NATIONAL ENERGY BOARD

IN THE MATTER OF the National Energy Board Act, R.S.C. 1985, c. N-7, as amended, and the Regulations made thereunder;

AND IN THE MATTER OF jurisdiction over the Coastal GasLink Pipeline Project;

AND IN THE MATTER OF National Energy Board Hearing No. MH-053- 2018;

AND IN THE MATTER OF Board File OF-Fac-PipeGen-T211 04

LNG CANADA DEVELOPMENT INC., SHELL CANADA ENERGY, NORTH MONTNEY LNG LIMITED PARTNERSHIP, DIAMOND LNG CANADA PARTNERSHIP, PETROCHINA KITIMAT LNG PARTNERSHIP, AND KOGAS CANADA LNG LTD.

WRITTEN ARGUMENT

April 16, 2019

To: The Secretary National Energy Board Suite 210, 517 – 10th Avenue S.W. Calgary, AB T2R 0A8

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I. INTRODUCTION AND SUMMARY

A. Introduction

1. This written argument is made in the National Energy Board (NEB or Board) proceeding regarding whether the Coastal GasLink Pipeline Project (Coastal GasLink) is properly within federal jurisdiction and subject to regulation by the NEB (MH-053-2018).

2. This submission is the combined written argument of LNG Canada Development Inc. (LNGCDI), as operator of the LNG Canada joint venture (LNG Canada), and that of the joint venture participants: Shell Canada Energy, North Montney LNG Limited Partnership, Diamond LNG Canada Partnership, PetroChina Kitimat LNG Partnership and Kogas Canada LNG Ltd. (the JVPs). For ease of reference, LNGCDI and the JVPs are referred to collectively as LNG Canada.

3. As established in the LNG Canada additional written evidence filed February 15, 2019, LNGCDI is constructing a liquefied natural gas (LNG) facility in the District of Kitimat, British Columbia, which it will operate on behalf of the JVPs (the LNG Terminal). The LNG Terminal includes a natural gas liquefaction plant, LNG storage and marine loading facilities from which LNG will be exported.1

4. The natural gas that is the feedstock for the LNG Terminal will be transported via Coastal GasLink from a point in northeastern British Columbia, near Groundbirch, to the LNG Terminal in Kitimat.2

5. This LNG Canada Written Argument will (1) summarize the LNG Canada position, (2) provide its views on the current state of the relevant law, (3) reference the pertinent and determinative facts, and (4) apply the law to the facts. It will conclude with a submission as to the process that LNG Canada would recommend be followed by the Board in the event that it should make a finding of federal jurisdiction.

B. Summary of LNG Canada Position

6. LNG Canada submits that, as a matter of fact and law, Coastal GasLink is properly within provincial jurisdiction and not subject to regulation by the NEB.

7. LNG Canada has reviewed the Coastal GasLink Pipeline Ltd. (CGL) Written Argument, filed April 2, 2019.3 LNG Canada supports the submissions of CGL found in Section II of the CGL Argument,4 and agrees with the CGL position that Coastal GasLink is properly within provincial jurisdiction and not subject to federal regulation by the NEB. Accordingly, LNG Canada will use this written argument as an opportunity to discuss the applicable law in the context of the facts as established in the LNG Canada evidence.

8. LNG Canada’s position can be summarized as follows:

(a) The evidence on the record of this proceeding clearly establishes that Coastal GasLink is a distinct local undertaking with a unique purpose. It is a local feedstock supply pipeline that will provide primary inputs to a

1 MH-053-2018, A97945-2, LNG Canada Development Inc. Additional Written Evidence (LNGC Evidence) at para 4.

2 LNGC Evidence at para 11.

3 MH-053-2018, A98591-1, Coastal GasLink Pipeline Ltd. Written Argument (CGL Argument).

4 CGL Argument at 4-10.

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provincially regulated LNG facility, and only that facility. It does not provide transportation for export;

(b) Coastal GasLink’s sole purpose will be to transport gas within British Columbia, from a point near Groundbirch, to Kitimat.5 There will be no bi- directional flow.6 Connections to upstream federal pipeline systems (whether the NOVA Gas Transmission Ltd. (NGTL) system or the Enbridge Westcoast system) will not change the nature and purpose of Coastal GasLink, but will simply improve the existing supply optionality for the pipeline. A future connection to NGTL will allow the JVPs and only the JVPs7 to elect whether to source feedstock for the LNG Terminal through their own primary natural gas production operations, or to procure gas from other producers which will be delivered to Coastal GasLink via a receipt point on the NGTL System.8 NGTL will be an incremental and optional source of supply to Coastal GasLink;9

(c) The JVPs are continuing to advance their plans for supplying gas to the LNG Terminal and, as such, there is some uncertainty as to how Coastal GasLink will ultimately be supplied. The uncontroverted evidence before the Board is that the JVPs collectively (other than North Montney LNG Limited Partnership) intend to use NGTL as an incremental, additional source of supply, and not as the exclusive or even primary source of natural gas feedstock;10 and

(d) Notwithstanding an expected physical connection to, and common ownership with, the interprovincial, federally regulated NGTL System, there is virtually no functional integration between Coastal GasLink and the NGTL System. As such, there is no basis on which to bring Coastal GasLink within federal jurisdiction.

5 MH-053-2018, A97628-1, Coastal GasLink Pipeline Ltd. Additional Written Evidence (CGL Evidence) at para 20.

6 MH-053-2018, A98292-2, CGL Response to NEB IR No. 1, at 1.5(e).

7 Other than North Montney LNG Limited Partnership, which does not intend to utilize NGTL to provide gas supply to Coastal GasLink (MH-053-2018, A97945-2, North Montney LNG Limited Partnership and PETRONAS Energy Canada Ltd, Additional Written Evidence (PETRONAS Evidence) at para 5).

8 LNGC Evidence at para 30; MH-053-2018, A97945-2; Shell Canada Energy, Additional Written Evidence (Shell Evidence) at para 9; PETRONAS Evidence at para 29; PetroChina Kitimat LNG Partnership, Additional Written Evidence (PetroChina Evidence) at paras 7 and 10; MH-053-2018, A97945-2, DLC Partnership, Additional Written Evidence (DLC Evidence) at paras 7-8; MH-053-2018, A97945-2, KCLNG, Additional Written Evidence (KCLNG Evidence) at para 26.

9 LNGC Evidence at paras 20 and 30.

10 LNGC Evidence at paras 20 and 30-31; Shell Evidence at para 9; PETRONAS Evidence at para 29; PetroChina Evidence at paras 7; DLC Evidence at para 8; KCLNG Evidence at para 26.

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9. Coastal GasLink is independent from and not essential to NGTL. It is clearly and demonstrably distinguishable from the works and undertakings considered in the Westcoast,11 Sawyer12 and NEB GH-5-200813 cases.

II. RELEVANT LAW

A. Subsections 92(10)(a) and 91(29)

10. Subsection 92(10)(a) of the Constitution Act, 1867 (Constitution Act) provides that:

92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,

…

(10). Local Works and Undertakings other than such as are of the following Classes:

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province; [emphasis added.]

Subsection 91(29) of the Constitution Act provides that such exceptions from provincial jurisdiction are exclusively within the legislative authority of the Parliament of Canada.14

11. The combined effect of subsections 92(10)(a) and 91(29) is to grant the provinces exclusive jurisdiction over local, intraprovincial works and undertakings, and to grant the federal government exclusive jurisdiction over interprovincial and international works and undertakings. Provincial jurisdiction is the presumption; federal jurisdiction is the exception.15 The onus is on the party alleging federal jurisdiction to establish the facts necessary to ground its existence.16

11 Westcoast Energy Inc. v Canada (National Energy Board), [1998] 1 SCR 322, (Westcoast).

12 Sawyer v TransCanada PipeLines Limited, 2017 FCA 159, (Sawyer).

13 National Energy Board Reasons for Decision, In the Matter of TransCanada PipeLines Limited, GH-5-2008, February 2009 (GH-5-2008).

14 91. …the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,

29. Such Classes of Subjects as are expressly excepted in the Enumeration of the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces.

15 Westcoast at para 43; Consolidated Fastfrate Inc v Western Canada Council of Teamsters, 2009 SCC 53, (Consolidated Fastfrate) at paras 28 and 68.

16 Northern Telecom Canada Ltd v Communication Workers of Canada, [1983] 1 SCR 733 (at 779), 1983 CarswellNat 535 (Northern Telecom 2) at para 88.

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12. The Supreme Court of Canada (SCC) has previously found that a pipeline is a transportation undertaking.17

13. When interpreting subsection 92(10)(a), it is important to take a purposive approach.18 As Justice Rothstein found in Consolidated Fastfrate, federal jurisdiction over interprovincial transportation and communication works and undertakings was intended to ensure that “works and undertakings of national importance be subject to federal authority in order to prevent fragmentary legislative authority that might stymie such undertakings”;19 however, there is a preference for local regulation in situations involving the power and means of developing provincial resources.20

14. A jurisdictional question may arise where a transportation undertaking is physically contained within one province, but has some connection, physical or otherwise, to an interprovincial undertaking. In such cases, a careful factual analysis is necessary to determine whether the connection is sufficient to bring the otherwise local facilities into federal jurisdiction.21 The question is always one of fact.22

15. The case law has established two types of federal jurisdiction that may arise in such circumstances: direct, and derivative.23 A purposive, fact-based analysis is used to determine whether federal jurisdiction exists and, if so, what type.24

B. Jurisdictional Test

16. Chief Justice Dickson in Central Western Railway Corp. v United Transportation Union set out the two ways in which a local work or undertaking may be found subject to federal jurisdiction:

First, it may be seen as an interprovincial railway and therefore come under s. 92(10)(a) of the Constitution Act, 1867 as a federal work or undertaking. Second, if the appellant can

17 Campbell-Bennett Ltd v Comstock Midwestern Ltd, [1954] SCR 207 (SCC) at para 13. This finding was also cited in Westcoast at para 44.

18 Consolidated Fastfrate at para 32. Although Rothstein J. seemed to be advocating for an interpretation of the provision based on its intended purpose, in the Dissent, Binnie J. accuses him of originalism (para 89). Nonetheless, Rothstein J.’s comments about the purpose of s. 92(10) are of assistance in a purposive analysis, which has been recently advocated for once again by Rennie JA in Sawyer.

19 Consolidated Fastfrate at para 68.

20 See Justice Rothstein’s remarks upon considering the historical purpose of subsection 92(10)(a) in Consolidated Fastfrate, at para 33:

In this light, it is clear that in the transportation context, only those works and undertakings that furthered the “general interest” of the emerging country were to be regulated by the federal government. Otherwise, the preference was for local regulation so that “each province will have the power and means of developing its own resources and aiding its own progress after its own fashion and in its own way."

21 Westcoast at para 52; Tokmakjian Inc v Achorn, 2017 FC 1057, (Tokmakjian), at para 103.

22 Westcoast at para 52 and 64.

23 Tessier Ltee v Quebec (Commission de la sante et de la securite du travail), [2012] 2 SCR 3, (Tessier), at para 18.

24 Consolidated Fastfrate at para 32; Westcoast at para 52; Sawyer at para 44.

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be properly viewed as integral to an existing federal work or undertaking it would be subject to federal jurisdiction under s. 92(10)(a).25

17. Jurisdiction arising as a result of the first test has come to be known as “direct” jurisdiction. Jurisdiction arising as a result of the second test is known as “derivative” jurisdiction.26

18. Dickson CJ in Central Western stressed that the question under the first part of the test is “whether the railway is itself an interprovincial work or undertaking” [emphasis added].27 The question under the second part, is whether “the regulation of the subject matter in question is integral to a core federal work or undertaking.”28

19. In Central Western, the issue was whether a railway (Central Western), located entirely within Alberta and owned by the Central Western Railway Corporation (CWR), was part of or integral to the interprovincial Canadian National (CN) railway undertaking. Chief Justice Dickson held that:

[CWR] controls and operates its railway without interference or aid from CN, and I therefore reiterate my conclusion that there exists insufficient operational connection between the two railways to support a finding that Central Western falls within federal jurisdiction as an interprovincial railway under s. 92(10)(a) of the [Constitution Act].29

20. Dickson CJ focused particularly on the distinct operation and control of the two railway lines to conclude that Central Western was not part of, nor integral to, CN’s interprovincial undertaking.30 Their intermittent physical connection and coordinated operation were not sufficient to establish functional integration.31 Nor was Central Western dependent on the services of CN.32 Despite delivering grain to CN for transportation, the local railway did not provide interprovincial service to its clients. Dickson CJ found that “it simply moves grain within central Alberta.”33

21. Central Western was interpreted and applied by the SCC in Westcoast, this time in the context of interconnecting pipeline facilities. Justices Iaccobuci and Major for the majority in Westcoast found that, despite the lack of a “single comprehensive test”, certain factors are very likely to be indicative of the appropriate jurisdiction:

The primary factor to consider is whether the various operations are functionally integrated and subject to common management, control and direction. The absence of these characteristics will, in all likelihood, determine that the operations are not part of the same interprovincial undertaking, although the converse will not necessarily be true. Other relevant questions, though not determinative, will include whether the operations are under

25 [1990] SCJ No 136, (Central Western) at para 15.

26 Tessier at para 18.

27 Central Western at para 15.

28 Central Western at para 15.

29 Central Western at para 37.

30 Central Western at paras 30, 32, 37 and 48-49.

31 Central Western at paras 48-49.

32 Central Western at para 51.

33 Central Western at para 36.

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common ownership (perhaps as an indicator of common management and control), and whether the goods or services provided by one operation are for the sole benefit of the other operation and/or its customers, or whether they are generally available. [emphasis added.]34

22. In Westcoast, unlike in Central Western, the federal and local undertakings in question were all owned, operated and controlled by Westcoast Energy Inc. (Westcoast). The question was whether local gathering lines and gas processing plants, which would ultimately connect to the interprovincial Westcoast mainline, were properly under federal jurisdiction. The majority held that they were, as the facilities constituted a “single federal undertaking.”35 The conclusion was based on the factual findings that: the facilities were subject to common management, control and direction; the local facilities were primarily devoted to the service of the federal facilities; there was a physical connection; and, there was common ownership by Westcoast.36

23. Justice McLachlin (as she then was) dissented in Westcoast, finding that, as the facilities themselves did not cross a provincial boundary, they could only be subject to federal jurisdiction if they passed the second branch of the Central Western test, which she characterized as one of “functional integration.”37 This analysis tracked more closely with Dickson CJ’s reasoning in Central Western Railway, where he considered functional integration as part of the second test (although also as part of the first test).38 McLachlin J agreed with the NEB that the local gas gathering and processing facilities in Westcoast had a “distinct non-transportation identity and hence were not essential nor integral, in the required constitutional sense, to the interprovincial pipeline.”39

24. The Westcoast decision has led to a restatement of the Central Western Railway test in “functional integration” terms. Despite the explicit statement of the majority in Westcoast that functional integration and common management, control and direction may not be sufficient to establish federal jurisdiction (quoted in paragraph 21 above), Justice Rennie in Sawyer described the Westcoast test as follows:

Under the first test, the otherwise local work or undertaking will be subject to federal jurisdiction if it is a part of a federal work or undertaking in the sense of being “functionally integrated and subject to common management, control and direction”: Westcoast at para. 49.

34 Westcoast at paras 64-65. Note, this distinction between the necessary existence of functional integration, common management, control and direction, and the sufficiency of their existence (if they do not exist, "in all likelihood" there will not be federal jurisdiction, but if they do, they may not be sufficient to establish federal jurisdiction), has been overlooked by subsequent cases, and functional integration, common management, control, and direction have been implicitly or explicitly treated as determinative of federal jurisdiction. It should be carefully noted that Westcoast is the governing law, and not these subsequent lower court or tribunal decisions (for example, see Sawyer, at para 41 and GH-5-2008 at 8).

35 Westcoast at para 78.

36 Westcoast at paras 72-73 and 77-78.

37 Westcoast at para 109.

38 See for example Dickson CJ’s reasoning at para 36 (when considering direct jurisdiction); and at paras 43 and 48-49 (when considering derivate jurisdiction).

39 Westcoast at para 158.

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Under the second Westcoast Energy test, the work or undertaking at issue will fall within federal jurisdiction if it is “essential, vital and integral” to a federal work or undertaking: Westcoast Energy at para. 46.40

25. In Sawyer, the Federal Court of Appeal overturned a decision of the NEB which had found that there was no prima facie case for federal jurisdiction over the intraprovincial Prince Rupert Gas Transmission pipeline (PRGT).41 PRGT proposed to connect to the NGTL System (and only the NGTL System), in order to deliver natural gas to the federally-regulated Pacific North West LNG Plant. Rennie JA for the Court considered the Westcoast test as described earlier and concluded that enough factors pointing to functional integration were present to establish a prima facie case for federal jurisdiction. Among other things, Rennie JA considered the fact that all the gas for PRGT would come from NGTL and that the NGTL System itself was being expanded because of the PRGT connection (and would not be expanded without it).42

26. Since Sawyer, the Federal Court and the British Columbia Court of Appeal have considered the subsection 92(10)(a) jurisprudence and acknowledged the overlap between the first and second test.43 In any case, Westcoast remains the governing law.44

C. Relevant Factors

27. In the face of the discussion surrounding the jurisdictional test, certain points of law have been made clear by the SCC through its many decisions on subsection 92(10)(a), including:

(a) a physical connection is not determinative of federal jurisdiction;45

(b) common management, control and direction are not enough – there must also be functional integration. Even then, it may not be sufficient evidence that it is a federal undertaking;46

40 Sawyer at para 41-42.

41 Sawyer is only law with respect to the NEB’s application of the prima facie test for jurisdiction. No ultimate determination on the question of jurisdiction was before the Court, and Rennie JA’s comments in that regard are all obiter dicta (see Sawyer at para 73).

42 Sawyer at paras 49 and 50.

43 Tokmakjian at paras 91-98; Actton Transport v British Columbia (Employment Standards), 2010 BCCA 272 at para 39.

44 Tokmakjian at para 97, citing Sawyer.

45 See for example: Westcoast at para 48; Central Western at para 24; Consolidated Fastfrate at paras 78- 79; and Reference re National Energy Board Act, [1988] 2 FC 196, 1987 CarswellNat 221, (Cyanamid) at para 35; Peter Hogg, Constitutional Law of Canada, 5th ed supp, (Thomson Reuters, Toronto: 2018) (Hogg) at 22.4.

46 Westcoast at para 65, see note 35.

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(c) even where a recognized federal undertaking exists, not every part of its enterprise will necessarily be subject to federal jurisdiction;47 or, alternatively, a single entity may own more than one undertaking;48 and

(d) a close commercial relationship is insufficient to establish federal jurisdiction.49

28. Although no one factor is determinative, physical connection, common ownership, and the commercial relationship are relevant factors to determine the overall degree of functional and operational integration indicative of federal jurisdiction.50 Also relevant but not determinative are:

(a) the purpose or object of the undertaking;51

(b) functional interdependence “in the sense that one [operation] would not exist without the other;”52

(c) the degree of dedication to and dependency of the local operation on the federal undertaking, and vice versa,53 including “whether the goods or services provided by one operation are for the sole benefit of the other operation and/or its customers;”54 and

(d) common management and operational control.55

29. In addition to those listed above, factors relevant to determining whether a local undertaking is “essential, vital and integral” to a federal undertaking include:

47 See for example: Consolidated Fastfrate at para 73, citing Canadian Pacific Railway Co v Attorney General for British Columbia, [1950] AC 122 (PC), 1949 CarswellBC 115 (the Empress Hotel case); Westcoast at para 48; and Hogg at 22.7.

48 Westcoast at para 48, see also the authorities listed in note 45, above.

49 See for example: Westcoast at para 49; Central Western at para 60.

50 Westcoast at para 57; Tokmakjian at para 103.

51 Westcoast at para 70; Sawyer at para 44; Tokmakjian at para 103;

52 Tokmakjian at para 103, citing Sawyer at para 49.

53 Westcoast at para 57; the Empress Hotel case (where the hotel was not operated solely or even primarily for the benefit of the Canadian Pacific Railway Company (CPR) patrons, it was found to be a separate undertaking, despite also being owned and operated by CPR, see Lord Reid’s decision at para 14); Dome Petroleum Ltd v Canada (National Energy Board) (1987), 73, NR 135 (FCA), at para 18 (where underground storage caverns were held to be part of the interprovincial transportation undertaking because they were entirely dedicated to it); Central Western (where all of the local railway’s freight was delivered to the interprovincial railway but still there was no federal jurisdiction); and Tessier at para 46.

54 Tokmakjian at para 103, citing Westcoast at para 65.

55 See Westcoast at para 50. The existence of common management and operational control was determinative in Luscar Collieries Ltd. v McDonald, [1927] AC 925 (Canada PC), where a local railway was separately owned, but managed and controlled by CN, in coordination with its federal railway undertaking. The lack of common management and operational control was determinative in Central Western, where CN did not control the local line, despite connecting with it and coordinating with it frequently.

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(a) whether it would not be possible to carry on the federal undertaking without the local undertaking;56 and

(b) whether the local undertaking loses its distinct character because of its connection to the federal work.57

D. Summary of the Relevant Law

30. In summary, in order to rebut the presumption of provincial jurisdiction, it is necessary to establish a sufficient connection between the federal and local works or undertakings in question. There are two ways to establish federal jurisdiction: either directly, or derivatively.

31. Both types of federal jurisdiction depend on the degree of functional integration between the local works or undertakings in question. Factors indicative of sufficient integration include: the purpose of the undertaking, the degree of interdependence and dependence between the undertakings, the dedication of the undertakings to one another, and common management and operational control.

III. RELEVANT FACTS

32. The relevant facts in this case relate to LNCDI, the LNG Terminal, the gas supply of the JVPs, and Coastal GasLink.

33. With respect to LNCDI:

(a) LNGCDI is incorporated and registered under the federal laws of Canada and is extraprovincially registered in British Columbia. It is owned by the JVPs, in proportion to their participating interests, which are: Shell Canada Energy 40%, North Montney LNG Limited Partnership 25%, Diamond LNG Canada Partnership 15%, PetroChina Kitimat LNG Partnership 15%, and Kogas Canada LNG Ltd 5%.58

(b) LNGCDI is the operator of the LNG Canada joint venture, and acting on behalf of LNG Canada, will build and operate the LNG Terminal in Kitimat, British Columbia.59 The LNG Terminal is currently under construction.60

34. With respect to the LNG Terminal:

(a) The LNG Terminal is primarily regulated by the province of BC.61

56 See for example: Central Western at para 40, citing Reference re Industrial Relations and Disputes Act, [1955] SCR 529 (the Stevedores Reference), where the federal undertaking could not be effectively performed without the local services; and Tessier at para 32, setting out the dependency principle.

57 See McLachlin J.’s dissent in Westcoast at para 111, as followed by Abella J. for the majority in Tessier, at para 45, followed at para 55.

58 LNGC Evidence at para 5.

59 LNGC Evidence at para 4.

60 LNGC Evidence at para 11.

61 LNGC Evidence at para 10.

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(b) The LNG Terminal includes a natural gas liquefaction plant, LNG storage and marine loading facilities from which LNG will be exported.62

(c) Coastal GasLink will be the only pipeline to deliver gas to the LNG Terminal. Gas delivered from Coastal GasLink to the LNG Terminal will be used as feedstock for the LNG operation of liquefaction, storage and export.63

(d) The LNG Terminal will take the feedstock gas delivered by CGL and process it using commercial and proprietary processes. It will then convert the processed gas into a liquid final product.64

35. With respect to the Gas Supply:

(a) The supply arrangements for Coastal GasLink have been and are still evolving.65 This case must be determined on the basis of the best evidence of the expectation of operation, as set out in the evidence of the JVPs.

(b) The JVPs are obligated to supply the LNG Terminal with sufficient gas to meet its feedstock needs.66

(c) The JVPs have robust gas supplies from JVP equity gas assets as their primary source of supply, as well as access to third-party gas facilities within British Columbia to meet their supply obligations to LNG Canada.67

(d) It is anticipated and expected that Coastal GasLink will be connected to third-party pipeline infrastructure, including but not limited to the NGTL System, in order to provide optionality for the JVPs in meeting their supply obligations.68 In this way, the JVPs can elect to “produce or procure” the gas to meet their supply requirements, based on economic and other considerations at hand.69

36. With respect to Coastal GasLink:

62 LNGC Evidence at para 4.

63 LNGC Evidence at para 11.

64 LNGC Evidence at para 12; NEB Licence GL-330, approved by Order in Council No. P.C. 2016-404 (20 May 2016). This is relevant notwithstanding the NEB license is to export “gas” as defined in the National Energy Board Part VI (Oil and Gas) Regulations SOR/96-244.

65 LNGC Evidence; Shell Evidence at paras 6-9; PETRONAS Evidence at paras 4-5 and 27-29; PetroChina Evidence at paras 7-8; DLC Evidence at paras 5-8; KCLNG Evidence at paras 20-26.

66 LNGC Evidence at paras 3 and 31; Shell Evidence at para 4; PetroChina Evidence at para 4.

67 LNGC Evidence at paras 20 and 27; Shell Evidence at para 6, 8 and 9; PETRONAS Evidence at para 4; PetroChina Evidence at para 5; DLC Evidence at para 5; KCLNG Evidence at para 11.

68 LNGC Evidence at para 20(c); Shell Evidence at para 9; PETRONAS Evidence at paras 27-29; PetroChina Evidence at para 7; DLC Evidence at para 8; KCLNG Evidence at para 25.

69 Shell Evidence at para 9; PETRONAS Evidence at paras 27-29; PetroChina Evidence at para 7; DLC Evidence at paras 5 and 8; KCLNG Evidence at para 25.

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(a) Coastal GasLink will not be an open access pipeline. The JVPs are the only parties that have entered into Transportation Services Agreements with CGL for delivery of natural gas feedstock to the LNG Terminal.70

(b) LNGCDI will determine the exact amounts of gas to be delivered through Coastal GasLink each day. CGL will then receive nominations from the JVPs and confirm the amount delivered by each JVP at the outlet.71 The JVPs will retain title to the gas shipped on Coastal GasLink, unlike shippers on NGTL.72

(c) The JVPs are responsible for all construction and operation costs of Coastal GasLink.73

(d) The JVPs made a positive final investment decision in LNG Canada. LNG Canada then authorized CGL to construct the Coastal GasLink pipeline.74

(e) Coastal GasLink is currently under construction.75

37. With respect to the JVPs’ Connections:

(a) Shell Canada Energy (Shell)

i. Shell is a 40% JVP in LNG Canada and, along with the other JVPs, will deliver its respective share of the LNG Terminal’s daily natural gas requirements to Coastal GasLink.76

ii. Shell plans to connect its natural gas supply in the Groundbirch area of British Columbia directly to Coastal GasLink, and to source all of its supply requirements through Groundbirch production and third-party suppliers.77

iii. No agreement has currently been reached with NGTL regarding the contemplated interconnection, but a possible future connection would be designed to provide operational flexibility in supply options to Shell.78

(b) North Montney LNG Limited Partnership (North Montney LNG)

i. North Montney LNG, a limited partnership between PETRONAS Canada LNG Ltd. (as general partner) and PETRONAS Canada (as

70 CGL Evidence at para 34.

71 LNGC Evidence at para 17.

72 MH-053-2018, A97947, NOVA Gas Transmission Ltd., NGTL Written Evidence at paras 15 and 45.

73 CGL Evidence at para 33; LNGC Evidence at para 28.

74 LNGC Evidence at para 8.

75 LNGC Evidence at para 11.

76 Shell Evidence at para 3-4; CGL Evidence at para 80.

77 Shell Evidence at paras 6 and 9.

78 Shell Evidence at para 9.

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sole limited partner), holds a 25% interest in LNG Canada and will deliver its respective share of the LNG Terminal’s daily natural gas requirements to Coastal GasLink. Both PETRONAS Canada LNG Ltd. and PETRONAS Canada are indirect wholly-owned subsidiaries of Petroliam Nasional Berhad (PETRONAS), a global integrated oil and gas company headquartered in Kuala Lumpur, Malaysia.79

ii. PETRONAS Canada holds significant natural gas reserves in northeast British Columbia, with which it plans to satisfy its supply requirements to LNG Canada. It does not currently require and is not pursuing a connection with NGTL.80

iii. PETRONAS Canada was the proponent of the LNG facility in Sawyer. It does not view the NGTL System tolling framework as accommodating the transportation supply of gas to LNG projects on an economically competitive basis or with an acceptable level of commercial certainty at the current time.81 Should these conditions change, any ultimate connection to the NGTL System would be purely a matter of optionality and reliability.82

iv. PETRONAS Canada has secured sufficient transportation supply capacity from Westcoast to meet its entire LNG Canada supply obligation: approximately 500 mmcf per day of transportation capacity for a 40 year term.83 Coastal GasLink will not be dedicated to the exclusive or primary use of NGTL shippers, even if other JVPs choose to source significant supply from an NGTL connection.

(c) PetroChina Kitimat LNG Partnership (PetroChina)

i. PetroChina holds a 15% interest in LNG Canada and will deliver its respective share of the LNG Terminal’s daily natural gas requirements to Coastal GasLink.84

ii. PetroChina is planning “a portfolio of commercial and equity gas options for PetroChina’s gas nomination requirements to the CGL pipeline.”85

iii. PetroChina currently has a Transportation Services Agreement with CGL that contemplates PetroChina transporting its entire LNG Canada gas nomination requirements on Coastal GasLink, as well as

79 PETRONAS Evidence at para 3.

80 PETRONAS Evidence at para 4-5.

81 PETRONAS Evidence at para 24.

82 PETRONAS Evidence at para 24.

83 PETRONAS Evidence at para 28.

84 PetroChina Evidence at para 2.

85 PetroChina Evidence at para 5.

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contemplating a connection to Coastal GasLink from PetroChina’s Groundbirch asset.86

iv. PetroChina is pursuing an agreement with NGTL as a “supplemental option” to procure gas off the NGTL System, but no connection request has yet been made, and no agreement has yet been reached.87

(d) Diamond LNG Canada Partnership (DLC Partnership)

i. DLC Partnership holds a 15% interest in LNG Canada and will deliver its respective share of the LNG Terminal’s daily natural gas requirements to Coastal GasLink.88

ii. DLC Partnership’s current intention is to source its share of natural gas feedstock primarily from the substantial gas reserves held by the Cutbank Ridge Partnership89 in the Montney lands in northeast British Columbia. DLC Partnership is planning to construct the Dawson- Groundbirch Pipeline, which would provide 1137 mmcf per day of capacity, to connect this supply to Coastal GasLink.90

iii. Although a future connection with NGTL might be sought to increase operational and commercial flexibility, no contracts are in place for such arrangement.91

(e) Kogas Canada LNG Ltd. (KCLNG)

i. KCLNG has a 5% joint venture participating interest in LNG Canada and will deliver its respective share of the LNG Terminal’s daily natural gas requirements to Coastal GasLink.92

ii. KCLNG has not yet determined the source, contractual terms, portfolio, or supply options for the natural gas that it will supply to the LNG Terminal.93

iii. Although KCLNG may elect to acquire gas from a shipper on NGTL, or transport its own natural gas supply on NGTL, it may also do so by

86 PetroChina Evidence at paras 5-10.

87 PetroChina Evidence at paras 7 and 11.

88 DLC Evidence at paras 2-4.

89 The Cutbank Ridge Partnership is the largest producer in the Montney region and 40% of its partnership interest is held by Cutbank Dawson Gas Resources Ltd., an entity wholly owned by Mitsubishi Corporation and an affiliate of DLC Partnership. See DLC Evidence at para 5.

90 DLC Evidence at paras 6-8; MH-053-2018, A98291-2, Responses to NEB Information Request No. 1 (March 12, 2019), DLC Partnership, at 1.4(d).

91 DLC Evidence at para 8.

92 KCLNG Evidence at para 6; CGL Evidence at para 80.

93 KCLNG Evidence at para 21.

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other means, or by some combination of means. It currently has no gas supply or NGTL shipping contracts.94

IV. APPLICATION OF THE LAW TO THE FACTS

38. When applying the law to the facts, what matters is how the undertaking is actually (or will actually) be operated – “not how it might otherwise operate or how others in the natural gas industry operate their businesses.”95 Where the undertaking is not yet in operation, the best evidence of the actual circumstances of operation should be accepted. LNGCDI, as operator of the LNG Terminal, and the JVPs, as the entities that will be supplying gas to Coastal GasLink, have put this evidence before the Board. They are in the best position to speak to current plans.

39. In the GH-5-2008 proceeding, the NEB held that the Alberta system (NGTL), the TransCanada mainline and the Foothills system are a single undertaking of TCPL to transport natural gas to markets in Canada and the United States. The Board found that the three works are functionally integrated, share common management, control and direction, are under common ownership, share a common purpose and are interconnected.96

40. In contrast, Coastal GasLink is a work and undertaking that is separate and distinct from the TCPL undertaking. It is located entirely within British Columbia, has a different and entirely distinct purpose, is independent, not dedicated to any TCC undertaking nor is any other TCC undertaking dedicated to it, and it has multiple sources of supply.

41. No party in this proceeding has put forward evidence that demonstrates the requisite degree of functional integration required to establish that Coastal GasLink is part of a single, federal undertaking, nor have they demonstrated that Coastal GasLink is integral to NGTL. Physical connection and common ownership are not sufficient to justify federal jurisdiction, and the “something more” that the SCC has found is required does not exist here.97

A. Direct Jurisdiction: The “Single Undertaking” Test

42. Coastal GasLink is not part of the TCPL interprovincial undertaking because it has a distinct purpose and is not dedicated to the TCPL undertaking (and vice versa).

(a) There are two distinct undertakings

43. The purpose of Coastal GasLink is to transport feedstock that has been produced or procured by the JVPs and delivered by them to Coastal GasLink's inlet near Groundbirch, BC to the LNG Terminal in Kitimat, BC. There will not be bi-directional flow on Coastal GasLink.98 Also, its purpose is not to export natural gas or to transport natural gas to different provinces. This is distinct from the purpose or object of the TCPL undertaking, which was found to be “to transport natural gas to markets in Canada and the United States.”99

94 KCLNG Evidence at para 21, 24 and 25.

95 Westcoast at para 67.

96 GH-5-2008 at 9.

97 Consolidated Fastfrate at para 79, citing Central Western at para 60.

98 MH-053-2018, A98292-2, CGL Response to NEB IR No. 1, at 1.5(e).

99 GH-5-2008 at 9.

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44. Similar to the NEB’s finding in GH-5-2008, in Winner, the Privy Council found that the intraprovincial undertaking could not be separated from the interprovincial undertaking. In that case, a bus company made interprovincial, intraprovincial, and international trips.100 It was therefore held to be subject to federal jurisdiction under ss. 92(10)(a) of the Constitution Act. The Privy Council rejected an argument that the intraprovincial service was a distinct, provincially regulated undertaking. Lord Porter found that: “[t]he same buses carried both types of passenger along the same routes; the journeys may have been different, in that one was partly outside the Province and the other wholly within, but it was the same undertaking which was engaged in both activities.”101 However, Lord Porter expressly left open the question of what jurisdiction would apply had Mr. Winner started a purely provincial bus service under the “aegis of and managed by his present organization.”102

45. The facts regarding Coastal GasLink present an even stronger case for provincial jurisdiction than Lord Porter’s hypothetical example: it is a purely provincial service that is owned by a subsidiary of, and managed separately from, a federal undertaking. Coastal GasLink does not form part of the single undertaking that is the TCPL system. It is not, as the Privy Council found was the case in Winner, a matter of TCPL carrying on its business one way or another.103

46. In Sawyer, Rennie JA described the purpose of the local pipeline as “to move gas from the WCSB for export to international markets.”104 This extremely broad characterization swept every stage of the process from production to LNG liquefaction to storage to export into one undertaking. Clearly, primary production of natural resources is not a federal undertaking, as s. 92A of the Constitution Act confirms.105 Further, the LNG facility in PRGT, as in this case, does not share the same purpose and is not part of the TCPL interprovincial transportation undertaking.

47. In Westcoast, McLachlin J echoed the concerns of Chief Justice Dickson in Central Western.106 In that case, Dickson CJ endorsed the words of Jackett CJ of the Federal Court of Appeal in re Cannet Freight Cartage Ltd.: “Even if the applicant’s activities and those of the Cottrell Company are viewed as integral parts of a whole, in my view they do not constitute an “undertaking” that falls within section 92(10)(a)” [emphasis added].107 Dickson CJ found that “[t]o hold otherwise would be to

100 Attorney-General for Ontario v. Winner, [1954] A.C. 541 (P.C.), 1954 CarswellNB 40.

101 Winner at para 50.

102 Winner at para 59.

103 Winner at para 55.

104 Sawyer at para 47.

105 92A. (1) In each province, the legislature may exclusively make laws in relation to

(a) exploration for non-renewable natural resources in the province;

(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and

(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.

106 McLachlin J. at para 161: “If interrelated activities and common direction and purpose is the test…the federal government, through its authority over interprovincial and international transportation and communication, has the power to sweep a vast array of provincial works and undertakings into the federal sphere.”

107 [1976] 1 FC 174, 1975 CarswellNat 72 at para 9.

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undermine completely the division of powers for, absent a requirement of functional integration, virtually any activity could be said to “touch” a federally regulated interprovincial undertaking.”108 Despite making these comments when considering whether the provincial undertaking was subject to derivative jurisdiction, Rothstein J. in Consolidated Fastfrate found that “[t]here is nothing in [Dickson CJ’s] analysis indicating that it was meant to apply only to cases of derivative federal jurisdiction.”109

48. Recently, in Consolidated Fastfrate, the SCC endorsed the position of the Privy Council in the Empress Hotel case, which held that a local work or undertaking “cannot be brought within any of the enumerated heads in s. 91 merely because the activities of one of the parties concerned in the matter have created a unified system which is widespread and important in the Dominion.” [emphasis added.]110 A finding that Coastal GasLink will be part of the TCPL undertaking would not put it within federal jurisdiction given the different purpose and insufficient degree of functional integration.

49. The Federal Court of Appeal in Cyanamid is also instructive on this point. In that case, the natural gas being shipped interprovincially by Cyanamid Canada on the TCPL mainline served as feedstock for a fertilizer production facility.111 The local pipeline in Ontario, owned by a corporate subsidiary of the owner and operator of the fertilizer plant, would connect to the TCPL mainline and deliver the natural gas from that connection to the plant. The gas was not exported, but used in the production of fertilizer products. MacGuigan J. found the local pipeline to be subject to provincial jurisdiction on the basis that it had “more of the character of an individual connection than of an interprovincial undertaking. It would be one end-user’s link with the main line, built for its own purposes.”112 The pipeline was not part of, nor integral to, the TCPL undertaking, despite the fact that the entire supply for the plant was sourced off the TCPL mainline.

50. Rennie JA in Sawyer apparently distinguished Cyanamid on the basis that the fertilizer plant in that case “consumed all of the gas delivered to it,” implying that the LNG facility in Sawyer did not.113 This cannot be correct. The LNG facility in Sawyer and in this case would use proprietary plant processes to treat, process and convert the natural gas feedstock from Coastal GasLink into LNG.114 In Cyanamid, the plant processes would also change the natural gas—into a component of fertilizer. As in Cyanamid and Central Western, Coastal GasLink is “one end-user’s link with the main line, built for its own purposes,”115 it “does not (through bilateral arrangements or otherwise) provide an interprovincial service to its clients: it simply moves grain within central Alberta” (or in this case, moves gas between two points within British Columbia).116

108 Central Western at para 60.

109 Consolidated Fastfrate at para 57.

110 Lord Reid in the Empress Hotel case at para 7, as cited by Rothstein J in Consolidated Fastfrate at para 74.

111 Cyanamid at para 2.

112 Cyanamid at para 42.

113 Sawyer at para 52.

114 LNGC Evidence at para 12.

115 Cyanamid at para 42.

116 Central Western at para 36.

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51. In Westcoast, the majority found the primary purpose of the local facilities was to “facilitate transmission through the Westcoast mainline transmission pipeline.”117 This is also distinguishable from Coastal GasLink, which does not have anything to do with transmission on NGTL and would simply be one of many points of delivery.

(b) There is distinct management and control

52. Although TransCanada Corporation indirectly owns both Coastal GasLink and the NGTL System, they are not subject to the same management and control.

53. CGL owns and operates Coastal GasLink, but LNGCDI determines the exact amounts of gas to be delivered through the pipeline on a daily basis. The JVPs then nominate their respective portions of the total amount to CGL. CGL, as pipeline operator, receives nominations from the JVPs and confirms the amount delivered by each JVP at the outlet.118 Coastal GasLink is not an open access pipeline, and CGL is in effect a provincial transport company moving goods at the direction of the JVPs, its customers.

54. The JVPs made a positive final investment decision in LNG Canada. LNG Canada then authorized CGL to construct the Coastal GasLink pipeline.119 That is, LNG Canada and the JVPs contracted for, and have ultimate control over the use and capacity allocation of the pipeline. The JVPs have underwritten 100% of its cost and contracted 100% of its capacity. The JVPs are also responsible for 100% of Coastal GasLink’s operation costs.120 Any significant future capital addition is under the control of the JVPs.121

55. Even if there were common management, control and direction between CGL and NGTL, there is no dependence between CGL and NGTL in either direction, as discussed immediately below.

(c) Coastal GasLink is not dedicated to or dependent on NGTL

56. Coastal GasLink is not dedicated to the TCPL undertaking. It is dedicated entirely to supplying natural gas feedstock to the provincially regulated LNG Terminal.122 Even if a substantial portion of feedstock for the LNG Terminal were to be sourced through the NGTL System, Coastal GasLink would not be sufficiently devoted to an interprovincial undertaking to warrant a finding of federal jurisdiction. NGTL gas transportation service is generally available. It is not for the sole benefit of Coastal GasLink. Nor is Coastal GasLink’s transportation service solely for the benefit of the NGTL System. It is for the benefit of LNG Canada.

57. In Sawyer, the local pipeline was to receive all of its natural gas supply from the NGTL System. The NGTL System had to be expanded in order to accommodate the local gas line and the LNG facility’s supply needs. Rennie JA found as a fact that the NGTL System expansion would not be

117 Westcoast at para 70.

118 LNGC Evidence at para 17.

119 LNGC Evidence at para 8.

120 CGL Evidence at para 33.

121 CGL Evidence at para 68.

122 There can be no question of the LNG Terminal’s proper jurisdiction. It is located on provincial lands and squarely within provincial authority. Its unique purpose is to liquify natural gas. It is not a transportation or communication work or undertaking. Nor is it commonly owned, managed, controlled or directed by TCPL.

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constructed without the local PRGT line.123 These facts are clearly distinguishable from Coastal GasLink, where no NGTL System expansion is required, and neither Coastal GasLink nor NGTL is dependent on an interconnection between them.

58. Coastal GasLink is also distinguishable from Westcoast, where the local facilities were primarily dedicated to the federal undertaking. The majority of the SCC found that “virtually all of the residue gas that is processed at the Westcoast processing plants is delivered into the Westcoast mainline transmission pipeline for transportation onward.”124 Westcoast did not process gas that was not then transported in its mainline transmission pipeline.125 The local facilities were dedicated to the mainline, unlike Coastal GasLink, which is dedicated to the LNG Terminal.

59. In the GH-5-2008 proceeding, the NEB found that the NGTL System was part of a single undertaking with the TCPL mainline and Foothills system. In that case, NGTL was exclusively dedicated to the TCPL undertaking.126 Again – Coastal GasLink is not dedicated to NGTL, and NGTL is not dedicated to Coastal GasLink.

60. Supply arrangements for Coastal GasLink have been and are still evolving.127 This flexibility and optionality alone is evidence of the lack of dependency on and integration of Coastal GasLink with the TCPL undertaking.

B. Derivative Jurisdiction: The “Vital, Essential or Integral” Test

(a) TCPL is not dependent on Coastal GasLink

61. This one-directional test requires that the federal undertaking be dependent on the local undertaking.128 TCPL (including NGTL) currently operates its interprovincial undertaking without a connection to Coastal GasLink. The operation of the NGTL System will not change or be affected if and when Coastal GasLink connects to it. Coastal GasLink therefore cannot be vital, essential or integral to the TCPL undertaking.

(b) Coastal GasLink would retain its distinct character

62. Coastal GasLink would not “lose its distinct character” as a local feedstock delivery pipeline by virtue of a connection with NGTL. A connection to NGTL would simply provide optionality with existing supply options. Coastal GasLink will remain devoted to the LNG Terminal with or without a connection to NGTL. NGTL shippers, other than the JVPs, would not gain access to Coastal GasLink if a connection were made.129 Coastal GasLink would not supply NGTL.130

123 Sawyer at paras 49 and 54.

124 Westcoast at para 72.

125 Westcoast at para 72.

126 GH-5-2008 at 9.

127 LNGC Evidence; MH-053-2018, A98290-2, LNGCDI Responses to M. Sawyer IR No. 1 (March 12, 2019), 3.1 at 66-67; Shell Evidence at paras 9; PETRONAS Evidence at paras 4-5 and 27-29; PetroChina Evidence at paras 5-11; DLC Evidence at paras 5-8; KCLNG Evidence at paras 20-26.

128 Central Western at para 39-42, citing the basic criteria from Stevedores Reference.

129 CGL Evidence at para 33; LNGC Evidence at para 28.

130 MH-053-2018, A98292-2, CGL Response to NEB IR No. 1, at 1.5(e).

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63. Coastal GasLink is not like the NGTL System in GH-5-2008. In that case, nearly 90% of the throughput on the TCPL mainline and virtually all of the volumes on the Foothills system were delivered by the NGTL System.131 The Board therefore found that it was essential to the federal undertaking.132 Coastal GasLink is not intended nor designed to deliver gas to NGTL. It flows in one direction only, and will not deliver gas to NGTL.133

C. Summary of the Application of the Law to the Facts

64. For the reasons set out above, Coastal GasLink should not be found to fall within federal jurisdiction, either directly or derivatively. Its unique purpose, lack of the requisite degree of common management, control and direction, and supply optionality preclude its characterization as part of an interprovincial undertaking. NGTL’s independence from Coastal GasLink demonstrates that Coastal GasLink is not “vital, essential or integral” to the TCPL undertaking.

65. The relevant question is, will the federal undertaking be stymied if the local undertaking is not subject to federal regulation?134 It was this kind of logic that guided the Privy Council in the seminal decision of Winner, where Lord Porter said:

No doubt if it were not for s. 92(10)(a) of the B.N.A. Act the Province, having jurisdiction over local works and undertakings and over property and civil rights within the Province could have prohibited the use of or exercised complete autocratic control over its highways, but the subsection in question withdraws this absolute right where the undertaking is a connecting one. To this limitation some meaning must be given and their Lordships cannot accept the view that the jurisdiction of the Dominion is impaired by the Province’s general right of control over its own roads. So to construe this subsection would in their Lordships’ opinion destroy the efficacy of the exception.135

66. The answer in this case is a resolute no. Coastal GasLink is not a “connecting undertaking”, and will not stymie the TCPL undertaking if it is provincially regulated. NGTL and the TCPL system will still be able to deliver gas interprovincially and internationally if Coastal GasLink is not federally regulated.

V. ALTERNATIVE FUTURE PROCESS

67. In the event the Board determines that Coastal GasLink is within its exclusive jurisdiction, LNGCDI and the JVPs support Section IV of the CGL Argument, which urges the NEB to establish an orderly transition process from provincial to federal jurisdiction by accepting the existing provincial approvals for Coastal GasLink.

68. More specifically, LNGCDI submits that the Board should accept the provincial approvals because:

(a) Not to do so would create a regulatory gap and undermine the decisions of provincial regulators. To avoid this result, the Board should issue a Certificate of Public Convenience and Necessity (CPCN) that includes the Coastal GasLink

131 GH-5-2008 at 2.

132 GH-5-2008 at 9.

133 MH-053-2018, A98292-2, CGL Response to NEB IR No. 1, at 1.5(e).

134 Consolidated Fastfrate at para 68.

135 Winner at para 38.

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facilities already approved by the British Columbia Oil and Gas Commission (BCOGC). As the Board said in proceeding GH-5-2008:

A finding that the Board cannot accept as valid the decisions made by provincial regulators prior to a jurisdiction transfer to the Board would negate the effect of those decisions as soon as the transfer is effected. This would create a period during which the Board cannot regulate, yet decisions of Alberta regulators would be of uncertain effect. The Board would then have to duplicate decisions that provincial regulators have already made. This duplication could produce inconsistent decisions and create uncertainty during construction.136

(b) The Board in proceeding GH-5-2008 found that:

It is fair and equitable that TransCanada and others be able to rely on decisions made by provincial regulators and act on them without fear that new applications will be required to a different regulator with possible different results.137

To do otherwise would be to violate the presumption against retrospective effect and duplicate proceedings contrary to a mutual public interest in convenience and a moral necessity to do justice.138

(c) There is no compelling reason in this case to require anything other than a “practical, efficient, expeditious and equitable” transfer.139 To do otherwise would be to cast doubt on the validity of the BCOGC decision and the authority of provincial regulators.

69. For these reasons, the Board in proceeding GH-5-2008 included in the CPCN facilities that had been approved by the Alberta regulator but not yet constructed. The reasoning of the Board and the transition process applied in GH-5-2008 is even more applicable in the case of Coastal GasLink, where the provincially approved pipeline facilities are already under construction.

VI. CONCLUSION

70. Coastal GasLink is properly within, and should remain within, provincial jurisdiction. The application of the law regarding jurisdictional matters, the evidence in this case, and the facts as they exist, demonstrate that Coastal GasLink and the NGTL System are not sufficiently connected to override the presumption of provincial jurisdiction contained in the Constitution Act.

71. For all of the reasons above, LNG Canada submits that the Board should conclude that Coastal GasLink is properly within provincial jurisdiction and not subject to regulation by the NEB.

136 GH-5-2008 at 18.

137 GH-5-2008 at 18.

138 GH-5-2008 at 18-19.

139 GH-5-2008 at 17.

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Respectfully submitted,

April 16, 2019 Calgary, Alberta

C. Kemm Yates

______

Terri-Lee Oleniuk

cc: Coastal GasLink Pipeline Ltd. MH-053-2018 Intervenors

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