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The Supreme Court of Canada has unanimously dismissed an appeal that would have allowed the B.C. government to regulate heavy oil flowing through its territory on the Trans Mountain pipeline.
The swift decision from the bench was a stunning end to a daylong slugfest where justices grappled with questions surrounding where genuine environmental protection should fit when considering issues of legal jurisdiction.
It means B.C. can’t move ahead with new rules that would have regulated the heavy Alberta oilsands product called bitumen to be sent down the completed Trans Mountain expansion project to a terminal in metro Vancouver.
“The Supreme Court of Canada has upheld the rule of law and put an end to the British Columbia government’s campaign of obstruction against Alberta energy," declared Alberta Justice Minister Doug Schweitzer, reacting to the decision.
Environmental law charity Ecojustice said the Supreme Court's decision leaves the environment and communities vulnerable to toxic spills.
Lawyer Kegan Pepper-Smith said he was "deeply concerned that the court refused to confirm that governments at all levels have both a right and a constitutional duty to protect the environment."
Oil lobby 'pleased, but not surprised'
Lawyers representing Canada, as well as oil and gas and transportation companies, argued that only the federal government should have final say over how products can be transported across provincial borders, and that it can still take environmental concerns into account as part of its overall assessment of pipeline projects.
Canada and others had argued the Constitution does not allow a province to decide whether and how goods can be transported, even in cases of protecting the environment. Ottawa said that if the B.C. rules were found to be valid, it would only apply to four businesses: the Trans Mountain corporation, now owned and operated by the government, as well as three railway companies.
Natural Resources Minister Seamus O'Regan welcomed the ruling on Thursday, saying it was a "core responsibility" of the federal government to help move natural resources like oil to markets where they can be sold. "We know this is only possible when we earn public trust and work to address environmental, Indigenous peoples' and local concerns, which we are doing every step of the way on TMX," he said.
Paul Chiswell, a lawyer representing the Explorers and Producers Association of Canada, an industry group of small and mid-sized oil and gas companies, told the Supreme Court that “if a province can effectively limit or veto the federal government’s approval of a pipeline, then certain provinces won’t be able to get their natural resources to market, my clients won't be able to get their products to market."
As long as the oil stays inside the pipeline, it is within exclusive federal jurisdiction, argued lawyer Brad Armstrong, representing the Canadian Association of Petroleum Producers, the country’s largest oil and gas lobby group.
CAPP president and CEO Tim McMillan said the organization was "pleased, but not surprised" at the decision. "It is time to unite behind the completion of this nation-building project so Canadians can start to benefit from selling our responsibly produced resources to global markets," he said.
Environmental protection and the rule of law
Many environmental groups, First Nations, municipalities and provinces all intervened in the case that pitted the attorney general of British Columbia against the attorney general of Canada.
Joseph Arvay, external counsel for B.C., had tried to demonstrate that the new rules can coexist with other laws and that its main purpose was not to enforce a ban on pipelines, but to protect the environment by establishing conditions to prevent oil spills.
“Don't let the tail of the enforcement provisions wag the dog of the substantive provisions,” Arvay had warned the justices.
From the beginning, it appeared Justice Malcolm Rowe was suspicious of B.C.’s approach.
When Ecojustice lawyer Harry Wruck argued that environmental protection has now reached “quasi-constitutional status,” Rowe almost immediately challenged him.
“Where do these underlying constitutional principles come from? Did we just cook them up?” he thundered.
“Without a viable environment, we cannot have a Constitution, we cannot have a nation based on laws. We cannot have a society, in effect,” Wruck replied.
Rowe would also say B.C.’s proposed rules were “about taking away the ability of the government of Canada to effectively approve interprovincial pipelines.”
He would imply in a later statement that commerce would be negatively affected. “The uncertainty will kill the business case," he said.
At another moment, Justice Rosalie Abella asked what was different in B.C.’s rules, which would be amendments to existing legislation, from what was already legislatively mandated.
Arvay replied that while it does cover spill response, the rules were designed to be “much more specific.”
“About pipelines?” Abella asked. “About bitumen,” Arvay replied. “It’s designed to be a more specific way of protecting the environment... it happens in this circumstance to have a disproportionate and perhaps a sole effect on a pipeline.”
Heiltsuk discusses 2016 diesel fuel spill
Lawyers for Saskatchewan and Alberta focused on the importance of getting fossil fuels to markets offshore as landlocked provinces. In that respect, they were able to focus attention away from environmental issues.
“We don't dispute that B.C. has legitimate environmental concerns,” said Peter Gall, the lawyer for the government of Alberta. “But in this case, in this situation, the dominant characteristic is the obstruction and interference with the pipeline. In our submission, that's the basis that this case should be decided on.”
Lawyers for Kitigan Zibi Anishinabeg, the Heiltsuk Nation Tribal Council, the Haida Nation and the Little Shuswap Lake Indian Band also made comments Thursday about strengthening the nation-to-nation relationship.
For the Heiltsuk Nation, environmental protection has always been a core value, its counsel said, as it is fundamental to Heiltsuk laws.
It remains particularly sensitive to this after the Nathan E. Stewart barge ran aground in Heiltsuk territory in 2016, spilling 110,000 litres of diesel fuel and other petroleum products into an important Heiltsuk food and cultural area.
Editor's note: This story was updated at 5:47 p.m. Eastern on Jan. 16, 2019 to include reaction from CAPP and the Alberta and federal governments.