Canada: A Waste Of Energy?

Municipal Influence in the Energy Sector
Last Updated: January 7 2016
Article by Kathleen Higgins

In recent years, the energy sector has become a growing source of economic development. It has also been a growing area of concern for local communities wary of disruptive industrial develop­ment and uncertain environmental ef­fects. The energy sector's increasing in­fluence in local communities in British Columbia can be readily seen in recent developments in the areas of coal, lique­fied natural gas (LNG), and oil pipe­lines. Perhaps the most prominent and recent example of this trend has been Trans Mountain's proposed "twinning" of an oil pipeline that runs from Alberta to British Columbia and the associated expansion of storage and terminal facili­ties on Burnaby Mountain.1

In the face of these developments, local governments have been left to consider their options. In advocating the interests of their communities, mu­nicipalities will have to confront the authority of both provincial and federal orders of government. This article will provide an overview of the juris­dictional boundaries relevant to the energy sector and consider how local governments may be able to exert their influence within this framework.

Constitutional and Statutory Framework

The Canadian Constitution divides law-making powers into categories, and grants those categories to either the federal or the provincial govern­ment.2 The federal government has jurisdiction to pass laws governing navigation, shipping, and undertak­ings that cross provincial borders. The provincial government has jurisdiction over local works, undertakings, and non-renewable natural resources.

Two key legal doctrines have emerged from this constitutional divi­sion of powers. First, if a provincial law impairs the core of a federal power, or vice versa, then that law is inapplicable to the federal matter being regulated.3 Second, if a valid federal law is in conflict with a valid provin­cial law, the provincial law yields and is considered to be inoperative.4

Municipalities do not have con­stitutional status; rather, they obtain their powers from provincial statutes, such as the Local Government Act and the Community Charter in British Columbia.5 Importantly, section 10 of the Community Charter provides that municipal by-laws cannot be in conflict with provincial legislation.

As a result of this framework, mu­nicipalities cannot pass a by-law that is in conflict with either federal or pro­vincial legislation. Additionally, mu­nicipalities cannot pass a by-law that impairs the core of a federal power.

Despite these limitations, there re­main a number of ways in which local governments may nonetheless exert influence over the many issues that can arise in the energy sector.

Pipelines

While the Constitution does not expressly reference pipelines, both the federal and provincial governments are able to legislate over pipelines under their more expansive categories of power. The first step for local govern­ments will be to consider whether the pipeline in question is a local (pro­vincial) undertaking, or whether it is sufficiently interprovincial to make it a federal undertaking. They can then consider the corresponding limits on their power.

The recent dispute between the City of Burnaby and Trans Mountain ULC provides a useful illustration. In 2013, Trans Mountain applied to the National Energy Board (NEB) for permission to expand its interprovincial pipeline operations. Part of this expansion would involve tunneling through Burnaby Mountain. The NEB ordered that certain tests be conducted in regards to the proposed tunnel.

In response to local opposition and mounting safety concerns related to the project as a whole,6 the City of Burnaby attempted to prevent Trans Mountain from accessing Burnaby Mountain by arguing that Trans Mountain had obstructed roads and cut down trees contrary to the city's parks and traffic by-laws. Trans Mountain then commenced proceedings before the NEB, seeking an order requiring the city to permit access.

In its decision, the NEB held that the city's by-laws could not limit Trans Mountain's access both because they were in conflict with the federal law that granted Trans Mountain the ability to perform the tests and because they impaired the core of the federal jurisdiction over the routing of interprovincial pipelines.7 The city at-tempted to appeal this decision to the Federal Court of Appeal; however, that court dismissed the appeal without is-suing reasons.8 The city then brought the same constitutional issues before the B.C. Supreme Court, but that court both declined jurisdiction and, in the alternative, agreed with the NEB's conclusions.9

Although frustrating from the city's point of view, the dispute should not be considered a complete rejection of a municipality's ability to regulate aspects of energy projects. The NEB expressly stated: "Federally-regulated pipelines are required, through operation of law and the imposition of conditions by the Board, to comply with a broad range of provincial laws and municipal by-laws."10 As such, the key for municipalities may be to take measures to influence, rather than prevent, the activity.

Coal and Liquefied Natural Gas

Generally, developments within the coal and LNG sectors will fall within provincial jurisdiction. In British Columbia, provincial legislation in these areas includes statutes like the Mines Act and the Environmental Management Act (EMA).11 Some of this legislation expressly contemplates exercises of municipal power. For example, section 31 of the EMA permits the Greater Vancouver Regional District12 to regulate the discharge of air contaminants within the Greater Vancouver area.

Accordingly, local governments must first determine which pieces of provincial legislation will be relevant to specific energy sector projects, and then consider whether participation at the municipal level has been contemplated within the enactment. This may not always be a straightforward exercise.

Anning v. British Columbia (Minister of Energy and Mines)13 is one example of municipal authority being taken into consideration, even though the relevant legislation did not expressly reference municipalities. In Anning, the minister of energy and mines is-sued a permit to operate a rock quarry on lands where the Regional District of Nanaimo's zoning by-law did not permit mining or excavation. The district appealed to the B.C. Supreme Court, and the court held that the minister could not ignore municipal or regional land use decisions and that the minister could require the permit holder to com-ply with specific by-law provisions.

Federally, a topic of late has been the export of energy products. As these ex-port projects will seek to ship coal and LNG products toward growing markets across the Pacific, a key factor will of-ten be the federal jurisdiction over navigation and shipping. Importantly, the Supreme Court of Canada has held that at least one type of shipping facility, in that case an integrated ship offloading and concrete facility,14 was not at the core of federal jurisdiction.

These examples illustrate that, despite a potentially restrictive constitutional framework, there are possibilities for cooperation between municipal authority and provincial legislation; and also that, while direct conflicts must be avoided, there is room for municipal authority. The exact scope of municipal power, however, will require careful analysis of the facts in each situation.

Non-Legislative Actions

As can be seen from the preceding discussion, municipalities cannot ex­ert influence over the development of energy sector projects through by-laws that attempt to obstruct energy devel­opment outright.

In order to directly influence deci­sions regarding the development and operation of energy sector projects, it may be more effective to get involved in other ways. One option may be to participate in proceedings, such as hearings before the NEB, as an inter­venor or as a commenter.15 Another option, which was attempted though ultimately unsuccessful in the Trans Mountain dispute, is to challenge the constitutionality of the law (or the process under that law) that empowers energy sector companies to operate or develop their project.16

Apart from asserting rights through legal proceedings, municipalities retain a wide variety of non-legal options to influence the development and opera­tion of energy sector projects. These options include lobbying and public pressure. Returning to the Trans Moun­tain example, Burnaby's Mayor Derek Corrigan captured national attention when he vowed to stand in front of bulldozers and face arrest to stop Trans Mountain's expansion.17

Conclusion

Issues in the energy sector are of great importance to local communities and will only continue to increase in significance in the years to come. As a broad topic, these issues may fall under both provincial and federal jurisdic­tion. In both cases, municipalities will have to consider the limitations to their authority, which will depend on the spe­cific facts of any given development.

Although there are various hurdles in dealing with the provincial and federal governments, influence is not impossible. Federal and provincial ju­risdiction is rarely all-encompassing. Municipal by-laws that do not impair a core part of federal jurisdiction or otherwise conflict with existing provin­cial and federal laws could be applied to energy projects. Additionally, apart from exerting influence through by-laws, municipalities can also look to other legal and non-legal options.

As local communities ultimately bear the impacts of energy sector de­velopment within their boundaries, it is important that their concerns be heard. By making use of all the available options, municipalities can help safe­guard their communities in a way that is certainly worth both their time, and yes, their energy.

Footnotes

1 The Trans Mountain expansion, as proposed, would involve the construction of 987 kilome­tres of new pipeline, the reactivation of 193 ki­lometres of existing pipeline, the expansion of storage facilities on Burnaby Mountain, and an expansion of the Westridge Marine Terminal on Burrard Inlet at the base of Burnaby Moun­tain. For more information on this project see: National Energy Board, "Trans Mountain Pipeline ULC – Trans Mountain Expansion" at www.neb-one.gc.ca/pplctnflng/mjrpp/trns­mntnxpnsn/1 The Trans Mountain expansion, as proposed, would involve the construction of 987 kilome­tres of new pipeline, the reactivation of 193 ki­lometres of existing pipeline, the expansion of storage facilities on Burnaby Mountain, and an expansion of the Westridge Marine Terminal on Burrard Inlet at the base of Burnaby Moun­tain. For more information on this project see: National Energy Board, "Trans Mountain Pipeline ULC – Trans Mountain Expansion" at www.neb-one.gc.ca/pplctnflng/mjrpp/trns­mntnxpnsn/index-eng.html.

2 The Constitution Act, 1867 (U.K.), 30 & 31 Vict, c. 3, ss. 91, 92.

3 This is referred to as the doctrine of interjuris­dictional immunity.

4 This is referred to as the doctrine of para­mountcy.

5 Local Government Act, RSBC 1996, c. 323; Community Charter, SBC 2003, c. 26.

6 Safety concerns that culminated in this more recent report: City of Burnaby, Trans Mountain Tank Farm Tactical Risk Analysis by Chris Bowcock (City of Burnaby: Fire Department, May 1, 2015).

7 National Energy Board: A97-1 – Ruling No. 40 – A4D6H0 (October 23, 2014) [NEB Ruling].

8 Burnaby (City) v. Trans Mountain Pipeline ULC (December 12, 2014), Docket 14-A-63 (FCA). It is not unusual for a court of appeal to decline to hear a case without giving reasons.

9 Burnaby (City) v. Trans Mountain Pipeline ULC, 2015 BCSC 2140 at paras. 50, 81.

10 NEB Ruling, note 7 supra at 13.

11 Mines Act, RSBC 1996, c. 293; Environmental Management Act, SBC 2003, c. 53.

12 In British Columbia, there are regional districts and municipalities. A regional district is com-prised of member municipalities. The Greater Vancouver Regional District is comprised of municipalities in the Greater Vancouver area.

13 Anning v. British Columbia (Minister of En-ergy and Mines), 2002 BCSC 896.

14 British Columbia (Attorney General) v. La-farge Canada Inc., 2007 SCC 23.

15 There are certain limits on who can participate as an intervenor or commenter; however, it is beyond the scope of this article to explain those limits or to discuss the differences be­tween these two forms of participation.

16 Burnaby (City) v. Trans Mountain Pipeline ULC, 2014 BCCA 465 at paras 7-8.

17 Justin McElroy, "Burnaby mayor says he'll stand in front of a bulldozer to stop Kinder Morgan [Trans Mountain] expansion," Global News (March 18, 2014).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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