B.C. to appeal top court ruling it can't regulate flow of bitumen through Trans Mountain pipeline

WATCH: The NDP government says it will appeal a unanimous decision by the B.C. Court of Appeal that the province has no right to restrict the flow of oil through pipelines. Jill Bennett reports, and Keith Baldrey provides analysis.

British Columbia says it will appeal a ruling by the province’s top court that found it could not restrict the transportation of diluted bitumen within its borders.

The case marks the latest twist in the ongoing Trans Mountain pipeline expansion dispute, and could have severely impacted the proposed pipeline expansion if it had succeeded.

B.C. had asked the court to rule on whether it has the constitutional power to regulate the flow of bitumen through a system of permits.

WATCH: Court rules B.C. cannot restrict oil shipments across borders

The five-member panel of judges unanimously ruled against B.C., finding that pipelines fall under federal jurisdiction.

In the court’s decision, Justice Mary Newbury wrote that B.C.’s proposed environmental regulations would have improperly restricted the flow of oil through a federal undertaking, and that it appeared to unfairly target the Trans Mountain expansion project.

B.C. argues it cannot stop Trans Mountain pipeline expansion, but it can protect environment

Watch below: The B.C. Court of Appeal ruled Friday the province doesn’t have a say in what goes in the Trans Mountain pipeline. Fletcher Kent reports.

“Combined with the fact that would apply only to additional volumes of heavy oil in the expanded Trans Mountain pipeline above historic amounts, the (admissible) evidence supports Canada’s characterization of the proposed legislation as aimed at the TMX project.,” wrote Newbury.

“From this proposition, it is a short step to Canada’s argument that the immediate purpose and undeniable effect … is to provide a means by which the Province may impede additional heavy oil originating in Alberta from being transported through British Columbia generally, and thus “frustrate” the project in particular.”

B.C. to appeal

B.C. Attorney General David Eby said the province would now take the case to the Supreme Court of Canada.

“We continue to believe we have the authority and the responsibility to protect our environment and our economy. And so we will be exercising our right to appeal to the Supreme Court of Canada,” Eby said.

Eby said under federal legislation, B.C. has the automatic right to appeal reference questions to the higher court, and rejected that continuing to pursue the case amounted to a waste of taxpayers money.

“In terms of the financial cost of going to court to clarify this question, to clarify the extent of our jurisdiction, it is a fraction of a fraction of the cost of a catastrophic diluted bitumen spill in terms of the impacts on economy, on jobs, and just cleaning up the mess. So we think it’s worthwhile.”

WATCH: B.C. Attorney General David Eby responds to court ruling

B.C. Premier John Horgan said from his government’s point of view, the power to “protect citizens” when it comes to environmental matters rests absolutely in the hands of provinces, rather than the federal government.

“There’s always been a tug and pull between the supremacy of federal jurisdiction versus that of provincial jurisdiction,” Horgan said.

“And when it comes to areas of the environment this is an untested area. That’s why we went to the courts. That’s why Saskatchewan and Ontario are going to the courts with their particular concerns on managing and regulating environmental issues.”

LISTEN: University of Saskatchewan law professor Dwight Newman joins Rob Breakenridge to discuss the B.C. court’s decision

But the decision to continue to pursue the case drew quick scorn from the opposition BC Liberals, who called on the NDP to “stop blocking pipelines.”

“While British Columbians spend the summer paying the highest gas prices in North America, John Horgan and David Eby will keep spending tax dollars to file more lawsuits trying to block a federally-approved pipeline that will increase supply and create jobs,” said party leader Andrew Wilkinson and attorney general critic Michael Lee in a joint statement.

LISTEN: Canadian Energy Pipeline Association president Chris Bloomer joins Calgary Today to discuss the B.C. court decision

“The NDP needs to finally start respecting our constitution and listening to the people rather than making up rules to please their activist friends and insiders.”

WATCH: Premier John Horgan reacts to Court of Appeal ruling and B.C.’s next steps

“Clear victory for Alberta”

Alberta Premier Jason Kenney took to Twitter with a video expressing his pleasure at the “clear victory for Alberta” and its energy sector.

“This is a huge victory for Alberta, for the rule of law, and a significant defeat from the forces of obstruction that are trying to land-lock our energy,” Kenney said.

Kenney said the ruling affirmed Alberta’s position that the pipeline had been appropriately approved under a federal process, and that B.C. had no power to further restrict it.

B.C. referred the question to the B.C. Court of Appeal last spring, ending a nasty trade dispute with Alberta that had escalated to the point where the Wildrose province banned the import of B.C. wine.

Former Alberta premier Rachel Notley was quick to celebrate the decision, tweeting that her government’s ban on B.C. wine forced the coastal province into a court case it couldn’t win.

“The result is this decision, creating investor certainty for AB,” she wrote. “Turns out B.C.’s toolbox was more Fisher Price than DeWalt.”

WATCH: Kenney responds to Supreme Court ruling on Trans Mountain: ‘We’re delighted’

B.C. argues it cannot stop Trans Mountain pipeline expansion, but it can protect environment

Speaking in Vancouver Friday, federal Conservative Leader Andrew Scheer also lauded the decision, but said questions continue to swirl around the project’s future.

“There still is a great deal of uncertainty as it relates to future court processes that will follow and still lack of a clear plan to get it built. We called on the Liberal government months ago to fast-track all judicial references to the Supreme Court so that investors can finally get clarity around getting big projects built,” Scheer said.

“This court ruling today is helpful, but of course that climate of confidence has not been created by this Liberal government.”

WATCH: Conservatives pleased with B.C. court decision on Trans Mountain

Constitutional question

Under Canada’s division of constitutional powers, the regulation of inter-provincial pipelines is squarely within federal jurisdiction.

But B.C. argued that the issue centred on the transportation of hazardous goods. It argued the proposed regulations concern environmental protection, and as such were within the province’s constitutional powers.

Alberta and the federal government have argued that B.C.’s motives for the regulations rested on a desire to stop the pipeline. During the 2017 B.C. election campaign, the province’s NDP said it would use “every tool in the toolbox” to prevent the pipeline expansion.

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Had B.C. won the case and amended its Environmental Management Act, it would have had the power to require Trans Mountain to get a “hazardous substance permit” for the expansion.

Permit applications would have had to detail the health and environmental risks of a spill, along with plans to cut risks and demonstrate the financial capacity to respond effectively.

WATCH: Protestors gather in Calgary to support Trans Mountain pipeline expansion

Bitumen shippers would have also needed to set up a fund for local governments and First Nations to give them the capacity to respond to a spill and compensate anyone involved in a cleanup.

The B.C. Court of Appeal began hearing the case in March. Trans Mountain Corp., Enbridge Inc. and Saskatchewan also argued against the proposed regulations, while some First Nations, B.C. municipalities and environmental groups backed it.

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The federal government bought the Trans Mountain pipeline last year amid concerns former owner Kinder Morgan would pull out of the project due to delays.

Last summer, the Federal Court of Appeal quashed the project’s approval, ruling Ottawa had failed to properly consult with First Nations.

Ottawa has until June 18 to complete consultations with Indigenous groups before making a final decision on whether to proceed with the plan to twin the pipeline.

-With files from the Canadian Press

© 2019 Global News, a division of Corus Entertainment Inc.

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