In a scathing rebuke of the National Energy Board’s “unjustified failure” to consider oil tanker risks triggered by expansion of the Trans Mountain pipeline expansion, the Federal Court of Appeal voted unanimously yesterday to quash approval of the controversial, C$13.8-billion project.
The decision halts construction of the pipeline and marine terminal until the Trudeau government can conduct additional environmental assessments and run a new consultation process, likely delaying the project by 18 months to several years.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
The case turned  on whether the federal government had adequately consulted with affected First Nations before approving the project. “The duties of consultation and if required, accommodation, form part of the process of conciliation and fair dealing,” wrote Justice Eleanor Dawson in the complex, 270-page ruling, and Ottawa failed that test. “Canada was required to do more than receive and understand the concerns of the Indigenous applicants.”
The appeal court “found that Crown consultation team members were ‘note-takers’ in meeting with Indigenous groups. But there was not a ‘substantive or meaningful response’ to their concerns,” iPolitics reports . “The NEB also erred by not giving weight to the ‘significant adverse effect’ of marine shipping, or tanker traffic, on the orca whales in the affected waters. ‘A worse-case’ oil spill event would be ‘catastrophic,’ the NEB found, but the probability is ‘very low’.”
But “the court ruled that in excluding shipping oil by tanker from the definition of the Trans Mountain project, the NEB erred. It was this error that resulted in a report too flawed to qualify as a ‘report’ and it was unreasonable for the federal government to rely on it, the court said.”
First Nations opposed to the project were jubilant. (More reaction here .)
“For years, Trudeau has been standing by their consultation plan and it failed—it failed completely,” said Squamish Nation Councillor and spokesperson Khelsilem.
“Today I stand before all of you, I stand with my people to tell the Trudeau government, to tell Prime Minister Trudeau, that they must listen to the courts,” he added, before admitting  to supporters he’d prepared two speeches for yesterday’s reaction and thought he’d be reading the other one.
“Stop picking fights with Indigenous people, behave honourably, respect us,” he added. “That’s all we’re asking.”
Kinder Morgan Canada said it would suspend construction immediately. Alberta Premier Rachel Notley responded  to the decision last night by withdrawing her province from the pan-Canadian climate change plan. Finance Minister Bill Morneau reaffirmed Ottawa’s commitment to complete the project, blamed the previous Stephen Harper regime for the NEB’s “flawed environmental review process”, and pointed to his own government’s “efforts to improve it”.
“While the federal government could appeal the decision to the Supreme Court of Canada, such a move would entail lengthy delays, with no assurance of success,” the Globe and Mail notes . “Asked if Ottawa would appeal, Mr. Morneau said the government is still reviewing the 270-page decision.”
Morneau asserted that “we take our responsibilities seriously. While we want to make sure that the project proceeds, we also want to make sure it moves ahead in the right way.”
But “a review of the record of the consultation process discloses that Canada displayed a closed-mindedness when concerns were expressed about the Board’s report and was reluctant to depart from the findings and recommendations of the Board,” Dawson wrote.
“With rare exceptions, Canada did not dialogue meaningfully with the Indigenous applicants about their concerns about the Board’s review. Instead, Canada’s representatives were focused on transmitting concerns of the Indigenous applicants to the decision-makers and nothing more. Canada was obliged to do more than passively hear and receive the real concerns of the Indigenous applicants.”
The ruling “confirms longstanding criticism from affected First Nations that the Trudeau government took a ‘paternalistic,’ ‘unrealistic,’ and ‘inadequate’  approach to consulting them, failing in its legal duty under the Constitution,” National Observer reports . “The Tsleil-Waututh Nation, which occupies unceded territories in what is now known as the Burrard Inlet in the Vancouver region, and other affected First Nations launched the case almost immediately after the Trudeau government approved the project in November 2016.”
Conservationists warned, as well, “that the project threatens the survival of a few dozen southern resident killer whales that were already at risk, a concern that was acknowledged by the National Energy Board (NEB), following public hearings to review the pipeline expansion,” Observer adds. The court “criticized the government for making its decision based on inadequate evidence from the report prepared by the NEB, which failed to allow participants to cross-examine the Texas company officials about their evidence and testimony during its review.”
Just 30 minutes after the court released its decision, 99% of Kinder Morgan shareholders voted  to accept the Trudeau government’s generous offer  to buy the pipeline for $4.5 billion. “A short time later, the Calgary-based company issued a statement saying it is taking measures to suspend construction-related activities on the project, but that it remains committed to the project,” CBC reports.
“It sure does make Kinder Morgan shareholders and CEO Rich Kinder look pretty smart,” University of British Columbia public policy professor George Hoberg told the Star Vancouver. “They had a better understanding of the risks in court on this issue than the Government of Canada.
“We now own the existing project—revenues will flow from that—but the big question is what to do about the expansion,” he added. “They need to have a serious rethink about their strategy with respect to pipelines and oilsands generally.”
Before the ruling, Hoberg told National Observer that a ruling against the pipeline would effectively kill the project. “If the Federal Court strikes down the permit authorizing the pipeline because of inadequate consultation, or for another reason, then I don’t see how the pipeline project can proceed—unless or until the Supreme Court reversed that decision,” he said.
But meanwhile, “Ottawa is now in the politically awkward position of being the Trans Mountain project owner as well as being responsible for its ultimate approval,” the Globe and Mail writes. “Prime Minister Justin Trudeau is facing implacable opposition to the project in British Columbia, especially from some First Nations communities, and angry insistence from Alberta that the pipeline expansion must be built over all objections.”
Morneau said the court decision “demonstrates that the government made the right decision to purchase the project,” National Observer writes. “He explained that there were too many political risks and delays to allow a private company to proceed on its own.”
Observer’s account of the day includes some of the key language from the appeal court decision.
“The unjustified failure to assess the effects of marine shipping under the Canadian Environmental Assessment Act, 2012, and the resulting flawed conclusion about the effects of the project was so critical that the Governor in Council could not functionally make the kind of assessment of the project’s environmental effects and the public interest that the legislation requires,” Dawson wrote.
“The inadequacies of the consultation process also flowed from Canada’s unwillingness to meaningfully discuss and consider possible flaws in the Board’s findings and recommendations and its erroneous view that it could not supplement or impose additional conditions on Trans Mountain,” the appeal judge added. “Canada is not to be held to a standard of perfection in fulfilling its duty to consult. However, the flaws discussed above thwarted meaningful, two-way dialogue. The result was an unreasonable consultation process that fell well short of the required mark.”
The ruling shows that “environmental corners cannot be cut when governments seek social licence for major infrastructure projects—especially in a case where increased tanker traffic and vessel noise are known to be key threats to killer whales,” CBC states .
“It’s very clear from this decision that environmental assessment considerations and Species At Risk Act decisions aren’t optional, and they need to be taken seriously,” said Ecojustice lawyer Dyna Tuytel, who represented the Living Oceans Society and Raincoast Conservation Foundation in the case.
“There’s a risk in taking shortcuts,” agreed UBC zoologist Eric Taylor, who chairs the federal Committee on the Status of Endangered Wildlife in Canada (COSEWIC). “It’s going to come back and bite you, as it’s done here.”