T-758-82
In re the Interpretation of a Certain Agreement
Entered Into Between Canada and Alberta on
March 29, 1973
Trial Division, Jerome A.C.J.—Edmonton, June
17; Ottawa, October 28, 1982.
Crown — Contracts — Application pursuant to s. 19 of the
Federal Court Act and para. 8 of Agreement between govern
ments of Canada and Alberta for transfer of ownership and
management of Bow River and St. Mary's irrigation projects
from Canada to Alberta, to resolve controversy over Canada's
obligation under Agreement to transfer mineral rights over
certain titles in Bow River Project — Language of paras. 3(1)
and 1(b) and Sch. B of Agreement clearly requires that Canada
transfer to Alberta all interests in land and mineral rights
acquired for purposes of Bow River Project, whether or not
presently held for that purpose — Para. 3(1) provides that
Canada will transfer all rights and interests in real and
personal property in Bow River Project to Alberta; para. 1(b)
defines Bow River Project as being management, administra
tion and control of all property, real and personal, and all
rights and obligations owned, held and enjoyed by Canada
within project and owned and used by Canada in association
with operation and maintenance of said project as described in
Sch. B — Sch. B includes in Project all lands and interests in
land held by Canada, including mineral rights (heretofore)
under Canada's Bow River Project management — Use of
word "heretofore" makes it clear Canada obliged to transfer
any mineral rights it owned at time of execution of Agreement
and which had been at any previous time under Canada's
management for purpose of Bow River Project — Canada
originally purchased all land, interest in land and mineral
rights in question for purposes related to Bow River Project
Fact that responsibility for mineral titles was removed from
the Prairie Farm Rehabilitation Administration, which has
overall responsibility for Bow River Project, and transferred to
different Ministry, which had no connection with project, is
inconsequential — Arrangements were essentially in nature of
internal management and do not alter Canada's ownership in
titles at date of 1973 Agreement nor do they change purpose
for which titles were originally acquired — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 19.
COUNSEL:
D. Friesen and J. A. Pethes for Government
of Canada.
A. P. Hnatiuk for Government of Alberta.
SOLICITORS:
Deputy Attorney General for Canada.
Attorney General for Alberta.
The following are the reasons for judgment
rendered in English by
JEROME A.C.J.: On March 29, 1973, the gov
ernments of Canada and Alberta entered into an
agreement for the purpose of transferring from
Canada to Alberta ownership and management of
the Bow River and St. Mary's irrigation projects.
This application, contemplated by paragraph 8 of
the Agreement and by section 19 of the Federal
Court Act' is to resolve a controversy over Cana-
da's obligation to transfer mineral rights in respect
to certain titles in the Bow River Project. Clause 8
of the said Agreement provides that:
8. If any dispute arises as to the interpretation or application of
this Agreement in respect to any matter, if the matter in
dispute cannot be resolved by the Ministers, Canada and
Alberta will by appropriate Agreement submit the questions of
fact and law in dispute to the Federal Court of Canada for
determination.
Section 19 of the Federal Court Act is as follows:
19. Where the legislature of a province has passed an Act
agreeing that the Court, whether referred to in that Act by its
new name or by its former name, has jurisdiction in cases of
controversies,
(a) between Canada and such province, or
(b) between such province and any other province or prov
inces that have passed a like Act,
the Court has jurisdiction to determine such controversies and
the Trial Division shall deal with any such matter in the first
instance.
After the 1973 Agreement had been executed but
before any actual transfers of land had taken
place, the parties were in disagreement over all
mineral rights. Accordingly, the first transfer from
Canada to Alberta, pursuant to the 1973 Agree
ment, was of surface rights only. Subsequently,
Canada acknowledged the responsibility to include
mineral rights where they were jointly held with
surface rights and did execute the appropriate
transfer. Mineral rights are separately held with
respect to forty-nine (49) titles and these remain
the subject of controversy. Three (3) such separate
mineral titles were acquired by Canada some time
after the original acquisition of the land for the
Bow River Project and the remaining forty-six
' R.S.C. 1970 (2nd Supp.), c. 10 and amendments thereto.
(46) were acquired at the same time but subse
quently placed under the direction and manage
ment of a Ministry which was not involved in any
way with the Bow River Project or with the execu
tion of the 1973 Agreement. The question to be
resolved in this application is whether the Agree
ment of March 29, 1973, requires Canada to
transfer to Alberta any or all of these forty-nine
(49) mineral titles. After careful consideration of
the evidence and of representations made by coun
sel for the parties at Edmonton on June 17, 1982, I
have reached the conclusion that the Agreement
does require Canada to make such a transfer.
Paragraph 3(1) of the 1973 Agreement is as
follows:
Canada will transfer to Alberta all of Canada's rights and
interest in property, real and personal, including accounts
receivable of the Bow River and St. Mary Projects and Alberta
agrees to accept the management, administration and control of
all Canada's rights, title and interest in the Bow River and St.
Mary Projects as of and from the 1st of April, 1973 or such
other date that the Ministers may agree to prior to the 1st of
April, 1974.
Paragraph 1(b) of the Transfer Agreement
defined the Bow River Project in the following
terms:
'Bow River Project' means the management, administration
and control of all canals, reservoirs and other irrigation works
held by Canada, from the point of intake on the Bow River in
Section 31, Township 21 and Range 25, West of the 4th
Meridian in the Province of Alberta, to and including the
irrigation works in the Hays District bounded on the east by
the Bow River in Townships 12 and 13 in Range 12, West of
the 4th Meridian, together with all property, real and personal,
and all rights and obligations owned, held and enjoyed by
Canada within the said Bow River Project area and owned and
used by Canada in association with the operation and mainte
nance of the said project, as further described in Schedule 'B'
attached.
Schedule "B" to the Transfer Agreement reads
as follows:
BOW RIVER PROJECT
(i) All the lands and interests in land held by Canada including
rights of way, easements, licences of occupation and mineral
rights (heretofore) under Canada's Bow River Project manage
ment, and as shown on Plan No. R623 attached hereto;
(ii) All choses-in-action which Canada is entitled to enforce or
enjoy arising from its operation of the said project;
(iii) All and sundry the property of Canada, real and personal,
and interests in lands within the Project area sold by Canada
under Agreement for Sale;
(iv) All those assets owned and used by Canada in association
with the operation and maintenance of the project and being:
all distribution facilities for the supply and distribution of
water; all buildings, shops, machinery, equipment, tools and
instruments owned and used by Canada in the repair, mainte
nance and operation of the said Project; the stores and inven
tory owned and used by Canada for the said Project; grain and
feed on land; the benefits of any and all agreements for the sale
of lands, leases, permits and for the distribution of water to
users within the Project.
I do not find the language of these paragraphs
either vague or ambiguous. Paragraph (i) of
Schedule "B" places Canada under the clear obli
gation to transfer all interests in land and all
mineral rights under Canada's management for
the Bow River Project. Without the bracketed
word "heretofore" in paragraph (i) of Schedule
"B", there might be some question whether Cana-
da's obligation would go beyond those interests or
rights actually held for that purpose at the time of
the execution of the agreement, but the presence of
the word "heretofore" removes any possibility for
doubt. It can only mean that Canada is obliged to
transfer any mineral rights which it owned at the
time of the execution of the agreement and which
had been at any previous time under Canada's
management for the purpose of the Bow River
Project.
Canada's original acquisition of the Bow River
Project took place by Agreement dated July 14,
1950, whereunder Canada acquired from the
Canada Land and Irrigation Company Limited an
irrigation project in the Province of Alberta which
included the Bow River Project. In paragraph 4 of
the Agreement Canada bought "... the undertak
ing of the company . ..", and in paragraph 5 the
term "undertaking" was defined to include "(a) all
of the land and interests in land held by the
company including rights of way, licences of occu
pation and mineral rights". Of the mineral rights
thus acquired by Canada, all but forty-six (46)
were in relation to certificates of title for both
surface and mineral rights, but there is no indica
tion that the purpose of acquisition by Canada of
the forty-six (46) separate mineral titles was in
any way different from the purpose of the balance
of the acquisition. All titles were acquired for the
purpose of the Bow River Project. Similarly, with
the remaining three (3) separate mineral titles.
These were acquired by Canada from sources
other than the Canada Land and Irrigation Com
pany Limited, but that fact does not in any way
alter Canada's purpose in the acquisition. It was
equally for the purposes related to the Bow River
Project.
Counsel for the Crown made reference to the
fact that after these acquisitions, responsibility for
the Bow River Project fell to the Prairie Farm
Rehabilitation Administration which was initially
within the Department of Agriculture and later
within the Department of Regional Economic
Expansion. Responsibility for the forty-nine (49)
separate mineral titles, however, was transferred to
a different Ministry and in March of 1973 was
under the management of the Department of
Northern Affairs and Natural Resources which
was charged by statute with responsibility for
Canada's interest in mineral rights. I also note that
this latter Ministry had no involvement at any
time with the Bow River Project and that the 1973
Agreement, which is in issue here, was not exe
cuted by a Minister responsible for Northern
Affairs and Natural Resources, but solely on
behalf of Canada by the Minister of Regional
Economic Expansion. I consider these arrange
ments to be essentially in the nature of internal
management. They do not alter Canada's owner
ship of these titles at the date of the 1973 Agree
ment. Neither do they change the purpose for
which these titles were originally acquired by
Canada.
To repeat, the language of the 1973 Agreement
is neither vague nor ambiguous. It requires
Canada to transfer mineral rights which it
acquired for the purposes of the Bow River
Project. The forty-nine (49) separate mineral titles
were owned by Canada at the date of the 1973
Agreement and had been acquired for the purpose
of management of the Bow River Project and I
therefore conclude that it is Canada's obligation
under the 1973 Agreement to transfer these forty-
nine (49) separate titles to Alberta.
No reference was made by counsel to the ques
tion of costs and I am not aware if the agreement
between the parties for the resolution of this con-
troversy contains any special arrangements in that
regard. It is my view that since the controversy
was resolved in favour of Alberta, costs should be
awarded to the Government of Alberta, but if the
parties wish to make further submissions in that
regard, I will hear them.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.