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Mackenzie Project Dodges Federal-Provincial Constitutional Battle

A separate arena has been created for a duel over constitutional aspects of Canada's northern pipeline plan, sparing the beleaguered Mackenzie Gas Project (MGP) a potentially lengthy further regulatory delay.

The National Energy Board set up the special fighting ring after a preliminary skirmish confirmed that a dispute about federal and provincial jurisdiction over the Alberta end of the project has opened a big legal can of worms. In a decision following a lawyers' conference on a contested jurisdictional motion by a northern Alberta aboriginal community, the NEB said the constitutional matters "do not form part of the MGP application and need not be resolved within that proceeding."

While refusing to set aside the distraction, the NEB concluded "the issues raised in the Dene Tha' First Nation's proposed motion would best be dealt with in a proceeding separate from the MGP."

In another part of the decision that spared the project even more potential delay, the NEB also decided against sending the whole tangle off to Canada's Federal Court of Appeal. The board set up a five-member panel to deal with the dispute itself. Led by the NEB Chairman Ken Vollman, the group also includes the board's first aboriginal member, Strater Crowfoot, former chief of the Siksika (Blackfoot) Nation east of the Canadian gas capital of Calgary.

No deadlines or schedules were laid down for the proceeding. But another aspect of the brief ruling tipped off industry specialists who understand the Canadian regulatory process to be ready for a very long legal duel.

The NEB said that if the Dene Tha' decide they still want to press the issue and go ahead with their regulatory motion, "a notice of constitutional question pursuant to the Federal Courts Act would be required." That means all provincial, territorial and federal attorneys general have to be advised of the contest and given a chance to intervene.

At least as much as in American states' rights cases, federal-provincial jurisdictional disputes are almost invariably contested hotly in Canada. The northern pipeline jurisdictional argument ignites a classic constitutional law debate in Canada.

The Dene Tha' insist the southern-most 60 miles of the MGP inside Alberta, known as the "connecting facilities," should be approved by the NEB as a project of national or international significance. The MGP division of labor assigns the short stretch of pipe to TransCanada PipeLines' Nova gathering system in the province, for approval by the Alberta Energy and Utilities Board.

The Dene Tha' have repeatedly complained that provincial authorities are less willing to listen to aboriginal communities than federal boards. The protesting group also emphasizes there is no guarantee the AEUB will enforce any conditions recommended by the MGP environmental and socio-economic Joint Review Panel of federal, native and Northwest Territories' representatives.

The Alberta natives accuse the MGP, TransCanada and Alberta of "project splitting" in a way that lets their concerns slip through the organizational cracks. The Dene Tha' are demanding benefits at least comparable to the most being provided for territorial aboriginal communities along the arctic pipeline route.

In written and oral skirmishes before the NEB, the Alberta government has made it plain the province stands as ready as ever to defend its jurisdiction. And that is very ready. The AEUB is a central institution in asserting and defending the province's constitutional ownership of its natural resources. The provision dates back to a 1930 constitutional amendment regarded to this day as a cornerstone of Alberta, bestowing rights ranging from authority over economic and environmental aspects of oil and gas development to multibillion-dollar royalties that at times cover up to 40% of the provincial budget.

To date federal authorities show no stomach for reviving 1970s and '80s fights over the extent of Alberta's power to govern Canada's oil and gas industry as opposed to Ottawa's jurisdiction. There has been no direct federal government involvement yet.

Industry veterans suggest Ottawa's notable detachment to date is no accident.

The current Conservative national government is on record as strongly encouraging the MGP to keep striving for approval. The administration sees the gas project as a potential cornerstone for large-scale economic development of a region to date heavily reliant on the federal purse for everything from roads and police to health, education and welfare. And Prime Minister Stephen Harper and Indian Affairs and Northern Development Minister Jim Prentice are both from Calgary. The gas capital's corporate leaders have been for a generation in accord on doing their best to avoid stirring up old regional and constitutional fights that have a long record of delaying or even stopping industry plans.

The Dene Tha', meanwhile, may also be thinking twice. The native group made no protest when the MGP's joint review panel resumed hearings on issues that involved northern Alberta. The action set aside a procedural ruling by the Federal Court of Canada that temporarily put a stop to talk about environmental and community issues raised by the MGP's short final stretch inside the province. Responses to aggressive Dene Tha' protests included an appointment by Prentice of a special commissioner or ambassador to their region.

The MGP's sponsors and TransCanada, while trying to prevent or limit the threatened outbreak of a constitutional duel, have made it plain they will also ensure it does not become a make-or-break issue for the project so long as it is not allowed to hold up the main regulatory proceeding. If the Dene Tha' eventually forced the NEB into a jurisdictional takeover of the project's Alberta stub, the northern pipeline's participants have indicated they would just apply to the federal board for the appropriate approval.

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ISSN © 2577-9877 | ISSN © 1532-1231
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