Part Two: British Columbia Defends its Amendments to the Environmental Management Act at the Court of Appeal

The three questions posed in the 2018 reference were:

(a) is the Proposed Legislation within the legislative authority of the Legislature of BC? The Attorney General of Canada submitted that

“The answer to the first question is no. The Proposed Legislation is in pith and substance an attempt to regulate interprovincial undertakings, a subject matter that falls under the exclusive jurisdiction of the Parliament of Canada.

(b) if the answer to (a) is yes, would the Proposed Legislation be applicable to hazardous substances (i.e., “Heavy Oil”) brought into BC by means of interprovincial undertaking? The Attorney General of Canada submitted that:

The answer to the second question is no. The Proposed Legislation would not be applicable to Heavy Oil brought into BC by means of an interprovincial undertaking, pursuant to the doctrine of interjurisdictional immunity.

(c) if the answers to (a) and (b) are yes, would existing federal legislation render all or part of the Proposed Legislation inoperative? The Attorney General of Canada submitted that:

The answer to the third question is yes. The Proposed Legislation would be inoperative pursuant to the paramountcy doctrine since it conflicts with and frustrates the purpose of federal legislation that regulates interprovincial oil transportation.

Canada’s Attorney General took further issue with the the “broad” discretion conferred upon the Director. It submitted that, from the Act, the Director has discretion to apply conditions to applications:

(a) provide information documenting, to the satisfaction of the Director, the risks to human health or the environment that are posed by a release of “Heavy Oil”, as well as an explanation of the impacts and costs of a release;

(b) demonstrate, to the satisfaction of the Director, that appropriate measures are in place to prevent, minimize, and respond to releases of “Heavy Oil”;

(c) demonstrate, to the satisfaction of the Director, financial capacity to respond and compensate in respect of releases of “Heavy Oil”;

(d) establish funds for or make payments to local or First Nation governments in order to ensure these governments have the capacity to respond to releases of “Heavy Oil”; and

(e) agree to compensate any person, local government or First Nation government for damages resulting from a release of “Heavy Oil”.

Further, under s.22.5 the Director may impose:

(a) conditions requiring the holder to implement and maintain measures to prevent, minimize and respond to releases of “Heavy Oil’;

(b) conditions requiring the holder to respond to releases of “Heavy Oil” in a manner specified by the Director; and

(c) conditions requiring the holder to compensate any person, local government or First Nation government for damages resulting from a release of “Heavy Oil”.

If the permit holder fails to comply with these conditions, the Director has the discretion to cancel the permits.

Canada’s AG submitted that the legislation is ultra vires, and argued for the invocation of the colourability doctrine- submitting that through the Act B.C.’s legislature is attempting to “do indirectly what it cannot do directly.”