A recent Federal Court decision has granted the British Columbia Attorney General an interlocutory (interim) injunction suspending the operation of Alberta’s Preserving Canada’s Economic Prosperity Act (also known as Bill 12, and sometimes referred to as the “turning off the taps” legislation). The decision prevents Alberta from making orders under section 2(2) of Bill 12 until the Federal Court makes a determination on British Columbia’s claim that the legislation is unconstitutional.
As we described in a prior post, the Alberta government passed Bill 12 – Preserving Canada’s Economic Prosperity Act on May 16, 2018, giving the province the ability to limit the export of oil and gas from the province. Bill 12 is aimed squarely at the Government of British Columbia’s opposition to the Trans Mountain pipeline project, a pipeline running from Edmonton, Alberta to Burnaby, British Columbia. Bill 12 gives Alberta the authority to require companies to obtain a licence before exporting oil or gas from Alberta via pipeline, rail or truck. Companies would not be automatically required to apply for an export licence. Rather, licences would only be required if the energy minister determined that it was in the public interest, including whether there was adequate pipeline capacity to maximize the return on Alberta’s oil and gas resources. Companies that do not comply may face fines of up to $10 million per day.
The Alberta legislation is responsive to legislative amendments in British Columbia that were intended to regulate the shipment of “most forms of heavy crude oil and all bitumen and blended bitumen products” and require permits for shippers whose volumes increase beyond prior levels. The B.C. Court of Appeal recently decided against the proposed legislative amendments, holding that British Columbia does not have jurisdiction to regulate the shipment of “heavy oil” through the province. The B.C. government is seeking leave to appeal the decision to the Supreme Court of Canada. MORE