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Chronicling the Trans Mountain Expansion Project’s Path to Legal Certainty

Fasken
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Indigenous Law Bulletin

The Supreme Court of Canada (“SCC”) will not hear appeals by three First Nations seeking to overturn the federal government’s second approval of the Trans Mountain Expansion Project (the “Project” or “TMX”). The First Nations were seeking to appeal the February 2020 decision of the Federal Court of Appeal, which found the government’s second round of consultation related to the Project to be sufficient. With this dismissal, there are no longer any outstanding legal challenges to the Project.

Below we provide an outline of the legal challenges the Project has faced since it was proposed in 2013.

The Long Road to Certainty

In December 2013, Trans Mountain applied to the National Energy Board (“NEB”) for permission to build and operate the Project.

The NEB conducted extensive hearings, commencing in April 2014, during which it received submissions from over 1,600 participants, consisting of approximately 400 intervenors and 1,250 commenters.

In September 2014, the City of Burnaby applied for an injunction[1] in the BC Supreme Court seeking to stop work on the Project within the Burnaby Mountain Conservation Area, which it argued was contrary to municipal bylaws. The Court found that the National Energy Board Act gave Trans Mountain the right to enter into private lands, including the Burnaby Mountain Conservation Area, to conduct its preliminary studies, and that any appeal of the NEB’s ruling ought to be brought to the Federal Court of Appeal. Leave to appeal this decision was denied by the BC Court of Appeal.[2]

In October 2014, the NEB determined that the City of Burnaby did not have jurisdiction to prevent work on the Project and its by-laws were inapplicable to the Project. The City of Burnaby sought leave to appeal this decision to the Federal Court of Appeal, which was denied.

In November 2014, the BC Supreme Court issued an injunction[3] against protestors who were impeding survey and drilling work at the Burnaby Mountain worksite, leading to the arrest of over 100 people. A subsequent application to extend the duration of the injunction a further two weeks was denied by the Court.[4]

In October 2015, the City of Burnaby returned to the BC courts and argued that the NEB did not have jurisdiction to consider constitutional conflicts between Burnaby’s bylaws and the powers granted under the National Energy Board Act. These arguments were dismissed by both the Supreme Court in November 2015,[5] and the Court of Appeal in March 2017.[6]

In October 2015, the Federal Liberals, under Justin Trudeau, won a majority government in Parliament, ending over nine years of Conservative governments.

In May 2016, the NEB issued its report recommending that the Federal Government approve the Project, subject to 157 conditions.

In November 2016, the Federal Governor in Council (effectively, the Federal Cabinet) approved the Project and directed the NEB to issue a Certificate of Public Convenience and Necessity for the Project. The Trudeau Government committed to getting the Project built.

Following the approval, in December 2016, the City of Burnaby stalled on its approval of multiple planning applications and a tree plan, which prevented Trans Mountain from commencing work on the Project. In response, in October 2017, Trans Mountain brought a motion to the NEB, seeking exemption from compliance with Burnaby’s bylaws. In January 2018, the NEB found that Burnaby’s bylaw review process was unreasonable, and caused unreasonable delay, and therefore exempted Trans Mountain from obtaining permits under those bylaws by declaring them inapplicable. The Federal Court of Appeal dismissed Burnaby’s application for leave to appeal the decision. Leave to appeal was subsequently denied to the SCC.

In January 2017, the Province of British Columbia issued an environmental assessment certificate (“EAC”) pursuant to an Equivalency Agreement with the NEB. The permit contained 37 additional conditions that Trans Mountain was required to fulfill before and during construction.

In June 2017, the government in the Province of British Columbia changed hands, from a majority Liberal government to a minority NDP government, supported by the Green Party. The NDP and the Green Party committed to taking steps to stop the Project from being built.

In March 2018, Trans Mountain was granted another interlocutory injunction against protesters who were blocking access to several of the Project’s worksites. In the following months, hundreds of people were arrested near the worksites for breach of the injunction, some of whom were charged with criminal contempt of court and convicted.[7]

In April 2018, the Provincial NDP government in British Columbia proposed amendments to the Environmental Management Act requiring “hazardous substance permits” for “heavy oil”. The Province then referred this proposed legislation to the BC Court of Appeal, asking the Court to pronounce on whether it was within the constitutional authority of the Province. The proposed legislation would likely stop TMX from proceeding, as committed to by the NDP government.

A number of developments arose in May 2018:

  • The BC Supreme Court denied a challenge by Squamish Nation[8] regarding the adequacy of consultation undertaken by the Province of British Columbia. Despite the fact that the Province did not have the power to deny issuance of the EAC (consistent with the Equivalency Agreement), the Court held that it still had a constitutional duty to consult with Indigenous groups who were potentially impacted by the Project. The Court found that the Province’s consultation had been reasonable and upheld the issuance of the certificate.
  • The BC Supreme Court denied a challenge by the City of Vancouver,[9] which alleged that the Province had not acted in accordance with the provincial Environmental Assessment Act when it relied on the Equivalency Agreement (discussed above). The Court found that the Province acted reasonably in its decision to issue the EAC and was entitled to rely upon the federal equivalent in the circumstances.
  • The federal government announced its intention to acquire the Project from Kinder Morgan Canada Limited. The sale was approved by its shareholders in August 2018.

In August 2018, the Federal Court of Appeal overturned[10] the federal Governor in Council’s first approval of the Project, primarily on the basis that the federal government had failed to sufficiently consult with Indigenous groups, had failed to adequately assess the impact of increased tanker traffic, and had failed to adequately consider the effects of the Project on marine mammals. Following this decision, the NEB undertook further review including a hearing, and the federal government undertook additional consultation.

In February 2019, the NEB issued a new report, recommending the approval of the Project subject to 156 conditions and with 16 new recommendations to implement measures solely within the jurisdiction of Cabinet.

In May 2019, the BC Court of Appeal found[11] that the Province’s attempt to regulate “heavy oil” through amendments to the BC Environmental Management Act fell outside of its constitutional jurisdiction. These amendments would likely have effectively prevented the Project from proceeding.

In June 2019, the federal Governor in Council approved the Project for a second time.

Also in June 2019, Squamish Nation and the City of Vancouver appealed both of the May 2018 decisions of the BC Supreme Court (see above). On appeal, the parties argued an additional ground that, in granting a provincial EAC, the Province relied upon the first federal approval, found to be deficient, and therefore, the basis for the Province’s approval was also deficient. In two separate decisions,[12] released in September 2019, the BC Court of Appeal found that Canada’s failure to properly consult did not automatically render the Province’s consultation inadequate. BC had undertaken additional consultation outside of the federal process and had followed the legal requirements under the provincial Environmental Assessment Act. However, in both decisions, the Court required the Province to reconsider its issuance of the EAC in light of the conclusions of the second NEB report, though it did not render the original EAC inoperative.

Following the second federal Project approval, twelve different groups filed applications to the Federal Court of Appeal seeking leave to appeal the federal government’s decision. In September 2019, the Federal Court of Appeal dismissed six of these applications,[13] significantly narrowing the scope of the issues on appeal and refusing to hear arguments based on environmental concerns. The only appeals allowed to proceed were challenges to the adequacy of the second round of Indigenous consultation. In March 2020, leave to appeal this scoping decision to the SCC was denied.

In October 2019, the Liberal Trudeau Government was re-elected, this time with a minority government. They again committed to getting the Project built.

In December 2019, Trans Mountain laid the first section of pipeline as part of the Project near Edmonton, Alberta.

In January 2020, the Province’s appeal of the BC Court of Appeal’s decision that its legislative amendments to the BC Environmental Management Act fell outside of its constitutional jurisdiction was unanimously dismissed by the SCC from the bench, with the Court adopting the reasons of the BC Court of Appeal.

In February 2020, the Federal Court of Appeal ruled[14] on the remaining six appeals, finding the second round of consultation with Indigenous groups to be sufficient and upholding the second federal Project approval.

In May 2020, the Province of British Columbia issued an amended EAC, in response to the BC Court of Appeal’s decisions in September 2019.

In July 2020, the SCC denied leave to three First Nations seeking to appeal the Federal Court of Appeal’s February 2020 decision.

Conclusion

The most recent decision by the Supreme Court of Canada to deny leave to appeal to the three Indigenous groups means there are no more outstanding legal challenges to the Project. Legal certainty has been hard to come by for this Project, and this decision by the SCC is an important step in achieving it. While it is always a possibility that there are future legal challenges, the Project has overcome each of them to date and seems likely to be completed.


 

[1] Burnaby (City) v. Trans Mountain Pipeline ULC, 2014 BCSC 1820.

[2] Burnaby (City) v. Trans Mountain Pipeline ULC, 2014 BCCA 465.

[3] Trans Mountain Pipeline ULC v. Gold, 2014 BCSC 2133.

[4] Trans Mountain Pipeline ULC v. Gold, 2014 BCSC 2403.

[5] Burnaby (City) v. Trans Mountain Pipeline ULC, 2015 BCSC 2140.

[6] Burnaby (City) v. Trans Mountain Pipeline ULC, 2015 BCCA 132.

[7] See, for example: Trans Mountain Pipeline ULC v. Mivasair, 2018 BCSC 1070.

[8] Squamish Nation v. British Columbia (Environment), 2018 BCSC 844.

[9] Vancouver (City) v. British Columbia (Environment), 2018 BCSC 843.

[10] Tsleil-Waututh Nation v. Canada (Attorney General), 2018 FCA 153.

[11] Reference re Environmental Management Act (British Columbia), 2019 BCCA 181.

[12] Squamish Nation v. British Columbia (Environment), 2019 BCCA 321; Vancouver (City) v. British Columbia (Environment), 2019 BCCA 322.

[13] Raincoast Conservation Foundation v. Canada (Attorney General), 2019 FCA 224.

[14] Coldwater First Nation v. Canada (Attorney General), 2020 FCA 34.


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