Warning Letter to Michels Canada

CER File: CV2526-351

May 11, 2026

Registered with acknowledgement of receipt.

Dean Cowling
President
Michels Canada
1102-16 Avenue
Nisku, AB T9E 0A9

RE: Warning Letter to Michels Canada

Dear Dean Cowling:

Safety and environmental oversight is a core responsibility for the Canada Energy Regulator (‘CER’).
The CER holds its regulated companies accountable for the safety, security, and protection of workers, the general public and the environment. CER-regulated companies, as regulatory authorization holders, as well as all persons working on, near or along CER-regulated facilities, are required to follow subsection 335(1) of the Canadian Energy Regulator Act (‘CER Act’) and its associated regulations.

For regulated pipeline companies, this includes the Canadian Energy Regulator Damage Prevention Regulations – Obligations of Pipeline Companies (‘DPR-O’). Other parties working on, near or along CER-regulated facilities that may cause ground disturbance are required to adhere to the Canadian Energy Regulator Damage Prevention Regulations – Authorizations (‘DPR-A’).

The CER wishes to emphasize that there is a collective responsibility for preventing damage to regulated facilities which is shared by many parties including: pipeline companies, developers, municipalities, utility companies, contractors, homeowners and those individuals performing construction or excavation work. Compliance with the regulations is a legal obligation and a critical measure to ensure protection of workers and preservation of essential infrastructure.

This letter is to inform you that the CER, based on its oversight relating to an incident on November 15, 2025 (detailed below), has serious concerns regarding compliance with the CER Act and the DPR-A.

BACKGROUND

On November 15, 2025, Westcoast Energy GP Inc. on behalf of Westcoast Energy Limited Partnership (‘Westcoast’) reported to the CER (as report INC2025-096) an incident that occurred on its Aspen Point Program near Pink Mountain, British Columbia. A Michels Canada crew was conducting construction activities related to the installation of a 24-inch-diameter (nominal pipe size [‘NPS’] 24) pipeline via trenchless boring under two active pipelines operated by Westcoast. While attempting to vertically install an NPS 20 steel flume in an observation hole intended to monitor the microtunnel boring machine drill head prior to crossing the existing NPS 16 Aitken Creek Pipeline Loop (‘NPS 16 pipeline’), the flume struck the NPS 16 pipeline. This contact prompted an evacuation of workers in the area and resulted in the release of approximately 47,310 m3 of sweet natural gas.

The CER conducted compliance oversight activities following this incident which resulted in the issuance of Inspection Officer Order (‘IOO’) No. VS-002-2025 to Michels Canada. Under IOO VS-002-2025, Michels Canada was required to:

  1. Ensure that the process for alternate methods of identifying a pipeline, and process for communication of surface markings with field workers involved in ground disturbance activities are effectively implemented.
  2. Submit to the Inspection Officer, for approval, a written investigation report, and an implementation plan for corrective and preventive actions within 60 days. The plan must address, at minimum, risk assessment for excavation practices within 3 meters of a pipeline, competency in selecting the excavation practices, training, communication, and practices that reinforce enabling stop work authority.

SUMMARY OF FINDINGS

It is alleged that Michels Canada undertook a mechanical excavation that caused a ground disturbance within the prescribed area of a pipeline contrary to subsection 10(3)(c)(ii) of the DPR-A.

The following facts are relevant to the alleged contravention:

  1. As part of construction activities for the trenchless bore, the NPS 16 pipeline had previously been exposed and measured to top of pipe at the location where the NPS 16 pipeline crossed the bore path (‘crossing’), and a stake was placed to mark that location. However, this stake was later broken and removed during clean-up activities for a drilling fluid release leaving the crossing unmarked.
  2. On November 14, 2025, a decision was made to hydro vacuum an observation hole on the bore path at a 2 m offset from where the NPS 16 pipeline crossed the bore path. A surveyor subcontracted to Michels Canada was onsite to survey and stake both the crossing as well as the 2 m offset point where the observation hole was to be excavated.
  3. The survey point that the surveyor had previously used to take a top of pipe measurement at the crossing was inaccessible at the time, so the surveyor used previously collected pipeline location data to approximate where to place the stakes. Subsequently, the surveyor placed a stake intended for the crossing point at an offset and labelled it “NPS 16 Hotline Crossing”.
  4. The surveyor placed these stakes with the understanding that they would be back to survey the pipeline after it was exposed. It was not communicated to the crew that the staking location intended for the crossing was approximated using previously collected pipeline location data.
  5. The crew proceeded to treat the “NPS 16 Hotline Crossing” stake as a confirmed control point, without any positive identification to confirm the exact location and depth of the NPS 16 pipeline, and began to hydro vacuum an observation hole approximately 2 m west of the stake.
  6. The observation hole at the 2 m offset point could not be reliably maintained due to sloughing caused by soil conditions. Previous attempts to re-establish visibility in the observation hole by installing a culvert as shoring were unsuccessful after the culvert encountered an obstruction believed to be a tree log and/or other type of woody debris.
  7. The decision to install a steel flume to maintain the observation hole and push through an encountered obstruction was reached by consensus between Michels Canada (Foreman and Superintendent) and Westcoast (Chief Inspector and Inspector). Although the NPS 16 pipeline had been positively identified at the crossing location weeks earlier, no verification was done on the day of the incident to confirm the accuracy of this information.
  8. During the attempted installation of the steel flume, the excavator bucket encountered resistance. The operator pushed the flume with the bucket approximately three times before another worker alerted the crew to a natural gas odour and observed bubbling fluid coming from the observation hole, at which point the site was evacuated.

CONCLUSION

Safety and environmental oversight are at the core of the CER’s mandate. The CER holds its regulated companies accountable to ensure they communicate expectations, and work with those who are undertaking activities on or around their pipeline. However, second party contractors, such as Michels Canada, also have obligations under the DPR-A and must work collaboratively with pipeline companies to follow specified conditions of their authorizations. This warning letter is issued in accordance with the CER’s Enforcement Policy and intended to underline the importance of future compliance with the CER Act and its associated regulations.

This written warning, and the circumstances to which it refers, will serve to form part of the CER’s compliance records of Michels Canada. Michels Canada is expected to exercise due diligence in meeting all CER requirements and take measures to prevent re-occurrence in the future.

Please be advised that any future reported events involving Michels Canada may result in further enforcement action, including administrative monetary penalties, in accordance with the CER’s enforcement policy and procedures. You can find more information on the CER’s compliance and enforcement activities at https://www.cer-rec.gc.ca/en/safety-environment/compliance-enforcement/.

Should you have any questions regarding this review, please contact Information not available at Information not available or Information not available.

Yours sincerely,

Jonathan Timlin
Vice-President
System Operations

Cc: Enbridge Inc.

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