Canada: Federal Court Of Appeal Dismisses Challenge, Finds That The Court Should Not Engage Itself Prematurely In The Administrative Process

On September 6, 2016, the Federal Court of Appeal released its decision in Tsleil-Waututh Nation v Canada (National Energy Board), 2016 FCA 219. The Federal Court of Appeal dismissed a North Vancouver First Nation's challenge against three of the National Energy Board's interlocutory decisions respecting the Trans Mountain pipeline. The Federal Court of Appeal held that there was no basis for appealing the decisions and the court should not engage prematurely in the administrative process.

Background

The Tsleil-Waututh Nation ("TWN"), a First Nation community, live primarily on the North Shore of Eastern Burrard Inlet in North Vancouver, which is located near Kinder Morgan's export terminal at the end of the Trans Mountain pipeline project (the "Project"). The TWN appealed three interlocutory decisions of the National Energy Board (the "NEB") pursuant to section 22(1) of the National Energy Board Act, RSC 1985, c N-7 ("NEBA"). Section 22(1) of the NEBA provides than an appeal can be made to the Federal Court of Appeal from a decision or order of the NEB.

In order for an inter-provincial pipeline, such as the Project, to be approved, the NEBA requires that companies apply for a certificate of public convenience and necessity ("CPCN"). In order to obtain a CPCN, the NEB must provide a report to the Minister of Natural Resources for consideration by the Governor in Council. The NEB's report must include a recommendation as to whether a CPCN should be issued to enable a project to proceed. In addition, pursuant to section 52(3) of the NEBA and the Canadian Environmental Assessment Act, 2012, SC 2012, c 19, s 52 ("CEAA 2012") the NEB is required to conduct an environmental assessment related to the potential project.

In 2014, the NEB made three interlocutory decisions ("Decisions") that formed the basis of the appeal by the TWN. The Federal Court of Appeal described those interlocutory decisions as follows:

  1. A determination that the Project application is sufficiently complete to proceed to an assessment and a public hearing under the NEBA;
  2. A confirmation that the Project is a "designated project" that ought to be assessed under the CEAA 2012, and setting out the list of factors and scope of factors to be considered for the purpose of the environmental assessment; and
  3. An order detailing the steps and deadlines for the application assessment process, including the public hearing process.

The Attorney General of Canada and Trans Mountain raised, as preliminary issues (the "Preliminary Issues"), that the Court of Appeal should refuse to deal with these questions at this stage because the TWN failed to put them directly to the NEB and it would thus be inappropriate for the Court to address them for the first time on appeal.

Decision

The Federal Court of Appeal noted that the role of the courts when administrative decisions are challenged is to first deal with any preliminary issues and then assess the administrative decisions to see if the court should interfere. As such, the Court of Appeal first considered the Preliminary Issues and reviewed section 22 of the NEBA. As noted, section 22(1) of the NEBA provides that an appeal can be made to the Federal Court of Appeal from a decision or order of the Board. However, section 22(4) provides that reports submitted by the Board under section 52 and 53 of the NEBA or section 29 and 30 of the CEAA are not decisions or orders of the Board.

The Court of Appeal reviewed the principles of administrative law and noted that except in exceptional cases, courts should not intervene prematurely in the administrative hearing process or address issues that were not raised before the administrative tribunal. This is to ensure that questions are decided by expert tribunals or other expert administrative decision makers, and that when courts are called upon to intervene, they should have the benefit of that expertise as well as an appropriate record to do so. In this case, the Court of Appeal noted that much of the evidence in the record was not before the NEB when it made the Decisions.

The Court of Appeal further found that the Decisions were neither final nor had the TWN been provided an opportunity to be heard in respect of the issues addressed in the Decisions. However, the Court noted there was no indication the TWN could not have made submissions before the Decisions, and had been given an opportunity to do so. The Court of Appeal further found that the TWN must be required to be proactive and diligent in voicing its concerns to the NEB, given the deficiencies, if any, that could result from not participating fully in the NEB process.

The Court of Appeal also considered the issue of duty to consult. The Court of Appeal stated that it was not disputed that the TWN had the opportunity to use the NEB process and seek information from the federal agencies involved. The TWN also filed considerable evidence and had an opportunity to make written and oral submissions. The Court of Appeal stated that the TWN did not raise the issue of a duty to consult before seeking the involvement of the Court of Appeal. The Court noted that it was important not to bypass the administrative tribunal process when dealing with constitutional issues. As such, the Court of Appeal found no good reason to exercise its discretion in favour of the TWN. Further, even if there had been a breach of the duty to consult, it was not clear what remedy was appropriate as the TWN had the opportunity to fully express its views to the NEB in respect of its concerns and the consultation process was not yet completed.

Based on the foregoing, the Court of Appeal was not persuaded that it should become any further engaged at this time. However, the Court noted that the dismissal was without prejudice to the TWN's right to raise issues related to whether the Crown discharged its duty to consult in any ultimate decision of the Governor in Council.

Implications

The decision by the Federal Court of Appeal confirms that the NEB has the jurisdiction to decide all questions of fact or law. Courts should not engage prematurely in the administrative process set out by the applicable legislative framework and the administrative tribunal.

This case confirms that parties to an administrative process should not count on using the appeal process to raise issues that could have been raised before the administrative tribunal. This is inappropriate not only in respect of factual findings that should be left to the administrative decision-maker, but also in respect of questions of law that call for an interpretation of the decision-maker's home statute or a closely-related statute.

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