Many energy projects are proposed for British Columbia’s coast and many fall within municipal boundaries and face local opposition. Municipalities often ask if they can regulate energy projects. But the answer is rarely black and white.
While proponents of energy projects cannot ignore municipal bylaws, there are limits to municipal authority. For example:
- As creatures of provincial statutes, municipalities can do only what such statutes enable them to do. If a municipality exceeds its statutory authority, its action can be challenged as invalid.
- A municipal bylaw cannot impair a federal undertaking (such as the routing of an interprovincial pipeline).
- A municipal bylaw cannot make it impossible to comply with a federal or a provincial enactment.
In the Lower Mainland, municipalities and community groups have opposed several recent energy projects, such as the Fraser Surrey Docks coal-shipping facility, the Vancouver International Airport’s jet fuel terminal, the Eagle Mountain pipeline twinning and the Trans Mountain pipeline expansion.
The Eagle Mountain and Trans Mountain examples are good illustrations of the limits on municipal authority.
In the first example, FortisBC challenged the District of Squamish’s decision to reject a development permit application respecting a feasibility study.
Municipalities have the authority to designate development permit areas and to establish guidelines for such areas. A municipality can refuse to issue the permit if the applicant has not complied with the applicable guidelines. However, it cannot refuse the permit arbitrarily, based on considerations unrelated to the guidelines.
Relying on this principle, FortisBC argues that Squamish’s decision is not valid because it is based on the prospective pipeline route and construction techniques, rather than on the guidelines applicable to the feasibility study. The outcome of this challenge remains to be seen.
In the second example, the National Energy Board (NEB) ruled that the City of Burnaby’s highway and park bylaws did not apply to (and could not prohibit) Kinder Morgan’s investigative works on Burnaby Mountain.
In particular, the parks regulation bylaw prohibited the destruction of trees in a park and the street and traffic bylaw prohibited excavation of public places without written permission from Burnaby (which was refused). Burnaby argued that the investigative works contravened the bylaws. Kinder Morgan requested the NEB confirm that Burnaby had no authority to obstruct or deny its works.
The NEB ruled in favour of Kinder Morgan, finding that the proposed works were integral to routing an interprovincial pipeline – a federal undertaking, which the bylaws could not impair. Also, the surveys were regulated by the federal National Energy Board Act. Based on Kinder Morgan’s evidence, it could not both undertake the surveys and comply with the bylaws. Given the conflict, the federal law prevailed.
The NEB decision in Trans Mountain is fact-specific and does not amount to a general exemption of energy projects from municipal bylaws. On the contrary, the NEB clearly stated:
“The opposite is true. Federally regulated pipelines are required, through operation of law and the imposition of conditions by the board, to comply with a broad range of provincial laws and municipal bylaws.”
In the end, whether and to what extent a municipality can regulate all or part of an energy project will always come down to applying the basic principles: determining whether the bylaw is valid and applies to the project and whether there is a provincial or federal law that – in the circumstances – supersedes the bylaw. •
Matthew Keen is a partner in energy and environmental law at Bull Housser. Olga Rivkin is an associate in Bull Housser’s local government group.
