Environmental Obligations in Insolvency Proceedings: Orphan Well Association v. Grant Thornton Ltd

On January 31, 2019, the Supreme Court of Canada rendered its decision in Orphan Well Association v Grant Thornton Ltd (commonly referred to as “Redwater”). In a 5-2 split, the court allowed the appeal and held that Alberta’s oil and gas licensing regime does not conflict with the federal Bankruptcy and Insolvency Act [BIA] so as to trigger the doctrine of federal paramountcy. Although the court held that “Alberta’s regulatory regime can coexist with and apply alongside the BIA”, this relationship may prove to be a strained and unhappy one.There is a deep flaw in the legislative design of the bankruptcy provisions, and a legislative solution is the only effective way out.