Canada: National Energy Board Rules In Favour Of Trans Mountain

Last Updated: October 28 2014
Article by Paul R. Cassidy, Gordon M. Nettleton and Monika A. Sawicka

1.               Background

On October 9, 2014, Trans Mountain Pipeline ULC's ("Trans Mountain") motion was heard by the National Energy Board ("NEB") after a series of incidents between Trans Mountain and the City of Burnaby ("Burnaby"). Burnaby officials ticketed Trans Mountain contractors for contravening the Burnaby Street and Traffic Bylaw and the Burnaby Parks Regulation Bylaw (the "Bylaws") while carrying out land surveys in and around the Burnaby Mountain Conservation Area (the "Subject Lands").

The attempted surveys were in response to a ruling by the NEB that in order to assess Trans Mountain's application for a certificate of public convenience and necessity, Trans Mountain was permitted to enter any Crown or private lands which lie in the intended pipeline route. After being unable to come to an agreement with Burnaby to enter the Subject Lands and conduct surveys, Trans Mountain filed a motion with the NEB 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 National Energy Board Act (the "Act").

During the hearing, Trans Mountain submitted the NEB has authority under the Act to order access and to determine the Bylaws are inoperative if they conflict with orders validly made under the Act. Burnaby, on the other hand, 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.

2.               Decision

The NEB released its decision on October 23, 2014 and concluded as follows:

  1. the NEB has jurisdiction to determine that specific Burnaby bylaws are inoperative or inapplicable to the extent they conflict with, or impair the exercise of, Trans Mountain's powers under s. 73(a) of the Act;
  2. the doctrine of federal paramountcy, or alternatively, interjurisdictional immunity, renders the Bylaws inapplicable or inoperative for the purposes of Trans Mountain's exercise of its powers under s. 73(a) of the Act;
  3. the NEB has authority under s. 13(b) of the Act to issue an order against Burnaby; and
  4. the facts necessitate the granting of such an order.

3.               Reasons

The NEB determined it has legal authority to consider constitutional questions related to its own jurisdiction. The NEB also determined that an analysis of constitutional legal principles, namely the doctrines of paramountcy and interjurisdictional immunity, both support a finding that the Bylaws are inoperative to the extent of the inconsistency or conflict. Paramountcy holds that where there are inconsistent or conflicting validly-enacted federal and provincial laws, as is the case between the Act and the Bylaws, the federal law prevails. The doctrine of interjurisdictional immunity also favours a finding that the Bylaws are inoperative. While the Bylaws were validly enacted, they are deemed inapplicable when it comes to matters falling outside of the jurisdiction of the enacting legislative body. In other words, the NEB found that the Bylaws impair a core competence of Parliament as the routing of the proposed pipeline is within the core of a federal power over interprovincial pipelines.

The NEB also found that it is within its power to issue an order to allow the Act's statutory scheme to be carried out. Based on principles of statutory interpretation, it would be illogical under s. 13 of the Act if the NEB could not make an order against a municipality that was preventing one of the purposes of the Act from being carried out. In the NEB's view, Parliament intended the NEB to have authority over both the subject matter of the motion (temporary access to the Subject Lands) and the remedy.

4.               Order

The NEB issued Order MO-122-2014, permitting Trans Mountain to carry out the surveys on the Subject Lands. Furthermore, to the extent that any Burnaby bylaws conflict with or impair Trans Mountain's exercise of its powers under s. 73(a) of the Act to access and conduct surveys, examinations, and other necessary arrangements on the Subject Lands, such bylaws are either inoperative or inapplicable to Trans Mountain.

More specifically, the NEB ordered that:

  1. Trans Mountain must provide Burnaby with 48 hours written notice in advance of its first entry on to the Subject Lands to perform surveys and examinations;
  2. Trans Mountain must provide Burnaby with a traffic management plan two business days in advance of any necessary road closures or traffic interruptions related to the necessary engineering, geotechnical, environmental and archaeological studies, surveys, examinations and other necessary arrangements for fixing the site of the pipeline and to set out and ascertain such parts of the Subject Lands as are necessary and proper for the pipeline on the Subject Lands;
  3. Burnaby, its staff, representatives, contractors, and agents are forbidden from interfering and obstructing Trans Mountain and its staff, representatives, contractors, or agents from exercising Trans Mountain's powers under s. 73(a) of the Act to enter into and on the Subject Lands and complete any surveys and examinations;
  4. Burnaby is prohibited from interfering or obstructing Trans Mountain by ordering or authorizing the presence of Burnaby's staff, representatives, contractors, or agents in any safety zone established by Trans Mountain for completing the surveys and examinations on the Subject Lands; and
  5. Unless otherwise directed by the NEB, the order expires on the earlier of the date Trans Mountain has exercised its powers under s. 73(a) of the Act and completed the surveys and examinations on the Subject Lands or July 30, 2015.

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