The tricky issue of jurisdiction in inter-provincial transportation

On Nov. 26, 2010, Daryl Janssen, an employee of Total Oilfield Rentals Ltd. Partnership, was killed on the job at a storage yard in Grand Prairie, Alta.

His death sparked a long and strange string of hearings and lawsuits between Total Oilfield and the governments of Canada and Alberta that last week culminated in an Alberta Court of Appeal ruling  about how to determine which level of government has jurisdiction over companies involved in inter-provincial transportation.

Total Oilfield is an Albera-based company that rents equipment, which it then transports to oil and gas companies. While the majority of its work is done in Alberta, it regularly transports equipment to clients in other provinces.

Janssen, who worked as an assistant bed truck operator for the company, was killed while off-loading oil and gas equipment from a trailer. Albertan health and safety officials initiated an investigation, but Total Oilfield managers told them in the past they had dealt with the federal authorities. The provincial inspectors accepted this and left.

Federal health and safety inspectors then came in and conducted their own investigation. They found a number of violations for which they ordered a variety of changes. In 2011, Total Oilfield was also ordered to a pay a $10,000 penalty arising from a National Safety Code audit.

Total Oilfield appealed both the safety directives and the $10,000 penalty. During the Occupational Health and Safety Tribunal hearing regarding the safety directives, Total Oilfield argued the directions given by federal inspectors were a “knee-jerk” reaction that none of them “would have any role in preventing the accident.” The company then asserted it was, in fact, a provincially-regulated entity and thus the requirements imposed upon it by the federal government should be nullified.

“The timing, vigour and process by which this incident has been reviewed, and our client’s practices assessed by your group have resulted in the writer suggesting to Total Oilfield that it is far better off being governed by Provincial Regulators who are much more inclined to work with businesses which are proceeding in good faith,” read a submission by Grant Stapon, a lawyer with Bennett Jones LLP who was counsel for Total Oilfield.

Total Oilfield later withdrew its request that the tribunal examine the jurisdictional question, but Jean-Pierre Aubre, the appeal officer took it up anyway. He concluded that although Total Oilfield did some inter-provincial transportation business, which would normally make it fall under the purview of the federal government, its primary business is intra-provincial equipment rental, and thus it should fall under provincial jurisdiction. He declared the federal health and safety orders void.

Aubre’s ruling was found to be defective by a Federal Court judge, but, since Total Oilfield had also appealed the $10,000 fine to the courts, the judge left it up to the Alberta courts to deal with jurisdictional questions.

In 2013, the Court of Queen’s Bench of Alberta, following a similar line of reasoning to Aubre, concluded since Total Oilfield did most of its business in equipment rentals, for the purposes of the transportation legislation, it should fall under the purview of the province.

It left the labour issues up to the Occupational Health and Safety Tribunal, which stated it would wait to make a definitive ruling until the courts had fully dealt with the matter.

The latest ruling by the Alberta Court of Appeal found in favour of the Attorney General of Canada and the Attorney General of Alberta, and concluded Total Oilfield was subject to both Alberta and federal jurisdiction when it comes to transportation.

“When an integrated transportation undertaking engages in both intraprovincial and interprovincial transportation, a small fraction of interprovincial activity is sufficient to engage federal transportation jurisdiction,” wrote Justice Brian O’Ferrall.

The court concluded the test for determining whether a company falls under federal labour jurisdiction differs from the one to determine transportation jurisidiction.

“In the present case, whether or not Total Oilfield is subject to federal or provincial labour law does not affect which level of government has transportation jurisdiction over its trucking activities,” wrote O’Ferrall.

Instead, the federal transportation laws applied if the company’s operations “continuously and regularly” extend beyond one province’s borders.

O’Ferrall stated one reason the various issues had become so muddled was the suits were sparked by Janssen’s death.

“In our view, part of the difficulty in this case arises because the chambers proceeding was conducted in the shadow of the 2010 fatality,” he wrote.

Justice Frans Slatter, however, dissented from the view of the majority, arguing the various sides of Total Oilfield’s business should all fall under provincial jurisdiction.

“From a constitutional point of view, it is conceptually possible to assign jurisdiction to Total’s third party trucking operation independently of the jurisdiction over its rental and delivery service,” he wrote. “The two components of the business are, however, in fact coextensive, because the same trucks and staff are used for both businesses.”

He also concluded there was no question Total Oilfield was covered under provincial labour laws.

“The fatality in Grande Prairie involved an employee of Total Oilfield Rentals, and occurred in Total’s storage yard. It occurred during the unloading of rig mats that Total rents out. The fatality therefore occurred entirely in Alberta in relation toTotal’s provincially regulated equipment rental and delivery business, and fell under the jurisdiction of the provincial investigators.”

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