News & Updates

    The Morning Brief - 05.28.19

    Posted by Bruce Carson on May 28, 2019 7:46:07 AM


    Economy—B.C. Court of Appeal and the Trans Mountain Pipeline; what’s Next?


    The Court Decision and Building a Pipeline

    Unlike the Federal Court of Appeal decision of last August, the B.C. Court of Appeal decision was unequivocal in support of federal jurisdiction and because of that there is no need for further studies or consultations about federal jurisdiction regarding interprovincial pipelines. Unlike the Federal Court decision out of which came a reference to the National Energy Board regarding the effect of increased tanker traffic or the need for further Indigenous consultations, the B.C. Court held unanimously that B.C. could not restrict oil shipments under the guise of environmental regulation.

    The proposed amendments to the B.C. Environmental Management Act were held not to be constitutional because they would interfere with the federal government’s exclusive jurisdiction over interprovincial pipelines.

    The Court held that the substance of the legislation was to place conditions on and, if necessary, prohibit the movement of heavy oil through a federal undertaking—an interprovincial pipeline. It was also held that the law was not one of “general application” but targeted at one substance, heavy oil, in one interprovincial project. The result of this was that the province could not prohibit operation of the pipeline by a provincially appointed official denying a permit.

    The Court held that this legislation threatens the role of the National Energy Board which has imposed conditions to protect the environment.

    The Court determined that “the TMX project is not only a B.C. project. The project affects the country as a whole and falls to be regulated taking into account the interests of the country as a whole.”

    In response to this decision the B.C. government said it would appeal to the Supreme Court of Canada and seek federal intervention in order to obtain an expedited hearing. B.C. government reiterated that the sole purpose of the legislation is to protect the B.C. coastline and the environment.

    Calgary Herald columnist Don Braid noted that this was the eighteenth court decision in favour of the pipeline against one defeat, the aforementioned Federal Court of Appeal decision. He wrote that this was an attempt to regulate by B.C. in a clear federal head of power.

    Premier Kenney is quoted as saying “the time for obstruction of the Trans Mountain pipeline is over.” He went on to say that this decision paves the way approval and First Nation involvement in the ownership and construction of the pipeline.

    The Court held that “it’s legislation that in pith and substance relates to, and relates only to, what makes the pipeline specifically of federal jurisdiction.” When dealing with the environment the Court held that “environmental jurisdiction is too important and too diffuse to belong to one level of government exclusively or absolutely.”

    Martha Hall Findlay who heads up the Canada West Foundation wrote an opinion piece published in the Globe entitled “B.C.’s Trans Mountain ruling champions our national interest.”

    She wrote “this is a win for Canada-regardless of whether you support pipelines and the oil industry, or you are a keep it in the grounder or, like many of us, you recognize the need to cooperate to find sustainable ways to harness our resources. The key is that the decision is a win for how this country is supposed to work, in reinforcing the importance of the separation of federal and provincial jurisdictions set out in Sections 91 and 92 of the Constitution.”

    She went on to write that the environment is a matter of shared jurisdiction and the Court held the proposed legislation related to the regulation of an interprovincial entity. The court held that flexible or cooperative federalism cannot override the separation of powers.

    Now the question is ‘what’s next?’

    The B.C. government has said it is going to appeal the decision to the Supreme Court of Canada, but given the strength of the decision and the fact is was unanimous should not put future approvals on hold.

    In relation to that appeal, it would seem that the Quebec government should intervene to support B.C.’s position as they share the same view of provincial rights regarding the environment and pipelines. It has long be felt that Prime Minister Trudeau did not move to declare the TMX a work for the general advantage of Canada to place it squarely within federal jurisdiction because there would then be an argument that the government could do this to ensure construction of the Energy East pipeline proposal.

    The B.C. decision clears the way for a decision on the pipeline at the federal cabinet meeting scheduled for June 18. There are still two theories as to what the Trudeau government will do. One, the government will withhold approval or approve it conditionally on the basis that the Notley climate plan be kept in place. Or it could approve it to demonstrate its support for the oil sector and improve its business credentials. As the government owns the pipeline, it could move quickly to sell interests in it to Indigenous groups which would address a deficiency the government has in this area following the expulsion of former minister Wilson-Raybould.

    Alberta’s Bill 12, the turn off the taps bill, is probably unconstitutional on the same grounds as the B.C. legislation which attempted to limit the flow of bitumen across B.C.

    Those in Alberta and Manitoba who are charged with bringing a court action questioning the legislative base for a federal carbon tax should look carefully at this decision and what it says about the environment being a shared area of jurisdiction. The Court said as noted above environmental jurisdiction is “too important and too diffuse to belong to one level of government exclusively or absolutely.” There is a recognized role for provincial involvement.

    With this decision there is no reason to delay a federal decision on the pipeline.  

    Other National Issues

    Former Liberal Ministers Wilson-Raybould and Philpott running as Independents

    After listening to the complaints leveled against the political party system by the two former ministers, it is perhaps not surprising that the both decided to run in the next election as independents. Commentary during the hours after the announcement yesterday concentrated on whether they might win running as independents. Little was said about what could be done to address their complaints about a system which they believe silenced them with too much control from the center.

    But if the culture and then the rules and conventions were changed to address their issues, would we have a better, more representative system or would it be as John Ivison called it “political anarchy” with loose fish voting every which way.

    The Morning Brief has dealt in past issues with the attempt of the McGrath Committee on Reform of the House of Commons, with some success, to enhance the position of the private member. 

    As we approach the fall election and party platforms are being finalized, perhaps the subject of Parliamentary Reform or the way Parliamentary business is undertaken could form a chapter in party platforms. Surely some middle ground can be found between ‘trained seals’ and ‘anarchy.’

    The former Liberal MP Keith Penner once said he never felt more important or relevant than during the Trudeau minority of 1972-1974as his views on matters of public policy and legislation were sought and listened to. The question is ‘can the party system adjust?’  The tradition in Canada is to whip most votes as opposed to what takes place at Westminster, where as we have seen in the many Brexit votes, members often ignore the whips.

    Wilson-Raybould and Philpott have raised issues which should be addressed by political parties themselves in the run-up to the fall election.

    To Come 

    --May 29, Bank of Canada deals with interest rates and the consensus seems to be that they will be left as is

    --May 30, Senior Deputy Governor of the Bank of Canada Carolyn Wilkins delivers a speech to the Calgary Chamber of Commerce

    --May 30, U.S. Vice President Mike Pence in Ottawa to discuss USMCA ratification

    --May 31, GDP numbers for March and Q1to be released--bc

    Topics: Morning Brief

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