BC Court of Appeal rules no province can obstruct pipelines

British Columbia’s Court of Appeal unanimously determined that the province does not have the authority to interfere with inter-provincial projects, upholding its decision that the constitutional principle that projects in the national interest remain federally legislated. Therefore, the BC government must respect the federal government’s jurisdiction over national projects and stop interfering with the Trans Mountain expansion pipeline (TMEP) to the detriment of all of Canada, including its own province.

The five-judge panel agreed that January 2018 amendments to BC’s Environmental Management Act were not constitutional because they would interfere with the federal government’s exclusive jurisdiction over interprovincial pipelines. Justice Mary Newbury wrote on behalf of the panel that the substance of the proposed amendments were to place conditions on and, if necessary, prohibit the movement of heavy oil through a federal undertaking. Therefore, the legislation is not just an environmental law of “general application,” but is targeted at one substance, heavy oil, in one interprovincial pipeline: the Trans Mountain expansion project. She wrote, “Immediately upon coming into force, it would prohibit the operation of the expanded Trans Mountain pipeline in the province until such time as a provincially appointed official decided otherwise. This alone threatens to usurp the role of the (National Energy Board), which has made many rulings and imposed many conditions to be complied with by Trans Mountain for the protection of the environment.”

The future of TMEP now rests with the Government of Canada to ensure construction begins immediately following the completion of consultations on June 18, 2019. Prime Minister Justin Trudeau’s government purchased the TMEP for CAD $4.5 billion and construction was paused last August after the Federal Court of Appeal overturned the federal permits. The project would triple the Trans Mountain pipeline’s capacity to carry diluted bitumen from the Edmonton area to Metro Vancouver and increase the number of tankers in Burrard Inlet seven-fold.

President and CEO of the Canadian Association of Petroleum Producers (CAPP) Tim McMillan said, “Today the B.C. Court of Appeal ruled in favour of Canada and its Constitution. No one province should have the ability to hold the rest of the country hostage … It is the role of the federal regulator to review all major projects and determine what is in the best interests of Canadians. At the end of the day, the National Energy Board determined Trans Mountain to be in the best interest of Canada, as a whole … Environmental stewardship and the protection of Canada’s waters have always been a priority. With world-class marine systems such as the West Coast Marine Response Corporation, Eastern Marine Response Corporation, and the federal Oceans Protection Plan, we can protect Canada from coast-to-coast-to-coast.”

Due to a lack of access and detrimental government policy, capital investment in Canada’s oil and natural gas sector is forecasted to drop to an estimated CAD $37 billion in 2019 compared to CAD $81 billion in 2014. Market access remains of paramount importance to Canada’s energy industry. In 2017, Eastern Canada imported about 586,000 barrels per day of foreign-sourced oil. According to the International Energy Agency’s, World Energy Outlook 2018 (New Policies Scenario), total global energy demand is projected to increase 27 percent over 2017 levels by 2040. Together, oil and natural gas will account for 53 percent of the world’s total energy demand by 2040.