On May 24, 2019, a five member panel of the BC Court of Appeal released its decision in Reference re Environmental Management Act (British Columbia), 2019 BCCA 181, a constitutional reference by the Province of British Columbia respecting proposed provincial environmental legislation that would regulate interprovincial pipelines.
As the Province acknowledged, the proposed legislation arose out of concerns about the Trans Mountain pipeline expansion (“TMX Project”). In the Province’s submission, the legislation would not necessarily prohibit the pipeline, but would impose additional regulatory steps that would be required before the pipeline could proceed.
Last year, the Province asked the Court of Appeal to opine on the constitutionality of its proposed legislation. Specifically, it asked the Court to consider whether the legislation was:
- within the legislative authority of British Columbia;
- applicable to hazardous substances (such as heavy oil) brought into British Columbia by interprovincial undertakings (such as pipelines); and
- rendered inoperative by existing federal legislation.
In its submissions, the Province took the position that even though the proposed legislation did regulate interprovincial undertakings (most immediately, the TMX Project), that legislation was within the Province’s jurisdiction because it related to the environment, which can be regulated by both federal and provincial governments. Among other arguments, the Province also relied on the principle of subsidiarity – put otherwise, that law-making is often best achieved by the level of government closest to the affected citizens. According to the Province, the legislation was valid, it applied to interprovincial undertakings (including pipelines), and the existing federal regulatory scheme did not render its proposed legislation invalid because the schemes could operate together harmoniously.
Canada disagreed, and argued that the Province’s proposed legislation attempted to directly regulate interprovincial undertakings, which are a matter of exclusive federal jurisdiction. It argued that even in light of the move away from “airtight compartments” towards “flexible federalism” (i.e., a move towards more shared legislative subject areas between federal and provincial governments), the Province’s proposed legislation represented an impermissible intrusion into an area of clear federal authority.
In addition to the Province and Canada, there were a large number of additional interested parties that participated in the reference, including Alberta, Saskatchewan, a number of First Nations, and a number of industry groups. Beecher Bay First Nations, Songhees First Nation and T’Sou-Ke Nation, represented by Robert J. Janes and Aria Laskin, argued that the legislation was unconstitutional and focused on the issue of paramountcy. They argued that to make meaningful space for a third level of government in Canada – Indigenous governments – the Court needed to ensure sure that one level of government could not intrude into the policy-making space of another, which would frustrate the development of legislative policies and schemes by the order of government that has primary responsibility over that area.
In its decision, the Court opined that the proposed legislation was unconstitutional because the legislation was, in pith and substance, directed at regulating an area outside of provincial authority: interprovincial undertakings. Writing for a unanimous court, Justice Newbury stated that while provinces can clearly enact valid environmental legislation, the proposed legislation “cross[es] the line between environmental laws of general application and the regulation of federal undertakings” (para. 101). In the Court’s view, this interpretation “does not reflect a ‘sea change’ in the law, a return to ‘watertight’ compartments of jurisdiction or a diminution of co-operative federalism. Rather it reflects the more basic principle that ss. 91 and 92 provide for “exclusive” heads of power that have substantive content” (para. 105).
In light of its decision on the first question, the Court declined to answer the second and third questions.
It remains to be seen whether the Province will attempt to overturn the Court of Appeal’s decision at the Supreme Court of Canada. It also remains to be seen whether the British Columbia Supreme Court’s decision in Coastal First Nations v. British Columbia (Environment), 2016 BCSC 34 – another case involving provincial environmental legislation and its applicability to pipelines – will still be viewed as applicable. Although that decision was not expressly overturned, in her reasons, Justice Newbury raised questions about whether that case remains good law (para. 51). It seems likely that this case will not be the final pronouncement from BC courts regarding the interplay between BC’s environmental laws and the movement of extra-provincial resources across the province.