Ground control: what landowners should know about their property rights

What do you know about your subsurface rights?

Two red Muskoka chairs on a rock Photo by Alessandro Cancian/Shutterstock

This article was originally published in the May 2017 issue of Cottage Life West magazine.

Jerry and Frances Kupchuk are a retired couple living on 1.6 acres in the lower mainland district municipality of Langley, B.C., next to Surrey, in an area that’s a mix of houses, farmland, and orchards. In the mid-’90s, they built the place as a second home especially for their retirement years. Then came Kinder Morgan’s Trans Mountain pipeline expansion. The Kupchuks were aware of an existing 60-foot easement on their land, but then Kinder Morgan expanded the easement to 200 feet. The move surprised the couple, but it was legal. Now the pipeline company has the right to access a 200-foot wide swath of their property at any time, and the Kupchuks can’t encroach on that area with additions such as trees or buildings. “And because the easement runs diagonally across our property, it probably takes up 80 per cent of the lot,” says Jerry. Now, the enlarged easement includes the land under their house. “So if our house burns down, does that mean we’re not allowed to rebuild it? I just don’t know.”

Stories like the Kupchuks’ are becoming increasingly common in parts of the country as resource development rises. Luckily, the Kupchuks are not facing the situation alone. They are part of the Collaborative Group of Landowners Affected by Pipelines (CGLAP), formed in 2014.

Most of the nearly 100 members aren’t opposed to pipeline expansion, says Delwen Stander, a lawyer based in Chilliwack, B.C., who represents CGLAP. But they do seek three main things: an improved relationship between the pipeline company and landowners; appropriate protection of their land and soil and fair compensation for land use.

And it’s not just pipelines that landowners should worry about. Last fall, the Petroleum Services Association of Canada forecast that 4,120 wells (including oil, gas, and bitumen) will be drilled in Canada’s western provinces in 2017 (with 280 in B.C., 1,900 in Alberta, and 1,940 in Saskatchewan). Most landowners will discover that they don’t have the right to say no to a company wanting to drill on their land. All they can do is negotiate for better terms to limit the impact on themselves and their property. For the Kupchuks and others facing resource companies, whether those companies deal in mineral extraction, pipelines, or oil and gas activity, the key to protecting their interests is to understand the process and their rights.

Can a company just set up shop on my land?

Generally speaking: yes. When a pipeline project is proposed, the regulator—such as the Alberta Energy Regulator (AER), the Oil and Gas Commission in B.C., or the National Energy Board (NEB) for interprovincial or international routes—assesses the project and determines whether it is in the public good. If so, the pipeline proceeds. As a general rule, landowners, and, in some cases, those adjacent, are given a chance to respond during the planning process, says Karen Campbell, a lawyer at Ecojustice, Canada’s largest environmental law charity. However, “since notification requirements differ depending on the size and type of a project or facility, in some instances you may be consulted and informed as a nearby landowner, while in others you may have to find the information yourself,” write Duncan Kenyon and Nikki Way in Landowners’ Guide to Oil and Gas Development. Before you sign off on any agreement, however, you should do your research, and ask questions about the proposed activity (and any subsequent development, such as well-drilling, pipeline construction, and possibly the installation of other infrastructure), says Campbell, who co-authored the guide “When the Landman Comes Knocking: A Toolkit for BC Landowners Living with Oil and Gas.”

Think about what’s important to you, ask questions, and use the answers to negotiate for a better contract. For instance, you may want to ask how long the oil and gas or pipeline company plans to operate on your land, and what limits there will be on its access (hours of the day, days of the week). How will the company return the land to its original state when it is done, and will it post a bond to ensure that cleanup and reclamation are completed? In terms of personal health, will the company pay for testing your drinking water source before, during, and after the activity, and does the proposed activity carry the risk of sour gas emissions? You could even ask how it plans to prevent company vehicles from transporting invasive species. The landowners and the oil and gas or pipeline company negotiate the terms and compensation, and then work can begin. That said, “once the NEB decides that the route is the route, then it’s pretty much a done deal,” says CGLAP’s Stander, though the exact placement can sometimes be negotiated. In addition, “landowners can seek mediation or arbitration,” he says. “They can’t necessarily stop a pipeline, but they can have a lot of say in the compensation.” If the parties can’t agree on terms of access, they go to the surface rights board for a ruling. Landowners who are not happy about placement or compensation can hire a lawyer and, in Alberta, “the AER will often even cover their costs,” says Eva Chipiuk, a lawyer who does pipeline-related casework at Prowse Chowne in Edmonton.

According to Stander, when the original Trans Mountain pipeline was built in the 1950s, landowners were given a small lump sum payment (as little as $70) in exchange for having a pipeline on their property in perpetuity. “Our feeling is that landowners negotiating new leases should be given a choice of a lump sum or an annual payment based on through put, a payment that would be reviewed every five years.” To date, Kinder Morgan has not responded to this proposal.

While landowner groups work to change the rules, cabin owners should look at ways to stand up for their rights within the system. The good news is that there are tool kits for landowners in each province that explain the process and how to prepare for negotiations.

What about mining?

Mining activity is also a concern for landowners, especially when they discover that it’s rare for a land title to include mineral rights. For instance, in Alberta, private individuals own just 0.55 per cent of all mineral rights in the province (a small portion is in the hands of the federal government, companies, and businesses, but about 80 per cent is owned by the province). Unless you legally own your mineral rights, you only own the surface rights, which typically only let you do things such as build a house, dig a garden, or add a swimming pool. Then there’s the practice of “free entry.” This system—the norm in Western Canada—is the claim-staking process that allows miners (which, in B.C.,for example, can be any Canadian citizen over 18 who has paid $25 for a certificate) to acquire exploration rights, including on private property.

Once a claim is granted, claim holders have the right to perform land surveys and drilling or core sampling on the property. “The original purpose of free entry laws was to encourage mining activity,” explains Karen Campbell in a paper for West Coast Environmental Law. “Although times and values have changed dramatically, the system remains in place…and permits mining to occur on private lands, even in people’s back yards without their consent.”

Furthermore, free entry has broader implications: it “allows virtually unregulated access to Crown land; and it acts as a bar to sound land use planning.”

 

Featured Video