National Energy Board: Pipelines
Authors: Shwed T.S. 
Published: March 2010

The National Energy Board (NEB) could be said to have been established as a result of the Great Pipeline Debate of 1956. However, its roots lie in the Electricity and Fluid Exportation Act of 1907 and the Railways Act. In 1949, the Pipelines Act was promulgated. Then, in 1955, the legislation was consolidated into a revised Act which was in force until 1959. During this time, the Board of Transport Commissioners heard applications under the terms of the above legislation. The two most important of these were Interprovincial (crude) Pipeline and West-coast Transmission.

Canadian petroleum production was (and still is) concentrated in Western Canada. Alberta was seeking to build up markets in the United States for its petroleum, but the Eastern Canada energy market was growing. The Federal Government was concerned with creating adequate links between the markets and the well-head.

With the establishment of gas reserves surplus to Alberta's future needs, two competing proposals for removal emerged: Western Pipe Lines proposed a line as far east as Winnipeg, thence south to Omaha; and Trans Canada Pipe Lines sought an all-Canadian line as far east as Montreal. In 1954, Premier Manning ordered these two companies to merge and the all-Canadian line was agreed upon.

Naturally, the Federal Government supported this plan. When financial problems threatened construction, the Ontario and Federal governments agreed to form a Crown Corporation to pay for the portion of the line through the worst part of the Canadian Shield. Time was at a premium, so the Federal Government used closure to rush the bill through Parliament. This resulted ultimately in the defeat of the Liberal government.

In 1957, the Gordon Royal Commission recommended the development of a comprehensive energy policy and the formation of a national energy authority to advise the government on long-term requirements for energy in various forms.

The Borden Royal Commission was asked to make recommendations on exports of energy and energy resources. The Commission was also required to set up rules on the regulation of prices, or rates, financial structure and control of pipeline companies, and all other matters necessary for the efficient and economical operation of interprovincial and international pipelines.

Legislation followed these two Royal Commissions, with the National Energy Board Act introduced in the House in May i959 and enacted in July 1959. One of the major objectives of the NEB Act was to consolidate all government functions in the energy fields. The Bill was designed to ensure that: pipeline projects will be economically feasible; tolls would be just and reasonable; the exported energy would be surplus to the Canadian needs; and all projects were to be for the public convenience and necessity. It is interesting to note that the Board reported to the Minister of Trade and Commerce.

However, in 1966, the Department of Energy, Mines and Resources (EMR), emerging from the old Mines and Technical Surveys, took over the NEB's policy functions. All NEB reports to Parliament on energy matters from then on were addressed to the Minister of the day.