THE NANOOSE BAY TEST RANGE:
OWNERSHIP AND EXPROPRIATION
Law and Government Division
22 June 1999
TABLE OF CONTENTS
OWNERSHIP OF THE SEABED
THE LICENCE OF OCCUPATION
EXPROPRIATION OF THE SEABED
THE NANOOSE BAY TEST RANGE:
OWNERSHIP AND EXPROPRIATION
In 1965, Canada and the United States
agreed upon the establishment, operation and maintenance of a torpedo test range at
Nanoose Bay in the Strait of Georgia, to be more formally known as the Canadian Forces
Maritime Experimental and Test Ranges (CFMETR).(1) The
land for the base at Nanoose Bay had been expropriated by the federal government in 1951.
The foreshore was transferred to Canada by British Columbia in 1988, for military use over
a period of 60 years.(2)
In 1984, the Supreme Court of Canada found
that several straits on the west coast of British Columbia, including the Strait of
Georgia, had been included in the pre-Confederation boundaries of British Columbia.
Therefore, the Province of British Columbia still had ownership of the seabed of the
Strait, notwithstanding an earlier Supreme Court of Canada decision that the boundaries of
British Columbia, with respect to the territorial sea, ended at the low water mark.
On 5 September 1989, the federal and
provincial governments signed a ten-year "licence of occupation" under the
British Columbia Land Act. In May 1997, the British Columbia government gave notice
that it would terminate the licence, because it was not satisfied with the progress of
Canada-U.S. negotiations on the Pacific Salmon Treaty.(3)
Discussions with the federal government followed, but these appear to have collapsed in
mid-May 1999. On 14 May 1999, the government of Canada announced that it had begun the
process of expropriating the seabed at CFMETR.
The Minister of National Defence explained
the expropriation as follows:
The Government of Canada cannot permit
itself to be put in breach of its international obligations. As such I have reluctantly
asked the Minister of Public Works and Government Services to initiate the process of
expropriation [to ensure that there is no disruption of operations when the current
licence expires on September 4, 1999]. I have done this because CFMETR is important to the
national security of Canada, significant to the economic well-being of the local
communities in the Nanaimo area, and essential to Canadas ability to fulfil our
defence commitments at home and abroad.(4)
The Notice of Intention to Expropriate
says simply that the lands are required "for a purpose related to the safety and
security of Canada or of a state allied or associated with Canada and it would not be in
the public interest further to indicate that purpose."(5)
British Columbia responded by condemning
"the first hostile expropriation of provincial land by Ottawa in recent
OWNERSHIP OF THE SEABED
In 1967, the Supreme Court of Canada
considered a reference to determine whether the seabed within the three-mile limit of the
west coast territorial sea, and the associated mineral resources, were owned by the
Province of British Columbia or Canada.(7) Although the
case dealt specifically with the British Columbia offshore, it is widely acknowledged to
have established the precedent for the ownership of offshore resources on both coasts. The
Supreme Court held that Canada had both jurisdiction over and property rights in the
territorial sea, from the low-water mark of the province to the territorial boundary
recognized by international law.(8)
The Supreme Court found that the
pre-Confederation colonies had never gained sovereignty over, or property rights in, the
territorial sea. The territorial sea had therefore been outside the boundaries of British
Columbia at Confederation, and those boundaries had not been extended since. Canada was
the sovereign state having the rights over the offshore recognized by international law,
such as the 1958 Geneva Convention.
In 1984, a more specific question was
placed before the Supreme Court in Re Strait of Georgia.(9) Without challenging the general principle set forth in Offshore
Minerals, British Columbia claimed that the historical documentation surrounding the
establishment of the province proved that certain bodies of water, and the seabed beneath
them, had in fact been within the boundaries of the province at Confederation, and were
therefore still the property of the province. The question put to the Supreme Court of
Are the lands or any part or parts
thereof including the mineral and other natural resources of the seabed and subsoil,
covered by the waters of the Strait of Juan de Fuca, the Strait of Georgia (sometimes
called the Gulf of Georgia), Johnstone Strait and Queen Charlotte Strait (bounded on the
south by the international boundary between Canada and the United States of America, on
the west by a line from Tatoosh Island lighthouse to Bonilla Point reference mark and on
the north by a straight line drawn across Queen Charlotte Strait from Greeting Point on
Nigei Island to McEwan Point on Bramham Island) the property of the Queen in Right of the
Province of British Columbia?(10)
Dickson J. summarized the issue before the
In the 1967 Off-shore Reference
this court applied the reasoning in Keyn [an 1876 British case standing for the
proposition that the realm of England extended only to the low-water mark, and all beyond
was the high seas] to the territorial sea surrounding British Columbia. It held that
though immediately prior to Confederation this three-mile strip might well have been
"British territory," the Imperial Parliament had done nothing to extend the
boundaries of British Columbia to include this strip, and therefore the normal assumptions
should prevail, namely, that the territory of the colony just prior to Confederation ended
at the low-water mark...
In order to succeed in the present
Reference, therefore, British Columbia must demonstrate that prior to Confederation either
the lands and waters in question were "within the realm" as the term is used in The
Queen v. Keyn or else that by some overt act Britain incorporated them into the
territory of the Colony of British Columbia so as to displace the "normal
assumption" cited in the 1967 Offshore Reference...
If [British Columbia] cannot make good on
either claim, then the lands and waters were not within the province at Confederation, the
United Kingdom retained them between 1871 and the period (1919-1931) during which Canada
acquired sovereign status and succeeded to the rights of the United Kingdom.(11)
The Supreme Court found that the
historical documentation, and in particular the 1866 Imperial Act for the Union of the
Colony of Vancouver Island with the Colony of British Columbia had incorporated the
straits in question within the boundaries of the colony of British Columbia, and that they
therefore continued to be within the boundaries of the Province of British Columbia after
Confederation. The western boundary of first the colony and then the Province of British
Columbia was the "Pacific Ocean," meaning the open Pacific, "thus making
the western boundary of the United Colony the coastline formed by the several islands off
the coast of British Columbia, including Vancouver Island."(12) The straits at issue were within the boundaries of British Columbia,
and therefore the seabed and subsoil of those straits were the property of the province.
The original treaty establishing CFMETR(13) provided that the United States would be responsible
for the supply, installation and maintenance of the technical equipment required for the
operation of the new torpedo testing range. It also provided that the United States would
retain ownership of all removable property it brought into or purchased in Canada and
placed on the site, including structures that could be readily dismantled. The agreement
was for a ten-year period, but was then to remain in force until it was terminated by
mutual agreement or by either partys giving 12 months written notice to the
Although the agreement continued until
terminated, it was renewed by an exchange of notes in 1976(14)
because the United States wished to update existing range equipment and to install an
advanced underwater acoustic measurement system at Jarvis Inlet. Renewing the treaty at
that time allowed the parties to make the necessary minor changes to the annex. In 1986,
the treaty was again renewed for ten years, by an exchange of notes, to allow for
long-term planning and commitment of resources.(15) In
1996, no renewal took place because of Canadas requirement for an environmental
clause to be added. In March 1998, however, the United States accepted a text proposed by
Canada for the incorporation of environmental protocols that would be referenced by the
Press reports suggest that the value of
the equipment involved in the torpedo testing facility is considerable:
The B.C. lease on the sea floor beneath
Nanoose Bay on Vancouver Island allows the testing facility to deploy 30 underwater arrays
-- metal towers measuring about 15 metres in height, each with four three-metre-long arms
equipped with sophisticated hydrophones.
These arrays track submarine torpedoes,
and monitor the movements of vessels. Canadian military aircraft and helicopters involved
in marine defence manoeuvres also use the Nanoose range.(17)
The B.C. lease does not include the
federally owned onshore facilities or actual waters at the Nanoose testing range. But the
ocean floor is studded with $100 million worth of test equipment, and cutting off use of
the sea-bed would seriously interfere with the naval operations.(18)
THE LICENCE OF
In 1989, the federal and provincial
government signed a "licence of occupation" under the provincial Land Act.(19) Although the Land Act defines "Crown
land" as "land, whether or not it is covered by water," the
federal-provincial agreement is clearly based on precedents that involved land, rather
than a seabed. For example, it provides for written notice to be given to the licensee by
"posting the same in a conspicuous place on the Land."
Article 6 of the agreement allows the
province to cancel the licence of occupation on 90 days written notice, in certain
circumstances, which include:
6.01(a) the Owner [the province] requires
the Land for his own use or in his sole discretion considers that it is in the public
interest to cancel the rights herein granted, in whole or in part...
(c) the Owner, in his sole discretion,
considers that it is no longer necessary for the Licensee to use the Land for purposes
This provincial discretion to cancel is so
broad that it is difficult to know how it would be interpreted. The Backgrounder to
the press release from the Premiers office announcing the cancellation of the lease
on 23 May 1999(20) refers to the fact that the
agreement "provides for cancellation at the sole discretion of the Province of
British Columbia when the Province considers that it is no longer necessary for the
licensee to use the seabed." Arguably, it is inappropriate for a provincial
government to decide unilaterally that the federal government no longer needs a seabed
supporting defence structures crucial to an international treaty obligation.
The Backgrounder also clearly
states that "British Columbia is cancelling the Licence of Occupation for the Nanoose
torpedo range in response to the American failure to cooperate with Canadians over West
Coast fishing issues." This suggests that the province is taking over the
responsibility for defining the "public interest" in matters of fisheries and
In August 1997, the Government of Canada
initiated a court challenge in the Superior Court of British Columbia to prevent an early
termination of the agreement with the Government of British Columbia. Canada argued that:
the Provinces right to
cancel the Licence when it "considers that it is within the public interest" to
do so does not extend to public interest matters within the expertise and exclusive
authority of Canada, including Fisheries, Foreign Affairs and Defence;
By the spring of 1999, with the natural
expiration of the licence of occupation only six months away, it was evident that its
cancellation, and the subsequent court case, were increasingly irrelevant to the final
outcome of the issue. On 5 May 1999, the negotiators for the two parties signed a
"without prejudice" document called Points of Principle,(21) which commenced:
The following represent the best efforts
of the two negotiators to arrive at points of principle concerning an amended licence of
occupation for the Whiskey Golf Test Range.
The negotiators will recommend an amended
licence based on these principles. It is recognized that certain policy issues have yet to
be resolved before either party commits to enter into an amended licence arrangement.
The term of the amended agreement shall be
40 years (30 additional years).
2. The fees for the additional 30 years
shall be based on an annual payment of $4 million; plus a one-time payment of $5 million
as an adjustment for the 89-99 period, payable on the date of signing of this amended
Point 7 provided that "an
environmental schedule ... will include a provision confirming that no nuclear warheads
will be present at any time within the licence area."
The Department of National Defence claims
that negotiations reached an impasse by 10 May 1999, after the government of British
Columbia introduced "fisheries issues unrelated to the operations of CFMETR."(22) On the other hand, British Columbias Minister
of Intergovernmental Relations claimed that the negotiations collapsed because the federal
government "backed away" from the Points of Principle, and
"wouldnt prohibit nuclear warheads."(23)
In any case, on 21 May 1999 the Minister of Public Works and
Government Services issued a Notice of Intention to Expropriate on behalf of Canada. On 13
September 1999, after a summer of contentious public hearings on the issue, the same
Minister confirmed the expropriation, offering less than $2 million compensation instead
of the total of $125 million compensation referred to in the Points of Principle.
British Columbia has launched a constitutional challenge against the expropriation.(24)
EXPROPRIATION OF THE SEABED
Generally speaking, the federal
government can expropriate provincially owned property, provided it does so for a valid
federal purpose. Peter Hogg notes that "federal legislative power will extend to bind
the Crown in right of a province, and there have been cases in which the federal
Parliament has validly expropriated provincial Crown property,"(25) and refers to several cases where this proposition has been upheld.
It should be noted, however, that the
courts are inclined to place strict limitations upon the federal power of expropriation.
Two of the cases cited by Professor Hogg are railway cases from the first quarter of the
century. The third, Re Exported Natural Gas Tax, dealt with the taxation of
provincial property, rather than its expropriation. The question of the federal
expropriating power was raised during argument, however, and the majority of the court
held that the federal power to expropriate provincial property extended only to "the
property absolutely essential to the Dominion undertaking":
One has to bear in mind, however, in
dealing with the arrogation of property rights by federal authority in the exercise of
some right, that, whatever the terminology may be, it is only such part of the property
right and such extent of the taking of that right, as may be tied inherently and of
necessity to the exercise of the authority in question by the federal level of government
that the Constitution will permit.(26)
On the other hand, international defence
treaties would seem to be at the very core of federal jurisdiction and in Re Strait
of Georgia the Supreme Court of Canada took pains to point out that the provincial
powers of ownership of the seabed are limited:
It is important to note that the
question raised in this reference is not concerned with legislative jurisdiction nor with
political or economic considerations. No question arises as to the power of Parliament to
legislate in relation to matters within its exclusive legislative jurisdiction as, for
example, control over shipping, navigation, trade and commerce, customs, fisheries and defence.
The sole question here is the matter of proprietorship in lands.(27) [italics added]
Perhaps the only safe conclusion to be
drawn with respect to the intended expropriation of the CFMETR seabed is that such action
appears both legally justifiable and politically controversial.
Points of Principle
Statement of Claim
(1) See Appendix 1 for the location of the range.
"B.C. Ends Seabed Lease for Nanoose Torpedo Range in Response to U.S. Intransigence
on Salmon Talks," Backgrounder, press release from the office of the Premier
of British Columbia, 23 May 1997.
"We have taken this step in the public interest because we have been disturbed
and frustrated by the unco-operative and unfriendly approach taken by the United States in
our efforts to negotiate new terms for the Pacific Salmon Treaty, said Premier Glen
Clark," press release, see note 2.
"Government of Canada Begins Expropriation Process to Retain Seabed Testing Site at
Nanoose Bay," Department of National Defence, press release, 14 May 1999.
Canada Gazette, Part I, 22 May 1999, 1503.
"Backgrounder," Intergovernmental Relations: Nanoose Bay Expropriation website,
accessed June 1999.
Reference re Offshore Mineral Rights (B.C.),  S.C.R. 792, 65 D.L.R. (2d) 353.
In 1967, international law recognized a three mile wide territorial sea.
 1 S.C.R. 388, 8 D.L.R. (4th) 161.
See note 9, 8 D.L.R. (4th) 161, at p. 165.
See note 9, 8 D.L.R. (4th) 161, at p. 172.
See note 9, 8 D.L.R. (4th) 161, at p. 191.
Treaty Series 1965 No. 6.
Treaty Series 1976 No. 18.
Treaty Series 1986 No. 40.
This agreement was conveyed by means of a Diplomatic Note from the United States on 13
March 1998. See "Chronology of Events: Canadian Forces Maritime Experimental Test
Ranges (CFMETR)," Department of National Defence press release, 14 May 1999.
Larry Pynn, "B.C.s Threat to End Lease Could Cost U.S. Millions," Vancouver
Sun, 23 May 1997, p. A1.
Ross Howard, "B.C. Cancels Military Lease," The Globe and Mail (Toronto),
23 May 1997, p. A1.
See Appendix 2 for the Lease of Occupation.
See note 2, above.
Intergovernmental Relations: Nanoose Bay Expropriation website,
accessed June 1999; See Appendix 3 for the "Points of Principle."
"Chronology of Events: Canadian Forces Maritime Experimental Test Ranges
(CFMETR)," Department of National Defence press release, 14 May 1999.
Andrew Petter, "Nanoose Expropriation: An Unprecedented Abuse of Federal Power,"
Victoria Times Colonist, 25 May 1999, A11.
(24) See Appendix 4 for the Statement of Claim.
Section 28.5(c), Constitutional Law of Canada (Looseleaf edition).
 1 S.C.R. 1004, at p. 1052-3).
See note 9, above, 8 D.L.R.(4th) 161, at 166.