Decision Date: May 29, 2020

Panel: Jeffrey Hand, Monica Danon-Schaffer, Reid White

Keywords: Environmental Management Act – s. 91.11(5); Spill Response, Preparedness and Recovery Regulation – s. 2(1)(b)(i); spill response information order; constitutional question; division of powers; interjurisdictional immunity; paramountcy

Canadian National Railway Company, Canadian Pacific Railway Company, and BNSF Railway Company (the “Appellants”) appealed Spill Response Information Orders (the “Orders”) issued by the Director of the Environmental Emergency Program (the “Director”), Ministry of Environment and Climate Change Strategy. The Appellants operate railways that transport crude oil from Alberta to B.C. and/or across the Canada/U.S. border. The Orders required each Appellant to provide information to the Director about their transportation of crude oil, by volume and route, through B.C. for the years 2018 to 2020. The Orders also stated that the information would be published unless it could not be disclosed under the Freedom of Information and Protection of Privacy Act.

Under sections 91 and 92 of the Constitution Act, 1867, the Parliament of Canada and the Legislatures of the provinces and territories have legislative power over specific subject matters. For example, Parliament has jurisdiction over railways and other undertakings that connect provinces or extend beyond a province, while the Legislatures have jurisdiction over property within the provinces and territories, and matters of a local nature. The Constitution Act, 1867, does not identify the “environment” as a matter under the jurisdiction of either Parliament or the Legislatures. As a result, legislative responsibility for environmental regulation is shared between Parliament and the Legislatures.

The Orders were issued under Division 2.1 of the Environmental Management Act (the “Act”), which sets out requirements regarding spill preparedness, response, and recovery. In Division 2.1, section 91.11(5) authorizes the Director to request information about substances transported by a “regulated person” who has possession, charge, or control of prescribed quantities of prescribed substances, as specified in the Spill Response, Preparedness and Recovery Regulation (the “Regulation”). Section 2(1)(b)(i) of the Regulation defines “regulated person” as a person who transports 10,000 litres or more of a “listed substance” by railway. Crude oil is a listed substance in the Regulation.

The Appellants are also subject to federal legislation governing rail safety, security, the transport of dangerous goods, and emergency response plans and preparedness. The Railway Safety Act regulates the safety and security of federal railways. It also enables local governments to communicate safety and security concerns to railways, and requires railways to respond to municipal inquiries about risk mitigation provided that municipalities undertake to keep that information confidential and disclosed only to persons who need to know. The Transportation of Dangerous Goods Act, 1992 (“TDGA”) requires the Appellants to prepare and maintain emergency response plans that address the unplanned release of dangerous goods. Those plans are reviewed and approved by the federal Minister of Transport. Also, the dissemination of information on dangerous goods transported by rail is regulated under Protective Direction No. 36 (“PD 36”), issued under the TDGA. PD 36 requires the Appellants to provide certain information to emergency planning officials in any municipality through which dangerous goods are transported. This information includes quarterly aggregate information on the nature and volume of dangerous goods transported in each province. Municipal emergency planning officials must agree to use the information only for emergency planning, to disclose it only to persons who need the information for that purpose, and to otherwise keep the information confidential.

On appeal, the Appellants argued that the Director lacked the constitutional jurisdiction to issue the Orders, because the legislation relied upon as authority for the Orders was outside of the Province’s authority under the Constitution Act, 1867. The Appellants argued that the impugned legislation and the Orders attempted to regulate interprovincial railroads, which are federal undertakings under the exclusive jurisdiction of the Parliament. Alternatively, if the Board found that the impugned legislation was within the Province’s authority, the Appellants submitted that the doctrines of interjurisdictional immunity and paramountcy applied, such that the impugned legislation could not operate or apply to the Appellants as federal undertakings. The Appellants also argued that the Orders were: unnecessary given the federal legislation governing spill preparedness and the disclosure of route and volume information; and, unreasonable because publication of the route and volume information could negatively impact the safety and security of trains carrying crude oil, and in turn, public safety and security.

Before turning to the constitutional questions, the Board considered whether it should determine the reasonableness or necessity of the Orders first, and decide the constitutional issues only if the Orders were found to be both reasonable and necessary. The Board found that it would be inefficient and illogical to consider whether the Orders are reasonable and necessary, without first determining if there was any power to make the Orders. If the impugned legislation was invalid or could not apply to the Appellants, there would be no need to consider the necessity and reasonableness of the Orders.

Next, the Board considered the pith and substance of the impugned legislation, which involved determining the legislation’s purpose and effect. The Board found that the legislation’s dominant purpose and effect, based on the statutory language and the evidence about the intended use of the information sought in the Orders, was to enable the Director to assess the Appellants’ spill preparedness resources and plans, such that he may require them to deploy their spill preparedness resources in a manner acceptable to him. The Board found that the prospect of the Director assessing the Appellants’ spill response preparedness and how they allocate resources for responding to spills, and his powers to review and order amendments to their spill response plans, could significantly affect the Appellants’ operations. The pith and substance of the impugned legislation was regulating the management and operations of interprovincial railways’ spill preparedness and response planning, and was outside the constitutional power of the Legislature. Consequently, the Director had no statutory authority to issue the Orders.

Given the Board’s finding that the impugned legislation was beyond the Legislature’s constitutional powers, the Board did not need to address whether the doctrines of interjurisdictional immunity or paramountcy applied. However, out of an abundance of caution, the Board went on to consider those questions.

Under the doctrine of interjurisdictional immunity, an otherwise valid provincial law is inapplicable to a federal undertaking if the provincial law impairs a core of federal power or a vital part of a federal undertaking. The Supreme Court of Canada has previously recognized interprovincial railway safety and associated operational management as a core of federal power. The Board found that both the impugned legislation and the Orders had a serious impact on the Appellants’ spill response planning. Requiring the Appellants to disclose information that the Director could use to assess, and request changes to, their spill preparedness and response plans would result in the Appellants having to satisfy both a federal and provincial regulator, and could lead to different spill response plans across provincial boundaries. In addition, disclosing the information sought in the Orders would be a radical departure from the Appellants’ practice of producing this information only on a ‘need to know’ basis and solely for the use of municipal emergency officials. Managing the safe transportation of crude oil, spill response planning, and allocating resources to address spills is a core power of a federal undertaking that transports products by rail across provincial boundaries. Such an undertaking must be able to plan its spill preparedness, allocate its resources, and manage its security and safety without provincial interference. Consequently, the Board concluded that even if the impugned legislation was validly enacted provincial environmental legislation, the doctrine of interjurisdictional immunity would apply, such that neither the impugned legislation nor the Orders applied to the Appellants.

The doctrine of paramountcy is intended to address conflicts between federal and provincial laws. The Appellants claimed that the impugned legislation and the Orders either conflicted with PD 36, such that the Appellants could not comply with the requirements of both, or frustrated the purpose of PD 36 and the confidentiality provisions in the federal legislation. The Board concluded that the doctrine of paramountcy did not apply, because there was no conflict between the federal legislation and the impugned legislation.

Given the Panel’s findings on the constitutional issues, it was unnecessary to decide whether the Orders were necessary or reasonable.

Accordingly, the Orders were reversed, and the appeals were allowed.