Construction crews digging a sewer-line trench in Burnaby, east of Vancouver, in July 2007 punctured two holes in a pipeline carrying synthetic crude to a waterfront shipping terminal.
Nearly 250,000 litres of oil gushed out in less than half an hour, with some coating nearby residential properties and about 70,000 litres spilling into the Burrard Inlet.
The pipeline was owned by Kinder Morgan subsidiary Trans Mountain Pipeline, which was charged along with construction company Cusano Contracting and the engineering firm R.F. Binnie.
The three companies each pleaded guilty to one count under the provincial Environmental Management Act.
The companies and the Crown agreed to a series of fines, which were outlined Monday to a provincial court judge in Vancouver.
Under the proposed sentence, each company would pay a fine of $1,000 and give $149,000 to the Habitat Conservation Trust Foundation.
In addition, Trans Mountain would pay $100,000 to the British Columbia Common Ground Alliance, a non-profit industry group that promotes safe practices to protect underground infrastructure.
B.C. Supreme Court Judge Conni Bagnall said she would rule on the sentence in about three weeks.
Crown lawyer Jim Cryder outlined an agreed statement of facts that detailed a series of missteps during the planning and construction of the new storm sewer line in a Burnaby neighbourhood.
Cryder said the companies failed to take adequate measures to determine the location of the pipeline, even when crews identified discrepancies in their diagrams.
That meant the operator of heavy excavation equipment didn't realize the machine was about to pierce a 61-centimetre pipeline carrying toxic crude.
"Upon the puncture appearing, crude oil began spewing into the air like a geyser," Cryder told court.
Cryder said 11 homes were affected by the spill, including several where residents had to wait months to return. About 250 people were immediately forced to leave the area to avoid the oil and the strong smell of crude that lingered in the air.
At the same time, oil flowed down local roads and into storm drains. About 70,000 litres eventually spilled into Burrard Inlet, coating plants and marine life, fouling the feathers of Canada geese and affecting 17 kilometres of shoreline.
Nearly all the oil was recovered, Cryder said, but the damage to the marine environment still lingers.
He said tests in the spring of last year showed most of the habitat appeared to have recovered and the water column showed no signs of lasting impact. However, sediment tests showed signs of contamination, as did tissue tests from red rock crab.
Cryder said the proposed sentence was appropriate when balancing the companies' quick response with the seriousness of the spill.
Cryder noted the companies immediately began work to mitigate the damage, spending $15 million cleaning up the marine habitat and millions more to clean the surrounding residential area. None had previous convictions for environmental charges.
But he also pointed out that the spill should never have happened in the first place.
"It's very clear that there was a rapid implementation of a response and extensive efforts to remediate the impacts of the spill," Cryder said.
"All these parties have worked in these areas for some time, and they had the resources and expertise to do a better job. They didn't."
The Transportation Safety Board released a report in 2009 that concluded poor communication and lax construction procedures led to the pipeline rupture.
The federal agency's report said the real position of the pipeline should have been verified before construction, but a combination of miscommunication and incorrect assumptions by the contractor and Kinder Morgan led to the use of a backhoe in a spot where hand tools should have been used instead.
A pre-construction meeting between the contractor and Kinder Morgan never took place, the 2009 report concluded, and no effort was made to clear up discrepancies between a map and the actual pipeline.