The construction of new pipelines, and the expansion, reversal or re-purposing of existing pipelines have always attracted controversy in Canada and the almost inevitable applications for judicial review or appeal. Consider, for example, the efforts to license the Makenzie Natural Gas Pipeline (and its variants) in the 1970s,1 the licensing of the Norman Wells Pipeline in the 1980s,2 and the licensing of the Express Pipeline in the 1990s.3 But those experiences have hardly prepared us for either the spate of pipeline applications currently before the National Energy Board (NEB, the Board), or the number of applications by interested parties to the Federal Court of Appeal contesting the Board’s treatment of these applications. The Board itself seemed to recognize this earlier this year (2015) when it developed a new page on its website to assist users to keep track of the various Federal Court applications.4
This paper has the modest goal of providing a largely descriptive account of the issues and the state of play of the relevant pipeline and Court applications. The paper first discusses the legal framework of the National Energy Board Act5 (NEBA) and the Federal Courts Act6 within which the NEB and the Federal Court of Appeal operate before examining the major pipeline proposals and the related Court applications.
The Legal Framework
No person may construct or operate an interprovincial or an international pipeline without a certificate of public convenience and necessity (CPCN) issued by the NEB.7 The procedure for issuing a CPCN now entails the NEB making a report and recommendation with respect to the issuance of a certificate to the Governor in Council and the referral back, acceptance or rejection of that recommendation by the Governor in Council.
The Board may recommend approval or rejection, but either way must indicate all the terms and conditions that it considers “necessary or desirable in the public interest” should the project go ahead.8 Section 22(4) of the NEBA provides that the NEB’s report is not “a decision or order of the Board” within the meaning of s. 22(1) of the Act with the necessary implication that the report cannot be made the subject of an appeal to the Federal Court of Appeal, with leave, on a point of law or jurisdiction under that same subsection of the Act.9 It does not follow from this however that there can be no application for judicial review in respect of a report because of a line of decisions interpreting s. 18.5 of the Federal Courts Act.10 These decisions tend to suggest that an application for judicial review is only precluded by that section to the extent that the decision is actually appealable.11 The Federal Court Trial Division has no jurisdiction over the NEB.12
While the Governor in Council may require the Board to reconsider its recommendation or any of the terms and conditions,13 in the ordinary course, the Governor in Council, by order, may direct the Board to issue a CPCN, subject to the terms and conditions in the Board’s report, or direct the Board to dismiss the application.14 The order must provide reasons15 and s. 55 of the NEBA expressly provides for judicial review, with leave, from the Federal Court of Appeal.16
The construction of a large diameter new pipeline will also trigger review under the new Canadian Environmental Assessment Act, 201217 (CEAA 2012) (or the predecessor version of that statute). Under the previous version of that statute the involvement of other federal or provincial agencies often led to projects being referred to a Joint Review Panel (JRP) resulting in additional complications in terms of the judicial supervision of the JRP.
In the case of federally regulated pipelines, a JRP Report discharged the Panel’s responsibility under both the CEEA and the NEBA. Insofar as CEEA panels are not listed in s. 28 of the Federal Courts Act as a federal board, commission or other tribunal over which the Federal Court of Appeal has exclusive supervisory jurisdiction, it must follow that any judicial supervision of this aspect of a JRP’s responsibility would fall to the Federal Court Trial Division. Thus, in cases involving JRPs, interested parties could elect to proceed in either or both Federal Court Trial Division (with respect to the CEEA panel responsibilities) and the Federal Court of Appeal (with respect to the NEB matters).18 This was the case for example in the litigation which followed the approval of the Express Pipeline. There, matters were consolidated by agreement of the interested parties in a hearing before the Federal Court of Appeal. In his judgement Justice Hugesson commented on this way of proceeding as follows:19
While the procedure followed by the applicants was not the subject of much discussion before us (it being clear that at least one of the applications must be the appropriate method of attack) we think we should comment on it briefly. As a matter of judicial policy and economy it appears to us that where both a panel report and a subsequent action by a responsible authority are attacked those attacks should if possible be heard together and in the same Division of the Court. Thus where, as here, the responsible authority is one which is listed in section 28 of the Federal Court Act judicial review should be started in (for the authority) or transferred to (for the panel) the Appeal Division.
Likewise, where, as here, the responsible authority is one whose decisions are appealable to this Court and judicial review thereof is consequently limited by the terms of section 18.5 of the Federal Court Act the preferred route should be the application for leave to appeal. That is especially the case here where the panel and the authority are in fact (and we think in law) the same body although exercising functions under more than one statute.
While this body of law is of some relevance for the Northern Gateway Project (since it too was the subject of a joint review panel) we are unlikely to see joint review panels involving the NEB in the future since CEAA, 2012 accords the NEB the authority to conduct assessments without the involvement of the Agency.20
The Projects
With this background, which has covered both the procedure for obtaining a CPCN and the judicial supervision of the NEB, the paper now turns to consider the different NEB\JRP projects that are currently the subject of judicial review or appeal applications. The projects covered are Enbridge’s Northern Gateway Project, Enbridge’s Line 9B Project, the TransMountain Expansion Project and TransCanada’s Energy East Project.
Enbridge Northern Gateway Project
Enbridge’s Northern Gateway Project is a proposal to construct and operate two pipelines between Bruderhiem, Alberta and Kitimat British Columbia and to construct and operate a marine terminal and associated berthing and storage facilities at Kitimat. One pipeline would be an oil export pipeline with the capacity to carry 525,000 bbls per day. The other pipeline would import condensate with a capacity of 193,000 bbls per day. The project was referred to a joint review panel. The JRP issued its Final Report on the project on December 19, 2013.21 The JRP had the responsibility under the CEAA to assess the effects the project could have on people and the environment, their significance, and how these effects might be mitigated, and whether the project met the public convenience and necessity test of the NEBA.22 The JRP recommended approval of the project subject to 209 conditions. In doing so the JRP concluded that the project would, in combination with the effects of other projects, have a significant adverse environmental effect on certain populations of woodland caribou and populations of grizzly bear (listed species under the Species at Risk Act23) – even after all of Northern Gateway’s mitigation efforts. Nevertheless, the JRP recommended that these significant effects could be justified in the circumstances.24 The particular circumstances that led to this conclusion included the ability of the Project to diversify Canada’s oil markets and condensate supply, and the other economic and social benefits of the project.25
As discussed in a previous issue of this Quarterly,26 various judicial review and appeal applications have been launched with respect to both the JRP Report and the decision of the Governor in Council. All of these applications have been consolidated27 and a schedule established with a view to a hearing in Fall 2015. My earlier paper provided a discussion of the pleadings in those applications (as of August 2014) and interested readers should refer to that discussion.28
This section comments on three interlocutory decisions which have been reported since then.29 The first two decisions were handed down by Justice Stratas on January 27, 2015. The straightforward issue in the first of these, Forest Ethics Advocacy Association v Northern Gateway Pipelines Inc,30 was whether the NEB should be added as a respondent in one particular application, A-514-14, the NEB having already obtained that status in the consolidated applications. The appellants opposed respondent status suggesting that the NEB should be treated as an intervener on the grounds that a tribunal has only limited participation rights on an appeal or judicial review of one of its decisions. Justice Stratas concluded that the Board’s submission showed that it was well aware of the limits on its participation, and that since, in a technical sense, the application is an appeal from the Board’s decision, the NEB should be treated as a respondent.
The second decision handed down in January, Gitxaala Nation v Northern Gateway Pipeline Inc,31 dealt with the extent to which parties might be able to supplement the record with affidavits. The Court anticipated this issue in its consolidation order of December 2014. In that Order, the Court took the position that it would not allow affidavit evidence with respect to constitutional matters that had not already been raised before the Board. The rationale for this is that since the NEB has the jurisdiction to consider constitutional matters, any effort to raise new questions would inappropriately bypass the Board.32 In this application for leave to file evidence, Justice Stratas noted that most of the affidavits “bear upon the issue whether there was a duty to consult”.33
Justice Stratas permitted the affidavits to be filed but left their ultimate admissibility to be determined by the panel hearing the matter. While he was unclear as to the extent to which the affidavits might have been raising new constitutional issues, Justice Stratas was referred to several authorities suggesting that the courts had taken a more relaxed view concerning the admissibility of new evidence in cases concerning Aboriginal peoples.34 While by no means convinced as to this line of reasoning, Justice Stratas acknowledged that this particular issue had not previously been considered by the Court of Appeal.35 Similarly, Justice Stratas also left to the hearing panel the question of whether the test for the admissibility of fresh evidence on a statutory appeal under the NEBA was governed by the test set out in Palmer v The Queen36 or by an administrative law standard.37
In the third decision, Gitxaala Nation v Northern Gateway Pipelines Inc,38 Justice Stratas was called upon to rule on two contested applications to intervene, one from Amnesty International (Amnesty) in support of the appellants and a second from the Canadian Association of Petroleum Producers (CAPP) in support of the respondents. Justice Stratas considered both applications in light his own decision in Canada (Attorney General) v Pictou Landing First Nation,39 which set out this test:40
- Has the proposed intervener complied with the specific procedural requirements in Rule 109(2)? Is the evidence offered in support detailed and well-particularized? If the answer to either of these questions is no, the Court cannot adequately assess the remaining considerations and so it must deny intervener status. If the answer to both of these questions is yes, the Court can adequately assess the remaining considerations and assess whether, on balance, intervener status should be granted.
- Does the proposed intervener have a genuine interest in the matter before the Court such that the Court can be assured that the proposed intervener has the necessary knowledge, skills and resources and will dedicate them to the matter before the Court?
- In participating in this appeal in the way it proposes, will the proposed intervener advance different and valuable insights and perspectives that will actually further the Court’s determination of the matter?
- Is it in the interests of justice that intervention be permitted? For example, has the matter assumed such a public, important and complex dimension that the Court needs to be exposed to perspectives beyond those offered by the particular parties before the Court? Has the proposed intervener been involved in earlier proceedings in the matter?
- Is the proposed intervention inconsistent with the imperatives in Rule 3, namely securing “the just, most expeditious and least expensive determination of every proceeding on its merits”? Are there terms that should be attached to the intervention that would advance the imperatives in Rule 3?
Amnesty proposed to focus on international law issues as part of its intervention. Justice Stratas granted Amnesty’s application on terms. In doing so he took the view that the intervention “casts things too broadly” insofar as it suggests “that international law is very much at large on all issues in many different ways”.41 In his view, international law might be relevant to the matter at hand in one of two ways. First, if there are multiple possible interpretations of a legislative provision the court should prefer an interpretation that would not put Canada in breach of its international obligations. Second, international law might also be relevant with respect to the exercise of a discretionary power – although in that context it would likely be necessary to show that the failure of the statutory decision maker to follow the guidance of international law would be unreasonable:42
That failure may or may not render the decision unreasonable. Much will depend on the importance of the international law standard in the context of the particular case and the breadth of the margin of appreciation or range of acceptability and defensibility the decision-maker enjoys in interpreting and applying the legislative provision authorizing its decision: see, e.g., Canada (Minister of Transport Infrastructure and Communities) v Jagjit Singh Farwaha, 2014 FCA 56 at paragraphs 88-105.
While these are simply two situations in which international law might be relevant to the application of domestic law rather than an exhaustive statement of the relevance of international law, they do serve as a reminder to counsel that it is not enough to adduce a body of international law; it is also necessary to show how that body of law might make a difference in terms of outcome.
Justice Stratas was especially cautious with respect to the connection between the duty to consult and accommodate and international law. Here Justice Stratas observed that:43
In the case of the duty to consult, decisions of the Supreme Court are binding on us and have defined the duty with some particularity. We are not free to modify the Supreme Court’s law on the basis of international law submissions made to us. International law, at best, might be of limited assistance in interpreting and applying the law set out by Supreme Court.
But even with this restriction, there should be considerable opportunity to argue that international law might inform such matters as: the content of the duty to consult, the significance of the right to culture, the respect that should be accorded to indigenous conceptions of property, and the question of what might constitute an unjustifiable infringement of an aboriginal right or title or a treaty right.44
Justice Stratas summarized his instructions to counsel as follows:45
Amnesty International’s written and oral submissions shall be limited to issues of international law, but only insofar as they are relevant and necessary to any of the issues in the consolidated matter. It must explain, in legal terms, how and why the particular international law submission is relevant and necessary to the determination of a specific issue, with specific reference to the law set out above or other law bearing on the point. For example, it will have to identify a legislative provision that is ambiguous or that authorizes more than one exercise of discretion and then identify the international law that it says is relevant to the issue.
Justice Stratas also invited counsel for the respondent to consider whether it might need to apply to extend the approved length of its memorandum of fact and law once it had had the opportunity to review the intervenor’s arguments.46 Justice Stratas had rejected an earlier application from Enbridge to file a more extensive memorandum.47
In some respects, CAPP’s application to intervene seemed to present more difficulty than that posed by Amnesty’s application. After all, as Justice Stratas himself acknowledged:48
The Association appears to be doing nothing more than advancing submissions that the respondents can themselves advance. The submissions do not reflect any particular perspective of the Association, a group of entities whose economic interests are affected by the Northern Gateway Pipeline Project.
What then were the clinching factors here that justified allowing CAPP to intervene (again on terms)? Justice Stratas referred to three considerations. First, the Court acknowledged that the decision to approve the project had involved public interest considerations (or public convenience and necessity in the argot of the NEBA) and that “The Association is well-placed to speak to the issue of public interest. It represents a broad segment of the public affected by the decision below.”49 The second relevant consideration seems to have been “equality of arms” (i.e. the need for “overall fairness in the litigation process”).50 And finally Justice Stratas noted that CAPP had been significantly involved in the matter under review. But Justice Stratas also had advice and instructions for counsel to CAPP:51
[CAPP] shall make representations on the public interest considerations that come to bear on this Court’s assessment of the correctness or reasonableness of the decisions under review. If reasonableness review is relevant, submissions may be made on the size or nature of the range of acceptability or defensibility or the margin of appreciation that should apply to the decisions under review and whether the decisions under review are within those ranges or margins. To be clear, the draft memorandum it has presented to this Court does not comply with the requirements set out in this paragraph and will have to be amended.
Enbridge Line 9B
Line 9 connects Sarnia and Montreal. It was originally constructed by Interprovincial Pipeline Inc (now Enbridge) in the mid-1970s as part of the Government of Canada’s response to the OPEC crisis to permit the delivery of Canadian oil to refineries in Montreal. In 1997 IPL obtained and implemented NEB approval to reverse Line 9 to permit shipment of oil from Montreal to refineries in Ontario. There matters stood until 2011 when Enbridge applied to reverse (i.e. reinstate an easterly flow) from Sarmia to North Westover (west of Toronto). This (Line 9 Reversal Phase I) took effect in 2013 but prior to that Enbridge made the further 9B application to reverse the balance of Line 9 into Montreal and to increase the capacity of the entire line from 240,000bpd to 333,333bpd. The Board issued its reasons for decision recommending approval of this application in March 2014.52
There are two cases involving Line 9B. The first was a judicial review application commenced by Forest Ethics Advocacy Association and Donna Sinclair. The Federal Court of Appeal provided a reasoned decision on this application in December 2014.53 The second application was an application for leave to appeal commenced by the Chippewas of the Thames First Nation. The Court has granted leave on issues that include the Crown’s duty to consult and accommodate.54
The Forest Ethics Case
As noted above, the Forest Ethics\Sinclair application was a judicial review application in respect of three interlocutory decisions.55 First, the Board had ruled that it would not consider the environmental and socio-economic effects associated with upstream activities, the development of the Alberta oil sands, and the downstream use of oil transported by the pipeline. The applicants contended that this decision was unreasonable. Second, the Board assessed (and rejected) the standing of the applicants to participate in the proceeding on the basis of an Application to Participate Form. Third, the applicants, and specifically Ms. Sinclair, argued that the Board had denied Ms. Sinclair her freedom of expression under the Charter by denying her standing. The Court also considered whether the applicants were in a position to raise Charter questions before the Court if such questions had not been raised before the Board; it also considered whether Forest Ethics had standing before the Court on the judicial review application.
The Procedure Followed by the NEB in Assessing Standing
- 55.2 of the NEBA establishes two forms of participation rights in relation to an application for a certificate of public convenience and necessity: (1) participation as of right for any person whom the Board considers to be adversely affected, and (2) participation at the discretion of the Board if, in the Board’s opinion, the proposed intervener has “relevant information or expertise”. The Board’s decisions on such matters are “conclusive”. In order to assess applications to intervene the Board required potential interveners to complete an Application to Participate Form. The Board granted some parties full intervention rights, granted some the opportunity to submit a letter of concern, and denied others, including Ms. Sinclair, any opportunity to participate further.
The choice of instrument that the Board uses to assess standing is a question of procedure. The standard of review for question of procedure is “correctness with some deference to the Board’s choice of procedure”.56 The Court gave several reasons for emphasizing the deference owed to the Board in relation to its choices:57
… in it its process decision, the Board is entitled to a significant margin of appreciation in the circumstances of this case. Several factors support this:
- 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 – in particular, the choice here to design a form and require that it be completed – are entitled to deference …
- 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.
- Finally …. the Board’s decisions are protected by a privative clause. (Authorities omitted)
The Court went on to say 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.”58 Furthermore, by amending the Act in 2012 to create two categories of participation, Parliament was signaling that procedures need to be more focused and efficient and that, as such, the Board was justified in creating procedure that requires “rigorous demonstration”59 of the capacity to make a contribution to the Board’s consideration of the matter at hand.
The Decision to Deny Ms. Sinclair Standing
The Board’s decision to deny Ms. Sinclair standing is “a mix of substance and procedure”.60 While admitting a party to participate is ordinarily a matter of procedure (with a standard of review of correctness with deference to the Board’s choices) it is evident that in making its decision the Board is also considering questions of materiality and relevance i.e. issues of substance (with a standard of review of reasonableness). However, “[r]egardless of how we characterize the Board’s decision, the Board deserves to be allowed a significant margin of appreciation … The Board engaged in a factual assessment, drawing upon its experience in conducting hearings of this sort and its appreciation of the type of parties that do and do not make useful contributions to its decisions. Matters such as these are within the ken of the Board, not this Court.”61 The Court then offered detailed reasons for finding that the Board’s decision to deny Ms. Sinclair standing was reasonable.62
The Decision to Deny Forest Ethics Standing on the Judicial Review Application
It appears from the Court of Appeal’s judgement that although Forest Ethics was a co-applicant in attacking the Board’s three interlocutory decisions it had had no prior involvement in the matters before the Board. It was indeed a classic “busybody”.63
Forest Ethics asks this Court to review an administrative decision it had nothing to do with. It did not ask for any relief from the Board. It did not seek any status from the Board. It did not make any representations on any issue before the Board. In particular, it did not make any representations to the Board concerning the three interlocutory decisions.
As such, Forest Ethics was entitled neither to standing as of right nor as a public interest litigant in bringing this judicial review application.
The Charter Questions
While it followed from this last point that Forest Ethics could not raise a Charter challenge, what about Ms. Sinclair? The Court held that while there would be some cases in which an applicant for judicial review would be able to raise a Charter challenge when the applicant had failed to do so before the administrative tribunal, that was not this case. Instead this case was governed by the usual rule and good practice that requires that the tribunal in question be able to express its own expert and contextualized opinion as to the constitutional or Charter question that the applicant seeks to put at issue.64
Upstream and Downstream Effects
The Court’s reasons for supporting the conclusion of the Board and finding its decision on (ir)relevance of upstream and downstream effects to be reasonable are long but worth quoting given the importance of this issue in a number of different proceedings:65
- The Board’s main responsibilities under [the NEBA] …include regulating the construction and operation of inter-provincial oil and gas pipelines (see Part III of the Act).
- Nothing in the Act expressly requires the Board to consider larger, general issues such as climate change.
- … in a section 58 application such as this, the Board must consider issues similar to those required by subsection 52(2) of the Act.
- Subsection 52(2) of the Act empowers the Board to have regard to considerations that “to it” appear to be “directly related” to the pipeline and “relevant.” The words “to it,” the imprecise meaning of the words “directly,” “related” and “relevant,” the privative clause in section 23 of the Act, and the highly factual and policy nature of relevancy determinations, taken together, widen the margin of appreciation that this Court should afford the Board in its relevancy determination …
- Further, in applying subsection 52(2) of the Act, the Board could reasonably take the view that larger, more general issues such as climate change are more likely “directly related” to the environmental effects of facilities and activities upstream and downstream from the pipeline, not the pipeline itself.
- The Board does not regulate upstream and downstream facilities and activities. These facilities and activities require approvals from other regulators. If those facilities and activities are affecting climate change and in a manner that requires action, it is for those regulators to act or, more broadly, for Parliament to act.
- Subsection 52(2) of the Act contains a list of matters that Parliament considered to be relevant …. Each of these is relatively narrow in that it focuses on the pipeline, not upstream or downstream facilities and activities. Paragraph 52(2) (e) refers to “any public interest.” It was for the Board to interpret that broad phrase. It was open to the Board to consider that the “public interest” somewhat takes its meaning from the preceding paragraphs in subsection 52(2) and the Board’s overall mandate in Part III of the Act. Thus, it was open to the Board to consider that the “public interest” mainly relates to the pipeline project itself, not to upstream or downstream facilities and activities. (In this regard, pre-Dunsmuir authorities that engaged in correctness review of the meaning of “public interest” or quashed Board decisions for failing to take into account a factor the Court considered relevant are to be regarded with caution …)
- Parliament recently added subsection 52(2) and section 55.2 to the Act in order to empower the Board to regulate the scope of proceedings and parties before it more strictly and rigorously: Jobs, Growth and Long-term Prosperity Act, S.C. 2012, c. 19, s. 83. The Board’s decision is consistent with this objective. Consistency of a decision with statutory objectives is a badge or indicator of reasonableness ….
- The Board’s task was a factually suffused one based on its appreciation of the evidence before it. This tends to widen the margin of appreciation this Court should afford the Board … In my view, the Board’s decision was within that margin of appreciation. [case authorities omitted]
In conclusion, the Forest Ethics case is important for a number of reasons. First it contains a useful discussion of standard of review issues with respect to a number of different types of decisions that the NEB must make. Second it confirms that a party intending to raise constitutional questions must raise them before the Board and not hold them back for any judicial review application. Third, it offers detailed reasons supporting the Board’s position that it need not consider the upstream and downstream greenhouse gas implications of pipeline decisions.
Trans Mountain Expansion Project
The Trans Mountain Expansion Project (TMX) is a proposal to expand the existing Trans Mountain pipeline system between Edmonton, AB and Burnaby, BC. It would include approximately 987 km of new pipeline, new and modified facilities, such as pump stations and tanks, and the reactivation of 193 km of existing pipeline. The Westridge Marine Terminal would also be expanded. New pipeline segments would be added between Edmonton and Hinton, AB, Hargreaves, BC and Darfield, BC and Black Pines, BC and Burnaby, BC. Some existing, but currently deactivated pipeline segments between Hinton, AB and Hargreaves, BC and Darfield and Black Pines, BC would be reactivated. The effect of the expansion will be to increase throughput by nearly 600,000 bbls per day.66 The proceedings before the NEB are ongoing.
The application has led to litigation in both the Supreme Court of British Columbia and in the Federal Court of Appeal. This section of the paper covers what will be referred to as the Burnaby bylaw litigation. Other issues have also been raised in the context of the TMX application but none has resulted in reasoned decisions from the Courts.67
The Burnaby bylaw applicability issues were pursued before the NEB, in the BC Supreme Court, and before the Federal Court of Appeal. Accordingly, the following section discusses the evolution of the bylaw dispute chronologically rather than strictly separating the two pathways.
TMPL’s expansion application anticipates using an existing right of way but open-houses that TMPL conducted in Burnaby, BC as part of preparing its application encouraged it to investigate an alternative and more direct routing in the Burnaby area which would involve drilling through Burnaby Mountain. In order to investigate the feasibility of that alternative TMPL needed to do further studies and assessments, including geotechnical investigations that would require drilling bore holes at particular sites. TMPL attempted to obtain access to the sites in question from the City of Burnaby over a prolonged period but was unable to secure Burnaby’s consent to its operations. In response to that TMPL sought clarification from the NEB as to its position under s. 73 of the NEBA which provides that:
A company may, for the purposes of its undertaking, subject to this Act …
(a) enter into and on any Crown land without previous licence therefor, or into or on the land of any person, lying in the intended route of its pipeline, and make surveys, examinations or other necessary arrangements on the land for fixing the site of the pipeline, and set out and ascertain such parts of the land as are necessary and proper for the pipeline;
The Board issued its ruling in response on August 19, 2014 in which it stated:68
A plain reading of the language used in paragraph 73(a) provides Trans Mountain with the power to enter any Crown (federal or provincial) or privately owned land which lies in the intended route of its pipeline to make surveys and examinations. There is no requirement in paragraph 73(a) for companies to reach agreement with land owners, the Crown, or otherwise, before exercising the right to access land.
Armed with this ruling TMPL commenced its survey operations only to be met with orders served by the City of Burnaby requiring it to cease operations on the basis that TMPL was in breach of the City’s bylaws. TMPL took this issue back to the NEB questioning the constitutional validity or applicability of the bylaws (discussed further below), but in the meantime the City of Burnaby brought an application in the Supreme Court of British Columbia seeking an injunction on the basis of s. 274 of the Community Charter. Justice Brown rejected that application69 and leave to appeal that decision was also denied.70
Justice Brown applied the three part test from RJR-MacDonald Inc. v Canada (Attorney General).71 He accepted that there was a serious issue to be tried but clearly believed that the issue should be tried before the NEB rather than by the Supreme Court of British Columbia;72 the balance of convenience pointed in that same direction;73 and there was conflicting evidence as to irreparable harm.74 By the time the matter came before the BC Court of Appeal on a leave application, the NEB had issued its own ruling on the applicability of the Burnaby bylaws (NEB Ruling No. 4075) and the Federal Court of Appeal had in turn denied leave (without reasons). As a result, the BC Court of Appeal had little difficulty in concluding that it should not grant leave, both because this should not be entertained insofar as it was a collateral attack on the NEB ruling,76 but also because the issue, at least in terms of enforcing the by-law, was no longer a live one; TMPL was not contemplating further work on Burnaby Mountain.77
As noted in the previous paragraphs, the NEB itself addressed the constitutional validity, applicability and operability of the bylaws in an important ruling, (Ruling No. 40) which in turn was appealed to the Federal Court of Appeal. In the absence of reasons from the Court for its decision to deny leave it is useful to examine the Board’s well-reasoned decision. The Board identified three issues that it needed to consider. The first was the legal authority of the Board to consider the constitutional questions of the validity, applicability and operability of the Burnaby bylaws. The Board had little difficulty in confirming that it had this authority and it is clearly on firm ground in reaching this conclusion given that s.11 of the NEBA establishes the NEB as a court of record and that s. 12 affords it the “full jurisdiction to hear and determine all matters whether of law or fact”.78
The second set of issues addressed the core of the matter: validity, applicability and operability. There could be no doubt about the validity of either NEBA or Burnaby’s bylaws. Indeed the Board hardly mentions the matter although it does go to some efforts in both this ruling and the earlier Ruling No. 28 to establish that the Board’s authority to order access to Crown and private lands for the purpose of surveying the route and geotechnical matters is clearly essential to the exercise of the Board’s overall jurisdiction.79 That left the Board to consider the applicability of the bylaws (i.e. the issue of inter-jurisdictional immunity) and their operability (i.e. were the by-laws inconsistent with the provisions of the NEBA and thereby inoperable by virtue of the doctrine of paramountcy).
On the issue of operability\paramountcy the Board found that there was a clear operational conflict (within the meaning of the relevant authorities80) between the NEBA at s .73(a) and the impugned bylaws and that s.73(a) of the NEBA must prevail to the extent of that conflict thereby rendering those bylaws inoperable to that extent:81
In the Board’s view there is a clear conflict between the Parks Bylaw and paragraph 73(a) of the NEB Act. Section 5 of the Parks Bylaw states that “no person shall cut, break, injure, damage, deface, destroy, foul or pollute any personal property or any tree, shrub, plant, turf or flower in or on any park”. There is a clear prohibition against cutting any tree, clearing vegetation or boring into the ground, regardless of whether minimal tree clearing is necessary where the trees would create a safety risk for the drilling work that must occur. While the Board accepts that the Parks Bylaw has an environmental purpose, the application of the bylaws and the presence of Burnaby employees in the work safety zone had the effect of frustrating the federal purpose of the NEB Act to obtain necessary information for the Board to make a recommendation under section 52 of the NEB Act.
There is also an operational conflict with sections 24(1) and (4) of the Traffic Bylaw. While 24(1) does allow Burnaby Council to approve work along a highway or to impose conditions regarding such work, in this case the Board finds that Burnaby refused to consider Trans Mountain’s request. … [G]iven the refusal of Burnaby to discuss the work, Trans Mountain undertook this work on its own. …
In the Board’s view, there is an operational conflict between the Impugned Bylaws and federal law. Based on the facts before the Board, dual compliance is impossible.
As for the doctrine of inapplicability or inter-jurisdictional immunity, the Board correctly recognized that this doctrine has to some extent fallen out of favour in recent years82 but also recognized that it has some continued relevance especially with respect to some recognized categories of provincial laws.83 The doctrine applies to render inapplicable an otherwise valid provincial law where that provincial law impairs the core content of a federal head of power. The Board concluded that both elements of the test (core competence and impairment) were met and that therefore, and in the alternative to the paramountcy argument, the impugned bylaws must be “inapplicable to the extent they impair temporary access to the Subject Lands by Trans Mountain for the purposes set out in paragraph 73(a).”84
The third and fourth issues raised questions as to the ability of the Board to operationalize the above conclusions with respect to the main issues. Here the Board concluded that it could issue an order against Burnaby forbidding the City from applying its bylaws in such a way as to prevent TMPL from exercising its powers under s. 73(a) of the NEBA.85 It also concluded that the facts, and in particular the City’s refusal to cooperate, provided compelling reasons for issuing the order.86
The Board’s methodology and reasoning here is compelling and offers useful guidance for thinking about the interaction of federal pipeline law and provincial environmental legislation.87 Both will be valid and in most cases a pipeline operator will need to comply with both the provincial laws and the NEBA – but there will be some cases in which the provincial law will frustrate the attainment of federal objective and such a law will be either inoperative or inapplicable. It is unfortunate that the Federal Court of Appeal declined to provide its own reasons for denying leave to appeal on such an important legal question but perhaps this was a case in which the Board’s own reasons required no further judicial glossing.
TransCanada Energy East
Energy East involves converting existing natural gas pipeline segments between the Alberta\Saskatchewan border and the Ottawa area to oil transportation; constructing new pipeline primarily in Alberta, Québec and New Brunswick to link up with the converted pipe; and constructing associated facilities, pump stations and tank terminals required to move crude oil from Alberta to Québec and New Brunswick, including marine facilities. At the time of writing, the Board had yet to establish a schedule of hearing dates and locations.
Thus far the main litigation launched against the Energy East project88 involved an application brought by Centre québécois du droit de l’environnement89 (CQDE) in the Federal Court Trial Division for an interlocutory injunction to extend any deadlines for participating in the Board’s consideration of TCPL’s application until the Commissioner for Official Languages had ruled on a complaint filed with the Commissioner by CQDE in which CQDE sought a direction that the NEB provide an official translation of the entirety of the 23,000 page Energy East application. Justice de Montigny dismissed the application on both jurisdictional and substantive grounds. On the jurisdictional issue, Justice de Montigny ruled that the Federal Court Trial Division had no appellate or judicial review jurisdiction over the NEB for the reasons rehearsed above and that it could not obtain this jurisdiction by virtue of the Official Languages Act (OLA):90
To the extent that the purpose of the interlocutory injunction motion brought by the moving parties is essentially to challenge the ruling rendered by the Board … it seems clear to me that this Court is not the appropriate forum and that the procedural vehicle chosen is inappropriate. It goes without saying that it would be wrong to do indirectly what is not permitted directly. The appropriate way for the moving parties to request a stay of the proceedings before the Board was to challenge the Board’s ruling … before the Federal Court of Appeal, the only Court that has jurisdiction to entertain an appeal from a ruling of the Board, and to request, by means of a crossmotion, the stay of proceedings before the Board for the duration of the challenge.
On the substantive issue, Justice de Montigny noted that CQDE would need to establish “that their future proceeding under the OLA raises a serious question, that they will suffer irreparable harm in the event that their motion is dismissed, and that the balance of convenience lies in their favour.”91 Justice de Montigny was of the view that CQDE’s position had no merit. While it was clear that the OLA applied to the NEB, all that the OLA requires is “ ‘optional unilingualism’ at the option of the speaker …. Put differently, it is the right to use either official language in any court or in any pleading in or process issuing from any such court that is guaranteed, and not the right that the official language used will be understood by the person to whom the pleading or process is addressed …”.92
In the absence of a clear legislative provision to that effect, there cannot be an obligation as onerous as that of requiring that all administrative tribunals and all courts subject to the OLA have all of the records submitted to them translated. In the alternative, the moving parties maintained that they could also avail themselves of section12 of the OLA, which sets out that “[a]ll instruments directed to or intended for the notice of the public, purporting to be made or issued by or under the authority of a federal institution, shall be made or issued in both official languages”. However, that provision clearly does not apply in this case because the application filed by Energy East did not originate from the Board.93
Justice de Montigny went on to note that the OLA might not exhaust the possible claims that the applicants might have. In particular he observed that if Energy East (or the NEB) failed to provide sufficient documentation in both official languages so as to permit a party to understand the issues raised in the application and to make an informed judgement as to whether or not to seek to participate, then a party might be able to bring an application before the Federal Court of Appeal on procedural fairness grounds.94
The CQDE case is principally important as an illustration of the different types of arguments that energy proponents must expect to meet in developing new projects. The case also confirms that the trial division of the Federal Court has no role to play in supervising the NEB; that duty falls to the Federal Court of Appeal.
Conclusions
Our current energy paradigm is highly networked and requires large linear developments. This survey of current applications before the NEB confirms that new linear developments will be contentious both at the site-specific level (Burnaby Mountain) and at a more macro-level (the carbon lock-in effects of new pipeline infrastructure), and will bring in to play competing assessments of the public interest (nationally and locally). This survey also shows that these contesting interests will throw up a broad range of questions. The issues canvassed here include constitutional questions (language rights, division of powers issues, aboriginal rights and the Charter), international law issues, technical questions of administrative law including the jurisdiction of the Federal Court, the Federal Court of Appeal and provincial superior Courts as well as questions of standing, and more traditional environmental law issues.
Many of the cases canvassed here are interlocutory in nature with the merits still to be heard. While all of these cases deserve monitoring it will be particularly important to follow the Northern Gateway litigation to see what it tells us about the relationship between the Courts, the NEB and the Governor in Council. Stay tuned.
The construction of new pipelines, and the expansion, reversal or re-purposing of existing pipelines have always attracted controversy in Canada and the almost inevitable applications for judicial review or appeal. Consider, for example, the efforts to license the Makenzie Natural Gas Pipeline (and its variants) in the 1970s,1 the licensing of the Norman Wells Pipeline in the 1980s,2 and the licensing of the Express Pipeline in the 1990s.3 But those experiences have hardly prepared us for either the spate of pipeline applications currently before the National Energy Board (NEB, the Board), or the number of applications by interested parties to the Federal Court of Appeal contesting the Board’s treatment of these applications. The Board itself seemed to recognize this earlier this year (2015) when it developed a new page on its website to assist users to keep track of the various Federal Court applications.4
This paper has the modest goal of providing a largely descriptive account of the issues and the state of play of the relevant pipeline and Court applications. The paper first discusses the legal framework of the National Energy Board Act5 (NEBA) and the Federal Courts Act6 within which the NEB and the Federal Court of Appeal operate before examining the major pipeline proposals and the related Court applications.
The Legal Framework
No person may construct or operate an interprovincial or an international pipeline without a certificate of public convenience and necessity (CPCN) issued by the NEB.7 The procedure for issuing a CPCN now entails the NEB making a report and recommendation with respect to the issuance of a certificate to the Governor in Council and the referral back, acceptance or rejection of that recommendation by the Governor in Council.
The Board may recommend approval or rejection, but either way must indicate all the terms and conditions that it considers “necessary or desirable in the public interest” should the project go ahead.8 Section 22(4) of the NEBA provides that the NEB’s report is not “a decision or order of the Board” within the meaning of s. 22(1) of the Act with the necessary implication that the report cannot be made the subject of an appeal to the Federal Court of Appeal, with leave, on a point of law or jurisdiction under that same subsection of the Act.9 It does not follow from this however that there can be no application for judicial review in respect of a report because of a line of decisions interpreting s. 18.5 of the Federal Courts Act.10 These decisions tend to suggest that an application for judicial review is only precluded by that section to the extent that the decision is actually appealable.11 The Federal Court Trial Division has no jurisdiction over the NEB.12
While the Governor in Council may require the Board to reconsider its recommendation or any of the terms and conditions,13 in the ordinary course, the Governor in Council, by order, may direct the Board to issue a CPCN, subject to the terms and conditions in the Board’s report, or direct the Board to dismiss the application.14 The order must provide reasons15 and s. 55 of the NEBA expressly provides for judicial review, with leave, from the Federal Court of Appeal.16
The construction of a large diameter new pipeline will also trigger review under the new Canadian Environmental Assessment Act, 201217 (CEAA 2012) (or the predecessor version of that statute). Under the previous version of that statute the involvement of other federal or provincial agencies often led to projects being referred to a Joint Review Panel (JRP) resulting in additional complications in terms of the judicial supervision of the JRP.
In the case of federally regulated pipelines, a JRP Report discharged the Panel’s responsibility under both the CEEA and the NEBA. Insofar as CEEA panels are not listed in s. 28 of the Federal Courts Act as a federal board, commission or other tribunal over which the Federal Court of Appeal has exclusive supervisory jurisdiction, it must follow that any judicial supervision of this aspect of a JRP’s responsibility would fall to the Federal Court Trial Division. Thus, in cases involving JRPs, interested parties could elect to proceed in either or both Federal Court Trial Division (with respect to the CEEA panel responsibilities) and the Federal Court of Appeal (with respect to the NEB matters).18 This was the case for example in the litigation which followed the approval of the Express Pipeline. There, matters were consolidated by agreement of the interested parties in a hearing before the Federal Court of Appeal. In his judgement Justice Hugesson commented on this way of proceeding as follows:19
While the procedure followed by the applicants was not the subject of much discussion before us (it being clear that at least one of the applications must be the appropriate method of attack) we think we should comment on it briefly. As a matter of judicial policy and economy it appears to us that where both a panel report and a subsequent action by a responsible authority are attacked those attacks should if possible be heard together and in the same Division of the Court. Thus where, as here, the responsible authority is one which is listed in section 28 of the Federal Court Act judicial review should be started in (for the authority) or transferred to (for the panel) the Appeal Division.
Likewise, where, as here, the responsible authority is one whose decisions are appealable to this Court and judicial review thereof is consequently limited by the terms of section 18.5 of the Federal Court Act the preferred route should be the application for leave to appeal. That is especially the case here where the panel and the authority are in fact (and we think in law) the same body although exercising functions under more than one statute.
While this body of law is of some relevance for the Northern Gateway Project (since it too was the subject of a joint review panel) we are unlikely to see joint review panels involving the NEB in the future since CEAA, 2012 accords the NEB the authority to conduct assessments without the involvement of the Agency.20
The Projects
With this background, which has covered both the procedure for obtaining a CPCN and the judicial supervision of the NEB, the paper now turns to consider the different NEB\JRP projects that are currently the subject of judicial review or appeal applications. The projects covered are Enbridge’s Northern Gateway Project, Enbridge’s Line 9B Project, the TransMountain Expansion Project and TransCanada’s Energy East Project.
Enbridge Northern Gateway Project
Enbridge’s Northern Gateway Project is a proposal to construct and operate two pipelines between Bruderhiem, Alberta and Kitimat British Columbia and to construct and operate a marine terminal and associated berthing and storage facilities at Kitimat. One pipeline would be an oil export pipeline with the capacity to carry 525,000 bbls per day. The other pipeline would import condensate with a capacity of 193,000 bbls per day. The project was referred to a joint review panel. The JRP issued its Final Report on the project on December 19, 2013.21 The JRP had the responsibility under the CEAA to assess the effects the project could have on people and the environment, their significance, and how these effects might be mitigated, and whether the project met the public convenience and necessity test of the NEBA.22 The JRP recommended approval of the project subject to 209 conditions. In doing so the JRP concluded that the project would, in combination with the effects of other projects, have a significant adverse environmental effect on certain populations of woodland caribou and populations of grizzly bear (listed species under the Species at Risk Act23) – even after all of Northern Gateway’s mitigation efforts. Nevertheless, the JRP recommended that these significant effects could be justified in the circumstances.24 The particular circumstances that led to this conclusion included the ability of the Project to diversify Canada’s oil markets and condensate supply, and the other economic and social benefits of the project.25
As discussed in a previous issue of this Quarterly,26 various judicial review and appeal applications have been launched with respect to both the JRP Report and the decision of the Governor in Council. All of these applications have been consolidated27 and a schedule established with a view to a hearing in Fall 2015. My earlier paper provided a discussion of the pleadings in those applications (as of August 2014) and interested readers should refer to that discussion.28
This section comments on three interlocutory decisions which have been reported since then.29 The first two decisions were handed down by Justice Stratas on January 27, 2015. The straightforward issue in the first of these, Forest Ethics Advocacy Association v Northern Gateway Pipelines Inc,30 was whether the NEB should be added as a respondent in one particular application, A-514-14, the NEB having already obtained that status in the consolidated applications. The appellants opposed respondent status suggesting that the NEB should be treated as an intervener on the grounds that a tribunal has only limited participation rights on an appeal or judicial review of one of its decisions. Justice Stratas concluded that the Board’s submission showed that it was well aware of the limits on its participation, and that since, in a technical sense, the application is an appeal from the Board’s decision, the NEB should be treated as a respondent.
The second decision handed down in January, Gitxaala Nation v Northern Gateway Pipeline Inc,31 dealt with the extent to which parties might be able to supplement the record with affidavits. The Court anticipated this issue in its consolidation order of December 2014. In that Order, the Court took the position that it would not allow affidavit evidence with respect to constitutional matters that had not already been raised before the Board. The rationale for this is that since the NEB has the jurisdiction to consider constitutional matters, any effort to raise new questions would inappropriately bypass the Board.32 In this application for leave to file evidence, Justice Stratas noted that most of the affidavits “bear upon the issue whether there was a duty to consult”.33
Justice Stratas permitted the affidavits to be filed but left their ultimate admissibility to be determined by the panel hearing the matter. While he was unclear as to the extent to which the affidavits might have been raising new constitutional issues, Justice Stratas was referred to several authorities suggesting that the courts had taken a more relaxed view concerning the admissibility of new evidence in cases concerning Aboriginal peoples.34 While by no means convinced as to this line of reasoning, Justice Stratas acknowledged that this particular issue had not previously been considered by the Court of Appeal.35 Similarly, Justice Stratas also left to the hearing panel the question of whether the test for the admissibility of fresh evidence on a statutory appeal under the NEBA was governed by the test set out in Palmer v The Queen36 or by an administrative law standard.37
In the third decision, Gitxaala Nation v Northern Gateway Pipelines Inc,38 Justice Stratas was called upon to rule on two contested applications to intervene, one from Amnesty International (Amnesty) in support of the appellants and a second from the Canadian Association of Petroleum Producers (CAPP) in support of the respondents. Justice Stratas considered both applications in light his own decision in Canada (Attorney General) v Pictou Landing First Nation,39 which set out this test:40
Amnesty proposed to focus on international law issues as part of its intervention. Justice Stratas granted Amnesty’s application on terms. In doing so he took the view that the intervention “casts things too broadly” insofar as it suggests “that international law is very much at large on all issues in many different ways”.41 In his view, international law might be relevant to the matter at hand in one of two ways. First, if there are multiple possible interpretations of a legislative provision the court should prefer an interpretation that would not put Canada in breach of its international obligations. Second, international law might also be relevant with respect to the exercise of a discretionary power – although in that context it would likely be necessary to show that the failure of the statutory decision maker to follow the guidance of international law would be unreasonable:42
That failure may or may not render the decision unreasonable. Much will depend on the importance of the international law standard in the context of the particular case and the breadth of the margin of appreciation or range of acceptability and defensibility the decision-maker enjoys in interpreting and applying the legislative provision authorizing its decision: see, e.g., Canada (Minister of Transport Infrastructure and Communities) v Jagjit Singh Farwaha, 2014 FCA 56 at paragraphs 88-105.
While these are simply two situations in which international law might be relevant to the application of domestic law rather than an exhaustive statement of the relevance of international law, they do serve as a reminder to counsel that it is not enough to adduce a body of international law; it is also necessary to show how that body of law might make a difference in terms of outcome.
Justice Stratas was especially cautious with respect to the connection between the duty to consult and accommodate and international law. Here Justice Stratas observed that:43
In the case of the duty to consult, decisions of the Supreme Court are binding on us and have defined the duty with some particularity. We are not free to modify the Supreme Court’s law on the basis of international law submissions made to us. International law, at best, might be of limited assistance in interpreting and applying the law set out by Supreme Court.
But even with this restriction, there should be considerable opportunity to argue that international law might inform such matters as: the content of the duty to consult, the significance of the right to culture, the respect that should be accorded to indigenous conceptions of property, and the question of what might constitute an unjustifiable infringement of an aboriginal right or title or a treaty right.44
Justice Stratas summarized his instructions to counsel as follows:45
Amnesty International’s written and oral submissions shall be limited to issues of international law, but only insofar as they are relevant and necessary to any of the issues in the consolidated matter. It must explain, in legal terms, how and why the particular international law submission is relevant and necessary to the determination of a specific issue, with specific reference to the law set out above or other law bearing on the point. For example, it will have to identify a legislative provision that is ambiguous or that authorizes more than one exercise of discretion and then identify the international law that it says is relevant to the issue.
Justice Stratas also invited counsel for the respondent to consider whether it might need to apply to extend the approved length of its memorandum of fact and law once it had had the opportunity to review the intervenor’s arguments.46 Justice Stratas had rejected an earlier application from Enbridge to file a more extensive memorandum.47
In some respects, CAPP’s application to intervene seemed to present more difficulty than that posed by Amnesty’s application. After all, as Justice Stratas himself acknowledged:48
The Association appears to be doing nothing more than advancing submissions that the respondents can themselves advance. The submissions do not reflect any particular perspective of the Association, a group of entities whose economic interests are affected by the Northern Gateway Pipeline Project.
What then were the clinching factors here that justified allowing CAPP to intervene (again on terms)? Justice Stratas referred to three considerations. First, the Court acknowledged that the decision to approve the project had involved public interest considerations (or public convenience and necessity in the argot of the NEBA) and that “The Association is well-placed to speak to the issue of public interest. It represents a broad segment of the public affected by the decision below.”49 The second relevant consideration seems to have been “equality of arms” (i.e. the need for “overall fairness in the litigation process”).50 And finally Justice Stratas noted that CAPP had been significantly involved in the matter under review. But Justice Stratas also had advice and instructions for counsel to CAPP:51
[CAPP] shall make representations on the public interest considerations that come to bear on this Court’s assessment of the correctness or reasonableness of the decisions under review. If reasonableness review is relevant, submissions may be made on the size or nature of the range of acceptability or defensibility or the margin of appreciation that should apply to the decisions under review and whether the decisions under review are within those ranges or margins. To be clear, the draft memorandum it has presented to this Court does not comply with the requirements set out in this paragraph and will have to be amended.
Enbridge Line 9B
Line 9 connects Sarnia and Montreal. It was originally constructed by Interprovincial Pipeline Inc (now Enbridge) in the mid-1970s as part of the Government of Canada’s response to the OPEC crisis to permit the delivery of Canadian oil to refineries in Montreal. In 1997 IPL obtained and implemented NEB approval to reverse Line 9 to permit shipment of oil from Montreal to refineries in Ontario. There matters stood until 2011 when Enbridge applied to reverse (i.e. reinstate an easterly flow) from Sarmia to North Westover (west of Toronto). This (Line 9 Reversal Phase I) took effect in 2013 but prior to that Enbridge made the further 9B application to reverse the balance of Line 9 into Montreal and to increase the capacity of the entire line from 240,000bpd to 333,333bpd. The Board issued its reasons for decision recommending approval of this application in March 2014.52
There are two cases involving Line 9B. The first was a judicial review application commenced by Forest Ethics Advocacy Association and Donna Sinclair. The Federal Court of Appeal provided a reasoned decision on this application in December 2014.53 The second application was an application for leave to appeal commenced by the Chippewas of the Thames First Nation. The Court has granted leave on issues that include the Crown’s duty to consult and accommodate.54
The Forest Ethics Case
As noted above, the Forest Ethics\Sinclair application was a judicial review application in respect of three interlocutory decisions.55 First, the Board had ruled that it would not consider the environmental and socio-economic effects associated with upstream activities, the development of the Alberta oil sands, and the downstream use of oil transported by the pipeline. The applicants contended that this decision was unreasonable. Second, the Board assessed (and rejected) the standing of the applicants to participate in the proceeding on the basis of an Application to Participate Form. Third, the applicants, and specifically Ms. Sinclair, argued that the Board had denied Ms. Sinclair her freedom of expression under the Charter by denying her standing. The Court also considered whether the applicants were in a position to raise Charter questions before the Court if such questions had not been raised before the Board; it also considered whether Forest Ethics had standing before the Court on the judicial review application.
The Procedure Followed by the NEB in Assessing Standing
The choice of instrument that the Board uses to assess standing is a question of procedure. The standard of review for question of procedure is “correctness with some deference to the Board’s choice of procedure”.56 The Court gave several reasons for emphasizing the deference owed to the Board in relation to its choices:57
… in it its process decision, the Board is entitled to a significant margin of appreciation in the circumstances of this case. Several factors support this:
The Court went on to say 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.”58 Furthermore, by amending the Act in 2012 to create two categories of participation, Parliament was signaling that procedures need to be more focused and efficient and that, as such, the Board was justified in creating procedure that requires “rigorous demonstration”59 of the capacity to make a contribution to the Board’s consideration of the matter at hand.
The Decision to Deny Ms. Sinclair Standing
The Board’s decision to deny Ms. Sinclair standing is “a mix of substance and procedure”.60 While admitting a party to participate is ordinarily a matter of procedure (with a standard of review of correctness with deference to the Board’s choices) it is evident that in making its decision the Board is also considering questions of materiality and relevance i.e. issues of substance (with a standard of review of reasonableness). However, “[r]egardless of how we characterize the Board’s decision, the Board deserves to be allowed a significant margin of appreciation … The Board engaged in a factual assessment, drawing upon its experience in conducting hearings of this sort and its appreciation of the type of parties that do and do not make useful contributions to its decisions. Matters such as these are within the ken of the Board, not this Court.”61 The Court then offered detailed reasons for finding that the Board’s decision to deny Ms. Sinclair standing was reasonable.62
The Decision to Deny Forest Ethics Standing on the Judicial Review Application
It appears from the Court of Appeal’s judgement that although Forest Ethics was a co-applicant in attacking the Board’s three interlocutory decisions it had had no prior involvement in the matters before the Board. It was indeed a classic “busybody”.63
Forest Ethics asks this Court to review an administrative decision it had nothing to do with. It did not ask for any relief from the Board. It did not seek any status from the Board. It did not make any representations on any issue before the Board. In particular, it did not make any representations to the Board concerning the three interlocutory decisions.
As such, Forest Ethics was entitled neither to standing as of right nor as a public interest litigant in bringing this judicial review application.
The Charter Questions
While it followed from this last point that Forest Ethics could not raise a Charter challenge, what about Ms. Sinclair? The Court held that while there would be some cases in which an applicant for judicial review would be able to raise a Charter challenge when the applicant had failed to do so before the administrative tribunal, that was not this case. Instead this case was governed by the usual rule and good practice that requires that the tribunal in question be able to express its own expert and contextualized opinion as to the constitutional or Charter question that the applicant seeks to put at issue.64
Upstream and Downstream Effects
The Court’s reasons for supporting the conclusion of the Board and finding its decision on (ir)relevance of upstream and downstream effects to be reasonable are long but worth quoting given the importance of this issue in a number of different proceedings:65
In conclusion, the Forest Ethics case is important for a number of reasons. First it contains a useful discussion of standard of review issues with respect to a number of different types of decisions that the NEB must make. Second it confirms that a party intending to raise constitutional questions must raise them before the Board and not hold them back for any judicial review application. Third, it offers detailed reasons supporting the Board’s position that it need not consider the upstream and downstream greenhouse gas implications of pipeline decisions.
Trans Mountain Expansion Project
The Trans Mountain Expansion Project (TMX) is a proposal to expand the existing Trans Mountain pipeline system between Edmonton, AB and Burnaby, BC. It would include approximately 987 km of new pipeline, new and modified facilities, such as pump stations and tanks, and the reactivation of 193 km of existing pipeline. The Westridge Marine Terminal would also be expanded. New pipeline segments would be added between Edmonton and Hinton, AB, Hargreaves, BC and Darfield, BC and Black Pines, BC and Burnaby, BC. Some existing, but currently deactivated pipeline segments between Hinton, AB and Hargreaves, BC and Darfield and Black Pines, BC would be reactivated. The effect of the expansion will be to increase throughput by nearly 600,000 bbls per day.66 The proceedings before the NEB are ongoing.
The application has led to litigation in both the Supreme Court of British Columbia and in the Federal Court of Appeal. This section of the paper covers what will be referred to as the Burnaby bylaw litigation. Other issues have also been raised in the context of the TMX application but none has resulted in reasoned decisions from the Courts.67
The Burnaby bylaw applicability issues were pursued before the NEB, in the BC Supreme Court, and before the Federal Court of Appeal. Accordingly, the following section discusses the evolution of the bylaw dispute chronologically rather than strictly separating the two pathways.
TMPL’s expansion application anticipates using an existing right of way but open-houses that TMPL conducted in Burnaby, BC as part of preparing its application encouraged it to investigate an alternative and more direct routing in the Burnaby area which would involve drilling through Burnaby Mountain. In order to investigate the feasibility of that alternative TMPL needed to do further studies and assessments, including geotechnical investigations that would require drilling bore holes at particular sites. TMPL attempted to obtain access to the sites in question from the City of Burnaby over a prolonged period but was unable to secure Burnaby’s consent to its operations. In response to that TMPL sought clarification from the NEB as to its position under s. 73 of the NEBA which provides that:
A company may, for the purposes of its undertaking, subject to this Act …
(a) enter into and on any Crown land without previous licence therefor, or into or on the land of any person, lying in the intended route of its pipeline, and make surveys, examinations or other necessary arrangements on the land for fixing the site of the pipeline, and set out and ascertain such parts of the land as are necessary and proper for the pipeline;
The Board issued its ruling in response on August 19, 2014 in which it stated:68
A plain reading of the language used in paragraph 73(a) provides Trans Mountain with the power to enter any Crown (federal or provincial) or privately owned land which lies in the intended route of its pipeline to make surveys and examinations. There is no requirement in paragraph 73(a) for companies to reach agreement with land owners, the Crown, or otherwise, before exercising the right to access land.
Armed with this ruling TMPL commenced its survey operations only to be met with orders served by the City of Burnaby requiring it to cease operations on the basis that TMPL was in breach of the City’s bylaws. TMPL took this issue back to the NEB questioning the constitutional validity or applicability of the bylaws (discussed further below), but in the meantime the City of Burnaby brought an application in the Supreme Court of British Columbia seeking an injunction on the basis of s. 274 of the Community Charter. Justice Brown rejected that application69 and leave to appeal that decision was also denied.70
Justice Brown applied the three part test from RJR-MacDonald Inc. v Canada (Attorney General).71 He accepted that there was a serious issue to be tried but clearly believed that the issue should be tried before the NEB rather than by the Supreme Court of British Columbia;72 the balance of convenience pointed in that same direction;73 and there was conflicting evidence as to irreparable harm.74 By the time the matter came before the BC Court of Appeal on a leave application, the NEB had issued its own ruling on the applicability of the Burnaby bylaws (NEB Ruling No. 4075) and the Federal Court of Appeal had in turn denied leave (without reasons). As a result, the BC Court of Appeal had little difficulty in concluding that it should not grant leave, both because this should not be entertained insofar as it was a collateral attack on the NEB ruling,76 but also because the issue, at least in terms of enforcing the by-law, was no longer a live one; TMPL was not contemplating further work on Burnaby Mountain.77
As noted in the previous paragraphs, the NEB itself addressed the constitutional validity, applicability and operability of the bylaws in an important ruling, (Ruling No. 40) which in turn was appealed to the Federal Court of Appeal. In the absence of reasons from the Court for its decision to deny leave it is useful to examine the Board’s well-reasoned decision. The Board identified three issues that it needed to consider. The first was the legal authority of the Board to consider the constitutional questions of the validity, applicability and operability of the Burnaby bylaws. The Board had little difficulty in confirming that it had this authority and it is clearly on firm ground in reaching this conclusion given that s.11 of the NEBA establishes the NEB as a court of record and that s. 12 affords it the “full jurisdiction to hear and determine all matters whether of law or fact”.78
The second set of issues addressed the core of the matter: validity, applicability and operability. There could be no doubt about the validity of either NEBA or Burnaby’s bylaws. Indeed the Board hardly mentions the matter although it does go to some efforts in both this ruling and the earlier Ruling No. 28 to establish that the Board’s authority to order access to Crown and private lands for the purpose of surveying the route and geotechnical matters is clearly essential to the exercise of the Board’s overall jurisdiction.79 That left the Board to consider the applicability of the bylaws (i.e. the issue of inter-jurisdictional immunity) and their operability (i.e. were the by-laws inconsistent with the provisions of the NEBA and thereby inoperable by virtue of the doctrine of paramountcy).
On the issue of operability\paramountcy the Board found that there was a clear operational conflict (within the meaning of the relevant authorities80) between the NEBA at s .73(a) and the impugned bylaws and that s.73(a) of the NEBA must prevail to the extent of that conflict thereby rendering those bylaws inoperable to that extent:81
In the Board’s view there is a clear conflict between the Parks Bylaw and paragraph 73(a) of the NEB Act. Section 5 of the Parks Bylaw states that “no person shall cut, break, injure, damage, deface, destroy, foul or pollute any personal property or any tree, shrub, plant, turf or flower in or on any park”. There is a clear prohibition against cutting any tree, clearing vegetation or boring into the ground, regardless of whether minimal tree clearing is necessary where the trees would create a safety risk for the drilling work that must occur. While the Board accepts that the Parks Bylaw has an environmental purpose, the application of the bylaws and the presence of Burnaby employees in the work safety zone had the effect of frustrating the federal purpose of the NEB Act to obtain necessary information for the Board to make a recommendation under section 52 of the NEB Act.
There is also an operational conflict with sections 24(1) and (4) of the Traffic Bylaw. While 24(1) does allow Burnaby Council to approve work along a highway or to impose conditions regarding such work, in this case the Board finds that Burnaby refused to consider Trans Mountain’s request. … [G]iven the refusal of Burnaby to discuss the work, Trans Mountain undertook this work on its own. …
In the Board’s view, there is an operational conflict between the Impugned Bylaws and federal law. Based on the facts before the Board, dual compliance is impossible.
As for the doctrine of inapplicability or inter-jurisdictional immunity, the Board correctly recognized that this doctrine has to some extent fallen out of favour in recent years82 but also recognized that it has some continued relevance especially with respect to some recognized categories of provincial laws.83 The doctrine applies to render inapplicable an otherwise valid provincial law where that provincial law impairs the core content of a federal head of power. The Board concluded that both elements of the test (core competence and impairment) were met and that therefore, and in the alternative to the paramountcy argument, the impugned bylaws must be “inapplicable to the extent they impair temporary access to the Subject Lands by Trans Mountain for the purposes set out in paragraph 73(a).”84
The third and fourth issues raised questions as to the ability of the Board to operationalize the above conclusions with respect to the main issues. Here the Board concluded that it could issue an order against Burnaby forbidding the City from applying its bylaws in such a way as to prevent TMPL from exercising its powers under s. 73(a) of the NEBA.85 It also concluded that the facts, and in particular the City’s refusal to cooperate, provided compelling reasons for issuing the order.86
The Board’s methodology and reasoning here is compelling and offers useful guidance for thinking about the interaction of federal pipeline law and provincial environmental legislation.87 Both will be valid and in most cases a pipeline operator will need to comply with both the provincial laws and the NEBA – but there will be some cases in which the provincial law will frustrate the attainment of federal objective and such a law will be either inoperative or inapplicable. It is unfortunate that the Federal Court of Appeal declined to provide its own reasons for denying leave to appeal on such an important legal question but perhaps this was a case in which the Board’s own reasons required no further judicial glossing.
TransCanada Energy East
Energy East involves converting existing natural gas pipeline segments between the Alberta\Saskatchewan border and the Ottawa area to oil transportation; constructing new pipeline primarily in Alberta, Québec and New Brunswick to link up with the converted pipe; and constructing associated facilities, pump stations and tank terminals required to move crude oil from Alberta to Québec and New Brunswick, including marine facilities. At the time of writing, the Board had yet to establish a schedule of hearing dates and locations.
Thus far the main litigation launched against the Energy East project88 involved an application brought by Centre québécois du droit de l’environnement89 (CQDE) in the Federal Court Trial Division for an interlocutory injunction to extend any deadlines for participating in the Board’s consideration of TCPL’s application until the Commissioner for Official Languages had ruled on a complaint filed with the Commissioner by CQDE in which CQDE sought a direction that the NEB provide an official translation of the entirety of the 23,000 page Energy East application. Justice de Montigny dismissed the application on both jurisdictional and substantive grounds. On the jurisdictional issue, Justice de Montigny ruled that the Federal Court Trial Division had no appellate or judicial review jurisdiction over the NEB for the reasons rehearsed above and that it could not obtain this jurisdiction by virtue of the Official Languages Act (OLA):90
To the extent that the purpose of the interlocutory injunction motion brought by the moving parties is essentially to challenge the ruling rendered by the Board … it seems clear to me that this Court is not the appropriate forum and that the procedural vehicle chosen is inappropriate. It goes without saying that it would be wrong to do indirectly what is not permitted directly. The appropriate way for the moving parties to request a stay of the proceedings before the Board was to challenge the Board’s ruling … before the Federal Court of Appeal, the only Court that has jurisdiction to entertain an appeal from a ruling of the Board, and to request, by means of a crossmotion, the stay of proceedings before the Board for the duration of the challenge.
On the substantive issue, Justice de Montigny noted that CQDE would need to establish “that their future proceeding under the OLA raises a serious question, that they will suffer irreparable harm in the event that their motion is dismissed, and that the balance of convenience lies in their favour.”91 Justice de Montigny was of the view that CQDE’s position had no merit. While it was clear that the OLA applied to the NEB, all that the OLA requires is “ ‘optional unilingualism’ at the option of the speaker …. Put differently, it is the right to use either official language in any court or in any pleading in or process issuing from any such court that is guaranteed, and not the right that the official language used will be understood by the person to whom the pleading or process is addressed …”.92
In the absence of a clear legislative provision to that effect, there cannot be an obligation as onerous as that of requiring that all administrative tribunals and all courts subject to the OLA have all of the records submitted to them translated. In the alternative, the moving parties maintained that they could also avail themselves of section12 of the OLA, which sets out that “[a]ll instruments directed to or intended for the notice of the public, purporting to be made or issued by or under the authority of a federal institution, shall be made or issued in both official languages”. However, that provision clearly does not apply in this case because the application filed by Energy East did not originate from the Board.93
Justice de Montigny went on to note that the OLA might not exhaust the possible claims that the applicants might have. In particular he observed that if Energy East (or the NEB) failed to provide sufficient documentation in both official languages so as to permit a party to understand the issues raised in the application and to make an informed judgement as to whether or not to seek to participate, then a party might be able to bring an application before the Federal Court of Appeal on procedural fairness grounds.94
The CQDE case is principally important as an illustration of the different types of arguments that energy proponents must expect to meet in developing new projects. The case also confirms that the trial division of the Federal Court has no role to play in supervising the NEB; that duty falls to the Federal Court of Appeal.
Conclusions
Our current energy paradigm is highly networked and requires large linear developments. This survey of current applications before the NEB confirms that new linear developments will be contentious both at the site-specific level (Burnaby Mountain) and at a more macro-level (the carbon lock-in effects of new pipeline infrastructure), and will bring in to play competing assessments of the public interest (nationally and locally). This survey also shows that these contesting interests will throw up a broad range of questions. The issues canvassed here include constitutional questions (language rights, division of powers issues, aboriginal rights and the Charter), international law issues, technical questions of administrative law including the jurisdiction of the Federal Court, the Federal Court of Appeal and provincial superior Courts as well as questions of standing, and more traditional environmental law issues.
Many of the cases canvassed here are interlocutory in nature with the merits still to be heard. While all of these cases deserve monitoring it will be particularly important to follow the Northern Gateway litigation to see what it tells us about the relationship between the Courts, the NEB and the Governor in Council. Stay tuned.
* Nigel Bankes is a Professor of Law at the University of Calgary, and Adjunct Professor at the University of Tromsø.