Federal govt’s repeated failures to adequately consult First Nations major impediment to development that MUST be resolved
Wednesday’s Federal Court of Appeal (FCA) decision to allow a First Nations legal challenge to the re-approval of the Trans Mountain Expansion (TMX) project elicited frustration from the oil and gas industry and its supporters. But is it not more important to finally clarify exactly what the federal government must do to satisfy the Crown’s duty to consult?
On August 30, 2018 the FCA quashed the original Governor-in-Council (federal cabinet) approval because the National Energy Board never considered the impact of marine shipping on southern resident killer whales and indigenous consultations were inadequate. The NEB provided a report to cabinet in February, after which Ottawa undertook additional consultations to satisfy the “duty to consult” obligation under Section 35 of the Constitution Act of 1982.
In June, Prime Minister Justin Trudeau announced a new approval for the controversial project. Twelve applicants asked leave of the FCA to challenge the re-approval. The Appeals Court does not usually explain why it does or does not grant leave, but did this time because this is “an exceptional case,” according to the decision.
To begin, there were three main issues the court was asked to consider: alleged conflict of interest and bias by cabinet; environmental effects of the project; and the duty to consult.
Justice Stratas closed the door on reviewing potential conflict of interest raised by the federal government’s purchase of most of Kinder Morgan Canada’s assets, including the TMX project, estimated to cost between $7.4 billion and $9 billion. “The Governor in Council [cabinet] is not the Government of Canada,” he wrote. “The Governor-in-Council, the decision-maker here, does not own the project.”
Environmental issues were also dismissed because “many arguments about the environmental effects of the project either were made or could have been made but were not” in the previous challenge. Justice Stratas pointed out that “doctrines of re-litigation” bar applicants from applying to the Court again and again to rehash settled issues.
He did, however, rule that indigenous consultations met the threshold of a “fairly arguable case,” but only six applicants, all First Nations, will be allowed to present arguments.
The decision was good news for Tsleil-Waututh Nation Chief Leah George-Wilson.
“As I’ve said before, the federal government has again failed to respond to the concerns we have been raising in regards to this project,” she said in a statement. “This feels like déja vu. We have no choice but to appeal again and we expect the same results – the approval of the Trans Mountain pipeline will be overturned.”
Comments from other First Nations that joined Tsleil-Waututh in challenging the federal cabinet’s June decision also show no willingness to back down – or to accept any outcome other than defeat of the 525,000 barrel per day twinning of the Trans Mountain pipeline between Edmonton, Alberta and Burnaby, BC.
The oil and gas industry was, not surprisingly, disappointed by the decision.
The Canadian Association of Petroleum Producers considers it a “setback” for TMX. Dennis McConnaghy worries that Stratas has opened the door to endless future challenges, despite the fact the judge specifically said environmental issues could not be re-litigated.
The Court could have dismissed “the leave to appeal because there was no real error at law,” he told Energi Media in an interview. “There’s just the question of how much micromanagement does the Federal Court of Appeals – or the Supreme Court, for that matter – want to get into to determine if the duty to consult has been discharged.”
The retired TransCanada executive, who spent 40 years in the energy sector, points out that uncertainty discourages investment. How can Canada expect to risk billions on a project that could be held up in the courts for years, perhaps decades?
“Is the standard to achieve consensus with every disgruntled or adamantly opposed First Nation?” he asks. “And if you can’t meet that standard, you really haven’t meaningfully consulted, just come up with an absolutely absurd conclusion.”
Law professor David Wright takes a different view. He says Canadian governments have been trying for the better part of 20 years to satisfy the Crown’s constitutional duty to consult aboriginal peoples when natural resource development projects infringe upon their territories. The Stephen Harper Conservatives failed with the Northern Gateway pipeline project when approval was quashed by the FCA in 2015. The Trudeau government failed with TMX.
“The applicants are arguing that the government was ordered to redo consultation, to remedy the defects identified in last year’s FCA decision, but dropped the ball again,” he said in an interview.
This challenge was inevitable and it’s difficult to see how the Court could have refused leave to appeal. The 2018 FCA decision was very specific about how the federal government failed to adequately consult, noting that bureaucrats were limited to “note-taking” rather than engaging in a negotiation that could possibly modify the government’s position and lead to the accommodation of First Nation concerns.
Was it also not inevitable that the Court would want to test the redo of those consultations?
“You’ve got an appetite for quick, short-term solutions to get crude oil to tidewater, but the broad range of aboriginal rights and interests, not to mention the cultural context of indigenous groups, makes it nearly impossible to solve quickly,” said Wright.
This is the conundrum facing Trudeau. He can’t escape the Crown’s constitutional obligations or the courts’ determination to enforce them, while at the same time the oil and gas industry is losing tens of millions of dollars because the Canadian pipeline system is overwhelmed. Jobs and tax revenue are at risk and, lest we forget, the federal government is on the hook for billions thanks to its purchase of TMX purchase.
The federal government must solve the puzzle that is aboriginal consultation. The only way that will happen is if consultation efforts are tested in court until the government gets a passing grade. Instead of wringing its hands over the FCA’s decision to review the TMX consultation redo, industry and its supporters should be cheering on the government lawyers.
With any luck, Trudeau got it right this time.