In June 2010, the Environmental Assessment Office (“EAO“) and the National Energy Board (the “NEB“) entered into an equivalency agreement to govern environmental projects requiring approval under both the British Columbia Environmental Assessment Act (the “EAA“) and the National Energy Board Act (the “Agreement“).  In the Agreement, and previous ones, the EAO accepted that any NEB assessment of these projects constitutes an equivalent assessment under the EAA, and that these projects do not require an additional assessment under the EAA. The Northern Gateway Project (the “Project“) is the first project the Agreement applies to.

During the hearing, the Province raised concerns regarding oil spills and their effect on the petitioner’s claimed land rights. In 2013 the NEB Joint Review Panel recommended the Project for approval, and in 2014 the federal government approved the Project. However, four of the Province’s five recommendations were not included in the final report.

The petitioners, Coastal First Nations (Great Bear Initiative Society and Gitga’at First Nation) (collectively “CFN“) sought to invalidate the part of the Agreement eliminating the need for an environmental assessment certificate (“EAC“). The CFN relied on two legal bases: (1) statutory interpretation of the EAA and (2) the constitutional obligation on the Province to consult with First Nations before engaging in any governmental action that may adversely affect First Nations. Northern Gateway Pipelines’ (“NGP“) position was that the petition violates fundamental constitutional and legal principles.

Constitutional Issues

NGP asserted that the interprovincial nature of the Project renders it a federal undertaking, thus within the exclusive jurisdiction of the federal government. They relied on the doctrines of pith and substance, inter-jurisdictional immunity and paramountcy.

The court found that the Project was distinguishable from past cases dealing with aviation or telecommunications. The proposed Project, while interprovincial, is not national and disproportionately affects British Columbians. The court found that to prevent provincial regulation over the Project would limit the Province’s ability to protect social, cultural and economic interests in its own lands and waters.

In the court’s view, the Project may proceed so long as it complies with the federal laws in question. In this way, if the Province chooses to issue further conditions, the provincial laws will also be permissible so long as they extend or further narrow the federal conditions.

Statutory Interpretation

Sections 27 and 28 of the EAA provide the authority for federal and provincial cooperation to avoid duplicating environmental assessments, including by entering into agreements. Section 17(3) of the EAA requires the ministers to issue an EAC. The CFN argued that the Agreement could not override the Provincial requirement to issue an EAC.

The court agreed and invalidated the Agreement to the extent that it removes the need for an EAC pursuant to the EAA.

Honour of the Crown

The CFN alleged the decision to enter into the Agreement was inconsistent with the honour of the Crown and that the Province breached its duty to consult with CFN.

The court found that entering into the Agreement did not trigger the duty to consult. The decision only had a thin connection to possible adverse impacts on the petitioner’s Aboriginal rights. However, between December 2013 and June 2014 when the oil spill concerns were brought forth by the Province, the court found that the Project posed potential adverse effects on CFN land. The court indicated that consultation/accommodation entails early and meaningful dialogue with First Nations whenever government has in its power the ability to adversely affect the exercise of Aboriginal rights. The court found the Province breached its duty to consult, and thus the honour of the Crown, by failing to terminate the Agreement or consult with the petitioners prior to June 2014.

The court also responded to the Province’s position that the duty to consult can be fulfilled by either level of government, and for the Project it was fulfilled by the federal government through the Joint Review Panel process, thereby discharging any duty that was owed by the Province. The court said the manifestation of the honour of the Crown, such as the duty to consult and accommodate First Nations, is clearly divisible by whichever Crown holds the constitutional authority to act. In this case, where environmental jurisdictions overlap, each jurisdiction must maintain and discharge its duty to consult and accommodate.

The court ordered a declaration that (1) the Ministers exercise s. 17 authority under the EAA in relation to the Project, and (2) the Province consult with the Gitga’at about (a) the potential impacts of the Project on areas of provincial jurisdiction, (b) how these impacts may affect the Gitga’at’s Aboriginal rights, and (c) how those impacts are to be addressed in a manner consistent with the honour of the Crown and reconciliation.

If upheld, the impact this decision will have on federally regulated pipelines will be difficult to predict. The court found that the province has authority with respect to the overall project approval for a federally regulated pipeline. In many jurisdictions, including Saskatchewan and Alberta, the province does not exercise environmental assessment jurisdiction over federally regulated pipelines, but does in relation to detailed permitting, following overall project approvals.