal Policy as a live issue, noting that "amended Approvals may themselves constitute appealable decisions, and parties may wish to file with the AER requests for regulatory appeal of the amended approvals." Ranchland had not pursued that regulatory appeal route under section 30 of the Alberta Energy Regulator Rules of Practice, Alta Reg 99/2013. On the Court's proper law-making function, determining the breadth and application of the Coal Policy against the long backdrop of its adoption, suspension, reinstatement, and the Government's evolving coal practices required a concrete legal dispute and factual context that was absent.

Ruling and overall outcome

The Court concluded that the appeal was moot and declined to exercise its discretion to hear and decide the merits. The dispute between the parties had become purely academic, the Coal Exploration Companies had not participated, and a true adversarial context with full argument was lacking. The appeal was dismissed. The respondents Alberta Energy Regulator, Cabin Ridge Project Limited, Elan Coal Ltd., and Montem Resources Alberta Operations Ltd. were the successful parties on the mootness determination. No monetary award was made; the Court ordered all parties and intervenors to bear their own costs.