Information for Landowners
Compensation for lands acquired and for damages
for federally-regulated pipelines
Negotiation and Arbitration services provided by
the Minister of Natural Resources Canada
For federally-regulated pipelines, the National Energy Board Act, (the NEB Act), provides that where a landowner and a pipeline company cannot agree on compensation for lands that the pipeline company has acquired or damaged, either the landowner or the pipeline company may apply to the Minister of Natural Resources Canada to receive the services of a negotiator, or to have the dispute settled by arbitration.
Negotiation
Negotiation proceedings are covered in sections 88 and 89 of the NEB Act. The process is informal, and there are no governing regulations. The Minister of Natural Resources appoints a negotiator whose role is to facilitate productive negotiation sessions between the parties. The negotiator has 60 days after the start of negotiations to file a report with the Minister as to the success or failure of the process.
The negotiator does not act as an advocate for either of the parties, and does not make a decision on the amount of compensation. Parties do not have to come to an agreement during the negotiation process. If an agreement is reached, the details are not usually contained in the negotiator´s report to the Minister. Even where they are, they are considered protected under the Privacy Act, and will not be released by Natural Resources Canada, unless the parties agree to it.
If the negotiation process is unsuccessful, either the landowner or pipeline company may apply to the Minister to have the matter determined by binding arbitration (see below). The landowner or pipeline company may also decide at any time during negotiations to request to have their dispute resolved by arbitration.
The negotiation process is done "without prejudice" to any subsequent proceeding. What transpires during negotiations cannot be used against either party during the arbitration proceeding. For example, the willingness to make or accept certain offers during negotiation proceedings does not become evidence during arbitration.
Note that for the negotiation process, neither the negotiator nor the Minister has the power to award costs. If a landowner wishes to be reimbursed for costs incurred during negotiation (e.g., for legal advice or representation, or for an appraisal or other expert opinion), this should be discussed with the pipeline company beforehand.
To receive the services of a negotiator, a landowner or the pipeline company must serve a notice of negotiation (section 88) on the Minister of Natural Resources Canada. The notice should include a clear and concise statement of the relevant facts and the nature of the decision sought. This will assist the Minister in appointing a negotiator, and will assist the negotiator in carrying out his / her duties.
Arbitration
Arbitration proceedings are covered in sections 90-103 of the NEB Act. There is also an accompanying set of regulations, the Pipeline Arbitration Committee Procedure Rules, 1986.
The arbitration proceeding is conducted by a committee of at least three members that have been appointed by the Minister of Natural Resources Canada. Once appointed, the committee is independent of the Minister and has its own powers.
Unlike negotiation sessions, arbitration hearings are relatively formal. A transcript is kept. There are provisions for presenting evidence, witness testimony and cross-examination. The decision of the arbitration committee is binding and is enforceable in a court of law. Parties may ask the committee to review a decision, and appeal lies to the Federal Court (Trial Division) on questions of law or jurisdiction.
Personal information contained in arbitration committee decisions is considered protected under the Privacy Act. Although the parties are free to release this information, Natural Resources Canada will not do so without the written permission of both parties.
The NEB Act makes provision for landowners to recover the costs they have incurred as a result of the arbitration. Subsection 99 (1) of the act reads:
"Where the amount of compensation awarded to a person by an Arbitration Committee exceeds 85% of the amount of compensation offered by the company, the company shall pay all legal, appraisal and other costs determined by the Committee to have been reasonably incurred by that person in asserting that person´s claim for compensation."
In circumstances where the Arbitration Committee makes an award that is less than 85% of the amount offered by the pipeline company, the Committee still has the discretion to order the company to pay some or all of the landowner´s costs.
To serve a notice of arbitration on the Minister, a landowner should refer to subsection 90(1) as well as sections 75, 84 and 85 of the NEB Act, and to subsection 4(2) of the Rules.
Further information and contacts
Information on the National Energy Board´s regulatory processes is available in the NEB publication "Pipeline Regulation in Canada: A Guide for Landowners and the Public." This is available on the NEB´s website (www.neb-one.gc.ca), or may obtained by calling the NEB´s Publications Coordinator at 1-800-899-1265, or by sending an email request to publications@neb-one.gc.ca.
For further information on negotiation or arbitration services provided by the Minister of Natural Resources Canada, or to receive a copy of the National Energy Board Act and the Pipeline Arbitration Committee Procedure Rules, contact:
A notice of negotiation or arbitration may be served on the Minister of Natural Resources at:
The Honourable Gary Lunn, P.C., M.P.
Minister of Natural Resources
580 Booth Street
Ottawa, Ontario K1A 0E4