Annual Compensation for Pipelines in Alberta

It is important to note that the SRB did not accept the company’s proposal or the landowner’s proposal. The Board was persuaded that there will be ongoing and recurring compensable loss and they considered alternative compensation options. The SRB states that they see merit in a system that would allow landowners to choose between a lump sum settlement and a compensation package that includes an annual component. However, it is necessary to distinguish between the magnitude and the structure of the award to ensure that there is not “double compensation”. It is also interesting to note that in this particular decision, the final award is actually lower than the initial company payment. The landowners must pay back some of the payment forwarded to them by the company; however, the Board gave the landowners time until 2011 to do so.

This information is intended to provide landowners with ongoing education and understanding of how arguments before the SRB are either acceptable or unacceptable to the Board and what arguments may require further research, explanation or clarification if they are to be used in subsequent arguments. These arguments do not create absolute precedence for future awards as each case before the SRB is heard on an individual basis. However, it can be assumed that since these arguments worked in this hearing, they have merit and may be used by landowners in freely negotiated agreements in the future if landowners believe annual compensation of pipelines is desirable. Please remember that this SRB decision may be appealed to the courts by the company which is fully within their rights to do so. The courts may or may not alter this decision and may or may not add further clarification to the decision rationale. If this occurs, the FAO will endeavour to report the court findings as another educational/information tool for landowners to assess.

Attached is a PDF file with the SRB verbatim text and the case review on annual pipeline compensation.