Recently the British Columbia Supreme Court (“Court”) released its reasons for judgment in Coastal First Nations v. British Columbia (Environment), 2016 BCSC 34. The BC Environmental Assessment Office (the “EAO”) had entered into an equivalency agreement (the “Agreement”) with the National Energy Board (“NEB”). The Agreement allowed for the EAO to rely on an environmental assessment from the NEB related to Enbridge’s Northern Gateway project (the “Project”). The   Court found that the Province of British Columbia had abdicated its statutory duties and breached its duty to consult with the Coastal First Nations when it signed and failed to terminate the Agreement that provided the NEB with sole jurisdiction over the environmental assessment decision-making regarding the Project.

Background

British Columbia’s Environmental Assessment Act, SBC 2002, c 43 (the “EAA”) is the main legislative framework for the Province's environmental assessment process for proposed major projects. In 2008 and again in 2010, the EAO and the NEB entered into equivalency agreements which were intended to avoid redundancy in the approval process and promote a coordinated approach. The equivalency agreements provided that the EAO accepted that any NEB assessment would constitute an equivalent assessment under the EAA. In doing so, the EAO abdicated its decision-making authority.

Coastal First Nations – Great Bear Initiative Society and Gitga’at First Nation (collectively “CFN”) sought, by way of judicial review, a series of declarations setting aside, in part, the Agreement for the Project.  CFN argued that while the EAA granted jurisdiction to the EAO to accept another jurisdiction’s assessment of the Project, the EAA did not authorize the EAO to abdicate its decision-making authority to grant an environmental assessment certificate (a “Certificate”) under the EAA. A Certificate is required prior to the approval of any project. In addition, CFN argued that they were owed a duty to consult prior to the Province entering into the Agreement and before the Province decided not to terminate the Agreement.

Decision

Statutory Interpretation

The Court first considered whether the EAA allowed the Province to abdicate its decision making. CFN argued that while the EAA provided authority for cooperation to avoid duplication of environmental assessments, the provisions of the EAA did not go so far as to allow for the abdication of the Province’s decision making.

In response, the Province argued the authority given to the Province and the exercise of that authority was an example of an effort by the Province to reconcile the overlap in jurisdiction between provincial and federal regulators with respect to environmental assessment.  Therefore the structure of the EAA allowed the EAO to exempt certain projects from obtaining a Certificate. The Northern Gateway project was one such project.

The Court acknowledged that the EAA granted the Province broad discretion to enter agreements with other jurisdictions to allow for equivalent environmental assessment processes. However, the Court concluded that the Province’s unique objectives, political and social goals, and legal obligations that led to the enactment of the EAA required an interpretation of the EAA that did not allow the Province to abdicate its decision-making authority. The Court stated the following:

​​…it cannot be the intention of the legislators to allow the voice of British Columbia to be removed in this process for an unknown number of projects, when the purpose behind the EAA is to promote economic interest in this province, and to protect its land and environment.

For these reasons, the Court held that despite the Agreement or other similar agreements, reviewable projects must obtain a Certificate under the EAA before projects began. Accordingly, the Court held that the Agreement was invalid to the extent that it purported to remove the need for reviewable projects to obtain a Certificate under the EAA. Finally, the Court declared that the Province must exercise its decision-making authority under the EAA in relation to the Project.

The Duty to Consult and Accommodate

The Court also considered whether there was a constitutional obligation on the Province to consult with First Nations before engaging in government action that may adversely affect First Nations’ rights. CFN argued that the Province had a duty to consult with First Nations before entering into the Agreement, as the Agreement allowed the Province to avoid its obligation to make a decision on the Project. Further, CFN argued that the Agreement provided for unilateral termination as it allowed the Province to terminate the Agreement at any time. Therefore the Province would not have been bound by the federal government’s decision if the Province terminated the Agreement prior to the federal government’s decision to approve the Project and completion of an environmental review process would be required.

In response, the Province asserted that no duty to consult arose in relation to entering into or terminating the Agreement for. The Province argued that pursuant to the Agreement the duty is assumed by the federal Crown. Generally, however, the Province took the position that the duty to consult does not arise until “actual foreseeable adverse impacts on an identified treaty or Aboriginal right or claim must flow from the impugned Crown conduct.” The Province’s position was that there must be a direct link between the adverse impacts and the impugned Crown conduct. If adverse impacts are not possible until after a later-in-time, independent decision, then it is that later decision that triggers the duty to consult.

The Court rejected the Province’s argument that the Agreement shifted sole responsibility for the duty to consult and accommodate to Canada, noting that both the federal and provincial Crown owe “specific responsibilities to consult First Nations as their respective legislative powers intersect”. However, the Court held that the Province did not owe a duty to consult prior to entering into the Agreement because there was little possibility that CFN’s rights would be adversely impacted by the Agreement as the Province retained the ability to unilaterally terminate the Agreement.  Nonetheless, the Province did owe CFN a duty to consult and accommodate on the Project and the duty to consult if the Agreement was not terminated.

By way of remedy, the Court ordered the Province to consult with CFN about the potential impacts of the Project on areas of provincial jurisdiction and how such impacts may affect CFN Aboriginal rights and should be addressed.

Implications

While it is unclear whether this decision will be appealed, it does raise a number of interesting questions with respect to the extent that provinces and the federal government may cooperate in EA processes. This decision makes it clear that the province cannot abdicate its duty to consult to the federal Crown in respect of projects that require both federal and provincial approval. As the Northern Gateway Pipeline Process and the Trans Mountain Process are subject to the same equivalency agreement, it is clear that the Province may adopt the NEB’s assessment.  However, it must consult First Nations about the impacts of the project before the Trans Mountain Pipeline can be approved.

The federal government has recently proposed a suite of new requirements for pipelines, including enhanced environmental requirements and First Nation Consultation. These new requirements provide for robust changes to the NEB’s review process and will likely affect the Northern Gateway Pipeline Process and the Trans Mountain Process. BLG will continue to monitor any appeal and follow the federal pipeline regulatory changes. ​