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British Columbia Appeal Court to decide on B.C. pipeline law that would impact Trans Mountain

A British Columbia Court of Appeal hearing on proposed provincial legislation that would impact the Trans Mountain pipeline expansion has concluded and a panel of five judges has reserved its decision.

B.C. filed the reference case to ask the court whether it can create a permitting system for companies that wish to increase the amount of heavy oil they are transporting through the province.

The system would allow a provincial public servant to impose conditions on permits, which B.C. says would help it protect its environment and ensure that companies agree to pay for accident cleanup.

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Canada says the proposed amendments to B.C.’s Environmental Management Act are unconstitutional because Ottawa – not the provinces – has jurisdiction over interprovincial infrastructure.

Federal government lawyer Jan Brongers told court the amendments are clearly intended to impede additional oil shipments through B.C. because they only target heavy-oil transporters that want to increase capacity.

Joseph Arvay, lawyer for B.C., said in his reply on Friday that the goal of the legislation is not to block Trans Mountain and the court should not presume the law would be used inappropriately in the future.

"There’s no evidence to support that theory at all,” he said.

Arvay added B.C. already has environmental assessment legislation that applies to interprovincial projects, and a ruling that found the proposed amendments interfere with federal jurisdiction would also mean that law doesn’t apply.

The Canadian government has purchased the Trans Mountain pipeline and related assets for $4.5 billion. The expansion would triple the capacity of the line that runs from the Edmonton area to Metro Vancouver and increase tanker traffic in Burrard Inlet sevenfold.

B.C. Premier John Horgan campaigned in 2017, while in opposition, on a promise to use “every tool in the tool box” to stop the expansion. But after his minority NDP government took power, it received legal advice that it cannot stop the project but it could impose conditions upon it, court heard.

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This is a “distinction without a difference,” given that the proposed legislation is unconstitutional, said William Kaplan, representing a consortium of energy producers including Suncor Energy Inc., Imperial Oil Ltd., Husky Oil Operations Ltd. and Cenovus Energy Inc.

When Horgan announced the proposed permitting regime last year, Alberta Premier Rachel Notley accused him of breaking the rules of Confederation and announced a ban on B.C. wines, which she later reversed.

A lawyer for Alberta told the Appeal Court that the permitting scheme is a “vague, amorphous” process that gives wide-ranging discretionary powers to a government official. Peter Gall said B.C. believes the only way to protect its environment is to stop the pipeline expansion.

Trans Mountain ULC also said the legislation is targeting the project and will “directly and significantly” impact it.

Justice Harvey Groberman questioned lawyers who argued the goal of the legislation was to stop the project, asking why such a declaration was necessary if the argument that it impedes federal jurisdiction holds up.

The National Energy Board conducted a years-long review involving dozens of intervenors before recommending the federal government approve the project with 157 conditions. After the Federal Court of Appeal quashed the approval last summer because the board failed to consider marine shipping impacts, the board recently looked at the topic and added another 16 conditions.

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However, Arvay said the energy board has been found to do inadequate followup with companies to ensure that conditions are being met. He added that B.C.’s proposed regime and that of the NEB are “complementary and interlocking” and can be harmonious.

The government of Saskatchewan, several First Nations, Enbridge Inc., the Canadian Association of Petroleum Producers and the Railway Association of Canada also delivered arguments opposing B.C.’s proposed rules at the five-day hearing this week.

The cities of Vancouver and Burnaby, environmental group Ecojustice, the Assembly of First Nations and the Heiltsuk Nation presented cases in support of B.C., with the Indigenous groups asserting that First Nations governments have the right to make these types of rules in their communities as well.

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