National energy board failing to apply required constitutional test of functional integration

Subsection 12(1) of National Energy Board Act authorizes National Energy Board to inquire into any matter where circumstances may require Board, in public interest, to make order or decision. Applicant brought application alleging respondent’s proposed pipeline should be subject to Board’s jurisdiction. Board concluded applicant had not established prima facie case that pipeline was federal work or undertaking within s. 92(10)(a) of Constitution Act, 1867, so Board had no jurisdiction. Applicant appealed. Appeal allowed. Having defined public interest wholly in terms of question of constitutionality, which is question of law and jurisdiction, Board triggered correctness standard of review. Board erred in its appreciation and application of prima facie test in determining its mandate. Board evaluated substance of evidence as it would in full jurisdictional hearing, giving rise to error of law. Board did not ask whether arguable case had been made out, it answered underlying question. Board relied on tangential factors to displace what it appeared to have concluded was otherwise prima facie case. Board also erred in its legal analysis of constitutional question. Board failed to define undertaking in purposive terms, and did not apply required constitutional test of functional integration.

Sawyer v. Transcanada Pipeline Limited (2017), 2017 CarswellNat 3405, 2017 FCA 159, D.G. Near J.A., Richard Boivin J.A., and Donald J. Rennie J.A. (F.C.A.).