The Federal Court of Appeal (the Court) has unanimously upheld Canada's1 approval of the Trans Mountain Expansion Project (the Project).2 The decision removes the second-last legal hurdle to the Project, and observers should note the key takeaways from the Court's reasons: the narrow role of the judiciary in reviewing consultation, a re-emphasis of participants' reciprocal obligations to participate in the consultation process, and re-iteration that Indigenous groups do not have a right to veto projects as part of consultation.
The Project is an expansion of a 1,150-km crude oil pipeline from Edmonton to British Columbia. The Project was originally approved by Canada in November 2016 after an extensive National Energy Board process (NEB) and separate consultation exercise undertaken by Canada. That approval was successfully challenged by a number of Indigenous and other groups in 2018, when the Court determined that while many aspects of the approval process were adequate, both the NEB process and "Phase III" of Canada's consultation process were "flawed."
Canada re-initiated the approval process by directing the NEB to undertake an additional process that expanded the scope of review to include environmental impacts of marine shipping, and by undertaking renewed and expanded Indigenous consultations in line with the Court's 2018 comments. Once these processes were complete, Canada again approved the project in June 2019.
Twelve groups then challenged the 2019 Project approval. The Court allowed six Indigenous groups to proceed with their judicial reviews and limited the review solely to duty to consult issues.3
Court decision on Canada's 2019 approval
The Court unanimously dismissed the judicial reviews, and held that Canada's re-initiated consultation process adequately remedied the flaws previously identified by the Court in 2018.
Role of the Court in Reviewing Consultation
The Court held that the question before it was narrow: its sole function was to determine whether, based on the reinitiated consultation, Canada's approval decision was defensible.4 In effect, the Court was not to determine whether Canada could have come to a different conclusion that the Court preferred or whether consultation could have been longer or better. Instead, Canada (or the relevant decision maker) is to judge the adequacy of consultation, while the Court considers whether that determination is reasonable.5 While the same standard was applied in previous related Federal Court of Appeal decisions, this decision was quite clear that a reviewing Court's role is not to act as an "academy of science" in relation to the potential environmental impacts of a project.6
The Court ultimately found Canada's approval decision was reasonable and "anything but a rubber-stamping exercise."7 In so doing, the Court noted Canada's Consultation and Accommodation Report demonstrated Canada understood its duty to consult, took its duty seriously, and had taken steps to remedy the Court's prior concerns regarding the consultation process."8
The Duty to Consult
The Court also confirmed the overarching principles of the duty to consult:
- Consultation and reconciliation do not dictate any particular outcome, and while the goal may be to reach an overall agreement, reconciliation can be advanced whether or not that is obtained so long as consultation is based on a relationship of mutual respect.9
- Indigenous groups do not have the right to veto projects based on asserted rights.10
- Reconciliation requires both the Crown and Indigenous groups to "commit to the process, avoid counterproductive tactics, get to the substance of the issues of concern, and exercise good faith."11 But "perfection" in the consultation process is not required by law.12
- Where there is continued opposition to a project after adequate consultation has taken place, Indigenous concerns must be balanced against competing societal interests, through accommodation.13 This balancing exercise can be delegated to administrative agencies.14
The Court rejected arguments from the applicants that the consultation process was too short or that Canada was biased. It was also critical of the applicants for failing to focus on whether earlier consultation-related deficiencies had been corrected, and instead attempting to re-litigate technical matters, and for failing to participate diligently in the reinitiated consultation processes and work towards accommodation. The decision did not expressly discuss the United Nations Declaration on the Rights of Indigenous Peoples, but stated in response to an argument from the Tsleil-Waututh Nation that "Canada was under no obligation to obtain consent prior to approving the Project. That would, again, amount to giving Indigenous groups a veto."15
Short- and long-term significance
With the Court's decision, the Project has cleared yet another significant hurdle to full construction and operation. As many Canadian commentators have noted, the myriad processes and court challenges to the Project have created a sense that Canada is closed to major resource projects. Barring a reversal of this decision by the Supreme Court of Canada, the Project may provide a roadmap for how to obtain major resource project approvals by, at first instance, seeking a balance of Indigenous and other interests in accordance with the Court's guidance provided in relation to the Project and Canada's most recent consultation process.
1. While the correct legal entity approving the project is the Governor-in-Council, we have used "Canada" to simplify.
2. Coldwater Indian Band v. Canada (Attorney General), 2020 FCA 34.
3. Raincoast Conservation Foundation v. Canada (Attorney General), 2019 FCA 224. Of the six applicants who received leave, two applicants later discontinued their applications, and only the judicial reviews of the Tsleil-Waututh Nation, Squamish Nation, Coldwater Indian Band, and a coalition of smaller First Nations proceeded.
4. Supra note 2, paras. 16 and 29.
5. Para. 28.
6. Para. 171.
7. Paras. 66-76.
8. Para 77.
9. Paras. 52, 161.
10. Paras. 53, 55.
11. Para. 56.
12. Para. 77.
13. Para. 57.
14. Para. 59.
15. Para. 194.
About Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.
For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.
Law around the world
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.