On October 2, 2014, the National Energy Board released a decision (found here) dismissing two motions that had been filed by a number of landowners, academics, business people and environmentalists (the "Applicants"). The Applicants had filed the two motions after they were not granted standing by the Board to participate orally on the Trans Mountain Expansion Project Application.
In its decision the Board concluded that most of the Applicants were not "directly affected" by the Project and a lack of an oral hearing did not amount to a "substantial" interference with their rights. Further, the Board concluded that an "untrammeled right of the public" to "open public expression" would come at the expense of the Board's statutory objectives and the Board would not be able to efficiently, effectively, or fairly hear the evidence it needs to assess the public interest in a project. The Board's decision is another example of the increasing struggle between public participation in energy development projects and the need for fair and efficient regulatory processes.
On May 23, 2013, Trans Mountain Pipeline ULC filed a project description with the National Energy Board ("Board"). The Trans Mountain Expansion Project (the "Project") is a proposal to expand the existing Trans Mountain pipeline system between Edmonton, AB and Burnaby, BC. It would include approximately 987 km of new pipeline, new and modified facilities, such as pump stations and tanks, and the reactivation of 193 km of existing pipeline.
On April 2, 2014, the Board made determinations about participation and the level of participation for the public hearing to review Trans Mountain's application for the Project (found here). In its Ruling the Board set out a list of intervenors and commenters, as well as the Board's reasons regarding those persons who were not granted participation.
On May 6, 2014, the Applicants filed a "Charter Motion" asserting either the standing test in the National Energy Board Act(the "NEB Act") or the Board's participation decisions in the Project hearing infringed the expression guarantee in section 2(b) of the Canadian Charter of Rights and Freedoms ("Charter").
On May 15, 2014, the Applicants filed a second separate "Procedural Motion" requesting an oral hearing of the Charter Motion on procedural fairness and evidentiary grounds.
In the Procedural Motion, the Applicants set out two grounds entitling them to an oral hearing of their Charter Motion. First, they asserted that the Board's common law duty of procedural fairness required it to hold an oral hearing. Second, they claimed an oral hearing was required to establish the adjudicative and legislative facts the Board needed to decide the Charter Motion. The Applicants argued that the NEB Act did not expressly address the issue of whether and when oral hearings should be held. They argued that the Supreme Court in Baker v. Canada (Minister of Citizenship and Immigration), 2 S.C.R. 817 [Baker] identified a non-exhaustive list of factors that are used to determine the extent and precise content of the duty of procedural fairness. The Applicants argued that Baker factors necessitated a high degree of procedural fairness.
In its decision, the Board recognized that a common law duty of procedural fairness falls on the Board whenever it issues an administrative decision affecting a person's rights, privileges, or interests. However, the Board concluded that a full analysis of all of the Baker factors pointed towards a more limited duty. The Board noted that the Applicants previously had the opportunity to offer written submissions which was sufficient to meet the requirements of procedural fairness and this process gave the parties an adequate opportunity to be heard.
The Charter Motion concerned the Applicants' right to freedom of expression guaranteed by section 2(b) of the Charter. The Charter Motion consisted of several constitutional claims.
The Applicants requested a declaration that section 55.2 of the NEB Act violated the freedom of expression guarantee in section 2(b) of the Charter. Section 55.2 provides that:
On an application for a certificate, the Board shall consider the representations of any person who, in the Board's opinion, is directly affected by the granting or refusing of the application, and it may consider the representations of any person who, in its opinion, has relevant information or expertise. A decision of the Board as to whether it will consider the representations of any person is conclusive.
The Applicants argued that section 55.2 of the NEB Act suppresses freedom of expression as it limited representations before the Board to those "directly affected" (the "Legislation Challenge").
The Board, in its decision, was not persuaded that the arguments raised by the Applicants had merit. The Board noted that the proper test for finding a Charter violation in cases raising "positive" rights claims was set out in Baier v. Alberta 2007 SCC 31 [Baier]. Applying the test in Baier, the Board concluded that the Charter Motion revolved around a claimed right to participate in the Board's process, not the exercise of a fundamental freedom. The Board noted that the Applicants had an opportunity to express themselves via means that included panel discussions, newspaper editorials, online blog posts, articles and reports, town hall meetings, public protests, and petitions. Further, the Board was not persuaded that the Project hearing's participation limits amount to a "substantial" interference with the Applicants' expressive rights.
Alternatively, the Applicants raised three further claims, requesting in each a declaration that the Board interpreted section 55.2 of the NEB Act in an unconstitutional way. They alleged that the Board: (i) created an unduly complex Application to Participate Process (Application Process Challenge); (ii) adopted an "extremely limited" interpretation of the NEB Act's "directly affected" standard in its Ruling on Participation (Participation Ruling Challenge); and (iii) unreasonably excluded consideration of upstream and downstream environmental and socio-economic effects from the hearing (List of Issues Challenge).
The Applicants' main alternative claim was related to Participation Ruling Challenge. The Applicants' argued that the Board adopted an unduly narrow interpretation of "directly affected" in section 55.2 of the NEB Act and the Board should have adopted a "liberal and generous" public law standard of participatory rights. The Board concluded that its application of section 55.2 represented a reasonable balancing of expressive interests of potential hearing participants against its statutory objectives. The Board noted that it had to balance providing an opportunity to those most affected by the Project to express their views, while providing an efficient process. Providing a liberal and generous standard would frustrate the ability of persons directly affected to participate in a meaningful way and would render the timing and logistics of the hearing functionally unmanageable.
The Board concluded that the Applicants did not establish that section 55.2 of the NEB Act or the Board's actions in the Project hearing violated the Charter. The Board in its decision noted that the Board invites public participation to assist in fulfilling its statutory mandate of regulating pipelines, energy development and trade in the public interest. However, an "untrammeled right of the public to "open public expression" would come at the expense of the Board's statutory objectives of regulating pipelines, energy development, and trade in the Canadian public interest.
The NEB decision affirms that an oral hearing is not always required. This will be a welcome result for oil and gas industry participants and follows a trend towards more manageable processes for energy development applications. The NEB Act was intended to provide those "directly affected" with a reasonable opportunity to express their views while, at the same time, providing for an efficient process. The Board cannot efficiently, effectively, or fairly hear the evidence it needs in a project if it is required to hear from any and all persons wishing to express an opinion on it. However, it is not likely the end of this dispute. ForestEthics Advocacy, one of the applicants, has announced it will be applying for leave to appeal to the Federal Court of Appeal and for an injunction to stay the Board's proceedings pending that application.