2.
Procedure for Review
[3]
The applications filed by Loblaws were published by the Commission in the
province's two daily newspapers, The Guardian and the
Journal-Pioneer, in late October and also publicly noticed on the
Commission's website on and after October 25, 2005. Among other things, the
Notice of Applications (the "Notice") stated, in part, as follows:
If you wish to comment on the applications, you can write to
the Commission at the address below. Comments must be received by Thursday,
November 10, 2005 in order to be considered. Comments provided to the
Commission must also be forwarded to the Applicant at the address below.
The Commission will determine the necessity of a public
hearing into these applications following receipt of written comments.
[4] In
response to the Notice, the Commission received 84 written submissions, seven of
which requested a hearing. It is noted that the seven respondents who requested
a hearing are represented by either Eugene P. Rossiter, Q.C. or by Spencer
Campbell. Many of the submissions relate to the requirements of Section 20 of
the
Petroleum Products Act.
[5] On the issue of whether a public hearing is
necessary, Mr. Rossiter, counsel for a number of operators of existing
petroleum outlets, submits, in part, as follows:
A
public hearing is essential for various reasons. First, the Applicant seeks
not one, but four new petroleum products licenses. Accordingly, the
Applications, if successful, would have a significant impact on Prince
Edward Island, including the rural areas. Loblaws would have gas bars in all
three counties.
Many public hearings have been held in connection with
applications for petroleum products licenses in the past. In those hearings,
only one license was sought, yet the Commission exercised its discretion in
favour of holding a public hearing. It only stands to reason that if one
Applicant seeks four licenses at the same time, the Commission should again
exercise its discretion in favour of a public hearing.
Further, there have been many comments filed by various
sectors of the public in respect of these applications. As you are aware, in
deciding whether to issue a license, the Commission is required to consider
''the public interest, convenience and necessity". In our view, in
considering the public interest, convenience and necessity in applications
such as the present ones, it is necessary to hear from the public. We, on
behalf of our clients (the owners and/or operators of 43 retail gas outlets
in Prince Edward Island) have a great deal of evidence to present to the
Commission. This can only be done by way of a hearing, which will also give
the Applicant an opportunity to respond to the evidence presented.
[Written
submission of Eugene P. Rossiter, Q.C., dated November 29, 2005]
[6] The Commission notes that Mr. Campbell, representing
another 38 owners or operators or both owners and operators of retail outlets,
agrees with Mr. Rossiter's submissions and submits that a public hearing is
necessary.
[7] The Applicant, Loblaw Properties Limited ("Loblaws")
submits, in part, as follows:
In respect to the need for a Public Hearing to deal with this
matter we have not seen any evidence raised by any of the
correspondents/interveners to justify the expansion of this process by way
of a Public Hearing.
Ample
opportunity has been given to allow for detailed input by all parties.
We believe the
Commission can judge the matter based on the information before it and render a
decision in a timely matter (sic) to the benefit of all parties.
[Written
submission of Brian Gillis, dated November 21, 2005]
[8] The requirement for a public hearing into licensing
applications is discretionary. Section 38(1) of the
Petroleum Products Act reads as
follows:
38. (1) The Commission of its own motion may, and on
the request of the Lieutenant Governor in Council shall, conduct a public
hearing in respect of any matter involving licensing under this Act and any
matter relating to the administration of this Act or the regulations.
Although discretionary, this authority must be exercised
reasonably and in a manner consistent with the overall purposes of the
Petroleum Products Act.
[9] The principles of natural justice have developed in
administrative law to provide a party with an interest in a proceeding with an
opportunity to be heard before a decision contrary to that interest is made.
Over time, the principles of natural justice have evolved into a general duty
of procedural fairness which is owed by an administrative tribunal to those
potentially affected by its decisions.
[10] In general terms, the duty of fairness requires that
the tribunal, or decision maker, give notice to interested participants about
a decision it is contemplating, as well as disclosure of information that is
relevant to the issue. The participants should then be provided with an
opportunity to present evidence or argument or both. The steps that are
required by a tribunal to fulfill the duty of procedural fairness vary with
the specific context of each case and all of the circumstances must be
considered in order to consider the context of the duty.
[11]
The Supreme Court of Canada has made it clear that the right to
participate in the decision-making process does not automatically mean that a
party has a right to an oral or a public hearing. A leading case on procedural
fairness is Baker v. Canada (Minister of Citizenship and Immigration),
[1999] 2 S.C.R. 817, a decision of the Supreme Court of Canada where
the court held, among other things, that a decision, by itself, not to hold a
hearing is not a denial of fair procedure. The court stated that a number of
factors should be considered, including the governing legislation and the
factual circumstances of the matter under consideration. The court went on to
state, at paragraph 22, as follows:
I emphasize that underlying all these factors is the notion
that the purpose of the participatory rights contained within the duty of
procedural fairness is to ensure that administrative decisions are made
using a fair and open procedure, appropriate to the decision being made and
its statutory, institutional, and social context, with an opportunity for
those affected by the decision to put forward their views and evidence fully
and have them considered by the decision-maker.
[12] Baker was decided in 1999. Last year, the
statements in that case relating to the duty of fairness were confirmed by the
Supreme Court of Canada in Congregation des te moins de Jehovah de St.
Jerome-Lafontaine v. Lafontaine (Minicipalite), [2004] 2 S.C.R. 650, where Chief Justice McLauchlan stated, at
paragraph 5, that the content of the duty of fairness on a public body varies
according to five factors:
(1) the
nature of the decision and the decision-making process employed by the
public organization;
(2)
the nature of the statutory scheme and the precise statutory
provisions pursuant to which the public body operates;
(3)
the importance of the decision to the individuals affected;
(4)
the legitimate expectations of the party challenging the
decision; and
(5)
the nature of the deference accorded to the body.
[13]
In Baker, as well, the Supreme Court of Canada discussed
the narrower issue of when an oral hearing must be held (at paragraph 33):
However, it cannot be said that an oral hearing is always
necessary to ensure a fair hearing and consideration of the issues involved.
The flexible nature of the duty of fairness recognizes that meaningful
participation can occur in different ways in different situations. The
Federal Court has held that procedural fairness does not require an oral
hearing in these circumstances . . .
[14] Finally, a review of the relevant case law indicates
that a decision on whether to hold a public hearing is often influenced by
consideration of expense, delay and inconvenience. In fact, the Supreme Court
of Canada made the following observation in 1979, which was approved as a
statement of principle earlier this year in a Newfoundland decision
(Johnson v. The Board of Commissioners of Public Utilities), [2005] NLTD
53:
.
. . Fairness, however, does not necessarily require plurality of hearings or
representations and counter-representations. If there were too much
elaboration of procedural safeguards, nothing could be done simply and
quickly and cheaply. Administrative or executive efficiency and economy
should not be too readily sacrificed . . .
[15]
The Commission has fully considered the submissions of the
parties on this issue as well as the applicable law and is of the view that an
oral hearing is not necessary to ensure a fair hearing and consideration of
the issues involved. The Applicant and the interveners have been given an
opportunity to submit material related to the applications and to make
argument. The Commission believes that procedural fairness has occurred in
these proceedings through the public noticing and commenting process and
through public access to all of the documentary evidence submitted by the
parties.
[16] It is, in the Commission's view, significant that
the Applicant is relying on the information it has filed with the Commission
while, at the same time, indicating that it believes that the applications can
be dealt with at this time without the necessity of a public hearing. In the
circumstances, and for the reasons that follow, it is our view that the
applications that have been submitted do not require a public hearing.
3.
The Applications & Interventions
[17] Section 20 of the
Act is repeated below:
20.
When issuing a license with respect to the operation of an
outlet operated by a retailer, the Commission shall consider the public
interest, convenience and necessity by applying such criteria as the
Commission may from time to time consider advisable including but not
restricted to the demand for the proposed service, the location of the
outlet, traffic flows and the applicant's record of performance.
[18] As noted above, the applications are for four new
retail outlets. In support of the applications, Loblaws made the following
written submission respecting the requirements of section 20:
Loblaws
Proposed Retail Fuel Outlets in PEI
The retail fuel outlets proposed by Loblaws are [intended] to
meet with the relevant criteria as set out in Section 20 of the Petroleum
Pricing Act.(sic).
Loblaws is continually striving to improve its retail offer,
both merchandise and services, to the general public and its customers. A
strategy is to offer convenience to the consumer with a one-stop shopping
philosophy. As such a retail fuel outlet located on the same lot as the main
store offers such a convenience.
By having the gas bar located on the same lot as the main
store offers many benefits to both Loblaws and our customers (and general
public).
>The gas bar takes advantage of the built in customer base
and draws off the traffic already drawn to the main store.
>It encourages customers to save time by doing more of their
shopping at one destination and avoid the inconvenience of multiple shopping
stops.
>The main stores typically have large parking lots which
easily accommodate the addition of gas bars and which also facilitate
efficient traffic flow within the parking lot and provides good
ingress/egress with the adjacent streets/roads.
Loblaws in addition to continually striving to improve its
product and service offerings also provides excellent value and cost savings
opportunities.
>Customers of Loblaws retail fuel outlets have the
opportunity to earn "autocash" and/or "PC Points" which can be redeemed for
merchandise at the main store.
>The above cross merchandising programs can provide
significant value and cost savings to customers.
Loblaws retail fuel outlets record of performance in other
Provinces is such that it provides modern, efficient and effective
facilities that lead to higher than industry standard sales. Similar
performance for our proposed PEI retail fuel outlets is expected.
In summary Loblaws retail fuel outlets are [a] unique
offering that is convenient for the customer, provides excellent value,
offers cost saving opportunities and differentiates us from typical fuel
outlets.
[Attachment to
October 6, 2005 email from Brian Magdee, Loblaws]
[19]
The above
submission was made in respect of each of the four applications. In addition,
the Commission received the following submission, also applicable to each
application:
With respect to the applications made for retail gas outlets
in Montague, Charlottetown, Summerside and O'Leary Corner the following
factors should be considered:
Loblaws, on whose behalf these applications are being
presented, is Canada's leading grocery retailer who has developed innovative
and value driven performance for its customers, operating from coast to
coast in Canada.
Loblaw's have brought such products as "President's Choice
Financial" which offers customers core banking services along with other
integrated customer loyalty programs under the President's Choice Branding.
"At the Pumps" – offers Atlantic Superstore customers the
opportunity to benefit from cross marketing of the grocer and gas product
lines. This unique service has been implemented successfully in all markets
in Canada with the exception of Newfoundland and PEI.
This unique service can offer "real value" to consumers
through discounts to their weekly purchases, helping householders to reduce
their expenses during these periods of escalating prices. Additionally it
opens the market to competitive forces that exist throughout Canada.
There is the further benefit of creating investment in our
Island economy and leveling the playing field with the other Maritime
Provinces.
[Contents of letter
dated September 28, 2005 from Brian Gillis on behalf of Loblaws]
[20] Apart from routine information required in the
standard application forms used by the Commission-including a site plan for
each proposed outlet and information on proposed promotional activities-the
above constitutes the complete submission of Loblaws in relation to the
requirements of section 20 of the
Act.
[21] The Commission received 84 written submissions
in response to the published Notice of Applications, most of them from
existing petroleum licensees. All of the submissions oppose the applications,
for several reasons, including:
[22] In response to the 84 written submissions, the
Applicant made the following submission:
In
response to the comments/interventions raised . . . there does not appear to
be any information raised to deny the applications by [Loblaws].
Society is
an ever changing, dynamic and an evolving set of relationships. We witness
everyday significant reworking of our economies with shifts in supply
relationships whether it is in Transportation – THE JOINING OF THE ISLAND TO
THE MAINLAND VIA A FIXED LINK, Communications – PHONE DEREGULATION OR THE
GLOBAL BUSINESS NETWORK OF THE INTERNET and in Power Generation – SHIFT FROM
OIL GENERATED ELECTRICITY TO WIND POWER.
Islanders have embraced these changes which bring about a level playing
field and real personal cost savings.
This is a natural transition in the retail petroleum industry
and yes, it will be resisted by parties that have a vested interest in the
status quo.
The
four points we wish to stress are:
1. The
Public interest is met in allowing Island consumers to have equivalent
opportunity for participating in Customer Loyalty programs, just as in any
adjacent market
area.
2.Allowing
consumers the convenience of cutting down on multiple trips and combining
their purchasing power at a single location.
3. Necessity – by allowing new investment to be made in our local economy.
4.All of the sites selected are strategic, high-traffic locations with safe
efficient access to the road network.
The skill and excellence that [Loblaws] demonstrates on a
daily basis with its retail programs from Coast to Coast are evidence
of its record of performance and its ability to successfully carry out a
retail gas bar program on Prince Edward Island.
. . .
[Contents of letter dated November 21, 2005 from
Brian Gillis on behalf of Loblaws]
[23] The requirements of section 20 of the
Act have been discussed in numerous
decisions and orders issued by the Commission over the years and need not, for
the purpose of these reasons, be further discussed herein. These decisions and
orders are readily available on the Commission's public website. In this
instance, it is necessary to say only that the applications do not adequately
address the specific criteria set out in section 20, nor do they contain
sufficient information to enable the Commission to address whether the public
interest, convenience and necessity require that any of the licenses be
granted.
[24] While it is unknown to the Commission whether the
Applicant carried out any research into the requirements of section 20, it is
clear to the Commission that Loblaws has not put its mind to the requirements.
There is little, if any, evidence addressing the requirements. The mere desire
on the part of Loblaws to open the proposed outlets is simply not enough.
[25] The Commission finds that the Applicant has not, in
respect of each of the four applications filed herein, persuaded the
Commission that the licenses applied for under section 20 of the
Act
should be issued. The applications are therefore dismissed.
4.
Disposition
[26] An Order dismissing the applications will therefore
issue.
Order
UPON
reading and considering the
applications and the submissions filed herein;
NOW THEREFORE,
for the reasons given in the annexed Reasons for Order;
IT IS ORDERED THAT
the applications
are dismissed.
DATED
at Charlottetown, Prince Edward Island, this 15th
day of December, 2005.
BY
THE
COMMISSION:
Maurice Rodgerson,
Chair
Brian McKenna,
Vice-Chair
Weston Rose,
Commissioner
James Carragher, Commissioner
Notice:
Section
58 of the
Petroleum Products Act
reads as follows:
58. Where any
person has the status of a party or is an intervenor in any hearing before the
Commission, he is entitled
(a) to appeal
the decision of the Commission to the Appeal Division; and
(b) to participate as a party in the hearing of an appeal.
and an appeal shall
be on a question of law or jurisdiction only and be governed by section 13 of
the Island Regulatory and Appeals Commission Act.
Sections 13.1 (1) and
(2) of the Island Regulatory and Appeals Commission Act provide as follows:
13.(1) An
appeal lies from a decision or order of the Commission to the Appeal Division
of the Supreme Court upon a question of law or jurisdiction.
(2)
The appeal shall be made by filing a notice of appeal in the Supreme Court
within twenty days after the decision or order appealed from and the Civil
Procedure Rules respecting appeals apply with the necessary changes.
