National Energy Board Procedural Reform – Round 2 Goes to the Regulator1

High court won’t hear challenge

The National Energy Board has the right to limit evidence or exclude participants from the Kinder Morgan pipeline hearing, or any other hearing it conducts. That’s the effect of a Supreme Court of Canada decision not to hear a constitutional challenge of federal government revisions to the National Energy Board Act. Vancouver based ForestEthics Advocacy and several interveners had hoped the high court would allow a challenge of section 55.2 of the Act, arguing the section limits Canadians’ right to free speech. ForestEthics spokesman Sven Biggs says the fight will now move to Parliament. He pledges critics will redouble their efforts to ensure the next federal government creates a fair process for the review of pipeline proposals.”

-Calgary Herald September 11, 2015

The short newspaper clipping refers to a decision by the Supreme Court of Canada (SCC)4 that dismissed an application by the ForestEthics Advocacy Association (ForestEthics) and eight residents of the Greater Vancouver area5 for leave to appeal from rulings of the National Energy Board6 (NEB or Board) in the proceeding relating to the Trans Mountain Pipe Line Expansion Project (TMX).

TMX is a proposed $5.4 billion expansion of the existing Trans Mountain pipeline between Edmonton, Alberta and Vancouver, British Columbia7 for the purpose of opening new markets in Asia for crude oil production from the Alberta oil sands. The NEB rulings in question related to participatory rights in the proceeding, in the context of its determination that climate change issues were irrelevant to the proceeding. Board Ruling 348 dismissed a motion by ForestEthics and Quarmby (Charter Motion) that asserted that either the standing test in section 55.2 of the National Energy Board Act (NEB Act) or the Board’s participation decisions in the TMX hearing infringed the freedom of expression guarantee in section 2(b) of the Canadian Charter of Rights and Freedoms (Charter).9

The SCC dismissal of the ForestEthics/Quarmby leave application is the latest (and perhaps last) in a series of decisions relating to implementation by the NEB of procedural reforms that were initiated by amendments to the NEB Act in 2012. Given that the standard for leave to appeal is an arguable question of law or jurisdiction, the effect of the denial of leave can be viewed as confirmation of the Board’s rulings and validation of the Board’s interpretation of the Charter and its procedural powers under its recently amended legislation.


In 2012, the Federal government legislated amendments to the NEB Act10 that effected fundamental changes to the role of the NEB in reviewing applications for certificates of public convenience and necessity (CPCNs) for interprovincial and international pipelines. The catalysts for the legislative changes included the delays experienced in the regulatory reviews of the Mackenzie Gas and Northern Gateway projects. The legislative changes, both substantive and procedural, were made to ensure ultimate political accountability for pipeline decisions and to enhance the efficiency of the review process.11

The Board’s role in the pipeline approval process changed from “decider” to “recommender” (to the Governor in Council). Time limits were imposed on the NEB’s review of applications for CPCNs. Germane to the current case were the amendments that were made with a view to increasing efficiency by limiting participation in CPCN proceedings. While previously, a party only had to be an “interested person”—a relatively low threshold—to participate, section 55.2 of the amended NEB Act requires the Board to consider representations of persons who are “directly affected by the granting or refusing of the application”, and permits it to consider the representations of persons who “in its opinion, [have] relevant information or expertise.”

Section 52 reads in its entirety:

55.2. On an application for a certificate, the Board shall consider the representations of any person who, in the Board’s opinion, is directly affected by the granting or refusing of the application, and it may consider the representations of any person who, in its opinion, has relevant information or expertise. A decision of the Board as to whether it will consider the representations of any person is conclusive.

The NEB issued guidance for the application of section 55.2.12 The Board decides who may be “directly affected” on a case-by-case basis. It allows participation by persons whose interests are “specific and detailed…rather than a general public interest”. The determination of whether a person has relevant information or expertise includes consideration of “how much value the information will add to the NEB’s decision or recommendation”.

Round 1—The Enbridge Line 9 Reversal Case

The TMX proceeding is the second time that the Board’s application of section 55.2 has been challenged in the courts. The first occasion arose out of the Enbridge Line 9 Reversal proceeding.13 In ForestEthics Advocacy Association v National Energy Board,14 the FCA upheld the NEB’s rulings on the scope of that proceeding and the establishment of participatory rights. The ForestEthics decision, which has been discussed in detail in previous editions of this journal,15 reflects the concept of respect for the decision-making imperatives of the Board and its specialized jurisdiction and expertise. In dealing with participatory rights, the Court commented that:

“Board hearings are not an open-line radio show where anyone can dial in and participate. Nor are they a drop-in center for anyone to raise anything, no matter how remote it may be to the Board’s task of regulating the construction and operation of oil and gas pipelines.”16

It went on to say that section 55.2 was enacted to make Board hearings more focused and efficient, and requires that persons who are not directly affected provide a “rigorous demonstration” that they have “relevant information or expertise” relating to the matter under consideration by the regulator.17

The Court stated that the Board’s decisions on process, including the establishment and utilization of the Application to Participate form, are procedural in nature, and that the standard of review on procedural decisions is “correctness with some deference to the Board’s choice of procedure.”18 The Court endorsed a “’significant margin of appreciation”19 for the Board in establishing processes and principles for the determination of participatory entitlements in proceedings subject to section 55.2,20 a conclusion that was supported by several factors:

  • The Board is master of its own procedure
  • The Board has considerable experience and expertise in conducting its own hearings and determining who should not participate, who should participate, and how and to what extent. It also has considerable experience and expertise in ensuring that its hearings deal with the issues mandated by the Act in a timely and efficient way.
  • The Board’s procedural choices are entitled to deference.
  • Finally…the Board must follow the criteria set out in section 55.2 of the Act – whether “in [its] opinion” a person is “directly affected” by the granting or refusing of the application and whether the person has “relevant information or expertise.” But these are broad terms that afford the Board a measure of latitude, and so in obtaining information from interested parties concerning these criteria, it should be also given a measure of latitude.
  • the Board’s decisions are protected by a privative clause.21

The Court also held that the Board’s decision to exclude climate change issues— upstream and downstream environmental and socio-economic effects associated with the development of the Alberta oil sands and the downstream use of oil transported by the pipeline—was reasonable in that it was within a range of acceptability and defensibility on the facts and the law—within the margin of appreciation.22

What the FCA did not do in ForestEthics, however, was deal with the Charter argument. ForestEthics only raised the 2(b) question on judicial review, a tactic that earned it a rebuke from the Court and a ruling that it was barred from invoking that argument for the first time on judicial review.23 The FCA relied on the SCC decision in Okwuobi24 for the proposition that, where an administrative decision-maker can hear and decide constitutional issues, that jurisdiction should not be bypassed by raising the constitutional issues for the first time on judicial review.25 The result was that ForestEthics and Quarmby brought the Charter argument to the NEB in the TMX proceeding.

Round 2 – The Charter Motion

The Charter Motion asserted that either the standing test contained in section 55.2 or the Board’s participation decisions in the TMX hearing infringed the freedom of expression guarantee in section 2(b) of the Charter.

Describing themselves as a “sampling of Canadians who were denied full participatory rights in the Project hearing by virtue of [section] 55.2 of the NEB Act and decisions made by [the] Board in furtherance of [section] 55.2”,26 the Applicants brought four constitutional challenges to the Board. The first (Legislation Challenge) sought a declaration that section 55.2 is of no force and effect since it violates the freedom of expression guarantee in section 2(b) of the Charter. Alternatively, the Applicants claimed that the Board had interpreted the otherwise-constitutional section 55.2 in a section 2(b)-infringing and unreasonable manner. They alleged that the Board created an unduly complex Application to Participate process (Application Process Challenge), that it adopted an “extremely limited” interpretation of the “directly affected” standard in its Ruling on Participation (Participation Ruling Challenge), and that the Board unreasonably excluded consideration of upstream and downstream environmental and socio-economic effects from the hearing (List of Issues Challenge).27

Participation Ruling

Early in the TMX proceeding, the Board established the procedure for Applications to Participate (ATP). The ATP form indicated that applicants to participate must clearly describe their interest in relation to the List of Issues that the Board had previously issued on July 29, 2013 and which was replicated in the form.28 The List of Issues included such matters as “the need for the proposed project” and “the economic feasibility of the proposed project,” but expressly excluded “the environmental and socio-economic effects associated with upstream activities, the development of oil sands, or the downstream use of the oil transported by the pipeline.”

The participation decisions that were challenged by the Applicants were contained in an April 2014 ruling of the Board (Participation Ruling).

The Participation Ruling sets out the Board’s interpretation of section 55.2 which establishes two categories of persons who may make representations to the Board in relation to an application for a CPCN: those who are directly affected by the granting or refusing of the application (Category 1), and those who have relevant information or expertise (Category 2). With regard to Category 1, the Participation Ruling states that the Board considers how the applicant uses the area where the project will be located, how the project will affect the environment, and how the effect on the environment will affect the applicant’s use of the area. The closer these elements are connected, the more likely the person is directly affected. The Participation Ruling also notes that the Board considers interests and direct effects that are commercial or financial as well as uses of land and resources for traditional Aboriginal purposes.29

The individual Applicants, all of whom resided in the Vancouver and surrounding area, sought status under Category 1. The NEB declined to grant intervenor status to any of the Applicants, with the exception of ForestEthics, which was told that it could not comment on the upstream and downstream effects of the development of the oil sands and climate change.30

The Charter Arguments

Section 2(b) of the Charter states:

  1. Everyone has the following fundamental freedoms:

(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

The Applicants argued that the proper test to be applied in relation to section 2(b) was established by the SCC in Irwin Toy Ltd v Quebec (Attorney General)31 and Montreal (City) v 2952-1366 Québec Inc.32 As stated by the Applicants, the “Irwin Toy/Montreal City test” requires a decision-maker to consider three factors to determine whether the impugned law unjustifiably infringes the claimant’s section 2(b) rights: (1) whether the claimant’s proposed speech has expressive content that brings it within the prima facie protection of section 2(b); (2) whether the nature of the forum in question removes that protection; and (3) whether the impugned provision denies that protection.33

The Charter Motion argues that the submissions that the Applicants wanted to make before the NEB constituted a form of political expression such that they fell within the prima facie protection of section 2(b).34 To the second part of the Irwin Toy/Montreal City test, the Charter Motion points to certain comments on the NEB’s website—that public participation in the NEB process lies at the core of its mandate—in support of the assertion that the NEB is “intended for expression.” To the question of whether section 55.2 of the NEB Act denies the protection guaranteed by section 2(b) of the Charter, the Charter Motion argues “yes” because the section was enacted to limit who could participate in NEB hearings (to those who are “directly affected” and those who have “relevant information or expertise”). The Charter Motion goes on to consider the justification analysis established under R v Oakes35 and argues that the infringement of section 2(b) of the Charter by section 55.2 of the NEB Act cannot be justified under section 1 because section 55.2 is overbroad in relation to its goal of making the NEB process more efficient, and because the deleterious effects associated with section 55.2 outweigh the salutary effect.36

In addition to the Irwin Toy/Montreal City test the Charter Motion also discusses the test established by the SCC in relation to section 2(b) of the Charter in Dunmore v Ontario37 and Baier v Alberta.38 The Baier test applies in circumstances where a “positive rights” claim is advanced or where the claimant is seeking access to a statutory platform that might afford them a unique form of expression. “Positive rights” are at issue where a claim is made that the government “must legislate or otherwise act to support or enable an expressive activity.”39 The conditions for finding a Charter violation in these circumstances are as follows:

(1) that the claim is grounded in a fundamental freedom of expression rather than in access to a particular statutory regime;

(2) that the claimant has demonstrated that exclusion from a statutory regime has the effect of a substantial interference with s. 2(b) freedom of expression, or has the purpose of infringing freedom of expression under s. 2(b); and

(3) that the government is responsible for the inability to exercise the fundamental freedom.40

The Charter Motion argues that the Baier test does not apply in the circumstances of the Applicants’ claim because the Applicants were not claiming positive rights—instead, the Applicants are said to have been “simply seeking to express themselves before [the] Board without having the content of their expression unduly curtailed.

Ruling 34

The Board dismissed the Charter Motion. With respect to the Legislative Challenge, it determined that the Charter Motion represented a positive rights claim. This conclusion was based on the fact that section 55.2 places limits on who can make representations before the Board in connection with the issuance of a certificate—i.e. those who are “directly affected” or who have relevant information or expertise—whereas the Applicants argued that “all persons interested in and affected by” the Project should be able to participate in the hearing.41 Having made this determination, the Board went on to apply the Baier test, which was found not to have been satisfied because the Charter Motion revolved around a claimed right to participate in the Board’s process, not the exercise of a fundamental freedom.42 In this regard, the Board noted that the Applicants had expressed themselves vigorously outside the Board’s process on the matters that they wanted to bring to the Board’s attention, including in panel discussions, newspaper editorials, online blog posts, articles and reports, Twitter, town hall meetings, public protests and petitions.43

Ruling 34 goes on to note that the Applicants’ preferred test (i.e. Irwin Toy/Montreal City test) would not be satisfied, either, because an untrammeled right of the public to “open public expression” at the Board would come at the expense of the Board’s statutory objectives.44 As stated in Ruling 34:

“[t]he Board cannot efficiently, effectively, or fairly hear the evidence it needs to assess the public interest in a project if it must hear from any and all persons wishing to express an opinion on it.”45

It also said:

“Quasi-judicial tribunals like the Board invariably establish expression-limiting rules of procedure, relevance and decorum. They have never been forums for free, open-ended expression. Like in a court, one cannot simply “intrude and present one’s message.”46

The Ruling concludes that none of the Applicants’ other three challenges engage section 2(b) Charter rights. It found that its Baier analysis that formed the basis for rejection of the Legislative Challenge also applied to challenges to the Board’s decisions.47

The Application Process Challenge (the claim that the Board ATP process was “inordinately complex”) was dismissed as centering on the terms of access to the Board’s hearing, not freedom of expression. Any “diminished” ability to convey a message did not measure up to the substantial infringement required to engage section 2(b).48 In ForestEthics, the FCA had previously dismissed this “ATP is too complicated” argument on non-2(b) grounds, saying that “[t]he Board is entitled to take the position that, consistent with the tenor of section 55.2, it only wants parties before it who are willing to exert some effort.”49

The Participation Ruling Challenge (the claim that the Board adopted an unduly narrow interpretation of “directly affected” in section 55.2) was also rejected on a Baier analysis, with the Board going on to express its view that its application of section 55.2 “represents a reasonable balancing of the expressive interests of potential hearing participants against its statutory objectives.”50 The Applicants’ sweeping position that any resident of the Greater Vancouver area was directly affected by TMX was rejected as frustrating the ability of any person to engage in meaningful participation in the hearing, and frustrating one of the “shared aims of section 2(b) and the Board’s statutory mandate—the search for truth—by rendering the timing and logistics of the hearing functionally unmanageable.”51

The List of Issues Challenge (the claim that the exclusion of upstream and downstream environmental and socio-economic effects from the List of Issues violated the Applicants’ expressive rights) was rejected as a content restriction that did not infringe section 2(b). Content restrictions are indispensable to the just and efficient management of a tribunal hearing.52 As noted earlier, in ForestEthics, the FCA found that the Board’s exclusion of the climate change issue as irrelevant was a reasonable decision, in that it reaches an outcome within a range of acceptability and defensibility on the facts and the law—within the margin of appreciation.53

Implications of the NEB Rulings and the Courts’ Denial of Leave to Appeal

In ForestEthics, the FCA applied administrative law principles to endorse the Board’s interpretation of its amended legislation and its development and application of procedural reforms to its process. In Ruling 34, the Board determined that neither section 55.2 nor its decisions exercising its jurisdiction under the amended legislation violated the Charter. The effect of the denials of leave to appeal by the FCA and the SCC is to endorse the Board’s views in Ruling 34.

Rounds 1 and 2 have gone to the regulator. The Calgary Herald report is essentially correct—the effect of the decisions of the FCA and the SCC is that, under the amended NEB Act, the Board may limit evidence or exclude participants from its hearings. Its decisions on those issues are consistent with administrative law principles and do not violate the Charter. The ForestEthics decision and Ruling 34 clearly articulate the legal basis for future action by the Board in respect of infrastructure proposals. If ForestEthics wants to pursue a Round 3, it will have to be in Parliament.


  1. The views expressed in this comment are those of the authors alone and do not represent positions or opinions of Blakes, Cassels & Graydon LLP (Blakes), any other lawyer of Blakes, or any client of Blakes.
  2. Kemm Yates, Q.C. is a partner in the Energy group in the Calgary office of Blakes. His regulatory practice involves representing energy pipelines, producers and project developers before administrative tribunals and courts.
  3. Sarah Nykolaishen is an associate in the Energy group of the Blakes Calgary office.
  4. Quarmby v Canada (Attorney General), [2015] SCCA No 113, September 10, 2015. McLachlin C.J. and Wagner and Gascon JJ. Application for leave to appeal dismissed without reasons.
  5. Lynne M. Quarmby, Eric Doherty, Ruth Walmsley, John Vissers, Shirley Samples, Tzeporah Berman, John Clarke and Bradley Shende (together, Quarmby).
  6. More precisely, the SCC denied an application by Quarmby, ForestEthics and others for leave to appeal from the denial by the Federal Court of Appeal (FCA) of their application for leave to appeal the NEB rulings to the FCA: Lynne M. Quarmby and others v National Energy Board and others, Court Number 14-A-62, January 23, 2015. Nadon, Ryer and Webb JJ.A. Application for leave to appeal dismissed without reasons.
  7. Trans Mountain applied to the NEB pursuant to sections 52 and 58 of the NEB Act for a certificate of public convenience and necessity (and related orders) approving the project which involves construction of 987 kilometres of new pipeline in British Columbia and Alberta, the reactivation of 193 kilometres of existing pipeline, new and modified facilities (including pump stations and tanks), and expansion of the Westridge Marine Terminal.
  8. Hearing Order OH-001-2014, Trans Mountain Pipeline ULC Application for the Trans Mountain Expansion Project, Notices of Motion dated 6 and 15 May 2014 by Lynne M. Quarmby, Eric Doherty, Ruth Walmsley, John Vissers, Shirley Samples, ForestEthics Advocacy Association, Tzeporah Berman, John Clark, and Bradley Shende (Applicants), National Energy Board Ruling No. 34, October 2, 2014 [Ruling 34 or Ruling].
  9. Quarmby also served a Notice of Constitutional Question and brought a procedural motion (Procedural Motion) requesting an oral hearing of the Charter Motion. The Procedural Motion was also dismissed in Ruling 34 and will not be discussed in this comment.
  10. Jobs, Growth and Long-term Prosperity Act, SC 2012.
  11. The changes to the NEB regulatory regime are discussedin detail in Rowland J. Harrison, Q.C., Lars Olthafer and Katie Slipp, “Federal and Alberta Energy Project Regulation Reform—at What Cost Efficiency?”, (2013) 51 Alta L Rev 249, particularly at 251-267,
  12. Applying to Participate in a Hearing, online: NEB<>.
  13. Enbridge Pipelines Inc. Application for the Line 9B Reversal and Line 9 Capacity Expansion Project under section 58 and Part IV of the National Energy Board Act, Hearing Order OH-002-2013.
  14. Forest Ethics Advocacy Association v National Energy Board, 2014 FCA 245 [ForestEthics].
  15. See, e.g. Rowland J. Harrison, Q.C., Case Comment, “Enbridge Line 9 Reversal”, (2014) 2 ERQ 129; David J. Mullan, 2014 “Developments in Administrative Law Relevant to Energy Law and Regulation”, March 2015—Volume 3, issue 1 2015 [Mullan].
  16. ForestEthics, supra note 14 at para 76.
  17. Ibid at para 77.
  18. Ibid at para 70.
  19. Ibid at e.g. para 72.
  20. See Mullan, supra note 15 at 7 and 12.
  21. ForestEthics, supra, note 14 at para 72.
  22. ForestEthics, supra note 14 at para 69.
  23. Ibid at para 58.
  24. Okwuobi v Lester B Pearson School Board; Casimir v Quebec (Attorney General); Zorrilla v Quebec (Attorney General), 2005 SCC 16, [2005] 1 SCR 257.
  25. Forest Ethics, supra note 14 at para 46.
  26. Charter Motion at para 35.
  27. Ruling 34, supra note 8 at pp 5-6.
  28. Trans Mountain Pipeline ULC (Ruling on Participation) (2 April 2014) OH-001-2014 (NEB) at 3.
  29. Ibid at 4.
  30. Charter Motion at para 35.
  31. Irwin Toy Ltd v Quebec (Attorney General), [1989] 1 SCR 927.
  32. Montreal (City) v 2952-1366 Quebec Inc,[2005] 3 SCR 141, 2005 SCC 62 [“Montreal City”].
  33. Charter Motion at para 46.
  34. Ibid at para 47.
  35. R v Oakes, [1986] I SCR 103.
  36. Charter Motion, pages 26-29.
  37. Dunmore v Ontario, 2001 SCC 94, [2001] 3 SCR 1016.
  38. Baier v Alberta, 2007 SCC 31, [2007] 2 SCR 673 [Baier].
  39. Ibid at para 35, as stated in Ruling 34 at page 8.
  40. Ibid at para 30, as summarized in Ruling 34 at page 7.
  41. Ruling 34, supra note 8, at p 8.
  42. Ibid.
  43. Ibid at p 9.
  44. Ibid at p 11.
  45. Ibid.
  46. Ibid at p 10.
  47. Ibid at p 13.
  48. Ibid at p 13, citing Longley v. Canada (Attorney General), 2007 ONCA 852 at para 109.
  49. ForestEthics, supra note 14 at para 75.
  50. Ruling 34, supra note 8 at page 13.
  51. Ibid.
  52. Ibid at pages 13-14.
  53. ForestEthics, supra note 14 at para 69.

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