Canada: Trans Mountain Decision: Application Of Existing Principles Or Evolving Standard?

In 2004, the Supreme Court of Canada recognized that there is a duty to consult Indigenous groups whenever the Crown is contemplating conduct that could adversely impact asserted or established Aboriginal or treaty rights. Since this time, there have been hundreds of court cases in which Indigenous groups have gone to court to challenge the adequacy of consultation and/or accommodation for certain Crown decisions, particularly in the context of resource development. This has been a challenging area for proponents, with many feeling that the standard to be met is a continually moving goal post.

In 2018, the most widely discussed duty to consult case was the Federal Court of Appeal's (FCA) decision to quash the Trans Mountain Expansion Project (TMX Project) based, in part, on inadequate consultation with Indigenous groups. While some feel that the Court simply applied existing duty to consult jurisprudence, a closer examination arguably reveals that the FCA applied a stricter standard on certain issues, including accommodation, the standard of review, and the adequacy of written reasons. While it remains to be seen whether other courts will take a similar approach to these issues in the future, the decision highlights the challenges that proponents can face with an evolving standard and some measures that should be taken to minimize risk going forward.

Background on the TMX Project and the FCA Decision

The TMX Project is a proposed twinning of an existing pipeline from Edmonton, Alberta to Burnaby, B.C. designed to bring more of Alberta's oil to tidewater for export to Asian markets. The project involves the construction of 987 kilometres of new pipeline segments and associated facilities, with approximately 89% of the pipeline route running parallel to existing disturbances. The operation of the proposed expanded pipeline system would increase overall capacity from 300,000 barrels a day to 890,000 barrels a day. It is also projected to increase the number of tankers at the Westridge Marine Terminal in Burnaby from approximately five per month to 34 per month. The tanker traffic would be within an established shipping route with significant vessel traffic.1  

The federal Cabinet approved the TMX Project on November 29, 2016 based on the recommendation of the National Energy Board (NEB). Following a detailed review and environmental assessment, the NEB concluded that the TMX Project was in the public interest and unlikely to cause significant adverse environment effects if certain conditions and mitigation measures were implemented. The NEB's conclusions were based on an environmental assessment under the Canadian Environmental Assessment Act, 2012, which did not assess the impacts of project-related marine traffic. However, the NEB did separately assess this issue under the NEB Act and determined that the operation of project-related vessels would likely result in significant adverse effects on the Southern Resident Killer Whale and traditional Indigenous uses associated with the whale, which is an endangered species. These findings were before Cabinet when it approved the project with 157 conditions.2 The then proponent also underwent a separate voluntary federal review process for marine transportation, which proposed additional measures to provide for a high level of safety for tanker operations and the proponent agreed to adopt each of the recommended measures.3

The former proponent undertook significant consultation with Indigenous groups and numerous Indigenous groups participated in the NEB process. Federal officials also consulted with Indigenous groups both before and after the release of the NEB report and Indigenous groups were provided the opportunity to provide short written submissions to Cabinet.4

After the federal government announced its decision, judicial reviews were commenced by two municipalities, two environmental groups, and five Indigenous groups/collectives. The Indigenous groups/collectives were all in British Columbia and were concerned with a variety of issues including marine safety, impacts to an aquifer, impacts on culturally significant sites and traditional harvesting activities, impacts on asserted Aboriginal title, pipeline safety, and emergency preparedness.

The Federal Court of Appeal ultimately quashed the federal government's approval on August 30, 2018 after finding that the consultation undertaken by federal officials was inadequate and that the NEB did not adequately assess the impact of increased tanker traffic on marine life. With respect to the duty to consult, the Federal Court of Appeal found several deficiencies, including a lack of meaningful two-way dialogue between Indigenous groups and federal officials, insufficient accommodation and a lack of willingness on the part of the federal government to depart from the NEB's findings and conditions, and that the federal government disclosed it rights impact assessments too late in the process.5 In addition, the FCA also found that the NEB's report did not give adequate information to the federal government on marine shipping due to a lack of sufficient consideration of mitigation measures relating to the impacts on the Southern Resident Killer Whale.6

In quashing the decision, the FCA directed the federal government to refer the matter back to the NEB for reconsideration on issues relating to marine shipping and for the federal government to redo its consultation after the NEB issues a revised report.7 The NEB is currently undertaking this further assessment and is expected to release its report by February 22, 2019. The federal government is also currently conducting additional consultations with Indigenous groups, which will continue following the release of the NEB report, and it is expected that the federal government will make a decision on the project prior to the fall 2019 election.

Court Reaffirms and Applies Certain Existing Duty to Consult Principles

Before discussing areas where the Court arguably diverged from existing jurisprudence, it is important to underscore that the Court did reaffirm and apply certain existing and important duty to consult principles.

First, the Court underscored the importance of meaningfulness of consultation. As the Court correctly noted, the duty is not intended to allow Indigenous groups to "blow off steam" and is "not fulfilled by simply providing a process for exchanging and discussing information" but rather "entails testing and being prepared to amend policy proposals in light of information received, and providing feedback."8 In other words, it is not intended to be a box-ticking exercise in which concerns are documented but no serious consideration is given to addressing them. The FCA's focus on the quality rather than quantity of consultation is consistent with a general trend in the case law that shows an increasing scrutiny of consultation and accommodation, but arguably goes beyond existing jurisprudence in the degree to which meaningfulness is assessed as discussed below.

Second, the FCA reiterated that consultation must focus on impacts to rights and not environmental effects per se and that impacts to constitutionally protected rights are not to be considered as "an afterthought to the assessment environmental concerns."9 This is consistent with the Supreme Court of Canada's recent decision in Clyde River and underscores the need to prepare separate and individual assessments for each potentially impacted Indigenous group detailing what asserted and established Aboriginal and treaty rights may be adversely impacted by the project and how they may be impacted or not. These assessments should be shared with the Indigenous groups as early as possible for comment.10

Third, the FCA correctly held that there is no duty to agree and that the duty to consult requires a commitment to a meaningful process and not a guaranteed result or veto.11   

Notwithstanding the application of these already established principles, there are a few areas where the FCA arguably diverged from existing jurisprudence as discussed below.

Accommodation

The FCA arguably applied a new standard for accommodation by failing to give any weight to specific measures that were introduced by the federal government to address Indigenous concerns. These measures included an Indigenous Advisory and Monitoring Committee for Indigenous groups to participate in the monitoring of construction, operation, and decommissioning of the project and a $1.5 billion Oceans Protection Plan to create a world-leading marine safety system that would, among other things, build local emergency response capacity of Indigenous communities and invest in oil spill clean-up research. It also included a commitment by the federal government to develop and implement a recovery plan for the Southern Resident Killer Whale before any shipping from the project begins which will be "designed to more than mitigate the effects of the project" and address the three main stressors impeding the recovery of the Southern Resident Killer Whale population.12

The Court did not give any weight to these measures because they had not yet been implemented and it was unclear to the panel whether they would meaningfully address the concerns of Indigenous groups:

"While Canada moved to implement the Indigenous Advisory and Monitoring Committee and Oceans Protection Plan, these laudable initiatives were ill-defined due to the fact that each was in its early planning stage. As such, these initiatives could not accommodate or mitigate any concerns at the time the Project was approved, and this record does not allow consideration of whether, as those initiatives evolved, they became something that could meaningfully address real concerns."13

A similar statement was made about the proposed action plan for the Southern Resident Killer Whale.14 These were important measures that Canada introduced in response to concerns of Indigenous groups about pipeline and marine safety. By not considering them, the Court failed to take into account key measures that arguably demonstrate that consultation on these issues was meaningful. The Court's approach to this issue is also problematic as it disregards the fact that most accommodation measures for project approvals will not be fully developed and implemented before a Crown decision has been made and that the duty to accommodate does not guarantee a specific outcome when it arises. It also disregarded the time available to further develop these initiatives before operations began and the principle of adaptive management, which "counters the potentially paralysing effects of the precautionary principle on otherwise socially and economically useful projects" and responds to the fact that there are frequently information gaps when a decision is made.15

Projects routinely contain conditions that will be implemented during construction, operation, and decommissioning phases, including Indigenous monitoring plans, and courts have frequently relied upon forward-looking project conditions in determining the adequacy of consultation.16 In Taku River, for example, the Supreme Court of Canada held that "project approval certification is simply one stage in the process by which a development moves forward" and, in determining that the duty to consult had been discharged, it relied on several forward-looking mitigation measures that were conditions of approval for the re-opening of an old mine, such as the development of more detailed base line information.17 The Supreme Court of Canada similarly relied on forward-looking requirements for further consultation and reporting in upholding the adequacy of consultation in Chippewas of the Thames.18

In its review of the B.C. Ministers' approval of the TMX Project, the B.C. Supreme Court notably recently relied on similar forward-looking accommodation measures, such as a requirement for additional oil spill preparedness research, in determining that the duty to consult had been discharged with respect to the provincial Crown decision:

"In this proceeding, the NEB process is the starting point, not the endpoint. Building on that process, British Columbia consulted with the Squamish in relation to the AC process as described above. That process did not answer all questions, but it did result in the imposition of additional conditions intended to accommodate Squamish's concerns, and providing for ongoing consultation. The duty to consult, of course is not thereby extinguished, but continues. (citations omitted)"

....The question is whether, viewing the process as a whole, British Columbia adequately considered Squamish's concerns arising from the process in coming to its decision. I find that it did. Squamish was afforded ample opportunity to communicate those concerns, and to comment on the EAO's responses. The conditions recommended by the EAO after consultation, adopted by the Ministers, included a number addressing the marine environment, oil spill preparedness, access through traditional territory, land uses for cultural and spiritual purposes and requirements for ongoing consultation reports from Trans Mountain.19

The Squamish First Nation notably also challenged the federal Crown decision and raised similar concerns with federal Crown consultation, particularly that it was premature to approve the project because there was not sufficient information known about the behaviour of diluted bitumen if spilled. The FCA came to a different conclusion than the B.C. Supreme Court holding, among other things, that the Government of Canada's Area Response Planning Initiative and ongoing research into the behaviour and potential impacts of a diluted bitumen spill in a marine environment "does not respond meaningfully to Squamish's concern that more needed to be known before the Project was approved." The Federal Court of Appeal notes that there is nothing to show that Squamish's concern about diluted bitumen was given real consideration or weight, which is a questionable conclusion given the B.C. government's condition for additional research regarding the behaviour and clean-up of heavy oils spilled in freshwater and marine aquatic environments and the federal government's Oceans Protection Plan, which included investing in oil spill cleanup research and methods to ensure that decisions taken in emergencies are evidence based.20

Reasonableness of the Decision

The FCA correctly determined based on existing jurisprudence that the adequacy of consultation must be reviewed on a reasonableness standard. This is not a standard of perfection and instead looks at whether "reasonable efforts were made to inform and consult."21 Reasonableness is a deferential standard of review and the Crown must look at "totality of measures the Crown brings to bear on its duty of consultation," including consultation afforded in the regulatory process, by the proponent, and by government officials.22

While purporting to apply a standard of reasonableness, the FCA arguably verged more towards a standard of correctness in assessing the adequacy of consultation. Rather than taking a step back to assess the reasonableness and meaningfulness of the entire process, the FCA engaged in a detailed examination of the back and forth communications to assess whether the verbal dialogue between Indigenous groups and federal officials was meaningful. This is arguably a departure from the less granular analysis and more deferential approach than is typically applied in a reasonableness review, which looks at both the "existence of justification, transparency, and intelligibility within the decision-making process" and "whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law."23 The FCA's reasons also effectively suggest that in at least some cases there needs to be a two-way dialogue between Indigenous groups and very senior government officials, without considering the practical implications of such a requirement for linear projects or whether the verbal dialogue would have be any more interactive if senior officials were engaging Indigenous groups.

This aspect of the decision also highlights the challenges of project review processes where a Minister or Cabinet is the final decision-maker but relies on the recommendation of an expert tribunal. While the FCA is correct that the Crown needs to be open to revisiting the findings and recommendations of the NEB, the Crown is also entitled to deference in its decision to rely on an expert tribunal particularly on issues like pipeline routing and should not be expected on a reasonableness standard to engage in a detailed reconsideration of each and every matter. This defeats the purpose of having an expert review process.

Written Reasons

While there continues to be some uncertainty around the scope of written reasons that may be necessary in the context of the duty to consult, the FCA also arguably went beyond existing jurisprudence by effectively requiring a written response from the federal government to every issue raised by the Indigenous groups.

In Newfoundland Nurses, the Supreme Court of Canada was clear that written reasons for administrative decisions do not need to address every argument raised and that a decision-maker is not required to address every issue raised or every finding relevant to its final conclusion.24 Moreover, a reviewing court must first seek to supplement the reasons of the decision-maker before substituting its own decision and a reasonableness review requires "a respectful attention to the reasons offered or which could be offered in support of a decision"25

In this case, there was no effort by the FCA to supplement the reasons of the Crown or look for reasons that could have been offered in support of the decision based on extensive record. For example, was it necessary for the Crown to provide additional reasons in response to the Squamish's concern about the behaviour of diluted bitumen when both the federal and provincial Crown's had undertaken to conduct additional research on this issue and the NEB had concluded that the likelihood of a large spill was unlikely?

It may be argued in the future that a different standard should be applicable for reasons relating to constitutionally protected Aboriginal and treaty rights and the Honour of the Crown. While this issue has not been definitively decided by the Supreme Court of Canada, it is important to note that this standard has been held by lower courts to be applicable to decisions engaging the duty to consult26 and by the Supreme Court for decisions that engage Charter rights.27 This issue will likely be further litigated but it is prudent in the meantime to ensure that there are responses to every issue raised including explanations for why specific accommodation measures or requests are not implemented. 

Overall, it remains to be seen whether these novel aspects of the decision will establish a new standard or be an outlier although there is contrary jurisprudence on each point. There are also certain aspects of the decision that are more unlikely to be followed than others, such as the FCA's approach to accommodation. Either way, it is expected that courts will continue to place an increasing emphasis on the meaningfulness of consultation and thus it will be very important for proponents to demonstrate how the process was meaningful and responsive to the issues raised and to address as many issues as possible itself in order to reduce the number of issues that Crown officials need to address.

*This article was originally published in Mining in the Courts.  https://www.mccarthy.ca/en/insights/books-guides/mining-courts-vol-ix-march-2019

Footnote

1 Tsleil-Waututh Nation v. Canada, 2018 FCA 153 at paras. 12-13. "Tsleil-Waututh". See also National Energy Board Report, Trans Mountain Expansion Project, May 2016.

2 Tsleil-Waututh, at paras. 68, 83, and 440

3 Tsleil-Waututh, at paras. 89-92.

4 Joint Federal/Provincial Consultation and Accommodation Report for the Trans Mountain Expansion Project, November 2016, online: https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/TMX_Final_report_en.pdf

5 Tsleil-Waututh, at paras. 557-646.

6 Tsleil-Waututh, at paras. 431-470

7 Tsleil-Waututh, at paras. 768-770.

8 Tsleil-Waututh, at paras. 499-500.

9 Tsleil-Waututh, at para. 504.

10 Clyde River (Hamlet) v. Petroleum Geo-Services Inc., 2017 1 SCR 1069 at para. 51.

11 Tsleil-Waututh, at para. 494.

12 Government of Canada, Trans Mountain Expansion Project, online: https://www.nrcan.gc.ca/energy/resources/19142

13 Tsleil-Waututh, at para. 661

14 Tsleil-Waututh, at para. 471.

15 Canadian Parks and Wilderness Society v. Canada, 2003 F.C.J. No. 703 at para. 24.

16 Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2017 1 SCR 1099 at para. 57 "Chippewas of the Thames"; Nunatsiavut v. Canada, 2015 FC 492 at paras. 292-314, Bigstone Cree Nation v. Nova Gas Transmission Ltd., 2018 FCA 89 at paras. 16 & 55- 59 "Bigstone Cree", Adam v. Canada, 2014 FC 1185 at para. 93, 99, 101 & 104; Prophet River First Nation v. British Columbia (Minister of Environment), 2015 BCSC 1682 at para. 80;

17 Taku River Tlingit First Nation v. British Columbia, 2004 SCC 74 at para. 44-46.

18 Chippewas of the Thames, at para. 57.

19 Squamish Nation v. British Columbia (Environment), 2018 BCSC 844 at paras. 170-172 "Squamish Nation"

20 Tsleil Waututh at para. 482. It is important to note that the B.C. Supreme Court was only considering the adequacy of provincial Crown consultation for the TMX Project. The issues of whether the federal Crown discharged its duty to consult before the federal Cabinet approved the TMX Project was not before the B.C. Supreme Court. The Squamish also conceded in this case that it was not open to the B.C. Ministers to refuse to issue an approval to Trans Mountain but that they could have required additional information be obtained before a decision is made.

21 Haida Nation v. British Columbia, 2004 3 S.C.R. 511 at para. 62 "Haida"; Bigstone Cree at para. 34; Canada v. Long Plain First Nation, 2015 FCA 177 at para. 133; West Moberly First Nations v. British Columbia, 2011 BCCA 247 at para. 197.

22 Gitxaala Nation v. Canada, 2016 FCA 187 at para. 183 and 214 and Haida at para. 62.

23 Prophet River First Nation v. British Columbia, 2017 BCCA 58 at para. 50.

24 Newfoundland and Labrador Nurses' Union v. Newfoundland and Labrador, 2011 SCC 62 at para. 16.

25 Trinity Western University v. Law Society of Upper Canada, 2018 SCC 33 at para. 29. "Trinity Western"

26 See for example Williams v. British Columbia, 2018 BCSC 1425 at paras. 121-122; Fort Chipewan v. Metis Nation of Alberta Local 125 v. Alberta, 2016 ABQB 713 at paras. 466-471; Bigstone Cree at para. 65; Squamish Nation at paras. 185-186.

27 Trinity Western at para. 29; Ktunaxa Nation v. British Columbia, 2017 2 SCR 386 at para. 139-140

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