Prime Minister Justin Trudeau, left, BC Premier John Horgan

Provincial or municipal laws can co-exist with Canadian laws, but they cannot “frustrate” federal approvals of Trans Mountain Expansion

Cue the pipeline hysteria! Did you know Canada is in danger of becoming a “petro-tyranny”? Or that BC may have to turn to the international community if the Canadian government tries to enforce Canadian laws? The Trudeau Liberals have really riled opponents of Trans Mountain Expansion, who insist BC’s constitutional right to regulate the project is equal to that of the national government. Is this the case? The only legal ruling we have on this specific project suggests it is not.

Warning: Boring legal language ahead. If you’ve already set your hair on fire, this column is probably not for you. If, however, you’d like to know what a superior court actually said about the legal issues at the heart of what is rapidly becoming a constitutional crisis, then plough on.

First, a bit of background.

The National Energy Board Act of 1959 established the federal energy regulator as a superior court whose decisions can only be appealed to the Federal Court of Appeal. This is why the NEB can rule on the application of Sect. 92.10(a), which gives the federal government authority over “works” (like pipelines) that cross provincial boundaries.

On October 27, Trans Mountain filed a motion asking for “relief” from the City of Burnaby’s tree cutting permits, which it claimed were being unreasonably delayed. The NEB issued its ruling on Dec. 6 and explained that decision in document A89360-1 NEB, which considered two issues.

One, the issue of the permits, on which it sided with the company.

Two, the constitutional question of jurisdiction, the core principle being fought over by BC and the Trudeau government.

Burnaby submitted a brief arguing for co-operative federalism:

[P]rovincial law has a role to play in regulating the project and “the operation of the laws of both levels of government should be favored where possible. Burnaby argued that, while a provincial authority cannot refuse to allow a federal undertaking to proceed, it does have the jurisdiction to impose conditions. It submitted that granting the relief sought would leave local matters unprotected and would effectively require the Board to interpose itself as a municipal regulator…It argued that a mere overlap or duplication of regulation does not amount to a conflict, even if the provincial law is more restrictive than the federal law. Burnaby argued that it cannot be said that conditions that require replacement or compensation for lost trees or streams, or obligations to meet fencing and parking rules, go to the ‘core’ of a federal undertaking.

The “core of a federal undertaking” point is key here.

Under the constitutional principle of “paramountcy,” which Burnaby argued did not apply to the issue under consideration, a junior government cannot impair or frustrate the intention of the senior government (Canada).

By this the court means that since the Canadian government approved the Kinder Morgan pipeline in 2016, and the project is considered in the national interest (it affects and has an impact on Canadians outside BC), then BC and Burnaby can’t use their laws and bylaws to cause the project to not be built, including imposing bureaucratic delays that caused Kinder Morgan to quit the project because of financial losses.

When federal and provincial laws conflict, federal law triumphs.

While British Columbia conceded paramountcy could apply, it argued that the “standard is high” and the doctrine should be applied with restraint:

It noted that, if provincial and federal laws can generally function without operational conflict, they should be permitted to do so…British Columbia argued that it is premature to make a finding of paramountcy because there is no operational conflict between the NEB Act and the bylaws before Burnaby makes a decision, or rejects the permitting applications; a position that was similarly argued by Burnaby.

Here’s how the NEB ruled on the issue co-operative federalism:

The Board agrees with British Columbia’ submission that “[t]oday’s constitutional landscape is painted with the brush of cooperative federalism.” The Board accepts that the preferred approach is to allow provincial and federal laws to both function where possible. It is important, and in the interest of cooperative federalism, that validly enacted provincial and municipal laws are respected such that matters of local concern are understood and addressed where possible in relation to federal undertakings.

However, it must also be said that the Project, as an interprovincial undertaking of which the Terminal Work is part, has been held to be in the overall Canadian public interest under the federal NEB Act. The public interest that was assessed is inclusive of all Canadians, with national, regional, and local benefits and burdens all having been considered. The Board agrees with Saskatchewan’s submission that it would be contrary to a basic principle of federalism (that the federal jurisdiction takes into account the interests of all Canadians) if one province, or a
single municipality of one province, could frustrate the construction of an interprovincial pipeline.

The NEB went on discuss whether it was theoretically possibly for Burnaby bylaws to co-exist with the federal approval of the pipeline, concluding that it was.

That is, if the City operated in good faith and processed the permits in a reasonable fashion, “there are no obvious problems with the imposition of Burnaby’s Zoning and/or Tree Bylaws on the Board-regulated Project.”

The problem arose when Burnaby did not process the company’s applications “in a timely and reasonable manner.”

After assessing a mountain of evidence – e.g. correspondence and emails between the parties – the NEB concluded that Burnaby bureaucrats had no interest in acting reasonably, despite the efforts of the company.

Even viewed with restraint, the unreasonable amount of time it has taken Burnaby to process the PPA applications and Tree Cutting Permits is having a sufficiently serious effect on when the Terminal Work which is part of the Project, can be carried out…the Burnaby permitting process is the cause of, or a contributing or exacerbating factor to, construction delays.

Burnaby and BC requested leave to appeal the NEB ruling to the Federal Court of Appeal. That request was denied by the court on March 26.

Burnaby Mayor Derek Corrigan says he will request leave to appeal to the Supreme Court of Canada, but UBC law professor Margot Young says the chances it will be heard are very slim.

Therefore, as of today, the NEB ruling stands.

And what applies to the City of Burnaby also applies to BC because municipalities have no standing in the Canadian Constitution and are considered “creatures of the Province.”

This is the legal landscape BC faces with respect to Trans Mountain Expansion: It can pass a new law or apply an existing law to the pipeline project, but that law or regulation cannot unreasonably delay construction.

If it does, the court has ruled it is a frustration of the “federal purpose.”

Readers can decide for themselves if the NEB’s ruling is reasonable.

But the idea that asking the Canadian government to enforce a ruling by a federally-mandated court on behalf of a Texas-based pipeline company willing to invest $8 billion in the Canadian economy is flirting with tyranny or requires United Nations intervention is preposterous.

When critics have lost the legal argument, outrageous hyperbole appears to be the only option remaining.