CBC.ca | The Current | TransCanada Pipeline

Listen to the segment from the CBC radio program The Current from February 22, 2011 discussing TransCanada Pipelines, the Keystone project and the Beardmore, ON explosion at: TransCanada Pipeline.

Ontario Farms Taxed at Industrial Rates?

Last week, I reported on a Court decision denying a farm operation leave to appeal a property tax assessment decision.  Read the Better Farming story on the case at the following link: Ontario Farms Taxed at Industrial Rates?

Another TransCanada Pipelines Ltd. explosion in Northern Ontario

Shortly after 11 p.m. last night, people near the Northern Ontario community of Beardmore, Ontario began calling in reports to the OPP of flames reaching hundreds of feet into the night sky.  A rupture in a TransCanada Pipelines Ltd. natural gas pipeline caused an explosion so large that the fire could be seen by airplanes passing overhead. 

Several hundred nearby residents were forced from their homes, but the fire burnt itself out after a few hours.  TransCanada's crew, which arrived on scene within an hour of the OPP, advised that the danger zone was within 1 km of the pipeline.  Reports say that the National Energy Board (NEB) is sending two inspectors from Calgary to investigate the scene.

In September, 2009, less than 18 months ago, another section of a TransCanada gas pipeline exploded near Englehart, Ontario.  Witnesses to that explosion described the sound of a jumbo jet crash.  The 2009 rupture happened on the 36 inch diameter main line. 

Farm loses bid for appeal of MPAC tax assessment decision

Lorentz Farms Limited owns a 2.66 acre parcel of land located in Wellesley Township.  As part of the applicant’s adjacent farm operations, machinery and equipment used to dry alfalfa and turn it into pellets is located on this property.  The Municipal Property Assessment Corporation (“MPAC”) classifies land use for tax purposes.  MPAC classified the subject property as industrial and commercial.  Believing the proper classification to be agricultural, and thus subject to a lower rate of tax, the applicant appealed this classification before the Assessment Review Board ("ARB") in 2009.  During the ARB hearings, valuation of the property was conceded and it was agreed that the only issue between the parties was classification of the property.  The ARB determined that the treatment of the Alfalfa on the property amounted to “processing” within the meaning of s.6(1)(1)(i) of the Act and therefore, the MPAC’s classification was deemed to be correct.

Lorentz Farms then applied for leave to appeal the decision of the ARB to the Ontario Divisional Court.  Justice McGarry of the Ontario Superior Court of Justice dismissed the application for leave to appeal, ruling:

In my view, it is clear based upon the agreed facts, that “processing” took place as the treatment of alfalfa by grinding into a powder and producing pellets amounts to “processing”. Therefore, as it is likely that the operations on the subject property amount to “processing” within the meaning of s.6(1)(1)(i), the property was properly was classified as industrial and accordingly, there is no reason to doubt the decision of the ARB.

Read the decision at: Lorentz Farms Limited et al v. MPAC.

Company fined $3,500 for replacing existing waste-oil burner

498503 Ontario Inc. (W. Paiement & Sons) Fined $3,500 for No Certificate of Approval

Haileybury – On December 2, 2010, 498503 Ontario Inc. operating as W. Paiement and Sons pleaded guilty to replacing equipment, namely a waste oil derived fuel burning heater, without first obtaining a Certificate of Approval.  The Court heard that the company services vehicles and heavy equipment.  On April 20, 2009 during an inspection by the Ministry of the Environment, it was noted that the waste derived oil burning furnace on-site was not the same as the one approved in the existing Certificate of Approval and that a larger unit had been installed.

The company was charged following an investigation by the ministry’s Investigations and Enforcement Branch.  The company was convicted and fined $3,500 plus a victim fine surcharge of 25% and was given six months to pay the fine.

Appeal Tribunal throws out unsigned Drainage Engineer report

A number of landowners appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal under Subsection 54(1) of the Drainage Act from decisions of the Court of Revision on the Baer Municipal Drain (the Drain) dated December 16, 2010.  The Town of Fort Erie had approved a report of a Drainage Engineer which was now being challenged by affected landowners.  However, at the opening of the appeal hearing, the Tribunal itself raised an issue with respect to the legal status of the Engineer's Report titled "Baer Municipal Drain - Final Engineer's Report, Town of Fort Erie", dated April 2010 (the Report) before it. The Report was prepared by Paul Douglas Smeltzer, an Engineer with Amec Earth and Environmental, Burlington, Ontario.

The Report was provided to the Tribunal by the Municipality as part of the evidence its representatives and the appellants would be relying on at the Hearing. The Report had been circulated, considered by Council and adopted by municipal by-law.  It was apparent in reviewing the Report that it had not been signed by the Engineer and did not have the required Engineer's seal on neither the text portion of the Report nor the drawings appended thereto. It was also apparent that the said drawings were still a "work in progress".

Despite the fact that the Engineer provided a signed and sealed copy of a subsequent report dated September 2010, which he testified was in every respect identical to the unsigned and unsealed September 2010 report circulated and subsequently brought to the municipal Council, this did not change the fact that the Town, at the beginning of the process that led to this Hearing, circulated the unsigned and unsealed April 2010 Engineer's Report to the landowners.  Further, the Town Council also considered, adopted and passed a by-law based on this same unsigned and unsealed April 2010 Report.  Accordingly, the Tribunal found that the Report was not a true report under the Drainage Act and therefore ordered that the April 2010 Engineer's Report that council adopted in July 2010 be set aside.

Read the decision at: Baer Municipal Drain.

Appeal Tribunal refuses to reinstate tobacco quota

Gubbels Farms Ltd. has grown tobacco under the marketing-system-of-the-day in Ontario since 1962. In 2008, Gubbels Farms Ltd. was licensed to produce approximately 418,000 lbs of basic production quota ("BPQ"). Gubbels Farms Ltd. did not participate in the Tobacco Transition Program ("TTP") and intended to continue producing tobacco for market. In 2009, the Ontario Flue-Cured Tobacco Growers' Marketing Board ("Board") removed the existing quota-based system for the control of production and marketing of tobacco and moved to a licensed-based system. The effect of this change was that the 418,000 lbs of BPQ associated with Gubbels Farms Ltd. ceased to exist. Also, before a licence to produce tobacco could be issued under the new system to Gubbels Farms Ltd., they had to be an eligible applicant and meet criteria set out in the General Regulations 2009 - 2010. Although Gubbels Farms Ltd. did not agree with the implementation of the licensed-based system, they complied with the new requirements and were issued licenses to produce tobacco in 2009 and 2010.

Gubbels Farms Ltd. appealed to the Board on April 1, 2010, asking for an exemption from the licensing requirements under the General Regulations 2009 - 2010 and for a refund of license fees paid to the Board for 2009 and 2010. The Board denied the request on April 22, 2010.  Gubbels Farms Ltd. appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal for relief from the April 22, 2010, decision of the Board with the following request:

Gubbels Farms requests that their permanent BPQ be reinstated and that, as a result, they be licensed to grow tobacco under the previous system. Furthermore, Gubbels Farms requests that the Board refund to Gubbels Farms all monies that it paid to the Board for the redundant licences (#65) for the 2009 and 2010 growing seasons.

The Tribunal found that the legislative and regulatory framework relative to the Board's absolute authority over quota, which included the BPQ, was in effect when the Board made its decision to drop the quota-based system and move to the license-based system. In short, the Board had the authority to remove the BPQ.  The Tribunal also found that the relief sought by the Appellant to have their BPQ reinstated was impossible to grant under this appeal. Pursuant to the Ministry of Agriculture, Food and Rural Affairs Act, the Tribunal could direct the Board to take any action that it is authorized to take under the Farm Products Marketing Act, and for this purpose may substitute its opinion for that of the Board.

This appeal, however, requested the reinstatement of the BPQ previously associated with Gubbels Farms Ltd. The Board's authority to issue tobacco quota was removed by the Farm Products Marketing Commission under the Farm Products Marketing Act Ontario Regulation 208/09 Tobacco - Powers of Local Board effective June 1, 2009. Furthermore, since the previous quota-based system no longer exists, there is no present or future opportunity for the Appellant to be licensed to grow and market tobacco under that previous system. Therefore, the licenses issued to the Appellant for the 2009 and 2010 growing seasons were not redundant. The fees associated with said licenses complete the licensing requirements of the Board and were authorized by Ontario Regulation 208/09.

Read the decision at: Gubbels Farms Ltd v. Ontario Flue-Cured Tobacco Growers' Marketing Board.

Nominate this blog for the Top 50 Environmental Law Blogs for 2011!

Law of the Lands has been nominated as one of the candidates for the LexisNexis Top 50 Environmental Law & Climate Change Blogs for 2011.  LexisNexis is asking for comments from blog readers like you.  If you would like to submit a comment about this blog, you can do so at the following link: LexisNexis Blog Comments by commenting on the ELCCC's announcement post.  Thank you for your continued readership.

Alberta farmer beats Alliance Pipelines at Supreme Court of Canada

The Supreme Court of Canada has released a major decision for NEB-pipeline landowners in Canada.  I've posted previously on several occasions about Vernon Smith, an Alberta landowner caught in a lengthy and costly dispute with Alliance Pipelines Ltd. over remediation of his property.  Ultimately, the dispute went to the highest court in Canada, a sign that the Court was prepared to give a rare statement on the National Energy Board and landowner rights.

In 1998, the NEB had approved the Alliance Pipeline, which was to cross Smith's land.  In 1999, the pipeline was completed, but Alliance failed to carry out remediation of Smith's property as had been agreed.  Smith went ahead and did the work himself and then sought payment from Alliance.  Alliance refused to pay and the matter went to arbitration. 

At the same, Alliance took Smith to Court and sought an injunction against him.  Alliance lost that case, and Smith was awarded his partial indemnity (or party and party) costs.  In other words, Smith won but only recovered part of his costs.  Therefore, at the arbitration hearing under the National Energy Board Act, Smith claimed the rest of his court costs that hadn't been awarded on the basis that he was supposed to be made whole in the expropriation process.  He was entitled to recover all costs he incurred as a result of the expropriation and the construction of the pipeline.

There was another wrench in the works.  The first arbitration committee that was appointed to hear Smith's case was dissolved when one of the members became a judge.  That meant that a second arbitration had to be commenced.  Smith sought his costs of the first arbitration, but Alliance opposed this.  The second arbitrator awarded Smith both his costs of the first arbitration and his unpaid costs from the court case.  Alliance appealed the decision unsuccessfully to the Federal Court, but later had the arbitrator's decision overturned on appeal to the Federal Court of Appeal.

The Supreme Court has now re-established the decision of the second arbitration committee, finding that the decision was reasonable.  The Court found that awards of costs are fact-sensitive and generally discretionary.  The second arbitration commitee was right to find that Section 99(1) of the NEB Act, the costs provision that is triggered when a landowner recovers 85% or better of the pipeline company's offer, merited a broad reading in accordance with the intent of the legislation.  The intention is clear - landowners are to be fully compensated.  This is the intention that lies behind expropriation legislation generally.

On that basis, the Court ruled that Smith was entitled to recover all of his costs which had been reasonably incurred in both arbitrations and in the court case.  The case before the Alberta Court of Queen's Bench related to the same single claim for compensation by Smith in respect of the same single expropriation by the same single expropriating party, Alliance Pipelines.

Also of importance, the Court awarded Smith his substantial indemnity costs (solicitor-client) for all of the appeals by Alliance, finding that Smith was to be fully compensated and that he should not be made to bear the costs of what was, for Alliance, at test case.

With respect to the NEB Act and expropriation in general, Justice Fish of the Court wrote:

The goal of complete indemnification first appeared in the NEBA in 1981, when Parliament amended the statute to introduce most of what now constitutes Part V (An Act to amend the National Energy Board Act, S.C. 1980-81-82-83, c. 80). Prior to these amendments, ss. 145 to 184 and 186 of the Railway Act, R.S.C. 1970, c. R-2, were imported directly into the NEBA (R.S.C. 1970, c. N-6, s. 75). Under those provisions, “the costs of the arbitration” were in the discretion of the arbitrator and could be ordered against either party (Railway Act, s. 164(1); see Re Conger Lehigh Coal Co. Ltd. and the City of Toronto, [1934] O.R. 35 (H.C.J.), at pp. 43-44).

The 1981 amendments to the NEBA were inspired by the Law Reform Commission of Canada’s review, in 1975, of expropriation in the federal context in its Working Paper 9, Expropriation. This was expressly acknowledged by the Minister who introduced the amendments. The proposed legislation, he told Parliament, “substantially incorporates all the major recommendations of the Law Reform Commission of Canada expressed in its 1975 working paper” (House of Commons Debates, vol. VII, (1st Sess., 32nd Parl., March 6, 1981, at p. 8006).

One of the Commission’s recommendations was that owners not be precluded from receiving the compensation to which they were entitled by the financial burden of litigation. Ideally, said the Commission, expropriated owners should receive “full indemnity for all such costs” (p. 73). It also found that the Railway Act regime did not provide adequate compensation because “[b]y a quirk in the law, the word ‘costs’ in the Railway Act, as in many other acts, does not mean exactly what it says[; it] does not mean ‘full costs’” (p. 74).

Today, the principle of full indemnification appears explicitly in s. 75 of the NEBA, which provides, as I noted earlier, that a company “shall make full compensation . . . for all damage sustained” by the expropriated owner. Parliament adopted this more comprehensive approach to indemnification by broadening the language of s. 99(1) from “costs of the arbitration” to “all legal, appraisal and other costs determined by the Committee to have been reasonably incurred by that person in asserting that person’s claim for compensation”.

This amendment must be presumed to signify a clear and considered decision by Parliament to allow Arbitration Committees to exercise their full discretion in seeking to make expropriated owners whole (Sullivan, at pp. 579-82), and the historical context validates this presumption.

Moreover, the NEBA operates within the broader context of expropriation law, both federal and provincial. As early as 1949, this Court acknowledged the vulnerable position of expropriated owners. In Diggon-Hibben, Ltd. v. The King, 1949 CanLII 50 (S.C.C.), [1949] S.C.R. 712, at p. 715, Rand J. (Taschereau J. concurring) stated that no one should be “victimized in loss because of the accident that his land [is] required for public purposes”. In the same case, Estey J., citing with approval the earlier reasons of Rand J. in Irving Oil Co. Ltd. v. The King, [1946] S.C.R. 551, affirmed the right of an expropriated person under the relevant clause “to be made economically whole” (p. 717; see K. J. Boyd, Expropriation in Canada: A Practitioner’s Guide, (1988), at pp. 144-45).

More recently, in Toronto Area Transit Operating Authority v. Dell Holdings Inc., 1997 CanLII 400 (S.C.C.), [1997] 1 S.C.R. 32, at paras. 20-22, Cory J. (speaking for six of the seven-member panel) reaffirmed the principle of full compensation. Dealing there with Ontario’s Expropriations Act, R.S.O. 1990, c. E.26, Justice Cory held that the Act, a remedial statute, “should be read in a broad and purposive manner in order to comply with the aim of the Act to fully compensate a land owner whose property has been taken” (para. 23).

Like various provincial expropriation statutes, the NEBA is remedial and warrants an equally broad and liberal interpretation. To interpret it narrowly, as the respondent in this case suggests, would in practice transform its purpose of full compensation into an unkept legislative promise.

This case will surely have an effect on future arbitration cases under the National Energy Board Act as well as expropriation matters before provincial boards.  It confirms the principle of full compensation that must underlie the treatment of landowners in pipeline expropriation contexts.  It is not often that the Supreme Court of Canada chooses to examine landowner issues under the National Energy Board Act.  When it does, it can't help but have an effect on future cases.
Read the full decision at: Smith v. Alliance Pipelines.

Ontario puts hold on off-shore wind energy development pending further study

Renewable Energy Approval Requirements for Off-shore Wind Facilities - An Overview of the Proposed Approach

On June 25 2010, the Ministry of the Environment (MOE) posted a policy proposal on the Environmental Bill of Rights Registry that outlined a proposed approach for developing regulatory requirements for offshore wind facilities. This policy proposal outlined considerations to provide clear, up-front provincial rules for offshore wind facilities, including a proposed five kilometre shoreline exclusion zone for offshore turbines from the water’s edge of the Great Lakes, other inland lakes (e.g. Lake St. Clair), and major islands.

In addition to MOE’s June 2010 posting, on August 18, 2010 the Ministry of Natural Resources (MNR) posted a policy proposal entitled “Offshore Windpower: Consideration of Additional Areas to be Removed from Future Development” (Environmental Registry posting # 011-0907). This policy proposal sought feedback on where, when and how Crown land should be made available for offshore wind facilities. The Decision Notice for the MNR’s policy proposal can be viewed using the link on the right of this notice.

In light of the comments received in response to MOE and MNR's postings and in particular the identified need for further study, Ontario is not proceeding with any development of offshore wind projects until the necessary scientific research is completed and an adequately informed policy framework can be developed. An offshore wind project is defined as any project classified under the Renewable Energy Approval regulation (O.Reg. 359/09) as a Class 5 wind facility.

Offshore wind power development in ocean environments is relatively well-understood technology and has been successfully deployed in several locations in Europe. By contrast, offshore wind power development in freshwater lakes is relatively new and presents technical challenges that do not exist in a saltwater environment, such as the need to manage potential impacts to drinking water and the effects of ice build-up on support structures. A recently constructed offshore wind pilot project is currently operating in Lake Vänern, a freshwater lake in Sweden. A second pilot project has been proposed in the State of Ohio in Lake Erie near Cleveland. Ontario will monitor these projects and the resulting knowledge gained from their construction and operation. Ontario will work with our US neighbours to undertake collaborative research and study that will ensure that any future projects are designed and implemented in a manner that is protective of human health, cultural heritage and the environment.

A bi-national collaborative approach to conducting research would leverage resources and expertise from within the entire Great Lakes region to focus on the scientific and technical challenges of developing offshore wind power in a freshwater environment. These challenges include a better understanding of how noise behaves over water and ice, foundation designs, water quality impacts, and impacts to shoreline ecosystems and wildlife.

The Government of Ontario will be implementing this direction through a coordinated multi-agency approach. During this time, applications for offshore wind projects in the Feed-In-Tariff program will no longer be accepted and current applications will be cancelled; the MNR will be cancelling all existing Crown land applications for offshore wind development that do not have a Feed-In-Tariff contract, including those with Applicant of Record status. MNR will not be accepting any new Crown land applications for offshore wind development. When there is greater scientific certainty, consideration of offshore wind development will resume.

Going forward, members of the public and all interested parties will have an opportunity to review and comment through the Environmental Registry on proposed technical, environmental and other requirements as they are developed . It is anticipated that once offshore wind-specific requirements are fully developed they would be included in regulation, policy and guidelines.

Public Consultation on the proposal for this decision was provided for 74 Days, from June 25, 2010 to September 07, 2010.

As a result of public consultation on the proposal, the Ministry received a total of 1403 comments: 206 comments were received in writing and 1197 were received online.

In response to its posting, the MOE received over 1,400 submissions which included comments from individual members of the public, community-based associations, environmental non-governmental organizations, municipalities, energy-developers and Aboriginal communities. A wide range of views was expressed. A majority of respondents expressed concern either that the proposed 5 km exclusion zone may not be far enough from the shoreline to be adequately protective, or that there were significant areas of scientific uncertainty resulting in the need for further study by provincial ministries and the Federal government. Considerations for further study include measures for protecting drinking water, transportation and navigation, and potential effects on fish and wildlife and shoreline ecosystems. The remaining respondents were either supportive of the proposed policy direction or expressed concern that the proposed 5 km exclusion zone may be too far from the shoreline and would result in Ontario foregoing significant opportunity to harvest clean energy.

Appeal Tribunal rules that drainage engineer didn't favour downstream mayor

The McWilliam-Campbell Drain is a closed tile drain located on Lots 6 to 8 Broken Front Concession A in the Municipality of Dutton/Dunwich. The drain was originally constructed under the Drainage Act in 1965. In its existing state, the tile is comprised of approximately 525 ft (160 m) of open ditch and 2,775 ft (845 m) of closed tile ranging in size from 6" (150 mm) to 12" (300 mm) diameter. The drain outlets to the Thames River and serves a watershed of approximately 44 hectares (109 acres) on both sides of Coyne Road. The lands within the watershed are predominantly agricultural with some wooded areas.

Robert and Susan McWilliam appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal under Section 48(1) and 54(1) of the Drainage Act (The "Act") from the Engineer's Report (the "Report") dated July 22, 2010, and from a decision of the Court of Revision dated September 1, 2010. John M. Spriet, (the "Engineer") a professional engineer with the firm Spriet Associates Limited was appointed under Section 78 of the Act to prepare the Report.  The work proposed by the Engineer's Report encompasses the replacement of the lower portion of the existing 12" (300 mm) diameter tile with a new 24" (600 mm) tile, including a new crossing at Coyne Road and three new catch basins. The Engineer's estimated cost of the proposed works is $44,000 which is assessed against two affected landowners and Coyne Road.

Susan McWilliam testified that she and her husband believe the Engineer favoured the downstream landowner throughout the process, who is also the Mayor for the Municipality of Dutton/Dunwich. She said that they do not dispute that the existing drain tile has problems and that they need an outlet for their lands. However, she stated that their issues have not been addressed and that the Engineer ignored their questions and concerns throughout the process. She said that the 24" (600 mm) tile proposed by the Engineer will not fix the problems on the drain and she believes that the costs are too high relative to the benefit they will receive. She added that the Engineer's Report does not provide evidence that the drainage issues will be resolved and that costly maintenance repairs will persist even after construction of the larger tile. In further testimony directly from Robert McWilliam, he explained that their share of the costs to repair the existing 12" (300 mm) tile drain have been on average about $600 per year. He reasoned that since the new tile drain is larger, the yearly cost to maintain the new tile will also increase. Additionally, he said that they would have to make payments of $2,500 per year for the construction of the larger tile. He complained that this would be a huge burden on them.

The Tribunal found no evidence to substantiate the Appellants' claim that the Engineer favoured the downstream landowner, Cameron and Anne Marie McWilliam. The Tribunal also found no evidence that the downstream landowner, Cameron McWilliam, who is also the current Mayor for the Municipality of Dutton Dunwich, knowingly influenced the Drainage Act process. Accordingly, the Tribunal was satisfied that the Engineer's Report is a "true report" pursuant to Section 11 of the Act.  The Tribunal also found no evidence to substantiate the Appellants' claim that the Engineer did not carry out a proper investigation of the condition of the existing tile drain.

In view of the evidence, the Tribunal found that the work proposed by the Engineer's Report was reasonable under the circumstances and declined to order any amendments.  However, the Tribunal did find that the Appellants were justified in their claim that the Assessment for Maintenance is unfair.  The Tribunal did not accept the Engineer's explanation as to why his Assessments for Maintenance significantly deviated from his Assessments for Construction.  The Tribunal therefore ordered changes to the Assessments for Maintenance.

Read the decision at: McWilliam Campbell Drain.

Bill C-474 defeated 178 to 98 in House of Commons

Bill C-474 was defeated by a vote of 178 to 98 this evening in the House of Commons.  The private member's bill, introduced by NDP MP and Agriculture Critic Alex Atamanenko, would have restricted the approval of GM-crops in Canada.  The government would have been required to review possible export implications before granting approval.  Without support from either the Conservatives or the Liberals, the bill was doomed in the vote. 

GMO exportability bill back in Commons Wednesday | Grain News

A vote is expected today on a private members' bill to block federal approval of GMO seeds. The bill is not expected to become law as neither the Conservative government nor the Liberals are expected to support it.

Read the Grain News article on the bill at: GMO exportability bill back in Commons Wednesday.

CFIA loses bid for judicial review of tagging decision

The Federal Court of Appeal has rejected an application by the Canadian Food Inspection Agency for judicial review of a decision by the Canadian Agricultural Review Tribunal made last January.  In the decision, Dr. Don Buckingham of the Tribunal determined that CFIA had failed to prove on a balance of proabilities that lambs which arrived untagged after transport from Saskatchewan to Ontario had been untagged when they left the farm. 

The Federal Court of Appeal's decision was simple: "Based on the evidence before it, the Tribunal was entitled to make these factual findings. Given the deferential standard of review of reasonableness that applies in this case, there is no basis upon which we can set aside these factual findings. Therefore, the Tribunal’s conclusion that there was no violation must stand."

The decision itself in this case is not extraordinary.  However, it does raise practical questions about how farmers can respond to CFIA allegations related to untagged animals.  Note that the appeal took place in Toronto.  The farmer is located in Saskatchewan.  While it is likely that the hearing would have taken place in Saskatchewan had the farmer participated in the appeal (which he did not), one can question whether it would ever be worthwhile for a farmer to expend resources to respond to an appeal in a case involving a $500 penalty.  Having won at the Tribunal, at his own cost, could the farmer be expected to pay more money to fight a CFIA appeal of the decision?

Read the Federal Court of Appeal decision at: Canada (Attorney General) v. Rosemont Livestock.

Read the original decision of the Canadian Agricultural Review Tribunal at: Rosemont Livestock v. Canada (Canadian Food Inspection Agency), 2010 CART 004.

Caveat Emptor - 1978 John Deere 1830 "in very good condition"

In September 2008, the Defendant had advertised for sale in the Western Producer a 1978, 1830 John Deere tractor, indicating, among other things that it was in very good condition. The Plaintiff contacted the Defendant by telephone, who confirmed that it was in good condition. The parties arranged for the Plaintiff to attend at the Defendant’s place to examine the tractor. Having done so, the parties negotiated a sale of the tractor, on September 29, 2008, for the sum of $8,800.00. No written contract or bill of sale was signed by the parties.

In a civil action in the Provincial Court of Saskatchewan, the Plaintiff claimed that between the date of purchase and when these proceedings were commenced, roughly twenty-one months later, the tractor had very light service. In the interim, however, the Plaintiff had been required to spend $593.53 on the hydraulic cylinders. As well, in the spring of 2010, the tractor had been examined by a mechanic who confirmed that the rear of the engine block was cracked, and had been re-welded. As well there was a hole in the side of the engine block that had been patched by pieces of metal and covered up with silicone. Further, the steering mechanism was such that it was too dangerous to drive.

Therefore the Plaintiff claimed that the Defendant had engaged in misrepresentation of the mechanical condition of the tractor at the material time. He sought recission of the contract (cancellation), with a return to him of the purchase price and related expenses.

The Plaintiff, however, was unable to prove that the Defendant had misrepresented the state of the tractor at the time of purchase.  The Plaintiff did not call the mechanic who had examined the tractor as a witness.  On that basis, the Court declined to rescind the contract and found that the principle of caveat emptor (buyer beware) also applied.

Read the decision at: Suwinski v. Wiebe.

Ontario Energy Board releases latest version of guidelines for pipeline construction in Ontario

The Ontario Energy Board has released the 6th edition of its guidelines concerning the construction and operation of energy pipelines in Ontario:
Environmental Guidelines for the Location, Construction and Operation of Hydrocarbon Pipelines and Facilities in Ontario.

Pipeline Companies plan to remove substantially less than 20% of pipelines on abandonment

In the ongoing NEB LMCI process looking at funding for future pipeline abandonment costs, the Canadian Energy Pipeline Association (CEPA), the industry group representing pipeline companies, has told the NEB point-blank that its companies have no intention of removing the 20% of large diameter pipelines proposed by the NEB in its base case:

... in canvassing the NEB Group 1 member companies that are CEPA members, each Group 1 member company is planning on filing a pipeline specific application for each asset as opposed to using the Base Case that was set out by the NEB in its December 21, 2010 Decision. That Decision re-affirmed the abandon-in-place versus removal ratio of 80% and 20% respectively for certain land usage categories.. Based on the principled approach whereby each specific land usage has an associated optimal method of abandonment, most, if not all CEPA member companies will be filing cost estimates that reflect substantially less removal of pipe than would be indicated by the Board’s Base Case Assumptions. CEPA has also heard from Group 2 companies indicating that if Group 1 member companies do not plan on filing with the Base Case assumptions, then it would not be appropriate for them to use the Base Case either. 

Read CEPA's letter at: CEPA to NEB January 12 2011.

NEB Participant Funding - What landowners can expect

The National Energy Board has recently released the report of its Funding Review Committee on the allocation of $175,000 made available for participants in the Vantage Pipeline Project hearing.  Six First Nations groups applied for more than $332,000 in funding based on budgets for participation in the approvals process.  In spite of that request, only $175,000 was made available by the Chief Operating Officer of the Board, Pradeep Khare. 

The NEB's Funding Review Committee (FRC) took the $175,000 and divided it up among the six applicants for funding, making a recommendation on the allocation to Khare.  The FRC addresses in its report the question of how the groups are to participate with less than was sought in their budgets - the answer from the NEB is that they will need to focus on specific issues and/or work together to minimize costs.

It will be interesting to see what happens when private landowners become involved in project funding applications as well.  Will additional funding be made available if there are more applicants?  Or will the pie simply be cut up into smaller pieces?  Clearly, the participant funding program created by the NEB and the federal government will not protect landowners from the costs associated with protecting their rights in pipeline and other project applications.  Despite the program, they will continue to bear the costs of energy projects on their lands.

Read the NEB's Funding Report at: Funding Review Committee’s Report.

Saskatchewan lawsuit against CWB moved to Manitoba

In December, I wrote about a Saskatchewan farm, Hudye Farms of Norquay, SK, suing the Canadian Wheat Board (CWB) for loss of income, breach of fiduciary duty and defamation: SK farmer sues CWB.  In response to the suit, the CWB made a motion to the Court of Queen's Bench for the following relief:

1. Challenging the Saskatchewan Court’s territorial competence over the Canadian Wheat Board or these proceedings under The Court Jurisdiction and Proceedings Transfer Act, S.S. 1997, c. C-41.1 as am. (“CJPTA”);

2. In the alternative, the defendant Canadian Wheat Board asked the court to decline to exercise any territorial competence pursuant to Rule 99 of the Queen’s Bench Rules and ss. 10(1) of the CJPTA on the basis that the courts of Manitoba are a more appropriate forum in which to hear these proceedings;

3. An order pursuant to ss. 12(1) of the CJPTA transferring the proceedings to the courts of Manitoba; and

4. For costs on a solicitor client basis.

The plaintiffs and the CWB agreed that they were contractually bound as producer and marketing board. Much of the argument and dialogue therefore focused around defining the contract, the role of Cargill Limited as the producer’s agent, and, the effect of a term in the contract which provides that the law of Manitoba will apply to any disputes and that the courts of Manitoba shall have exclusive jurisdiction over any proceedings arising out of the commercial contract and relations created by the contract.
The Court was left to decide whether the Saskatchewan action should be stayed because the proper forum for the lawsuit was Manitoba:

It is undisputed law that Hudye Farms Inc. bears the onus and burden of proving strong cause as to why a stay should be denied the Canadian Wheat Board in the face of the forum and choice of law clause. The language of the forum and law selection clause is clear and unambiguous. Refer again to the quotation from E.K. Motors at paragraph 13, quoted earlier. Then consider further Barclay J.’s three step analysis in the Willick decision also quoted earlier. If the Manitoba courts have jurisdiction over these disputes/proceedings, should this Saskatchewan action be struck, stayed or transferred to the Manitoba courts? If Manitoba courts do not have exclusive jurisdiction, should this action be transferred to the Manitoba courts pursuant to the CJPTA?

In the end, the Court found that the proper forum based on the contract was Manitoba, and so an order has been made transferring the case to the Manitoba courts.

Read the decision at: Hudye Farms Inc. v. Canadian Wheat Board.

Should corn burning stoves be sold in Saskatchewan?

A Saskatchewan man has lost his Provincial Court claim for damages related to a hybrid wood pellet/corn stove he purchased from the defendant in the case.  After only one week of use, James Turnbull began to experience problems with the stove.  It was determined that the problems arose because Turnbull was burning "grain", rather than wood pellets or corn.  Turnbull argued that corn stoves shouldn't be sold in Saskatchewan, since it's not a corn growing province.  The Court ruled that burning grain in the stove was a misuse of the stove and, therefore, Turnbull was not entitled to any damages.

Read the decision at: Turnbull v. Aldous.