Quebec seeks injunction against Energy East pipeline

The Quebec government will seek an injunction to ensure the Energy East pipeline project is subject to the province's environmental regulations.

TransCanada Pipelines Ltd.(TSX:TRP) must demonstrate that its plans for the Quebec portion of the project respect the province's laws, Environment Minister David Heurtel said Tuesday.

"In Quebec, companies know that if they want to develop major projects such as this one, they have to submit to an environmental impact assessment and TransCanada has so far refused to comply," he told a news conference.

His announcement came a few weeks after a coalition of Quebec environmental groups said it would take legal action against Energy East for the same reasons.

Heurtel said TransCanada was advised in letters in November and December 2014 that the Quebec segment of its $15.7-billion project was subject to the province's environmental regulations.

"Unfortunately, we never received a response to these letters," he said.

"Today's motion very simple and very clear. It signifies that whoever seeks to build a project in Quebec must comply with all Quebec laws and regulations. I clearly informed TransCanada Pipelines that it needed to table a project notice for Energy East.

"In the face of its neglect, the government has taken action. This is not only a matter of respect, but equally a question of fairness toward all companies that wish to do business in Quebec."

TransCanada has not replied to Quebec's requests for formal notice, saying Energy East is subject only to federal regulation.

The pipeline would carry 1.1 million barrels a day of western crude as far east as Saint John, N.B., serving domestic refineries and international customers.

The project has run into stiff opposition in Quebec, with the mayors of Montreal and surrounding municipalities arguing that environmental risks outweigh the economic rewards.

Heurtel said the decision to engage in legal action does not mean the province has made a final decision on Energy East.

"Quebec in no way with this announcement today is saying it's for or against the project," he said. "We just want our laws to be respected."

And Heurtel moved to defuse any potential backlash from Western Canada against the motion for the injunction.

"This not directed at any province or region," he argued. "This is about one company that wants to do a project in Quebec which, in our opinion, is not respecting Quebec law."

Quebec's environmental regulation agency is set to begin hearings on Energy East on March 7, but the environmental coalition that is seeking to block the project says its mandate is "truncated" because of the absence of impact studies.

TransCanada spokesman Tim Duboyce indicated a few weeks ago the company is committed to participating in Quebec's environmental hearings, which he called a "credible and rigorous'' process.

"It will be an opportunity for us to answer the questions posed by commissioners and the public about Energy East," he said.