On Wednesday, Aug. 28, the National Energy Board (NEB) became the Canada Energy Regulator (CER). For further information please visit our Implementing the Canadian Energy Regulator Act information page
Compensation For Easements
Under the NEB Act, landowners are entitled to compensation from companies for the use of private property for pipeline or power line facilities. This includes when the company acquires permanent land rights, as well as other access to private lands.
Compensation is also to be provided for any damages caused by the company as a result of activities associated with their facilities. This could include:
- damages to the lands
- impacts to the landowner
- impacts to business operations related to the lands
Examples of impacts could include: trees that are cut down due to construction, crop loss, noise or other inconveniences. The company may also offer to minimize inconveniences or address the impacts by means other than monetary compensation.
Offers for easement compensation are typically based upon a detailed statement of value of the lands required. These offers can rely upon generally accepted appraisal methodologies, such as fair market value.
The company’s offer may also provide details for options on the method of payment for the easement which can be either; at the option of the landowner:
- Annual or periodic payments of equal or different amounts over a period of time - for this option, the payment schedule and amounts must be reviewed every five (5) years; or
- A one-time lump sum payment
The decision rests with the landowner to select which method of compensation they would prefer. The NEB Act does not prescribe the amount to be paid or the payment schedule.
While negotiating with the company on compensation matters, landowners can provide their own supporting information such as an appraisal, receipts, studies or reports.
Should the landowner and the company be unable to conclude an agreement on compensation at any time during the lifecycle of the project, either party may apply to the Minister of Natural Resources (NRCan) to request the services of a negotiator, or to have the dispute settled by arbitration. The decision of the NRCan arbitration committee is binding and is enforceable in a court of law. Parties are referred to the Pipeline Arbitration Secretariat within Natural Resources Canada given that the NEB does not have the authority to decide on matters pertaining to compensation
In the end, if the landowner and the company cannot reach an agreement, the company can seek a ‘Right of Entry Order’ from the Board for the right to enter the lands associated with an approved project. Whether the landowner objects to the issuance of an Order or not, the landowner can submit written comments to the Board regarding the terms and conditions that the company has requested in its application. If an Order is issued, the landowner will be paid an advance on the compensation amount, even if the final amount is yet to be determined.
If assistance is required to resolve these types of concerns, the NEB can provide qualified staff to help landowners reach a mutually acceptable outcome with the company.
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