PIPELINE OBSERVER Summer 2021

PIPELINE

SUMMER 2021

CANADIAN ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

CONTINENTAL ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

OBSERVER

FARMLAND INFLATION Higher prices mean higher stakes for pipeline landowners

Personal Responsibility Reliance on government never ends well

Rights During a Pandemic Protecting property rights during COVID-19

Victory for all Landowners B.C. court ruling a slap in the face to CBC’s “legal experts”

Only a few provinces benefit from pipelines move billions of dollars into Canada’s economy nationwide.

Pipelines drive prosperity across Canada through employment and billions for vital government programs like education and health care. To see how, visit: SHAREDFUTURE.CA/ECONOMY

CONTENTS

SUMMER 2021

CANADIAN ASSOCIATION OF ENERGY AND PIPELINE LANDOWNER ASSOCIATIONS

04

Personal responsibility is the best way to protect human and economic health

07

Inflation 101

10

Private Property: Inherent Right or Gift from Government?

Money can be printed, but land is a precious commodity

Farmland is a real asset and offers stability during the pandemic spending spree

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Ottawa’s Money Printing Will Boost Land and Crop Prices

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The Sword of Damocles Hangs over Every Property Owner

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Prairie Pipeline Preparedness Exercise Far from Routine

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More Pipelines = More Economic Security

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Property Rights are Human Rights

How does inflation impact production costs and risk to the landowner?

A businessman’s property is his in name only, granted to him by the state

nbridge met with positive community reaction for its E emergency response test

yberattacks on energy infrastructure a result of the C government pipeline war

25 Plugged into Pipeline Exclusion Zones

29

Pipeline plug-in rewrites agreements between operators and landowners

29 Line 3 Replacement Project Proceeds

Decommissioning of Enbridge’s old line begins in Manitoba

31 Warning: Read Before Signing

34

What landowners need to know before signing a company's offer

Are Property Rights Too Impractical During a Pandemic?

During the pandemic, government has trampled all over property rights

36 Sacred Bones

Cover: iStock/ Toltek; Jobalou

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Government policies on Indigenous rights impact property owners

Victory for Canada’s Largest Ranch a Win for Landowners .C. court rules on landowners’ right to deny trespassers B access to agricultural lands

Pipeline Observer is a publication of the Canadian Association of Energy and Pipeline Landowner Associations and the Continental Association of Energy and Pipeline Landowner Associations 257, 918 Albert St., Regina, SK S4R 2P7; 306-522-5000.

All contents copyright ©2021 CAEPLA. Advertising information: advertising@caepla.org | Editorial: editor@caepla.org Administration: admin@caepla.org | caepla.org | Twitter: @CAEPLA

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BY ANNETTE SCHINBORN

Property Rights are Human Rights From pandemics to biosecurity, personal responsibility is the best way to protect human and economic health

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“The tendency to expect others to keep us ‘safe’ has conditioned people to rely more on government than on taking personal responsibility.”

iStock/ Wildroze; loveguli

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t would appear it’s human nature to always seek the path of least resistance. We enjoy modern conveniences and although they have assuredly made our lives easier, they can also dull us into not being vigilant and make us unwilling to take uncomfortable action.

This is apparent in many aspects of our society. We have grown accustomed to thinking that governments know what is best for us and will be there to bail us out should we fail. We look for government handouts and subsidies rather than relying on our own skills and ideas and building fallback plans.

We’ve become so comfortable relying on government that we don’t recognize that it’s government interference in business, in “creating jobs” and in so much else, that causes problems and creates the distortions that make it more difficult to succeed.

Relying instead on property rights can provide a solid foundation to focus on true signals like supply and demand. This provides a clearer picture of what consumers really want and builds the confidence upon which business can prosper.

Similarly, the tendency to expect others to keep us “safe” has conditioned people to rely more on government than on taking personal responsibility. As we have found over

the past year and a half, what government gives it can also take away.

Many small businesses have either closed shop or are slowly limping along as government has crippled them by dictating what is best and issuing lockdowns rather than allowing for a free market where the people choose.

We have also seen dependence on big pharma, government and public health bureaucrats to keep us safe rather than each one of us taking personal responsibility for maintaining our own health. It is much more convenient to take a pill than to think about getting exercise, learning what a healthy diet consists of and making the effort. It is not fast, convenient or easy. Sitting in front of our TV or tablet watching Netflix, eating pizza, chips and ice cream is convenient and easy, but it does not lend itself to good health.

Whatever the merits of the science involved, expecting a shot of an experimental therapy to help restore freedoms that should never have been taken away in the first place, shows us how far we have fallen.

We are all living a delusion if we expect politicians and bureaucrats to be making life and death decisions for us rather than making our own plans to keep our families safe and building a better society.

By adopting this way of thinking and behaving, we are effectively giving away our property rights. Most people think of property rights in terms of land and homes, but they ex-

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“Relying on a government regulator and the corporate management of pipeline companies to protect landowners’ soil and farming businesses did not work.”

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owners like the Lewingtons, it paved the way for other landowners like the O’Neils and Vances to start the Ontario Pipeline Landowners Association (OPLA). This paved the way for the development of CAEPLA – and for its founders to take the risks necessary to unite landowners and landowner associations across the country.

Many landowners have greatly benefited from these individuals taking uncomfortable action, personal responsibility and resisting the comforts and ease of convenience in order to bring about positive change.

Many landowners now have unprecedented easement agreements in hand that not only protected their soil during pipeline construction, but have established biosecurity protocols and integrity dig maintenance protocols that will protect them and their property into the future.

Recently, I received a phone call from a new pipeline landowner who had purchased land with a pipeline across it. The former owner had been able to hand over to him the detailed easement and integrity dig agreement that clearly outlined how future work would be handled on his property, how he would be notified before any work was done and the calculation of compensation.

This creates peace of mind for the novice pipeline landowner and for the experienced one with a lot of frustrations under their belt. It is also a great selling feature when selling your property with energy infrastructure.

However, not all landowners can boast of this benefit.

Unfortunately, there are still pipeline companies proud to be bullies and mistreat the people who host their pipelines and energy infrastructure.

They still come to a landowner’s door and say, “Trust us.”

CAEPLA has made huge gains for landowners since its inception. But landowners need to be aware that it is never in their best interest to coast on their accomplishments. They must push forward to continue to make improvements as well as resist encroachments that will erode those gains.

Convenience and apathy are the enemy of growth and a risk to our property rights.

It’s through property rights and taking personal responsibility that we are able to protect our soil health and our personal health, which yields far-reaching benefits in protecting our personal, social and economic health. 

Annette Schinborn is chief executive officer at CAEPLA, having served previously as COO and director of landowner relations. Before joining the team at CAEPLA, Annette worked with grassroots non-profits including the Canadian Taxpayers Federation, the Prairie Centre and the Western Canadian Wheat Growers Association. She has worked closely with farmers, ranchers and other landowners on issues such as tax and agricultural policy, energy transport and property rights.

iStock/ Marseas; selensergen

tends far beyond that. Property rights are human rights, the foundation for personal responsibility.

The personal security and choice that empower landowners to protect their soil health by having biosecurity protocols and integrity dig agreements in place can also protect the individual and society through a declared pandemic.

It is clear that relying on a government regulator and the corporate management of pipeline companies to protect landowners’ soil and farming businesses did not work. Although the companies told you and your family to “trust us,” landowners continually faced harmful construction practices that damaged their soil health.

CAEPLA was born through landowners fighting for their property rights to be respected. One of the founding member families of this landowner movement, Peter and Jean Lewington, mortgaged their farm to seek retribution on the damage caused to their soil by pipeline construction.

In Peter’s book, No Right-of-Way: How Democracy Came to the Oil Patch, he wrote, “Probably the most damning indictment of all was that my wife and I, with our puny resources, had funded more research to mitigate the impacts of pipelines on farming than the provincial and federal governments and the entire oil industry combined, in the history of pipelining.”

Our history is filled with people who took risks at great cost to their families and businesses to protect their property rights.

Because of the risks taken by land-

BY DANNY LEROY

Inflation 101 The Bank of Canada can create more money but it can’t create more farmland

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and is the ultimate investment for most farmers. As the saying goes, “They’re not making any more of it.”

But farmland value reflects more than scarcity and location. As a result, critical thinking and keeping a sharp pencil are key to making wise, dispassionate decisions about buying, selling, or renting farmland.

All aspects of agricultural production, whether it’s a tractor, a grain bin, or farmland, yield a flow of services per unit of time. For each, the anticipated marginal productivity over time has an important influence on its valuation by buyers and sellers. Many other variables do as well.

Farmland provides a particular-

ly compelling example. Since 1993, farmland prices have increased every year in Canada. The annual rate of increase was particularly rapid from 2011 to 2015, with single-digit percentage increases more recently.

According to Farm Credit Canada, the average price of farmland rose by six per cent in Alberta last year, 5.4 per cent in Saskatchewan, and 3.6 per cent in Manitoba. Explanations for rising farmland prices included, among others, strong crop receipts, better than average growing and harvesting conditions, overall optimism within agriculture, tenants purchasing land from landlords, neighbour-to-neighbour sales, producers buying or selling land to gain operational efficiencies and family farm purchases to support succession plans. Historically low interest rates were also identified as a contributing

factor. Low interest rates encourage more borrowing, enabling buyers to bid up asset prices.

Let’s unpack these explanations. If individuals were certain about the future, farmland prices would reflect the present discounted value of the net income stream generated from it. Thus, if a parcel of farmland is expected to yield a perpetual annual net inflow of $300 per acre at a constant interest rate of five per cent, the market price would be $6,000 per acre. That would be the prevailing price in a world where everyone is certain about the future earnings of that farmland and the unwavering interest rate.

Clearly, this is not the world in which we live. However, by understanding the basic process of asset pricing, one can deduce how changes in the underlying fundamentals influence farmland prices.

“Most farmers don’t care what happens to the Canadian money supply, but they care a lot about their input costs and the prices they receive for their outputs. Change in the money supply distorts both.”

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iStock/ Marseas; selensergen; jgroup;alexsl

“Newly created money in Canada is being used by early recipients to bid up asset prices, most notably stocks, houses and farmland.”

For example, if the perpetual annual net inflow doubled to $600 per acre, the market price for an acre of farmland would rise from $6,000 to $12,000, all else constant. As a second example, consider the impact of a decrease in the interest rate from five to two per cent. Everything else the same, the market price of farmland would rise from $6,000 to $15,000 per acre.

These two examples are insightful, but they still lack realism. Farmland pricing is not mechanically capitalizing its known, certain physical productivity. Future income streams are variable and not known with certainty. Further, the value individuals ascribe to farmland is subjective — time, place and circumstance specific. The same parcel of farmland has different worth to different people at different times. A litany of other variables must also be considered — taxation, adjacent landowners, obtaining unimpeded right-of-entry, easements on the property, even activists.

Finally, there is the incomplete and frequently contradictory knowledge possessed by separate individuals who

manifest in differences in managerial and entrepreneurial decision-making.

With so many unknown and unknowable aspects, what is known about market-based transfers of farmland ownership? At least three things.

First, each counterparty sacrifices something they value less to obtain something they value more. Second, price and timing are critically important. And third, resulting prices may be public knowledge, but the valuations of each counterparty is subjective and private.

Another reality is the present value of the expected net income stream from farmland is unique and in the discerning mind of the farmer. Also unique and on the farmer’s mind is the value of money presently needed to acquire farmland. Most farmers don’t care what happens to the Canadian money supply, but they care a lot about their input costs and the prices they receive for their outputs. Changes in the money supply distorts both.

M1+ is the narrowest measure of Canada's money supply. It consists of anything that can be spent in Canadian dollars without notice — currency held outside of banks plus chequable deposits at chartered banks, trust and mortgage loan companies and credit unions.

According to the Bank of Canada, M1+ has expanded from $136 billion in January 1993 to $1.412 trillion in January 2021, an increase of 933 per cent. Moreover, one quarter of all Canadian currency defined by M1+ has been created since January 2020.

Properly understood, inflation is

an increase in the money supply. The effect of inflation is a reduction in the purchasing power of money. Newly created money in Canada is being used by early recipients to bid up asset prices, most notably stocks, houses and farmland. Corn, soybeans, canola and wheat are also trading at multiyear highs. Inflation is another reason why farmland prices have surged to levels not justified by other factors.

Be careful. Artificially low interest rates and the anticipated effects of inflation can make long-term investments appear more profitable than they really are.

The Bank of Canada can create more money by buying government bonds, but it can’t create farmland for that newly created money to buy.

Depending on the preferences of those who first receive the newly created money, some goods will experience an increase in demand while others a relative decrease. This in turn changes outputs of various goods and ultimately the pattern of investment.

Printing money doesn’t create prosperity, it redistributes it while confounding decision-making for farmers and for everyone else. 

Danny Le Roy, PhD., is an economics professor at the University of Lethbridge where he is also coordinator of the Agricultural Studies program.

Areas of research include commodity production, marketing and trade, government interventionism and Austrian economics. He blogs occasionally at mises.ca.

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BY THOMAS ORIET

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“Canadian statutes allow the government to take property without compensation or for almost any reason.”

PRIVATE PROPERTY:

Inherent Right or a Gift from Government?

iStock/ stevegeer;onurdongel

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Depends on where you live – and some countries have special protections for farmland

very government has the actual or inherent power to take private land ownership, either under the law or through direct force.

Under the law, a landowner can agree to the terms of the government’s forced conveyance of the land. Or the beneficiary of the expropriation can have parliament enact legal justifications to force the conveyance regardless of the landowner’s consent. In Canada, the legal doctrine is expropriation, while Americans use the term eminent domain.

Expropriation is an ancient doctrine that attempts to balance the government’s duty to protect and promote commerce while simultaneously respecting private property interests that restrain governmental control over those lands.

Depending on where you live, property can be a gift from your government or an inherent right.

Canada and the U.S. have private land ownership that appears coequal, however, the source of the land’s privatization affects a landowner’s legal defences.

In New Zealand and Canada, the Crown owns all the land and it

conveyed the land to create private ownership without eliminating the Crown’s underlying control.

Comparatively, the U.S. considers property as an inherent right that existed before the ratification of the federal and state constitutions. No American government has an underlying interest to reclaim dominion of the land, and landowners have a right to request the government to uphold their private interests.

When property is not an inherent right, the government has fewer barriers to reclaiming full ownership of land it previously granted to private individuals. For instance, New Zea-

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“A landowner may accuse the government of taking land for an improper purpose, but has an onerous burden to prove bad faith.” land has a long history of reverting private land interests to the Crown without paying compensation to the landowners. New Zealand nationalized all petroleum, natural gas, gold, silver and uranium beneath anybody’s land — reverting specific mineral rights back to the Crown.

In Canada, mineral rights were transferred from the federal Crown to the provinces, which could later transfer mineral rights to private individuals. Nevertheless, Alberta and British Columbia have kept most of the mineral rights under government ownership. They have also excluded mineral rights from the expropriation regime and potentially the compensation policy depending on the circumstances.

Although most western constitutions have a right to property, Canada’s Constitution Act, Charter and case law fail to recognize authoritative

property rights to restrict government actions.

Although Canadian landowners have federal and provincial rights to compensation at the time their land is taken, Canadian statutes could allow the government to take property interest without compensation or for almost any reason.

Canadian courts declined to create a common-law (case law) right to property to emulate the U.S. The courts also reiterated that it holds no authority to judge the legislative burdens posed to land which could substantially impair property rights. The government must inhibit all reasonable ways to use the property, not merely 50 or 90 per cent of the land’s usefulness, before a court will declare an expropriation as de facto.

A constitutional right to property is not an impenetrable shield against expropriation abuse, but it allows judges

“Land redistribution with the expectation of a positive economic outcome has been accepted worldwide.”

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to question the validity and severity of statutes authorizing expropriations.

In New Zealand, Canada and Singapore, the governments’ notice to expropriate land is practically conclusive evidence that land is needed for a legitimate purpose. A landowner may accuse the government of taking land for an improper purpose, but has an onerous burden to prove the government’s bad faith or illegitimate actions. For example, the modern trend of expropriating land from one private person to give it to a different private person has not been considered bad faith or an improper purpose.

Land redistribution with the expectation of a positive economic outcome has been accepted worldwide, even in countries with resilient property rights – the U.S. and Switzerland. However, countries with constitutional property rights can have adjudicators questioning the government’s basis for taking the land, which offers landowners an opportunity to defend their land on less onerous legitimacy grounds.

Canada is the second-largest country in the world, with about 11 per cent of the land being privately owned and where 6.5 per cent of the land is agricultural. Despite the proportionally scarce amount of agrarian land, Canada has not recognized a unique legal defence for farmland against expropriation.

Comparatively, in Switzerland, farmland serves a public interest as it secures a food base for the nation’s sustainability, imposing special legal tests on the government’s expropriation plans.

Most countries have not considered farmland as imperative to feeding the country and reducing dependence on imports. These factors have not stopped expropriation activity, even though farmland is irreparable after it is developed with cement foundation buildings.

iStock/ facing page MariuszSzczygiel; this page SylvieBouchard; blamb

Farmland Fails as an Inflation Hedge When Government Fails to Protect Property Rights

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he world is entering a period of inflation from governments’ COVID-19 spending, and real assets like farmland will offer stability against substantial inflation.

Unfortunately, governments that do not treat property rights as imperative expropriate farmland during tough financial times — possibly because the costs of producing food increase or farmers refuse to work due to punitive

taxation or price controls failing to cover rising production costs.

As economist Morten Arisson explains: “Farmers, landowners will always be loathed by democracies because in many ways they can afford to ignore democratic rulers and carry on with a self-sufficient living...At the end, when chaos finally sets in with hyperinflation, those farmers who saved their lives and that of their loved ones

by leaving everything behind and migrating to another nation will consider themselves fortunate.”

Parliament’s discretion to compensate for expropriations or to not expropriate frequently does not prevent parliament from changing its policy since “parliament is always correct” under parliamentary supremacy.

Parliament embodies the electorate, and if most voters cannot afford housing or food during unstable times, nationalizing food production or redistributing land for housing purposes becomes politically popular or necessary. These consequences are as ancient as the doctrine of expropriation.

Arisson cites Egypt, France, Argentina, Zimbabwe and colonial New York State as examples where farmland lost its anti-in-

flationary character due to a legislature’s supreme power to cease respecting property rights.

If parliament disallows compensation for expropriations in a statute, the courts may not help since it has not acknowledged a distinct common-law right to compensation from the nation’s historical custom.

Farmland works in food production and as an inflation-hedge only if the government enforces property rights during the worst economic times. Of course, if the rule of law is no longer enforced, there will be greater concerns than the loss of property rights.

Thankfully, Canada has been a stable country for generations, but the underlying property rights framework poses uncertainty for the future sustainability of property laws during unstable times. 

Thomas Oriet, Esq., LLM, EA, has law degrees from Canada and the United States. Thomas is a U.S. attorney and legal scholar specializing in asset protection, estate planning and agricultural law at the law offices of Casey D. Conklin. He is a fifth-generation farmer in Essex County. He can be contacted at tom@caseydconklin.com

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BY CK REEDER

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Ottawa’s Money Printing Will Boost Land and Crop Prices But what will inflation mean for farm production costs and risks?

iStock/ ajansen; alexsl

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nflation concerns are suddenly hitting the mainstream in 2021.

It’s going to become an even bigger topic going forward, especially for landowners.

Ottawa’s utterly unprecedented and bewildering $380 billion budget deficit in response to the virus panic is being financed primarily by the Bank of Canada (BoC). Not foreign creditors, not big pension funds, but our own central bank.

The BoC started 2020 with about

$80 billion in Canadian bonds – that number is now over $380 billion.

What that really means is Ottawa is paying its bills with the BoC printing press.

When the Bank of Canada buys an asset, it literally brings new money into existence. It is no different than if you could simply add zeros to your bank account balance at will.

When the government increases the money supply, it dilutes the value of the currency because there are more dollars relative to the same number of goods. This pushes up prices.

We are seeing this now in a lot of sectors that are smoking hot despite an economy that is still being strangled by the response to the virus.

But the upward pressure on prices does not occur evenly or affect everything the same way.

One of the most critical insights about inflation – one obscured by economists’ talk about abstractions like “general price levels” and such – is that new money enters the economy at specific times in specific places.

Right now, this new money enters through the banking system and is

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then spent by Ottawa. Perhaps it starts with emergency subsidies, corporate bailouts and gravy for cronies.

Over time, some sectors surge as new money pours into them – perhaps commodities, real estate, or technology stocks. The dynamic of the market directs the flow of funds.

What is this going to mean for landowners?

Although inflation tends to push up the prices of real assets, property owners should not assume that numbers going up on paper means more value in the end.

Property owners can benefit from inflation as the value of their land increases. A farmer can benefit significantly from inflation if new money

pushes up prices for their product.

However, costs are also subject to severe pricing pressure. When there is new money competing for the same inputs, those prices will be pushed up.

For producers, they have a lot of competition for their inputs: fuel, shipping, equipment, chemicals, personnel, etc. These prices will tend to rise fastest because new money will tend to move into capital goods industries.

A farmer needs to produce before they can sell, and this takes time. As they work toward finished crops for the market, their production costs are now increasing. Their higher selling prices, later, aren’t guaranteed to have risen in the same proportion – or even at all for some goods.

“An increase in land prices means the dollar buys less land.”

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There is another issue that will be appreciated by CAEPLA readers.

If oil prices soar due to inflation, the demand for energy infrastructure will increase. In a world where expropriation is an option, this increases the risk to property owners. Big business and its bureaucratic allies will become more aggressive, and costs for operations, maintenance and decommissioning will also increase.

The landowner can easily be a net loser in the end – especially if the government is piling on new taxes and regulations at the same time.

Perhaps the best way to understand the destruction of inflation is by thinking about the difference between land increasing in value and the dollar decreasing in value.

There actually is no difference – both statements mean the same thing.

An increase in land prices means the dollar buys less land.

The value of productive land will not rise in real terms if the increase is just the result of new money created out of thin air by the BoC. The value of land comes from its ability to create value, whether with agriculture or livestock or commercial development or simple peaceful enjoyment.

Creating new money for the government to spend does not create more value anywhere – it just distorts everything and benefits primarily banks and industries with political connections.

Our so-called leaders in Ottawa are walking an extremely dangerous path. 

Clayton Reeder is a mergers & acquisition advisor in Calgary. He works with many clients in the oil and gas sector and owns farmland in central Alberta. He loves oil and agriculture.

iStock/ ImagineGolf; MicroStockHub; Facing page;iStock/ duncan1890

“If oil prices soar due to inflation, demand for energy infrastructure will increase. In a world where expropriation is an option, this increases risk to property owners.”

BY CONNOR MORTELL

The Sword of Damocles Hangs Over Every Property Owner

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icero once wrote of a courtier by the name of Damocles, who served in the court of King Dionysius. After acknowledging his envy of the king’s lifestyle, Dionysius challenged Damocles to take on the throne for himself.

At first, Damocles was taken by the

royal lifestyle. However, during one of his feasts, Dionysius hung a sword above Damocles that was held by a single horsehair. The fear that this thin hair would eventually succumb to the weight of the sword, fall and kill him became too much, and as a result, Damocles begged Dionysius to remove him from this position of power.

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“The businessman’s property, then, is their property in name only. It is granted to them by the state, and it exists only as long as the state does not decide otherwise.”

This story has long been used as an example of the feeling of losing everything due to some overarching threat — like a sword hanging over your head.

This same expression was used

by Hans-Hermann Hoppe in his book The Great Fiction: Property, Economy, Society, and the Politics of Decline.

But before he gets into the sword of Damocles, Hoppe must first address what “fiat property” means.

The term “fiat” gets thrown around regularly in the discussion of money – fiat money being money that has obtained some legal status. It is much rarer, however, to discuss the concept of fiat property, but no less important.

In Hoppe’s chapter titled “Entrepreneurship with Fiat Property and Fiat

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Money,” he begins by first addressing fiat property: “We can make two interrelated predictions as to the effect of a state on the business of business. First, and most fundamentally, under statist conditions real property will be called fiat property.”

From here, he goes on to explain what fiat property is and what it has to do with our proverbial sword: “The state cannot increase the quality and quantity of real property.

But it can redistribute it as it sees fit. It can reduce the real property at the disposal of businessmen or it can limit the range of control that they are allowed over their property; and it can thereby increase its own property (or that of its allies) and increase its own

range of control over existing physical things.”

The businessman’s property, then, is their property in name only. It is granted to them by the state, and it exists only as long as the state does not decide otherwise.

Constantly, the sword of Damocles is hanging over the heads of businessmen. The execution of their business plans is based on their assumption of the existence of certain physical resources and their physical capabilities being at their disposal. All their value speculations are based on this physical basis being a given.

But these assumptions about the physical basis can be rendered incorrect at any time — and their value calculations vitiated as well — if the

Facing page: iStock/ valio84sl; channarongsds; top right: Hans-Hermann Hoppe by Gage Skidmore, Wikimedia

state merely decides to change its current legislation and regulation.

This once theoretical threat that the state could — on a whim — demonstrate that the businessman does not truly own his or her property has become more real than ever this past year.

Threats like eminent domain were always present to show the evils of which the state is capable. However, even with such options existing, never could one have claimed the degree to which the state would really utilize fiat property upon discussion of COVID-19. This past year, the single horsehair that was holding up the sword finally snapped.

While some U.S. states are finally limiting governors on their ability to destroy lives at the stroke of a pen, it is obvious by looking at the states that have yet to do so that in our current fearful world, property is more fiat than ever. The state is now the determinant, not just of which businesses succeed and fail, but which can attempt to do so — no longer the market.

As students of free-market economics know, entrepreneurs making malinvestment decisions because they are guided by government signals rather than market signals is dangerous.

But this is not intended as a negative message. Rather, it is a call to action. While in The Great Fiction, Hoppe was too early to address just how fiat our property would become, he still ends his chapter with a positive note that holds true today: “A businessman can choose the honorable but at the same time also the most difficult path. This businessman is aware of the nature of the state. He knows that the state and its operators are out to get him and bully him, to confiscate his property and money and, even worse, that they are arrogant, self-righteous, haughty, and

Above: Hans-Hermann Hoppe, author of The Great Fiction: Property, Economy, Society, and the Politics of Decline.

full of themselves. Based on such understanding, this very different breed of businessman then tries his best to anticipate and adjust to the state’s every evil move. But he does not join the gang. He does not pay bribes to secure contracts or privileges from the state. Instead, he tries as well as he can to defend whatever is still left of his property and property rights and make as large profits as possible in doing so.”

While this year we have seen any shred of property rights shrivelled to the most fiat of fiat property, that is no reason to give up. That is the very reason to take this passage to heart.

We are called to go forward and act as a different breed of entrepreneur.

We are called to not join the gang but instead to defend what is left: “tu ne cede malis, sed contra audentior ito.” (You should not give in to evils, but proceed ever more boldly against them.) 

Connor Mortell graduated from Texas Christian University with a BBA in finance, minoring in Chinese language and culture. After graduation he worked as a legislative aide in the Florida House of Representatives for just shy of two years. Currently, he is an MBA student at Florida State University.

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Prairie Pipeline Preparedness Exercises Far From Routine

By overcoming logistical challenges in innovative Souris River emergency response test, Enbridge is met with positive community response

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E

nsuring the safety of the critical energy infrastructure we rely on to fuel our economy is a job that must be done — no matter the

circumstances.

Such was the case when Enbridge held an emergency response training exercise along the Souris River in the town of Wawanesa, Man., in May. Activity was focused along the river within the town. A command post and staging area were set up and a flat-bottomed boat deployed an oil containment boom over a span of some 500 feet across the shallow river. No actual crude oil products were used in the exercise scenario.

“The exercise was designed to test Enbridge’s ability to respond to an oil spill near our mainline pipeline system,” explains Stephen Lloyd, manager, emergency management with Enbridge. “In addition to meeting a regulatory requirement of our Line

Photos supplied by Enbridge

“The exercise was designed to test Enbridge’s ability to respond to an oil spill near our mainline pipeline system.”

3 Replacement Program, this supports our ongoing effort to continuously practice and improve our emergency response capability on all waterways in proximity to pipeline operations and populated regions.”

Preparing for a potential emergency is a routine part of pipeline operations, but the Manitoba exercise was anything but routine. For example,

Facing page: A flat-bottomed boat was used to navigate the shallow river. Above: Boom deployment across the Souris River, captured by a drone.

the tightening of provincial COVID-19 guidelines on outdoor gatherings (from 10 to five persons) and restrictions on out-of-province visitors required Enbridge to revise and adapt its plans for the exercise.

“Only those essential to running the exercise in the field, 30 people, were able to be onsite,” explains Lloyd. “We divided these individuals into pods to comply with the current maximum limit on outdoor gatherings in Manitoba. The pods communicated by radio — at any given time, only one group was on the river, in the staging area or Incident Command Centre.”

Another 160 people (Enbridge employees and observers) participated virtually via their home or office computers, including the Province of Manitoba, Natural Resources Canada and the Canada Energy Regulator.

“Overall, it was a positive and highly collaborative exercise,” says Steve Loney, senior advisor, community and Indigenous engagement with Enbridge. “We had tremendous support from the [rural municipality] of Oakland-Wawanesa and the town, including the fire department and the school next door to the exercise.

“People were warm and welcoming and waved at us when we were driving by in our company vehicles.” 

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More Pipelines = More Economic Security Governments’ war on pipelines makes us vulnerable to attacks on our infrastructure

iStock/ solarseven; tifonimages

V

ickie Phillips received an unpleasant surprise when she stopped in for a fill-up at the Pop Shoppe in Greensboro, N.C., one Monday in May. There was no fuel.

“I can’t believe that we’re here and can’t even get gas,” Phillips told a local TV station. “People are tired of sitting in the house and they just want to get out and try to resume something of normality with their life and they’re definitely going to need fuel and gas to do that.”

Phillips was just one of thousands of people who saw their travel plans disrupted in the wake of the May cyberattack targeting the Colonial Pipeline, a vital network of pipelines that run over 8,800 kilometres from the U.S. Gulf Coast to New York Harbor.

The New York Times reported that many stations in southeastern states immediately placed caps on the amount of fuel consumers could purchase, while many stations ran out of fuel altogether.

In the wake of the disruption, North Carolina Gov. Roy Cooper declared a state of emergency, while Georgia Gov. Brian Kemp suspended the state’s gas tax. The Biden administration, meanwhile, lifted environmental regulations on the sale of gasoline in several states and the nation’s capital.

Following the attack, fuel futures jumped to US$2.22, a three-year high.

Hackers: We didn’t mean to cause problems There’s no question the Colonial Pipeline is a key piece of infrastructure.

Analysts have described the pipeline as one of the most vital energy arteries in the country, one capable of carrying up to three million barrels of fuel — gasoline, diesel and jet fuel — per day to the East Coast.

“This is as close as you can get to the jugular of infrastructure in the United States,” Amy Myers Jaffe, research professor of the Climate Policy Lab, told Reuters. “It’s not a major pipeline, it’s the pipeline.”

Still, the widespread disruption seemed to surprise even the hackers

responsible for the cyberattack.

“Our goal is to make money and not creating [sic] problems for society,” DarkSide, the group the FBI confirmed is responsible for the attack, wrote on its website.

This invites an important question: how was a single cyberattack able to derail an entire region of the most prosperous country in the world, disrupting the lives of millions of Americans?

Pipelines under attack One answer is that we simply don’t have enough oil pipelines. The Colonial Pipeline provides nearly half — 45 per cent — of the fuel consumed on the East Coast. As other astute commentators have noted, “One pipeline network shouldn't be serving half of the East Coast's fuel needs.”

The reality is regulatory hurdles have made it all but impossible to build new pipelines, which has placed a great deal of pressure on existing energy infrastructure. And it’s getting worse. Indeed, politicians are now actively scrapping pipelines that are

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“What we really need is not more, but less government oversight getting in the way of more pipelines.”

instrumental to meeting future energy needs.

One of President Biden’s first initiatives was to scrap, by executive order, the Keystone Pipeline, a 4,324km pipeline that could have carried roughly 800,000 barrels of oil each day from Alberta to the Gulf Coast.

Instead, the bulk of that fuel will be transported by railways, which are less environmentally friendly and more dangerous.

Biden cancelling the Keystone Pipeline received a great deal of attention, but it’s worth noting the action was part of a trend that has been largely overlooked. Across Canada and the U.S., pipelines are being targeted by politicians, regulators and courts with great zeal.

A year ago, Michigan Gov. Gretchen Whitmer took legal action to force the shutdown of the Line 5 Pipeline, which links Lake Michigan and Lake Huron and carries about 500,000 barrels of crude each day.

“Here in Michigan, the Great Lakes define our borders, but they also define who we are as people,” said Whitmer, who gave Enbridge Energy a deadline of May 2021 to stop the oil.

The deadline came and went, but the oil was still flowing. And news reports say Enbridge and the Michigan governor are likely heading for a legal showdown.

Then there is the Atlantic Coast Pipeline. Last year, Duke Energy and Dominion Energy announced

the cancellation of the near 1,000-km project — which would have piped gas from West Virginia to eastern North Carolina — because delays and regulatory uncertainty had threatened “the economic viability of the project.”

The 1,886-km Dakota Access Pipeline, which has been operational since 2017, currently carries hundreds of thousands of barrels of crude through the Dakotas to Iowa and Illinois.

While the Biden administration has announced it will not shut down the pipeline, a U.S. district court judge did in July 2020. That ruling was overturned by a federal appellate court, but the pipeline’s fate hangs in the balance pending an environmental review.

Reminder: Oil is still a vital resource For many, the lesson of the recent gas shortage is that we need more cybersecurity oversight.

“This pipeline shutdown sends the message that core elements of our national infrastructure continue to be vulnerable to cyberattack,” Mike Chapple, a professor in University of Notre Dame’s Mendoza College of Business, told Reuters. “Securing our energy infrastructure is a national security issue that involves several different federal agencies and requires centralized leadership.”

Anyone who understands Hayek’s “knowledge problem” will be rightly

“Anyone who understands Hayek’s ‘knowledge problem’ will be skeptical of solutions based on centralized leadership.”

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skeptical of solutions based on “centralized leadership,” especially when it comes to a “national security issue that involves several different agencies,” given the track records of the NSA, the TSA, the CDC, etc. What we really need is not more, but less government oversight getting in the way of more pipelines.

The current disruption should serve as a reminder that fossil fuels are an essential part of human prosperity.

No one has made this point better than Alex Epstein, the author of The Moral Case for Fossil Fuels, who noted that cheap, plentiful fossil fuels — when married with human ingenuity — allow humans to improve the world around them.

“Fossil fuel technology transforms nature to improve human life on an epic scale. It is the only energy technology that can currently meet the energy needs of all seven-plus billion people on this planet,” wrote Epstein.

“Ultimately, the moral case for fossil fuels is not about fossil fuels; it’s the moral case for using cheap, plentiful, reliable energy to amplify our abilities to make the world a better place — a better place for human beings.”

The other side of that coin is that when energy is made needlessly expensive, scarce and unreliable — whether by cybercriminals or politicians — it makes the world a more frustrating and unhappy place for human beings, as Vickie Phillips and many other Americans discovered. 

Jonathan Miltimore is the managing editor of FEE.org, a publication of the Foundation for Economic Education.

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Plugged into Pipeline Exclusion Zones iStock/ alexsi; macrovector; Astamais

Safety bureaucrats set landowners up for stealth expropriation

F

rom large-scale residential subdivision developments to grain elevators and livestock barns to backyard swimming pools, landuse development requires municipal consent, often in the form of a building permit.

Across Canada, elected local and regional planning officials make decisions on applications to develop land with guidance from provincial policymakers. Provincial policies are adopted in local and regional official plans and zoning bylaws which govern the types of development that can take place in any given location.

The Manitoba Pipeline Landown-

ers Association (MPLA), a member association of CAEPLA, recently wrote to the Province of Manitoba to express its concerns about the “pipeline plug-in” included in the Municipal Planning Guide to Zoning Bylaws in Manitoba. The plug-in is ready-made language that can be inserted by local and regional planning authorities into zoning bylaws.

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If adopted by a planning authority, Manitoba’s model zoning plug-in for pipelines would prohibit development “within 200 metres (650 feet) of the centre line of a pipeline unless a proximity agreement has been signed between the pipeline operator and the landowner that waives or reduces this requirement.”

Like many other landowners across Canada, MPLA landowners have entered into easement agreements for the pipelines located on their properties. These agreements grant pipeline operators the rights required for the construction, operation and maintenance of the pipelines, but otherwise reserve to the landowner the use of their property subject only to specified restrictions and notice requirements.

t re me

5 s (6

0 ft

)

There are certain activities, including development, that cannot be carried out within the easement strip (often 18-20 metres in width) within which the pipeline is located.

Some activities can be carried out where notice is given to the operator.

However, the agreements between the operator and landowners do not limit the activities that can be carried out by the landowner outside of the easement strip, including development activities. The pipeline operator does not purchase those rights from the landowner.

The pipeline plug-in as currently written effectively rewrites agreements between pipeline operators and landowners by giving operators a right to prohibit development within a large area outside of pipeline easements. When adopted in a zoning bylaw, the plug-in language empowers pipeline operators to extract concessions from landowners in exchange for permission to build structures within an area of up to 400 metres (1,300 feet) in width. As stated by MPLA in

“Agreements between a company and landowners do not limit the activities that can be carried out by the landowner outside of the easement strip, including development activities.”

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its recent communication to Manitoba’s planning officials, “Granting this authority to pipeline operators is patently unfair.”

Manitoba’s pipeline plug-in was apparently based on a 2004 document produced by the Canadian Standards Association (CSA) called Land Use Planning for Pipelines: A Guideline for Local Authorities, Developers and Pipeline Operators. The CSA has since replaced the 2004 document with the new CSA standard Z663-18: Land Use Planning in the Vicinity of Pipeline Systems.

Neither CSA document makes reference to a prohibition on development in the vicinity of pipelines or to a requirement for proximity agreements.

Instead, the documents call for local and regional planning authorities to impose requirements to give notice to nearby pipeline operators about proposed developments.

The pipeline plug-in goes far beyond imposing the requirement to give notice to a pipeline operator about a proposed development. The plug-in requires landowners to enter into a new written agreement with a pipeline operator — an agreement that the operator is under no obligation to make. In that sense, a municipality or planning district that adopts the plugin is abdicating its planning authority.

It's taking the power to make decisions out of the hands of duly elected officials and entrusting it to pipeline operators, often private entities motivated by profit.

Would a pipeline landowner have any recourse where a pipeline operator refused to grant permission for a development within the restricted zone identified in a zoning bylaw based on the plug-in language?

MPLA has asked Manitoba to remove the pipeline plug-in from its guide, but the elimination of the plugin alone may not end the threat of

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iStock/ macrovector; OstapenkoOlens; tarras79

“Would a pipeline landowner have any recourse where a pipeline operator refused to grant permission for a development within the restricted zone identified in a zoning bylaw based on the plug-in language?” development prohibitions and requirements for proximity agreements.

While on the surface the CSA documents promote notification to pipeline operators, there is reason to be concerned they could be used by the CSA and the pipeline industry to shift responsibility for (and cost of) pipelines from operators to landowners.

For instance, the CSA has hinted that the next version of standard Z663-18 may include “long range planning for future pipelines,” which sounds a lot like a development exclusion zone around existing pipelines to ensure future pipelines can be accommodated.

This could result in an enlargement of pipeline easements without compensation to landowners.

Pipeline landowners cannot afford to ignore the discussions going on behind the scenes between some wouldbe industry participants, the CSA and municipal and provincial planning officials.

As shown in the Manitoba pipeline plug-in, pipeline landowners are only a zoning bylaw amendment away from a requirement to obtain proximity agreements from pipeline operators over and above the easement agreements that are already in place.

Stay vigilant.

Dave Core is managing partner at Dave Core and Associates, a consulting firm specializing in land management, property rights and agribusiness. He was president and CEO of CAEPLA from 2000 to 2018.

I

Secret Rule Change Could be Costly to Landowners

n the regular course of business, zoning bylaws are amended to modernize and control development in a responsible manner.

The Rural Municipality of Lorne, Man., belongs to a planning district comprising several neighbouring municipalities in the province.

Bylaws are amended with input from municipalities, the planning district and the provincial government. Draft bylaws are then presented to the voters of the municipality through a public hearing process.

Then, the bylaws are approved by council and enacted.

I became aware of two significant

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“This CSA standard was developed by a working group within the energy industry and did not include input from landowners and developers.” landowner to facilitate a proximity agreement. Real estate developers could be prevented from developing valuable sites if a proximity agreement can’t be negotiated with a pipeline company. And pipeline companies themselves would have to build capacity to administer a program to deal with this.

As a landowner, I have no problem providing notification to a pipeline operator of development adjacent to a RoW. However, this plug-in rewrites our easement agreements. As a landowner, I could never agree to allow additional pipeline construction on my property under this condition.

The second issue regards CSA Z663, which the provincial government included in the "Planning Guide to Zoning Bylaws in Manitoba." CSA Z663 was developed by the Canadian Energy Pipeline Association (CEPA). It is supposed to address notification to pipeline operators regarding development within 200 metres of a pipeline. It appears to be a benign document because it seems to reasonably address safety and responsible

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development near a pipeline.

The fact is this CSA standard was developed by a working group within the energy industry and did not include input from landowners and developers. The standard is also copyrighted and cannot be accessed unless a fee is paid to CSA. Distribution is also not allowed because it is under copyright.

This is not only a lack of transparency where the public is concerned, but a tax on landowners — imposing a cost of hundreds or thousands of dollars simply to make decisions concerning our property.

I attended a webinar promoted by CEPA and presented by a private consulting company regarding CSA Z663. The purpose of the webinar was to explain how municipal planners can implement Z663. My attendance was a fluke

because Lorne’s representative to the planning district could not attend so I filled in.

Most of the information presented seemed reasonable and most planning districts or municipalities would likely rubber stamp it. One point, however, stood out: that the standard would not accommodate future development.

This, for me, raised a red flag.

A document created in secret that can be amended in secret presents a problem for all landowners and developers. Worse, it appears CSA Z663 was created to ensure landowners and developers could end up bearing the cost of existing and future pipelines.

Our municipality, through the planning district, informs and notifies many entities daily of development near infrastructure at risk. An application for a building permit starts the process of notification to Manitoba Hydro, Centra Gas, Bell MTS and Manitoba Agriculture. They can comment on the developers’ permit application and at times could work with the developer to mitigate risk to their infrastructure. This is a more reasonable approach.

The responsibility for development still resides with the local authority and the concerns for infrastructure at risk can still be addressed. 

Daniel Hacault is a Manitoba landowner who currently has nine Enbridge pipelines on his property. Seven of these pipelines are operating, one is abandoned and one is in the process of being decommissioned. Hacault is also a councillor for the Rural Municipality of Lorne, Man.

iStock/ OstapenkoOlena; facing page iStock/ FrankRamspott

issues that affect landowners, developers, pipeline operators and local government. These were included in draft bylaws presented to Lorne council. The issues were forwarded by the Manitoba government to be included in the zoning bylaws. The province proposed a “pipeline plug” in a guidance document titled "Planning Guide to Zoning Bylaws in Manitoba."

The purpose of the plug-in was to prohibit development within 200 metres from the centre of a pipeline unless a proximity agreement has been signed between the pipeline operator and the landowner that waives or reduces this requirement.

I find this to be an egregious overreach. Activities near a pipeline are already governed by federal regulation through the Canadian Energy Regulator (CER).

The pipeline operator has rights under its easement agreement to maintain and operate a pipeline within the right-of-way (RoW). The operator has not paid for and does not have any rights outside the RoW, except an area described as a safety zone and prescribed by the CER. The issue here is no longer merely the usual matter of notification of activities near a pipeline, but is now about asking permission to conduct activities within a 200-metre zone. This has the effect of removing the responsibility of zoning and planning from the local government and placing it in the hands of a pipeline operator.

A pipeline operator could demand concessions from a

MANITOBA

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Virden

Line 3 Decomissioning Enbridge Facility

Oak Lake

Hwy.1

Brandon

Winnipeg Cromer

West Souris /Souris

Souris

Glenboro

Glenboro Wawanesa

St. Leon Manitou

Manitou

Mordern Winkler Gretna

CANADA

Line 3 Replacement Project Proceeds

USA

Manitoba is the first of four segments in the decommissioning of the old line

A

s the last leg of Enbridge’s 1,660-kilometre Line 3 replacement pipeline (L3RP) is laid in the ground in

Minnesota, decommissioning of the old Line 3 has begun in Canada.

Decommissioning of the 1,097-km Canadian portion of Line 3 has been divided into four segments and will occur in stages, the first of which is underway as of June in Southern Man-

itoba. The remaining segments (Hardisty to Kerrobert; Kerrobert to Regina; and Regina to Cromer) are scheduled to begin next spring and be complete by the end of 2022.

A decommissioned pipeline is defined by the Canada Energy Regu-

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“We always approach these projects from the point of view that we are guests on the land.”

— Allen Sawatzky, construction manager, Enbridge

lator (CER) as one that is taken out of service safely and permanently while other existing or new pipelines in the same right-of-way continue to provide service to end users.

“Leaving Line 3 in place avoids the added disturbance and significant construction activities that excavation and removal would bring,” explains Brett Fixsen, supervisor, projects with Enbridge. “It reduces the risk of soil and slope instability as well as settlement and compaction issues that could compromise the safety of active pipelines sharing that right-of-way.”

Decommissioning work in Manitoba began in early June and covers approximately 260 km from Cromer to Gretna, where Line 3 connects to its U.S. segment. It’s the last step in Canada of the L3RP, Enbridge’s largest ever capital project.

The first step of decommissioning involves scrubbing clean the inside of the pipeline. For this purpose, a pig

trap (a 'pig' is a special instrument launched inside a pipeline for cleaning and general maintenance) is being installed at a site near Enbridge’s Cromer Terminal, south of Virden.

Staging for the installation will take a couple of weeks and the cleaning itself about one week.

This part of the process is expected to be complete by the beginning of August, at which time the primary tasks of decommissioning will begin with crews of seven to 10 persons and a peak workforce of approximately 35 contract personnel.

“We always approach these projects from the point of view that we are guests on the land,” says Allen Sawatzky, construction manager with Enbridge. “Our workforce is expected to demonstrate respect and integrity in their personal conduct through all stages of construction – on and off the right-of-way. This includes everything from strictly following public health

restrictions and Enbridge’s COVID-19 Safe Work Protocol, to driving courteously and safely on all roads, especially with wildlife, changing weather conditions, large farming equipment and narrow surfaces.”

From August to October, decommissioning will focus on isolating Line 3 from operating facilities (valves are permanently closed and disabled; above-ground features are removed at stand-alone sites); segmenting (small sections of pipe are removed and plates installed to prevent water flow through the pipe); and rail fill (the line is filled with an engineered material at railway crossings to protect rail infrastructure).

“Our commitments to landowners and communities are the same with decommissioning as with construction of the replacement pipeline,” Sawatzky concludes. “That is to return the land to its pre-construction state or better when our work is done.”

The Line 3 Decommissioning Process The pipeline will be safely removed from service by taking the following steps. Enbridge remains responsible for its pipelines, whether or not those pipelines are active.

1

Removing the oil from the pipeline segment by launching an internal device called a ‘pig.’ Using this method, the vast majority of the crude oil is removed from the pipeline segment.

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2

Flushing the pipeline with cleaning agents and cleaning devices (scraper pig) to ensure the crude oil is completely removed.

3

Physically disconnecting the pipeline segment being replaced from any operating facilities.

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4 5

Injecting inert material at certain locations.

Monitoring the decommissioned segment of pipe and maintaining the cathodic protection to prevent corrosion.

If a landowner suspects a problem on either an active or decommissioned line, they are urged to contact the Enbridge 24-hour toll free number (1-877-420-8800). 

BY STEPHANIE FRADETTE

WARNING: Read Before Signing What smart landowners need to think about before signing a company's offer

T

here is a pipeline project being proposed across your land.

You’re a smart landowner and an engaged citizen. You want to see development

happen. You know you can deal with a pipeline on your land. The landman tells you he’ll write down any concerns you have. You don’t want to stand in the way of progress. You don’t want your neighbours to talk trash about you. The money seems fine to you. You

should sign, right?

Maybe not.

We’re going to take a comparative look at Saskatchewan’s recent Surface Rights Board of Arbitration order for immediate right-of-entry (RoE) and the offer that was presented to the

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“We do not want to give the impression that the board order was good. It was unjust and deficient in many ways.” landowner by the energy company.

This was not a landowner trying to stand in the way of a project. It was a landowner who knew the agreement was not written in their favour.

For simplicity, we’ll refer to the landowner as “Wendy” and the energy company as “Pipe Inc.” It is boring and complicated to take a deep dive into the Surface Rights Act (SRA), the board order and the offer, so we’ll look at a few highlights.

We do not want to give the impression that the board order was good.

It was unjust and deficient in many ways. But, it was head and shoulders above the offer Pipe Inc. offered Wendy. The offer was a perpetual (forever) right-of-way (RoW) across an entire

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quarter section for a one-time payment of $1,875/acre. For that single compensation, Wendy would be agreeing to:

The Comparison

• More than one pipeline • Having to obtain written consent from Pipe Inc. to use the RoW • Indemnifying Pipe Inc. from paying damages that Pipe Inc. could incur from Wendy using the RoW • Installation of above-ground structures • Never hindering or interrupting any activity on the RoW by Pipe Inc. • Accepting that a letter of intent from Pipe Inc. to remedy any default is, in and of itself, a remedy • Future abandonment in place

➥

Money.

During discussions, Pipe Inc. admitted to Wendy there was no financial incentive for her to sign when compared to forcing a board order. This was true. In fact, by forcing the order, Wendy would be compensated for her time and for any legal or consulting fees she acquired. Pipe Inc. refused to pay for legal fees during negotiations. A landowner along an alternate route had his lawyer look at the offer. He will not be reimbursed for that cost.

“If Pipe Inc. could have gotten her to sign its offer, it could have increased its rights and further limited its responsibilities.”

➥ Number of pipelines.

The board order limited the order to construction of one line. The offer did not. It contains repeated references to “pipelines.”

➥ Written consent.

The board order said Wendy shall have unrestricted access across the service line for all recreational vehicles or agricultural machinery. The offer says Wendy “shall not use the RoW for any purpose which might either interfere with the rights granted herein to ‘Pipe Inc.’ or which might incur a liability for damages payable by ‘Pipe Inc.’ without the prior written consent of ‘Pipe Inc.’”

➥ Indemnity clauses.

Still exists in the board order. Confusing in both.

➥ Above-ground structures.

The board order states above-ground structures cannot be installed. The offer says Pipe Inc. can install them.

➥ Weed control.

The board order says Pipe Inc. is responsible for weed control. The offer does not address this.

➥

Soil management.

Both the offer and board order are weak.

But, the board order clearly states that soil horizons need to be separated and replaced in the same order.

➥ Cleaning.

The board order says the construction equipment will be cleaned to prevent introduction of weeds or soil contamination. The offer does not provide Wendy anything.

The CAEPLA Workshop Series An opportunity for continued learning on topics such as: INTEGRITY DIGS

Clearly, the offer presented to Wendy was designed to improve Pipe Inc.’s position, not Wendy’s. It was an offloading of responsibility and liability from Pipe Inc. onto Wendy.

Without her signature, Pipe Inc. still easily managed to access her property by way of a RoE order. But if Pipe Inc. could have gotten her to sign its offer, it could have increased its rights and further limited its responsibilities.

Wendy knew this, so she didn’t sign.

But every other landowner did.

Would you sign? 

➥

Abandonment.

Not addressed in the board order. Would fall onto the act, which has a process for a pipeline’s end of life. In the offer, Wendy would be agreeing to abandonment in place and reclamation being completed however is “practicable” to do so and at the discretion of Pipe Inc.

CAEPLA WORKSHOP SERIES

What they are, what’s involved and what landowners should know.

BIOSECURITY

How developing and enforcing a biosecurity protocol protects your land.

PROTECTING PROPERTY RIGHTS

Know your rights—and how to stand up for them.

DECOMMISSIONING /ABANDONMENT

Why you need to know what you don’t know – the impact on you, when pipelines are left in place.

RESEARCH

Stephanie Fradette is a CAEPLA director. She owns and operates a family ranch with her husband and three daughters in southern Saskatchewan. They have oil wells, battery sites, injection wells, abandoned wells, lease roads, flow lines and pipelines on their property.

They have had good and bad experiences with various companies and regulators and have learned the most through their bad experiences.

Why you need to be involved in driving research that protects your soil and your property from energy project infrastructure.

caepla.org For more information contact: admin@caepla.org or 306-522-5000 Brought to you by:

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BY CK REEDER

Are Property Rights Too Impractical During a Pandemic?

Simon Fraser University study says lockdowns “one of the greatest policy failures in history”

R

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espect for private property rights is a huge part of this magazine’s mission.

Property rights are necessary

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for any civilization to prosper. The owner has the strongest moral claim about how a piece of property should be used. Few people are surprised to learn that the poorest, most backward nations on Earth are those with the least respect for these basic rights.

Putting aside thorny philosophical debates, there is no doubt that when people make choices with physical property, production and trade, money and markets and profits and losses, interfering with property rights generally leads to poor results.

“Whatever we think about the danger level of the virus, is there any surprise this monumental assault on property rights has resulted in such devastation to our communities and economies?”

To make this clear, imagine the consequences if theft were legalized (we’ll resist making obvious jokes about Ottawa here).

Property rights aren’t just morally justified in an abstract sense, they work and they are practical. We can see this by looking at how so many of the world’s problems can be solved, or at least mitigated, by property rights.

We can even see this in extreme situations like the declared global COVID-19 pandemic.

The panic over COVID-19 resulted in unprecedented government interventions, lockdowns and restrictions on our social lives.

The government has trampled all over property rights, bullying businesses, churches and even telling you whether you’re allowed to have healthy people in your own home.

Whatever we think about the danger level of the virus, is there any surprise this monumental assault on property rights has resulted in such devastation to our communities and economies?

Here are a few reasons why respecting property rights would have resulted in less devastation and panic during the pandemic:

Respect for private property rights decentralizes decision-making

iStock/ matejmo; uyrk

Right now, we are seeing the lockdown narrative fall apart more every day.

A recent cost-benefit analysis from a researcher at Simon Fraser University called lockdowns “one of the greatest peacetime policy failures in Canadian history.”

How did this happen?

Normally when a person makes a bad decision, it affects their own property and they face the consequences.

But politicians and bureaucrats make decisions for other people’s property. When they get it wrong, they still find a way to reward themselves while others suffer.

This has several severe consequences. First, centralizing decision-making increases the likelihood of error and corruption. Second, it means errors spread greater damage than otherwise, and it also restricts competition for good ideas.

Readers know property owners with skin in the game tend to make better decisions than politicians and bureaucrats. There is no special exception for “public health.”

Respect for property rights means respecting people’s right to do business together A lot of ink has been spilled over how to treat COVID-19, with a lot of hype about vaccines. Some therapies have been marginalized for political reasons. Seemingly innocuous motherly advice like, “Take vitamins and get some fresh air” has been disparaged as dangerous — how bizarre.

“Property owners with skin in the game tend to make better decisions than politicians and bureaucrats. There is no special exception for ‘public health.’”

The government severely restricts the production and sale of pharmaceutical products and treatments.

People and their doctors should have more options to act on their own risk assessments when it comes to health decisions.

The risk issue also goes beyond that. Throughout the panic, the government unilaterally decided many activities were intolerably risky and severely handicapped not just businesses, but many other basic things in our communities that make life worth living at all.

Respecting property rights means a greater respect for people to make choices about their own lives, take their own risks and rationally deal with those risks together. People must generally be okay at doing this, otherwise the human race would have gone extinct ages ago.

Property rights are about more than “stuff” — property rights are about human dignity and respecting our neighbour’s choices Try telling a farmer that their property is merely a piece of land — that land is part of them. And this is more than a metaphor. Through blood and sweat, triumphs and failures, they put themselves into the geography.

Property is fundamental to human existence and the flourishing of mankind. That’s why a society that sneers at property rights always increases suffering and impoverishment. In recent decades, has there been a more vicious example of this than the COVID-19 panic? 

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BY BRIAN GIESBRECHT

Sacred Bones Duty to consult, UN Declaration on the Rights of Indigenous Peoples seriously eroding property rights

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he case of a frustrated pub owner on Hornby Island, B.C., might be a preview of what is to come if the United Nations Declaration

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on the Rights of Indigenous Peoples (UNDRIP) becomes law in the rest of Canada.

UNDRIP was adopted by B.C. in 2019. It remains an aspirational document elsewhere in Canada, but the Trudeau government is pushing hard

to enact it into law. A brief look at the Hornby Island case might give landowners some idea of what to expect in a UNDRIP future.

Briefly put, ancient human remains were found on the pub owner’s property when he was attempting

“Sacred bone claims alone have the potential to have a serious impact on property rights, pipeline projects and resource development nationally.” stymied and remains a helpless pawn while all of this plays out.

Expect that from now on, versions of this scenario will repeat itself throughout the country.

How often will situations like this arise?

Consider first the fact that virtually all of Canada is someone’s claimed traditional territory. (In fact, there are so many overlapping claims by various First Nations that much of Canada is claimed many times over.)

Then consider the fact that most of Canada’s Indigenous people were semi-nomadic. Burials took place wherever a group of people happened to be at the time. And those burials took place over thousands of years.

Suppose every bone is sacred and potentially the subject of a legal claim.

In that case, it can be seen that sacred bone claims alone have the potential to have a serious impact on property rights, pipeline projects and resource development nationally.

iStock/ bgsmith

Sights of Indigenous significance

some construction. A nearby First Nation claimed the remains were on its traditional territory and were its “sacred” property. Construction has been halted indefinitely while the case winds its way through the political and legal process. The pub owner is

In fact — even without formal recognition of UNDRIP — there is already a virtual “sacred artifact” industry going strong in Canada. The Trudeau government has made reconciliation a priority. As part of that policy, Aboriginal construction monitors identify sites of Indigenous significance (SIS).

If those sites (which can consist of a few bones) are found on Crown land slated for development, projects can be halted indefinitely. If found on private property, owners can be prevented from making use of their own land.

There are already lawyers who are

skilled in what is now viewed as a new business opportunity.

This is not to imply that all such claims are simply money grabs.

Clearly, First Nations have very legitimate reasons to honour their history and cherish the past. Landowners should work with First Nations on all legitimate cases to find compromises that will respect both the rights of the First Nations and landowners.

However, some enterprising Indigenous and non-Indigenous people are pursuing some of these “sacred bones” cases purely for monetary or political benefit.

The sacred bone business has, in effect, become one of the many sub-industries in what has been referred to as the “Indian Industry.” And where did the term Indian Industry come from? Frances Widdowson called it the “Aboriginal Industry” in Disrobing the Aboriginal Industry in 2008.

Indigenous author Calvin Helin used the term Indian Industry in his important book Dances With Dependency in 2007. But the term has been around for many years and has been in regular use by both Indigenous and non-Indigenous insiders. It is not meant as a pejorative term; it is a simple statement of fact.

What is the Indian Industry?

Widdowson, and writers like Tom Flanagan, describe how Indigenous leaders use a combination of lawfare and politics to extract money from the federal government. It is the business model that has been in constant use

by Indigenous leaders for generations.

Political demands and legal challenges are used to extract money in the form of transfer payments, grants, compensation for alleged historical

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“If sites of Indigenous significance are found on private property, owners can be prevented from making use of their own land.” grievances, or other methods. The key is that nothing of value is produced and offered for sale. Instead, grievances are used to demand money from others. Many of those who profit most from the Indian Industry are not even Indigenous.

This is not to imply that all Indigenous communities adopt this business model. There are some well-known First Nations, like Chief Clarence Louie’s Osoyoos band, that have built productive and self-sustaining local businesses that serve their communities well. But some First Nations are what Flanagan refers to as “extractive,” and Widdowson calls “rentierist.” In plain terms, they produce nothing but rely on various methods to extract money from the federal government (i.e. taxpayers).

Profiting from the duty to consult This is also not to imply that Indigenous people, generally, adopt this

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extractive business model. A growing number of Indigenous people who compete successfully in the job market and economic sphere attest that hard work and creativity are values inherent in any culture. However, this does not take away from the fact that some First Nations insist on employing the extractive business model.

The Indian Industry got a huge boost in 2004 with the Haida Nation case. The Supreme Court literally invented a “duty to consult” in favour of all First Nations. From that time forward, First Nations could claim a financial interest in Crown land that was anywhere near their communities by claiming it as part of their traditional land or territory. Most of British Columbia — where treaties were not part of their history — was particularly impacted. However, even the huge area between Lake Superior and the Rocky Mountains covered by treaties immediately saw many duty to consult cases launched.

It should be noted that each of the

numbered treaties specifically gave Indigenous people the right to hunt and fish on unoccupied Crown land — but only until that land was needed for settlement or development. The Supreme Court virtually rewrote all of the treaties. These duty to consult cases have become a money-maker for select First Nations entrepreneurs but generally a huge drag on Canadian resource development.

An interesting aside is that retired Supreme Court Justice, Alberta’s Jack Major, expressed his astonishment that the duty to consult he had helped to develop while on the Supreme Court had become virtually a growth industry. He had assumed that duty to consult was simply a common-sense courtesy to First Nations and he had no idea it would in effect become a major sub-industry (my words) of the Indian Industry.

The duty to consult cases received a further boost when former Attorney General and Justice Minister Jody Wilson-Raybould’s Practice Directive was adopted by the Trudeau government. Simply put, in every other area of the law, the pursuit of justice is the goal of the federal Department of Justice. However, when dealing with Indigenous claims, the pursuit of justice gives way to a pursuit of reconciliation. The practical effect of this is that all claims are heavily tilted in favour of the Indigenous claimants. The losers in all of this are the resource developers, landowners and taxpayers.

First Nations acquire quasiproperty right worth billions But the fact that duty to consult cases have become a growth industry for extractive First Nations (and the legal profession) should come as no surprise. It is a way money can be made.

And with the Haida Nation line of

iStock/ Nadia Nusatea

cases, First Nations can now tap corporations and individual landowners as well as the federal government.

But the die had been cast for duty to consult, sacred bones and all of the creative new UNDRIP type of cases in 1982. That is when our Constitution was being written and when all of the premiers were suddenly confronted with Section 35, something none of them wanted. They were adamant that they wanted no new Indigenous law created because some members of the group foresaw what is happening today with duty to consult and UNDRIP cases. In fact, Alberta Premier Peter Lougheed absolutely refused to sign. Only when he was assured

by Prime Minister Pierre Trudeau and the Indigenous representatives that the inclusion of the word “existing” would guarantee that the Supreme Court would create no new Indigenous law did he and the others reluctantly sign.

He and the rest were snookered. It took little time for an activist Supreme Court to invent a brand new Indigenous law — a law that not only was the opposite of what the Indigenous law had clearly been for 100 years, but a law that was the opposite of what every one of the seven numbered treaties (signed between 1871 and 1877) stipulated. Instead of First Nations having the right to use unoccupied Crown land until it was needed for settlement or development, First Nations had now acquired a quasi-property right that was worth billions.

It is not clear how far duty to consult will be taken. However, some of Canada’s most expensive law firms now employ highly paid, expert lawyers who can be expected to take it as far as they can. Many of the judges come from those law firms.

I am not imputing fault to either First Nations politicians and business-

“Claims are heavily tilted in favour of Indigenous claimants. The losers in all of this are the resource developers, landowners and taxpayers.” people, or lawyers for taking advantage of what are lucrative business opportunities by making full use of all political and legal options made available by the Indian Industry. I am suggesting that ultimately the Indian Industry benefits the monied class — Indigenous and non-Indigenous — but prevents the large underclass of marginalized and dependent Indigenous people from advancing. They stay where they are. Just as important, duty to consult and UNDRIP cases are seriously eroding property rights and crippling resource development nationally.

UNDRIP enforced aggressively at the expense of property rights It is not possible to say how far UNDRIP cases will be taken. It is clear that the same politicians who are insisting that UNDRIP become law do not have any clear idea what will happen if it does. UNDRIP is a “pig in a poke.”

Canadians are being asked to take a transformational leap into the unknown. However, the Hornby example of the sacred bones type of cases is an indication that we are at the beginning of years of political and judicial claims that will severely impact resource developers, pipelines, landowners and taxpayers. The best guess is that UNDRIP litigation will become a permanent feature in the life of this country.

Because UNDRIP is already central to the federal government’s Indigenous policy, it is not clear that an immediate passage of UNDRIP into federal law would make that much of an immediate difference in practice.

However, if UNDRIP does become law and a new federal government takes power in the future, that new government will be virtually powerless to reverse the steady progress of UNDRIP cases.

Meanwhile, the Supreme Court track record is clear. The Haida and Tsilhqot’in Nation cases are strong evidence that UNDRIP cases will be enforced broadly and aggressively at the expense of property rights, the treasury, or even the very concept of Crown sovereignty.

What this likely means overall is a dilution of property rights and the continuing suppression of resource development in Canada. It also spells uncertainty for developers, pipelines and landowners.

The reconciliation-UNDRIP agenda appears to be a winner for the Trudeau Liberals. They can claim to be helping Indigenous people, while appealing to their base. (The fact that marginalized and dependent Indigenous people do not appear to be any less marginalized and dependent as a result of five years of this reconciliation policy doesn’t seem to be noticed by the public.) And the policy costs the Liberals nothing. The costs are instead borne by resource developers, landowners and taxpayers — often the same people.

The sacred bones industry is only one new sub-industry in the hugely successful Indian Industry. If activists and their Liberal allies have their way, it can only be expected to grow. 

Brian Giesbrecht, retired judge, is a senior fellow at the Frontier Centre for Public Policy.

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BY DEREK FROM

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“Property rights are often described as a ‘bundle of rights’ which include the legal authority to possess and control and to exclude others from what is yours.”

Victory for Canada’s Largest Ranch a Win for Landowners iStock/ materapaso; 101cats; illustration David Willicome

Contrary to the wishes of CBC legal “experts,” property rights upheld in B.C. Court of Appeal

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his spring, CBC reported that a decades-long legal battle in B.C. “exposed gaps in provincial legislation” related to property rights.

The decision from the B.C. Court of Appeal is an important restatement of the law regarding property owners’

legal authority to deny trespassers access to agricultural lands.

The battle concerned a privately-owned parcel of ranch land in the B.C. interior that cut off access to two publicly-owned lakes making it impossible for the members of a nearby recreational club to access the lakes without crossing private land. The court decided that even though the

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“Weak legal recognition of property rights inevitably leads to a tragedy of the commons where scarce resources are squandered...” lakes were publicly owned, the recreational club members were not permitted to trespass in order to use them.

Legal experts, CBC’s narrative claimed, bemoaned the decision saying, “There has to be a common solution that respects private property rights but at the same time acknowledges there is a public right to access public resources.”

Wait... a public right to access public resources? That is nothing short of a gross misrepresentation of what was at issue in this case.

This case was about whether members of a recreational club could enter and use a rancher’s land without authorization to access the lakes. It was a trespass case. It was a property rights case.

This gap-in-the-law hypothesis proffered by CBC’s legal expert is an unabashed plea to undermine hundreds of years of case law that developed the important institution of property rights, and all on account of a perceived (and fake) harm. Experts of all stripes should be more circumspect when offering policy recommendations that are out of step with the legal traditions that have served us so well.

Even though Canada’s Constitution, written and unwritten, contains no specific mention of property rights, making it nearly one-of-a-kind in the entire world, these fundamentally important rights are protected by Canadian law and custom.

In 1978, the Supreme Court of Canada said the Anglo-Canadian legal tradition has historically “recognized, as a fundamental freedom, the right of the individual to the enjoyment of property and the right not to be de-

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prived thereof, or any interest therein, saved by the due process of law.”

Property rights are often described as a “bundle of rights” which include, among other things, the legal authority to possess and control and to exclude others from what is yours. When these legal rights are present at once, it comes close to what people mean by “ownership.”

Property rights have a long history in our tradition because they more regularly lead to better results than any alternative would. Property rights make prosperity and security possible by rewarding development and innovation. They lead to improved productivity and efficiency while promoting the type of society where we are free to pursue our own good in our own way without undue interference.

Thankfully, this is our tradition.

Alternatively, attenuated and weak legal recognition of property rights inevitably leads to a tragedy of the commons where scarce resources are squandered because, without a clear proprietary interest, there is no incentive to preserve, maintain or improve.

Societies with weak legal protection for property rights have more conflict and violence, citizens are more frequently pitted against each other and it’s always vulnerable groups that inevitably bear a disproportionate burden.

An interesting side note is that the ranch owner — the Douglas Lake Cattle Company — did attempt to meet public demand halfway. The company built a lodge offering guests legal access to the lakes and the invitation to enjoy its land. It seemed like a reasonable compromise. But that was not enough. The club members want to use the land on their terms, not the property owner’s, and want to have the same right to control the land.

Unlike what some experts might say, the Court of Appeal’s decision is a good one. It recognizes both the instrumental value and fundamental importance of allowing property owners to possess, control and exclude. Property rights should allow ranchers to prevent trespassers from interfering with ranching operations.

Disputes like this should not be transformed into a negotiation between a legally recognized property owner and interlopers who, without legal authority, want to use someone else’s land for their own benefit.

Property rights should be sacrosanct and inviolable. Reading the decision, a successful appeal to the Supreme Court of Canada overturning this ruling is unlikely. And for the moment at least, the Douglas Lake Cattle Company and all property owners can breathe a sigh of relief. 

Derek From is an associate at WKA Lawyers in Airdrie, Alta. He was raised in Saskatchewan and earned degrees in religious studies, philosophy and law from Briercrest College and Seminary, the University of Waterloo and Western University respectively. After graduating from law school, From practised constitutional law with the Canadian Constitution Foundation for over 10 years. During that time, he advocated for individual liberty, limited government and property rights while frequently appearing in the broadcast and print media discussing constitutional and policy issues.

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Deep roots. We didn’t start learning to drive a tractor at 10 years old. Or rise to the challenge of running the family farm.

But we do help power the machinery that will empower generations of farmers to come. When the energy you invest in farming meets the energy we fuel it with, sustaining a nation happens.