Legal ups and downs for British Columbia

Rulings by Supreme Court of Canada, BC Supreme Court have opposite impacts on resource development projects

GARY PARK

For Petroleum News

Of two recent Canadian court rulings one has dealt a blow to resource development in British Columbia, while the other has given a shred of hope to the construction of oil and natural gas pipelines that cross the B.C.-Alberta border.

In the first, the Supreme Court of Canada opened the door to aboriginal communities to sue private companies for damages caused by resource projects without first having to establish their claims to land title and without being limited to taking action against governments.

Ravina Bains, associated director of the Fraser Institute Center for Aboriginal Policy Studies, said the verdict that applies to two Nechako First Nations is both precedent-setting and groundbreaking, but not in good ways.

She warned the decision will create even greater uncertainty for both existing and future resource projects in a province where aboriginal communities are claiming title to more than 100 percent of the land.

Opponents of the decision argue that lawsuits should be directed against the governments that regulate land use, noting that any companies that are successfully sued will likely retaliate by suing the governments they relied on to properly regulate their resource development project.

The Vancouver Sun said in an editorial that “judges surely need to keep in mind the potential economic implications to society of their decisions” which have left a “mess of confusion and uncertainty for businesses on the ground in British Columbia.”

In the second ruling, British Columbia Supreme Court Justice George Macintosh effectively put an end to a legal attempt by the City of Burnaby in the Greater Vancouver area to halt work by Kinder Morgan on its Trans Mountain oil pipeline expansion.

He said Canada’s National Energy Board rules take precedence over the city’s bylaws, which become constitutionally “inoperative” if they frustrate a federal undertaking, such as an interprovincial pipeline.

Macintosh said the City of Burnaby appeared to be using its bylaws to “make Trans Mountain’s preliminary work on the expansion project difficult, if not impossible, to undertake.”

The city, which is considering an appeal, was also ordered to pay Kinder Morgan’s legal costs.

Kinder Morgan said the court’s decision simply reaffirms earlier rulings upholding the NEB’s jurisdiction as it relates to plans to almost triple capacity on the Trans Mountain system to 890,000 barrels per day of oil sands crude from Alberta to a tanker terminal in Burnaby and refineries in Washington state.

The City of Burnaby also asked the court to rule that the NEB did not have the “constitutional jurisdiction” to direct or limit the enforcement of the city’s bylaws.

But Macintosh simply noted that the city had failed to win the same argument in earlier hearings before the Federal Court of Appeal and the NEB.