B.C.’s Court of Appeal has rejected an appeal by three of Canada’s major railways about how they disclose information about crude oil and diluted bitumen routes and volumes they transport through B.C.
Canadian National Railway Company, Canadian Pacific Railway Company and BNSF Railway Company challenged orders issued under the provincial Environmental Management Act (EMA), which would require them to disclose the information.
“The orders were issued in the context of growing public concern about increasing shipments of crude oil and diluted bitumen through British Columbia by rail,” the court said.
The court agreed with the purpose of the orders saying the EMA section the railways challenged “may properly be characterized as minimizing adverse risks to the environment, human health, and infrastructure in British Columbia by regulating spill planning, preparedness and response.”
The railways argued disclosure of route and volume information would leave them vulnerable to sabotage and terrorism.
The legislation section involved deals with oil spill contingency, planning and preparedness and about reviewing such plans for compliance with regulations.
The May 20 decision from the three-judge panel, said the railways first appealed the orders to the Environmental Appeal Board, which found the EMA section was invalid or alternatively inapplicable to the companies.
The companies then took that to a judicial review where the judge concluded that the board erred on several points, including on issues of security.
The appeal court said the appeal raised issues of the constitutionality of provincial legislation that purports to apply spill regulation requirements to interprovincial railways engaged in the cross-border transportation of certain petroleum products.
The decision noted the companies are regulated under federal legislation, including the Canada Transportation Act, Railway Safety Act and the Transportation of Dangerous Goods (TDG) Act, along with associated regulations.
The railways described that legislative regime as creating a “’comprehensive and detailed regime regulating all aspects of the safe transportation of dangerous goods by interprovincial rail, including the prevention of and response to any accidents including spills of crude oil.’”
However, the EMA director and B.C. Environmental Appeal Board said those federal laws except the TDG do not address spill planning and response.
“However, there is no question that the appellants are subject to detailed federal regulation in relation to their operations, including their safety practices,” the appeal court said.
Lac-Megantic tragedy
Looming over any Canadian rail oil transportation safety issue is the spectre of the July 2013, Lac-Megantic spill in Quebec, where 47 people died in a major derailment. The train was carrying 7.7 million litres of petroleum crude oil at 104 km/h.
A Quebec coroner called the situation “avoidable” and "violent.”
That was not lost on the B.C. appeal court judges, who noted federal changes as a result of that tragedy meant railways had to supply emergency information to local jurisdictions they passed — but not to provincial governments.
“The railways were not required to provide this information unless the emergency planning official had undertaken or agreed to use the information only for emergency planning or response, and to otherwise keep the information confidential,” the appeal court said.
The orders
In 2018, the EMA director ordered each of the railways to disclose information about the routes and volumes of crude oil and diluted bitumen they transport through B.C.
The companies argued the orders were constitutionally invalid under the constitutional doctrine of interjurisdictional immunity.
Also before the board, the railways cited security concerns with the provision of detailed volume and route information to the director without sufficient confidentiality protections in place.
On the first appeal, though, B.C. Supreme Court Justice John Steeves concluded that “the pith and substance” of the EMA was spill planning, preparedness, and response.
“He held that this purpose was within established areas of provincial constitutional competence, and therefore the impugned legislation was valid,” the appeal court said.
Steeves sent the case back to the board on the companies’ security issues claim.
It was then that the railways filed their case with the appeal court.
However, the high court said the EMA direction to provide route and volume information “does not impair a core of federal power over interprovincial undertakings.”
The court further said, “(Steeves’) conclusion that the board was best suited to hear, weigh, and assess the appellants’ security-focused argument does not reflect any error in principle.”
