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Clerk’s Stamp COURT FILE NUMBER: 2001-05482 COURT COURT OF QUEEN’S BENCH OF ALBERTA JUDICIAL CENTRE CALGARY IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985 c. C-36, as amended AND IN THE MATTER OF THE COMPROMISE OR ARRANGEMENT OF JMB CRUSHING SYSTEMS INC. and 2161889 ALBERTA LTD. AND IN THE MATTER OF A PLAN OF ARRANGEMENT OF JMB CRUSHING SYSTEMS INC., MANTLE MATERIALS GROUP LTD. and 2324159 ALBERTA INC. DOCUMENT Bench Brief of Alberta Environment and Parks (re Revised Reverse Vesting Order) ADDRESS FOR SERVICE Alberta Justice and Solicitor General AND CONTRACT Legal Services Division INFORMATION OF 1710, 639 5th Avenue SW PARTY FILING THIS Calgary, Alberta T2P 0M9 DOCUMENT Attention: Melissa N. Burkett / Natasha Sutherland Telephone: (403) 297-2001 Facsimile: (403) 662-3824 Email: [email protected] / [email protected] File No. LIT-11583 Table of Contents PART I: Facts ............................................................................................................................. 1 1. Overview of the Application ................................................................................................. 1 2. Statement of Facts ................................................................................................................. 1 (a) The reclamation security bonds ...................................................................................... 1 (b) AEP’s involvement in these CCAA proceedings ........................................................... 2 (c) The Notices of Non-Compliance .................................................................................... 3 (d) The EPOs and EO ........................................................................................................... 4 (e) The Revised RVO ........................................................................................................... 5 PART II: Issues ........................................................................................................................... 6 PART III: Argument .................................................................................................................... 6 1. The existing regulatory framework ....................................................................................... 6 (a) Public Lands ................................................................................................................... 7 (b) Private Lands .................................................................................................................. 8 (c) Director’s discretion ....................................................................................................... 9 (d) Abandonment and Reclamation Obligations .................................................................. 9 2. The relief sought in the Revised RVO ................................................................................ 10 3. Section 11.1 of the CCAA ................................................................................................... 11 (a) Extraordinary relief ....................................................................................................... 11 (b) Improper use ................................................................................................................. 11 (c) Pre-emptive use ............................................................................................................. 12 (d) Inequity of having two separate governing regimes ..................................................... 13 (e) The test for s. 11.1(3) has not been met ........................................................................ 14 PART IV: Conclusion and Relief Sought ................................................................................. 15 Table of Authorities .................................................................................................................... 17 i Brief of AEP PART I: Facts 1. Overview of the Application [1] In the proposed Amended Reverse Vesting Order (the “Revised RVO”), the Plan Parties no longer seek Alberta Environment and Parks’ (“AEP”) approval to transfer certain dispositions or registrations under either the Public Lands Act1 or the Environment Protection and Enhancement Act2. [2] Consequently, AEP should not have a significant role in these CCAA proceedings. The AEP, as a creditor, is an unsecured creditor and understands that any debts owed to it prior to the Filing Date are almost certainly lost. [3] Unfortunately, the relief sought in the Revised RVO is blatant attack on AEP in its role as the regulator, as well as on the environmental regime applicable in Alberta. [4] Rather than seek the relief that is necessary in order to effect the transaction, the Plan Parties ask this Court, in its capacity as a CCAA court, to bless their desire to avoid Alberta’s regulatory regime at their convenience. [5] The mere existence of CCAA proceedings does not permit parties to avoid their environmental obligations. [6] AEP opposes any relief sought in the Revised RVO, or otherwise, that directly impacts its ability to regulate under the Regulatory Legislation (defined below). 2. Statement of Facts [7] The facts set out below are relevant for the purposes of this Application. (a) The reclamation security bonds [8] Prior to the CCAA proceedings, AEP became aware that the security bonds that had been posted relating to six private pits were due to expiry between March 2020 to December 2020. 1 Public Lands Act, RSA 2000, c P-40, as amended (the “PLA”), Tab 1. 2 Environment Protection and Enhancement Act, RSA 2000, c E-12, as amended (the “EPEA”), Tab 2. 1 Brief of AEP [9] Pursuant to the EPEA and related Regulations, at all material times it is the responsibility of the registration holder, in this case, JMB Crushing Systems Inc. (“JMB”), to ensure that its security remains current.3 [10] On January 20, 2020, AEP advised JMB of the pending expirations of six registrations. 4 On October 20, 2020, AEP advised JMB of the pending expiration of the Buksa pit.5 [11] JMB did not respond to either of those notices. (b) AEP’s involvement in these CCAA proceedings [12] Notwithstanding that the Initial Order was issued in May 2020, AEP was not aware of these CCAA proceedings until it was served with the application for the SAVO and the RVO on September 30, 2020, returnable October 1, 2020. [13] AEP promptly sought an adjournment to allow it time to review the requested orders as they directly impacted the AEP. Further, an adjournment would allow the parties time to agree upon the terms of a mutually agreeable SAVO and RVO. [14] The transactions contemplated, subject to AEP’s approval: (1) the assignment of certain public land dispositions held by 2161889 Alberta Ltd. (“216”) (the “216 Dispositions”) to Mantle Group Materials, Ltd. (“Mantle”); (2) the assignment of certain public land dispositions held by JMB Crushing Systems Inc. (“JMB”) (the “JMB Dispositions”) to 216; (3) the assignment of certain private land registrations (“EPEA Registrations”) held by JMB (the “JMB Registrations”) to Mantle; and (4) the assignment of the remaining JMB Registrations to 216.6 [15] On October 16, 2020, this Court granted the SAVO and the RVO. 3 Affidavit of Maxwell Harrison, sworn March 29, 2021 (the “Harrison Affidavit”), at para. 23. 4 Harrison Affidavit, at paras. 19; Exhibits “A” and “B” to the Harrison Affidavit. 5 Harrison Affidavit, at para. 22; Exhibits “C” and “D” to the Harrison Affidavit. 6 Affidavit of Heather Dent, sworn March 29, 2021 (the “Dent Affidavit”), at para. 27; Harrison Affidavit, at para. 41. 2 Brief of AEP [16] On October 19, 2020, counsel for Mantle, 216, and JMB submitted assignments for the 216 Dispositions.7 Counsel for the Plan Parties submitted assignments for JMB Dispositions on October 29, 2020.8 [17] On October 30, 2020, Tyler Pell submitted an email request for the transfer of the EPEA Registrations on the Buksa, Havener, and Shankowski pits.9 [18] On the same day, AEP responded to Mr. Pell providing Consent to Transfer forms and advising of additional requirements for the requested transfers, including the replenishment of the expired security.10 [19] The transfer forms were incomplete because the outstanding security was never replaced.11 [20] On November 16, 2020, after conducting a file review in consideration of the proposed Mantle Assignments, AEP advised JMB and 216 of outstanding reclamation obligations regarding certain lands subject to public lands dispositions.12 [21] Shortly thereafter, on November 18, 2020, a similar notice went out to JMB in relation to outstanding reclamation obligations on the private pits.13 (c) The Notices of Non-Compliance [22] Notices of Non-Compliance were issued on the private pits on February 12, 2021 and on the public pits on February 23, 2021.14 7 Dent Affidavit, at para. 28. 8 Dent Affidavit, at para. 29. 9 Harrison Affidavit, at para. 42; Exhibit “T” to the Harrison Affidavit. 10 Harrison Affidavit, at para. 43; Exhibit “U” to the Harrison Affidavit. 11 Harrison Affidavit, at para. 45. 12 Dent Affidavit, at paras. 31-37; Exhibit “A” to the Dent Affidavit. 13 Harrison Affidavit, at para. 24; Exhibit “E” to the Harrison Affidavit. 14 Harrison Affidavit, at para. 25; Exhibit “F” to the Harrison Affidavit; Dent Affidavit, at paras. 38-41; Exhibits “D”, “E”, and “F” to the Dent Affidavit. 3 Brief of AEP (d) The EPOs and EO [23] AEP found that JMB/216’s responses to the Notices of Non-Compliance

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