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Storage tanks, holding crude and refined oil, at the Kinder Morgan tank farm are pictured in Burnaby, British Columbia October 6, 2014.

BEN NELMS/REUTERS

Temporary funding for safety oversight programs at the National Energy Board is set to expire as scrutiny of major pipeline projects winds up.

A report from the federal pipeline regulator shows a substantial reduction to staff and planned spending by the 2017-18 fiscal year, which a spokeswoman attributed to the sunsetting of a five-year funding allotment.

The board regulates construction and operation of pipelines and power lines, which includes conducting environmental assessments on projects. It has been under fire recently for limiting participation at public hearings into the expansion of the Kinder Morgan pipeline between Alberta and Vancouver.

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A coalition in Vancouver claims the NEB has violated the charter right to freedom of expression. It recently launched a challenge asking the Supreme Court of Canada to overturn the board's decision to limit public participation in hearings.

The NEB's 2015-16 Report on Plans and Priorities shows that over the next two years the board faces a nearly 24-per-cent decrease in planned spending. Also projected is a 15-per-cent drop in full-time equivalent positions, or 73 staff members.

The funding difference from the current fiscal year to the end of the budget projection is more than $18-million. The report also attributes the spending decline to one-time expenses that won't continue and a shift in application submissions.

NEB spokeswoman Stacey Squires said Thursday the board instituted a temporary plan for the five-year cash infusion in association with several large projects, including Kinder Morgan's Trans Mountain pipeline and the Energy East pipeline extension to New Brunswick.

A variety of positions were filled for the added work, from market analysts to inspectors to engineers, but the projected funding decline won't necessarily equate to job loses, she said.

Ms. Squires said it's too soon to speculate on whether the board will request more funding.

"It would be false to say that we're not very much live to the need for responsible fiscal management, to use our resources correctly and in an appropriate way," she said. "But I don't think that constitutes a crisis."

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A message in the report from board chair Peter Watson says the plan is released at a critical juncture for the regulator.

"An increasing number of large and highly complex project applications are juxtaposed against the operational realities of legislated time limits, resource constraints and the need for fair, efficient regulatory processes."

Karen Wristen at the Living Oceans Society said her group is shocked by the budget changes, and she criticized the federal government for cuts to the board's capacity.

"The management of the process has just been horrendous," she said. "The thought that they could continue to manage the number of projects that they're trying to manage with fewer people and less budget is beyond belief."

Natural Resources spokesman Alain Cacchione said in an e-mail that there are no cuts, and that outcomes of future funding decisions will be reflected in the board's budget exercises.

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