On August 30, 2018, the Federal Court of Appeal released its decision concerning the judicial review of an Order in Council approving the Kinder Morgan Trans Mountain Pipeline Expansion Project (the “Expansion Project”). The Order in Council, dated November 29, 2016, was based on a report and recommendation of the National Energy Board (“NEB”), and directed the NEB to issue a certificate of public convenience and necessity approving the construction and operation of the Expansion Project.
The Application before the Federal Court of Appeal was a consolidation of numerous applications for judicial review of the Order in Council. The Applicants seeking to challenge the Order in Council included multiple First Nations, the cities of Burnaby and Vancouver, and two NGOs.
The Federal Court of Appeal narrowed the issues before it to two questions:
1. Were the Board’s process and findings so flawed that the Governor in Council could not reasonably rely on the Board’s report?
2. Did Canada failed to fulfil the duty to consult owed to Indigenous peoples?
In answering these questions, the Honourable Eleanor Dawson found that the NEB’s report had unjustifiably defined the scope of the Expansion Project not to include “Project-related tanker traffic”. According to the Court, the NEB’s exclusion of marine shipping from the scope of the Project led to “successive, unacceptable deficiencies” in the NEB’s report and recommendations. The Court concluded that as a result of these deficiencies, the Governor in Council could not rely on the NEB’s report and recommendations when assessing the Project’s environmental effects and the overall public interest.
The Court also found that Canada had failed to satisfy the standard of consultation owed to Indigenous Peoples and First Nations. According to the Court, at the last stage of the consultation process (the “Phase III” stage), Canada had failed to “engage, dialogue meaningfully and grapple with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns”.
As a result of these findings, the Court quashed the Order-in-Council and remitted the matter back to the Governor in Council to address the above flaws and re-determine the issue. The Court also ordered Canada to re-do its Phase III consultation, and held that the Project could only be put before the Governor in Council for re-approval once that consultation was completed.
Implications
Sending the matter back to the Governor in Council could add years to the eventual realization of the Expansion Project, leaving the fate of the Project uncertain. Shortly after the Court released its decision, the shareholders of Kinder Morgan Canada voted to approve the sale of the pipeline and the Expansion Project to the Federal Government.
The Background:
The existing Trans Mountain pipeline extends 1,147 and moves crude oil and refined and semi refined petroleum products from Edmonton, Alberta to British Columbia and Washington State. The Expansion Project proposes to add 987 kilometres of new pipeline segments along the existing pipeline for the purpose of transporting bitumen from Edmonton to Burnaby. The Expansion Project also proposes to build two new pipelines from the Burnaby storage facility to the Westridge Marine Terminal. The Expansion Project would increase the capacity of the Trans Mountain Pipeline from 300,000 barrels per day to 890,000 barrels per day.