NEB rules in favour of Kinder Morgan Trans Mountain - City of Burnaby prohibited from interfering or obstructing destruction of park land

In a decision dated October 23, 2014, the National Energy Board (NEB) has ruled that: 1) it has the jurisdiction to determine that City of Burnaby by-laws are inoperative or inapplicable to the extent that they conflict with or impair the exercise of Trans Mountain's powers under paragraph 73(a) of the NEB Act; 2) the doctrine of federal paramountcy, or alternatively, interjurisdictional immunity renders those by-laws inapplicable or inoperative for the purposes of Trans Mountain's exercise of its powers under paragraph 73(a) of the NEB Act; and, 3) the NEB has authority under subsection 13(b) of the NEB Act to issue an order against the City of Burnaby.

The NEB has issued that order, which prohibits Burnaby from interfering with or obstructing Trans Mountain and its staff, representatives, contractors, or agents from exercising Trans Mountain's powers under paragraph 73(a) of the NEB Act to enter into an on lands owned by or controlled by the City of Burnaby (including park lands and conservation lands) to complete surveys and examinations.  The NEB then specifies that there is a "broad range of necessary activities and arrangements that must be performed in completing the surveys and examinations", including but not limited to "associated brush clearing, tree removal, movement of equipment, traffic management and bore hole drilling necessary to complete the geotechnical site investigations."

The NEB also ordered that Burnaby could not order or authorize its own personnel to be present within any "safety zone" set by Trans Mountain during the survey and examination work.

NEB decides that Trans Mountain - Burnaby dispute raises constitutional question

About a month ago, I posted about a fight going on before the National Energy Board between Trans Mountain Pipeline (Kinder Morgan) and the City of Burnaby with respect to property access for the proposed Trans Mountain Pipeline Expansion Project.  At that time, the NEB sided with Trans Mountain in rejecting a request by Burnaby for answers to constitutional questions including whether a company's right to survey under Section 73 of the National Energy Board Act (NEB Act) could displace a municipality's by-laws.  The NEB said that Trans Mountain had not made any application for an order requiring Burnaby to allow access to City lands. 

My guess a month ago was that Trans Mountain would have to bring an application for access, and it has.  Now the NEB says that the constitutional question must be answered and has ordered that Trans Mountain provide the Notice of a Constitutional Question to be served on the attorneys-general of Canada and the provinces and territories.  The decision can be accessed at: Ruling No. 32.

Although the NEB continues to maintain its interpretation of Section 73 (i.e. that companies have a right to enter upon lands and complete surveys and examinations), it explains why the Burnaby situation raises a constitutional question:

The Board accepts that it has the authority to consider constitutional questions as they relate to its enabling legislation, pursuant to section 12. The Board can refuse to apply provisions within its enabling legislation if the Board determines that those provisions are contrary to constitutional law. However, this is not the relief requested by Trans Mountain from the Board, nor has Burnaby argued in this instance that the provisions of the NEB Act are unconstitutional.

While the draft order proposed by Trans Mountain does not specifically request that the Board order Burnaby to stop enforcing its by-laws, it is clear from the above quote that this is the desired effect of such an order. This may require the Board to find, either directly or indirectly, that, on the facts before it, legislation or by-laws enacted by another level of government are inapplicable to Trans Mountain and that, consequently, that government should be forbidden by the Board to take any actions to enforce those laws. In the Board’s view, this clearly raises a constitutional question.

This is a case to keep your eyes on.  Should NEB-regulated pipeline companies have a right to run roughshod over pre-existing municipal by-laws?

City of Burnaby challenges NEB on access rights of companies for pre-approval project work - NEB sides with company

The National Energy Board (NEB) is considering an application by Trans Mountain Pipeline ULC (Kinder Morgan) to access lands owned by or within the authority of the City of Burnaby for preliminary work related to the proposed Trans Mountain Expansion Project.  The work includes land surveying and related studies that Trans Mountain wishes to conduct in anticipation of the eventual approval of its project.  In particuar, the work relates to a new proposed pipeline route that was not inclued in Trans Mountain's original application for approval to the NEB. 

Burnaby has so far delayed in deciding on Trans Mountain's request for access over outstanding concerns about environmental protection, environmental remediation, safety and inadequate notice to owners.  A number of properties affected are located in conservation areas under the authority of the City, and the activities that may be carried out on lands dedicated for park and recreation use are extremely limited.  In other words, the proposed access and use of the lands being sought by Trans Mountain are in conflict with municipal by-laws.

Trans Mountain applied for access under Section 73(a) of the NEB Act, which sets out that the powers of a "company" include the power to enter onto land "lying in the intended route of its pipeline, and make surveys, examinations or other necessary arrangements on the land for fixing the site of the pipeline."  In past instances involving private landowners, the NEB has readily granted access to pipeline companies in spite of landowner objections and without the company having served a notice under Section 87 of the NEB Act.  Section 87 requires that a company serve a notice to landowners where the company requires their land for a pipeline.  The notice then provides protection to the landowner for any costs incurred in dealing with the proposed pipeline if the project is later withdrawn. 

Not surprisingly, the NEB has also ruled that the company can serve the Section 87 notice whenever it wants - there is no obligation on it to serve the notice prior to entering on lands pursuant to Section 83(a) even though the company obviously knows by that point that it "may require" the lands in question.

Burnaby challenged the NEB on Section 83(a) on a different basis.  First, Burnaby questioned whether a company may even apply for access under Section 83(a), arguing that the section does not provide for making such an application.  Second, Burnaby argued that Section 73 does not override provincial law or muncipal by-laws.  Burnaby submitted, "There is room for both the operation of Section 73(a) of the NEB Act and Burnaby's by-laws, if access to Burnaby lands is granted subject to Burnaby reviewing the Request and making a determination. Trans Mountain, for instance, would still be able to access the land to survey and examine, even if such access was subject to conditions imposed by Burnaby to protect the purpose for which the property was reserved [i.e. as park or conservation land], pursuant to its by-laws."

Burnaby also argued that Section 73(a) does not authorize the intentional disturbance of land as proposed by Trans Mountain, including the installation of infrastructure or facilities. 

A notice of constitutional question was filed with the NEB and the Attorneys General of Canada and the provinces and territories.  The specific issues raised were:

• Section 73(a) of the NEB Act does not empower the NEB to make orders that override provincial and municipal jurisdiction pursuant to Section 92(8) of the Constitution Act, 1867; and,
• In so far as Section 73(a) of the NEB Act purports to empower a company to enter land, Section 73(a) does not override municipal jurisdiction or by-laws enacted pursuant to the Community Charter, S.B.C. 2003, c. 26 and the Municipal Act, S.B.C. 1958, c. 32, as amended.  Further, or in the alternative, to the extent that they are able, Section 73(a) of the NEB Act and by-laws enacted pursuant to the Community Charter and the Municipal Act, as amended, must operate concurrently.

In a ruling made on August 19, the NEB rejected the submissions made by Burnaby.  The NEB ruled that, pursuant to Section 73(a), Trans Mountain has the power to enter into and on Burnaby land without Burnaby's agreement and Trans Mountain does not require a temporary access order for this purpose.  The NEB says that the Trans Mountain application was not one requesting temporary access; the NEB says the application was one only requesting confirmation of Trans Mountain's rights under the Act, which the NEB has now given.

On that basis, the NEB also found that the Notice of Constitutional Question was misdirected, saying that Trans Mountain did not apply for access.  The NEB added that it did not find that "co-operative federalism" should apply to or influence the powers of Trans Mountain under Section 73(a) of the NEB Act.

Since this decision was made, Burnaby's mayor has said that the City will continue to enforce its by-laws prohibiting access to Burnaby mountain.  We can speculate on what will happen if the City continues to hold out against Trans Mountain.  Trans Mountain would likely have to apply to the NEB for an access order (the application the NEB says Trans Mountain didn't already make).  Assuming the order would be granted, Burnaby could appeal the decision in court.  It would be helpful to have some judicial consideration of the NEB's interpretation of Section 83.  Individual landowners are generally in no position to fight this issue - the City of Burnaby may be in that position.

Trans Mountain Pipeline LP ordered to pay $250,000 after oil spill

The Trans Mountain Pipeline is 1,050 kilometres in length and has a diameter of 610 millimetres, which is about 24 inches, for most of that length. The Trans Mountain Pipeline can transport approximately 300,000 barrels of oil per day and can transport different products in batches rather than being limited to transporting one product type at a time.  It has been in operation since 1953 and crosses the provincial boundary between Alberta and British Columbia.  Since it is an interprovincial pipeline, it is regulated pursuant to the federal National Energy Board Act and the National Energy Board Pipeline Crossing Regulations and is subject to the oversight of the NEB.

Trans Mountain has recently been ordered to pay $250,000 after the pipeline was damaged during excavation work, resulting in an oil spill.  A civil engineering company working for the City of Burnaby applied to Trans Mountain under Section 112 of the NEB Act for permission to excavate near the pipeline to complete works for a City storm sewer project.  A crossing agreement was signed and then the engineering firm retained a construction company to carry out the work.  During construction, no preconstruction meeting was scheduled or held between the construction company and Kinder Morgan, the pipeline company acting as agent for Trans Mountain. 

The Foreman for the construction company reviewed a services map in conjunction with the project plans and determined that the planned construction work would conflict with the location of the pipeline.  Kinder Morgan was advised of the potential conflict and requested to attend to locate and mark the pipeline in the area of the discrepancy.  An inspector attended and located the pipeline, the location being consistent with the newly provided service map and inconsistent with the project plans prepared by the engineering firm and approved by Kinder Morgan. 

Eventually, construction was being carried out on the site without the presence of an inspector from the pipeline company.  No complete location of the pipeline was requested and no preconstruction meeting was held.  Later, an excavator operator was widening the trench for the installation of an additional manhole when he pierced the pipeline.  Pursuant to this training, the excavator operator attempted to cover the puncture in the pipe with the bucket of his excavator in order to contain the escape of oil.  This led to a second puncture. 

In handing down its sentence, the Court noted:

There was no benefit which flowed to any of the defendants from the pollution here. The spill was, on the contrary, an accident which could and should have been avoided. Culpability for each of the defendants is at the low end of the spectrum. A combination of small errors by each party created the event. There were misunderstandings, there were erroneous assumptions, but there was not even what might be referred to as real negligence and there was certainly no deliberate wrongdoing. Care was taken, but not enough care.

The Court imposed fines of $1,000 on each of the three companies involved - the engineering firm, the construction company and Trans Mountain.  In addition, each company was ordered to pay $149,000 to the Habitat Conservation Trust Foundation.  Trans Mountain was ordered to pay another $100,000 to the B.C. Common Ground Alliance for the purpose of "identifying parties engaged in construction or excavation, organizing and planning DigSafe BC! workshops, and raising awareness about damage prevention for those undertaking excavations near underground utilities."

Read the sentencing decision at: R. v. B. Cusano Contracting Inc. et al.