A recent decision of the BC Supreme Court has significant implications for the environmental assessment of federally regulated projects, notably pipelines regulated by the National Energy Board (“NEB”).

In 2010, under section 27 of the BC Environmental Assessment Act (“BC EAA”), the provincial Minister of Environment (through her delegate) entered into an agreement with the NEB respecting the environmental assessment of projects that require both NEB approval and an environmental assessment certificate (“EAC”) from the province. Under the agreement, the Minister accepted that NEB project assessments were equivalent to provincial environmental assessments. The agreement also eliminated the requirement for the projects covered by it to go through a provincial environmental assessment, or obtain an EAC. Pursuant to section 28 of the BC EAA, that Act was varied to the extent necessary to give effect to the agreement.

Coastal First Nations challenged the agreement in part, based on an interpretation of the BC EAA, and also on the basis that the province had failed to consult with First Nations before entering into it. Northern Gateway Pipelines argued that section 17 of the BC EAA, under which provincial ministers decide whether or not to grant an EAC, was constitutionally inapplicable to interprovincial pipelines, such as the one it has proposed between Alberta and Kitimat, BC.

In her judgment released in January, Madam Justice Koenigsberg held that section 27 did not allow the Minister to remove the need for an EAC. While eliminating the requirement for projects covered by the agreement to go through a provincial environmental assessment was valid, they would still require a decision by provincial ministers on whether or not they should be issued an EAC.

Koenigsberg J. made important statements with respect to the provincial authority to conduct environmental assessments of interprovincial pipelines. She held that as regulation of the environment is a matter of shared jurisdiction, the BC EAA is valid even where it applies to interprovincial undertakings. While a refusal to issue an EAC for an interprovincial project could be unconstitutional, no decision had yet been made, so a determination in this regard would be premature. Further, while the province may face constitutional limitations in imposing EAC conditions on an interprovincial undertaking, conditions that advance environmental protection would be consistent with federal environmental protection legislation. Again, until the province imposes an EAC condition, a determination of its constitutional validity would be premature.

This judgment has implications for a number of projects, including two that have been the subject of extensive public discussion. The certificates issued for the Northern Gateway project, the subject of the decision, were recently quashed by the Federal Court. In addition to federal approval it will now also require a provincial EAC in order to proceed. The same goes for Kinder Morgan’s TransMountain Expansion project (“TMX”), a proposal to significantly increase the capacity of an existing oil pipeline from Alberta to Burnaby, BC. The NEB recommended approval of TMX in May, and the federal government is expected to make a decision on it later this year. In keeping with Koenigsberg J.’s judgment, both projects could be required to meet additional provincial conditions in any EAC granted for them.