Vol. 135, No. 1 — January 3, 2001

Registration
SOR/2001-30 22 December, 2000

NATIONAL ENERGY BOARD ACT

Rules Amending the National Energy Board Rules of Practice and Procedure, 1995

The National Energy Board, pursuant to paragraph 8(b) of the National Energy Board Act, hereby makes the annexed Rules Amending the National Energy Board Rules of Practice and Procedure, 1995.

Calgary, Alberta, December 19, 2000

RULES AMENDING THE NATIONAL ENERGY BOARD RULES OF PRACTICE AND PROCEDURE, 1995

AMENDMENTS

1. Sections 55 and 56 of the National Energy Board Rules of Practice and Procedure, 1995(see footnote 1) are replaced by the following:

55. (1) To apply for a right of entry order under section 104 of the Act, a company shall, after serving the owner of the lands with the notice described in subsection 104(2) of the Act, file an application with the Board not less than 30 days and not more than 60 days after the date of service of the notice on the owner.

(2) The application must be served on the owner of the lands on the same day that the application is filed with the Board.

(3) The application must contain

(c) a schedule that is proposed to be made part of the order sought and that contains, in a form suitable for depositing, registering, recording or filing against lands in the land registry or land titles office in which land transactions affecting those lands may be deposited, registered, recorded or filed, a description of

(d) a current abstract of title to the lands, a certified copy of the certificate of title to the lands or a certified statement of rights registered in the land registers for the lands;

(e) a copy of section 56; and

(f) evidence that the application, including the information set out in paragraphs (a) to (e), has been served on the owner of the lands.

Written Objection

56. (1) An owner of lands for which a right of entry order is sought who wishes to object to the application shall file the objection with the Board no later than ten days after the date that the application is served on the owner by the company.

(2) Where an owner of lands files an objection in accordance with subsection (1), the owner shall, on the same day that the objection is filed with the Board, serve the objection on the company at the address shown in the notice served on the owner by the company.

(3) A company that receives an objection under subsection (2) shall file with the Board a reply to the objection, or a statement that it does not wish to respond to the objection, within seven days after the date that the objection is served on the company by the owner of the lands.

(4) Where a company files a reply to an objection, the company shall serve the reply on the owner of the lands on the same day that the reply is filed with the Board.

2. The schedule to the Rules is amended by replacing the reference to "19" wherever it occurs with a reference to "20".

COMING INTO FORCE

3. These Rules come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Rules.)

Description

Pursuant to section 8 of the National Energy Board Act ("the Act"), the National Energy Board ("the Board") may make rules governing the practice and procedure of the Board in dealing with matters brought before it on application or complaint.

The Board has amended the National Energy Board Rules of Practice and Procedure, 1995 ("the Rules") to reflect recent experience with applications for a right of entry under section 104 of the Act. Section 104 provides the mechanism by which a pipeline company can obtain a legal interest in property against the wishes of a landowner in order to construct a pipeline. The recent experience of the Board has disclosed certain irregularities and anomalies between the Rules and the Act, as well as the common law.

The main problem in the relationship between the Rules and the Act is a conflict concerning the timing of the filing of a right of entry application. The Act requires that applications be submitted to the Board 30 to 60 days after a notice of the application is served upon a landowner, while the Rules stipulate that a pipeline company should submit its application to the Board forthwith after service of the notice upon a landowner.

A conflict appears between the Rules and the common law in that there is no provision of the Rules which requires the Applicant to serve the application for a right of entry order upon a landowner. Currently, only a notice is required to be served on a landowner by the Rules. It is considered by the Board that an affected landowner should receive a copy of all of the material submitted by a pipeline company to the Board. The absence of such a procedure may offend the common law principles of natural justice and procedural fairness.

Other deficiencies in the Rules which have been identified include the following:

• At present, a pipeline company is only obligated to provide the Board with proof that a notice was served on the landowner, rather than proof that the complete application was served by the company;
• There are no time limits for the filing of objections by the landowner to the application of the company;
• There are no time limits for the filing of a reply by the company to the objections of the landowner; and
• There is a requirement for a landowner to send their objection to the company by registered mail, which serves no useful purpose and may operate as a potential barrier to participation in the Board's process by a landowner.

The Board has proposed the following amendments to correct the legal problems identified with the existing Rules:

• Removal of the word "forthwith" in section 55, and its replacement by a direction to pipeline companies requiring them to file their applications for a right of entry order not less than 30 days, and not more than 60 days, following the service by the company of a notice on the landowner;
• Insertion of a requirement that the right of entry application be served on the landowner, including all of the material associated with the application. This amendment will honour the common law obligation of the Board to ensure that persons affected by an application have full knowledge of that application;
• Insertion of a requirement that the pipeline company provide proof that the entire right of entry application was served on the landowner. This provision will provide assurance to the Board that a landowner is aware of applications that are contrary to the landowner's interests;
• Insertion of a requirement that landowners must file their objections to the right of entry application within 10 days after the date that the application is served on them. This provision provides the landowner with an opportunity to respond fully to the notice and to the application, while maintaining reasonable process efficiency, since landowners will have a cumulative total of 40 days following the service of a notice upon them by a pipeline company to express a view to the Board about the acquisition by a company of an interest in their lands;
• Insertion of a requirement that a pipeline company must file its reply to the landowner's objection within 7 days after the date that the objection is served on the company by the landowner, and that the company must serve a copy of its reply on the landowner; and
• A minor amendment removing the obligation of a landowner to serve their objection by registered mail.

Alternatives

No other alternatives were considered. The amendments are required to bring the Rules into congruency with established legal principles concerning natural justice and procedural fairness.

Benefits and Costs

One consequence of these amendments may be to extend the processing of right of entry applications by approximately 10 days. However, the current system is procedurally weak and may therefore be open to attack on legal grounds. The potential advantage of the slightly quicker processing cycle which now exists is outweighed by the possibility that a right of entry application could be successfully impugned, leading to much greater process delays.

There will be no impact on the resources of the Board devoted to these matters.

These amendments have no impact on the year 2000 computer issue.

Consultation

As noted above, the amendments are required to correct legal deficiencies and anomalies in the current version of the Rules. The proposed changes were pre-published in the Canada Gazette, Part I on November 4, 2000 and given wide distribution by the Board through its Internet website and Regulatory Agenda publication. No comments were received by the Board following prepublication.

Compliance and Enforcement

Compliance and enforcement is conducted by the Board through quasi-judicial processes. No additional resources will be required for compliance and enforcement of these amendments.

Contact

Mr. Peter W. Noonan
Legal Services Unit
National Energy Board
444 - 7th Avenue S.W.
Calgary, Alberta
T2P 0X8
Tel.: (403) 299-3552
FAX: (403) 292-5503

Footnote 1

SOR/95-208

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with extensible hypertext markup language (XHTML 1.0 Strict).