Canada: It's A Two-Way Street: Court Finds "More Was Required Of Canada"


Early yesterday, the Federal Court of Appeal ("Court") released its decision in the highly-anticipated judicial review of Governor in Council's ("GIC") approval of the Trans Mountain Expansion Project ("Project"). As a quick recap, the GIC issued an Order in Council ("OIC") approving the Project and granting a Certificate of Public Convenience and Necessity ("Certificate") on November 29, 2016, following a recommendation made by the National Energy Board ("NEB") in a 500-page report ("NEB Report") issued on May 19, 2016. The NEB Report contained 157 conditions on various aspects of the Project, which would be attached to the Certificate. Shortly thereafter, various parties filed applications for judicial review of the NEB Report and the OIC, including Tsleil-Waututh Nation, Squamish Nation, Xàlek/Sekyú Siýam, Coldwater Indian Band, Aitchelitz, Skowkale, Shxwhá:y Village, Soowahlie, Squiala First Nation, Tzeachten, Yakweakwioose, Skwah, Upper Nicola Band, and Secwepemc Nation (collectively, the "Indigenous Applicants").

In its decision yesterday, the Court set aside the OIC and sent the application for a Certificate back to the GIC for reconsideration. The Court based its decision largely on two findings: (1) the NEB unjustifiably defined the scope of the Project under review to not include project-related tanker traffic which led to unacceptable deficiencies in the NEB Report, meaning that the GIC could not rely on it; and (2) while Canada acted in good faith and selected an appropriate framework for consultation with First Nations, Canada's execution of that framework resulted in an "unreasonable consultation process that fell well short of the required mark" (from paragraph 762 of the decision).

Consequently, the GIC must now recommence consultation with affected First Nations and reconsider "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" (from paragraph 770 of the decision).

What We Say

Given the myriad of legal issues addressed by the court, we anticipate this will be the first in a series of posts on this significant decision. This blog addresses the court's reasons when finding in favour of the Indigenous Applicants that Canada failed to fulfil its duty to consult and accommodate–a constitutional pre-requisite to the approval of the Project. In reaching its conclusions on consultation, the court did not create new law but rather applied well settled legal principles established by the Supreme Court of Canada to the facts before it (most of which were not contested). Stay tuned here for additional blog posts.

Duty to Consult

It was at critical Phase III of consultation that the Court found Canada failed in its duty to consult. The consultation framework was split into the following four phases:

  • Phase I: early engagement, from the submission of the Project description to the start of the NEB hearing
  • Phase II: NEB hearing, commencing with the start of the NEB hearing and continuing until the close of the hearing record
  • Phase III: consideration by the GIC, commencing with the close of the hearing record and continuing until the GIC rendered its decision in relation to the Project
  • Phase IV: regulatory authorization should the Project be approved, commencing with the decision of the GIC and continuing until the issuance of department regulatory approvals, if required

In Phase II, the Federal government largely relied on the NEB process to fulfil its duty to consult with affected First Nations. In doing so, Canada was well within its rights. However, the purpose of Phase III consultations was for Crown representatives to meet with affected First Nations and to consult and accommodate on any outstanding concerns about Project-related impacts that remained following Phase II. In Phase III, Canada's responsibility was to properly address those concerns, to the extent possible.

Ultimately, the Court found that Canada failed to fulfil its duty in Phase III due to:

  • Canada's unwillingness to depart from the NEB's findings and recommended conditions in the NEB Report
  • Canada's erroneous view that it lacked the ability to impose new conditions on the Project proponent
  • the lack of two-way, meaningful dialogue with the Indigenous Applicants

NEB Report + Conditions

As part of the Phase III consultations, Canada committed to participating in joint consultation meetings (via the Major Projects Management Office and the British Columbia Environmental Assessment Office), sharing information and preparing a "Joint Federal/Provincial Consultation and Accommodation Report for the Trans Mountain Expansion Project" ("Crown Consultation Report"). Throughout Phase III, the Indigenous Applicants consistently expressed dissatisfaction with the NEB process and the Crown's reliance on that process. In response, Canada stated that it was unwilling to revisit the NEB's conclusions and instead wholly relied on the NEB Report. In light of Canada's unwillingness to address the Indigenous Applicants' stated concerns with the NEB process, the Court noted:

As in Gitxaala, Phase III presented an opportunity, among other things, to discuss and address errors, omissions and the adequacy of the recommendations in the Board's report on issues that vitally concerned the Indigenous applicants. The consequence of Canada's erroneous position was to seriously limit Canada's ability to consult meaningfully on issues such as the Project's impact on each applicant and possible accommodation measures. (From paragraph 615 of the decision.)

Further, Canada stated that the GIC could not introduce new conditions or supplant those already contained in the NEB Report, contrary to the Court's express instruction in Gitxaala v. Canada ("Gitxaala") that the GIC necessarily has the power to impose conditions on any Certificate it directs the NEB to issue.

Two-way Dialogue

Phase III represented a crucial phase of consultation – it was "the first opportunity for the Indigenous Applicants to dialogue directly with Canada about matters of substance, not process" (from paragraph 566 of the decision). Unfortunately, Canada deployed note-takers to meet with the Indigenous Applicants and transmit their concerns to Crown decision-makers, which would later be incorporated in the Crown Consultation Report, to Crown decision-makers. Crown decision-makers were rarely present, if at all. Rather than being a mechanism through which meaningful consultation could take place, the Crown Consultation Report amounted to a 'what we heard' report wherein Canada diarized the Indigenous Applicants' concerns while failing to address them. On this, the Court stated (in paragraph 558):

Canada was required to do more than receive and understand the concerns of the Indigenous applicants. Canada was required to engage in a considered, meaningful two-way dialogue. Canada's ability to do so was constrained by the manner in which its representatives on the Crown consultation team implemented their mandate. For the most part, Canada's representatives limited their mandate to listening to and recording the concerns of the Indigenous applicants and then transmitting those concerns to the decision-makers.

Crucially, in identifying this as a fatal flaw, the Court acknowledged that it was applying existing Supreme Court of Canada jurisprudence on the necessity of a two-way exchange between Canada and Indigenous groups (in paragraph 563):

The jurisprudence of the Supreme Court on the duty to consult is clear. The Indigenous applicants were entitled to a dialogue that demonstrated that Canada not only heard but also gave serious consideration to the specific and real concerns the Indigenous applicants put to Canada, gave serious consideration to proposed accommodation measures, and explained how the concerns of the Indigenous applicants impacted Canada's decision to approve the Project.

Concluding Thoughts + Thank You

In conclusion, while the Court did acknowledge that significant improvements had been made to the consultation process since Gitxaala, it nevertheless expressly found that in Phase III, Canada failed "to engage, dialogue meaningfully and grapple with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns" and, accordingly, "[t]he duty to consult was not adequately discharged" (from paragraph 6).

We are grateful to have had the opportunity to work with our clients, Aitchelitz, Skowkale, Shxwhá:y Village, Soowahlie, Squiala First Nation, Tzeachten, Yakweakwioose, and Skwah on this judicial review and congratulate them on their victory.

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.

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