Source: https://www.nrcan.gc.ca/energy/infrastructure/natural-gas/pipeline-arbitration-secretariat/5915
Timestamp: 2019-04-24 12:17:25+00:00

Document:
This is an information document and should not be considered legal advice. These "Frequently Asked Questions" (FAQs) will give you legal information. To get legal advice regarding your situation, you would have to speak with a lawyer.
Q1. I have a pipeline crossing my land. Am I entitled to any compensation?
Q2. How do I apply for the services of a negotiator or an arbitrator?
Q3. What information should I include with my application?
Q4. What is the difference between the negotiation option and having an arbitration committee appointed?
Q5. It must be expensive to participate in these negotiation and/or arbitration proceedings. What about my costs? Is there any up-front money available to landowners or will I be reimbursed for my out-of-pocket expenses?
Q6. How do I decide whether to choose negotiation or arbitration? Can someone at Natural Resources Canada help me decide and, if it is arbitration, help me prepare the notice of arbitration?
Q7. What is the Pipeline Arbitration Secretariat (PAS or Secretariat)?
Q8. Where do the arbitration committees hold their hearings? Will it be close to my residence so that I can attend?
Q9. Generally, companies are represented by lawyers. Should I have a lawyer to represent me?
Q10. What information can the Secretariat provide to landowners?
Q11. How does the Minister appoint negotiators and arbitration committees?
Q12. How long does it take to set up a committee and get a decision?
Q13. How can I receive copies of arbitration committee decisions?
Q14. What are my options after the arbitration committee provided a decision?
Q15. How many arbitration committee decisions have been appealed and what was the outcome?
Q16. Once an arbitration committee has made its decision regarding compensation, what are my options for receiving the funds?
Q17. The process of getting compensation can be onerous and slow. Will Natural Resources Canada establish service standards so these proceedings will be faster?
Q18. If a pipeline company decided to abandon its pipeline, could the Minister of Natural Resources appoint a negotiator or an arbitration committee to determine how much compensation I might receive?
Q19. Where can I get additional information about negotiation or arbitration services available from Natural Resources Canada or to receive a copy of the National Energy Board Act and the Pipeline Arbitration Committee Procedure Rules?
Compensation is a private matter between a pipeline company and a landowner.
However, for pipelines that are federally-regulated, i.e. by the National Energy Board, when a landowner and a pipeline company cannot agree on compensation for lands that the company plans to acquire, has acquired or has damaged, either party may apply to the Minister of Natural Resources Canada (Minister) to receive the services of a negotiator, or to have the dispute settled by arbitration.
(iii) the inspection, maintenance or repair of the pipeline.
Negotiation proceedings are covered in sections 88 and 89 of the National Energy Board Act (NEB Act). To receive the services of a negotiator, a landowner or the pipeline company must serve a notice of negotiation (subsection 88(1) of the NEB Act) on the other party and on the Minister of Natural Resources Canada.
For a negotiator to be appointed, your application must include a clear and concise statement of the relevant facts and details regarding the proposed compensation.
To serve a notice of arbitration on the Minister, a landowner should refer to subsection 90(1) as well as subsections 75, 84 and 85 of the National Energy Board Act, and to subsection 4(2) of the Pipeline Arbitration Committee Rules, 1986 that specifically set out the information that must be included.
The Minister appoints a negotiator to help the parties reach an agreement.
The negotiator has 60 days after the start of negotiations to report to the Minister as to the success or failure of the process.
It is an informal process during which the negotiator does not favour either party and does not decide on the amount of compensation.
If there is agreement, details are not necessarily included in the negotiator's report to the Minister. However, if they are, they are protected under the Privacy Act and would not be released by Natural Resources Canada without the consent of both parties.
If the negotiations are unsuccessful, either party may apply to the Minister to have the matter settled by binding arbitration.
The negotiation process is carried out "without prejudice" to any subsequent arbitration proceeding. Whatever happens during negotiations cannot be used against a party during arbitration. In other words, the willingness to make or accept offers during negotiations cannot bind any party for the purpose of the arbitration proceedings.
has its own powers to conduct the arbitration proceedings as it sees fit.
Unlike negotiations, arbitration hearings are relatively formal. A transcript of what is said is kept. The committee may review evidence and hear from witnesses.
A committee's decision is binding and enforceable in a court of law.
Parties may ask a committee to review a decision. Subsection 46 (1) of the Pipeline Arbitration Committee Procedure Rules, 1986 provides more information about what shall be included in your review application.
It is your right to appeal an arbitration committee's decision to the Federal Court on questions of law or jurisdiction. An appeal must be filed within 30 days of the decision.
Evidence gathered at hearings and the committee's decision are protected under the Privacy Act. You are free to release information, but Natural Resources Canada will only do so with the written permission of both parties.
Unfortunately, Natural Resources Canada cannot provide money in advance for the negotiation process.
More specifically, during negotiations, neither the negotiator nor the Minister can award costs.
Landowners who want to be reimbursed for any expenses they expect to incur during the negotiation process can discuss this matter with the pipeline company prior to the start of negotiations.
Like negotiation, Natural Resources Canada cannot provide funding in advance to landowners to participate in the arbitration process.
However, if a pipeline company has been given a right of entry order by the National Energy Board to enter your lands, under section 105 of the National Energy Board Act you are entitled to advanced compensation. However, if you have not received any advanced compensation or you are unable to reach an agreement with the pipeline company, you may request that the matter be determined by an arbitration committee.
If you go to arbitration, the National Energy Board Act provides for the recovery of reasonable costs incurred during this process.
"Where the amount of compensation awarded to a person by an Arbitration Committee does not exceed eighty-five per cent of the amount of compensation offered by the company, the legal appraisal and other costs incurred by that person in asserting his claim for compensation are in the discretion of the Committee, and the Committee may direct that the whole or any part of those costs be paid by the company or by any other party to the proceedings."
Legislative provisions can be open to interpretation. As such, Natural Resources Canada cannot provide any definitive statements as to the meaning of subsections 99 (1) and (2) that address the matter of reimbursement of costs incurred. However, the interpretation of these subsections was the subject of a Federal Court decision on June 7, 2006 (Bue v. Alliance Pipeline Ltd). You could benefit from reading this decision to form your own view of the meaning of these sections and/or seek legal counsel.
Officials at Natural Resources Canada and the Department of Justice cannot provide advice regarding your decision to apply for negotiation or arbitration.
The Pipeline Arbitration Secretariat can provide you with basic information on how to proceed.
At the end of the day, applicants must make their own determination as to their perceived rights and decisions as to whether to apply for negotiation or arbitration.
release of decisions where permission has been granted by the parties to do so.
The Secretariat provides information to landowners and pipeline companies on the negotiation and arbitration services via the Minister of Natural Resources Canada.
Information is provided upon request or available on the Pipeline Arbitration Secretariat website.
Section 94 of National Energy Board Act leaves the choice of hearing location up to the arbitration committee.
However, the Secretariat believes that the spirit of the National Energy Board Act is best served by holding proceedings in a location requested by the property owners.
You may decide whether or not you are represented by a lawyer. You can represent yourself in the negotiation proceedings or before an arbitration committee. However, you should be aware that the processes are based on the applicable provisions of the National Energy Board Act and, in the case of arbitration, the Pipeline Arbitration Committee Procedure Rules, 1986. If you want advice on the interpretation of these provisions, you may seek legal advice.
Information for Landowners, compensation for lands acquired and for damages for federally regulated pipelines. Negotiation and arbitration services provided by the Minister of Natural Resources Canada.
The National Energy Board Act and an Amendment Order to the Act.
A table that allows you to read the National Energy Board Act and the Procedure Rules together.
The Secretariat cannot provide advice to landowners and pipeline companies. This includes interpretation of the provisions of the NEB Act that apply to the negotiation and arbitration services offered by the Minister.
If there is an existing arbitration committee to which additional work can be referred, under paragraph 91(1)(a) of the NEB Act, the Minister may do so.
Alternatively, the Minister's office can provide the Secretariat with a list of suitable candidates located near the landowner to screen for interest, availability and qualifications.
Provided that potential arbitration committee members successfully complete a conflict of interest questionnaire, the Deputy Minister of Natural Resources recommends appointments to the Minister for consideration.
The Minister may appoint whomever she/he sees fit.
If there is an existing committee to which the Minister can give the additional work, this eliminates the need and time to find new members, determine their interest and availability, ensure that there are no conflicts of interest and make the appointments.
Once the committee is appointed, it is master of its own proceedings and operates independently of the Minister of Natural Resources. The time required can vary considerably depending on the complexity of the case, the number of landowners involved, the availability of three arbitration committee members, lawyers and/or landowners to meet and, following the completion of the hearings, to write the decision. Appeals will also affect the time required for a final decision.
Historically, arbitration committees have taken 19-37 months to reach a final decision.
Arbitration committees' decisions are subject to the provisions of the Privacy Act. As such, Natural Resources Canada will only release them if it has received permission from all parties to the agreement to do so.
Terrence and Marcia Balisky, Peter and Levke Eggers, Byan Ellingson, Fern Jones, Gregory leroux and 340104 Alberta Ltd., Donald Liland, Randy and Kristin Moe, Franklin Moller, Robert and Ada Richards, Albert Slater, Gordon Strate, Byron Bue, Raymond Bue, Brian and Teresa Fast, Raymond and Florence Gilkyson, Stirling and Laura Hanson, Lloyd and Kathryn Olley, Kane Piper and Dale and Gwen Smith vs. Alliance Pipeline Ltd. (June 15, 2012).
*Redacted version, i.e. does not include any dollar amounts for compensation.
As well, arbitration committee decisions that have been appealed (see Question 15) can also be released. These decisions are available upon request to the Secretariat.
First, you can accept the decision.
Second, pursuant to subsection 100(2) of the National Energy Board Act, you can ask that the arbitration committee to review its decision. You should refer to subsection 46 (1) of the Pipeline Arbitration Committee Procedure Rules, 1986 regarding the information you must provide to the committee.
Third, pursuant to section 101 of the National Energy Board Act, the arbitration committee's decision can be appealed to the Federal Court.
Several arbitration committee decisions have been appealed (including cross-appeals) to the Federal Court, the Federal Court of Appeal and/or the Supreme Court of Canada. They have involved pipeline companies, landowner(s), mineral rights owners and/or the Minister of Natural Resources. Some decisions have been appealed more than once.
About half were won by landowners and half were won by the pipeline company or the Minister of Natural Resources. Some decisions were split, and determined some aspects in the landowners' favour and other aspects in the pipeline company's favour.
a link to the complete decision.
The information reproduced here is not the official version of any of the decisions below and while we strive to be accurate, readers are directed to the Federal Court websites for the full text of these decisions. This information is not provided in affiliation with or endorsement of the Federal Court of Appeal or the Court Administration Service. We have provided hyperlinks to all the court decisions. Visitors to the Federal Court website should read the "Important Notices" in the bottom right hand corner on the last page of the decision for further information.
PIPELINE ARBITRATION - CASES THAT WERE APPEALED TO THE FEDERAL COURT OR THE FEDERAL COURT OF APPEAL.
The appellant appealed from a decision of the Pipeline Arbitration Committee which set the compensation to which she was entitled as a consequence of the expropriation of part of her land to build a pipeline. The Committee considered that the best use of the property at the time the expropriating party took possession was for farming or forestry. The appellant maintained that her land should have been assessed as a gravel and sand pit.
The Landowners' appeal was dismissed.
M. Pelletier and G. De Maddelein v. Gazoduc Trans-Québec et Maritimes Inc.
The Landowners' application commenced on January 15, 2001 and was amended on August 8, 2001. They sought a review of the Minister's decision not to appoint an arbitration committee to address their notices of arbitration with respect to right of entry orders issued by the National Energy Board to Alliance and the Minister's request to the arbitration committee not to consider the issue of the controlled area.
The Landowners' application for judicial review was dismissed.
In Balisky v. Goodale (listed above), the court dismissed the Landowners' application for a judicial review of the Minister's request to the arbitration committee not to consider the issue of the controlled area.. This case was an appeal of that court decision.
The Landowners won their appeal with costs. The court's decision quashed the Minister's decision regarding compensation for the controlled area. The Minister was directed to refer the matter of compensation relating to the controlled area to an arbitration committee or committees.
Alliance appealed an order by an arbitration committee in respect of the amount of advance compensation payable to the Bokenfohrs for the acquisition of permanent and temporary easements for their lands for the construction of a pipeline.
Alliance's appeal was dismissed with cost to the Bokenfohrs.
Alliance appealed an order of a pipeline arbitration committee in respect of the amount of advance compensation payable to the Fasts for the acquisition of permanent and temporary easements over their lands for construction of the pipeline.
The court ruled that the arbitration committee's order be revised by deleting its direction that the advance payment be made in such periodic increments as requested by Alliance.
By way of background, the Minister of Natural Resources had refused the Landowners' applications to appoint an arbitration committee to determine damages in respect of the controlled area on either side of the pipeline's right of way. The Landowners' application to the Federal Court for a judicial review was refused Balisky v. Goodale (listed above). Subsequently, the Federal Court quashed the Minister's decision and directed that an arbitration committee be appointed to address the issue of compensation for the controlled area Balisky v. Canada (Minister of Natural Resources) 2003 (also listed above). This case dealt with the Landowners' assessment of costs in the above court cases which they put at $7,823.57 each against Alliance and the Minister.
The Landowners won their appeal but the Court awarded $1,812.28 respectively against each of the Minister and Alliance, i.e. less than what had been sought.
The Minister of Natural Resources determined that an arbitration committee would be appointed to hear the compensation claim of the Elliotts. The Elliotts claimed compensation for diminution of the capital value of their property alleged to have arisen due to its proximity to MNP's pipeline. MNP submitted that the arbitration provisions of the National Energy Board Act, do not apply to the Elliotts or their claim and sought to have the Minister's decision quashed.
MNP's appeal was allowed. As such, the Minister's decision was quashed.
Alliance appealed an award by a pipeline arbitration committee dated September 5, 2003 and released March 15, 2004. Alliance contended that the arbitration committee had not taken into account that the interest of the Smiths was lease hold, as opposed to all of the other claims dealt with that were freehold land.
Alliance's appeal against the award provided by the arbitration committee was successful. The Court also awarded costs to Alliance in the lump sum of $550.00.
Bev Holdings Ltd., Byron and Raymond Bue, Brian and Teresa Fast, Raymond and Vicky Gilkyson, Stirling and Laura Hanson, Mario and Jamie Marouelli, Lloyd and Katherine Olley, Dale and Gwen Smith, Frank and Irma Thederahn and Scott and Tricia Gabert, Kane Piper ("Landowners").
and Byron and Raymond Bue, Brian and Teresa Fast, Raymond and Vicky Gilkyson, Stirling and Laura Hanson, Lloyd and Katherine Olley, Dale and Gwen Smith, Frank and Kane Piper ("Landowners").
The Landowners appealed the arbitration committee's award of compensation. Alliance's cross-appeal questioned whether the arbitration committee had erred in its compensation award to the Peace River landowners based on a "pattern of dealings".
1. The court set aside the arbitration committee's decision of October 21, 2004 with respect to each of the landowners' appeals and referred the matter of costs back to a differently constituted arbitration committee for redetermination.
2. In addition, the Court set aside the arbitration committee's decision of September 5, 2001 regarding the appeals of the following landowners: Scott and Tricia Gabert; Mario and Jamie Marouelli; Frank and Irma Thederahn; and Bev Collins Holdings Ltd. and referred the matters back to a differently constituted arbitration committee for redetermination in accordance with the reasons provided.
3. Alliance's cross-appeals were dismissed.
4. Finally, the Court awarded costs of each appeal to the Landowner Appellant in Tariff B, Column III of the Federal Courts Rules.
Bue v. Alliance Pipeline Ltd.
Heartland was granted by the Province of Nova Scotia a right to explore for minerals on land which was subsequently acquired to build a pipeline. Heartland alleged that the prohibition on work close to the pipeline diminished the value of its exploration right. Heartland sought compensation to the extent its exploration right was diminished. It appealed the Arbitration Committee's decision dismissing its request for compensation under section 90 of the National Energy Board Act.
The Federal Court dismissed Heartland's appeal. The right to explore for minerals, defined in the Nova Scotia Mineral Resources Act 1975, did not amount to an interest in land to Heartland. Without an interest in land, the Arbitration Committee did not have jurisdiction to award any compensation, if any could be proven.
Heartland Resources Inc. v. Sable Offshore Energy Inc. and Maritimes & Northeast Pipeline Management Ltd.
Mr. Smith sought an order dismissing the appeal, with his costs covered.
Alliance's appeal was dismissed, with costs to Mr. Smith.
Alliance's appeal questioned whether the arbitration committee erred in how it determined the appropriate amount of compensation for the Landowners and the manner in which compensation should be paid. Alliance argued that the arbitration committee took into account irrelevant factors. The Landowners also appealed, contending that the arbitration committee should have ordered Alliance to pay them an annual fee rather than a lump sum.
The Court determined that the arbitration committee's decision was, in the large part, reasonable. However, the court found that the arbitration committee erred in its determination of the compensation payable to three of the respondents – two in Fort Saskatchewan, Alberta and one in Fort St. John, British Columbia. As such, Alliance's appeal was allowed in part. The Landowners' appeals (both listed above) were dismissed.
Alliance appealed a Federal Court decision of January 4, 2008 (listed above) that had dismissed a previous appeal by Alliance of a decision and award by a (second) arbitration committee on September 18, 2006 and corrected on November 6, 2006. This appeal focussed on an award to Mr. Smith of his legal costs incurred in another court case, initiated by Alliance, that was dismissed by the Alberta Court of Queen's Bench and the award of costs from a previous arbitration committee that was unable to complete its work on his compensation case because one of the members resigned.
Alliance won its appeal with costs. As such, the Federal Court decision of January 4, 2008 (listed above) was set aside. In addition, Alliance won its appeal of the (second) arbitration committee's decision of September 18, 2006 to award the costs incurred by Mr. Smith during the first arbitration committee's proceedings.
The Landowner, Mr. Smith, and Alliance had a dispute over the losses Mr. Smith suffered from Alliance's operations on his land. The dispute was submitted to arbitration but the arbitration committee lost a member and could not render a decision. Alliance afterwards initiated and then discontinued a lawsuit against Mr. Smith in relation to the dispute. A second arbitration committee awarded Mr. Smith compensation for his losses and reimbursement of his costs before the first arbitration committee and before the Court. Alliance appealed the arbitration committee's decision about reimbursement of the costs on the grounds that the arbitration committee did not have the power to order a reimbursement of the costs under section 99 of the National Energy Board Act.
This appeal revisited the Federal Court of Appeal's decision to overturn a Pipeline Arbitration Committee award to Mr. Smith for his legal costs. The Supreme Court of Canada decided that Mr. Smith`s costs incurred before the first arbitration committee and before the Court were the kinds of costs that the National Energy Board Act empowered arbitration committees to consider.
Mr. Smith won his case before the Supreme Court of Canada. Alliance was ordered to pay the costs awarded by the second Pipeline Arbitration Committee, as well as Mr. Smith legal costs throughout.
Vernon Smith v. Alliance Pipelines Ltd.
You should refer to subsection 86 (2) of the National Energy Board Act, that sets out the provisions that should be included in a land acquisition agreement between a pipeline company and a landowner.
While these provisions should be read in their entirety, subsection 86 (2) states, in part, that: "A company may not acquire lands for a pipeline under a land acquisition agreement unless the agreement includes provision for (a) compensation for the acquisition of lands to be made, at the option of the owner of the lands, by one lump sum payment or by annual or periodic of equal or different amounts over a period of time...".
Subsection 86 (2)(b) goes on to state that, where the amount of compensation payable for annual or other periodic payments has been selected, the agreement should include a provision for it to be reviewed every five years. There is no mention of a five-year review where the lump sum option has been selected.
It is not possible to establish service standards for arbitration committees. Once a committee is appointed, it is master of its own procedures and operates independently of Natural Resources Canada.
Before a company can abandon the operation of its pipeline, it must first obtain permission from the National Energy Board (NEB). At that time, the NEB will review the proposed abandonment, taking into account the concerns of landowners and other affected parties, and will determine the required conditions for the company to abandon the pipeline. Although the NEB will not decide on liability, it will be able to address, through conditions, the issues that may give rise to liability.
In the early part of 2009, the NEB was in the last stages of a hearing process to consider the financial aspects of pipeline abandonment. The NEB is also addressing physical issues related to pipeline abandonment with the Land Matters Consultation Initiative (LMCI).
Abandonment could be subject to the negotiation and/or arbitration services available via the Minister of Natural Resources, depending on the facts presented to the Minister at the time of a landowner's application.
Natural Resources Canada cannot provide a definitive statement as to the exact meaning of operations and activities of the company as they are open to interpretation. However, the relevance of these expressions, i.e. operations and activities, in relation to the appointment of a negotiator or an arbitration committee has been the subject of a Federal Court of Appeal decision Balisky v. Canada. Readers could benefit from reading this decision to form their own view of the meaning of these sections or when seeking legal counsel.

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