Guidance on Land Related Compensation Disputes

Chapter 1: Introduction

The Canada Energy Regulator and Compensation Disputes

The Canada Energy Regulator (CER or Regulator) is a quasi-judicial, independent agency that regulates pipelines, international power lines, offshore renewable energy, and energy development in the Canadian public interest. We promote safety and security, environmental protection, and efficient energy infrastructure and markets.

The CER’s mandate is set out in legislation, including the Canadian Energy Regulator Act (CER Act), the Canada Oil and Gas Operations Act, the Canada Petroleum Resources Act, and the Impact Assessment Act. The CER oversees safety and environmental protection for the full lifecycle of energy facilities – from design and application assessment to construction, operation, and abandonment.

This guide provides information on how the public can bring compensation disputes to the CER under Part 6 of the CER Act,Footnote 1 in relation to:

  • the acquisition, lease or taking of lands;
  • lands whose use is restricted by the Prescribed AreaFootnote 2, whether or not the lands were acquired, leased or taken; and,
  • damages caused by the activities of the company to any person, provincial government, local authority and government or Indigenous governing body during their planning, construction, operation or abandonment.

Chapter 2: Options For Resolving a Compensation Dispute

Negotiation with the Company

Landowners and companies are encouraged to work together to negotiate agreements on compensation (including impacts of construction, such as damages) and the size and location of the land rights required for the project.

The CER expects all interested parties to first attempt to resolve compensation disputes amongst themselves before bringing a compensation dispute to the CER.

CER Resolution Options

If parties are unable to resolve a compensation dispute through their own negotiation efforts, the CER can support the resolution of the dispute in two ways: Alternative Dispute Resolution (ADR) or Adjudication (Hearing and Decision).

Figure 1: CER Compensation Dispute Resolution Processes

Figure 1: CER Compensation Dispute Resolution Processes

Each of these options is described further in subsequent chapters of this guide but are briefly summarised in the table below.

Table 1: Key characteristics of ADR and Adjudication

Table 1: Key characteristics of ADR and Adjudication
Alternate Dispute Resolution (ADR) Adjudication (Hearing and Decision)
  • ADR is an interest-based, confidential way for landowners, Indigenous peoples, and other land users to resolve disputes throughout the lifecycle of a project with CER-regulated companies. It includes negotiation, facilitation and mediation.
  • Participation is voluntary – all parties involved in the dispute must consent.
  • The CER encourages parties to use ADR to resolve issues to explore and understand interests, and develop acceptable solutions where possible.
  • The CER cannot provide participant funding, but typically the pipeline company will voluntarily cover reasonable costs.
  • The Commission may use or refer to the results of the ADR process in its decisions, orders or recommendations.
  • Adjudication is a quasi-judicial process in which the Commission hears all the evidence from parties and makes a decision. Parties have the opportunity to present evidence and argument in support of their respective positions, and to test the evidence of parties in their particular process.
  • The Commission has the discretion to make the hearing public or not.
  • The administrative principles of fairness and quasi-judicial process apply.
  • The reasons for any decision must be published.
  • The decision is binding.

Accessing CER Resolution Processes

The first step in requesting the CER’s support to resolve a compensation dispute is to contact the CER with details of the dispute using one of two forms available on the CER website:

  • For ADR, a Complaint Form must be completed and submitted to the CER. The form and ADR process are further described in Chapter 3 of this guide.
  • For a compensation dispute hearing, a Compensation Dispute Hearing Application must be completed and submitted to the CER. The application and hearing process are further described further in Chapter 4 of this guide.

CER receipt intake of Compensation Dispute (submitted via Complain or Application)

The CER will contact the sender within 10 calendar days of receipt of a Complaint Form or Compensation Dispute Hearing Application to confirm receipt and provide information on the next steps.

CER staff are available to answer questions and provide information about what ADR and adjudication typically entail in terms of process, timelines and amount of effort. They do not make decisions regarding the dispute or provide advice on the dispute itself. For further information please contact the CER:

Canada Energy Regulator
Suite 210, 517 Tenth Avenue SW
Calgary, Alberta T2R 0A8

Telephone: 403 292-4800
Toll Free: 1-800-899-1265
Fax: 403-292-5503
Fax (Toll Free): 1-877-288-8803

E-mail: info@cer-rec.gc.ca

Chapter 3: Alternative Dispute Resolution

Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) is a process for parties to jointly resolve disputes. The objective of ADR is to ensure a common understanding of the facts, and involves examining different options with the goal of establishing a mutually agreed upon solution outside of or in parallel to an adjudication process.

Goals and Principles of the CER’s ADR Process

The goals and principles of the CER’s ADR process reflect the desire of the CER to have a range of dispute resolution processes available to develop innovative and satisfactory solutions outside of a hearing.
Goals

  • Promote efficiency by achieving resolution outside of an adjudication process.
  • Promote a better understanding of the issues and identifying common interests.
  • Enable parties involved to take an active role in resolving the dispute.
  • Increase face-to-face discussions between affected parties and company decision-makers.

Principles

  • The ADR process will preserve the neutrality of the CER.
  • The ADR process will be clear, accessible, flexible, and responsive to the parties and their needs.
  • ADR can occur without impacting the timing of a regulatory decision unless the CER determines otherwise.
  • Parties to the ADR process will act in “good faith”. Good faith means that the parties agree to be open-minded, respectful, and direct in arriving at a mutual solution.
  • Discussions in preliminary-ADR meetings and subsequent mediation are confidential and conducted without prejudice unless the parties agree otherwise.

Steps in the CER’s ADR Process

To request ADR, you must complete and submit a Complaint Form which can be found on the Submit Applications and Regulatory Documents page on the CER’s website.

The CER will contact the sender of the form within 10 calendar days to confirm receipt and provide information on next steps. If the sender consents, the CER will send the complaint to the company and request a response.

If both parties agree, the CER will then arrange a pre-resolution conference for parties involved in the compensation dispute. The conference is guided by CER staff and is typically held over the phone but could take place face-to-face. Lawyers or other representatives are not required, but parties may invite them if they wish.

The pre-resolution conference will generally include:

  • identifying, clarifying and narrowing the issue(s) or complaint;
  • sharing and exchanging information, including documents, about the dispute; and,
  • exploring options available for resolution.

Parties will also discuss timing, location, cost, confidentiality and who should participate in the ADR process.

Following the pre-resolution conference, parties can make an informed decision on whether to continue with ADR. The CER, in consultation with the parties, will draft an ‘Agreement to Mediate’ document that will set out the next steps. Next steps include a mediation session with the parties which is typically in-person.

Considerations for the CER’s ADR Process

ADR has its own conventional rules regarding confidentiality, without prejudice and sharing of information. CER staff facilitating ADR will ensure participating parties adequately discuss and understand these topics early in the ADR process.

The results of the ADR process are not binding. However, any resolution or settlement agreed to must conform to all regulatory and statutory requirements. Therefore, certain technical, scientific, or other information or components of an agreement may be disclosed to the CER or other regulatory authorities.

Agreements

The ADR process may result in parties reaching agreement on compensation. The CER does not enforce agreements made through ADR, nor are they made public. However, the CER considers it important that parties meet commitments, and CER staff will follow up if contacted by either party with concerns about the terms of an agreement not being honoured.

Costs and Funding

There is no participant funding available for ADR but typically the pipeline company will voluntarily cover reasonable costs.

Chapter 4: Adjudication Process

Adjudication (Hearing and Decision)

Adjudication, or a hearing, is a quasi-judicial process in which the Commission hears all the evidence from parties and makes a decision. Parties have the opportunity to present evidence and arguments in support of their respective positions, and to test the evidence of parties in their particular process.

Adjudication Process

During a hearing, the CER may also ask pertinent questions about the application as it seeks the information it needs to make a transparent, fair, and objective decision.
The only matters that can be considered in a compensation dispute hearing include:

  • the acquisition, lease or taking of lands;
  • lands whose use is restricted by the Prescribed Area, whether or not the lands were acquired, leased or taken; and
  • damages caused by the activities of the company to any person, provincial government, local authority and government or Indigenous governing body during their planning, construction, operation or abandonment

Compensation Dispute Hearing Application

To request a compensation dispute hearing, you must complete and submit a Compensation Dispute Hearing Application which can be found on the Submit Applications and Regulatory Documents page on the CER’s website. After completing this form, save it and e-file it with the Commission. E-filing is the method to submit documents to the Commission in a hearing. Please note that you cannot submit an application by email. The Filer's Guide to Electronic Submission [PDF 1282 KB] provides additional information on filing documents. You will receive an email containing a “filing receipt.”

You are asked to send one hard copy of the e-filed application and document(s) and one hard copy of the signed filing receipt to the CER by mail, hand delivery, or courier.

If you are not able to e-file your application, it can also be filed by facsimile, courier, regular mail or in person. All documents filed with the Commission are placed on the CER’s website and become part of the public registry.

The CER will contact the sender of the application within 10 calendar days to confirm receipt and provide information on next steps. The CER will also provide a copy of the application to the company.

Hearings

The CER will announce a hearing and will issue a process letter or a document called a Hearing Order. A Hearing Order typically includes a brief description of the application, the list of issues that can be considered, as well as details on the steps in the hearing process and the schedule (timing and deadlines) for the various steps. Many hearings are conducted in writing only, however if there is an oral step (such as oral cross-examination or oral argument), the date, location and time of the oral portion of the hearing may be shared if these details are known.

In a hearing, a Commissioner or panel of Commissioners will be assigned to read and listen to all of the evidence that is filed on the application, and may ask questions of the applicant and other participants before making a decision.

In some cases, the CER may assign Process Advisors to support the public and Indigenous peoples who are participating in hearings to answer questions about the CER’s hearing process and explain the different roles in a hearing. The Hearing Order will include information on any resources that are available to assist with hearing related questions, including a whether Process Advisors have been assigned to the hearing.  

Role of Commissioners

A Commissioner, or panel of Commissioners will hear evidence from all parties in a compensation dispute and make a decision.

A compensation dispute may relate to other matters or hearings under consideration by the Commission. For example, a compensation dispute may relate to the acquisition of land rights proposed to be required by a company in order to build new pipeline facilities. In this example, the company may be applying, or may have already applied, to the Commission for an Order or Certificate permitting it to construct the proposed pipeline facilities.

The Commission will normally consider compensation matters separately from other related applications, unless it determines otherwise.

Decision

The CER Act sets out the factors that the Commission considers when deciding a compensation dispute under Part 6:

  • market value of lands;Footnote 3
  • changes to periodic payments as a result of changes to market value of the lands;
  • loss of use as a result of the operation of the prescribed area;Footnote 4
  • adverse effect of the taking by the company including the prescribed area, on the remainder of the lands;
  • nuisance, inconvenience and noise in connection with the operations of the company;
  • damage to lands caused by the operations of the company;
  • loss of or damage to livestock or other personal property;
  • special difficulties in relocation of an owner or their property; and
  • any other factors that the Commission considers appropriate.

In all cases, the Commission will decide on compensation matters on a case by case basis and will rely on evidence submitted by all parties regarding the dispute.

Once the Commission has determined it has all the information it needs to makes its decision, it will publicly issue its decision with reasons. The Commission may include in its decision, direction on the awarding of costs. For more information on costs see the section below.

Review and Appeals

There are two options if you do not agree with a decision made by the Commission - you can file an appeal or you can ask the Commission to review its decision.

Decisions made by the Commission may be appealed to Canada's Federal Court of Appeal on a point of law or jurisdiction if the Court grants permission (or leave) to appeal it. An application asking for permission to appeal (known as a leave to appeal application) must be filed with the Federal Court of Appeal within 30 days following the CER decisionFootnote 5.

The Commission may also be asked to review or alter its own decision. Parties involved in the compensation proceeding can ask the Commission for a review but only if specific requirements are met. These requirements are listed in the National Energy Board Rules of Practice and Procedures.Footnote 6 If the Commission decides to hold a review, it may hold a hearing or ask for further input from people interested in the project.

Costs and Funding

There is no participant funding available for CER compensation hearings.

The Commission may, and in some cases must, order the company (or other party) to pay some or all of an applicant’s costs incurred for a compensation hearing. After the Commission orders an amount of compensation to be paid, the Commission will hear additional evidence and argument to determine costs. At that time, the Commission will need to know the amount of compensation that was offered by the company. 

If the amount the Commission awards a person in its compensation decision is more than 85% of the amount of compensation offered by the company, costs are mandatory; that is, thecompany must pay all legal, appraisal and other costs reasonably incurred by that personFootnote 7. If the amount the Commission awards a person in its compensation decision is 85% or less of the amount of compensation offered by the company, costs are discretionary; that is, the company may be ordered by the Commission to pay some or all of the applicant’s costs.

In assessing reasonability of costs, the Commission may consider factors such as the type of cost, the reasonability of rates, and whether the costs incurred resulted in assisting the Commission in making its compensation determination. Regardless of whether a cost award is mandatory or discretionary, the Commission will consider the amount of costs incurred, and whether they were reasonably incurred.

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