In this decision, the CER granted the request from Trans Mountain ULC (“Trans Mountain”) to file in confidence information in its certificate of insurance that discloses the names of its insurers.
All pipeline companies regulated by the CER must file financial resources plans each year showing that that company has enough resources to cover the company’s expected liabilities if a pipeline spills. Trans Mountain requested an exception to the typical public filing process, asking the CER to keep their insurers confidential going forward. On April 29, 2021, the CER granted the request by making an order under section 60 of the Canadian Energy Regulator Act (“CER Act“) to keep the identity of Trans Mountain’s insurers confidential. The decision pertains only to the insurance in place to cover liability for operating the Trans Mountain pipeline.
Requirements to be Met
The confidential treatment of the information in question requires that Trans Mountain meets the requirements set out in Subsection 60(a) and 60(b) of the CER Act.
The CER or a designated officer may take any measures and make any order that the CER or designated officer considers necessary to ensure the confidentiality of any information likely to be disclosed in any proceedings under this Act if the CER or designated officer is satisfied that
(a) disclosure of the information could reasonably be expected to result in a material loss or gain to a person directly affected by the proceedings, or could reasonably be expected to prejudice the person’s competitive position;
(b) the information is financial, commercial, scientific or technical information that is confidential information provided to the Regulator and
(i) the information has been consistently treated as confidential information by a person directly affected by the proceedings, and
(ii) the Commission or designated officer considers that the person’s interest in confidentiality outweighs the public interest in disclosure of the proceedings; or
(c) there is a real and substantial risk that disclosure of the information will compromise the safety and well-being of persons or cause harm to property or the environment.
Section 60 sets out how the CER must approach granting a limited exception to the fundamental principle that its proceedings need to be open, accessible, and transparent. The CER has held that the granting of an order under section 60 is an extraordinary order, and the onus to meet the test to set aside and open public process is on the company requesting it.
Trans Mountain’s Request
Trans Mountain provided evidence that disclosing the names of its previous insurers in prior such filings had previously resulted in the termination of insurance coverage. While Trans Mountain replaced this coverage, it experienced a significant reduction in available insurance capacity and incurred a significantly higher cost. Trans Mountain submitted that if there is continued public disclosure of the names of its insurers, there will be ongoing targeting and pressure placed on insurers which could be expected to have the same result. Trans Mountain stated this would result in a material loss to it and its shippers because of increased insurance premiums. The increased premiums would result from a smaller pool of insurers and challenges maintaining adequate insurance coverage, as required by section 138 of the CER Act. Loss to Trans Mountain and its shippers in the form of (i) higher insurance; and (ii) challenges in maintaining adequate insurance coverage to fulfill its significant financial resource obligations under section 138 of the CER Act.
In support of its request, Trans Mountain referred to a previous decision regarding Genesis Pipeline Canada Ltd. and NOVA Chemicals (Canada) Ltd. where confidentiality over the names of the insurers was granted pursuant to the predecessor to Subsection 60(b) of the CER Act. Trans Mountain argued that consistent with this precedent, its interest in confidentiality outweighed the public interest in disclosing the insurers’ names.
Comments Received About the Request
Comments submitted to the CER raised concerns arguing that granting confidentiality would deprive Canadians of their right to know that sufficient insurance is available to cover catastrophic events and provide necessary compensation. Further comments included un-insuring of fossil fuel projects, such as the Trans Mountain Pipeline, as the best non-violent way of shifting Canada towards a carbon-free energy future. They further argued that the confidential treatment would hinder the protection of Indigenous rights. Further, they argued that the increase in insurance costs and decreased coverage feared by Trans Mountain is not a result of public pressure. Instead, they are the result of a trend in the insurance industry of considering the cost of climate change and divesting away from fossil fuel projects, as well as Trans Mountain’s safety record.
Trans Mountain responded to comments and concerns raised about the project by noting that the rising costs in the insurance industry are not supported by evidence and are irrelevant to the test for confidentiality.
The CER noted that the confidentiality request is in relation to very little information. Only the names of the insurers would be removed, while the public record would still show information about Trans Mountain’s insurance, including the limit of liability/amount of coverage attributable to each un-named insurer.
The CER agreed that Canadians should have the opportunity to make themselves aware via publicly filed information that sufficient financial resources are available and are maintained to cover catastrophic events. However, the CER found that this opportunity is provided through the requirements of the CER Act, the Pipelines Financial Requirements Regulations, and the CER’s assessment of companies’ financial resources plans. It is the responsibility of the CER to assess whether the financial resources requirements are met.
In response to comments stating that un-insuring fossil fuel projects, such as the Trans Mountain Pipeline, is the best and non-violent way of shifting Canada towards a carbon-free energy future, the CER noted that determining the nature and composition of Canada’s energy future may be a worthy policy debate. However, the CER could not ignore the statutory requirement that the pipelines and facilities regulated by the CER carry appropriate insurance or similar financial resources. Further, this requirement serves a vital public interest.
The CER determined Trans Mountain had met the requirements for confidentiality under both subsections 60(a) and 60(b). For 60(a), the CER found “the disclosure of the names of Trans Mountain’s insurers could reasonably be expected to prejudice its competitive position in its dealing with potential insurers”, and for 60(b)(ii) found that Trans Mountain’s interest in confidentiality outweighs the public interest in disclosure of the names of Trans Mountain’s insurers, and that there was a public interest in knowing the pipeline is sufficiently insured, but not in the particulars of all insurers.
The CER granted the relief requested by Trans Mountain to file in confidence information its certificate of insurance that discloses the names of its insurers.
The CER determined that this confidential treatment may be applied to all future filings of the names of the insurers, as set out in Trans Mountain’s certificate(s) of insurance unless there is a material change.