Can cities say no to pipelines?

Julius Melnitzer

For all the political noise coming from municipalities and provinces in opposition to various pipeline projects, in reality they may lack any legal leverage to stop the projects or insist on conditions.

“The feds pretty well have exclusive jurisdiction over pipelines,” says constitutional law professor Dwight Newman of the University of Saskatchewan. “The case law has long been clear that provinces cannot exercise their jurisdiction in ways that interfere with interprovincial transportation, including pipelines, so the final decision on projects like Energy East rests with Ottawa.”

Montreal mayor Dennis Coderre has been particularly vocal in his opposition to Energy East, which would transport 1.1 million barrels of oil a day from Alberta and Saskatchewan through Quebec and New Brunswick for shipment overseas. Environmentalists are concerned about spills and about the impact of the pipeline on Canada’s greenhouse gas emissions.

For its part, the City of Burnaby went beyond vocal a few years ago when it denied Trans Mountain Pipeline ULC access to city-owned lands to complete studies ordered by the National Energy Board. Burnaby argued that Trans Mountain’s access would offend municipal bylaws.

TMP successfully obtained an order from the NEB permitting access to Burnaby’s territory. The board concluded that preventing access for work related to pipeline routing is contrary to the National Energy Board Act. It reasoned that, under the doctrine of “paramountcy,” the municipal bylaws were inoperative to the extent they conflicted with federal jurisdiction.

Burnaby sought to have the Federal Court of Appeal review the order. The FCA refused, giving no reasons. But there are dissenters from this view. They maintain that recent jurisprudence has limited the doctrine of “interjurisdictional immunity.”

Under that doctrine, provincial laws — and by implication, municipal laws, which are creatures of provincial statutes — were inapplicable to federal undertakings if they affected an essential part of a federal undertaking. But in 2007, the Supreme Court of Canada set out a stricter test: it ruled that provincial legislation applied to federal undertakings unless they impaired the undertaking’s vital or essential parts.

Writing in the Vancouver Sun, constitutional law professor David Robitaille of the University of Ottawa argues that it is now simplistic to say, as Newman suggests, that provincial legislation that interferes with federal jurisdiction is inapplicable.

“Federal power must be impaired by the interference,” Robitaille writes. “The Supreme Court has established that impairment occurs where the federal power is ‘seriously or significantly trammeled’ by a provincial law.”

The upshot, Robitaille concludes, is that while provinces cannot prevent the passage of interprovincial pipelines on their territory, they can impose conditions on interprovincial companies to protect the environment and the health and safety of communities.

In support of Robitaille’s reasoning, Eric Richer La Flèche of Stikeman Elliott LLP in Montreal points to a recent decision of the British Columbia Supreme Court in a case known as “Coastal Nations” involving the Northern Gateway Project.

“Coastal Nations suggests that the provinces can impose conditions on pipeline projects,” he says.

The case arose when the provincial government tried to delegate its responsibility to issue an environmental certificate to the federal government, on the grounds that the NGP was a federal undertaking.

The court ruled that the province could not do so. While acknowledging that “the province cannot go so far as to refuse to issue a certificate and attempt to block the project from proceeding,” it was premature to decide any constitutional issue before the decision on the certificate was made, the judge held.

The case is under appeal. If upheld it could mean that interprovincial projects would require separate decision-making processes by each province, creating a very burdensome regulatory regime that could produce a host of different conditions from the various provincial regulators.

Newman agrees that the courts have recently provided more latitude for provincial legislation to co-exist with federal legislation, but insists that these cases have not changed his view on the constitutional issues.

“I agree that Coastal Nations does tend to support Robitaille’s argument, but I think the case is an outlier and will be overturned on appeal,” he says.

Meanwhile, so far as Energy East is concerned, it seems that cooler heads are prevailing: the Quebec government recently allowed TransCanada to produce an impact study of the pipeline in just six weeks without necessarily having to address concerns raised during an earlier round of provincial environmental hearings. For two years, the company had refused to provide an environmental impact assessment for the province on the grounds that federal jurisdiction prevailed.

Photo: Daryl Dyck, Canadian Press