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Trans Mountain headed to courts?

Industry Spotlight
|Written By Beth Raymer
Trans Mountain headed to courts?

The continuing dispute between British Columbia and Texas pipeline company Kinder Morgan over the proposed $7.4-billion Trans Mountain Pipeline ULC expansion, from Alberta to B.C., is heading to the courts, with one senator urging Ottawa to ask the SCC to decide on the issue.

Calgary-based senator Doug Black announced March 1 that he was calling on the federal government to expedite a reference to the Supreme Court of Canada to decide on the fate of the pipeline expansion, which has been beleaguered by opposition and delays. The project has already been approved by the government of Canada and by the National Energy Board, with a set of conditions.

At issue is the safety of transporting heavy bitumen through the proposed pipeline expansion, and the environmental risks posed to British Columbian municipalities near the proposed expansion.

“There’s no question, in the case of pipelines, that it’s a federal decision” whether to permit the expansion, says Gregory McDade, managing partner at Ratcliff & Company LLP in Vancouver and legal counsel for the City of Burnaby, where the proposed expansion would terminate. “But provinces and municipalities have the power to impose regulations and environmental conditions that are equally valid.”

In February, the National Energy Board gave permission for the pipeline to start construction on the Burnaby Mountain tunnel entrance, subject to other applicable federal, provincial and municipal permits. The City of Burnaby has appealed the NEB decision to the Federal Court of Appeal on the grounds that, in December, the NEB said Trans Mountain did not have to abide by Burnaby’s tree bylaw and its zoning bylaw.

The City of Burnaby’s appeal “will resolve that constitutional issue around those bylaws, but based on a factual record,” McDade told Canadian Lawyer in early March. The NEB initially declared the Burnaby bylaws to be constitutional, he says; but in the NEB’s review of the permitting process, it found that Burnaby’s failure to assess Trans Mountain’s applications “in a timely and reasonable manner” rendered the bylaws constitutionally inapplicable.

“They found, in effect, that . . . Burnaby’s laws were constitutional and could apply, but its process was unreasonable,” says McDade.

The proposed route of the pipeline expansion is through a sensitive area that has been designated for conservation by the municipality. Burnaby felt it did not have sufficient information about the risks involved in the proposed expansion to issue permits to Kinder Morgan, he adds, and it continued to press for more information from the company, over a period of several months.

“That’s what the appeal is about — whether a law that was constitutional could be found unconstitutional because [the permitting process] took too long,”
McDade says.

As for the reference to the Supreme Court of Canada, “I think eventually this question will get to the Supreme Court; the question is how.” The federal government has the power to refer a matter to the SCC on a question of law, he notes, but British Columbia also has the power to direct a reference to the British Columbia Court of Appeal, “and they’ve indicated an intention to do that.”

In March, the B.C. government announced it would hold a public consultation on how it should “defend B.C.’s land, coast and waters from oil spills.” The government, under new NDP premier John Horgan, denied that the consultation was meant to challenge the Kinder Morgan project specifically, but rather it was aimed at any company that transports oil through the province. And on the same day, federal infrastructure minister Amarjeet Sohi said that Ottawa was “doing everything under our control” to ensure the pipeline expansion was constructed.

It likely makes more sense to wait for a regulation on the matter from British Columbia, “and then the Supreme Court will parcel out the evidence and submissions on the questions” should they hear the case, McDade says.