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Trans Mountain Expansion Project Reasons for Decision MO-002-2021, CER Letter Decision

Link to Decision Summarized

Interjurisdictional Immunity – Federal Paramountcy


This Order provided the CER’s reasons for granting Motion C10426 (the “Motion”), filed by Trans Mountain on December 15, 2020. The CER granted to Trans Mountain: (i) relief from obtaining tree cutting permits under the City of Burnaby’s (“Burnaby”) bylaw (“Tree Bylaw”) for all Project-related tree clearing within Burnaby; and (ii) section 3 of the Tree Bylaw is inapplicable and inoperative under the doctrine of interjurisdictional immunity and federal paramountcy and therefore inoperative to the tree clearing.

The MH-002-2021 Proceeding

In the Motion filed by Trans Mountain with the CER, Trans Mountain made requests, including that the CER:

(a) Grant relief pursuant to Certificate Condition 1 from Certificate Condition 2, insofar as it requires Trans Mountain to obtain Tree Cutting Permits under section 3 of the Burnaby’s Bylaw No. 10482 ((referred to as the Tree Bylaw) for all Project-related tree clearing within Burnaby (defined in the Motion as Tree Clearing);

(b) Issue an Order pursuant to sections 32, 34 and paragraph 313(i) of the Canadian Energy Regulator Act (“CER Act”) declaring that:

  • The constitutional question raised in the Motion is answered in the affirmative;

  • Section 3 of the Tree Bylaw is inoperative, invalid and/or does not apply with respect to the Tree Clearing; and

  • Trans Mountain may proceed with the Tree Clearing all Project-related tree clearing within Burnaby pursuant to the terms and conditions of the certificate and related orders notwithstanding the fact that Burnaby has not issued Tree Cutting Permits under section 3 of the Tree Bylaw for the Tree Clearing; and

(c) Adjudication of the Motion expeditiously and in accordance with the generic process set down by the Process Order.

The City of Burnaby Tree Law

Section 3 of the Burnaby Tree Bylaw requires Trans Mountain to obtain Tree Cutting Permits for all Project-related clearing of certain protected trees within Burnaby. Section 5 sets out the requirements for a Tree Cutting Permit Application, including payment of a permit fee and submission of a tree plan.

On December 7, 2020, Trans Mountain applied for a permit to conduct tree clearing on private and municipal lands (the “Application”) in Burnaby and sought a decision by 11 December 2020. Trans Mountain indicated in the covering letter to the Application that “[s]hould a decision not be forthcoming by this date, Trans Mountain will take steps to secure necessary approvals to complete this work.”

On December 9, 2020, Burnaby denied Trans Mountain’s application. Burnaby stated that “[a]t this time, the City is not prepared to consider the application given that Trans Mountain does not accept the City’s jurisdiction and intends to make an application to the CER.”

Constitutional Question

The Motion raised the following constitutional issue:

Whether, on the facts before it, the CER should find that the requirement for municipal approval under section 3 of the Tree Bylaw prior to conducting the Tree Clearing is inapplicable, invalid, or inoperative under the doctrines of interjurisdictional immunity and/or federal paramountcy.

The CER noted the parties’ agreement on several threshold matters:

(a) There was no dispute that the CER has the authority to decide the constitutional question;

(b) There is no dispute that the Tree Bylaw is a properly enacted and a valid exercise of provincial authority; and

(c) There is no dispute about the constitutional law governing interjurisdictional immunity and paramountcy. The dispute between the parties pertains to whether these constitutional doctrines apply on the facts.

The CER found, based on the facts before it, that section 3 of the Tree Bylaw is inapplicable and inoperative under the doctrine of interjurisdictional immunity and federal paramountcy. The CER reached its conclusion on the basis that Burnaby’s refusal to process the application represents a frustration of a federal purpose and serious impairment of a core competence of Parliament and a federal undertaking.

Paramountcy

The CER found that the facts of this case established that the City of Burnaby’s refusal to process the Application since December 7, 2020, without legislative authority on which it relied to do so, had the effect of frustrating a federal purpose in this specific instance.

  • The Project had been held to be in the Canadian public interest and Trans Mountain has broad powers to carry out its construction under section 313 of the CER Act. Moreover, Burnaby already reached an agreement with Trans Mountain on the detailed route and methods of construction for the Project;

  • The Tree Clearing was necessary to proceed with the Project and Trans Mountain should have been able to begin Tree Clearing in January 2021 to maintain the Project construction schedule and avoid environmentally sensitive windows;

  • Burnaby had never issued a Tree Cutting Permit for Trans Mountain’s Project even in the circumstances of danger trees needing removal;

  • In its 9 December 2020 letter, Burnaby refused to process the Application. While Burnaby qualified the refusal being “at this time”, Burnaby could not provide an estimate of the time it needed to process the Application;

  • Burnaby confirmed that since its December 9, 2020 refusal letter, it had not taken any steps to process the Application. This, despite an amended Tree Management Plan being filed on December 18, 2020 indicating that Trans Mountain continued to pursue the permitting process and despite weeks lapsing between December 7, 2020 and argument being heard on the Motion on January 29, 2021;

  • Burnaby confirmed that it was reasonable to assume that the Tree Cutting Permit Application is unlikely to be approved as filed; and

  • Burnaby’s refusal to process the Tree Cutting Permit Application since it has been validly filed on 7 December 2020 through to the time of the closing of the record for the hearing on 29 January 2021, caused, or was a significant contributing or exacerbating factor to, delay the Tree Clearing. Trans Mountain has obtained all regulatory approvals including plan, profile and book of reference approval, and had satisfied the pre-construction conditions required to conduct the Tree Clearing, except for the Tree Cutting Permit at issue.

Therefore, the CER found that Burnaby’s refusal to process the Application was frustrating Trans Mountain’s exercise of its authorizations under the certificate and other NEB / CER orders, and its powers under section 313 of the CER Act. Accordingly, the doctrine of paramountcy applies to render section 3 of the Tree Bylaw inoperable to the extent that it frustrates Trans Mountain’s ability to proceed with the Project which was found to be in the Canadian public interest.

Interjurisdictional Immunity

The CER maintained that matters of when and where the Project can be carried out, and its orderly development, fall within the “core” of federal jurisdiction over interprovincial undertakings and are vital to the Project. Accordingly the CER was satisfied that Burnaby’s refusal to process the Application trenches into core competences of Parliament and vital part of a federal undertaking. The CER found that Burnaby’s refusal to process the Application, intentional or not, (the CER made no finding of intent), was the cause of, or a contributing or exacerbating factor to, delay in Tree Clearing, which had a significant and direct implication on Project timing and construction. In the CER’s view, Burnaby’s refusal was sufficiently serious in the circumstances to invoke the doctrine of interjurisdictional immunity, rendering section 3 of the Tree Bylaw inapplicable to the extent that it impairs Trans Mountain’s ability to perform the Tree Clearing.

The CER found that the constitutional question doctrines apply due to the delay caused by Burnaby’s inaction and its refusal to process the Tree Cutting Permit Application, regardless of the nature of Trans Mountain and Burnaby’s motives or intentions.

Relief from Certificate Condition 2

The CER determined that it would be in the public interest to relieve Trans Mountain of the requirement under Certificate Condition 2 to obtain a Tree Cutting Permit under section 3 of the Tree Bylaw with respect to the Tree Clearing. The CER reached this conclusion on the basis that there was delay caused by Burnaby’s refusal to process the Application. Trans Mountain’s Application had been held in abeyance by Burnaby since December 7, 2020 with no indication of imminent resolution and, given the urgency of the Tree Clearing and likely negative effects of delaying Project construction on Trans Mountain, third parties and the environment, the public interest in granting the exemption outweighs the public interest in requiring Trans Mountain to continue with the Tree Cutting Permit process.

Conclusion

The constitutional question raised in paragraph 3 of the Motion was answered in the affirmative. The CER found that the doctrines of federal paramountcy and interjurisdictional immunity render section 3 of the Tree Bylaw inapplicable and inoperative to the Tree Clearing.

The CER also found it to be in the public interest to relieve Trans Mountain of the requirement of Certificate Condition 2, insofar that it requires Trans Mountain to obtain a Tree Cutting Permit for Tree Clearing.

Commitments Made

In addition, the CER expects Trans Mountain to follow through on all the representations and commitments it made on the record of this Motion and described in the reasons for decision on the Motion.

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