Westcoast Energy Inc. v. National Energy Board et al., (1998) 223 N.R. 241 (SCC)

• Judge: Major and Bastarache, JJ.
• Court: Supreme Court (Canada)
• Case Date: March 19, 1998
• Jurisdiction: Canada (Federal)
• Citations: (1998), 223 N.R. 241 (SCC);223 NR 241;156 DLR (4th) 456;3 Admin LR (3d) 163;[1998] ACS no 27;1998 CanLII 813 (SCC);[1998] SCJ No 27 (QL);[1998] 1 SCR 322

Westcoast Energy v. Nat. Energy Bd. (1998), 223 N.R. 241 (SCC)

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[French language version follows English language version]

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Temp. Cite: [1998] N.R. TBEd. MR.019

BC Gas Utility Ltd. (appellant) v. Westcoast Energy Inc., National Energy Board, Attorney General of Canada and Attorney General of British Columbia (respondents) and Attorney General of Nova Scotia, Attorney General for Saskatchewan and Attorney General for Alberta (interveners)

(25259)

Indexed As: Westcoast Energy Inc. v. National Energy Board et al.

Supreme Court of Canada

L'Heureux-Dubé, Gonthier,

Cory, McLachlin, Iacobucci,

Major and Bastarache, JJ.

March 19, 1998.

Summary:

Westcoast Energy Inc. operated a gas pipeline utility in British Columbia with connections to the Yukon, Alberta and the United States. Westcoast took delivery of gas provided by producers and delivered the gas to its particular destination. At no time did Westcoast own the gas. Westcoast's mainline pipeline was regulated by the National Energy Board. Westcoast proposed to expand its facilities in the Fort St. John area and in the Grizzly Valley area. The expansions would consist of an expansion of the gather­ing facilities for the transportation of "raw" gas from the point of delivery by the pro­ducers, and the construction of new or expanded processing plants in which the "fuel" gas, basically methane, was separated from the other components of the raw gas. In both cases, the proposed new processing facilities represented by far the most im­portant and expensive part of proposed expansions. In each case there would be minor changes and additions to the mainline fuel gas transmission facilities downstream of the proposed processing plants. Westcoast applied to the National Energy Board for approval of both projects. The Grizzly Valley application was adjourned and only the Fort St. John application proceeded. BC Gas Utility Ltd. (BC Gas) questioned the Board's jurisdiction on the grounds that the proposed expansions were purely local works and undertakings and not within the ambit of federal jurisdiction under ss. 91(29) and 92(10)(a) of the Constitution Act, 1867. BC Gas also submitted that the proposed pro­cessing facilities, the most important part of the proposed project, did not come within the Board's jurisdiction under s. 2 of the National Energy Board Act because they were not part of the pipeline.

The National Energy Board allowed BC Gas's objection and declined jurisdiction. Westcoast appealed. Westcoast also revived the Grizzly Valley application and applied to the Board to refer the question of jurisdiction for determination by the court. The Board referred the following questions to the court: (1) are the proposed facilities to be con­structed and operated by Westcoast within the federal jurisdiction under the Constitution Acts 1867 to 1982 and (2), if so, do such facilities fall within the definition of pipeline in s. 2 of the National Energy Board Act.

The Federal Court of Appeal, in a decision reported 193 N.R. 321, allowed the appeal in relation to the Fort St. John application and returned the matter to the Board for a de­cision on the merits. In regard to the Grizzly Valley reference, the court held that (1) the proposed expansion was within federal jurisdiction and that (2) the facilities fell within the definition of pipeline. BC Gas appealed.

The Supreme Court of Canada, McLachlin, J., dissenting, dismissed the appeal.

Administrative Law - Topic 9057

Boards and tribunals - Jurisdiction of particular boards and tribunals - National Energy Board - [See Administrative Law - Topic 9118 and first four Constitutional Law - Topic 6643 ].

Administrative Law - Topic 9118

Boards and tribunals - Judicial review - Curial deference to decisions of tribunals - An interprovincial natural gas transmission company applied for approval to construct some regional gas gathering facilities and two gas processing facilities - The National Energy Board held that it did not have jurisdiction over a proposed expansion because the improvements were local in nature - On appeal, the issue arose as to the degree of deference to be accorded to the Board's decision - The Supreme Court of Canada held that "even questions of mixed law and fact are to be accorded some measure of deference, but this is not so in every case. It would be particularly inappropriate to defer to a tribunal like the Board, the expertise of which lies com­pletely outside the realm of legal analysis, on a question of constitutional interpreta­tion. Questions of this type must be answered correctly and are subject to overriding by the courts" - See paragraphs 36 to 42.

Constitutional Law - Topic 6643

Federal jurisdiction (s. 91) - Interprovincial works and undertakings - Pipelines - West­coast operated a gas pipeline with inter-provincial connections - Westcoast pro­posed to expand its facilities in the Fort St. John area - The expansion would consist of an expansion of the pipeline gathering facilities for the transportation of "raw" gas from the point of delivery by the pro­ducers, and the construction of a new or expanded processing plant in which the "fuel" gas, basically methane, was sepa­rated from the other components of the raw gas - Westcoast applied to the National Energy Board for approval - B.C. Gas submitted that the Board lacked juris­diction because the proposed expansion was a purely local work and undertaking - The Board declined jurisdiction - West­coast appealed - The Supreme Court of Canada held that the proposed construction fell within the federal sphere and that the Board had jurisdiction because the ex­pansion fell within the meaning of pipeline as defined in s. 2 of the National Energy Board Act - See paragraphs 43 to 88.

Constitutional Law - Topic 6643

Federal jurisdiction (s. 91) - Interprovincial works and undertakings - Pipelines - Sec­tion 92A of the Constitution Act, 1867, allowed the provinces to control the pri­mary production and export of non-re­newable natural resources - An interprovincial gas pipeline proposed two expansions to its gas gathering and pro­cessing facilities - The issue arose as to whether the National Energy Board had jurisdiction - The Federal Court of Appeal stated that "I cannot read this [s. 92A] as preventing the exercise of federal jurisdic­tion over a transportation undertaking which receives raw gas from the producers thereof after it has been extracted from the ground, dehydrated, and transported to delivery points. Such federal jurisdiction is entirely compatible with the exercise of provincial powers mentioned in s. 92A" - An appeal was dismissed by the Supreme Court of Canada - See paragraphs 80 to 84.

Constitutional Law - Topic 6643

Federal jurisdiction (s. 91) - Interprovincial works and undertakings - Pipelines - A gas pipeline (Westcoast) proposed to expand its gas gathering facilities and gas processing plants in the Fort St. John and Grizzly Valley areas - The issue arose as to whether the National Energy Board had regulatory jurisdiction because, inter alia, the gathering operations were a separate undertaking from the processing and the mainline transmission operations and its interprovincial aspect was not significant - The Federal Court of Appeal stated that the gathering facilities "must be considered as interprovincial because such transporta­tion takes place on a regular and con­tinuous basis across provincial boundaries. Nor is the fact that only a relatively small part of Westcoast's gathering facilities extend into Yukon, Northwest Territories and Alberta of constitutional significance. ... At a minimum, all Westcoast's gather­ing facilities are subject to federal jurisdic­tion" - An appeal was dismissed by the Supreme Court of Canada - See paragraphs 43 to 88.

Constitutional Law - Topic 6643

Federal jurisdiction (s. 91) - Interprovincial works and undertakings - Pipelines - A gas pipeline (Westcoast) proposed to expand its gas gathering facilities and gas processing plants in the Fort St. John and Grizzly Valley areas - The issue arose as to whether the National Energy Board had regulatory jurisdiction in regard to the gas processing plants - A reference was made to determine whether processing plants were included in the meaning of the word "pipeline" as defined by s. 2 of the National Energy Board Act - The Federal Court of Appeal ruled that the Board had jurisdiction because the pipeline was a single undertaking and the plants formed an integral part of the pipelines to which they were connected on each side - An appeal was dismissed by the Supreme Court of Canada - See paragraphs 86 to 88.

Constitutional Law - Topic 6643

Federal jurisdiction (s. 91) - Interprovincial works and undertakings - Pipelines - An interprovincial gas pipeline (Westcoast) proposed to expand its gas gathering facili­ties and gas processing facilities in northern British Columbia - The issue arose as to whether the expansion was under federal jurisdiction under s. 92(10)(a) of the Constitution as a works or undertakings extending beyond the limits of the province - United Transportation Union v. Central Western Railway Corp. (Central Western) held that a work or undertaking would be under federal juris­diction if it was (1) part of a federal un­dertaking or (2) integral to a federal under­taking - BC Gas submitted that part one of the Central Western test was inappropriate when one of the activities involved was not a transportation or communications activity (eg., gas processing) - The Supreme Court of Canada held that "a single federal undertaking may exist notwithstanding that it is engaged in different activities and one of them is not a transportation or com­munications activity" - See paragraph 63.

Mines and Minerals - Topic 8542

Oil and gas - Pipelines - Operation of - Pipeline - What constitutes - [See fourth Constitutional Law - Topic 6643 ].

Words and Phrases

Pipeline - Westcoast Energy Inc. proposed to expand its natural gas gathering facili­ties and to build two natural gas processing plants - The Supreme Court of Canada held that the natural gas processing plants fell within the meaning of "pipeline" as contained in s. 2 of the National Energy Board Act, R.S.C. 1985, c. N-7 - See paragraphs 86 to 88.

Cases Noticed:

United Transportation Union et al. v. Cen­tral Western Railway Corp., [1990] 3 S.C.R. 1112; 119 N.R. 1, dist. [paras. 22, 101].

Director of Investigation and Research, Competition Act v. Southam Inc. et al., [1997] 1 S.C.R. 748; 209 N.R. 20, dist. [para. 37].

Campbell-Bennett Ltd. v. Comstock Mid­western Ltd., [1954] S.C.R. 207, consd. [paras. 44, 107].

Montreal (City) v. Montreal Street Rail­way, [1912] A.C. 333 (P.C.), consd. [paras. 47, 116].

Regulation and Control of Radio Com­munication, Re, [1932] 2 D.L.R. 81 (P.C.), consd. [para. 47].

CNCP Telecommunications v. Alberta Government Telephones and Canadian Radio-Television and Telecommuni­cations Commission, [1989] 2 S.C.R. 225; 98 N.R. 161; [1989] 5 W.W.R. 385; 68 Alta. L.R.(2d) 1; 26 C.P.R.(3d) 289; 61 D.L.R.(4th) 193, consd. [paras. 47, 127].

Canadian National/Canadian Pacific Tele­communications - see CNCP.

Alberta Government Telephones v. C.R.T.C. - see CNCP Telecommuni­cations v. Alberta Government Tele­phones and Canadian Radio-Television and Telecommunications Commission.

Reference re Application of Hours of Work Act (B.C.) to Employees of the Canadian Pacific Railway in Empress Hotel, Victoria (City), [1950] A.C. 122 (P.C.), dist. [paras. 48, 123].

Canadian Pacific Railway Co. v. British Columbia (Attorney General) - see Reference re Application of Hours of Work Act (B.C.) to Employees of the Canadian Pacific Railway in Empress Hotel, Victoria (City).

Empress Hotel Case - see Reference re Application of Hours of Work Act (B.C.) to Employees of the Canadian Pacific Railway in Empress Hotel, Victoria (City).

Luscar Collieries Ltd. v. McDonald, [1927] A.C. 925 (P.C.), appld. [paras. 50, 137].

Northern Telecom Ltd. v. Communications Workers of Canada and Canada Labour Relations Board, [1980] 1 S.C.R. 115; 28 N.R. 107, consd. [paras. 52, 127].

Ontario (Attorney General) v. Winner, [1954] A.C. 541 (P.C.), consd. [paras. 53, 124].

Dome Petroleum Ltd. v. National Energy Board (1987), 73 N.R. 135 (F.C.A.), apprvd. [para. 55].

Nor-Min Supplies Ltd. et al. v. Canadian National Railway Co., [1977] 1 S.C.R. 322; 7 N.R. 603, dist. [paras. 56, 124].

Reference re Industrial Relations and Dis­putes Investigations Act (Can.), [1955] S.C.R. 529, consd. [paras. 61, 142].

Stevedores Reference, Re - see Reference re Industrial Relations and Disputes Investigations Act (Can.).

R. v. Eastern Terminal Elevator Co., [1925] S.C.R. 434, consd. [para. 63].

Nova, An Alberta Corp. v. Minister of National Revenue, [1988] 2 C.T.C. 167; 87 N.R. 101 (F.C.A.), consd. [para. 66].

Ontario Hydro v. Labour Relations Board (Ont.), [1993] 3 S.C.R. 327; 158 N.R. 161; 66 O.A.C. 241, appld. [paras. 81, 119].

Reference re National Energy Board Act, [1988] 2 F.C. 196; 81 N.R. 241 (F.C.A.), consd. [para. 109].

Toronto (City) v. Bell Telephone Co. of Canada, [1905] A.C. 52 (P.C.), refd to. [para. 129].

Northern Telecom Canada Ltd. et al. v. Communication Workers of Canada et al. and Canada Labour Relations Board et al. (No. 2), [1983] 1 S.C.R. 733; 48 N.R. 161, refd to. [para. 129].

British Columbia Electric Railway Co. v. Canadian National Railway Co., [1932] S.C.R. 161, refd to. [para. 130].

Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [1974] S.C.R. 955, refd to. [para. 130].

Ontario v. Canada (Board of Transport Commissioners), [1968] S.C.R. 118, refd to. [para. 137].

Go Train Case - see Ontario v. Canada (Board of Transport Commissioners).

Cannet Freight Cartage Ltd., Re, [1976] 1 F.C. 174; 11 N.R. 606 (F.C.A.), refd to. [para. 141].

Letter Carriers' Union of Canada v. Ca­nadian Union of Postal Workers, [1975] 1 S.C.R. 178, consd. [para. 142].

Syndicat national des employés de la com­mission scolaire régionale de l'Outaouais (CSN) v. Union des employés de service, local 298 (FTQ), [1988] 2 S.C.R. 1048; 95 N.R. 161; 24 Q.A.C. 244; 35 Admin. L.R. 153, consd. [para. 151].

Union des employés de services, local 298 v. Bibeault - see Syndicat national des employés de la commission scolaire régionale de l'Outaouais (CSN) v. Union des employés de service, local 298 (FTQ).

Bibeault - see Syndicat national des em­ployés de la commission scolaire régionale de l'Outaouais (CSN) v. Union des employés de service, local 298.

U.E.S. - see Union des employées de service.

Pezim v. British Columbia Securities Com­mission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1; [1994] 7 W.W.R. 1; 92 B.C.L.R.(2d) 145; 14 B.C.R.(2d) 217; 22 Admin. L.R.(2d) 1; 114 D.L.R.(4th) 385, consd. [para. 151].

Superintendent of Brokers v. Pezim - see Pezim v. British Columbia Securities Commission et al.

University of British Columbia v. Berg, [1993] 2 S.C.R. 353; 152 N.R. 99; 26 B.C.A.C. 241; 44 W.A.C. 241, refd to. [para. 153].

Cuddy Chicks Ltd. v. Labour Relations Board (Ont.) et al., [1991] 2 S.C.R. 5; 122 N.R. 361; 47 O.A.C. 271; 81 D.L.R.(4th) 121, refd to. [para. 153].

Attis v. Board of Education of District No. 15 et al., [1996] 1 S.C.R. 825; 195 N.R. 81; 171 N.B.R.(2d) 321; 437 A.P.R. 321, consd. [para. 153].

Ross v. New Brunswick School District No. 15 - see Attis v. Board of Education of District No. 15 et al.

Statutes Noticed:

Constitution Act, 1867, sect. 91, sect. 92(10)(a), sect. 92A(1)(b), sect. 92A(1)(C), sect. 92A(5), Sixth Schedule, s. 1 [paras. 21, 99].

Federal Court Act, R.S.C. 1985, c. F-7, sect. 18.3, sect. 28(1)(f), sect. 28(2) [para. 21].

National Energy Board Act, R.S.C. 1985, c. N-7, sect. 2 [paras. 22, 99]; sect. 29(1), sect. 29(2), sect. 29(3) [para. 22]; sect. 30(1), sect. 30(2), sect. 31 [paras. 22, 99]; sect. 33 [para. 22]; sect. 47, sect. 52 [paras. 22, 99]; sect. 58(1), sect. 58(3), sect. 59 [para. 22].

Authors and Works Noticed:

Hogg, Peter W., Constitutional Law of Canada (3rd Ed. 1992)(Looseleaf Supp.), vol. 1, pp. 22-2, 22-3 [para. 43]; 22-4 [para. 47].

La Forest, Gerard V., Water Law in Canada (1973), pp. 49, 50 [para. 63].

Counsel:

W.S. Martin and C.B. Johnson, for the appellant, BC Gas Utility Ltd.;

W. Ian C. Binnie, Q.C., Robin M. Sirett and Bruce E. Pydee, for the respondent, Westcoast Energy Inc.;

Peter W. Noonan and Lori Ann B. Boychuk, for the respondent, National Energy Board;

Judith Bowers, Q.C., and Simon Fothergill, for the respondent, Attorney General of Canada;

George H. Copley, Q.C., for the respon­dent, Attorney General of British Columbia;

Michael S. McPhee (written submission only), for the intervener, the Attorney General of Nova Scotia;

Thomson Irvine (written submission only), for the intervener, the Attorney General for Saskatchewan;

Robert J. Normey and Jill Page, for the intervener, the Attorney General of Alberta.

Solicitors of Record:

Russell & DuMoulin, Vancouver, British Columbia, for the appellant, B.C. Gas Utility Ltd.;

McCarthy, Tétreault, Vancouver, British Columbia, for the respondent, Westcoast Energy Inc.;

Legal Services, National Energy Board, Calgary, Alberta, for the respondent, National Energy Board;

George Thomson, Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the respondent, Attorney General of Canada;

Attorney General of British Columbia, Victoria, British Columbia, for Her Majesty the Queen in Right of the Prov­ince of British Columbia;

Attorney General of Nova Scotia, Halifax, Nova Scotia, for the intervener, the At­torney General of Nova Scotia;

Attorney General of Saskatchewan, Regina, Saskatchewan, for the intervener, the Attorney General of Saskatchewan;

Attorney General for Alberta, Edmonton, Alberta, for the intervener, the Attorney General of Alberta.

This appeal was heard on November 12, 1997, before L'Heureux-Dubé, Gonthier, Cory, McLachlin, Iacobucci, Major and Bastarache, JJ., of the Supreme Court of Canada.

On March 19, 1998, the judgment of the Supreme Court of Canada was delivered in both official languages and the following opinions were filed:

Iacobucci and Major, JJ. (L'Heureux-Dubé, Gonthier, Cory and Bastarache, JJ., concurring) - see paragraphs 1 to 89;

McLachlin, J., dissenting - see para­graphs 90 to 170.