TransCanada’s proposed Energy East pipeline (“the project”) may experience yet another challenge as it will likely undergo an environmental impact assessment and review (“EIAR”) by Quebec’s Bureau d’audience publique sur l’environnement (“BAPE”), as required by the province’s Environment Quality Act (“EQA”).¹ The many challenges which Energy East has had to overcome in the province of Quebec have turned the project’s application process into a thrilling saga, or rather, something akin to a horror story. While there is nothing unusual about pipelines having to undergo a series of assessments, reviews and consultations prior to beginning construction and eventually becoming operational, interprovincial pipelines which fall under federal jurisdiction have historically evaded the scrutiny of provincial administrative organs. The following article will examine the legal situation surrounding Energy East, by analyzing the constitutional validity, applicability and operability of provincial environmental protection legislation, to federally regulated pipelines.

Background

Energy East is a proposed 4,500 km pipeline which would bring 1.1 million barrels of crude oil a day from Alberta and Saskatchewan to refineries and export locations in eastern Canada. The original version of the project was filed to the National Energy Board (“NEB”) in October 2014, but after numerous complaints that the application was incomplete and too difficult to understand, a consolidated and “user-friendly” project application replacing the original application was filed in May 2016.² Beginning in Hardisty, Alberta, the proposed pipeline would extend eastwards to Saint John, New Brunswick, where a marine terminal would allow for the crude to be exported to foreign markets in Europe and the United States. The project consists of three components; the construction of new pipeline segments, the conversion of existing natural gas pipeline to an oil transportation pipeline, and the construction of associated facilities such as pump stations and tank terminals which are necessary to transport the crude.³

Since the project’s inception, it has faced ongoing turbulence in the province of Quebec given the sensitive geo-political situation and the fact that the majority of new pipeline construction would occur in that province.

In 2014, the original version of the project proposal had included an additional marine terminal on the St-Lawrence River at Cacouna, Quebec. The construction of the proposed terminal caused public uproar from environmental groups and concerned citizens due to its alleged impact on the beluga whale population. In September 2014, the environmental groups had successfully sought an interlocutory injunction from the Quebec Superior Court to temporarily suspend preliminary geotechnical work which TransCanada had lawfully been conducting under a certificate pursuant to sections 1, 20, 22 and 24 of the EQA.⁴ This had been the environmental groups’ second attempt to suspend geotechnical and drilling activities in the Saint-Lawrence River, having been denied a request for a safeguard order approximately two weeks earlier.⁵

Also, in February 2015, while the project’s initial application process had been underway, the Centre québécois du droit de l’environment (“CQDE”) applied to the Federal Court for an injunction to suspend the project’s assessment by the NEB arguing that the English language of the documents filed before the National Energy Board allegedly contravened the Official Languages Act⁶. While TransCanada had made public French translated versions of all of the “essential documents,” the CQDE and others took exception to the fact that there was not an official French version of the application, and that not all of the thirty-thousand page application’s exhibits were translated. The CQDE alleged that this in effect prejudiced the French-speaking landowners in Quebec who did not have a firm grasp of the English language. The Federal Court rejected the motion for an injunction on the grounds that the first criterion of “rais[ing] a serious question” had not been met.⁷ This incident incited Quebec nationalist movements to join the fight against TransCanada,⁸ adding a layer of political tension and heightened social pressure on top of the legal challenges inherent to constructing a pipeline, that TransCanada would have to overcome.

While this is not atypical as a result of the passions which pipelines often provoke, for some, Energy East took on added significance given the internal tensions which exist between Quebec and English Canada. In a province where language rights are an extremely delicate subject, the incident provoked an “us versus them” mentality in Quebec that prevented the project from gaining a social licence to operate in the province. By April of 2015, TransCanada ultimately agreed not to build the marine terminal in Cacouna, a decision which in effect delayed the project’s realization an additional year as result of the time needed to assess alternative options.⁹

But even as TransCanada amended the project in an effort to build support among Quebecers, it began to face more challenges in the province, some from the government itself. The Ministère du Développement durable Environnement et Lutte contre les changement climatique (“the Minister”) as well as the CQDE brought pressure to have the project submitted to the BAPE for a provincial environmental assessment under s 31.1 EQA. TransCanada refused on the grounds that, as an interprovincial pipeline under federal jurisdiction, the project is not required to comply with provincial environmental assessment regimes. This led Quebec Environment Minister Heurtel to mandate the BAPE to undertake a Generic Assessment of the project under s 6.3 EQA, since a detailed assessment would not be possible without the cooperation of the proponent. Applications made under s 6.3 are of a generic nature, meaning they do not determine the rights of specific project proponents, but is still a mechanism used to examine controversial questions relating to the environment. Environmental impact assessment and reviews (“EIAR”) under s 31.1 in contrast, are rigorous schemes where proponents are prohibited from realizing certain activities (i.e. pipeline construction and operation), unless and until the Government grants authorization pursuant to the Minister’s evaluation.¹⁰

TransCanada was also served with two injunctions, one from the Minister and one from a coalition of environmental groups, both attempting to force TransCanada to comply with environmental legal requirements of the EQA to file an EIAR under section 31.1.11 The Minister was careful to clarify that the fact that he filed an injunction against TransCanada was not indicative of a particular stance on the project, but would rather allow the provincial government to gain information about the project in order to articulate its position as an intervener in the NEB hearing. ¹² In other words, the province wanted TransCanada to undergo the arduous provincial environmental impact assessment as a means for the province to acquire pertinent information to be used at the NEB hearing.

Once the BAPE inquiry resumed, it became increasingly clear that a portion of Quebecers fiercely opposed the project. Following a series of riots which suspended the public hearing, Quebec’s Premier publicly told Quebecers to appeal to reason rather than opting for more aggressive modes of interference.¹³

As tensions continued to increase, TransCanada submitted a notice of application in order to undergo an EIAR under s 31.1 EQA.¹⁴ In return, the Minister ended the BAPE generic inquiry and agreed to withdraw its injunction once the study is approved.¹⁵ However, notwithstanding that the notice of application has been submitted to the Minister, the drama is by no means over. The notice of application to the provincial authority specified that it was filed “voluntarily… in a spirit of cooperation,” and remains “subject to any opinion that Energy East may have regarding the application of provincial law to Energy East, notably the environmental impact assessment provided by … the Environment Quality Act” [translation].¹⁶ In contrast, the Minister still maintains that the company was required by law to file for the approval of the project and respect the terms of the EQA.¹⁷

In light of these opposing views, it is worth analyzing the extent to which provincial environmental protection legislation is constitutionality applicable and operable to pipelines which fall under federal jurisdiction.

Analysis

The issue at hand essentially amounts to determining whether section 31.1 of Quebec’s EQA applies to interprovincial pipelines. Considering that the question is one which involves delimiting legislative heads of powers defined by the Constitution Act, 1867¹⁸, the following analysis will apply the framework provided by the Supreme Court in Canadian Western Bank v Alberta ¹⁹ and the jurisprudence which emanates from that decision. Therefore, in order to assess the degree to which provincial environmental protection legislation can influence Energy East, it is necessary to examine the “pith and substance” doctrine, “interjurisdictional immunity”, and the “paramountcy doctrine”, bearing in mind that the modern state of Canadian federalism is of a cooperative nature which demands flexibility in answering such questions. ²⁰

Validity

The first step involved in resolving a question with regard to the constitutionality of legislation must begin with an analysis under the “pith and substance” doctrine.²¹ By examining the real purpose, and to a lesser degree the effects of the impugned legislation, the analysis involves assessing whether the dominant character of the legislation in question can be related to a matter that falls within the jurisdiction of the level of government that enacted the legislation.²² Section 31.1 EQA reads as follows:

31.1. No person may undertake any construction, work, activity or operation, or carry out work according to a plan or program, in the cases provided for by regulation of the Government without following the environmental impact assessment and review procedure and obtaining an authorization certificate from the Government.

While there has been tremendous discussion with regard to the applicability of the EQA to Energy East, up until now, there has not been discussion of whether the Environmental Impact Assessment and Review process provided by the EQA is valid. This is most likely because it would be highly farfetched to allege that the dominant character of the impugned legislation relates to regulating interprovincial pipelines rather than the protection of the environment. If the dominant purpose of the legislation falls within the level of government that enacted it, it is not problematic that it produces “incidental effects” on matters which relate to the jurisdiction of the other level of government.²³ “Incidental” in this context does not relate to the level of significance or importance of the legislation’s effects, but rather implies that the effects must be collateral or secondary to the mandate of the enacting legislature.²⁴

In this case, the impugned legislation would be judged valid if its pith and substance falls under the provincial government’s jurisdiction to legislate under the shared subject of the environment. In Friends of the Oldman River Society v Canada (Minister of Transport)²⁵, the Supreme Court held that the environment is not a homogenous head of power which has been given to one level of government, but rather “cuts across many different areas of constitutional responsibility, some federal and others provincial.²⁶ The jurisdiction to regulate over matters relating to the environment is delineated by “looking at the catalogue the heads of powers and deciding how they may be employed to meet or avoid environmental concerns.²⁷ Once the dominant purpose falls within a head of power of the enacting level of government, for example, the widely used property and civil rights power,²⁸ the provision remains valid even if it intrudes into matters which fall under federal jurisdiction.

It is almost certain that by assessing evidence internal and external to the EIAR regime of the EQA, one would come to the finding that the dominant purpose of section 31.1 is protecting the quality of the environment. While the impugned legislation does produce effects on interprovincial pipelines, such effects are secondary to the dominant purpose of the provision which is clearly to protect the quality of the environment in the province. The impugned legislation is of general application and does not attempt to only target federal undertakings such as interprovincial pipelines. Therefore, there is no basis whatsoever to allege that the provision in reality serves to regulate the pipelines under the guise of environmental protection legislation.

Although it is highly difficult to imagine that a court would declare the EIAR regime as invalid, it is also possible for a pipeline proponent to attack the provision of the regulation which renders pipelines subject to the regime provided by s 31.1 of the EQA. As indicated in the wording of s 31.1, the rigorous EIAR process is only covered by “cases provided by regulation.” Paragraph (j.1) of s 2 of the Regulation Respecting Environmental Impact Assessment and Review²⁹ explicitly renders the construction of oil pipelines in a new right of way subject to the provincial regime. If a party would succeed in attacking the validity of this regulatory provision, Quebec would lose the legal mechanism to conduct the EIAR since the class of project would no longer be covered by regulation. While the Constitution only excludes pipelines which extend beyond the provincial boundaries from provincial jurisdiction,³⁰ it must not be overlooked that for a project to be able to undergo provincial scrutiny, the regulation which subjects it to the EIAR process must be able to withstand the pith and substance analysis as well.

Interjurisdictional Immunity

If TransCanada would fail to invalidate the impugned legislation, it can nevertheless attack the legislation on the basis that it is inapplicable to the federal undertaking. In other words, even if s 31 of the EQA is held to be valid, under certain circumstances, works or undertakings that are the subject of federal legislation can be protected from the effects of an otherwise valid provincial law. Known as the doctrine of interjurisdictional immunity, this doctrine serves as an exception to the principle discussed above that validly enacted legislation may produce effects on the level of government other than that which enacted the impugned legislation. It ensures that the basic and unassailable content of federal legislative heads of powers are immune from serious intrusions from validly enacted provincial laws.³¹ In order to determine the likelihood of this doctrine protecting the Energy East pipeline from valid provincial environmental protection legislation, it is necessary to explore the Supreme Court’s treatment of interjurisdictional immunity.

Although the origins of the doctrine of interjurisdictional immunity have been around for well over a century,³² its modern restrictive application emanates from the principles laid out in Canadian Western Bank. In that case, one of the issues which the Court sought to resolve was whether the Alberta’s Insurance Act³³ was applicable to the Canadian Western Bank, considering that banks fall under federal jurisdiction under s 91(15) of the Constitution Act, 1867. In its analysis, the Court acknowledged the doctrine’s potentially dangerous impact on the Canadian federal structure,³⁴ and therefore favoured a more cooperative approach toward federalism.³⁵ The Court was clear that the dominant tide of federalism “puts greater emphasis on the legitimate interplay between federal and provincial powers … and that the court should favour, where possible, the ordinary operation of statutes enacted by both levels of government.”³⁶ In contrast to the logic of cooperative federalism, a liberal application of the doctrine of interjurisdictional immunity would promote a version of federalism which divides the legislative heads of powers into “watertight compartments.”³⁷ Moreover, excessive reliance on the doctrine would also create unpredictability which goes against one of the goals of the Canadian Constitutional structure. Consequentially, the Court decided to generally reserve the doctrine’s scope of application to situations which have previously been covered by precedent.³⁸To be clear, interjurisdictional immunity continues to exist. However, it is essential to reiterate that it only applies in “rare circumstances.”³⁹ It is not enough to rely on a literal interpretation of section 91 of the Constitution Act, 1867 which grants “exclusive” jurisdiction to parliament over interprovincial works to justify the opinion that provincial environmental assessment legislation would not apply to an interprovincial pipeline. It would necessarily have to satisfy the modern analysis elaborated by the Supreme Court.

In concrete terms, interjurisdictional immunity renders a provincial law “inapplicable to the extent that its application would ‘impair’ the core of a federal power”.⁴⁰ In order to assess whether the doctrine applies, it would first have to be demonstrated that the provincial law trenches on the core of federal power or a vital or essential part of the federal undertaking. It would then have to be demonstrated that the level of intrusion meets the test for it to be characterized as impairment.⁴¹

a) Basic, minimal and unassailable content of the interprovincial pipeline undertaking

As mentioned above, in order for the doctrine of interjurisdictional immunity to render a provincial law inapplicable, it must be the core of the federal competence, or a “vital or essential part of a federal undertaking” which has been placed in jeopardy.⁴² In Canadian Western Bank, the Supreme Court interpreted the meaning of the vital or essential part of an undertaking. In that case, it was necessary to determine whether the promotion of insurance products constituted a vital or essential part of the federal competence over banking. Interpreting the words in their ordinary grammatical sense, the Court held that vital denotes being “[e]ssential to the existence of something; absolutely indispensable or necessary; extremely important, crucial … [and that] [t]he word “essential” has a similar meaning, e.g. ‘[a]bsolutely indispensable or necessary.’”⁴³ The argument that insurance activities were vital or essential to banking was rejected on the basis that it “inflates out of all proportion” what could reasonably be considered the absolutely indispensable or necessary content of the federal undertaking of banking. ⁴⁴

In the context of the present discussion, Parliament’s jurisdiction over the Energy East derives from the authority over interprovincial works and undertakings provided at s 92(10)(a) of the Constitution Act, 1867⁴⁵:

92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say:

[…]

10. Local Works and Undertakings other than such as are of the following Classes:

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province….

As an operational pipeline which stretches across 45,000 km of various provincial boundaries, there is no doubt that Energy East falls within the scope of s 92(10)(a). The more difficult question, however, is to define the vital and necessary core of this power. In light of the above considerations, it has been held that the minimal and unassailable core of the power of interprovincial works and undertakings amounts to the selection of the proposed route of the pipelines.⁴⁶ In other words, the selection of the pipeline’s routing falls within the most basic and unassailable content of s 92(10)(a). By analogy, the Supreme Court in Rogers v Chateauguay recently determined that the siting of a cellphone tower network, that is to say, the determination of its location, lies at the core of the power to regulate telecommunications.⁴⁷ Commentators have noted that the “rooting …, construction, maintenance, security, and the siting of infrastructure essential the interprovincial transport…” [translation] are components within the interprovincial pipeline undertaking.⁴⁸ In order for these elements to be protected by the doctrine of interjurisdictional immunity, it would first have to be proven that they lie at most basic core of that head of power. This does not seem farfetched. Furthermore, critical aspects relating to the pipeline’s operations would logically fall within the essence of pipelines. It seems obvious that by specifically withdrawing the provinces’ jurisdiction to legislate over matters relating to interprovincial works connecting one province to another, the Fathers of Confederation intended that the federal government would retain the authority to control the construction, location, maintenance, and operation of those works. These elements of pipelines fall within the essential, minimal core of pipelines and should therefore be protected from serious intrusions from the provinces.

In the NEB’s Trans Mountain Ruling No. 40, for the purposes of assessing the applicability of a by-law enacted by the City of Burnaby, the Board identified that the routing of the interprovincial pipeline is within the core of a federal power over interprovincial pipelines.⁴⁹ The Board supported its decision with the reasoning provided in Canadian Owners and Pilots Association v Quebec (“COPA”)⁵⁰ where the Supreme Court confirmed that the location of aerodromes forms an essential and indivisible part of the federal power over aeronautics.⁵¹ With respect to interprovincial pipelines, this principle should apply by analogy. By extension, within the context of the federal power of interprovincial pipelines, it is safe to say that the operations, routing , construction, maintenance, security, and the location of infrastructure essential to the interprovincial transport are elements of interprovincial pipelines which are vital, essential and indivisible to the legislative head of power.

b) Impairment

It is worth reiterating that the minimal threshold of intrusion on the core of a federal power which is necessary to invoke the doctrine of interjurisdictional immunity is that of impairment rather than affects.⁵²In COPA, the Supreme Court confirmed that the impairment test applies, and specified that impairment entails that the federal power is “seriously or significantly trammel[led].”⁵³ The intrusion on the federal power “need not paralyze it, but it must be serious.”⁵⁴ The level of intrusion which can be characterized as impairment marks the “midpoint between sterilization and mere effect.”⁵⁵ For example, in COPA, a provincial law which prohibited the non-agricultural use of designated agricultural land was held to impair the core the federal power of aeronautics to the extent that it prevented private residents from constructing aerodromes in those locations. It was not necessary that the law totally paralyze the core content of the aeronautics power; however, it would be insufficient if the law merely affected that power. Similarly in Ruling No. 40 the NEB panel held that a municipal by-law which had the effect of prohibiting surveying and investigations to be conducted on municipal land impaired the core of the federal government’s jurisdiction to regulate interprovincial pipelines. In both these cases, the provincial legislation impaired, that is to say that it seriously or significantly trammeled the core federal government’s legislative authority.

In order for Energy East to avoid the application of s 31(1) EQA, the impugned legislation would have to impair the core of the federal power over interprovincial pipelines, as defined above. The argument based on precedent alone is insufficient to the extent that it does not meet the threshold provided by the Supreme Court in recent years. While cases like Campbell-Bennet v Cornstock Midwestern ⁵⁶ and the NEB’s Ruling No. 40 serve as relevant authorities to illustrate that interjurisdictional immunity may be applied to shield interprovincial pipelines from provincial legislation, previous rulings on the matter do not mean that a pipeline proponent would be entitled to disregard the criteria established by the Supreme Court. The Canadian Western Bank, COPA and Marcotte decisions have unequivocally confirmed that the jurisprudence has evolved overtime. However, in order to accurately assess how the aforementioned principles would apply to the context of the present dispute, one must not lose sight of the fact that there are multiple scenarios which can occur before the provincial agency, which in turn would influence whether the provincial legislation remains applicable.

Scenario: BAPE rejects the project’s application, or imposes burdensome conditions that would make the project no longer viable:

The solution to the question regarding the application of interjurisdictional immunity would be most apparent in the scenario where the BAPE rejected the application made under the EQA, or imposed arduous conditions upon the pipeline’s construction or operation. Should the province make it unreasonably difficult or unviable for the proponent to follow through with the pipeline, or reject it altogether, it is likely the province would be held to be impairing the core of the federal interprovincial pipeline power. Even if the provincial restrictions sought to further legitimate environmental concerns, this would not merely affect the federal government’s control over interprovincial pipelines. The effects of the BAPE rejecting an application to proceed with the project, whether directly or indirectly, would perhaps be better characterized as impairing or even paralyzing the federal government from controlling an area under its jurisdiction.

If s 31(1) EQA applied in such a scenario, it would undermine both the wording and the spirit of the Constitution. A provincial government which opposed the construction of an interprovincial pipeline on its territory would have appropriated a de facto veto right which would consequentially deprive the federal government of the core of its power to regulate interprovincial pipelines. Adopting the reasoning of the Supreme Court in COPA by analogy, if the EQA applied in such circumstances, it would “force the federal government to choose between accepting that the province can forbid the placement …on the one hand, or specifically legislating to override the provincial law on the other hand.”⁵⁷ Consequently, “[t]his would impair the federal power over… [interprovincial pipelines], effectively forcing the federal Parliament to adopt a different and more burdensome scheme for establishing … [pipelines] than it has in fact chosen to do.”⁵⁸ This conclusion is further supported by the majority’s decision in Rogers. In that case, the municipality’s decision to prevent the construction of a cellphone tower in a particular location was enough to trigger the doctrine of interjurisdictional immunity as it “compromised the orderly development and efficient operation of radiocommunication and impaired the core of the federal power over radiocommunication in Canada.”⁵⁹ In the case that the BAPE imposes serious obstacles to the realization of a pipeline project, the situation would require the doctrine of interjurisdictional immunity to render s 31(1) EQA inapplicable in order to allow the federal government to retain the capacity to control the core of their constitutionally embedded jurisdiction over interprovincial pipelines.

Scenario: BAPE allows the project to proceed without imposing arduous conditions

The more difficult question is whether this reasoning would apply if the BAPE did not impose any conditions, or imposed minimal conditions. In other words, would interjurisdictional immunity justify TransCanada from evading an EIAR, even if it were guaranteed that the project would be approved without any conditions attached?⁶⁰ In support of the position that TransCanada is not bound to undergo the EIAR, it might be argued that the fact that s 31.1 EQA essentially amounts to a prohibition which would justify applying the reasoning of the paragraphs above (i.e. scenario 1). The provision clearly indicates that “[n]o person may undertake any construction, work, activity or operation, or carry out work according to a plan or program…without following the environmental impact assessment and review procedure and obtaining an authorization certificate from the Government.” It can be argued that the impugned provision enables the provincial government to prohibit the realization of projects which fall under federal authority, which for the reasons discussed in the paragraphs above, impairs the core of the federal power. Indeed, the fact that the legislation offers a mechanism to derogate from the prohibition may not mitigate the fact that s 31.1 prescribes a prohibition which unduly impairs the federal government from controlling a matter within its jurisdiction.

A close reading of COPA may justify this position. As mentioned above, the case involved a provincial law which designated areas in the province as agricultural zones, and prohibited all non-agriculture use of the designated land. The fact that the law prohibited building aerodromes in those locations impaired the core of the federal power over aeronautics, which included the capacity to decide the location of the aerodromes. It is quite apparent how the facts of COPA can apply prima facie to the case of Energy East on the basis that the prohibition to build aerodromes impaired the power over aeronautics in parallel to the fact that the s 31.1 EQA prohibits TransCanada from building pipelines unless the Government decides to allow it upon the minister’s recommendation following an EIAR.

There are two aspects of the impugned legislation in the COPA case (An Act Respecting the Preservation of Agricultural Land and Agricultural Activities, or “ARPALAA”) that may specifically shed light on the question of whether Energy East must at least be submitted to the BAPE. Firstly, in COPA, it was not absolutely prohibited to build aerodromes in the province of Quebec. The scope of the prohibition only included designated agricultural lands. Quebecers were still free to build aerodromes outside of the protected agricultural zones.⁶¹ In contrast, s 31(1) EQA is a general prohibition to build or operate works covered by regulation, which include pipelines. Considering that the scope of the prohibition provided by s 31.1 EQA is broader than the ARPALAA in COPA, and that the latter was sufficient to impair the core of the aeronautics power, COPA can serve as strong authority to support TransCanada’s claim that it is not obliged to undergo the EIAR. Does the fact that sections 31.1 and 31.5 EQA provide a mechanism to derogate from the prohibition (by undergoing an EIAR followed by the Minister’s recommendation to the Government) serve as grounds to distinguish COPA from the case at bar? No, it should not. In addition to the territorial limits of the prohibition in COPA, s 26 ARPALAA allowed for applicants to derogate from the prohibition by seeking authorization from the Commission de protection du territoire agricole (Commission of the protection of agriculture land of Quebec):

26. Except in the cases and circumstances determined in a regulation under section 80, no person may, in a designated agricultural region, use a lot for any purpose other than agriculture without the authorization of the commission [emphasis added.]

The scope of the provision of the COPA case which had been held as inapplicable to aeronautics is similar to s 31.1 EQA. Both provisions allow for applicants to proceed before an administrative entity in order to proceed with the project. In COPA, the fact that the law offered a possibility to build aerodrome in conformity with the provincial legislation did not prevent the Court from concluding that the legislation impaired the core of the federal power over aeronautics. By extension, this reasoning applied to the case of Energy East may justify rendering s 31.1 inapplicable to Energy East. It should be mentioned, however, that in COPA, the applicant did in fact apply for exemption, and was refused one.⁶² Nevertheless, the Supreme Court in its reasons, did not suggest that s 26 ARPALAA is only inapplicable to the extent that the Commission refuses to allow an aerodrome to be built on designated agriculture land, nor did the Court suggest that the Commission would be able to impose conditions or play any other type of role in the construction of aerodromes on designated lands.

The difficulty with the Energy East review in Quebec is that while the argument in support of TransCanada may hold water, the argument in favour of the position that Energy East should at least submit its project to the BAPE definitely has merit as well. Bearing in mind the evolution of interjurisdictional immunity as was discussed above, it is conceivable that merely following the process of an EIAR does not impair the core of the federal power over interprovincial pipelines.⁶³ As discussed above, it is true that it is no longer sufficient for the EIAR to affect the federal undertaking for it to be inapplicable.⁶⁴ Concretely, it would have to be argued that the fact of merely participating in an EIAR process does not seriously or significantly trammel the capacity to construct, determine the routing, and ultimately regulate pipelines.⁶⁵ Moreover, the fact that the BAPE process is officially being used as a mechanism for the province to acquire information to be used in the federal process further supports the argument that the hearing process would not impair federal power. The reasoning may even extend to support the position that Energy East would be bound to respect the provincial environmental laws in addition to conditions imposed by administrative entities which directly affect the pipeline’s structure and construction, seeing how minor conditions may only affect the core of the federal head of power.⁶⁶ Accordingly, by relying on a restrictive application of interjurisdictional immunity, it is reasonable to allege that undergoing a review process and imposing certain conditions on the pipeline’s construction or operation may be the legitimate exercise of provincial power.

While this argument is most compelling when assessing the applicability of an individual project to a specific provincial statute, a more holistic analysis reveals the argument’s potential weaknesses. As discussed above, one may contemplate that Energy East undergoing an EIAR does not impair the federal head of power over interprovincial pipelines. The same may even be said about Energy East being forced to respect certain conditions imposed by Quebec for granting the project’s authorization. However, Energy East is planned to be installed in six Canadian provinces, not just Quebec. Therefore, if the provincial environmental assessment regime is valid in Quebec, and if conditions of the pipeline’s construction or operation may be imposed in Quebec, there is no reason why the five other provinces would not do the same. Forcing Energy East to participate in the environmental assessments in six provinces, and respect the conditions imposed by six provinces in addition to the federal regulator would be sufficiently strenuous to impair, and perhaps even paralyze the efficient realization of the project altogether. In such a case, every segment of the pipeline would have to be approved in the province which it is located in, and would be required to respect the conditions imposed by that province. This major difficulty would logically justify why the Fathers of Confederation opted to exclude such works from provincial jurisdiction. While the law is decided on individual cases, judges would be wise to consider the wider implications of their judgements.

The claim that provinces may impose conditions on interprovincial pipelines may be supported by recent authorities as well.⁶⁷ In Burlington Airpark v Burlington (City),⁶⁸ the question at hand was whether a municipal by-law which required a permit to be obtained before placing fill on the ground was applicable to an aerodrome. Citing COPA, the airpark alleged that the by-law impairs the unassailable core of the federal head of power over aeronautics as it used the fill to build up the runways. The City on the other hand argued that regulating the quality of the fill does not impermissibly trench on the core jurisdiction over aeronautics. The Court of Appeal for Ontario held that regulating the use of fill which supports the runway does not impermissibly trench the unassailable core of the power over aeronautics. The Court supported its finding by stating that requiring the airpark to use clean fill “will not be permanently reflected in the structure of the finished product [ie the runway].”⁶⁹ The Court continued its reasoning by holding that it accepts that regulating the quality of the fill will “have an impact on the manner of carrying out a decision to build airport facilities in accordance with federal specifications, [however], such regulation will not have any direct effect upon the operational qualities or suitability of the finished product which will be used for the purposes of aeronautics. [emphasis added]”⁷⁰ Such an intrusion, the Court held, does not intrude, let alone impair “the authority absolutely necessary to enable Parliament ‘to achieve the purpose for which exclusive legislative jurisdiction was conferred.’”

It is no surprise that this recent decision has been used to support the conclusion that interprovincial pipeline proponents must comply with provincial environmental legislation. There is merit to the argument that if airparks must comply with environmental protection legislation in the use of fill to support runways, then so must interprovincial pipelines proponents. However, upon analyzing the facts of this case, in addition to the Court’s reasoning, the case is by no means detrimental to TransCanada’s position. Regulating the quality of the fill of runways, as the Court stated, is “not permanently reflected in the finished product.” The by-law was not an attempt to regulate slopes or surfaces of runways, runway shoulders or the slopes and strength of runway shoulders.⁷¹ There exists a degree of separation between the matter which is being regulated, that is to say the fill which supports the runway, and the core of the aeronautics power. Back to the case of Energy East, would an EIAR and the conditions which it may impose on the project have “no direct effect upon the operational qualities or suitability of the finished product”? The regime under s 31.1 EQA imposes a prohibition to undertake the construction, work, activity or operation of the pipeline. Therefore, by authorizing a proposed pipeline project with amendments or conditions, it is totally conceivable that these conditions will pertain to the construction, work, activity or operation in a direct manner. The provincial legislation in such a case will have the capacity to shape the finished product, and influence the project’s timeframe. Even if the conditions still served the purpose of protecting the environment, the EQA prescribes that the conditions can dictate how the pipeline is to be constructed and operated. Therefore, while the case is pertinent in that it reiterates the restrictive application of interjurisdictional immunity, the insignificant effect of the regulation of runway fill on the core of the aeronautics power should be distinguished from the direct impact which EIAR would have on Energy East as an operation pipeline.

More trouble may come from a recent decision from the British Columbia Supreme Court. In Coastal First Nations v British Columbia (Environment)⁷², the case revolved around the constitutionality of an Equivalency Agreement concluded between British Columbia and the Federal Government. The governments agreed that all reviewable projects under the provincial Environmental Assessment Act (“EAA”) which also required approval under the National Energy Board Act (“NEBA”)⁷³ would only have to undergo a federal assessment, which was deemed to be an equivalent assessment process. Being an interprovincial pipeline project, Northern Gateway Pipeline (“NGP”) required a Certificate of Public Convenience and Necessity under s 52 of the NEBA, as well as a federal environmental assessment under the Canadian Environmental Assessment Act.⁷⁴ The project also required an environmental assessment under the provincial EAA. The petitioners Coastal First Nation challenged the constitutional validity of s 3 of the Equivalency Agreement to the extent that it removed the provincial government’s authority to conduct an environmental assessment, and consequently unlawfully abdicates its power.⁷⁵ NGP on the other hand asserted that the Equivalency Agreement is valid because since the project falls under federal jurisdiction, any requirement for statutory compliance under the province’s EAA is unconstitutional. ⁷⁶ In other words, as a federal undertaking, the project would not be required to undergo a provincial environmental assessment anyway.

After finding that the law was validly enacted, the Court considered whether the doctrine of interjurisdictional immunity and federal paramountcy would apply. The Court held that it was premature to assess whether there has been an impairment or a conflict until there has actually been conditions imposed by the provincial authority, and that it would require an analysis on a case by case basis in order to conclude that the environmental assessment would be inapplicable.⁷⁷ Justice Koenigsberg however, did state in obiter dicta that she “agree[d] that the Province cannot go so far as to refuse to issue an EAC and attempt to block the Project from proceeding.”⁷⁸ For now, the decision supports Minister Heurtel’s position that it is not optional for TransCanada to submit Energy East for an assessment before the BAPE. As for the legality of imposing conditions the project to proceed, the uncertainty remains.

Federal Paramountcy

If it is not found that the provincial legislation impairs the core of the federal head power, pipeline proponents may allege that under the paramountcy doctrine, the law comes into conflict with a provincial statute, which would justify that the federal statute prevails. In order for a conflict to justify invoking the paramountcy doctrine, it either must be impossible to comply with both provincial and federal acts,⁷⁹ or the provincial law must frustrate the purpose of the federal law.⁸⁰

a) Impossibility of dual compliance

The first form of conflict which would trigger the paramountcy doctrine is if one law expressly contradicts the other.⁸¹ The explanation originally articulated by the Supreme Court in Multiple Access⁸² continues to serve as the “fundamental test”:

In principle, there would seem to be no good reasons to speak of paramountcy and preclusion except where there is actual conflict in operation as where one enactment says “yes” and the other says “no”; “the same citizens are being told to do inconsistent things”; compliance with one is defiance of the other. [Emphasis added]⁸³

Accordingly, there will be an operational conflict when it is impossible to comply with both federal and provincial laws as citizens would be in a situation where respecting one of the laws would necessarily result in violating the other. Professor Hogg discusses how the above notion of conflict of operation would manifest itself in the case of a project which requires authorization from both federal and provincial agencies:

Is there an impossibility of dual compliance if a federal law requires the consent of a federal agency for a particular project and provincial law requires the consent of a provincial agency for the same project? In principle the answer is no…. Even if one level of government imposes stricter conditions on the project than the other one, compliance with the stricter conditions obviates any conflict. [Emphasis added] ⁸⁴

According to this logic, not only will it not result in an operational conflict for the project to undergo an examination from both the BAPE and the NEB, it may even be acceptable if the BAPE’s conditions are more severe than the NEB’s because it is possible to comply with the laws of both levels of government by complying with the stricter conditions. Following that line of reasoning, one may conclude that in the case that the NEB authorizes Energy East to proceed, and the BAPE hearings concludes that it may only proceed if specific conditions attached to the recommendations, this would not justify rendering the EQA inoperable.⁸⁵ TransCanada in such a scenario would not be in a situation where it is impossible to comply with both the EQA and the NEBA. There is a strong argument that in the case that the NEB merely authorized (not required) the proponent to construct a pipeline or work, and the BAPE did not, there would be no conflict since it would not violate the NEBA if the proponent respected the more onerous provincial requirements.

It is well established that a conflict of operation will not arise if the provincial law is more restrictive than the federal law.⁸⁶ For example, if only the BAPE imposed the obligation for Energy East to be equipped with automatic emergency shutdown valves, TransCanada would be able to satisfy the conditions of both levels of government, unless the NEB would have hypothetically prohibited the use of such equipment. Likewise, if the provincial body imposed the requirement for a more sophisticated emergency response protocol that was omitted from the NEB’s conditions, TransCanada would not find itself in a situation where complying with the more rigorous requirements would result in defying the federal law. This is consistent with the Supreme Court’s recent decision Saskatchewan v Lemare Lake Logging Ltd⁸⁷ where the Court held that it “has been regularly considered not to constitute an operational conflict” when the “federal law is permissive and the provincial law [is] more restrictive.”⁸⁸ In that case, a secured creditor appointed a receiver over the assets of a debtor farmer. The debtor challenged the action on the grounds that Part II of The Saskatchewan Farm Security Act⁸⁹ which requires that prior to beginning an action over farm land, the creditor must send a notice to the debtor and participate in mediation for up to 150 days. Section 243 of the Bankruptcy and Insolvency Act⁹⁰, however, allows for the court to appoint a receiver, without mentioning the requirement to undergo formalities provided by the provincial law. The Court cited numerous authorities to support the finding that by respecting the more arduous requirements of the provincial law, the creditor would be able to comply with both legislative schemes.⁹¹

Applying the Court’s reasoning to Energy East would suggest that by respecting the more onerous requirements imposed by the provincial body, TransCanada would be able to comply with both provincial and federal authorities. It goes without saying, however, that certain conditions imposed by the NEB may be incompatible with conditions imposed by the BAPE. The answer to the question whether the provincial law is operable would most likely only be available once the conditions were imposed by both levels of government.⁹² One can conceive of conditions that would be more likely to create a conflict. This is particularly true with questions of routing. If there are disagreements with respect to the pipeline’s route, it would be impossible to simultaneously respect both route trajectories. In such a case, the route imposed by NEB would prevail.

The question is more difficult to answer if the provincial body were to block the project altogether. In theory, TransCanada may argue that it is possible to comply with both the provincial law and the federal law in the case that the BAPE does not allow the project to advance. Even if the NEB’s recommendation would authorize the project’s construction and operation, a proponent who has obtained authorization would not be violating the terms of the NEBA by not undertaking the project. This finding is in line with the Supreme Court in COPA where it did not constitute a conflict for the provincial law to prohibit aerodromes on agricultural designated lands, even though such an activity was permitted under the federal scheme:

Federal legislation says “yes, you can build an aerodrome” while provincial legislation says “no, you cannot”. However, the federal legislation does not require the construction of an aerodrome. Thus, in Dickson J.’s formulation in McCutcheon, compliance with one is not defiance of the other. Here, it is possible to comply with both the provincial and federal legislation by demolishing the aerodrome.⁹³

This argument can be understood as the logical progression of the argument that the province can impose conditions on the project without there being an operational conflict. If it is possible to comply with a permissive federal law and a provincial law which imposes more onerous conditions, it seems logically sound to suggest that it would be possible to comply to both laws in the case that the project were rejected by the provincial body, by omitting to construct the pipeline. Unfortunately for the 25,000 Quebecers who recently signed the petition denouncing the project,⁹⁴ the most authoritative constitutional law scholar in Canada does not share the same opinion. While Hogg, as discussed above, subscribes to the view that complying with the stricter provincial law does not result in a conflict, he does not extend his reasoning to the case that one authority were to approve the project and the other one rejects it:

Even if one level of government imposes stricter conditions on the project than the other, compliance with the stricter conditions obviates any conflict. Only if one level of government denies consent and the other grants consent, is there an impossibility of dual compliance, which would cause the federal decision to prevail over the provincial decision in that particular case.⁹⁵

The statement was supported with the 2007 Supreme Court decision British Columbia v Lafarge Inc.⁹⁶ In that case, the proponent wished to build a marine facility on the Vancouver Port. Accordingly, the project required federal approval from the Vancouver Port Authority. The question was whether the project also needed to respect the municipal land-use by-law. The majority held that the very act of submitting the project for municipal approval would create an operational conflict as it would deprive the federally constituted Port Authority of its decision making authority.⁹⁷ The Lafarge decision may serve as a useful authority by pipeline proponents; however, the decision is not overly persuasive in that it does not explicitly deal with the question of whether Lafarge would comply with both acts by not building the plant.⁹⁸ It can be argued that the majority goes too far by stating that it is impossible to comply with both federal and provincial levels of government by simply submitting the project for municipal authorization. Hogg states that Bastarache J’s concurring opinion was “surely correct” to state that “until the city refuses a permit, dual compliance is not ‘impossible’ here.” ⁹⁹ However, as the present article discusses above, even that can be put to question since opting to not build the pipeline may allow the proponent to comply with both laws.

In November 2015, the majority of the Supreme Court in Alberta v Moloney¹⁰⁰ applied the paramountcy doctrine, and in doing so, explicitly confirmed the Lafarge decision.¹⁰¹ While the Court’s reasoning can serve as a useful authority for pipeline proponents

who wish to render the provincial regime inoperable, a close reading of the decision may also be used to support the opposing position. The question which the Court sought to resolve was whether the Bankruptcy and Insolvency Act conflicted with s 54(4) of the Alberta Traffic Safety Act¹⁰². Moloney contravened the provincial Act by operating an automobile while he was uninsured and was involved in a roadside collision. In consequence, under s 54 of the Act, he was obliged to pay a fine to the province. However, he made an assignment in bankruptcy, and the debt was treated as a claims provable under the federal law. The province argued that there was no operational conflict since the bankrupt “can either opt not to drive or voluntarily pay the discharged debt.”¹⁰³ The Court rejected the argument that an operational conflict can be avoided by omitting to take advantage of a right or privilege provided by the provincial Act, since the question is whether both laws can apply and operate concurrently: ¹⁰⁴

In a case like this one, the test for operational conflict cannot be limited to asking whether the respondent can comply with both laws by renouncing the protection afforded to him or her under the federal law or the privilege he or she is otherwise entitled to under the provincial law. In that regard, the debtor’s response to the suspension of his or her driving privileges is not determinative. In analyzing the operational conflict at issue in this case, we cannot disregard the fact that whether the debtor pays or not, the province, as a creditor, is still compelling payment of a provable claim that has been released, which is in direct contradiction with s. 178(2) of the BIA…

Both laws cannot operate concurrently “apply concurrently” or “operate side by side without conflict”. The facts of this appeal indeed show an actual conflict in  operation of the two provisions. This is a case where the provincial law says “yes” (“Alberta can enforce this provable claim”), while the federal law says “no” (“Alberta cannot enforce this provable claim”). The provincial law gives the province a right that the federal law denies, and maintains a liability from which the debtor has been released under the federal law. [Emphasis added] [References omitted]

Neither can the question under the operational conflict branch of the paramountcy test be whether it is possible to refrain from applying the provincial law in order to avoid the alleged conflict with the federal law. To argue that the province is not required to use s. 102 in the context of bankruptcy, or that it can choose not to withhold the respondent’s driving privileges, leads to a superficial application of the operational conflict test. To suggest that a conflict can be avoided by complying with the federal law to the exclusion of the provincial law cannot be a valid answer to the question whether there is “actual conflict in operation”… To so conclude would render the first branch of the paramountcy test meaningless, since it is virtually always possible to avoid the application of a provincial law so as not to cause a conflict with a federal law. [Emphasis added] [References omitted]

To find a possibility of dual compliance with the conflicting laws at issue — on the basis of hypotheticals that call for “single” compliance, by any one of the actors involved, with one law but not with the other — would be inconsistent with this Court’s precedents on federal paramountcy.

The reasoning of the above passage can support the existence of an operational conflict if the NEB allows Energy East to proceed, and if the BAPE comes to an alternative finding. The decision supports the position that if the NEB says “yes” and the BAPE says “no,” there would be a conflict considering that both laws would not be able to operate and apply simultaneously. Accordingly, the choice not to proceed with a project (in order to avoid a conflict) would deny the proponent a right that it has acquired under a valid federal law, and would thus result in a “superficial analysis.” This interpretation of the paramountcy doctrine has been applied in disputes revolving pipelines in the past. In Trans Mountain’s Ruling No. 40, the municipal by-law prohibited disturbing the land in parks by cutting trees, clearing vegetation and drilling boreholes.¹⁰⁵ However, s 73(a) of the NEBA states that a company “may” conduct activities necessary to fixing a pipeline, make examinations and survey the land. The wording permits such activities which are prohibited by the by-law, it does not require them. Notwithstanding that the companies could have opted to not perform the activities in the park, the NEB nevertheless held that it was impossible to comply with the by-law and the NEBA.¹⁰⁶

The question then becomes whether COPA’s analysis of the paramountcy doctrine is still relevant. This can be answered in the affirmative, but it must be reconciled with Moloney. As discussed above, the Court held in COPA that there was no conflict since the provincial law prohibited the construction of an aerodrome whereas the federal law permitted, not required aerodromes on agricultural lands. At first glance, it seems difficult to reconcile the two decisions. Indeed, Côté J, in her concurring opinion, relied on the Court’s reasoning in COPA to come to the finding that there was no operational conflict, and that “even a superficial possibility of dual compliance will suffice for a court to conclude that there is no operational conflict.”¹⁰⁷ The majority’s response to Côté J’s concerns, which McLachlin CJ subscribed to, confirms that COPA continues to apply and can be used to support position that there is no operational conflict between the EQA and the NEBA. ¹⁰⁸

In Moloney, the majority distinguished that case with COPA, and in doing so, keeps the door open for Energy East to avoid the application of the paramountcy doctrine. This distinction was based on the fact that COPA was a situation where authorization to build an aerodrome could have been acquired by administrative authorization.¹⁰⁹ In other words, COPA was not a situation when one law said “yes” and the other said “no,” but rather where one law said “yes” and another said “sometimes.” On the other hand, in Moloney, the application of both laws directly resulted in conflicting outcomes. One says “yes” while the other says “no.” The situation in COPA was therefore characterized as one where the provincial law was more restrictive than the federal law, not in conflict with it. This aspect of COPA is similar to the case of Energy East, where s 31.1 EQA allows for the authorization to construct of a pipeline if a certificate is provided by the Government. If the present issue ever makes it to the courts, it will be interesting to see whether Moloney will be used as an authority to justify the existence of an operational conflict, or conversely, that the laws of both levels of government may operate side by side in such situations.

b) Frustration of Federal Purpose

In addition to the operational conflict based on the impossibility of dual compliance, the paramountcy doctrine can render a provincial law invalid in the case that the provincial legislation is incompatible with the purpose of the federal legislation.¹¹⁰ In this second branch of the paramountcy doctrine, the effect of a provincial law may frustrate the purpose of the federal law even though it does not entail a direct violation of the federal law’s provision.¹¹¹ The courts must first interpret the purpose of the federal law, before demonstrating that the law’s effect is incompatible with that purpose.¹¹² It is a high threshold to attack a law with this second branch, which “requires clear proof of purpose; mere permissive federal legislation does not suffice.”¹¹³ Moreover, the Supreme Court has cautioned to limit the scope of application of this branch of the paramountcy doctrine.¹¹⁴ “The mere fact parliament has legislated in an area does not preclude provincial legislation from operating in the same area….”¹¹⁵

The general purpose of the NEBA is to regulate the construction, operation and abandonment of interprovincial and international pipelines and power lines, as well as oil and gas exploration and production activities. With respect to Part III which governs applications for Certificates of Public Convenience and Necessity, its purpose is to assess whether a project is in the public interest of Canadians. This involves evaluating all considerations that “appear to be directly related to the pipeline” which include inter alia the availability of the energy source,¹¹⁶ the existence of markets,¹¹⁷ the economic feasibility of the project,¹¹⁸ the extent to which Canadians benefit economically from the project,¹¹⁹ and the environmental impact of designated projects.¹²⁰

Accordingly, would the effect of s 31.1 EQA’s operation frustrate this purpose? The public assessment under sections 31.1-31.5 allows for intervenors and the proponents to present evidence on the nature of the project and its environmental effects so that the provincial government can be informed prior to deciding whether the project should come to fruition. If the provincial review were to allow the project, even with more rigorous conditions, the federal government would still be able to fulfil its purpose. In this regard, the provincial assessment may even be seen to further the aforementioned purpose.

That being said, a proponent that is attempting to attack the operability of the provincial law would emphasize that one of the purposes of the NEBA is to create a highly streamlined process to allow for pipeline applications to be treated in a timely manner. S 52(4) provides the NEB with a time limit of 15 months to complete the report. This delay may be extended by up to three months if ordered by the Minister, or may be extended by an additional period of time by the Governor in Council if recommended by the minister. Furthermore, the Act grants the Minister with the power to issue binding directives at different stages of the application process in order “[t]o ensure that the report is prepared and submitted in a timely manner.”¹²¹ Moreover, the Chairperson is vested with the power to take any measure which he considers appropriate to ensure that the time limit is met. ¹²² Upon reading the Act, it is clear that parliament intended that the approval process for interprovincial pipelines be conducted in a timely manner.¹²³ By extension, if the provincial EIAR were to seriously delay the approval process, the argument can be made that the operation of the EQA in such a scenario would not be compatible with one of the purposes of the NEBA.

In addition, it is probable that a project proponent would cite Ruling No. 40, where the NEB held that the municipal by-law discussed above frustrated the purpose of paragraph 73(a) NEBA. However, a closer look at the provisions in question distinguishes that case from the issue in discussion. The provision empowered proponents to access land for the ultimate purpose of collecting information which could be used to create an enlightened decision-making process. Therefore, the by-law which prevented cutting trees, clearing vegetation and drilling boreholes which were proven to be necessary to the exploration activities, frustrated the federal purpose of the federal law. This issue is distinct from the question of whether submitting a pipeline project to a provincial EIAR would frustrate the purpose of NEBA.

It is also worth examining whether it would frustrate the purpose of the NEBA if the BAPE were to conclude that the project should not proceed. As discussed above, the goal of Part III of the NEBA is to regulate interprovincial pipelines, and determine whether the proposed pipeline projects are in the public interest. In COPA the permissive federal regime generally permitted citizens to construct aerodrome without first acquiring approval. The Court rejected the argument that parliament deliberately implemented a permissive federal regime for the purpose of encouraging the widespread construction of aviation facilities.¹²⁴ The Court required clear proof to establish the Act’s purpose.¹²⁵ In the absence of establishing a clear proof that parliament’s purpose is being frustrated by the federal law, the doctrine will not apply.

Similarly, in 114957 Canada Ltée (Spraytech) v Hudson (City of)¹²⁶, a law that restricted the use of pesticides, except to the extent permitted, was held to be permissive rather than exhaustive. The municipal by-law, however, more rigorously prohibited the use of pesticides. The Court held that the fact that the federal law was permissive in nature, as opposed to explicitly providing for a positive right made both schemes compatible.¹²⁷ In other words, interpreting the statutory scheme did not clearly indicate parliament’s intention to grant Canadian with the positive right to use pesticides. Therefore, a federal regime which may permit the construction of pipelines does not necessarily indicate parliament’s clear intention to allow such projects. This is to be distinguished with Law Society of British Columbia v Mangat¹²⁸ where provisions of the federal Immigration Act¹²⁹ explicitly provided non-lawyers with the positive right to appear on behalf of clients before the Immigration and Refugee Board which violated the terms of the B.C. Legal Professional Act¹³⁰. The Court ruled that it would undermine the purpose of the federal Act by restricting who can represent an applicant before the board to a licensed lawyer, as the Act clearly allowed for lawyers to represent applicants in order to pursue the objective of rendering the process accessible and informal.¹³¹ It was ruled that this objective would be frustrated if applicants were only permitted to attain the services of licensed counsel. Considering that Part III of the NEBA does not clearly indicate parliament’s intention to allow pipelines to proceed, the case of Energy East would be more similar to COPA and Spraytech than Mangat. Accordingly, the EIAR process prescribed by the EQA does not frustrate parliament’s intention for enacting the NEBA.

Conclusion

The degree to which Quebec’s EQA can affect Energy East can be determined by analyzing the three essential Constitutional doctrines which are employed to solve problems relating to the division of legislative powers. With respect to the provincial Act’s validity, there is little doubt that an analysis of the “pith and substance” doctrine would reveal that the EQA’s general EIAR process is in reality an attempt for the province to legislate over interprovincial pipelines. However, there is a better chance that the application of the EQA would be prevented by the doctrine of interjurisdictional immunity. In the event that the provincial authority were to impose burdensome conditions that affected the viability of the project, or if it were rejected altogether, it is likely that the provincial law would be held to be impairing the core of the federal power over interprovincial undertakings. It is less certain whether this doctrine would be able to justify TransCanada from omitting to file its project before the BAPE. If a court were to look at the situation in abstracto without considering the wider implications of the decision, it is understandable how merely submitting the project for a review would not necessarily impair the core of the federal power. However, it is easy to envision how the federal government can lose its capacity to regulate interprovincial pipelines upon considering the effects of submitting the project to six provinces in addition to the federal regulator. Finally, with respect to the paramountcy doctrine, it is unlikely that the fact of submitting the project before the provincial body creates a situation where TransCanada would be in a position where complying with one law entails the defiance of the other. Only upon assessing specific conditions imposed by both administrative bodies would it be possible to truly weigh whether there is a conflict between the federal and provincial legislation.

The Energy East saga has effectively highlighted that federalism is an imperfect system of government. Inherent in the idea of federalism is the difficulty in balancing local interests with the broader interests of all Canadians. The courts are faced with the duty of ensuring that the division of powers provided by the Constitution is upheld, and have overtime increased the importance placed on local interests by favouring a federal order based on cooperation and flexibility. As important as it is for the Constitution to evolve with the times,132 interpreting it in a manner that would allow the provinces to substantially interfere with an interprovincial pipeline would derogate from the abundantly clear text of the written constitution which was created to serve as a blueprint of how to handle such conflicts. Behind the written text lies a logic that there are a number of situations in which the federal government must be able to effectively make certain decisions to the benefit of Canadians from coast to coast. By explicitly excluding interprovincial works and undertakings from the legislative jurisdiction of the provinces, it is clear that the Fathers of Confederation envisioned the extremely grave impracticality which can result from provincial intrusions into such matters. Too many cooks spoil the broth.

* Daniel Gralnick is a legal intern at the Canadian Gas Association, and serves as Technical Editor of Energy Regulation Quarterly. He holds a LL.L (magna cum laude) from the University of Ottawa’s Civil Law section, and is currently pursuing a JD degree as part of the National Program. The views and opinions expressed in this piece are strictly those of the author and do not necessarily reflect those of the Canadian Gas Association or any of its members.

1. Environment Quality Act, CQLR c Q-2 [EQA].
2. Re Application for the Energy East Project and Asset Transfer (17 May 2016) (NEB); see also TransCanada, Energy East Consolidated Application, online: TransCanada <http://www.energyeastpipeline.com/regulatory-filing/application/>.
3. National Energy Board, Energy East and Eastern Mainline Projects, online: NEB <https://www.neb-one.gc.ca/pplctnflng/mjrpp/nrgyst/index-eng.html#s2>.
4. Centre québécois du droit de l’environnement c Oléoduc Énergie Est ltée, 2014 QCCS 4398.
5. Centre québécois du droit de l’environnement c Oléoduc Énergie Est ltée, 2014 QCCS 4147.
6. Official Languages Act, RSC 1985, c 31 (4th Supp).
7.  Centre québecois de droit de l’environnement v National Energy Board, 2015 FC 192 at p 13.
8. “Énergie-Est: la Cour fédérale refuse l’injonction réclamée par des écologistes”, Canadian Press (16 February 2015) online: le Soleil <http://www.lapresse.ca/le-soleil/actualites/environnement/201502/16/01-4844701-energie-est-la-cour-federale-refuse-linjonction-reclamee-par-des-ecologistes.php?utm_categorieinterne=trafficdrivers&utm_contenuinterne=cyberpresse_vous_suggere_4842769_article_POS3> [French only].
9. Martin Ouellet & Julien Arsenault, “Pas de terminal à Cacouna, mais d’autres options sont à l’étude”, Le Devoir (2 April 2015) online: Le Devoir <http://www.ledevoir.com/environnement/actualites-sur-l-environnement/436225/transcanada-pas-de-terminal-a-cacouna-mais-d-autres-options-sont-a-l-etude> [French only].
10. EQA, supra note 1, s 31.5.
11. Alexandre Shields, “Le BAPE sur Énergie Est en sursis”, Le Devoir (2 March 2016) online: Le Devoir <http://www.ledevoir.com/environnement/actualites-sur-l-environnement/464387/le-bape-sur-energie-est-en-sursis> [French only].
12. Ibid.
13. Alexandre Robillard, “Philippe Couillard lance un appel à la raison” Le Devoir (8 March 2016) online : Le Devoir <http://www.ledevoir.com/environnement/actualites-sur-l-environnement/464905/energie-est-philippe-couillard-lance-un-appel-a-la-raison> [French only].
14. TransCanada, Projet Oléoduc Énergie Est, Avis de projet (April 2016) (BAPE) online: MDDELCC <http://www.mddelcc.gouv.qc.ca/evaluations/transcanada/Avis-Projet201604.pdf> [Notice of Application].
15. Nia Williams, “Quebec halts injunction requestagainst TransCanada’s Energy East pipeline”, Financial Post (22 April 2016) online: Financial Post <http://business.financialpost.com/news/energy/transcanada-says-quebec-halting-pipeline-injunction-request-against-energy-east-pipeline?__lsa=df80-2ae6>.
16. Notice of Application, supra note 14 at p 5.
17. Martin Croteau “BAPE sur Énergie Est: TransCanada et Québec toujours en désaccord”, La Presse (27 April 2016) online: La Presse <http://www.lapresse.ca/actualites/politique/politique-quebecoise/201604/26/01-4975309-bape-sur-energie-est-transcanada-et-quebec-toujours-en-desaccord.php> [French only].
18. Constitution Act, 1867, 30 & 31 Vict, c 3.
19. Canadian Western Bank, 2007 SCC 22, [2007] 2 SCR 3.
20. Quebec (Attorney General) v Canada (Attorney General), 2015 SCC 14, [2015] 1 SCR 693 at para 17; Canadian Western Bank, supra note 19 at 24.
21. Ibid; Re Anti Inflation Act, [1976] 2 SCR at 450.
22. Canadian Western Bank, supra note 19 at paras 26-27.
23. Ibid at para 28.
24. Ibid; British Columbia v Imperial Tobacco, 2005 SCC 49, [2005] 2 SCR 473, at para 28.
25. Friends of the Oldman River Society v Canada (Minister of Transport), [1992] 1 SCR 3 [Friends of the Oldman River].
26. Ibid at p 63-64 , citing Gibson” Constitutional Jurisdiction over Environmental Management in Canada” (1973), 23 UTLJ 54 at p 85.
27. Friends of the Oldman River, supra note 25 at p 65.
28. The Constitution Act, 1867, supra note 18, s 92(13).
29. Regulation Respecting Environmental Impact Assessment and Review, c Q-2, r 23, s 2 (j.1).
30. Constitution Act, 1867, supra note 19, ss 91(29), 92(10)(a).
31. Bell Canada v Quebec (Commission de la Santé et de la Sécurité du Travail), [1988] 1 SCR 749, 51 DLR (4th) 161 at pp 839-840; Canadian Western Bank, supra note 19 at para 33.
32. Ibid at para 39.
33. Insurance Act, RSA 2000, c I-3.
34.  Canadian Western Bank, supra note 19 at paras 35-38.
35. Ibid.
36. Ibid at para 37.
37. OPSEU v Ontario (Attorney General), [1987] 2 SCR 2 at p 17; Canadian Western Bank at 36.
38. Ibid at para 78.
39. Bank of Montreal v Marcotte, 2014 SCC 55, [2014] 2 SCR 725 at para 64 [Marcotte].
40. Ibid.
41. em>Ibid.
42.  Canadian Western Bank, supra note 19 at para 48; Peter W. Hogg, Constitutional Law of Canada, 2012 Student ed (Toronto: Carswell, 2012) at 15.8 (c) [Hogg].
43. Canadian Western Bank, supra note 19 at para 51.
44. Ibid at paras 50-51.
45. This must be read with s 91(29) which states that classes of subjects which are explicitly excluded from provincial jurisdiction (i.e. interprovincial works and undertakings) fall within exclusive federal jurisdiction.
46. Trans Mountain Pipeline ULC, Trans Mountain Notice of Motion and Notice of Constitutional Question (26 September 2014), Ruling No 40 (National Energy Board) [Ruling No 40] at 14, leave to appeal to the FCA refused.
47. Rogers Communications Inc v Châteauguay (City), 2016 SCC 23 at paras 60-68 [Rogers].
48. David Robitaille, Mémoire du Centre québècois du droit de l’environnement. “Consultation publique sur le projet d’oléoduc Énergie-Est de TransCanada”, at 9 and note 24, online : CQDE <https://cqde.org/wp-content/uploads/2015/09/Mmoire-du-CQDE-Consultation-CMM-version-2.pdf> [French only] [CQDE Memo].
49. Ruling No 40, supra note 46 at 14.
50. Quebec (Attorney General) v Canadian Owners and Pilots Association, 2010 SCC 39, [2010] 2 SCR 536 [COPA].
51. Ibid at paras 36-40.
52. Canadian Western Bank, supra note 19 at para 48; See also COPA, supra note 50 at paras 43-44; Marcotte, supra note 39 at para 54. Prior to Canadian Western Bank, there existed a stream of case law which allowed for interjurisdictional immunity to apply so long as the core of the federal power had merely been affected. See Bell Canada v Quebec, [1988] 1 SCR 749.  In Canadian Western Bank and COPA, the Supreme Court explicitly rejected this approach because it did not properly reflect the modern federal scheme which prioritizes cooperation between both levels of government.
53. COPA, supra note 50 at para 45.
54. Ibid.
55. Ibid at para 44.
56. For example, in Campbell-Bennett v Comstock Midwestern Ltd, [1954] SCR 207, [1954] 3 DLR 481.
57. COPA, supra note 50 at para 60.
58. Ibid.
59. Rogers, supra note 47 at para 71.
60. This is essentially the allegation of Minister Heurtel who claims that the motivation of the EIAR in the case of Energy East is simply so that the provincial government can acquire sufficient information to participate in the National Energy Board hearing.
61. These considerations formed the basis of Deschamps J’s dissenting motives at paras 87-90, as she held that the area in Quebec in which the construction of aerodromes may be permitted is sufficient to conclude that the impairment test could not be met.
62. Laferrière c Québec (Procureur général), 2008 QCCA 427 at para 1.
63. See David Robitaille, “Le transport interprovincial sur le territoire local : vers un nécessaire équilibre” (2015) 20:1 Review of Constitutional Studies 75 at section 2.2 [Vers un nécessaire équilibre]; CQDE Memo, supra note 48 at 13.
64. Ibid.
65. Ibid.
66. Ibid at 15; Vers un nécessaire équilibre, supra note 63 at 97-99; David Robitaille, “Opinion: Provinces can impose conditions”, Vancouver Sun (16 December 2014); Julius Melnitzer, “The paramountcy doctrine: Can cities really say no to pipelines?” Financial Post (17 May 2016) online: Financial Post <http://business.financialpost.com/legal-post/the-paramountcy-doctrine-can-cities-really-say-no-to-pipelines>.
67. See Vers un nécessaire équilibre, supra note 63 and CQDE Memo, supra note 48 for detailed jurisprudential analysis of cases which have been used to support the argument.
68. Burlington Airpark Inc v Burlington (City), 2014 ONCA 468, 23 MPLR (5th) 1.
69. Ibid at paras 12, 17.
70. Ibid.
71. Ibid.
72. Coastal First Nations v British Columbia (Environment), 2016 BCSC 34 [Coastal FN].
73. National Energy Board Act, RSC 1985, c N-7.
74. Canadian Environmental Assessment Act, SC 1992, c 37.
75. Coastal FN, supra note 72 at para 6. The agreement was also attacked on the basis that concluding the agreement resulted in violating the duty to consult.
76. Ibid at paras 42.
77. Ibid at paras 61-62.
78. Ibid at para 55.
79. Multiple Access Ltd v McCutcheon, [1982] 2 SCR 161 at p 191 [Multiple Access]; 14957 Canada Ltée (Spraytech, Société d’arrosage) v Hudson (Town), 2001 SCC 40, [2001] 2 SCR 241 at para 34 [Spraytech];  M & D Farm Ltd v Manitoba Agricultural Credit Corp, [1999] 2 SCR 961 at para 17; Canadian Western Bank, supra note 19 at para 126; Alberta (Attorney General) v Moloney, 2015 SCC 51, [2015] 3 SCR 327 at 19 [Moloney].
80. Bank of Montreal v Hall, [1990] 1 SCR 121 at p 154-155; Law Society of British Columbia v Mangat, 2001 SCC 67, [2001] 3 SCR 113 at para 72; Canadian Western Bank, supra note 19 at para 73; Moloney, supra note 80 at para 25.
81. Hogg, supra note 42 at 16.2.
82. Supra note 79.
83. Ibid at p 191; Moloney, supra note 79 at para 19.
84. Hogg, supra note 42 at 16.2(a).
85. See Vers un nécessaire équilibre, supra note 63 at 111-113.
86. Moloney, supra note 79 at para 26; Saskatchewan v Lemare Lake Logging Ltd, 2015 SCC 53, [2015] 3 SCR 419 at para 25 [Lemare Lake Logging].
87. Ibid.
88. Ibid at para 25.
89. The Saskatchewan Farm Security Act, SS 1988-89, c S-17.1.
90. Bankruptcy and Insolvency Act, RSC 1985, c B-3.
91. Lemare Lake Logging, supra note 86 at para 25.
92. This finding was recently held by the Supreme Court of British Columbia in Coastal First Nations, supra note 72 at paras 71-72.
93. COPA, supra note 50 at para 65.
94. Dominique La Haye, “Une pétition de 25 000 noms contre Énergie Est ” Journal de Québec (14 June 2016) online: Journal de Québec <http://www.journaldequebec.com/2016/06/14/une-petition-de-25-000-noms-contre-energie-est>.
95. Hogg, supra note 42 at 16.3(a).
96. British Columbia (Attorney General) v Lafarge Canada Inc, 2007 SCC 23, [2007] 2 SCR 86.
97. Ibid at paras 75, 81-82.
98. The decision was criticized in Côte J’s concurring reasons at paras 93, 106 in Moloney, supra note 79 who argued that the Court mistakenly conflated the “frustration of federal purpose test” with the “impossibility of dual compliance test.”
99. Hogg, supra note 42 at 16.3(a), citing Lafarge, supra note 96 at para 113 (Bastarache J’s concurring reasons).
100. Supra note 79.
101. The Court cited and confirmed the decision at paras 20, 21, 26, 53, 70, 71, 75.
102. Alberta Traffic Safety Act, RSA 2000, c T-6.
103. Moloney, supra note 79 at para 60.
104. Ibid at paras 60, 63, 69, 70, 73.  Côté J (supported by McLachlin CJ) expressed her strong disaccord with the majority’s finding that the dispute has given rise to an operational conflict.
105. Ruling No 40, supra note 46 at 12
106. Ibid at 12-13.
107. Moloney, supra note 79 at paras 101, 109.
108. Ibid at para 74;
109. Ibid.
110. See note 80.
111. Canadian Western Bank, supra note 19 at para 73; Moloney, supra note 79 at para 25.
112. Hogg, supra note 42 at 16.3(b); COPA, supra note 50 at para 66.
113. Ibid at para 68.
114. Marcotte, supra note 39 at para 72; Canadian Western Bank, supra note 19 at para 74.
115. Marcotte, supra note 39 at para 72.
116. NEBA, supra note 73 s 52(2)(a)
117. Ibid, s 52(2)(b)
118. Ibid, s 52(2)(c)
119. Ibid, s 52(2)(d)
120. Ibid, s 52(3).
121. Ibid, s 52(8), (9).
122. Ibid, s 6 (2.2).
123. The law includes numerous other deadlines which govern the application process including inter alia s 34 (3),(4) which gives affected citizens up to 30 days from being served a notice to file a written statement which contains the grounds for opposing a route.
124. COPA, supra note 50 at 68.
125. Ibid.
126. Supra note 79.
127. Spraytech, supra note 79 at para 35.
128. Supra note 80.
129. Immigration Act, RSC 1985, c. I-2.
130. Legal Profession Act, SBC 1987, c 25.
131. Mangat, supra note 79 at para 72.
132. This is known as the “living tree doctrine.”