NEB finds that City of Burnaby’s permit review process was “unclear, inefficient, and uncoordinated”

Anyone who thinks the City of Burnaby is hard done by because the National Energy Board recently agreed to grant Trans Mountain Expansion permits it couldn’t get from the lower mainland BC municipality should read the regulator’s ruling. The City appears to have acted in such bad faith that perhaps it’s time for the NEB to bypass the local government altogether and leave all permit applications to the feds.

Under the Canadian Constitution, the Canadian government has exclusive jurisdiction over inter-provincial pipelines, as I’ve explained many times in past columns. Provincial and municipal governments regulate some areas that are ancillary to federal authority (e.g. brush clearing along pipeline right of ways), but they can do nothing that frustrates or impairs the senior government’s authority.

Last week, the National Energy Board set up a process to review disputes between Kinder Morgan Canada (TMX’s parent company), BC and local governments over issuing permits in a timely manner.

Kinder Morgan says the junior governments are dragging their feet. The City of Burnaby, the municipality currently in the spotlight on this issue, adamantly denies the charge. The problem with Burnaby’s position is that the City and its colourful mayor, Derek Corrigan, have fought the project every step of the way, including taking the company to court.

A reasonable person watching the mayor fulminate against TMX on this 22-minute video produced by the City of Burnaby and posted to Youtube on Thursday might very well conclude that Corrigan and his bureaucrats are unalterably opposed and unlikely to be doing the Texas pipeline giant any favours on permit applications.

It’s certainly the conclusion the national regulator has arrived at.

And the NEB has some history on its side.

As the regulator pointed out in the Jan. 18 ruling, Burnaby tried to prevent Kinder Morgan from undertaking studies on Burnaby Mountain in 2014: “…the Board found that Burnaby was attempting to use certain of its bylaws to block access by Trans Mountain to conduct the studies at issue. On constitutional grounds, the Board ordered Burnaby to allow Trans Mountain temporary access to city lands to conduct its studies.”

Burnaby then appealed the NEB decision to the BC Supreme Court and BC Court of Appeals.

Does that sound like a city government ready to treat Kinder Morgan fairly the second time around?

As part of the review leading up to the latest ruling, the NEB looked at “the significant amount of emails, correspondence, and meeting minutes that Trans Mountain and Burnaby filed as evidence,” as well as a number of affidavits, including one from economist and notorious anti-pipeline campaigner Robyn Allan.

The two parties agreed to work through the various issues within a technical working group that began meeting in late 2016, and then as part of the Preliminary Plan Approval process, which began in the spring of 2017.

The board concluded that while Kinder Morgan expected the working group would be the “primary forum” in which its “applications would be reviewed and guidance would be given,” and the City gave some assurances to that effect early on, Burnaby was engaging in bad faith.

“Although Burnaby made some statements to the effect that the TWG could be used to work through permitting issues, there was no clear commitment on Burnaby’s part that this would be the case,” the NEB wrote, noting that senior City staff regularly attended the meetings.

After months of effort and no progress, Kinder Morgan filed the necessary preliminary plan approvals in June. Judging from the NEB ruling, the next four or five months was characterized by City bumbling and miscommunication.

Bureaucrats failed – or refused – to give the company clear guidance on its four applications. Explanations appear to have been contradictory in some instances, muddy in other others, and the entire process was a fiasco from beginning to end.

“The Board is not persuaded that the evidence supports Burnaby’s argument that Trans Mountain never tried to comply with its PPA application process and was setting it up for failure. On the contrary, the Board finds that Trans Mountain’s reasonable requests to allow it to reach PPA application compliance in an efficient manner were continually rebuffed by Burnaby,” the NEB wrote.

“Viewed as a whole, Burnaby’s review process was unclear, inefficient, and uncoordinated…While there was an earnest effort on Trans Mountain’s part to resolve matters, the Board is of the  view that a similar effort was largely absent on Burnaby’s part,” the regulator concluded.

Last month, Corrigan said, “City staff have been reviewing Kinder Morgan’s construction applications in good faith…”

Referring to the City’s reluctance – or refusal, depending on your reading of the ruling – to arrange meetings with Kinder Morgan so that permit issues could be discussed and resolved, the board found “the position taken by Burnaby to be disingenuous.”

Disingenuous, as in not sincere.

The City couldn’t logically have been “acting in good faith” and “disingenuous” at the same time.

Is the Mayor lying? You be the judge.

But it’s not hard to see why Kinder Morgan was frustrated and applied to the NEB to issue the permits, which the regulator has the authority to do under the National Energy Board Act.

An important point to keep in mind is that even though the NEB can grant permits in the place of provincial and local governments, that doesn’t let Kinder Morgan off the hook for meeting the permit conditions.

“While the Project has been determined to be in the public interest, Trans Mountain is still required to comply with applicable provincial and municipal laws. Trans Mountain is also expected to exercise good Project planning and allow sufficient time to properly engage provinces and municipalities,” the NEB said in a press release on Friday.

If the City bylaw requirements are going to be met even if issued by the NEB, why not let the NEB review all municipal permits application for the Trans Mountain Expansion project?

Based upon the evidence in the Jan. 18 ruling, the City of Burnaby isn’t willing to provide a fair and expeditious review process.

Ed. note: Readers have pointed out that I have used “bad faith” incorrectly in this column and they’re partly right. The NEB specifically said Burnaby did not act in bad faith, which in the legal sense means deliberately being dishonest about fulfilling a contractual duty. I used the phrase as a counterpoint to Mayor Corrigan, who publicly said Burnaby was acting in good faith, which in the context of his comments I took to mean the non-legal definition, being sincere. From that point of view, based upon the critical comments in the NEB ruling, a case can be made that Corrigan is being insincere. That said, I apologize for any confusion caused by my several incorrect use of “bad faith.”