The British Columbia Court of Appeal decided unanimously that amendments proposed by British Columbia to the Environmental Management Act (B.C.) that would have required the Trans Mountain expansion project (“TMX Project”) to obtain a permit from the BC government were unconstitutional. The court’s decision will have important implications for all provincial regulation of any works and undertakings, such as pipelines or railways, that cross provincial boundaries. It also has an important impact on Canada’s energy industry and is at the centre of one of the most significant political issues in Canada.
The proposed amendments sought to regulate the possession of “heavy oil” in British Columbia, including the type of heavy crude and diluted bitumen that will be transported through the TMX Project. The amendments applied only to persons who possessed more heavy oil in the province than they had between 2013 and 2017. It prohibited such possession unless the person obtained a permit from a provincial official. Using the permit, the official could place a variety of conditions on the person’s possession of heavy oil.
The court held that the purpose and effect of the proposed amendment was to regulate interprovincial undertakings like the TMX Project. As a result, it was outside British Columbia’s constitutional authority. The court found that the TMX Project is “not only a ‘British Columbia project’” but one that “affects the country as a whole and falls to be regulated taking into account the interests of the country as a whole.”
The court reasoned that “it is simply not practical — or appropriate in terms of constitutional law — for different laws and regulations to apply to an interprovincial pipeline (or railway or communications infrastructure) every time it crosses a border.” The Constitution gives the federal Parliament authority over interprovincial undertakings so that “a single regulator [may] consider interests and concerns beyond those of the individual province(s).”
The Attorney General of British Columbia has filed an appeal of the decision to the Supreme Court of Canada.
The Interested Persons, Consortium of Energy Producers were represented by Blake Cassels & Graydon LLP, with a team comprised of William Kaplan, QC, Cathy Beagan Flood, Ben Rogers, Peter Keohane, Joanne Lysyk, Laura Cundari and Christopher DiMatteo.
Attorney General of British Columbia was represented by Joseph Arvay, QC, Catherine Boies Parker, QC, and Derek Ball of Arvay Finlay LLP, and Gareth Morley of the BC Ministry of Justice.
Attorney General of Canada was represented by Jan Brongers, B.J. Wray, Christopher Rupar, and Jonathan Khan of Justice Canada.
The Interested Person, Attorney General of Alberta was represented by Peter Gall and Andrea Zwack of Gall Legge Grant Zwack LLP.
The Interested Person, Attorney General of Saskatchewan was represented by Thomas Irvine and Katherine Roy of the Ministry of Justice (Saskatchewan) Constitutional Law Branch.
.Counsel for the Interested Person, City of Vancouver was Susan Horne.
The Interested Person, City of Burnaby was represented by Gregory McDade, QC and Michelle Bradley of Ratcliff & Company LLP.
The Interested Person, EcoJustice Canada was represented by Harry Wruck, QC and Kegan Pepper-Smith of EcoJustice Canada Society.
The Interested Persons, The Council of the Haida Nation were represented by David Paterson of Paterson Law Office and Terri-Lynn Williams-Davidson of White Raven Law Corporation.
The Interested Persons, The Heiltsuk First Nation were represented by Lisa Fong of Ng Ariss Fong, Lawyers, and Katherine Webber of the Ministry of Attorney General (BC).
The Interested Person, The Assembly of First Nations was represented by Justin McGregor of Alexander Holburn Beaudin + Lang LLP.
The Interested Persons, The Little Shuswap Lake Indian Band were represented by Arthur Grant of Grant Kovacs Norell.
The Interested Person, Trans Mountain Pipeline ULC was represented by Maureen Killoran, QC and Olivia Dixon of Osler, Hoskin & Harcourt LLP.
The Interested Persons, Beecher Bay First Nations, Songhees First Nation and T’Sou-Ke Nation were represented by Robert Janes, QC and Aria Laskin of JFK Law Corporation.
The Interested Persons, Lax Kw’alaams Band were represented by Christopher Harvey, QC and Robert Wickett, QC of Mackenzie Fujisawa LLP.
Counsel for the Interested Person, Canadian Association of Petroleum Producers was Brad Armstrong, QC, Will Shaw and Lewis Manning of Lawson Lundell LLP, and Nicholas Hughes of McCarthy Tétrault LLP.
The Interested Person, Canadian Fuels Association was represented by Geoffrey Cowper, QC and Daniel Byma of Fasken Martineau DuMoulin LLP.
Counsel for the Interested Person, Canadian Energy Pipeline Association was Michael Marion of Borden Ladner Gervais LLP.
The Interested Person, Enbridge Inc. was represented by Maureen Killoran, QC and Sean Sutherland of Osler, Hoskin & Harcourt LLP.
The Interested Persons, Coalition of Interested Parties were represented by Alyssa Tomkins of CazaSaikaley LLP.
The Interested Person, Railway Association of Canada was represented by Nicholas Hughes, Emily MacKinnon and Sarah Blanco of McCarthy Tétrault LLP.