In a first but telling blow for the Transmountain Pipeline Expansion project, the Federal Court of Appeal issued its decision today in the appeal of Tsleil-Waututh Nation v. Canada (Attorney General) quashing the Federal Government’s Order in Council approving the project.

The validity of the Order in Council was challenged by a number of applicants on two principal grounds: first, the Board’s process and findings were so flawed that the Governor in Council could not reasonably rely on the Board’s report; second, Canada failed to fulfil the duty to consult owed to Indigenous peoples.

While the court found that most of the flaws asserted against the Board’s process and findings were without merit, it concluded that the Board had made one critical error when it unjustifiably defined the scope of the Project under review not to include Project-related tanker traffic. The unjustified exclusion of marine shipping from the scope of the Project led to successive, unacceptable deficiencies in the Board’s report and recommendations. As a result, the Governor in Council could not rely on the Board’s report and recommendations when assessing the Project’s environmental effects and the overall public interest.

The court also also concluded that, although Canada  had acted in good faith and selected an appropriate consultation framework. to discharge its duty to consult Indigenous peoples and First Nations, its efforts at the last stage of the consultation process prior to the decision of the Governor in Council, fell well short of the mark set by the Supreme Court of Canada. Canada failed in Phase III of the process to engage, dialogue meaningfully and grapple with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns. The duty to consult was not adequately discharged.

Accordingly, the court quashed the Order in Council and remitted the matter back to the Governor in Council for appropriate action, if it sees fit, to address these flaws and, later, proper redetermination.

In giving the judgement of the court, Dawson J.A. made clear what steps were required to address those flaws:

[769] In that redetermination the Governor in Council must refer the Board’s recommendations and its terms and conditions back to the Board, or its successor, for reconsideration. Pursuant to section 53 of the National Energy Board Act, the Governor in Council may direct the Board to conduct that reconsideration taking into account any factor specified by the Governor in Council. As well, the Governor in Council may specify a time limit within which the Board shall complete its reconsideration.

[770]  Specifically, the Board ought to reconsider on a principled basis whether Project-related shipping is incidental to the Project, the application of section 79 of the Species at Risk Act to Project-related shipping, the Board’s environmental assessment of the Project in the light of the Project’s definition, the Board’s recommendation under subsection 29(1) of the Canadian Environmental Assessment Act, 2012 and any other matter the Governor in Council should consider appropriate.

[771]  Further, Canada must re-do its Phase III consultation. Only after that consultation is completed and any accommodation made can the Project be put before the Governor in Council for approval.

It will be interesting to see how the Government and Kinder Morgan, which continues to own the pipeline until its sale to the federal government closes, responds to this decision in coming days and weeks.

To read the full decision, please click here

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Manning Environmental Law is a Canadian law firm based in Toronto, Ontario. Our practice is focussed on environmental law, energy law and aboriginal law. 

Paul Manning is a certified specialist in environmental law. He has been named as one of the World’s Leading Environmental Lawyers and one of the World’s Leading Climate Change Lawyers by Who’s Who Legal.

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