Last week, the British Columbia government filed a second lawsuit against the Alberta government over its turn-off-the-taps legislation, the Preserving Canada’s Economic Prosperity Act (the “Act”).
The Canadian Press (“CP”) reported that a statement of claim has been filed in Federal Court on June 14, similar to a document filed in Alberta’s Court of Queen’s Bench that alleged Alberta introduced the bill to inflict economic pain on B.C. by limiting the supply of petroleum products to the province.
CP reported that:
“The claim says Alberta’s attorney general brought an application to have the action dismissed in the Court of Queen’s Bench on the grounds that B.C. has no standing to challenge laws created in the Alberta legislature and that the legal action is premature.
The B.C. government says it believes the case can be heard in Alberta but if it is found not to have standing there, it wants the Federal Court to declare Alberta’s Preserving Canada’s Economic Prosperity Act unconstitutional.”
Alberta’s former NDP government passed the bill but it wasn’t proclaimed into law until April 30, 2019, after the United Conservative Party was elected earlier this year.
Previous Court Challenge
In February 2019, the Alberta Court of Queen’s Bench issued a decision on the issue, finding the B.C. government’s claim to be premature, as the Act was not yet in force.
In that case, B.C. brought an action against Alberta claiming that the Act was unconstitutional. Its statement of claim sought declaratory relief that the Alberta Court of Queen’s Bench declare the Act to be unconstitutional and thereby of no force and effect.
B.C.’s statement of claim alleged that the Act was enacted to counteract steps taken by the Government of British Columbia in opposition to the building of the Trans Mountain pipeline.
The court noted that in the Alberta Hansard, the Alberta Minister of Justice had confirmed that the Actwas to be enacted so that Alberta could restrict the export of refined products to British Columbia. The Minister had stated:
“As I mentioned, we continue to fight in the courts, and soon we will be introducing legislation to limit resources being exported to B.C. They’ve made some decisions, and we’re going to inflict pain on those economic decisions so they understand what they’ve done. […]
As we’ve said many times, we’re going to use every tool in our toolbox to fight the decisions B.C. is making. As I mentioned, in the forthcoming days there will be legislation dropped – and I hope you will be supporting that – to restrict resources to B.C., to inflict economic pain upon them so that they realize what their decisions mean. […]
We’re introducing legislation in the coming days that will allow us to restrict the flow of refined products into B.C.”
An affidavit submitted in court stated that approximately 55% of British Columbia’s gasoline and 71% of its diesel is imported from Alberta refineries, the majority of which travels through the Trans Mountain pipeline, carrying an average of eight million litres per day of refined petroleum products from Alberta to British Columbia.
The affidavit went on to say that British Columbia could not replace that supply from viable sources and that reductions in supply from Alberta would cause shortages in British Columbia and that the result could be increased prices, lack of supply and civil unrest in British Columbia.
In response, however, Alberta brought application for the court to strike the claim. It argued that while the Act was enacted on May 9, 2016, it had still not been proclaimed to come into force at the time of trial and that no date had been set for such proclamation.
Alberta therefore argued that the claim was premature and inappropriate for consideration by the court and should be struck.
Alberta contended that once a law had been enacted with Royal Assent, it would then be law; and at that point the court may, on proper application, review the constitutionality of the law and make declarations in relation thereto.
The court agreed with Alberta’s position, finding that a claim seeking a declaration as to constitutionality of an Act that has not yet been proclaimed was premature. It stated that for a court to consider such a claim, the Act must first be in force.
The court therefore dismissed the claim for being premature, but stated B.C. may recommence their claim should Alberta proclaim the Act in force.
When disputes arise in the oil and gas industry they can be complex, involving international parties and various pieces of specialized legislation. If you are involved in such a dispute, it’s important for you to have a legal team in place that knows how these interests and laws work together and can help you navigate this intricate terrain.
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