A-335-77
Interprovincial Pipe Line Limited (Applicant)
(Appellant)
v.
National Energy Board (Respondent)
Court of Appeal, Heald and Le Dain JJ. and Kelly
D.J.—Toronto, June 20; Ottawa, August 17, 1977.
Jurisdiction Appeal from National Energy Board order
Whether or not Board can order preparation and filing of
information in documentary form not already in existence —
National Energy Board Act, R.S.C. 1970, c. N-6, ss. 10(3),
14(2), 18, 24, 50, 52, 53, 54, 55 National Energy Board
Rules of Practice and Procedure, SOR/72-413, ss. 3(1), 5.1 —
Inquiries Act, R.S.C. 1970, c. 1-13, s. 4.
This is an appeal pursuant to section 18 of the National
Energy Board Act, from an order of the National Energy
Board directing the appellant to file with the Board certain
information relating to its wholly-owned subsidiary in the
United States. Leave to appeal was granted to consider the
issue of the Board's statutory authority to order the preparation
and filing of information in a documentary form that is not
already in existence.
Held, the appeal is dismissed. It is questionable whether the
Board can claim to be exercising the powers of inquiry con
ferred for purposes of Part Il when exercising its jurisdiction
under Part IV. There is no clearly explicit author
ity in the Act or Rules for the power exercised by the Board in
the present case, but given the practical necessity of such power
it exists by necessary implication from the nature of the
regulatory authority that has been conferred on the Board. To
deny the Board this power and to deny application of such
power to information that is available to and under control of
appellant by virtue of its control of and common management
with its subsidiary would defeat the purposes of the statute.
The allocation of costs and charges between appellant and its
subsidiary is of essential concern to the Board and the informa
tion sought is relevant to that concern.
APPEAL.
COUNSEL:
John W. Brown, Q.C., and J. A. Hodgson for
appellant.
Ian Blue and Miss A. Bigué for respondent.
William G. Burke-Robertson, Q.C., for Brit-
ish Columbia Energy Commission.
D. H. Rogers for Ministry of Energy for
Ontario.
SOLICITORS:
Blake, Cassels & Graydon, Toronto, for
appellant.
Cassels, Brock, Toronto, for respondent.
Burke-Robertson, Chadwick & Ritchie,
Ottawa, for British Columbia Energy Com
mission.
Thomson, Rogers, Toronto, for Ministry of
Energy for Ontario.
The following are the reasons for judgment
rendered in English by
LE DAIN J.: This is an appeal pursuant to
section 18 of the National Energy Board Act,
R.S.C. 1970, c. N-6, from an order of the National
Energy Board directing the appellant, Interprovin-
cial Pipe Line Limited (hereinafter referred to as
"Interprovincial") to file with the Board certain
information relating to its wholly-owned subsidiary
in the United States of America, Lakehead Pipe
Line Company Inc. (hereinafter referred to as
"Lakehead").
Interprovincial, a company incorporated by Act
of Parliament and continued under the Canada
Corporations Act, R.S.C. 1970, c. C-32, owns and
operates a pipeline system in Canada for the trans
mission of crude oil and other liquid hydrocarbons.
The system runs from Edmonton, Alberta, to a
point on the International Boundary between
Canada and the United States near Gretna,
Manitoba, and from a point on the International
Boundary in the St. Clair River near Sarnia,
Ontario, to Port Credit, Ontario. It has a branch
line running from Westover, Ontario, to a point on
the International Boundary in the Niagara River
near Chippewa, Ontario, as well as an extension
from Sarnia to Montreal.
Lakehead, its wholly-owned subsidiary incorpo
rated under the laws of the state of Delaware,
owns and operates a pipeline system for carrying
similar products in the United States. The Lake-
head system commences at a point on the Interna
tional Boundary between Canada and the United
States near Gretna, Manitoba, and traverses the
states of North Dakota and Minnesota to Supe
rior, Wisconsin. From Superior, a northerly line
crosses the states of Wisconsin and Michigan to a
point on the International Boundary in the St.
Clair River. A southerly line extends from Supe
rior across the states of Wisconsin, Illinois and
Indiana around the southerly tip of Lake Michigan
and across the state of Michigan to a point on the
International Boundary in the St. Clair River
immediately downstream of the northerly line. The
pipeline commences again at a point on the Inter
national Boundary in the west branch of the
Niagara River and extends to refineries in Buffalo.
The Interprovincial and Lakehead systems con
nect at the points referred to above on the Interna
tional Boundary near Gretna, Manitoba, in the
west, and near Sarnia and Niagara Falls in the
east. The Lakehead system makes deliveries in the
United States, but it also forms an essential part of
the integrated system by which crude oil and other
liquid hydrocarbons are transmitted from western
Canada to the Provinces of Ontario and Quebec.
Interprovincial is subject in respect of its inter-
provincial pipeline to the regulatory jurisdiction of
the National Energy Board and Lakehead is sub
ject in respect of its pipeline to the regulatory
jurisdiction of the Interstate Commerce Commis
sion of the United States. The tariffs filed by
Interprovincial with the Board include joint tariffs
entitled
INTERPROVINCIAL PIPE LINE LIMITED
in connection with
Lakehead Pipe Line Company, Inc.
and covering through transportation from points in
western Canada to points in eastern Canada. The
precise extent of the Board's jurisdiction with
respect to such joint tariffs is not in issue on this
appeal.
The order appealed from arises out of a rate
hearing which the Board ordered of its own motion
to determine whether the tolls charged by Inter-
provincial are just and reasonable and whether
Interprovincial makes any unjust discrimination in
tolls, service or facilities against any person or
locality. The authority for such a hearing exists
under Part IV of the National Energy Board Act,
and in particular, in virtue of sections 50, 52, 53,
54 and 55 thereof'. Subsection 14(2) of the Act
' 50. The Board may make orders with respect to all matters
relating to traffic, tolls or tariffs.
52. All tolls shall be just and reasonable, and shall always,
under substantially similar circumstances and conditions with
respect to all traffic of the same description carried over the
same route, be charged equally to all persons at the same rate.
(Continued on next page)
provides 2 that the Board may act of its own motion
to exercise its jurisdiction under the Act. Interpro-
vincial does not in these proceedings challenge the
authority of the Board to conduct the rate hearing
that it has initiated in the present case.
The issue on appeal is the authority of the Board
to compel Interprovincial to file certain informa
tion related to Lakehead. The information is speci
fied in the Board's Order No. PO-5-RH-2-76
dated February 10, 1977 as follows:
1. Information for Lakehead Pipe Line Company Inc. for 1975
and 1976 similar to the information already provided respecting
Interprovincial contained in Exhibits 19(A) and 19(E).
2. An up to date, physical description and systems map of the
facilities owned by Lakehead Pipe Line Company Inc., includ
ing laterals, tankage, loading and delivery points.
3. The actual throughputs by product to delivery points of
Lakehead Pipe Line Company Inc.'s systems for the year 1976.
4. Lakehead Pipe Line Company Inc.'s tariff curves, including
supporting data and information as to the method used in
developing the historic curve.
5. Calculations supporting Lakehead Pipe Line Company
Inc.'s minimum charge, its cost additives for specific move
ments to specific areas and its oil allowance.
Interprovincial applied to this Court for leave to
appeal from the Board's order pursuant to section
18 of the Act upon the following grounds:
(Continued from previous page)
53. The Board may disallow any tariff or any portion thereof
that it considers to be contrary to any of the provisions of this
Act or to any order of the Board, and may require a company,
within a prescribed time, to substitute a tariff satisfactory to
the Board in lieu thereof, or may prescribe other tariffs in lieu
of the tariff or portion thereof so disallowed.
54. The Board may suspend any tariff or any portion thereof
before or after the tariff goes into effect.
55. A company shall not make any unjust discrimination in
tolls, service or facilities against any person or locality.
2 14. (1)...
(2) The Board may of its own motion inquire into, hear and
determine any matter or thing that under this Act it may
inquire into, hear and determine.
1. That the National Energy Board has no jurisdiction over
Lakehead Pipe Line Company Inc. (hereinafter referred to for
convenience as "Lakehead") and accordingly the National
Energy Board erred in law and exceeded its jurisdiction in
directing the applicant to file information respecting the costs
underlying the tariffs and tolls charged by Lakehead.
2. That the National Energy Board erred in law in holding that
it had sufficient jurisdiction over joint tariffs to enable it to
require the production of information relating to the operations
of a pipeline located in the United States of America and
owned and operated by Lakehead.
3. That the National Energy Board erred in law in holding that
it had jurisdiction to order the applicant to produce information
relating to the operation of a subsidiary company which carried
on business solely in the United States of America.
4. That the National Energy Board erred in law and exceeded
its jurisdiction in requiring the applicant to file financial infor
mation not already in existence related to the operation of
Lakehead.
By order of this Court dated May 10, 1977 leave
to appeal was granted upon the following terms:
... on the following question only namely:
That the National Energy Board erred in law and exceeded its
jurisdiction in requiring the applicant to file financial informa
tion not already in existence related to the operation of Lake-
head Pipe Line Company Incorporated.
In thus limiting the appeal to the fourth ground
on which leave was sought the Court has ruled
that the question of whether the Board has any
jurisdiction with respect to Lakehead, as distinct
from Interprovincial, is not an issue on the appeal.
The emphasis in the question on which leave was
granted is that the information referred to in the
Board's order is information that is not already in
existence in the form specified by the Board, and
this is the point to which argument was directed on
the appeal. Counsel appeared on behalf of the
Minister of Energy for the Province of Ontario
and the British Columbia Energy Commission and
made submissions in support of the Board's order.
The issue on appeal is whether the Board has
statutory authority to order the preparation and
filing of information in a documentary form that is
not already in existence. Such information can be
said to be not already in existence, at least in the
form specified by the Board, because its prepara
tion involves such acts or operations as calcula
tions, reconciliation, analysis, adjustments, esti-
mates and forecasts. It is information that must be
specially prepared in a particular form for the
Board's purposes. What is involved in complying
with the Board's order in the present case is sug
gested by the affidavit of Mr. McWilliams, Assist
ant Secretary of Interprovincial, in which he states
that he is informed that "it will be necessary for
Interprovincial to request Lakehead staff in Supe
rior, Wisconsin, to make estimates of future costs,
make allowances arid adjustments to annualize and
normalize existing data and prepare schedules of
financial information not already in existence".
There can be no doubt that the power to order
the preparation and filing of written information
of this kind is necessary to the effective exercise of
the Board's jurisdiction under the Act. Mr. Whit
tle, the Secretary of the Board, put the matter thus
in his affidavit:
It is my opinion that, if the Board is not able to require
companies subject to its jurisdiction to provide information in a
form directed by the Board, and if it is restricted to using
unprocessed, unanalysed, unscheduled, uncollated and disor
ganized documents, financial and engineering data as happen
to be in the custody and control of such companies, the Board,
assisted by technical staff, would be unable to adequately
discharge the statutory responsibilities assigned to it under the
National Energy Board Act, having regard to the complexity
and nature of the energy problems facing Canada in the 1970's.
It is conceded that all of the information sought by
the Board's order could be obtained in some
manner, shape or form, and over some extended
period of time, by viva voce evidence, but the same
reasoning applies to the practicality of this mode
of proceeding. The nature of the economic and
other issues to be determined by the Board in the
exercise of its jurisdiction under Parts III and IV
of the Act with respect to certificates of public
convenience and necessity and traffic, tolls and
tariffs is such that the Board must have the power
to determine the kinds of information it requires
from companies and the form in which it requires
it.
The Board appears to have relied for statutory
authority for its order on subsection 10(3)' of the
3 10. (1)...
(3) The Board has, with respect to the attendance, swearing
and examination of witnesses, the production and inspection of
Act, which confers on it the power of a superior
court of record to order production of documents. I
would question whether the order in this case can
be assimilated to an order for the production of
documents, which in practice is directed to specif
ic, existing documents. Reference was also made in
the course of argument to section 5.1 4 of the
National Energy Board Rules of Practice and
Procedure (adopted pursuant to section 7 of the
Act), which provides that the Board may require
an applicant, respondent or intervenor to furnish
additional information, but strictly speaking, this
section, as indeed the Rules generally, would
appear to apply to proceedings upon an application
rather than proceedings which the Board orders of
its own motions. There was also reference to sec
tion 24 6 of the Act which confers on the Board,
when it is exercising its advisory functions under
Part II, the powers of commissioners under Part I
of the Inquiries Act, R.S.C. 1970, c. I-13, includ
ing those conferred by section 4 7 thereof, which in
its terms would appear to be comprehensive
enough to include the specific power exercised in
this case. It is questionable, however, whether the
Board can claim to be exercising the powers of
inquiry conferred for purposes of Part II when
documents, the enforcement of its orders, the entry upon and
inspection of property and other matters necessary or proper
for the due exercise of its jurisdiction, all such powers, rights
and privileges as are vested in a superior court of record.
4 5.1 At any time after the filing of an application and before
the disposition thereof by the Board, the Board may require
any applicant, respondent or intervenor to furnish the Board
with such further information, particulars or documents as the
Board deems necessary to enable it to obtain a full and
satisfactory understanding of the application, reply or
sûbmission.
5 This would appear to result from the terms of section 5.1
itself, and from the other provisions of the Rules, including
particularly subsection 3(1), which provides:
3. (t) Subject to the Act and the regulations and except
as otherwise provided in these Rules, these Rules apply to
every proceeding before the Board upon an application.
6 24. For the purposes of this Part, the Board has all the
powers of commissioners under Part I of the Inquiries Act.
4. The commissioners have the power of summoning before
them any witnesses, and of requiring them to give evidence on
oath, or on solemn affirmation if they are persons entitled to
affirm in civil matters, and orally or in writing, and to produce
such documents and things as the commissioners deem requisite
to the full investigation of the matters into which they are
appointed to examine.
exercising its jurisdiction under Part IV. In view of
these uncertainties I am unable to conclude that
there is clearly explicit authority in the Act or the
Rules for the power exercised by the Board in the
present case, but given the practical necessity of
such power I am of the opinion that it exists by
necessary implication from the nature of the
regulatory authority that has been conferred on
the Board. See Halsbury's Laws of England, 3rd
ed., vol. 36, para. 657, p. 436: "The powers con
ferred by an enabling statute include not only such
as are expressly granted but also, by implication,
all powers which are reasonably necessary for the
accomplishment of the object intended to be
secured."
To deny the Board this power, which it has
exercised by long-established practice, and which,
indeed, Interprovincial did not challenge in com
plying with previous orders of the Board for simi
lar information relating to itself, would be to
defeat the purposes of the statute. It would also in
my opinion defeat the purposes of the statute to
deny the application of such power to information
that is, as the Board found, available to and under
the control of Interprovincial by virtue of its con
trol of and common management with Lakehead.
Quite clearly the allocation of costs and charges
between Interprovincial and Lakehead is of essen
tial concern to the Board and the information
sought is relevant to that concern. For these rea
sons I would dismiss the appeal.
* *
HEALD J.: I concur.
■ * *
KELLY D.J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.