Energy disputes in Canada are rising on every front at once; pipelines are being challenged in court before construction crews arrive, and even developers are now fighting several stakeholders, sometimes all at the same time.
If you’re part of Canada’s energy sector, the question is no longer whether a dispute might find you, but whether you are ready when it does. In this article, we will discuss these disputes and how a Lexpert-ranked lawyer can help you in case one arrives at your doorstep.
What are the key trends on energy disputes in Canada nowadays?
While Canada’s energy sector is one of the strong ones in the country, it also is continuously struck with several disputes coming from all sides. These energy disputes are not just increasing in number, but they are also getting more complicated, more expensive, and harder to predict.
Energy disputes in Canada are usual in these areas, and each one carries its own risks and legal implications:
- Disputes before regulatory and government bodies
- Commercial contract disputes, often resolved through arbitration
- Investor-state arbitration under trade treaties
- Constitutional litigation driven by Indigenous rights
- Disputes related to renewable energy
We will discuss these disputes below.
Another area of energy disputes between companies and regulators would be taxes. Watch this video for a recent example in Alberta:
Learn how to handle these energy disputes by consulting with the best energy lawyers for electricity in Canada as ranked by Lexpert.
1. Disputes before regulatory and government bodies
Disputes with regulators, such as the Canada Energy Regulator (CER), often arise from project approvals, conditions regarding licences, tariff decisions, and their oversight of pipeline operations.
Updated export and import reporting requirements will affect how companies document their activities and apply for authorisations. Gaps in compliance can trigger enforcement action, and enforcement decisions are also common sources of formal disputes.
Changing regulatory frameworks as a source of disputes
However, the regulatory framework itself is changing. As such, energy businesses should also monitor these changes closely.
For instance, the CER is in the process of replacing four sets of regulations inherited from the old National Energy Board Act. Draft regulations covering the export and import of oil, gas, and electricity were pre-published in the Canada Gazette in December 2024, with a public comment period that closed in January 2025.
These are important, since enforcement decisions are themselves a common starting point for energy disputes in Canada.
2. Commercial contract disputes and arbitration
Commercial arbitration has long been the preferred and growing forum for contract disputes in the Canadian energy sector. Commercial energy disputes that commonly proceed to arbitration include:
- joint venture disagreements: disputes over operating decisions, cost overruns, and whether a project has met agreed milestones
- gas supply and pricing conflicts: disagreements about how prices are calculated under long-term contracts when market conditions shift
- power purchase agreements (PPAs): conflicts between generators and offtakers about curtailment, force majeure, and performance guarantees
- decommissioning liability: disputes about which party bears the cost of retiring aging infrastructure is a growing issue in mature oil and gas plays
- engineering, procurement, and construction (EPC) contracts: claims for delay, disruption, and defect in major energy infrastructure projects
Disputes in all these categories are more likely to arise during periods of price volatility, regulatory change, or energy transition.
Case in point: Disputes over LNG projects
Projects for liquefied natural gas (LNG) are generating their own wave of litigation. One example is when environmental groups acquire findings which directly result in regulatory enforcement disputes and environmental litigation.
Commercial contracts are also breaking down under price pressure. Globally, the shift away from long-term, oil-linked LNG contracts toward spot market pricing is producing a new generation of pricing and delivery disputes.
3. Investor-state arbitration under trade treaties
Canadian energy policy decisions can trigger investor-state dispute settlement (ISDS) claims under the Canada-United States-Mexico Agreement (CUSMA). These are formal arbitration proceedings brought by foreign investors against the Canadian government when they believe a regulatory decision has unjustly damaged their investment.
One significant example involved Ruby River Capital, a U.S. company that launched a claim against Canada under a legacy CUSMA provision for the federal government’s refusal to approve a gas pipeline and LNG terminal.
4. Indigenous rights and constitutional litigation
Another area of Canadian energy law that generates more litigation is the intersection of energy development and Indigenous rights.
The legal standard for consultation with Indigenous peoples in connection with major energy projects is well established in Canadian case law, but its application continues to be contested in the courts. For energy companies, this means that the legal risk profile of a major project cannot be assessed without a careful analysis of the duty to consult and any treaty or Aboriginal title interests in the project area.
Case in point: the Building Canada Act
The push to fast-track projects is also colliding with Indigenous rights, such as the Building Canada Act (BCA), which was designed to accelerate projects deemed to be of national interest.
However, it has one vulnerability that has become a subject of energy dispute: a large share of the major projects it covers sit on unceded First Nations territory. This prompted several legal and constitutional challenges from the environmental sector and the Indigenous Peoples and First Nations.
Community members themselves can also be at the frontline of these energy disputes, such as this case in Ontario:
If you’re looking for lawyers to help you with your energy dispute, check out the Special Reports by Canadian Lawyer, one of our sister publications, which also ranks the best lawyers and firms in Canada.
5. Renewable energy and the new wave of disputes
The energy transition is generating its own category of disputes in Canada, and they differ in important ways from traditional oil and gas conflicts. Outside the country, we have seen disputes over renewable energy subsidies, PPAs, and regulatory policies, which produced a lot of international arbitration cases.
Case in point: Power purchase agreements
Renewable energy generators and their offtakers are increasingly at odds over tariff terms agreed when financing costs and electricity prices looked very different. Price volatility, increased CAPEX, and financing costs are just some of the primary drivers of PPA disputes, not just in Canada, but also in other countries.
What are the ways to resolve energy disputes in Canada?
There is no single path to resolution when an energy dispute arises. It all depends on what the dispute is about, who the parties are, what the contract says, among other factors. In any case, here some of the ways to resolve energy disputes in Canada:
Going to a regulator first
Some energy disputes in Canada must go to a regulatory body before they can go anywhere else, depending on the matter which falls within their statutory authority. Examples would be the CER, or other provincial and territorial energy regulators.
However, there is an important limit to this rule: Canadian energy regulators do not hear contractual disputes between private parties. These types of disputes go to the court or an arbitration panel, but certainly not with these government regulators.
Negotiation and dispute clauses
Most energy contracts in Canada are structured so that formal proceedings are a last resort. This is why stepped or multi-tiered dispute resolution clauses are common in the Canadian energy sector.
In practice, these steps would typically look like this:
- first, parties are expected to attempt negotiation in good faith
- when negotiations fail, parties then move to mediation or arbitration
- litigation would be the last step of the dispute resolution process
One advantage of out-of-court procedures is that statements made during these are non-discoverable and cannot be used as evidence when litigation happens later.
Example: The Inter Pipeline case
The case of Inter Pipeline Ltd v. Teine Energy Ltd, 2024 ABKB 740 is a useful illustration of how arbitration and the courts interact in Canada. Here, the Alberta court addressed the following:
- the test for staying enforcement of an arbitral award pending appeal, and
- what happens to confidentiality once a party seeks court intervention
The case is also a reminder that arbitration does not guarantee privacy if one party takes the dispute into an open court.
How can lawyers help clients resolve energy disputes?
Since energy disputes in Canada are rarely simple, the role of energy and electricity lawyers in this environment goes well beyond showing up to argue a case. Here are some of the ways that these lawyers can help clients in resolving energy disputes:
- assessing risks before a dispute starts: this includes reviewing contracts, assessing whether a proposed project touches on the exclusive jurisdiction of a regulator, and identifying where Indigenous rights or environmental obligations could become contentious
- drafting contracts that hold up until the end: many energy disputes trace back to contracts that were not drafted carefully enough, and this is one area where lawyers are heavily needed, such as writing strong dispute resolution terms or clauses
- handling Indigenous rights and constitutional litigation: the duty to consult, Aboriginal title claims, and section 35 rights under the Constitution Act now create obligations that would require specialist knowledge from lawyers
Energy disputes in Canada: Keeping the current running
Energy disputes in Canada are not going to slow down. The push to build pipelines faster, the shift to renewable energy, the rising pressure from climate litigation, and the unresolved questions around Indigenous rights are all producing more conflicts.
The good news is that most disputes do not have to end in years of litigation. With the right advice from Lexpert-ranked energy lawyers, you’ll have more chance of preventing any energy disputes from arising, or have it handled smoothly as it comes.
Subscribe to the free Lexpert newsletter to be updated on Canadian laws, including ways lawyers can help in resolving energy disputes.