Executive Summary: Key Legal and Evidentiary Issues

• Alberta's Court of Appeal considered whether an emergency order made in Bankruptcy and Insolvency Act proceedings had become moot before the appeal could be heard.
   
• British Columbia's Attorney General argued the order continued to shield Erikson National Energy Inc. from investigation or prosecution over gas taken without a lease.
   
• Chambers proceedings below were conducted on an emergency Friday-afternoon basis, with only the applicant's affidavit material before the judge.
   
• Constitutional questions about the reach of federal bankruptcy jurisdiction into provincial resource authority were raised but never argued in an adversarial context.
   
• Grant Thornton Limited's subsequent appointment as receiver and the sale of Erikson's assets left the underlying order with no clear ongoing practical effect.
   
• Justices Strekaf, Antonio, and Woolley unanimously found the appeal moot and declined to exercise discretion to hear it regardless.
   

Facts of the case

Erikson National Energy Inc. owned a gas plant in remote northeastern British Columbia. The plant had stopped operating after the British Columbia Tenure and Resource Stewardship Branch (BC Tenure) cancelled Erikson's natural gas leases for non-payment. Erikson had continued using natural gas in its pipelines to maintain and heat the plant, but two days before the events at issue it discovered only five days of gas remained before its equipment risked freezing — a scenario that could cause extensive facility damage, safety risks, and environmental harm. Efforts to negotiate a temporary emergency arrangement failed.

While Erikson was the subject of a proposal under the Bankruptcy and Insolvency Act, RSC 1985, c B-3, it brought an emergency application before the Alberta Court of King's Bench on short notice, heard on a Friday afternoon [source states the application was brought "on December 5, 2024," though the order itself is dated December 6, 2024 — a Friday; the discrepancy is unresolved in the source]. The only affidavit material referred to in oral argument was filed by Erikson itself. Counsel for the Attorney General of British Columbia (AGBC) flagged a constitutional concern about the chambers judge's jurisdiction but said he could not provide authorities given the emergent timelines. AGBC stated it did not want to stand in the way of a solution and made no submissions regarding Erikson's ability "to deal with this emergency or anything else."

The British Columbia Energy Regulator (BCER) took the position that it could not direct Erikson to take gas that did not belong to it. BC Tenure maintained it was constrained by legislation from continuing the lease, even temporarily. After discussion with counsel, the chambers judge granted the order without providing reasons.

Policy and legislative provisions at issue

The order directed BCER to issue an emergency measures order requiring Erikson "to maintain its assets in a safe manner, including maintaining" the plant despite the cancelled lease. It declared that taking these measures would not constitute an offence under the Energy Resource Activities Act, SBC 2008, c 36 (ERAA), and granted Erikson and its employees, agents, directors, officers, and shareholders relief from penalties under the ERAA or otherwise.

AGBC appealed the order on December 13, 2024. No party sought to vary or stay it, either below or on appeal. On May 5, 2025, BCER applied to have a receiver appointed over Erikson's assets; that application was granted, the assets were subsequently sold through the receivership process, and the receiver was discharged. AGBC was the only party participating in the appeal. Separately, because Erikson no longer operated the facility, it was not obvious the order could have any further practical effect — prompting the Court of Appeal to ask AGBC to explain why the appeal was not moot, a threshold question governed by the test set out by the Supreme Court of Canada in Borowski v Canada (Attorney General), 1989 CanLII 123 (SCC), [1989] 1 SCR 342 at 353: a matter is moot when the court's decision will not resolve a controversy affecting or potentially affecting the parties' rights.

Reasoning and analysis

The Court acknowledged it retains discretion to hear a moot matter where appropriate, weighing the presence of an adversarial relationship, judicial economy, the importance of the question, whether the issue is capable of repetition yet evasive of review, and the court's proper law-making function.

AGBC argued that while BCER had issued direction consistent with the spirit of the order, it had not done so in the order's exact terms, raising a question about whether the order was spent. More forcefully, AGBC argued the order had an ongoing effect by preventing it from investigating or prosecuting the taking of gas without a lease or the taking of excess gas — though the nature of any such prosecution was never identified. AGBC further submitted the appeal should proceed regardless of mootness given the importance of the jurisdictional question, the order's potential precedential effect, and the likelihood the issue would recur in emergent contexts and evade review.

Because BCER was not a party to the appeal, the Court declined to entertain any suggestion that BCER had failed to comply with the order. It found AGBC could not explain how the order might prevent an investigation or prosecution if gas were taken without permission or beyond what was needed to maintain the assets, nor how a reversal on appeal could affect the assessment of any actions Erikson took while the order was in force. AGBC had also asked the Court to provide guidance on how far the Bankruptcy and Insolvency Act could reach in directing the exercise of provincial authority over natural resources and authorizing the taking of resources without compensation. The Court accepted these might be important issues but found that any such analysis required an adversarial context that was absent on appeal, particularly given the sparse record left by the emergent timelines below. AGBC's counsel advised orally that another party was apparently seeking a similar order based on the order under appeal; the Court found that if such a case arose, a more appropriate forum would exist to determine the order's legality, and it was not satisfied the issues would evade review.

Ruling and overall outcome

The Court of Appeal held that the appeal was moot and declined to exercise its discretion to hear it. The appeal, brought by the Attorney General of British Columbia, was dismissed, leaving the underlying emergency order — and the relief it afforded Erikson National Energy Inc. — undisturbed. The judgment does not identify any monetary award, damages, or costs order in favour of either party.