Canada: Putting The "Provincial" Back Into Federal-Provincial Cooperation: Assessing The Potential Implications Of "Coastal First Nations v. British Columbia (Environment)"

On January 13, 2016, the BC Supreme Court released its decision in Coastal First Nations v. British Columbia (Environment),1 which addressed the Province's role in the environmental assessment (EA) process for the proposed Northern Gateway project, an interprovincial pipeline that will traverse parts of northern British Columbia (Project). While affirming the cooperative approach to EAs undertaken between the BC Environmental Assessment Office (EAO) and the National Energy Board (NEB) in respect of the Project, the Court said that the Province cannot abdicate its responsibility to decide whether to issue an Environmental Assessment Certificate (Certificate) for the Project. As a result, the Court directed the Province to make a decision to issue a Certificate, with or without additional conditions, as well as to consult with the Gitga'at First Nation on potential impacts of the Project on areas of provincial jurisdiction.

While this decision is likely to be appealed, it raises a number of interesting questions regarding the extent to which provinces and the federal government may cooperate in EA processes, and the circumstances in which their regulatory authority may come into conflict. The decision could have potential implications for other projects subject to similar regulatory review processes, but such implications will depend on the terms of the federal-provincial cooperation and the nature of the applicable provincial legislation, particularly with regard to the decision-making discretion afforded to public officials.

Background

The Northern Gateway pipeline project involves the development of a twin pipeline system that will run 1,177 kilometres from northern Alberta to Kitimat, British Columbia for the purposes of exporting petroleum and importing condensate. The NEB and the Canadian Environmental Assessment Agency referred the Project to a joint review panel (JRP) in January 2010 and Northern Gateway filed its Project application with the JRP in May 2010. In June 2010, the EAO and the NEB entered into an agreement (Equivalency Agreement) which provided that the NEB's assessment of any projects requiring approval under both the BC Environmental Assessment Act (EAA) and the National Energy Board Act would constitute an equivalent assessment under the EAA, with the intention of avoiding a duplicative provincial assessment.2 The Equivalency Agreement (clause 3) also provided that any reviewable projects may proceed without a provincial Certificate. The Project is a reviewable project under the EAA.

The Province participated in the federally mandated JRP process as an intervenor and ultimately opposed approval of the Project, as it felt that its minimum standards for the Project had not been met, particularly with respect to its requirements for evidence of a world-class spill response capability. In December 2013, the JRP issued its report (JRP Report) recommending approval of the Project subject to 209 conditions. In June 2014, the federal Governor-in-Council determined that the significant adverse environmental effects of the Project were justified in the circumstances, and directed the NEB to issue Certificates of Public Convenience and Necessity for the Project, on the same conditions as set out the JRP Report.

The Coastal First Nations – Great Bear Initiative Society represents an alliance of coastal First Nations in northern BC. Together with Gitga'at First Nation (Petitioners), they applied for judicial review to set aside the Equivalency Agreement and obtain orders for the Province to make a Certificate decision, and to consult with the Gitga'at First Nation prior to making such decision. The Petitioners also sought an order that no provincial approvals for the Project be granted or given effect until a valid Certificate is issued.

Case Highlights

  • The Court held that while the EAA allows cooperation in EAs between provincial and federal jurisdictions, it does not authorize the Province to abdicate its decision-making authority. Accordingly, the Court found that the Equivalency Agreement is valid, except to the extent that it removes the need for reviewable projects to receive a Certificate.
  • The Court further held that the Province breached its duty to consult and the honour of the Crown by failing to consult with the Petitioners prior to June 2014, up to which time it had the opportunity to terminate the Equivalency Agreement and accommodate the Petitioners' outstanding concerns by imposing additional provincial conditions on the Project.
  • Northern Gateway submitted that the construction and operation of the Project is within the exclusive constitutional jurisdiction of federal Parliament and the application of the EAA to the Project is therefore ultra vires. The Court dismissed these arguments as premature, finding that while the Project is an interprovincial pipeline under federal jurisdiction, environmental regulation is shared provincial-federal jurisdiction and there is no conflict in the legislation on its face. The Court held that it could not consider whether there is any conflict until the Province has issued a Certificate along with any additional conditions.

The Court's Decision

1. The Province maintains independent decision-making authority, even in connection with valid equivalent EA processes.

The EAA is the main legal framework for the Province's EA process for proposed major projects. Section 17 of the EAA sets out the basis for decision-making on EA Certificate applications. Applying principles of statutory interpretation and legislative intent to the EAA, the Court found that there is sufficient discretion under the EAA (s. 27) for the Minister to enter into agreements with other jurisdictions to allow for equivalent EA processes. However, the Province cannot abdicate its responsibility to decide whether to issue a Certificate for reviewable projects and whether to impose conditions (under s. 17(3) of the EAA).

If the Province did not maintain the ability to make a s. 17(3) decision, the Court said there would be "no mechanism by which to ensure it meets its objectives and responsibilities with regard to any project" to which the Equivalency Agreement applies.3 As a result, the EAO must maintain at least some discretion in respect of every project that has the potential to affect British Columbia and to enforce and uphold its standards.4

For these reasons, the Court said the Equivalency Agreement and other agreements established pursuant to s. 27 of the EAA require a s. 17(3) determination, and reviewable projects must obtain a Certificate before any activity in relation to such projects can begin.5 Accordingly, the Court held that clause 3 of the Equivalency Agreement is invalid and ultra vires to the extent that it removes the Province's jurisdiction to make a decision pursuant to s. 17(3) of the EAA, or in other words, to decide whether to issue a Certificate.6 The Court declared that the Province must exercise its s. 17 decision-making authority under the EAA in relation to the Project. The Court also held that the Province has "complete and ultimate" discretion regarding whether to issue a Certificate with or without additional conditions.7

2. The Province must consult the Gitga'at First Nation

The Court acknowledged that First Nations were consulted by the federal Crown through the JRP process and the Province, as intervenor, made submissions to the JRP regarding means of mitigating impacts on, and accommodating, Aboriginal rights.8 The Province had also argued that despite delegating its decision-making authority and the duty to consult to the federal Crown through the Equivalency Agreement, it was still able to consult with and accommodate the Petitioners' rights, such as by implementing policies for a world-leading spill preparedness and response regime.

Despite the Province's efforts, the Court found that they were inadequate for achieving meaningful consultation, which must occur as policy choices are developed rather than after the fact. The Court concluded that the Province breached the honour of the Crown and its duty to consult by failing to consult with the Petitioners prior to June 2014 when it felt that their concerns had not been adequately addressed by the JRP's recommended conditions for approval of the Project. The Court considered the time period between December 2013 (when the JRP Report and conditions were issued) and June 2014 (when the federal government approved the Project). Up until that time, the Province would have had the opportunity to terminate the Equivalency Agreement to accommodate the Petitioners' concerns by exercising its decision-making authority and attaching additional mitigating conditions to a Certificate.9

By way of remedy, the Court ordered the Province to consult with the Gitga'at about the potential impacts of the Project on areas of provincial jurisdiction and how such impacts may affect the Gitga'at's Aboriginal rights and should be addressed.

We note that the Court dismissed the Petitioners' argument that the Province also had a duty to consult before entering into the Equivalency Agreement. Due to the general nature of the Equivalency Agreement, there was a lack of a sufficient causal connection between the Equivalency Agreement and the potential for adverse effects, so it would also be unrealistic to engage in consultation on the subject. The Court held that the Province is entitled to enter such kinds of agreements without the requirement for consultation.10

3. Court rejects Northern Gateway's constitutional arguments as premature

At the outset of the decision, the Court addressed Northern Gateway's position that since the Project is an interprovincial pipeline, it is a federal undertaking within the exclusive jurisdiction of the federal government. Northern Gateway submitted that the application of the EAA to the Project is therefore unconstitutional, and that any conditions or requirements that the EAO might attach to the Project would be ultra vires and of no force and effect.

The Court acknowledged the interprovincial nature of the pipeline, but found that BC's interests will be substantially affected by its construction. The Court further stated that although the pipeline is interprovincial, it will disproportionately impact the interests of British Columbians. Therefore, disallowing any provincial environmental regulation would limit the Province's ability to protect social, cultural and economic interests in BC, thus bucking the trend towards co-operative federalism.

The Court held that the Province has a constitutional right to regulate territorial environmental impacts through the EAA. The Court stated that "since it is established law that regulation of the environment is shared jurisdiction among all levels of government, it flows logically that the EAA, whose purpose is to regulate environmental concerns in British Columbia while advancing economic investment in the Province, is valid legislation, even where it applies to an interprovincial undertaking."11

On the issues of inter-jurisdictional immunity and paramountcy, the Court acknowledged that "the Province cannot go so far as to refuse to issue a Certificate and attempt to block the Project from proceeding."12 The Court agreed that these were valid concerns, but it would be premature to make a constitutional finding regarding a potential conflict with or impairment of federal powers prior to the Province making a s. 17 decision and imposing and additional conditions on a Certificate. In theory, a decision by the Province to refuse to issue a Certificate or to impose unreasonable conditions could effectively prohibit the development of the Project and would be unconstitutional.

Discussion

Potential impacts on other reviewable projects under the Equivalency Agreement

The Province maintains a list of all reviewable projects that are currently subject to the Equivalency Agreement. If the decision is ultimately upheld on appeal, this would cause the EAO and NEB to revise the terms of the Equivalency Agreement to meet the standard required for the Province to maintain its decision-making authority and issue a Certificate in respect of other reviewable projects. The Province could also consider whether to make any statutory amendments to the EAA to allow for greater ministerial discretion in respect of the issuance of a Certificate, on a case by case basis.

In all other respects, the EA equivalency processes established under the Equivalency Agreement are deemed valid and would not require amendment, except to the extent that the Province may need to carry out some aspects of consultation, depending on the circumstances.

Potential impacts on other equivalency and substitution processes in Canada and other interprovincial projects

There are a number of equivalency and substitution agreements in place between federal and provincial regulatory agencies dealing with environmental assessment reviews, among other environmental matters. While this decision could have potential impacts for other projects across Canada that are subject to regulatory review processes similar to the one established for the Project, the extent of such impacts will depend on the nature of federal/provincial cooperation, as well as the scope of ministerial discretion contained in the relevant provincial environmental legislation, in particular the ability of provincial decision-makers to determine the need for their own certification or approval of a project. As a result, project proponents will need to carefully consider the terms of the federal/provincial agreement in question and the specific legislative provisions which provides the basis for cooperation. Further, both proponents and regulators will need to be mindful of the scope and type of impacts of the project on provincial interests within the context of the province's ability to enforce and uphold provincial standards.

The Court acknowledged that the Project, while interprovincial, is not a national project and has disproportionate effects on British Columbia. However, this decision also raises the issue of whether other interprovincial projects that cross multiple provincial jurisdictions would require separate decision-making processes by each province, resulting in a potentially burdensome regulatory process and unduly fettering federal jurisdiction. If this decision is upheld on appeal, joint review processes for other interprovincial projects might require consideration, on a case by case basis, of any equivalency processes between each province and the federal government, as well as each province's environmental legislation, to determine the scope of ministerial discretion to maintain or delegate provincial decision-making authority. However, the decision suggests that if a province refuses to issue a provincial environmental assessment certificate or imposes conditions that would impair a project or render it inoperable, this could constitute an unconstitutional interference with federal jurisdiction.

Lack of provincial representation on the JRP

Joint environmental review processes often involve decision-making representatives from both the provincial and federal Crown. In the case of the Project, however, the Province was not represented on the JRP, but only participated in a more passive role as an intervenor. The JRP was comprised of two representatives from the NEB, and a non-government geologist.

While the Court did not expressly find fault with this approach, the lack of provincial representation on the JRP may have been another indicator of a lack of involvement or responsibility by the Province in the decision-making process. This also raises a question of whether, had the Province been represented on the JRP, the Court would have still ruled that the Province was required to issue its own Certificate, or whether the JRP's report and recommendations would have been sufficient to discharge the Province's authority. However, we note that since the JRP is not the final decision-making authority and only makes a recommendation to the Governor in Council, this suggests that a separate provincial decision would still have been deemed necessary by the Court.

Scope of consultation remedy

In our view, there appears to be a disconnect between the Court's analysis in the decision and the broad remedy that it ultimately provides for the Province's breach of the duty to consult.

In the decision, the Court concludes that the Province should have consulted with the Petitioners once it became aware in December 2013 that their concerns were not adequately addressed in the JRP recommendations, in order to decide whether to terminate the Equivalency Agreement prior to June 2014 and issue a Certificate with its own conditions. However, the scope of the Court's remedy seems broader; it directs the Province to consult ""with the Gitga'at about the potential impacts of the Project on areas of provincial jurisdiction and about how those impacts may affect the Gitga'at's Aboriginal rights, and how those impacts are to be addressed in a manner consistent with the honour of the Crown and reconciliation."

In our view, the Court did not conclude that the Province must conduct an entirely new and separate consultation process on all areas of provincial jurisdiction with respect to the Project, although the remedy could be interpreted as such. In our view, the scope of the consultation remedy (if any) should have been limited to discussing those aspects of the Gitga'at's concerns that would put the Province in a position to determine what further mitigating conditions should attach to the Certificate. It will be interesting to see whether the scope of the Court's remedy in this regard might be appealed or will require clarification.

In our further view, however, if the Province's jurisdiction over environmental matters gave rise to a duty to consult independent of the federal Crown, there were a number of other ways that the Province might have satisfied itself that it had fulfilled its legal duty, without having to carry out procedural aspects of consultation on its own accord. It could have taken steps to ensure that the JRP engaged in further consultation with the Gitga'at prior to June 2014 and issued further recommendations, or that the federal Crown implemented additional conditions on approval. Failing that, the Province may ultimately have needed to terminate the Equivalency Agreement and impose its own conditions to a Certificate. However, in our view it does not necessarily follow that the Province had to engage in consultation in order to satisfy itself that the duty to consult had been discharged. Further, the Province appears to have been already well aware of the outstanding concerns of the Petitioners.

Footnotes

[1] 2016 BCSC 34.

[2] The 2010 Equivalency Agreement superseded a 2008 equivalency agreement.

[3] Para. 168.

[4] Paras. 170, 171.

[5] Paras 180, 182.

[6] However, the Court rejected the Petitioners' argument that the entirety of the Equivalency Agreement was invalid, finding that the Minister properly delegated s. 27 powers to the Executive Director of the EAO to enter into the Equivalency Agreement.

[7] Para 181.

[8] Para. 185.

[9] Paras. 205, 206.

[10] Para. 204.

[11] Para. 56.

[12] Para. 55.

To view original article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
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
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions