Canada: The National Energy Board Saga Between Trans Mountain And Burnaby Continues …

On October 9, 2014, the National Energy Board (the "NEB") heard oral argument for a motion by Trans Mountain Pipeline ULC ("Trans Mountain") seeking an order pursuant to sections 12, 13, and 73(a) of the National Energy Board Act (the "Act"). Submissions were made by Trans Mountain and the City of Burnaby ("Burnaby").  At the end of the hearing, the NEB advised a decision will be made soon, but did not provide a specific time frame.

1.       Background

On August 19, 2014, the NEB issued Ruling No. 28 (the "Ruling"). The Ruling concluded that under s. 73(a) of the Act, Trans Mountain is permitted to enter any Crown (federal or provincial) or private lands which lie in the intended route of its pipeline to carry out surveys and examinations. This included a small portion of the Burnaby Mountain Conservation Area (the "Subject Lands").

The October 9, 2014 motion arose after a series of incidents whereby Burnaby officials ticketed Trans Mountain contractors for contravening the Burnaby Street and Traffic Bylaw and the Burnaby Parks Regulation Bylaw while carrying out land surveys in and around the Subject Lands. After failing to resolve the matter with Burnaby officials directly, Trans Mountain filed a motion with the NEB on September 3, 2014 requesting the NEB issue an Order permitting temporary access to the Subject Lands (the "September 3 Motion"). On September 8, 2014, Burnaby filed a Notice of Civil Claim in the Supreme Court of British Columbia ("BCSC") seeking, among other things, an injunction to restrain Trans Mountain from carrying out any further work on city-owned land in contravention of city bylaws.

On September 25, 2014, the NEB issued Ruling No. 32 in which it dismissed the September 3 Motion (without prejudice) for several reasons, including the fact there was a pending application before the BCSC, and that Trans Mountain must provide formal notice to the attorneys general of a Notice of Constitutional Question.

On September 26, 2014, the BCSC released reasons for its decision stating that no injunction would be granted and that the matter was properly before the NEB. Trans Mountain subsequently filed another motion seeking an Order for access to the Subject Lands, as well as a Notice of Constitutional Question, submitting the NEB has authority to determine Burnaby's bylaws are inoperative for the purposes of the rights granted to Trans Mountain under s. 73(a) of the Act. This motion was the subject of the October 9, 2014 hearing.

2.            Trans Mountain Oral Argument

Trans Mountain submitted the NEB has authority under the Act to order access and to determine the Burnaby bylaws are inoperative if they conflict with orders validly made under the Act. The actions of Burnaby amount to an attack on the mandate of the NEB which is to consider the national interest and all those affected by a proposed project of this kind.

Trans Mountain conceded the work necessary to fulfill the NEB's request for certain information will indeed violate the bylaws (i.e. the cutting of trees). However, Trans Mountain submitted that while it is impossible to fulfill its orders from the NEB and to comply with Burnaby bylaws simultaneously, a proper analysis of constitutional law principles (namely, paramountcy and interjurisdictional immunity) supports a finding that the Act should take precedence and the bylaws must "step aside".

The NEB asked counsel whether an order should reference certain bylaws. Counsel responded that the "spirit" of the order should allow them to carry out the work reasonably necessary to fulfill their obligations to the NEB, and that it is important to note Trans Mountain has no real issue with the validity of bylaws in and of themselves. Finally, Trans Mountain submitted the NEB should consider the fact that the BCSC held the damage done to the Subject Lands was "minimal" and that there was "no serious issue to be tried", nor will any harm be "irreparable".

3.            City of Burnaby Oral Argument

Burnaby took the position that the NEB would be reaching outside the Act if it were to make an order that the bylaws must step aside. Burnaby submitted there is no clear power granted to the NEB in the Act itself to allow the NEB to make declarations of invalidity in relation to municipal bylaws. Burnaby further submitted that while the NEB can determine legal and constitutional questions, it must be over its own enabling statute.

Burnaby submitted there is no real conflict between s. 73(a) and the bylaws, so an analysis of interjurisdictional immunity or paramountcy is largely unnecessary. The bylaws deal with trees and parks, for example, and only encroach on the Act in the most incidental of ways. Burnaby also submitted there was a lack of research into the environmental effects and damage that will occur to the Subject Lands due to Trans Mountain's work. Any order should take that into account. Burnaby concluded there is strong public interest in protecting the Subject Lands.

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