B.C. seeks judicial approval from Court of Appeal to regulate heavy oil shipments

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British Columbia will be in court Monday to test whether it can say “no” to the federally owned and regulated Trans Mountain pipeline expansion project.

The trial in the B.C. Court of Appeal will turn on constitutional law. Pipelines and railways that cross provincial boundaries, in Canada, are under the authority of the federal government, but B.C. argues that it has a responsibility to protect the environment within its borders.

The province is seeking judicial approval of draft regulations that would allow it to limit any increase of heavy oil being transported through the province, whether by pipeline, rail or highway.

The federal government will argue the proposed regulations aim to frustrate its right to oversee the pipeline expansion that it has declared to be in the national interest.

“By giving the province a veto power that it can use to effectively stop the expansion of federally-approved interprovincial oil transportation systems," the opening submission from the Attorney-General of Canada states, "B.C.’s regime conflicts with and frustrates the purpose behind existing federal legislation that is designed to comprehensively oversee their safe and efficient operation.”

The B.C. NDP campaigned in the 2017 provincial election on a commitment to “use every tool in our toolbox" to stop the Trans Mountain project from going ahead.

But after forming government, the new administration was briefed on the limits of provincial jurisdiction. “It became clear, through listening to legal advice, that we did not have the authority to stop a project that had been approved by the federal government," B.C. Environment Minister George Heyman said in 2018.

However, he said, “we do have authority to apply conditions that are attached to the environmental assessment, a certificate, and to propose regulations to defend B.C.‘s coast.”

In its opening submission, B.C. argues that the provinces have direct ownership and legislative jurisdiction over the environment, including the lands, waters, plants and wildlife that can be damaged by a spill of heavy oil.

“The issue in this reference is how Canadian federalism reconciles these provincial responsibilities with federal authority over interprovincial transportation undertakings,” B.C. argues. “The risks of such harm are too serious, too pervasive and too interrelated with provincial responsibilities to be of exclusively federal concern.”

The trial is set to run seven days. Given the stakes, it is likely to be challenged to a higher court regardless of the outcome. Lawyers for industry, Indigenous communities and environmental organizations have standing, as do the municipalities of Vancouver and Burnaby, and the provinces of Alberta and Saskatchewan.

B.C.'s reference case puts three questions to the court to determine whether it can enact regulations that would require companies to obtain provincial permits to increase the volume of heavy oil they transport through the province. (The province says it cannot assert control over existing transportation levels because those have already been approved by Ottawa.)

The battle over the pipeline has created a rift between the West’s two NDP governments. Alberta Premier Rachel Notley, who is facing a tough election this spring, has argued that her province needs this pipeline to get its landlocked oil resources to overseas markets. The energy sector accounted for one-third of Alberta’s economy in 2017.

“Our government stood up to B.C.’s obstruction from the beginning and will continue to,” said Mike McKinnon, a spokesman for the Alberta Ministry of Energy. “We believe B.C.’s proposed legislation is not based on environmental protection but is another attempt to target and stop the export of our natural resources, which is already costing Canadians millions of dollars each day.”

The parties have agreed on a statement of facts that runs 137 pages, which should sidestep arguments on the impact of an oil spill, or the economic benefits of Canada’s energy sector.

The parties have agreed in advance that heavy oil may sink or submerge if it is spilled in water, which would make clean-up challenging. They also agree that plants and animals that come into contact with the oil may become contaminated and some may be unable to survive.

Trans Mountain’s proposed pipeline route will intersect 35 aquifers within British Columbia, and 15 of them are classified as highly vulnerable.