Redwater decision reassuring, but we aren’t out of the woodsPembina Institute reacts to the Supreme Court of Canada’s Redwater decision

Jan. 31, 2019

Oilsands tailings. Photo: Jennifer Grant, Pembina Institute

CALGARY – JODI MCNEILL, analyst at the Pembina Institute, made the following statement in response to the Supreme Court's Decision on the Redwater legal case:

"The Supreme Court of Canada has prioritized paying clean up costs before creditors when extractive companies go bankrupt. This outcome reinforces the growing understanding that polluters are responsible for their clean up obligations.

“However, the Supreme Court's decision does not alleviate broader challenges posed by insolvent operations. While the Supreme Court's decision ensures bankrupt companies' remaining assets first go to clean up, those assets are often insufficient to cover full costs. Canadian taxpayers are already paying billions to clean up former operations including the Faro Mine in the Yukon, the Giant Mine in the Northwest Territories, and numerous mines in B.C.

“Over the last five decades Alberta's clean up obligations have steadily grown, and now include over 80,000 inactive oil and gas wells, facilities, and pipelines as well as 1.4 trillion litres in fluid oilsands tailings. The Government of Alberta officially estimates it will cost CAD$57 billion to cleanup these sites, though there are ongoing concerns about the accuracy of this figure. Conversely, only $1.2 billion is currently held in securities to protect the public. 

"There are tools available to reduce the risk exposure of Canadian taxpayers and communities. Before we can chart solutions, however, everyone needs to be on the same page about the problem. The Alberta government has long neglected its obligation to collect and release precise information on oil and gas liabilities. All political parties in the province must make clear commitments on how they will substantively address this issue moving forward.”



Michelle Bartleman
Communications Lead, Alberta


Key Facts

  • In 2015 an Alberta-based junior oil and gas company called Redwater Energy Corp. declared bankruptcy. The company’s trustee Grant Thornton LLP then declared it would use the company's remaining assets to pay off the company's creditors before paying for its cleanup obligations. This contradicts provincial regulatory laws enforced by the Alberta Energy Regulator (AER).

  • Grant Thornton LLP's argument was that a clause in the Federal Bankruptcy and Insolvency Act (BIA) contradicts the AER's rules and allows for paying creditors to be prioritized over cleanup.

  • The AER sued Grant Thornton LLP, and in May 2016 Alberta's highest court ruled in favour of the trustee's interpretation of the BIA. The AER then appealed the decision to Canada's Supreme Court. Today, the Supreme Court overturned the original Queen's Bench ruling in favour of the Alberta Energy Regulator.


Blog: The Alberta government has a transparency problem when it comes to oil and gas liabilities (November 2018)

Blog: A liability iceberg in Alberta exposed by the Redwater case (April 2018)

Blog: The catch-22 of the Redwater case (May 2018)

Blog: What does the Redwater case mean for oilsands mines clean-up? (May 2018)


About the Pembina Institute

The Pembina Institute is a non-profit think-tank that advocates for strong, effective policies to support Canada’s clean energy transition. We have offices in Vancouver, Calgary, Edmonton, Ottawa and Toronto. Learn more:


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