Skip to main content

A judge has ordered Alberta Premier Jason Kenney’s government to decide whether Prosper Petroleum Ltd. can build an oil sands project, ruling that 20 months without a decision constitute an abuse of power.

Two successive provincial governments have deliberated on Prosper’s Rigel project since it won Alberta Energy Regulator approval in June, 2018. Its finances dwindling, the company asked the court to force the cabinet to issue a yes or a no.

Alberta Court of Queen’s Bench Justice Barbara Romaine on Tuesday sided with the company on all of its arguments, giving the government 10 days to decide whether it will grant an order in council, the final step before the project can proceed. Justice Romaine ruled that the time the cabinet has taken without explaining what is behind the delay is “unfair” and “abusive.” Previously, the longest such deliberation for an oil sands development was seven months.

The government has not offered a specific reason for the unusually long review, citing cabinet confidentiality, but part of the proposed project sits on land that the Fort McKay First Nation wants set aside for traditional use as part of a plan that also requires provincial approval. At the end of January, the province and the First Nation announced they would negotiate the final draft of the Moose Lake Access Management Plan over three months.

In court last week, Alberta argued that legislation gives the cabinet broad discretion for deciding on orders in council and does not allow the court to impose timelines. The province’s lawyer said that Prosper made its investments to date knowing the risks of the approval process. In addition, the transition of power to Mr. Kenney’s United Conservative Party government from Rachel Notley’s New Democrats in the spring of 2019 added to delays.

The judge said that other oil sands projects were approved during that time, however. She said the company had shown it was facing financial hardship and had done all it could to try to meet with government officials and make its case, to no avail.

The government will appeal the decision, spokespersons with the justice and energy ministries said, without providing details.

The lengthy delay is at odds with Mr. Kenney’s pro-oil rhetoric. His government has been adamant that energy projects should proceed without delay. Indeed, he has been front and centre demanding that Prime Minister Justin Trudeau’s federal cabinet approve Teck Resources Ltd.'s Frontier project without snags, and has pushed the federal government to proceed expeditiously with the Trans Mountain oil pipeline expansion.

In her decision, Justice Romaine made note of the Kenney government’s stated priorities of easing regulatory burdens on the oil industry, reducing costs and speeding up approvals.

In an interview, Alberta Justice Minister and Solicitor-General Doug Schweitzer declined to draw parallels between the Prosper and Teck cases, despite both of them waiting for cabinet approvals after having garnered regulatory clearances. “When it comes to this situation here, this is an ongoing court process. When it comes to Teck, that matter has gone through the full regulatory process," Mr. Schweitzer said. "It is now in the hands of the federal cabinet as to whether or not they are going to approve or not approve. So [those are] very distinct cases here, and situations.”

Brad Gardiner, Prosper’s chief executive officer, said the company was left with no other options when it took the government to court. He has said Prosper has already reduced staff and implemented a shortened work week to stay afloat during the waiting period. The Rigel project, which would produce 10,000 barrels a day 65 kilometres northwest of Fort McMurray, is its only asset.

“It’s not a preferred course of action, but we gave the government lots of opportunity to come to a decision on this. They didn’t appear willing to work with us or give us an explanation why,” he said.

With a report from Carrie Tait

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error

Editorial code of conduct