Canada: Equivalency Agreements, Environmental Assessment And Aboriginal Consultation – Implications Of Coastal First Nations V. British Columbia (Environment)

Last week the BC Supreme Court released its decision in Coastal First Nations v. British Columbia (Environment)1, holding the Province could not rely on a federal / provincial environmental assessment "equivalency agreement" that applied to (among other things) the Northern Gateway Project. Unless the decision is changed through appeal or addressed by legislative / regulatory amendments, it could have significant consequences not only for the Northern Gateway Project, but also for other projects for which governments have sought to streamline environmental assessment through a single decision-making process.

BACKGROUND

In 2008 and 2010, in an effort to streamline environmental assessment processes for projects that fell under both federal and provincial jurisdiction, the British Columbia Environmental Assessment Office and the National Energy Board ("NEB") signed equivalency agreements pursuant to sections 27 and 28 of the BC Environmental Assessment Act.2 Under these agreements, the Environmental Assessment Office accepted that any NEB assessment of a project that required approval under the Environmental Assessment Act and the National Energy Board Act3 constituted an "equivalent" assessment under the Environmental Assessment Act, and that these projects would not then require a separate assessment under the Environmental Assessment Act.4

The Northern Gateway Pipeline project is one such project. It is a federally regulated proposed oil pipeline stretching from Bruderheim, Alberta to Kitimat, British Columbia (the "Project"). The Project underwent a multi-year environmental assessment conducted by a joint review panel (jointly between the NEB and the Canadian Environmental Assessment Agency) after which the panel issued a report recommending the Project's approval. Following the recommendation, the federal government approved the Project in July of 2014.

In January of 2015, the Coastal First Nations filed a petition in the BC Supreme Court challenging the validity of the equivalency agreement to the extent that it removed the need for a provincial environmental assessment certificate issued under the Environmental Assessment Act. The petitioners also claimed that the Province had failed to adequately consult them prior to entering into the agreement (or in any decision not to terminate it) and were thus in breach of their constitutional duty to consult. The Province opposed these positions. The proponent, Northern Gateway Pipeline, opposed them as well, and also argued that the imposition of provincial conditions through an environmental assessment certificate would be unconstitutional as the Project was a federal undertaking.

KEY ISSUES AND DISCUSSION

Is the application of the BC Environmental Assessment Act to an interprovincial pipeline unconstitutional?

The Court held that while there was clearly federal jurisdiction over the matter, it was not exclusive and the application of the Environmental Assessment Act to the Project was not an unconstitutional exercise of Provincial power. The Court made these statements in the context of discussing conditions the Province could impose, but also noted that the Province would not have the power to render the Project inoperable through the refusal of an environmental assessment certificate or unduly onerous conditions. The Court held that the determination of what would be unacceptable conditions must be decided on a case by case basis with actual conditions under consideration.

There has been no prior case law specifically on the constitutional right of a province to conduct an environmental assessment in respect of federally regulated undertakings, but this line of reasoning is consistent with relevant constitutional principles and judicial trends.

Is the agreement permitted by s.27(3) of the BC Environmental Assessment Act?

The Court held that the authority to enter into an equivalency agreement pursuant to section 27 of the Environmental Assessment Act with respect to an "assessment" is not broad enough to displace the Province's need to make a decision regarding the Project (though it can rely in other respects on a federal assessment process and reports). Accordingly, the agreement was held to be invalid to the extent that it purported to remove the requirement for a certificate decision on the Project by the Province.

It is noteworthy that the Court indicates (at paragraph 93) that the Executive Director's interpretation of section 27 was neither correct "nor reasonable". That is to say that, the Court was not prepared to give the Executive Director any deference in interpreting his own highly specialized statute. Yet it took the Court 25 pages of detailed analysis to come to this conclusion.

Further, despite the lengthy reasons, the Court does not address certain key points.

For example, it does not address the significance of the word "required" in section 27(3)(d) which allows such agreements to:

provide for a means to accept another party's or jurisdiction's assessment as being equivalent to an assessment required under this Act, [emphasis added]

If the Legislature did not intend for these agreements to displace the need for a provincial assessment entirely (in cases where the province so chooses) then why would the Environmental Assessment Act allow agreements that "accept" other assessments "as being equivalent to an assessment required under this Act"? If, as the Court says, the term assessment is to be read in its narrow sense (i.e. the preparation of the report but not the ultimate decision of ministers) then there would be no meaning given to the word "required". Because nowhere does the Environmental Assessment Act "require" anyone to complete an assessment per se – it is only a certificate that is "required" to build a reviewable project. As such, the Court's view that the section 27(3) agreement cannot affect the certificate decision under section 17 is difficult to understand.

Similarly, the Court gives little discussion to section 28 – which contains some very powerful language:

28 Effective on the date of an agreement under section 27, and for as long as the agreement remains in effect, both this Act and the regulations are by this section deemed to be varied, in their application to or in respect of a reviewable project that is the subject of the agreement, to the extent necessary to accommodate that agreement. [emphasis added]

This seems to make clear that section 27 agreements can have the effect of displacing the application of the Environmental Assessment Act to a reviewable project, in whole or in part, and such agreement need not be limited to using other government's environmental assessment processes to prepare a report for decision-makers.

Finally, the Court does not address the question of how the term "equivalency" is understood and commonly applied as between the federal and provincial governments in the context of environmental assessments. As is reflected in the Canadian Environmental Assessment Act, 2012 ("CEAA 2012")5 and various reports and legislative studies and debates preceding it, "equivalency" refers to a situation where the parties agree one level of government need not undertake an assessment and make a decision. By contrast, in cases where one government relies on the other's assessment report but then still makes its own decision, that is typically referred to as "substitution". The Court seems to have misunderstood this point, when it states:

[174] It is noteworthy that the federal government, when taking recommendations to streamline the assessment process and create provisions in the CEA Act to allow for recognition of equivalent assessments, maintained their ultimate decision-making authority. Section 36 of the CEA Act requires the responsible authority to consider the relevant report from the substituted assessment when making decisions in accordance with s. 52(1).

In fact, section 36 of the CEAA 2012 speaks to the situation of substitution (where final decision making remains). Section 37 (not mentioned by the Court) deals with equivalency and in that case it is clear no federal decision is required at all.

But, as in any case involving statutory interpretation, there will of course always be different arguments and perspectives and ultimately it is up to the courts to reach conclusive determinations on such matters.

Did the Province breach its duty to consult with the Coastal First Nations?

The Court concluded that the Province was entitled to enter the 2008 and 2010 agreements without any aboriginal consultation.

However, despite this, the Court did ultimately find that a breach of the duty to consult existed in this case. It did so on the basis that the Province was aware the petitioners had concerns with the Project (concerns which echoed those stated by the Province itself in the Northern Gateway joint review panel process, but not resolved there) and did not engage with the petitioners on those issues. More specifically, the Court noted that the Province (having such concerns and knowing the First Nation concerns) could have terminated the equivalency agreement but chose not to.

Normally, the duty to consult attaches to government decisions or actions that can adversely affect the exercise of aboriginal right. To extend the duty to consult to "failing to terminate" an agreement that the Court expressly says would not itself give rise to a duty to consult is extraordinary indeed.

When read as a whole, it seems clear that the root of the Court's concern is that the Province was, on the one hand, avoiding a decision-making and condition-imposing role under the Environmental Assessment Act by accepting the federal process as equivalent through the agreement, while at the same time, publicly expressing concerns about the Project and taking positions on conditions that differed from those the federal government had imposed. But whatever one's views on the Province's positions on this specific project, it is important to bear in mind that the consequences of this decision are not limited to it.

WHAT NOW?

What does the decision mean for the Project?

This chapter is not yet written. If the decision is not appealed or addressed through regulatory / legislative change it would appear that a provincial environmental assessment decision will still be required, given the Court's very clear declarations regarding the need for a section 17 decision and an equally clear declaration that no other provincial approvals under any enactment can be issued until that occurs. This raises complex and unprecedented questions about how provincial ministers would make a decision under section 17 of the Environmental Assessment Act at this time (as discussed further below).

What will provincial ministers need to do to adequately consult when relying on a federal environmental assessment process?

In the provincial environmental assessment process, aboriginal consultation does not occur simply in relation to the "report" or the "findings". Rather, aboriginal groups are consulted every step of the way. They are consulted on the initial decision under section 10 as to whether to require an assessment for a project that meets the regulatory thresholds. They are consulted in the development of the section 11 order which sets out the terms of reference for the environmental assessment process. They are consulted in the identification of "valued components" that are deemed worthy of study. They are consulted on the establishment of the "application information requirements" document which specifies the information that must be obtained and studies and analysis that must be presented by the proponent. They are integral members of the working group, which is the table at which issues and concerns are addressed and real time project design modifications can occur. The decision, however, provides no guidance as to whether there would be any need for provincial ministers to afford consultation on any of these earlier steps.

When are provincial conditions too much?

While the Court is clear that the Province is not devoid of constitutional authority in relation to environmental assessment of federally regulated projects, it is equally clear that authority is limited and cannot be used to go so far as to render federal projects inoperable. Determining at what point potentially onerous conditions would render a project "inoperable" will be extremely difficult. This is particularly true in the context of complex infrastructure projects that can have hundreds of conditions, and for which the viability of the project can depend on many things including the cost and complications of conditions. Administering the environmental assessment process and making related decisions are already tough. Adding this further degree of uncertainty will make it significantly harder.

What does the decision mean for other federally regulated projects?

At paragraph 30, the Court mistakenly says this is "the first project to which the agreements apply". In fact, the are other NEB regulated projects in BC to which these agreements have been applied.6 Further, as noted earlier, a similar agreement was used in respect of the Prince Rupert Fairview Terminal Phase II Facility Expansion Project.

What does this decision mean for federal decisions to accept provincial assessments as equivalent or on a substituted basis?

As noted earlier, important changes were introduced in CEAA 2012 to allow the federal government to accept provincial environmental assessments on an "equivalent" or "substituted" basis. The former would remove entirely the need for any federal decision-making, the latter would expressly allow reliance on the provincial process and report but reserving federal decisions at the end. While not the focus of this case, the decision raises questions in this context as well, particularly about the timing and nature of any federal duty to consult aboriginal groups that may be required when the federal government accepts a provincial assessment as equivalent or substituted. A review of the federal agreements respecting substitution used to date does not however provide much information as to whether and how this question is entertained. Instead, they appear to simply focus on the utilization of a "Whole of Government approach to consultations".7

Will this be the end of equivalency agreements?

For many years, governments have talked about minimizing duplication and overlap between provincial and federal environmental assessment processes – usually with very little action. In recent years, however, significant advances have been made through provincial exercise of existing powers, and through the incorporation of new substitution and equivalency provisions in federal legislation. This did not happen without a great deal of thought and effort. It is always challenging to explore new and creative solutions to longstanding problems.

If the effect of this decision is to set back that laudable goal it will be unfortunate, given that environmental assessments often cost tens of millions of dollars and take years to complete. This is especially true when (as is the case in BC) both of the overlapping federal and provincial environmental assessment processes are preliminary review processes that precede - but do not in any way replace - other environmental permitting and related aboriginal consultation.

It will be interesting to see whether this decision is appealed, and where these matters ultimately land.

Footnotes

1. 2016 BCSC 34.

2. S.B.C. 2002, c. 43; It should be acknowledged that one of the authors (Robin Junger) was the Executive Director under the BC Environmental Assessment Act when the 2008 equivalency agreement was signed with the National Energy Board.

3. R.S.C., 1985 c. N-7.

4. Although not mentioned by the Court, a similar equivalency agreement was entered into between federal and provincial governments respecting the Prince Rupert Fairview Terminal Phase II Facility Expansion Project. The project did not fall under the purview of the NEB and therefore required a separate agreement pursuant to section 27 of the Environmental Assessment Act. See http://www.eao.gov.bc.ca/pdf/MOA_Prince_Rupert.pdf.

5. 2012, SC 2012, c 19, s 52.

6. See http://www.eao.gov.bc.ca/EAO_NEB.html.

7. See, for example, Project Agreement for the Woodfibre LNG Project In British Columbia http://mpmo.gc.ca/projects/242.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Robin M. Junger
Natalie Cuthill
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.