Chapter 7: Compensation for Land Use
You may not be able to agree with the company on how much you should be paid to compensate you for the use of your land or for damage that may occur because of the construction or maintenance of the pipeline. The NEB does not have jurisdiction over compensation matters. The information in this chapter may help you to understand how compensation matters may be addressed.
- How is the amount of compensation negotiated?
- What if I disagree with the company about the amount of compensation offered for the use of my land or for damages?
- I have a pipeline crossing my land. Am I entitled to any compensation?
- How do I apply for the services of a negotiator or an arbitrator?
- What information should I include with my application?
- What is the difference between the negotiation option and having an arbitration committee appointed?
The amount of compensation paid for an easement is negotiated between the company and the landowner. Most companies retain qualified appraisers to determine the market value of the land. This provides a basis for determining the compensation to be paid for the use of the land. Compensation may also be available for, but not limited to:
- the use of any temporary work space;
- any inconvenience or nuisance caused by the construction of the pipeline;
- loss of use of the land; and
- compensation for all damages suffered as a result of the operations of the company.
What if I disagree with the company about the amount of compensation offered for the use of my land or for damages?
The NEB does not have the authority to determine compensation for the use of land or for damage that results from the construction of the pipeline. Compensation claims for land use or for damage resulting from construction are handled by the Minister of NRCan.
When a landowner and a pipeline company cannot agree on compensation for lands that the company has acquired or damaged, either party may apply to the Minister of NRCan to receive the services of a negotiator, or to have the dispute settled by arbitration. NRCan's Pipeline Arbitration Secretariat (PAS) can settle matters of compensation. For NRCan’s complete contact information please see the back cover.
Addressing compensation disputes through NRCan
The information in this box is reproduced from NRCan's website.
- Compensation is a private matter between a pipeline company and a landowner.
- However, for pipelines that are federally-regulated, i.e. by the NEB, when a landowner and a pipeline company cannot agree on compensation for lands that the company plans to acquire, has acquired or has damaged, either party may apply to the Minister of NRCan to receive the services of a negotiator, or to have the dispute settled by arbitration.
- To have a negotiator or an arbitration committee appointed, the Minister must, pursuant to subsection 84(a) of the NEB Act be satisfied that the activities of a pipeline company for which compensation is sought directly relate to:
(i) the acquisition of lands for a pipeline,
(ii) the construction of the pipeline, or
(iii) the inspection, maintenance or repair of the pipeline;
In either case, your application, on which more details are provided below, should be submitted to:
The Minister of Natural Resources Canada
580 Booth Street
Ottawa, Ontario K1A 0E4
- Negotiation proceedings are covered in 88 and 89 of the NEB Act. To receive the services of a negotiator, a landowner or the pipeline company must serve a notice of negotiation (subsection 88(1) of the NEB Act) on the other party and on the Minister of Natural Resources Canada.
- For a negotiator to be appointed, your application must include a clear and concise statement of the relevant facts and details regarding the proposed compensation.
- To serve a notice of arbitration on the Minister, a landowner should refer to subsection 90(1) as well as subsection 75, 84 and 85 of the National Energy Board Act, and to subsection 4(2) of the Pipeline Arbitration Committee Rules, 1986 that specifically set out the information that must be included.
What is the difference between the negotiation option and having an arbitration committee appointed?
- The Minister appoints a negotiator to help the parties reach an agreement.
- The negotiator has 60 days after the start of negotiations to report to the Minister as to the success
or failure of the process.
- It is an informal process during which the negotiator does not favour either party and does not decide on the amount of compensation.
- If there is agreement, details are not necessarily included in the negotiator's report to the Minister. However, if they are, they are protected under the Privacy Act and would not be released by Natural Resources Canada without the consent of both parties.
- If the negotiations are unsuccessful, either party may apply to the Minister to have the matter settled by binding arbitration.
- The negotiation process is carried out “without prejudice” to any subsequent arbitration proceeding. Whatever happens during negotiations cannot be used against a party during arbitration. In other words, the willingness to make or accept offers during negotiations cannot bind any party for the purpose of the arbitration proceedings.
- An arbitration committee consists of at least three members appointed by the Minister and, once appointed:
- is completely independent of the Minister; and
- has its own powers to conduct the arbitration proceedings as it sees fit.
- Unlike negotiations, arbitration hearings are relatively formal. A transcript of what is said is kept. The committee may review evidence and hear from witnesses.
- A committee's decision is binding and enforceable in a court of law.
- Parties may ask a committee to review a decision. Subsection 46 (1) of the Pipeline Arbitration Committee Rules, 1986 provides more information about what shall be included in your review application.
- It is your right to appeal an arbitration committee's decision to the Federal Court on questions of law or jurisdiction. An appeal must be filed within 30 days of the decision.
- Evidence gathered at hearings and the committee's decision are protected under the Privacy Act. You are free to release information, but Natural Resources Canada will only do so with the written permission of both parties.
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