Federal Court of Appeal upholds approval for the Trans Mountain Expansion Project

Today the Federal Court of Appeal (FCA) released its decision, Coldwater Indian Band et al v. Canada (Attorney General) et al, upholding the Governor in Council’s (GIC’s) approval of the Trans Mountain Expansion Project, and the GIC’s determination that Indigenous consultations were reasonable, and in compliance with the previous direction of the FCA.

The Hon. Frank Iacobucci was appointed as Federal Representative, and with a team from Torys, oversaw and provided guidance to the Government of Canada in respect of those Indigenous consultations, following the August 30, 2018 decision quashing the approval of the project. 129 potentially affected Indigenous groups were consulted by the Crown and the proponent, the largest such exercise in Canadian history.

What you need to know

  • The FCA dismissed applications for judicial review of the GIC’s approval of the Trans Mountain Expansion Project brought by four Indigenous groups alleging that the Crown did not adequately discharge its duty to consult and accommodate.
  • The FCA largely applied existing law on what constitutes meaningful consultation on the deep end of the consultation spectrum. Consultation must be in good faith, with an open mind, with two-way dialogue that leads to a demonstrably serious consideration of accommodation. The Court also emphasized that the process of accommodation is a balance of Indigenous concerns against “competing societal interests”.
  • The FCA also explained what the consultation process is not, including that there is no veto, that the consultation and accommodation process does not dictate one substantive outcome, and that parties may not use tactical behaviour in an attempt to frustrate the consultation process or exercise a de facto veto. Parties must also avoid unnecessary delay, posturing and insisting on matters of form rather than substance.
  • The FCA clarified its role when reviewing a decision regarding the adequacy of consultation for reasonableness. The Court’s task is to review the reasons of the decision-maker, in this case the GIC, to ensure that they do not suffer from errors in reasoning or logical deficiencies—not to reach its own independent view as to whether consultations were adequate.
    • It will be important for project proponents to work with their regulators, to the extent possible, to ensure that they are well-positioned to deliver such well-supported reasons.
  • The FCA found that the Crown remedied the defects identified by the Court in its August 2018 decision, including: 1) there was meaningful two-way dialogue considering, and where appropriate, agreeing to accommodations to minimize the impact of the project (and the GIC’s conclusion in this regard was reasonable and supported by the evidence); and 2) the GIC imposed amended binding conditions as it determined to be appropriate in light of issues that emerged in the consultation process. The Court found that “this was anything but a rubber-stamping exercise. The end result was…an approval with amended conditions flowing from renewed consultation.”1

Background

The Trans Mountain Expansion Project proposes to twin an existing 1,150km pipeline (amounting to 980km of new pipeline) from Strathcona County (near Edmonton), to Burnaby, British Columbia.

On November 29, 2016, the GIC issued an Order in Council (OIC) directing the National Energy Board (NEB, now the Canada Energy Regulator) to issue a certificate of public convenience and necessity approving the construction and operation of the project. Shortly thereafter, seven Indigenous groups2 potentially affected by the project, the City of Burnaby and certain NGOs filed applications for judicial review challenging that approval.

On August 30, 2018, the FCA released its decision quashing the 2016 OIC on the basis that: 1) the NEB incorrectly defined the scope of the project under review to exclude project-related marine shipping; and 2) the government failed to properly conduct Indigenous consultations following receipt of the NEB report and recommendation. In particular, the Court held that: 1) the government failed to engage in meaningful two-way dialogue with Indigenous groups; 2) consultation officials had a deficient mandate that did not include the ability to provide responses to concerns expressed by Indigenous groups; and 3) the government incorrectly took the position that it was unable to depart from the findings and project conditions of the NEB.

On October 3, 2018, the government announced that it would not appeal the August 2018 decision, but would instead proceed to correct the errors identified by the Court and conduct a meaningful consultation process in line with the Court’s guidance. The government mandated an NEB reconsideration proceeding addressing impacts of project-related marine shipping and related Indigenous consultation issues, and directed a re-initiated Indigenous consultation process between 129 Indigenous groups, the Crown and the proponent.

Through the re-initiated consultation process, the Crown and the project proponent made various commitments to Indigenous groups in the aim of minimizing the impacts of the project on potentially affected Indigenous groups. Torys provided advice to the Crown’s consultation team and other government officials throughout this process on those and other related issues. The GIC approved the project on June 18, 2019, and in its OIC amended six binding project conditions in response to concerns raised by Indigenous groups.

Eight Indigenous groups, the City of Vancouver, and certain individuals and NGOs applied for judicial review of the June 2019 OIC. The Court granted leave to the six Indigenous groups that challenged the GIC’s 2016 approval of the project. Two groups subsequently withdrew their applications and signed mutual benefit agreements with the proponent. The remaining four applications, brought by Coldwater Indian Band, Squamish Nation, Ts'elxwéyeqw Tribe and Tsleil-Waututh Nation, were heard December 16-18, 2019.

Decision

The Court dismissed the applications for judicial review and found that the GIC’s decision to approve the project was not only reasonable, but would survive a higher correctness standard of scrutiny.3

The Court drew on existing legal principles underpinning the duty to consult, and where appropriate accommodate, and their application in practice. Consultation needs to be reasonable, not perfect, recognizing the complex, dynamic nature of these processes. Reasonable consultation at the deep end of the spectrum, which all parties agreed was required in this case, requires that the government show it considered and addressed the rights claimed by Indigenous peoples in a meaningful way. The Crown must consult in good faith, with an open mind, with two-way dialogue that leads to a demonstrably serious consideration of accommodation.4 The Court noted that the process of meaningful consultation can result in various forms of accommodation, but the failure to accommodate in any particular way, does not necessarily mean there has been no meaningful consultation. The process of accommodation is a balance of Indigenous concerns against “competing societal interests”  in an “ongoing give and take”, which may result in the imposition of conditions on a project or other changes to minimize impact.5

The Court also emphasized what the consultation process is not. In particular, the Court highlighted that there is no veto, and reconciliation does not dictate one substantive outcome or the preference for one set of interests over another. The Court stated that Indigenous peoples cannot tactically use the consultation process as a means to try to veto a project: “tactical behaviour aimed at ensuring that discussions fail within the time available…would, if tolerated, allow for the effective use of a veto right.”6 All parties must avoid “unnecessary delay, posturing and insisting on matters of form rather than substance.”7

The Court clarified its role when reviewing an administrative decision-maker’s decision regarding the adequacy of consultation, in light of the Supreme Court’s recent Vavilov decision and the reasonableness standard of review. The Court’s task is to review the reasons of the decision-maker, in this case the GIC, to ensure that they do not suffer from errors in reasoning or logical deficiencies. The Court’s role is not to reach its own independent view as to whether consultations were adequate in these circumstances.

In this case, the Court held that the explanations provided by the GIC show a chain of reasoning progressing from reasonable views of the evidence before it to plausible conclusions well within the bounds of governing legislation.8 The Court noted that the GIC: provided extensive reasons demonstrating that it understood the legal content of the duty to consult and the shortcomings of its prior decision; reviewed and summarized the extensive consultation work done and accommodations made; reviewed the work undertaken by the NEB and its conclusions and conditions; decided to implement amendments to certain NEB conditions; and explained its reasons why it believed the government had complied with the duty to consult. The Court held that the GIC’s justifications that the Crown meaningfully discharged its duty to consult are “fully supported by the evidence in the record.”9

Importantly, the Court went on to analyze the specific consultation defects alleged by the applicants at length, while noting their error in not addressing the decision of the GIC in light of the reasonableness standard of review. The Court concluded that the defects alleged by the four applicants were not borne out. The Court did note that the applicant’s submissions amount to an assertion that the project “cannot be approved until all of their concerns are resolved to their satisfaction”, which if accepted, would mean no end to consultation as a practical matter, giving the applicants “a de facto veto right.”10

In conclusion, it is important to emphasize that this decision is situated in the context of reconciliation between Indigenous peoples and Canada, and an ongoing relationship between potentially affected Indigenous groups, the project proponent and the government, including further consultation in the course of project development and regulation. It is hoped that the learning from this exercise may be put to use in the future, including by working to implement the many commitments made by the proponent and the government in the course of the consultation and accommodation process.

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1 2020 FCA 34 at para. 77.

2 Musqueam Indian Band subsequently withdrew its application for judicial review.

3 2020 FCA 34 at para. 85.

4 Ibid., paras. 38-41

5 Ibid., para. 20, 38-41, 58.

6 Ibid., paras. 52-53, 55.

7 Ibid., para. 20.

8 Ibid., para. 66.

9 Ibid., paras. 65-76.

10 Ibid., paras. 85-86.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2019 by Torys LLP.
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