Participants in the regulatory world sometimes observe that if only one remembered what we have gone through in the past, perhaps it would be easier and faster to find solutions to difficult regulatory matters.   As the saying goes, “memory is a faculty that forgets.”  It is in this spirit that this article is being offered, somewhat like the Rolling Stones’ “Through the Past, Darkly,” albeit in a very different field.  Since 1979 I have had the pleasure, the opportunity and the privilege of being actively engaged in regulatory debates, proceedings, and day-to-day regulatory work, such as keeping oil and gas pipelines safe, setting just and reasonable tolls, and allowing exports that are surplus to the foreseeable needs of Canadians.  This experience provided me with sufficient observations to offer a personal perspective on what has changed since then, and what will continue to change, but also, at least as importantly, what has not changed and remains true to itself.

Previous articles, publications and memoirs have been written^1,2,3 about the history of National Energy Board (Board) regulation.  This article is presented in the same spirit, recognizing that it borrows from the author’s personal experience and is therefore selective and greatly incomplete.

In the beginning…pipeline extensions

When I joined the National Energy Board on May 22, 1979, as a junior engineer (feeling lucky I had found a job when the labour market for graduates was mediocre, even in sciences and engineering), Canada already had major pipelines crossing a good part of the land from west to east.  Oil and gas exploration and development was also mature, although the Beaufort Sea and the East Coast had yet to experience the boom of the 80’s, owing in whole or in part to the Petroleum Incentives Program of the Trudeau Government.  Yet, nation building through the construction of pipelines from west to east was still topical then as the gas pipeline network ended in Montreal.  I was hired in large measure to help assess two competing applications.  One was by TransCanada PipeLines Limited (TransCanada), under the name “Gas East Project”, proposing to extend their pipeline to Quebec City and then through New Brunswick to Nova Scotia.  The other application was by Q&M Pipe Lines Ltd. (Q & M), an affiliate of NOVA Gas Transmission Ltd., to do essentially the same thing.

In what was seen as a dramatic move, perhaps a precursor to the future merger between TransCanada and NOVA Gas Transmission Ltd. (NOVA), the two competing companies combined their application and presented to the NEB a single proposal, TransCanada sponsoring the pipeline to Quebec City, and Q&M from there to the Maritimes.

The project entailed a large-diameter mainline and several laterals to serve regions in Quebec and in the Maritimes. Much controversy was generated about these laterals.  Regions wanted their own lateral, seeking the economic benefits that access to natural gas could bring.  I recall in particular the Beauce and Lac St-Jean regions of Quebec who felt deprived of their own pipeline. The Board’s approval did not include provision for these laterals due to their economics.  Later on, each of these regions saw a lateral built under provincial jurisdiction and federal subsidies.

The Board approved the Quebec component on May 15, 1980, subject to approval by the federal Cabinet.  As part of the same decision, the NEB turned down the Maritimes component, citing among the reasons that it was concerned about the lack of environmental information related to that segment. In its Reasons for Decision,⁴  the Board indicated that:

“…Q&M has not satisfied the Board that the pipeline could be constructed in an environmentally acceptable manner”.

More specifically, in the environmental chapter of the Reasons,⁵ the Board reasoned as follows:

“The Board is not convinced that Q & M is sufficiently cognizant of the nature of the environmental concerns it would encounter, nor does it appear to the Board that the Company has sufficiently planned and thought out the appropriate measures necessary to protect the environment through which its pipeline would pass.”

This denial of approximately 1800 km of mainline and lateral illustrates the Board’s determination, since its inception, to integrate social, environmental and economic considerations in the decisions it must make under the National Energy Board Act (the NEB Act).  It is sometimes observed that the Board is bent to approve pipeline projects rather than deny them.  I disagree.  The reason for there being more approvals than denials is not a “bent”.  The proportion of approved projects relative to denied projects is an indication of the degree of difficulty a company must face to prepare a complete application that is compliant with the Board’s Filing Manual and the Board’s expectations with respect to pre-filing consultations with the public and affected citizens and their communities.  Many projects die on the drawing board or in the board room of corporations. Some survive this natural selection all the way to the filing stage and then die as a result of the Board’s public interest determination, as the Q & M project shows.

The Board’s recommendation to approve the Quebec component of the project was approved by the federal government.

The Maritimes component was refiled and re-heard. It was approved in 1981. Although unrelated in my view, the Maritimes extension had received the explicit and public support of the federal government as part of its October 1980 National Energy Program.⁶ The certificate was issued to a new company combining the financial and human resources of TransCanada and NOVA, called Trans Québec & Maritimes Inc.

Inflation, cost overruns, regulatory burden and the policy and regulatory responses

The National Energy Program was updated in 1982⁷ to reflect changed circumstances and to communicate the policy response to these changes.  The status of the Maritimes extension was addressed in the update as follows:

“…the construction timetable for the Trans Québec & Maritimes pipeline has slipped because of provincial regulatory delays and other factors beyond the control of the Government of Canada. Completion of the pipeline to Halifax is not now expected until late 1986.”⁸

What this explanation did not convey was the reality at the time that the pipeline sector was experiencing devastating cost escalation and overruns.  The Québec section of the pipeline, notably two construction contracts between Montréal and Trois-Rivières, was experiencing very significant overruns, inter-twined with bad weather and labour unrest.  The economics of pipeline construction was changing fundamentally.  Policy makers felt they had to respond.  And so they did.  On December 16, 1982, Energy Minister Jean Chrétien announced the appointment of a “one man task force on pipeline construction costs.”⁹  Mr. Chrétien appointed Mr. Vernon L. Horte to “investigate increasing construction costs of federally-regulated pipelines in Canada, and recommend practical solutions.”  Mr. Horte had impressive credentials.  He had been President of TransCanada from 1968 to 1972, and later President of Canadian Arctic Gas Study Ltd.  At the time of his appointment, he was a consultant and member of the board of directors of several Canadian companies.

Mr. Horte produced his report on June 31, 1983,¹⁰ known from then on as the “Horte Report.”  Mr. Horte spoke to a broad range of people in the industry and provided very creative recommendations.  Not too many were implemented as proposed, but with respect to his recommendations aimed at the regulatory process, the spirit of his work was to be reflected in the practices of the Board in years to come, notably:

make more clear to applicants what a complete, deficiency-free application looks like (the Board now has a very complete and helpful Filing Manual);

make Board staff available to prospective applicants before they file applications so they are aware of the filing requirements (this is now a common practice and clear, explicit and public policy in that respect has been in place for many years); and,

make a broader use of pre-hearing conferences.

Mr. Horte recognized what was accepted by the Board at the time, that is, the regulatory process imposes a cost on applicants and on society.  Throughout its history, the Board has been mindful of this reality and has always strived to implement only those regulatory requirements that demonstrably added net value to Canadian society in the public interest.  Chairman Roland Priddle was a leader, and my principal source of inspiration, in this area, and many others.

Some of Mr. Horte’s recommendations were very audacious and would have required an amendment to the NEB Act.  None of these recommendations were adopted.  The most significant was a proposal to introduce an optional preliminary assessment:

“Such a process would allow for a preliminary assessment of the project by the Board and Cabinet.  The assessment would be available to the applicant at the outset of the process, before substantial regulatory expenditures are made.  By the use of this procedure, applicants for major projects which are likely to entail a lengthy hearing and substantial regulatory costs, will be afforded an opportunity to assess the risk of success or failure before committing to the heavy financial burden associated with the preparation and presentation of a detailed and complete regulatory case.  In the view of the Task Force, the availability of such an option within the certification process will encourage the development of major projects in the years ahead. ”¹¹

By saying so, Mr. Horte was acknowledging what is not always appreciated by observers of the regulatory process.  As I indicated earlier, project proposals are assessed throughout the life of project definition and justification, and many projects are abandoned along the way due to lack of economic justification, or due to environmental or social considerations.  Therefore, only very strong projects ever get presented to the Board.

In parallel to the Horte Report, the Board and its staff were looking for ways to improve the regulatory process.  The language of the time was about “regulatory burden”, including the time and cost of responding to what was often seen by applicants as excessive numbers of information requests,  “regulatory delays”, and the need to “streamline” and reduce “overlap and duplication.”  Not much was talked about publicly in terms of the value of regulation in promoting safety, environmental and economic efficiency outcomes, although this must have been recognized implicitly in policy circles and many parts of the energy industry.  But the public dialogue, the thinking in policy departments, the political discourse, and the Board’s response, was focused on reduction or elimination of the cost of regulation.

The Board’s response continued over time.  In 1985, the Board concluded that smaller pipelines under its jurisdiction should be subject to a lighter degree of toll and tariff regulation.¹² The Board divided pipeline companies into two groups:

Group 1 companies that operate extensive pipeline systems; and

Group 2 companies that operate smaller pipelines.

A memorandum of guidance was issued to initiate this approach, which is still in effect today through the provisions of the Board’s Filing Manual.¹³ Also in effect today is the Streamlining Order, making clearer what needs to be the subject of a project-specific application, versus the work that can be carried out subject only to informing the Board.  Since 1985, the number of projects requiring a specific decision by the Board has gone down very significantly.  Resources of both regulated companies, affected parties and Board staff can be invested in the most productive regulatory pursuits.

In improving the regulatory process, the Board has always been determined to continually improve safety and environmental outcomes.  Streamlining and improving has been about reducing the administrative aspects of processes and having regulated companies file only information that matters in achieving these outcomes.  Safety and environmental protection have never been compromised in this journey.  In fact, by focusing on high-value information provided by companies on a risk-informed basis, safety and environmental protection outcomes have continually improved.  As per the Beatles’ song, “Getting better”, in this and many other areas at the Board, it’s getting better all the time.

In another manifestation of its desire to continually improve its toolbox, on October 24, 1988 the Board issued a report on improving the regulatory process.¹⁴ The report followed a public paper issued in 1987 and the subsequent exchange of correspondence with parties participating in the Board’s processes.  The topics addressed in the report ranged “…from procedural matters such as the feasibility of negotiated settlements and generic rule making, the clarification of the role of Board staff at hearings, the application of the rules of natural justice and the use of technical conferences.”¹⁵   Of note, the report was an early, timid effort at making possible the filing of negotiated settlements for tolls and tariff matters.  The Board shied away from affirming toll determination principles as part of that exercise, a gap that the Board would soon fill in specific proceedings.  It also refrained from imposing time limits for the processing of applications as suggested by some parties in industry.  This would change gradually with the adoption by the Board of service standards a few decades later and with the passing of the Jobs, Growth and Long-term Prosperity Act by Parliament in 2012.

Principle-based regulation

As a quasi-judicial administrative tribunal, the Board is not bound by precedent.  Yet many observers of the regulatory world see as a positive attribute the taking of decisions which shows a certain predictability and an overall sense of purpose and direction.  The Board has for several decades attempted to be clear and explicit as to the core principles and values it espouses when taking decisions.  As I have often put it, on a specific matter before the Board, one cannot say for sure where the Board is going, but one knows for sure where the Board is coming from.  This has been made possible by the framing, by various Board panels, of the principles guiding them in their decisions.

A first manifestation of a series of Reasons containing first principles can be found in the Board’s June 1987 Decision in respect of the tolls of Interprovincial Pipe Line Limited (IPL),¹⁶  now known as Enbridge Inc.  I credit the Panel Chair, Board member A. Digby Hunt, ably assisted by a then young Board counsel, Loyola Keough, for pushing the Board and its staff to endorse fundamental regulatory principles.  I doubt the concept was new, but it is in that decision that the basic concept of “cost based tolls”, or the “user pay” principle, was defined and explained clearly.  In the words of the Board:

“The complexity of the issues and the conflicting positions advocated by the various parties confirm that, when dealing with toll design, the Board must be aware of and attempt to apply consistently the principles which it views as resulting in just and reasonable tolls…¹⁷ A principle is something from which one should not easily be diverted…¹⁸ A principle which the Board has attempted to apply in the development of the appropriate toll design methodology for IPL is that the resultant tolls should be, to the greatest extent possible, cost based. In other words, generally speaking the concept of “user-pay” should be applied. The Board recognizes that due to such things as practical considerations and limitations on cost allocation procedures, no toll in practice will be absolutely cost-based, in the sense that it will precisely and completely reflect all expenditures related to a particular service over a precise distance. However, designing IPL’s tolls to be as cost-based as practicable should yield the result that the users of the system bear the financial responsibilities for the costs caused by the transportation of their particular hydrocarbon through the line. As well, the Board is of the view that all reasonable efforts should be made to minimize cross-subsidization. If these objectives are attained the resultant tolls can reasonably be characterized as cost-based.”¹⁹

At about the same time, the Board was dealing with successive expansions of the TransCanada system. In three consecutive decisions on these expansions in the late 80’s/early 90’s, the Board continued to build the foundation of a principle-based, value-driven, regulatory construct for pipeline facilities and their tolls and tariffs.

In the GH-2-87 Reasons for Decision,²⁰  following a 44-day hearing, the Board dedicated significant effort in explaining its choice of the rolled-in versus incremental toll treatment of a proposed expansion aimed in some measure at the US Northeast natural gas market.  Depending on the economic consequences on them, parties were sharply divided on the matter.  In the Toll Methodology Chapter²¹  of these Reasons, the Board explained the practical and legal considerations relevant to its decision.  This is the first occurrence of the Board providing a comprehensive commentary on the principles it had espoused in reaching its decisions.  This included:

fairness and equity

the integrated nature of the system

complexity/simplicity

the just and reasonable standard, and the role of cost causation in achieving this standard

no unjust discrimination

no acquired rights.
Several of the statements made by the Board in these Reasons have been presented back to the Board in subsequent hearings, and re-affirmed by the Board in its decisions.  No doubt these will appear again in the future.  One of the best examples is the “no acquired rights” principle.  In the Board’s own words:

“In the Board’s view, the payment of tolls in the past conferred no benefit on tollpayers beyond the provision of services at that time.  The Board does not equate those who paid for a service with those who paid for the facilities.  Accordingly, the Board rejects the notion that shippers who have used the pipeline in the past are somehow entitled to continue using the existing facilities without being affected by new circumstances.”²²

In its subsequent facilities application, known as GH-4-88, TransCanada was seeking the Board’s approval for a $568 million expansion aimed at strengthening the overall system capacity and increase domestic and export deliveries.  It was a more modest hearing, lasting only 14 days.

The previous hearing, GH-2-87, had affirmed a number of principles considered by the Board under Part IV of the NEB Act, in respect of tolls and tariffs.  In GH-4-88, the Board affirmed an important principle related to its examination of facilities carried out under Part III of the Act, namely, the question of economic feasibility of an expansion. Again, the words chosen by the Board in this case have often been presented back to the Board in future cases, and re-affirmed by the Board in its decisions.  No doubt we will see these words again in the future.  In the Board’s words in GH-4-88:

“The Board is of the view that TransCanada had the responsibility to submit evidence demonstrating, inter alia, the economic feasibility of an increase in pipeline capacity. TransCanada should not be perceived as a mere conduit of various information to be submitted and debated at a public hearing.  Although it is ultimately for the Board to decide whether facilities that are applied for under Part III of the Act are and will be in the present and future public convenience and necessity, TransCanada has the onus to demonstrate through its evidence that an expansion is economically feasible. This evidence must demonstrate, among other things, that TransCanada has assured itself that there is or will be adequate natural gas supplies and viable natural gas markets in the long term to ensure the financial viability of the pipeline as a going concern.”²³

In a third of somewhat related applications, heard under Board Order GH-5-89,²⁴ TransCanada sought approval for a $2.6 billion expansion aimed again at a combination of Canadian and US markets.  The Board approved the expansion using the framework for economic feasibility outlined in GH-4-88.  It also endorsed a rolled-in methodology for the expansion, in keeping with the  principles enunciated in GH-2-87.  In summarizing the views of parties in its Reasons, the Board organized its summary of evidence according to these principles, notably, among others:

the integrated nature of the system

simplicity

cost causation

no unjust discrimination

no acquired rights.
These four Reasons for Decision in a row, RH-4-86, GH-2-87, GH-4-88 and GH-5-89, formed together a body of principles that are still being used today and will likely be used for the foreseeable future.  They contributed to the Board’s reputation of a regulatory agency concerned about regulatory stability and consistency. They should be cited in any course on Canadian regulatory principles.

Many years later, in a case known as Gros Cacouna,²⁵ the Board re-affirmed these principles and applied them to the proposed receipt point for liquefied natural gas.  The facilities have not been built due to changes in the market place, but the case allowed the Board to show that first principles do not easily change when it comes to grounding its decisions.

Relocation, Incentive Regulation, Negotiated Settlements, and Generic Cost of Capital

In parallel to these cases, a growing consensus was developing among many parties, and within the Board, that toll and tariff hearings often involved repetitive evidence, predictable debates, and fully expected expert witness evidence.  Few believed that these long, drawn out, adversarial hearings were efficient and productive.  I can only imagine that, for many witnesses preparing for cross-examination, this was not unlike AC/DC’s “Highway to Hell.”

The Board felt that it was important  to communicate to the parties appearing before it that it was fully open-minded about the evolution of the regulatory framework it administered.

Meanwhile, the Board had moved from Ottawa to Calgary.  The move was announced by the Minister of Finance, the Honourable Wilson, in the February 1991 Budget Speech of the Mulroney Government.  Folk culture suggests that the wording of the announcement was handwritten on a yellow sticky, as the announcement was not part of the written budget material.  By Labour Day 1991, the Board was operating from Calgary, its Ottawa office closed.  Many employees, this author included, were shocked by the news, and the way it was announced.  Budget confidentiality was invoked as to the choice of communication method.  The Board lost two thirds of its staff in the process, several of its executives, but very few Board members.    While we were concerned about the loss of institutional memory, the re-staffing in fact produced a fundamental transformation of the Board’s culture and attitude, creating what is known in agricultural science as “hybrid strength”, blending together in one organization the public service values one finds in all federal institutions, and the best of Calgary, that is, its entrepreneurial spirit and its “can do” attitude.  I do not recall being deprived once of institutional memory during that time.

I had left Ottawa in July 1991 still employed as the Director of Engineering.  I did not know at the time but Director General Ed Gordon and Executive Director Robin Glass had decided that, upon my landing in Calgary, I would become Director of Financial Regulation.  Being a good soldier, I accepted, not knowing what lay ahead.  Fundamental reforms of financial regulation was in stock.

Driven in large measure by the ideas of then Board member Ken Vollman, the Board published a white paper on incentive regulation,²⁶  held a workshop, and summarized the results.²⁷  In its covering letter attaching the workshop results, the Board stated:

“…the Board remains interested in considering changes aimed at improving the efficacy of its regulatory process and at adjusting the regulatory regime to ongoing changes in market conditions.”

By these simple steps, the Board had made it abundantly clear that it was open to new ideas, and new ideas came.

The first out of the gate was Imperial Oil Limited who published an innovative piece called “PRIDE.”²⁸  The 39-page paper was used in discussions within the shippers group of then Inter Provincial Pipe Line.   PRIDE stood for “Price Driven Efficiency.”  In its paper, Imperial proposed market-like regulation, focused primarily on tolls (prices) rather than costs, providing incentives for efficiencies of operation and the provision of services, and benefiting customers through these efficiencies by periodically rebasing rates and through an annual productivity offset.  Imperial stated in its document that “this method isn’t perfect, but it’s better than traditional cost-of-service regulation.”²⁹ In its introduction, Imperial made reference to the Board’s Incentive Regulation Workshop as the basis for opening these discussion.

The Board was not actively engaged in the discussions around PRIDE.  It is commonly understood that ¨PRIDE” was a key contributor to the first five-year negotiated settlement between Inter Provincial Pipe Line and its shippers.  The settlement was guided by basic principles of incentive regulation.  Canadian regulation had made a quantum leap.  By accepting the settlement without modification, the Board provided concrete evidence that it was willing to accept negotiated settlements without “cherry picking”, in keeping with its own negotiated settlement guidelines.

Prior to that, for several years, the Board had low credibility in dealing with negotiated settlements.  One of the key contributing factors to this situation was the Board’s “cherry picking” of a contested settlement filed by Trans Québec & Maritimes Pipeline Inc. for new tolls effective 1 February 1985.  In its RH-4-85 Decision of September 1985,³⁰ the Board expressed the following lukewarm views about negotiated settlements:

“The fact that an agreement on just and reasonable tolls was reached between the Applicant and some major interested parties has some relevance to the Board’s determination of a just and reasonable toll.  However, the existence of such an agreement cannot fetter the Board’s discretion.  The Board cannot abandon its mandate; the agreement cannot, per se, be the vehicle for determining the justness and reasonableness of the tolls applied for.”³¹

The fact that this contested settlement was denied created a chilling effect that lasted almost 10 years.  The first IPL settlement completely thawed the chill, and several settlements were filed and approved by the Board in years following.  Today, negotiated settlements remain what people hope to achieve, going to adjudication before the Board when all else fails.  Meanwhile, the Board remains clear that it sees two doors available to companies and their shippers to have tolls put in place: the settlement door, and the adjudication door.  As I have said often, the Board does not have “feelings” about whether one door is better than the other.  Submission of a contested application or a contested settlement is not viewed by the Board as failure, simply as a statement of facts to respond to.

As part of the flurry of activities in the first half of the 90’s to improve the regulatory process, the Board took concrete action to reduce the burden, some will say the pain, of annual determinations of rate of returns or regulated settlements.  Through its settlement, IPL made such a determination moot.  Other companies, however, still had to go through the meat grinder, every year or almost every year.  Financial regulation is seen by many as a very complicated science, by others as smoke and mirrors.  Experts, often PhDs, can produce a broad range of fully justified rates of return.  Assumptions are many.  Exchanging information requests and cross-examining on the topic can be excruciating. And, in the end, informed judgment is absolutely required on the part of the Board members sitting on the case.  As noted by the Board at the time:

“…the Board has noted that evidence submitted by expert financial witnesses has tended to be much the same from one proceeding to the next. While the financial parameters change from year to year, the techniques and interpretations used in making rate of return on common equity recommendations typically do not. This led the Board to consider what potential economies could be realized from the implementation of a formulaic adjustment mechanism for rate of return on common equity.”³²

It is because of the apparent excessive investment in annual determinations that the Board decided, with mixed support from industry, to embark into a major generic multi-company cost of capital proceeding.  On March 17, 1994, the Multi-Pipeline Rate of Return proceeding, RH-2-94, was born.

In what was a leadership move, the Board communicated its vision of the ultimate outcome, not in terms of the rate of return itself, but in terms of the way the rate of return would be set.  In its hearing order:

“The Board expressed the desire to avoid annual hearings on the cost of capital and was of the view that some automatic mechanism to adjust the return on common equity could be the most appropriate way to ensure that this return continued to be fair to all parties, while avoiding the expense of litigating annual or biennial changes in the rate of return. ”

This is precisely what the Board did in the end.  In its reasons for decision, the Board concluded that, for the 1995 test year, a rate of return on common equity of 12.25 per cent was appropriate for a benchmark pipeline.  To account for company-specific risks, it established capital structures for each of the companies included in the scope of the hearing.  It established an automatic adjustment mechanism for 1996 and beyond, based on the yield for long-term Canada Bonds.  All of a sudden the ritual had ended.  Other jurisdictions followed the lead.  The nearly impossible goal been achieved. The same generic process was going to remain in place for 14 years, until October 2009, when it came to disuse.

This case is an example of one of the key attributes of the National Energy Board: it does not hesitate to take a leadership position and move forward even when the degree of support among affected parties is mixed, as was in this case at the start.  The Board is guided in its actions by what it sees as being in the public interest.  This does not always mean what is most popular – in fact it does very rarely.

Retooling internally, in a big way 

While the Board continually looked for ways to improve its external processes, it was also considering ways to improve the way it was running internally.  In December 1984 I became Executive Director, a position later retitled Chief Operating Officer (COO).  Soon did I hear from then Chairman Roland Priddle that I was free to consider significant changes, including a re-organization, this over-valued panacea, to bring about positive change.

It took two years, with invaluable help from Danny Woodard, an Ottawa-based consultant in organizational matters, for me to present at an all-staff meeting held at a downtown hotel on October 17, 1996 a major business transformation aimed at bringing the best out of people throughout the Board.  This featured, yes, a re-organization, still essentially in place today, forming teams around business processes (e.g., applications, operations, analysis and monitoring of energy commodities).  Until then, as it was when I joined the Board in 1979, people were grouped by profession, such as engineering, environment, and economics.

It is then that the Board created the concept of Professional Leaders, such as Chief Engineer, Chief Economist, and Chief Environmental Officer, to take care at the executive level of the more complex technical matters, and to oversee the professional development of people by professional group.  Again, this feature is still in place today, enhanced by the creation of a few more Professional Leaders, such as Professional Leader, Legal and Professional Leader, Northern Engagement.

Any transition of this magnitude requires the occurrence of major costs, mostly human.  I trust that, in this particular case, given how long the basic foundation of the 1996 transformation has been in place, the benefits exceeded the costs.

A pipeline extension through the Eastern Townships

Having completed a major internal initiative, then Chairman Roland Priddle had asked the Government to appoint me as a temporary Board member so there could be a bilingual Panel Chair available to preside over the Portland Natural Gas Transmission System (PNGTS) expansion application by Trans Québec & Maritimes Pipeline Inc.  I do not recall then Chairman Roland Priddle ever asking me if I would agree to play that role.  Again, being a good soldier, as he knew I was, when he informed me of both my appointment as temporary Board member and my role as Panel Chair, being asked to jump, I jumped. It was my first ever hearing as a Board member and, why not, my first hearing as Panel Chair by the same token.

This was not the first project considered by the Board with significant concerns about the project, its route, and its impact on residents and on the environment.  It was of course my own first case of that kind or of any kind.  While my legs were shaky the first day of the hearing when I climbed the stairs to the podium, it proved to be an extremely worthwhile task for me, in and of itself, and also in preparing me for future appointments as full time Board member, then Vice-Chair and finally Chair and CEO.

We held hearings in a part of Quebec which did not have any pipeline infrastructure at the time.  Among key learnings for me was the skill of listening, carefully and intently, without judgment, to a broad range of views, including the views of citizens speaking with their hearts.  As acknowledged in the Reasons for decision, the project “…could adversely impact the recreational and touristic vocation of a region.”³³   The word “vocation” was borrowed from its common use in French.  In the end, the Board approved the project and, as it has done since its inception in 1959, the Board exercised its discretion in balancing the interests of a diverse public.  The theme of balancing, or integrating, the various economic, social and environmental considerations, into one decision, is in its very essence the concept of sustainability assessment.  I will come back to this theme later in this article.

Sumas Energy 2, Inc. – not a plebiscite 

It would not take long before the theme of balancing the various dimensions of the public interest would unfold again in a very big way in front of the Board, as part of the examination of the Sumas Energy 2, Inc. (“SE2”) international power line project.  The physical dimensions of the project were modest:  a 8.5 km long power line from the Canada/US border to a BC Hydro substation in Abbotsford, BC. Its purpose would be to transport electricity generated in the US by a gas-fired plant. The level of interest in the case, however, would be unprecedented, in large measure because of the environmental effects of the electricity generated in the US on air quality in Canada.

SE2’s application attracted the largest public response of any application ever filed with the Board at that time.  More than 400 parties registered as intervenors and approximately 22 000 Letters of Comment were received by the Board. It would take the Gulf of Mexico blow out and the subsequent Northern Gateway oil pipeline application before the Board would see this level of interest again.

The Reasons for decision of the Board in this case contain a wealth of principle-based affirmations that students in regulation would be well advised to review.  This article cannot even provide a summary of these affirmations.  A few examples are provided here.   The following is a particularly relevant quote in today’s environment:

“…decisions by regulatory tribunals such as the National Energy Board are not made by conducting a plebiscite or merely on the basis of a demonstration of public opposition or support. Rather, such decisions are made within a legal framework enacted by the legislature and applied by the courts. This is, of course, the essence of the rule of law.”³⁴

An entire chapter³⁵ is dedicated to explaining the public interest determination made by the Board, including a detailed examination of the benefits of the project and its burdens, and how the Board weighed them. Once again, the Board was endorsing an approach consistent with the basic principles of sustainability framed by the Brundtland Commission, integrating all the relevant social, environmental and economic dimensions of the decision it had to take in the public interest.  On the basis of this integration, the Board turned down the project.

The Canadian Arctic 

The Board has been involved in oil and gas development in the Canadian Arctic since the 1970’s, especially in the Northwest Territories.  There were the years of the first Arctic pipeline hearings.  Also, initially through the Canada Oil and Gas Administration, which was merged with the Board at the same time as the relocation to Calgary in 1991, the staff of the Board has been present in Northern communities, meeting people, listening to their concerns, providing assistance, and promoting safety and environmental outcomes while responding to Northern expectations.  The Board’s credibility in the North comes in large measure from the regular and respectful presence of its staff on the land of the people who have lived there from time immemorial, taking care of the land.

The Board’s role, however, had to increase significantly with the expectation that an application for the Mackenzie Gas Project would be filed in the early 2000’s.

Wanting to be ready for this giant filing, then Chairman Ken Vollman proposed first the idea that a cooperation plan be negotiated with all affected boards and agencies in the Northwest Territories.  I had the privilege of accompanying him to most of the meetings discussing the plan.  I learned through these meetings the fine art of listening to Northern concerns and the necessity to look for “made in the North” solutions.  In the end, the achievement of a Cooperation Plan,³⁶ released on June 20, 2002, was about people and respect for the North and its land claim institutions.

The Plan provided for two parallel processes: a Joint Review Panel (JRP) dealing with the environmental and socio-economic dimensions, and a National Energy Board Panel dealing with the technical aspects other than those addressed by the JRP and the ultimate question of Public Convenience and Necessity.  In December 2009, the JRP released its final report.  Following a consultation process between the JRP and governments, as per the legislative requirements, the Board Panel completed its work by releasing its Reasons for Decision on December 15, 2010.

In its reasoning, the Board used a language that was inspired by the basic notion of sustainability as originally framed by the Brundtland Commission³⁷ in 1987, including the need to integrate the environmental, social and economic dimensions of a decision.  This was a step beyond the reasoning of the PNGTS extension.  In the words of the Board³⁸:

“We looked at how the project would contribute to sustainability in the way it would affect the people, the land where they live, and the economy, now and in the future.

(…)  We examined the benefits the project could bring.  We found that they are large and varied.  We also looked at the negative impacts.  We found that they can be minimized and are acceptable.  This allowed us to answer the key question before us, whether the North and Canada would be better off with the project than without the project.  We find that the North and Canada would be better off with the project.

Our thinking required us to bring together many factors into a single decision.  In doing so, we considered:

the people, especially those who would be most directly affected;

the land, in the broad sense, including the environment and natural resources;

the economy; and

safety, including design, construction and engineering plans.

Integrating our findings on these factors is how we reached our public interest decision.”

Several years later, the Northern Gateway Panel would use a similar integrative approach.

Constitutional matters

For as long as I can remember, the Board and its staff have had internal discussions, sometimes debates, about the question of whether the Alberta system, regulated since its beginning by provincial regulatory bodies, was in fact a federal undertaking.  The Board being a practical and very busy one, there was never enough of a reason for it to initiate, on its own volition, a proceeding to examine the jurisdictional aspects of the system.  The Board also realized over the years that its record in terms of dealing with jurisdictional issues was not spotless – the federal Court would more than once disagree with its findings.

A decision to proceed on its own volition became moot when, on June 17, 2008, TransCanada PipeLines Limited applied to the Board to effect recognition that the TransCanada Alberta System (Alberta System) is by law properly within Canadian federal jurisdiction and subject to regulation by the Board as part of a single federal undertaking.

When the Board is facing a major case, it will sometimes decide to sit as a Panel of five Board members, instead of the usual panel of three.  This happened in GH-5-89, when the Board was dealing with a major facilities expansion of TransCanada and the perennial question of “rolled-in vs. incremental” toll treatment was again before the Board.  It would happen much later when the Board asked five Members to listen to Northerners and other interested parties in the Arctic Review.

In this case, we sat as a Panel of five for the jurisdictional questions.  Three members, a subset of the Panel of five, then took care of the more technical question of the certificate of public convenience and necessity.  It took three days of oral hearings to hear the jurisdictional matters.  Seven additional days would suffice to deal with the rest of the case.

For a question that had been discussed and debated for so long, it is surprising that it took so little regulatory work to dispose of the matter.   The Reasons for Decision³⁹ on the jurisdictional matter took only 10 pages to explain, including the one-page declaratory order.  The decision came out on February 26, 2009, a little more than eight months after the filing of the application.  I suppose it would be fitting to say in this case as Jim Morrison of The Doors sang, “when the music’s over, turn out the lights.”  It was over.  Before too long, however, a new event would turn the spotlight on the Board.

April 20, 2010 – a new Board is born

On April 20, 2010, an oil drilling platform, Deepwater Horizon, blew out in the Gulf of Mexico.  The shock waves following the blow out reached every region of the globe.  People were asking: “can it happen here?”  In places like Inuvialuit communities on the shores of the Beaufort Sea, towns on the shores of the Gulf of St. Lawrence, Baffin island communities where exploration for oil and gas is being considered, the answer of course was: “yes, if we let it happen.”  For 87 days, the media were broadcasting a real life version of Groundhog Day: every morning, people were hoping the day would be different and the company would find a way to kill the well.  For 86 days, the day was the same as the day preceding – not much had changed: the oil kept flowing in the Gulf of Mexico.

Within days of the blow out, the Board realized that it had acquired a major responsibility: explain to Canadians what it was doing to prevent such disasters under its jurisdiction.  This was a quantum leap – in my view, the largest ever in the Board’s history in terms of the Board’s accountably and its public visibility.  From a rather obscure administrative tribunal responsible for technical matters, the Board suddenly became front and centre in the eyes of the public and the media, and before Parliamentary Committees.  A new Board was born.

The Board immediately launched its Review of Offshore Drilling in the Canadian Arctic, known as the Arctic Review.  Media coverage was incessant.  The Board appeared numerous times before Parliamentary Committees, both Senate and House of Commons.  Access to information requests were filed at a frequency never seen before: what was the part-time job of a single employee became a well-resourced multi-disciplinary team.  Monitoring of the work of Parliament and documentation of references to the NEB was a strategic task.  Key message management became a way of life at the Board.  Still today, the effects of the Gulf of Mexico blow out are felt pervasively throughout the organization.  Not only has it profoundly changed the way the Board explains itself publicly with respect to drilling, but it also has sharpened its thinking in how it regulates pipeline safety – more on this in the Safety Culture section.

The Arctic Review was for me the most motivating and inspiring task in 35 years of work at the Board.  Several times over the course of more than three years, I visited with a small team the six Inuvialuit communities in the Beaufort-Delta, several Central Arctic communities, and Baffin Island.  I met there the people who, from time immemorial, have taken care of the land and have depended on it for their way of life.  I have often  heard from these people that, “if you take care of the land, the land will take care of you.”  I have deepened my ability to listen to people, attentively and respectfully, without time limits, not to judge what they feel or think, but seek to understand and simply acknowledge their fears, concerns, hopes and goals – the fine and difficult art of listening.  I have met youth in several high schools, an experience I found frightening the first few times (how on earth does one interest teenagers in a topic like offshore drilling?)  I have travelled in a small boat on the Beaufort Sea and got stuck on sand bars.  I have tasted county food, including beluga, char, and snow geese and visited whaling camps. I have participated in the summer games at Shingle Point, on the western shore of the Canadian Beaufort and received the wisdom of elders who felt I was worthy of their knowledge.   My work in the North was not work.  It was a basic connection to the very essence of humanity and the true North.  I am deeply grateful to all the Northerners I have met for all they have given me, which will stay with me the rest of my life.

The Board’s Arctic Review finest moment was an amazing week at the recreation centre in Inuvik, in September 2011.  For five full days, a few hundred people, including academia, environmental groups, youth, elders, community members, elected officials, representatives from land claim institutions, other regulators, industry and the Board itself met and shared what was important to them and what they knew about what makes drilling safe and protective of the environment. I will always remember the spirit of collaboration and respect that prevailed throughout these five days.  I honestly cannot recall any major disagreement on anything discussed over these five days.  A very strong final report⁴⁰ would come out on December 15, 2011 reflecting this consensus.  Today, the Board has the best available knowledge reflected in its filing requirements for offshore drilling.  I do not think there is a finer product of that kind anywhere else in the world.

Aboriginal engagement and collaboration

The Board’s ongoing work in the North brought home to me the importance of Aboriginal peoples in our constitution, our history, and in our identity.  Working towards a Cooperation Plan for the Mackenzie Gas Project was a very useful investment in my journey as a lifelong learner in that respect.  More was to come.  Soon after I became Chair and CEO, the Board signed a Memorandum of Understanding with the First Nations Tax Commission, another quasi-judicial body from whom we could learn and whom we could help. I also invested a great deal of my time and energy in the work of the NWT Board Forum, a fine group of Chairs, Executive Directors and staff  representing all the land claim boards and environmental assessment bodies in the Territory.  I have made many friends among these people, all highly dedicated to the well-being of all Northerners.  In parallel to our work in the Arctic Review, and the subsequent visits to Arctic communities, the Board has signed several memoranda of agreement with institutions created by Northern Land Claims.⁴¹

Environment and sustainability

Early in my term as Chair and CEO I felt specific effort was required to effect a rapprochement with Environmental Non-Government Organizations (ENGOs).  It was apparent that there was a major opportunity to understand each other, mostly through listening.  This is what the Board did.  With a small team, I visited Vancouver, Toronto and Montreal to meet with any ENGO wishing to talk with us and tell us how we could improve our processes to better meet their needs.  We met several of them.

A concrete and very significant outcome of that round of meetings was a collaborative effort by many ENGOs to work with the Board towards a much improved version of the cumulative effects chapter in the Board’s Filing Manual.  In my view, there is no better description of what a solid, science-based cumulative assessment must include than that found in the Board’s Filing Manual.  This is to the credit of ENGOs who worked with the Board at the time, and the Board’s environmental staff who shared the same goal of excellence in the approach to cumulative effects assessments.

When assessing applications for pipeline projects under s. 52 of its Act, the Board “…shall have regard to all considerations that appear to it to be directly related to the pipeline and to be relevant, and may have regard to the following:

(e) any public interest that in the Board’s opinion may be affected by the issuance of the certificate or the dismissal of the application.⁴²

This language has been in place since 1959, when the Board was created.  I believe the people on the Diefenbaker team were, perhaps inadvertently, visionaries, as they contemplated a Board looking at all the factors that are relevant to a case, and then integrating all of these considerations in the decision it must make in the public interest.  It is this very integration that the Brundtland Commission recommended 28 years later as an essential part of the sustainability journey.  And it is part and parcel of the overall approach proposed by Professor Robert Gibson from the University of Waterloo in his beautiful book, “Sustainability Assessment,”⁴³ a pillar of environmental assessment literature and a way of thinking that has been broadly referred to and used within the Board.

Environmental assessments have always been part of the Board’s work since its inception.  Environmental chapters appear in Board Reasons for decision since the 1970’s.  The Board has a large group of people specialized and devoted to environmental science, socio-economics, land matters, public engagement, participant funding and other related disciplines.  There are more than 60 people working in these areas.  Even when I joined the Board in 1979, environment was a large team.

When the Canadian Environmental Assessment Act (CEAA) was passed in 1994, what the Board acquired was new administrative processes.  The substance of environmental assessment did not change.  When the Board was first granted substitution status a few years ago, and more recently became again fully responsible on its own for environmental assessments, again nothing changed in the way the Board conducted environmental assessments.  If anything, the removal of a number of administrative processes freed up some resources that were re-invested in the substance of environmental assessments, a net gain from an environmental outcome point of view.

The same could be said about the impact of recently transferring to the Board the responsibilities under the Fisheries Act.  Board staff have always considered the effects of  projects on fish and their environment.  At the same time, officials at the Department of Fisheries and Oceans were doing similar work.  The transfer of responsibilities was simply a reduction in process administration, a highly desirable outcome in government organizations.

Safety, safety, safety

This is the regulatory equivalent of what is known in real estate as “location, location, location.”

The Board has in the last few years identified itself as Canada’s safety watchdog in the energy sector.  This is how media now refer to it when reporting on pipeline incidents and compliance issues with regulated companies.  This is good.

Thanks in part to the learnings from major accidents on drilling platforms, from Piper Alpha in the North Sea in the 80’s to Deep Horizon in the Gulf of Mexico in 2011, and the clever teachings of Professor Mark Fleming of Dalhousie University, the Board has moved gradually towards a regulatory regime based on outcomes, risk-informed choices, management systems, and the promotion of a pervasive safety culture in regulated companies.  Much of its safety work is now based on strongly worded regulations, compliance audits, enforcement actions and, more recently, administrative monetary penalties, affectionately known as AMPs.

One of the Board’s great achievements was to assemble several hundred people in Calgary for a day and a half, on June 05 and 06, 2013, to talk about what makes pipelines safe.  Industry people, safety advocates, academia, students, environmentalists, landowner representatives, and other regulators attended the Board’s Safety Forum 2013.  Not unlike the magic of the Arctic Review roundtable in Inuvik in September 2011, all quickly realized there was a broad consensus on what needed to be done: good management systems strongly and explicitly supported by the company leadership, and a pervasive safety culture, for safety to be achieved.  Once again, the Board had taken a leadership role in advancing a regulatory outcome and people wanted to follow the trend set by the Board.  Today, the final report on the Board’s safety workshop⁴⁴ is still an important reference for those involved in pipeline safety.

Two potential visions of a country again – Northern Gateway

I have referred to the Board’s Reasons for Decision in the Mackenzie Gas Project, referring to the three pillars of the sustainability stool: social, economic and environmental dimensions, integrated to form the basis of a decision.

In its final report, the Northern Gateway Panel⁴⁵ adopted a similar approach.  It offered to Canadians two visions of a country, one with the project, one without, followed by an independent affirmation of which of these two visions, in the Panel’s view, was in the public interest, integrating all of the relevant dimensions.  In the Panel’s words:

“We find that Canadians will be better off with this project than without it…we found that the project would bring significant local, regional, and national benefits. These benefits, on balance, outweighed the potential burdens of the project. These benefits would be both social and economic…The environmental, social, and economic aspects of this project and our recommendations are all connected…it was our job to weigh all aspects…”

Volume 1 of the Panel’s Report was fittingly titled “Connections”.  This heading and the content of the report were in keeping with the 1959 vision of the Board as enunciated by Parliament, with the 1987 Brundtland Commission report, and with basic principles of sustainability assessment proposed in 2005 by Gibson.  Again, the Board showed that it could be relied upon when it comes to the consistency of the basic principles guiding its many actions.

Restructuring gas transmission, in a big way

Having dedicated a good part of my career to tolls and tariff matters as a Board staff member, it was with particular delight that I embarked in 2011 on a remarkable journey:  hearing the TransCanada tolls case for 2012 and 2013, known as the TransCanada Restructuring Case.  It was like going back to my deep roots.  The size of the task was gargantuan.   It was contested.  It was complicated.  Discussions had been going on for a long time between TransCanada and its shippers without apparent progress.  Nobody could say “It’s so easy,” as Buddy Holly and the Crickets had sung more than 50 years earlier, in the early days of both the mainline and rock & roll.

Toll and tariff hearings can be rather laborious and complicated.  And not always riveting, when cross-examination of a witness on a spreadsheet, line-by-line, over several hours, is the order of the day.  As the matter under consideration is about money, and pretty much a zero-sum game, it is normal for the atmosphere in the hearing room to be sometimes austere and adversarial.

I knew from the start this was likely to be my last public hearing, and it was.  We managed to make this 72-day hearing a very interesting affair.  We also insisted that part of the debate be one of a vision of the future of transportation services on the TransCanada Mainline.  And it was.

The Reasons for Decision,⁴⁶ issued March 27, 2013, must speak for itself, and it would not be appropriate to comment on them.  Financial analysts have commented on the effects of the decision on TransCanada and how it has been viewed in financial circles.  I will simply say that I savoured every moment of the time we invested in this proceeding, before the hearing, during the hearing, and during deliberation.  A proud and grand finale it has been for me.

Independence

The Board has a degree of independence.

It is absolutely independent in the way it takes decisions under its enabling legislation, including the way it makes recommendations to Governor-in-council when the legislation provides for the duty to recommend.

At the same time, the Board itself does not decide who sits on the Board as Board members.  Parliament has determined that the government of the day, namely, the Governor-in-council, appoints Board members.  The Board also does not independently decide on its budgets and its cash flow: this is a decision made by Parliament through the Appropriations Act, as part of the budget cycle, informed by the submissions of Treasury Board ministers.  The Board also does not independently decide how it will approach official languages and staffing.  There are countless other examples that illustrate my point: the Board has a degree of independence from Government.

In 2012, with the passage of Bill C-38, which became the Jobs, Growth and Long-term Prosperity Act, the NEB Act was amended to provide for a change in the way the Board disposes of certificates of public convenience and necessity.  Since 1959, the Board would recommend approval when it found the project to be in the public interest.  It would take the final decision to deny, if it found it was not.  Bill C-38 made the Board’s responsibilities related to approving or denying a project symmetrical: it would now recommend approval or denial to the Governor-in-council.

There was concern expressed by some at the time Bill C-38 was debated, and when it passed, that the Board had lost some independence. I do not share that view.  The Board is created by statute.  The statute requires that it be independent in the action it takes on specific cases.  Post Bill C-38, the Board conserves its entire independence in the way it assesses the merits of projects.  What has changed with Bill C-38 is what happens after the Board has completed its work.  This change was adopted democratically by the people Canadians elected to represent their interests in Parliament.  This change is not about how the Board looks at the public interest. For the Board and is staff, nothing has changed, saved for the wording of the Board’s disposition, and the covering page of the decision, in keeping with the wishes of Parliament.

And in the end…

I began writing this article expecting to demonstrate how different federal energy regulation is today compared to 35 years ago.  Although some bells and whistles have changed, I have found the opposite: the very essence of regulation, its benefits to Canadian society, the values underpinning it, the principles providing its foundations, have not changed in 35 years, and will not likely change by much in the foreseeable future.  This bodes well for the future of public interest determinations and the Canadian public interest.

What has changed greatly is how Canadians interact with their federal energy regulator, the National Energy Board.  Since the Gulf of Mexico blowout, many Canadians from all walks of life know about the Board.  They read about it in newspapers almost every day, some times on the front page.  They hear about it in national newscasts regularly.  They associate it with difficult and controversial topics, such as accidents, ruptures and leaks, the oil sands, and even climate change.  The facts show that federally-regulated pipelines are fundamentally safe, that accidents are few and far between, that the environmental consequences of all the leaks, mostly very minor, since the Board’s creation in 1959, have all been fully reversed, in the short term with that.  These facts however, do not inform much the public debate playing out before the Board.   As a result, the Board is exposed to a broad range of comments and criticisms as to the state of our society, whether or not it is under the Board’s jurisdiction, and to a broad range of policy choices that only policy makers and elected officials can make, not the Board itself.  For the Board, this is neither good nor bad.  This is a fact of life to be considered when organizing public hearings and making procedural choices as to how it will get relevant information, choices which it is enabled to make, just like any judicial or quasi-judicial entity.

The Board has shown that it has adapted to this change in the public debate unfolding in front of it.  It has also shown that it will continue to be clear as to where it is coming from:  rigorous adhesion to the basic principles of natural justice, fair mindedness, commitment to continual improvement in all it does, internally and externally, ability to listen with sincerity to all the points of view on any matter before it begins forming an opinion, after having hear from everybody from all sides.  The law requires that it be so.

In his article on the first 25 years of the Board, former Vice-Chairman Douglas M. Fraser wrote, in respect of the first hearing held by the Board in 1960⁴⁷:

“Looking back now at that quarter-century, one can think of many things that one might have done better, or differently, but from that first transcript and those first Reasons for Decision, one can clearly see the willingness to listen, and the determination to get it right, that we all felt on that first day.  May it so continue.”

From the beginning, the National Energy Board has been the Rock of Gibraltar of energy regulation in Canada.  It is my turn to say: may it so continue.  I believe it will.

* Gaétan Caron was Chair and CEO of the National Energy Board until June 06, 2014.  He is now an Executive Fellow at the School of Public Policy of the University of Calgary.  He also consults on energy, regulation and governance, and offers facilitation services.

1.  See the spirited article prepared by R. Priddle, “Reflections on National Energy Board regulation 1959-1998 – From persuasion to prescription and on to partnership”,  prepared for the Canadian Petroleum Law Foundation’s Thirty-seventh Annual Research Seminar on Oil and Gas Law, Jasper, Alberta, June 05, 1998.
2.  See also the colourful description of how the Board was created and how it started operating: National Energy Board, Twenty-five years in the Public Interest, 1994, “Reminicences – Early Days by Douglas M. Fraser (Vice-Chairman from 1968 to 1975), at paras 53-58.
3. The most comprehensive publication about the Board’s history is the book prepared under the inspired leadership of then Chairman Kenneth W. Vollman: Earle Grey, Forty years in the Public Interest – a History of the National Energy Board, (Tontonto/ Vancouver : Douglas & McIntyre, 2000) and National Energy Board.
4. National Energy Board, Reasons for Decision in the Matter of applications under Part III of the National Energy Board Act of TransCanada PipeLines Limited and Q & M Pipe Lines Ltd., GH-4-79 , Ch 11, Decision, at 11-18.
5. Ibid at 6-126
6. Energy, Mines and Resources Canada, The National Energy Program, October 1980 at 58: “[…] the Government has recently accepted the recommendation of the National Energy Board that the application to extend the gas pipeline system beyond Montreal to Quebec City be approved […] The Government wishes the pipeline to be extended into the Maritimes.”
7. Energy, Mines and Resources Canada, National Energy Program – Update 1982.
8. Ibid at 58.  
9.  Energy, Mines and Resources Communiqué, “Chrétien announces appointment of a one-man task force on pipeline construction costs”, December 06, 1982.
10. Task Force Report on Pipeline Construction Costs, V.L. Horte, June 1983
11. Ibid at 62.
12. National Energy Board, Regulation of Small Pipelines, G132-27, 1985.
13. National Energy Board, Filing Manual, Section P.6, Regulation of the Traffic, Tolls and Tariffs of Group 2 Companies
14. National Energy Board, Improving the Regulatory Process – Current Position on Submitters’ Suggestions, September 1988.
15. Ibid, accompanying News Release dated October 24, 1988.
16. National Energy Board, Reasons for Decision in the matter of Interprovincial Pipe Line Limited, Application dated 5 September 1986 for new tolls effective 1 January 1987, RH-4-86 (June 1987).
17. Ibid at 47. 
18. Ibid at 48.
19. Ibid.
20. National Energy Board, Reasons for Decision, TransCanada PipeLines Limited, Applications for Facilities and Approval of Toll Methodology and Related tariff Matters, GH-2-87 (July 1988).
21. Ibid, Ch 8, Toll Methodology, at 70 seq.
22. Ibid at 70.   
23. Ibid at 64.
24. National Energy Board, Reasons for Decision, TransCanada PipeLines Limited, GH-5-89, Volume 1 (November 1990), Volume 2 (November 1990),  Volume 3 (April 1991).
25. National Energy Board, Reasons for Decision in the Matter of TransCanada PipeLines Limited, Application for approval of new receipt point at Gros Cacouna, Quebec for the receipt of regasified natural gas and the toll methodology that will apply to service from that point, RH-1-2007 (July 2007).
26. National Energy Board, Public Consultation on Incentive Regulation, File No: 4500-A000- 9 (22 June 2002).
27. National Energy Board, Incentive Regulation Workshop: Summary of Discussion, File No: 4500-A000-9 (11 March 1993).
28. Imperial Oil Limited, PRIDE – A New Vision of Pipeline Regulation” (June 1994).
29. Ibid, (Executive Summary) at 3.  
30. National Energy Board, Reasons for Decision, Trans Québec & Maritimes Pipeline Inc., Application dated 22 February 1985, as revised, for new tolls effective 1 February 1985, RH-4-85 (September 1985).
31. Ibid at 1-2.
32. National Energy Board, Reasons for Decision in respect of Cost of Capital, RH-2-94 (March 1995), at 1.
33. National Energy Board, Reasons for Decision in respect of Cost of Capital, RH-2-94 (March 1995), at 1.
34. Reasons for Decision in the Matter of Sumas Energy 2, Inc., Application dated 7 July 1999, amended 23 October 2000, for the construction and operation of an International Power Line, EH-1-2000 (March 2004) at 14.
35. Ibid Ch 8 at 91-98.   
36. Northern Pipeline Environmental Impact Assessment and Regulatory Chairs’ Committee, Cooperation Plan (20 June 2002).
37. United Nations, Report of the World Commission on Environment and Development, Our Common Future (20 March 1987).  See in particular Chapter 2, “Towards Sustainable Development, Part III, “Strategic Imperatives”, Section 7, “Merging Environment and Economics in Decision Making”, and section 72, “The common theme throughout this strategy for sustainable development is the need to integrate (emphasis added) economic and ecological considerations in decision making.”  Still today, the integration of social, economic and environment dimensions in decision taking, rooted in the Brundtland Commission Report, is seen as the essence of pursuing a sustainable future.
38. National Energy Board, Reasons for Decision, Mackenzie Gas Project, Respecting all voices: our journey to a decision GH-1-2004 (28 October 2011), at 74.
39. National Energy Board, Reasons for Decision in the Matter of TransCanada Pipelines Limited, Application dated 17 June 2008 for a Declaratory Order and for a Certificate of Public Convenience and Necessity GH-5-2008 (February 2009).
40. National Energy Board, The past is always present – Review of Offshore Drilling in the Canadian Arctic – Preparing for the Future (December 2011); and Filing Requirements for Offshore Drilling in the Canadian Arctic (December 2011).
41. Memoranda of Understanding have been signed with the Inuvialuit Environmental Impact Review Board, the Inuvialuit Environmental Impact Screening Committee, the Mackenzie Valley Environmental Impact Review Board, the Mackenzie Valley Land and Water Board, the Inuvialuit Water Board (formerly the Northwest Territories Water Board), the Nunavut Impact Review Board, and the Nunavut Water Board.  For a complete list of Memoranda of Understanding signed by the Board, see online : NEB <http://www.neb-one.gc.ca/clf-nsi/rpblctn/ctsndrgltn/mmrndmndrstndng/mmrndmndrstndng-eng.html>.
42. National Energy Board Act, RSC 1985, c N-7 s 52.  
43. Robert B. Gibson et al, Sustainability Assessment, Criteria and Processes (London : Earthscan Publishers, 2005).
44. National Energy Board, 2013 Safety Forum Report, (30 September 2013).
45. National Energy Board and Canadian Environmental Assessment Agency, Connections, Report of the Joint Review Panel for the Enbridge Northern Gateway Project (December 2013), Volume 1at 72-74.
46. National Energy Board, Reasons for Decision in the matter of TransCanada Pipelines Limited, NOVA Gas Transmission Ltd., and Foothills PipeLines Ltd., Business and Services Restructuring Proposal and Mainline Final Tolls for 2012 and 2013 RH-003-2011 (March 2013).
47. Ibid at 58.