Decision Date: February 17, 2017

Panel: Alan Andison

Keywords: Oil and Gas Activities Act – s. 72(3); preliminary decision; pipeline; permit; stay; RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.)

Rodney and Kim Strasky appealed a decision of the Oil and Gas Commission (“Commission”) to issue a pipeline permit to Encana Corporation (“Encana”). The permit authorizes Encana to construct and operate a pipeline, subject to certain conditions, on land that is owned by the Appellants. The Appellants operate a farm on land that the pipeline will cross.

Approximately 2½ months after the appeal was filed, the Appellants applied for a stay of the permit, pending the Tribunal’s decision on the merits of the appeal.

In determining whether a stay ought to be granted, the Tribunal applied the three-part test set out in the Tribunal’s Rules of Practice and Procedure. That three-part test is based on the Supreme Court of Canada’s decision in RJR-MacDonald Inc. v. Canada (Attorney General).

With respect to the first part of the test, the Tribunal found that the appeal raised serious issues. The primary issue was whether the Commission gave due regard to the Appellants’ written submissions before the permit was issued. The Appellants’ submission expressed concerns about Encana’s construction practices, the routing of the pipeline, and the impacts on their farming practices. The Tribunal found that the issues were not frivolous, vexatious or pure questions of law.

Turning to the second part of the test, the Appellants had to establish that their interests would likely suffer irreparable harm unless a stay was granted. The Appellants submitted that denying a stay, and allowing the pipeline construction to proceed pending the decision on the merits of the appeal, would cause the Appellants to lose seeding time on their farm, which would affect their livelihood. However, the Tribunal found that he Appellants did not indicate the extent to which the pipeline construction would likely delay seeding, or whether even a short delay in seeding would be likely to cause the Appellants to suffer harm that is irreparable in nature, such as permanent loss of market share, or going out of business. In addition, the Tribunal found that the Appellants were entitled to compensation for any damage arising from Encana’s oil and gas activities on their land, and therefore, the harm they asserted appeared to be compensable.

Turning to the third part of the test, the Tribunal concluded that the balance of convenience weighed in favour of denying a stay. The Tribunal found that granting a stay would delay Encana’s plans to construct and operate the pipeline for at least four months and perhaps longer. Encana provided evidence that such a delay would cause harm to its financial interests as a result of construction delays and possibly increased construction and/or transportation costs. Such financial harm was unlikely to be compensable if the appeal was ultimately dismissed on its merits. The Tribunal concluded that the risk of harm to Encana’s interests, if a stay was granted, outweighed the potential harm to Appellants’ interests if a stay was denied.

Accordingly, the application for a stay was denied.