In 2013, Trans Mountain Pipeline ULC applied to the National Energy Board ( the "NEB") for permission to twin its existing interprovincial pipeline, which transports petroleum products from Alberta to BC, and to expand its storage facilities on Burnaby Mountain and its terminal facilities on Burrard Inlet at the base of Burnaby Mountain (the "Trans Mountain Expansion Project"). This project, which is still under review before the NEB, has given rise to a number of challenges by parties concerned with its potential health, safety and health impacts, including the City of Burnaby ('Burnaby").
In the most recent decision to address the Trans Mountain Expansion Project, Burnaby (City) v. Trans Mountain Pipeline ULC, 2015 BCSC 2140, Justice Macintosh was asked to rule on several constitutional questions relating to the power of the NEB to order access over municipal lands, regardless of whether that access is in contravention of a municipal bylaw. In the end, Justice Macintosh ruled that the court should defer to a previous NEB ruling that had already decided the same issues. However, in the alternative, he noted that he would have agreed that municipal bylaws cannot limit an interprovincial pipeline proponent's access for testing where ordered by the NEB.
History of Litigation between Burnaby and Trans Mountain
An understanding of the history of the dispute between Burnaby and Trans Mountain is necessary to place this most recent decision in context.
On July 15, 2014, the NEB determined that engineering, environmental, socio-economic, and geotechnical studies were required from Trans Mountain before the NEB would be in a position to make a recommendation about the Trans Mountain Expansion Project's proposed routing. The studies would require drilling and access in the Burnaby Mountain Conservation Area, a municipal park.
Burnaby refused to allow the access, instead maintaining that the works, which obstructed roads and required the cutting of trees, violated the Burnaby Parks Regulation Bylaw and the Burnaby Street and Traffic Bylaw.
On August 19, 2014, the NEB ruled that the Federal National Energy Board Act ("NEB Act"), provides Trans Mountain with the authority to enter onto public or private lands to conduct surveys and examinations provided that as little damage as possible is done and compensation is paid to the property owner.
On August 28, 2014, Trans Mountain commenced work on Burnaby Mountain. On September 2 and 3, 2014, Burnaby's staff issued orders to cease bylaw contraventions.
Trans Mountain then brought an application to the NEB for an order requiring Burnaby to grant Trans Mountain access to Burnaby Mountain, arguing that the Burnaby bylaws, while validly enacted, could not function to block the federally ordered studies. On October 23, 2014, the NEB agreed.
In Ruling No. 40, the NEB reasoned that since municipal bylaws fall under provincial jurisdiction and since federal laws are paramount over provincial laws to the extent of any conflict between the two, the fact that Burnaby's bylaws are in conflict with studies ordered under the federal NEB Act means that the bylaws are inoperative to the extent of the conflict. In the alternative, the NEB held that, since provincial laws cannot impair the core of constitutional powers granted to the federal government, and since the federal government was granted exclusive power over the routing of interprovincial pipelines, the Burnaby bylaws cannot apply to impair the access required to make routing decisions.
In response to the NEB's Ruling No. 40, Burnaby applied to the Federal Court of Appeal for a judicial review. On December 12, 2014, the Federal Court of Appeal denied leave to appeal Ruling No. 40 without issuing any reasons. It is not uncommon for a court of appeal to deny leave without reasons. This effectively means that the Federal Court of Appeal has neither endorsed nor overturned the NEB ruling.
Burnaby had also applied to the BC Supreme Court for a statutory injunction to enjoin Trans Mountain from violating its bylaws. In September 2014, the BC Supreme Court denied the application and in November 2014, the BC Court of Appeal upheld that decision, reasoning in part that the dispute was more properly before the Federal Court of Appeal. In February 2015, the BC Court of Appeal declined to reconsider its November 2014 decision.
Most Recent Decision
In October 2015, the parties once again returned to the BC Supreme Court, this time on a constitutional application rather than an injunction application.
As was the case before the NEB, two constitutional doctrines were at the core of the parties' arguments. The first is the rule that federal laws are paramount to provincial laws such that where a valid provincial law directly conflicts with a valid federal law, the provincial law yields and is inoperative. The second is the rule that neither the provincial nor federal level of government can act to impair the core of a power constitutionally assigned to the other level of government.
In brief, Burnaby argued that (a) the NEB Act, properly interpreted, could not override municipal bylaws, (b) to the extent that it could, it was in relation to the locally focused matters assigned to the province and so not valid federal legislation, (c) or in the further alternative, the NEB Act is inapplicable to a municipality's enforcement of its land use bylaws.
Trans Mountain framed its arguments more squarely around the two doctrines. It argued that Burnaby's bylaws were both constitutionally inoperative and constitutionally inapplicable.
In the result, Justice Macintosh declined to answer any of the constitutional questions put before the court. He reasoned that while the Supreme Court had the jurisdiction to hear the questions, it should not do so in light of the NEB's prior decision and the fact that a review of that decision should be, and had been, placed before the Federal Court of Appeal. He noted that "Burnaby is here because it was unsuccessful elsewhere".
Justice Macintosh then went on to opine on the constitutional matters before him so that his reasons would be available in the event that his first conclusion is later overturned on appeal. The effect of Justice Macintosh's initial decision to decline jurisdiction is that his constitutional conclusions, while perhaps persuasive to future disputes, are not binding.
With respect to the constitutional questions, Justice Macintosh noted NEB's summary of the two applicable constitutional doctrines was "clear and brief, as well as being right" and then engaged in his own constitutional analysis of the facts, ultimately coming to the same conclusions arrived at in Ruling No. 40.
On the issue of whether Burnaby's bylaws impermissibly interfered with the core of a federal power, Justice Macintosh concluded that obtaining the research results was central to the decision of where to locate the pipelines. He reasoned that:
If the NEB did not have the power to overrule the interests of NEB intervenors [such as Burnaby and other municipalities] as to the location of pipelines, and the related preparatory studies, virtually no pipeline could ever be built. Given the political, economic, cultural and other competing interests now associated with pipelines, that is why I expect the final say as to whether an interprovincial pipeline is approved now rests with the federal cabinet.
On the issue of whether there was a conflict between the municipal bylaws and the federal NEB Act, he concluded that despite increasing legislative cooperation between the levels of government, "when examining interprovincial undertakings at the stage of determining where such undertakings will be located, one legal regime needs to prevail over the other where there is a conflict".
Implications of Decision
In a time when municipalities, and their residents, are becoming increasingly concerned about the potential health, safety and environmental impacts of energy sector infrastructure within their borders, this decision provides important considerations for municipal decision makers.
While this most recent decision does not technically affirm the NEB ruling, it provides a good indication of how the court may respond to similar questions.1 In particular, bylaws are at most risk of being declared inoperative or inapplicable where they seek to directly control or impact a pipeline.
Further, the court's willingness to decline to exercise its jurisdiction where the same issue had been addressed within the NEB regime, emphasizes that it is all the more important that municipalities consider applying to have a voice, as an intervenor or a commenter, at the NEB proceedings that affect them.
1 Burnaby has appealed the decision. We will provide an update on the outcome of appeal in a future newsletter or blog post.
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