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‘I do not believe a political compromise is achievable’: Trans Mountain pipeline dispute likely to rely on the courts

As the infighting over the controversial Trans Mountain pipeline heats up, the courts may ultimately do what the politicians in Alberta, B.C., Ottawa and − recently − Saskatchewan have been unable to do so far.

Pending rulings could set the stage for killing or saving the $7.4-billion expansion of the 65-year-old link between Alberta and Burnaby, B.C. The dispute now spans three western provinces and has drawn the federal government and even Quebec into the fray.

Ian Lee, a public policy professor at Carleton University’s business school, says it’s unlikely politicians will be able to negotiate a resolution on their own.

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“They’re paralyzed, and not because they’re bad actors or bad people. They’re paralyzed because there are interests on multiple sides of these issues that are pressing the politicians in multiple directions, and you cannot square this circle,” Prof. Lee said.

“I do not believe a political compromise is achievable.”

Texas-based Kinder Morgan announced its interest in expanding the pipeline in 2012. The effort would add about 1,000 new kilometres of pipe between Edmonton and B.C. In 2016, the National Energy Board (NEB) recommended the approval of the pipeline with 157 conditions, and the federal Liberal government offered its own approval in November of that year. Last year, months after the BC Liberals offered conditional support for the project, the NDP came to power with support from the BC Green Party. Both parties opposed the project, citing, among other factors, the risk of spills linked to the increased amount of bitumen the expanded pipeline could ship to B.C. to be loaded on tankers for shipment to foreign markets. Since then, B.C. has weighed into a debate already involving some First Nations, environmentalists and others.

Without some sort of political solution, it will be up to the courts. A tangled series of cases pending and promised will be in front of judges at several levels.

Last month, B.C. lost a case at the federal Court of Appeal aimed at overturning an NEB ruling that allows Kinder Morgan to bypass Burnaby’s municipal bylaws during construction to expand Trans Mountain.

But the Federal Court of Appeal is scheduled to rule soon on a much larger case: one involving more than a dozen applicants, several First Nations, environmentalists, a pair of B.C. cities, the province and others. The focus is the process that led to the approval of the pipeline. Hearings on the matter were held last fall.

Separate from that will be B.C.’s intention to test its jurisdiction by filing a reference, or question, to the B.C. Court of Appeal by the end of this month. It’s the highest court the province can ask: Only the federal government can refer a case directly to the Supreme Court of Canada, and the Liberals have said they will not do this.

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Both actions are likely to lead to the Supreme Court, however.

Eric Adams, an associate law professor at the University of Alberta, who has published widely on constitutional law, says the complexities of Canada exist in overlapping jurisdictions that have become more enmeshed with Indigenous rights and environmental concerns in recent years.

“It’s fascinating to watch, and why constitutional law professors get up in the morning,“ he said in an interview.

Federal court case

The National Energy Board process that led to the approval of the Trans Mountain pipeline expansion is under review by the Federal Court of Appeal, acting on the submissions of 15 parties, including First Nations, environmental groups and the cities of Burnaby and Vancouver. The provinces of B.C. and Alberta also have intervenor status.

The perceived failure of the federal review process runs through all the arguments against the project, says Eugene Kung, staff lawyer for West Coast Environmental Law group, which is not a party to the case, but is helping the Tsleil-Waututh Nation in its legal action.

“If there is a common thread, it would be that the National Energy Board process and subsequent federal process was inadequate in thoroughly reviewing the project in the haste of getting to a decision that may have been made before any of those processes played out,” Mr. Kung said.

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The case was heard in October, 2017, in Vancouver. Whatever the outcome, it is widely expected to be appealed to the Supreme Court of Canada, prolonging the debate.

Still, Margot Young, a professor of constitutional law at the UBC law school, says that in the short term, the ruling will shape the political discussion.

Constitutional reference question

While the Federal Court of Appeal case deals with the approval process, the B.C. government plans by April 30 to ask the B.C. Court of Appeal – the province’s highest court – to determine whether it has the authority to regulate the movement of diluted bitumen through its territory.

Premier John Horgan describes the reference as a major effort to clarify jurisdiction.

“When it comes to asserting our ability in British Columbia to protect British Columbia’s needs, I believe [the issue] is far larger than me and my government,” Mr. Horgan said this week.

“It’s about now and into the future. The reference question will clarify that.”

Attorney-General David Eby said he expects the B.C. action will elicit a lot of interest.

“We assume that there will be various intervenors interested in participating, perhaps other provinces, perhaps the federal government or various interest groups, perhaps First Nations,” Mr. Eby told reporters.

Earlier this week, B.C. Environment Minister George Heyman said that if the Federal Court of Appeal rules in favour of the Kinder Morgan project, that will underscore the need to pursue the reference.

“We are determined, particularly if the Court of Appeal question is lost and the project is going ahead, to ensure we exercise every inch of our constitutional jurisdiction to ensure we are regulating against the possibility of a spill,” he said.

“Of course, we want to focus on ensuring that whatever project is built, the risk of a spill is completely minimized.”

Mr. Adams of the University of Alberta said the path ahead on the issue is risky for the B.C. government.

“A court may refuse to answer the question because it is too vague,” he said in an interview. “Courts try and avoid entering into political debates and answering hypothetical questions without the real issue before them.

“The B.C. government will be thinking about that, and wondering if they should have a more targeted approach in which they actually present a more reasonably detailed legislative enactment, be it a regulation or a proposed law.”

But even this could be risky, Mr. Adams said.

“Let’s imagine that scenario in which B.C. asks that more targeted question, then the federal government and presumably the Alberta government would argue that the legislation is invalid because it is simply an indirect attempt to regulate a pipeline, which is a non-provincial jurisdiction.”

Alberta can’t stop its western neighbour from bringing the reference question before a judge, but it can argue that B.C. has no right, under the Constitution, to limit the volume of the oil products travelling through its territory.

That’s because such a policy would be targeting inter-provincial and international trade, which is a federal subject matter, according to Nigel Bankes, a professor of natural resources law at the University of Calgary.

“Alberta will say ‘while it’s not directed at the Trans Mountain facility, every public statement made by the province [of B.C.] makes it clear that that’s the real target,’” he said.

Joel Bakan, a law professor at the University of British Columbia, says B.C. has all the regulatory authority it wants to protect the environment, culture or people from whatever harms that might come from the pipeline as long as it does not use those rules in a way that would impair the operation of Trans Mountain.

“The key word is ‘impair,’” he said in an interview.

In the past two decades, the Supreme Court has gradually changed its standard for when a provincial law overreaches to impair inter-provincial trade. Over the past two decades, the court has embraced a co-operative federalism, which, Mr. Bakan says, gives both Ottawa and the provinces as much jurisdiction as possible so that the public interest is protected and their constituents represented.

The courts have taken a more pro-regulatory stand, saying “‘it’s better if both levels of government are regulating to protect the public interest so long as the province isn’t regulating in a way that totally frustrates and impairs the enterprise,’” he said.

The leading precedent for this doctrine is a 2007 Supreme Court ruling, he said, that found Alberta could regulate the insurance products sold by the Canadian Western Bank and other chartered financial institutions even though that sector is federally regulated because the insurance products didn’t form a core of their business.

“The bank was saying that consumer protection legislation can’t apply to us, because we’re a federal undertaking, in the same way that the federal government and Alberta are saying [B.C.’s] provincial regulation can’t apply to the pipeline because it’s a federal undertaking,” he said. “It was in that context that the court said what it said.”

Again, a judge would ultimately need to decide whether B.C.’s regulations impair the operation of Trans Mountain to an unconstitutional degree.

Turning off the taps: Alberta’s Bill 12

Constitutional experts agree that the legality of Alberta’s bill promising to give itself broad powers over the flow of oil exports will once again hinge upon whether the move limits inter-provincial trade.

Mr. Eby, B.C.’s Attorney-General, said his government will seek an injunction if Alberta moves ahead with this “bluff” that would curtail fuel shipments. He said B.C.’s case would be backed up by a Supreme Court ruling this week that provinces can restrict the amount of alcohol people export to other provinces, but they can’t use these limits to punish other provinces.

Because of the heated political rhetoric, it will be hard for Alberta to argue that what it is doing is not a direct retaliation to B.C. contemplating slowing the flow of oil through Trans Mountain, according to James Coleman, a law professor at Texas’s Southern Methodist University.

“Alberta doesn’t really have much of an argument as to what it’s doing is constitutional,” said Mr. Coleman, who taught at the University of Calgary up until two years ago.

“It’s going to try to offer one for public relations purposes, but what they’re promising to do is basically, ‘if you’re going to use an illegal tariff, we’ll retaliate with an illegal tariff.’”

Mr. Bankes, who wrote an extensive post on the University of Calgary law faculty’s blog, said one possible − if painstaking − way for Alberta to enact Bill 12 in a nondiscriminatory fashion would be to slow exports to B.C. and all other jurisdictions.

“Simply say ‘everybody is taking a 20 per cent hair cut,’” he said.

With a report from Justine Hunter in Victoria

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