Guidance on Land Related Compensation Disputes

Contents

Chapter 1: Introduction

The Canada Energy Regulator and compensation disputes

This guide provides information on how the public can bring compensation disputes to the Canada Energy Regulator for compensation payable under Part 6 of the Canadian Energy Regulator Act (CER Act).Footnote 1 This may include compensation for:

  • the acquisition, lease or taking of lands;
  • lands whose use is restricted by the operation of section 335 of the CER Act, whether or not the lands were acquired, leased or taken; and,
  • damages caused by the activities of the company which are directly related to: the acquisition or lease of lands for a pipeline or abandoned pipeline; the construction of the pipeline; or the inspection, maintenance or repair of the pipeline or abandoned pipeline.

For more information about section 335 of the CER Act, including the prescribed areaFootnote 2, see the damage prevention section of the CER website.

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:

  • Complaint Resolution Option,
    • Parties use the CER’s alternative dispute resolution (ADR) services.
    • ADR is an interest-based approach to resolve disputes, facilitated by the CER’s ADR staff who are trained in dispute resolution.
    • This option is confidential. Information shared and any disclosures made through the ADR process is confidential and will not be placed on the CER’s Public Registry.

or

  • Hearing (Adjudication) Option
    • A party requests that the compensation dispute be decided by Commissioners of the CER in a public hearing process (adjudication).
    • The hearing may be oral or written.
    • The Commission sets out the decision-making steps and all documents are placed on the CER’s Public Registry (REGDOCS).

These two options are illustrated in Figure 1.

Figure 1: Options available to resolve compensation related disputes

Figure 1: Options available to resolve compensation related disputes

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 Complaint Resolution and Hearing (adjudication) Options

Table 1: Key characteristics of Complaint Resolution and Hearing (adjudication) Options

Complaint Resolution Option

Hearing (Adjudication) Option

  • Uses ADR, an interest-based, confidential way to resolve disputes. It involves negotiation, facilitation and mediation. ADR is facilitated by CER staff.
  • Applies to compensation disputes throughout the lifecycle of a project with CER-regulated companies.
  • Participation is voluntary – all parties involved in the dispute must consent.
  • Any settlement agreement is confidential. The Commission may take into account or refer to the results of the ADR process in its decision, order or recommendation.
  • The results of the ADR process are not binding.
  • Costs for participating in ADR are not reimbursable by the CER through its Participant Funding Program. However, costs may be discussed between the parties at the pre-resolution conference.
  • Adjudication is a court-like process and the administrative principles of fairness and quasi-judicial process apply.
  • Only applies to certain claims for compensation, as detailed in chapter 4.
  • 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 hears all the evidence from parties and makes a decision.
  • The reasons for any decision must be published.
  • The decision is binding.
  • The Commission has the discretion to make the hearing public or not.
  • Costs may be awarded, in accordance with the CER Act.

Requesting CER support for compensation disputes

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 the Complaint Resolution Option, complete the Complaint Form [PDF 315 KB] and send it to the CER. The complaint form will not be placed on the CER’s public registry. More information about the Complaint Resolution Option are provided in Chapter 3 of this guide.
  • For the Hearing Option (adjudication), a Compensation Hearing Application [PDF 287 KB] must be completed and filed with the CER. The compensation hearing application will be placed on the CER’s public registry. More information about the Hearing Option are provided in Chapter 4 of this guide.

The CER will contact the sender within 10 calendar days of receipt of a complaint form or compensation hearing application to confirm receipt and provide information on the next steps.

CER staff are available to answer questions about the Complaint Resolution and the Hearing Options including process and timelines. CER staff do not make decisions regarding the dispute or provide advice on the dispute itself. For further information please contact the CER.

Chapter 3: Complaint Resolution Option and ADR

Alternative dispute resolution

The Complaint Resolution Option uses the CER’s ADR services. 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. The CER recommends ADR as an option to resolve a dispute before considering other formal processes the CER may provide, such as a hearing (adjudication).

Goals and principles of the CER’s ADR services

The goals and principles of the CER’s ADR services 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 a hearing (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.

Requesting the CER’s ADR services

To request ADR, you must complete and submit a complaint form. Download the Complaint Form [PDF 315 KB] from our website, or call 1-800-899-1265 (toll free) or email info@cer-rec.gc.ca to request a copy.

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

Pre-resolution conference

If both parties agree, the CER will then arrange a pre-resolution conference for parties involved in the compensation dispute. This is an informal opportunity for parties to identify the issues, ask questions about the process, and decide on how they would like to have the dispute resolved. The conference is guided by CER staff and can be held remotely (e.g., over the phone) but could take place in-person. Lawyers or other representatives are not required, but parties may invite them if they wish. The pre-resolution conference is not open to the public.

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. If both parties agree to use 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 services

ADR has its own conventional rules regarding confidentiality 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

The CER’s ADR services are available at no-cost. The CER does not provide participant funding for ADR.

If the compensation dispute is unresolved

If the compensation dispute is unresolved using the Complaint Resolution Option, parties can pursue resolution through the Hearing (adjudication) Option. A compensation hearing application must be filed, and the process follows the steps in Chapter 4. Documents from the Complaint Resolution Option are not provided to the Commission. Parties must file material they wish the Commission to consider.

Chapter 4: Hearing (adjudication) Option

Adjudication, or a hearing, is a court-like process. 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. The Commission hears all the evidence from parties and makes a decision.

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.

Compensation dispute hearings are only available for compensation that is compensable under Part 6 of the CER Act. This includes:

  • the acquisition, lease or taking of lands
  • lands whose use is restricted by the operation of section 335 of the CER Act, whether or not the lands were acquired, leased or taken
  • damages caused by the activities of the company which are directly related to: the acquisition or lease of lands for a pipeline or abandoned pipeline; the construction of the pipeline; or the inspection, maintenance or repair of the pipeline or abandoned pipeline

For information on how to document damages, see the Land Agreements page in the Land Matters Guide on the CER website.

Compensation hearing application

To request a compensation dispute hearing, you must complete and submit a Compensation Hearing Application. Download the Compensation Hearing Application [PDF 287 KB] from our website, or call 1-800-899-1265 (toll free) or email info@cer-rec.gc.ca to request a copy.

Instructions on how to file the application are included on the Compensation Hearing Application form. All documents filed with the Commission are placed on the CER’s website (REGDOCS) and become part of the public registry, which is available to the public.

After the application is filed, the CER will contact the applicant within 10 calendar days to confirm receipt and provide information on next steps.

Icon: question mark

Do you need a representative to submit an application?

You do not need a lawyer or other representative to participate in a CER hearing or any other CER process. However, you may designate a person to help you to prepare your written information for filing with the CER.

Pre-resolution conference

The CER may invite all parties to participate in a pre-resolution conference. If the parties agree, a pre-resolution conference will be held. Information on pre-resolution conferences is provided in Chapter 3 of this guide.

If no pre-resolution conference occurs, or the parties decline ADR at the pre-resolution conference, the process continues to the next step.

Hearings

If a party files an application pursuant to section 327 of the CER Act, and if the matter is within the Commission’s mandate, 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 the parties questions 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 whether process advisors have been assigned to the hearing.

To learn more about the CER hearing process visit the CER website.

Icon: question mark

Will you need to travel to attend a hearing?

If a hearing contains an oral portion, the decision on where to hold the oral portion of a hearing is made by the Commission. Hearings can be held in the CER Hearing Room in Calgary and people may attend or participate from another location using available technology. Sometimes the oral portion of the hearing may take place at a location near those who are participating.

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.

Icône: point d'interrogation

Can you still continue to negotiate with the company once a hearing starts?

Yes. Parties are encouraged to continue to make efforts to resolve the dispute and come to a mutually agreeable outcome even if a hearing process is underway. Should parties reach an agreement, the applicant can withdraw their application and notify the Commission in writing.

At any time during a compensation proceeding, the parties may continue to discuss and negotiate terms either privately or using the CER’s ADR services, and may advise the Commission that a compensation claim or portions thereof have been settled and are withdrawn from the Commission’s consideration.

Decision

Subsection 327(2) of the CER Act sets out the factors that the Commission considers when deciding a compensation dispute under Part 6:

  • market value of landsFootnote 3
  • changes to periodic payments as a result of changes to market value of the lands
  • the loss of use of the lands taken by the company or whose use is otherwise restricted by the operation of section 335 of the CER Act
  • adverse effect of the taking of the lands by the company on the remainder of the lands, including by restricting their use by the operation of section 335 of the CER Act
  • 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 or moveable affected by the operations of the company
  • special difficulties in relocation of an owner or their property
  • any other factors that the Commission considers appropriate
  • other prescribed factors that are prescribed under paragraph 333(e) of the CER Act

In all cases, the Commission will decide on compensation matters on a case by case basis and will consider the 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.

Costs and funding

There is no participant funding available for CER compensation hearings.

The Commission may, and in some cases must, order the company to pay some or all of the legal, appraisal and other costs reasonably incurred for a compensation hearing.Footnote 4

  • If the Commission awards a person compensation for more than 85% of the amount offered by the company, costs are mandatory; that is, the company must pay all legal, appraisal and other costs reasonably incurred by that person.
  • If the Commission awards a person compensation for 85% or less of the amount 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.

Only reasonably incurred costs are payable. 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 assisted the Commission in reaching its compensation determination. If the Commission awards a person compensation, the Commission may receive additional submissions from the parties before determining costs.

Review and appeals

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.Footnote 5 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 decision.

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 Procedure.Footnote 6 If the Commission decides to hold a review, it may ask for input from people interested in the review application, and may hold a hearing.

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