Quebec Government Seeks Injunction to Require Provincial Environmental Review of Energy East

On March 1, 2016, the Quebec Government announced that it is seeking an injunction against TransCanada Pipelines (TransCanada) to ensure that the relevant parts of the Energy East project (a federally-regulated interprovincial pipeline project) are subject to a Quebec environmental assessment process. We have previously written about the Energy East project here and here. Although the Energy East project is the subject of an application to the National Energy Board (NEB), the Quebec Government asserts that there should be a review by the province's Bureau d'audiences publiques sur l'environnement (BAPE) to consider environmental impacts within Quebec. According to the recent Quebec Government announcement, the injunction asks the Court to require TransCanada to comply with the Quebec Environmental Quality Act and file environmental assessment documents for the Quebec portion of the project.

One issue in the Quebec Government's injunction request will presumably be the extent to which there can be provincial oversight of federally-regulated pipeline projects. While pipeline proponents can be expected to argue that all relevant interests are considered by the NEB and other federal bodies, the Quebec Government and pipeline opponents will want to have more local review of local environmental impacts.

Similar issues were recently addressed by the British Columbia Supreme Court (BCSC) in a case regarding the British Columbia (BC) Government's planned oversight of the NEB-regulated Northern Gateway project. In Coastal First Nations v. British Columbia (Environment), the BCSC set aside an "Equivalency Agreement" between the BC Government and the NEB, pursuant to which the BC Government agreed to accept any NEB environmental assessment of an NEB-regulated project. Under the "Equivalency Agreement," there would be no Provincial environmental review. The BCSC set aside the "Equivalency Agreement" because it improperly takes away the BC Government's obligation to exercise discretion to issue an "environmental assessment certificate" under section 17 of the BC Environmental Assessment Act (EAA). The BCSC also indicated that the "Equivalency Agreement" failed to recognize the Province's duty to consult with First Nations.

A key item addressed in Coastal First Nations v. British Columbia (Environment) was whether section 17 of the EAA is unconstitutional, at least in relation to interprovincial pipelines like Northern Gateway. The argument (as advanced by the pipeline proponent) is that an interprovincial pipeline is within the exclusive jurisdiction of the Federal Government. The BCSC decision contains some detail and analysis about when provincial laws affecting federal undertakings are unconstitutional. The BCSC concluded that regulation of the environmental impacts of an interprovincial pipeline is not within the exclusive jurisdiction of the Federal Government. The BCSC did caution, however, that issues of paramountcy could arise if the BC Government decided to deny environmental approval for a project that had already been approved by the NEB. On the other hand, the BCSC appeared to accept that the BC Government could properly include supplemental local environmental conditions of approval for an interprovincial pipeline (beyond those stipulated by the NEB) so long as those conditions advance environmental protection concerns (which are within provincial jurisdiction).

While the Coastal First Nations v. British Columbia (Environment) decision of the BCSC will not be binding on the Court hearing the Quebec Government's injunction request, the decision is likely to be referenced and it may be persuasive. To the extent that the Quebec Government can demonstrate that its BAPE process is not taking away the NEB's jurisdiction to approve the interprovincial Energy East project, then the Quebec Government may succeed in its injunction. As of the time of writing (March 7, 2016), the BAPE hearings have commenced, but there is no decision on the Quebec Government's injunction and TransCanada has not yet filed any environmental impact studies for Energy East's route through Quebec. It seems fair to expect that there are further developments to come.