On February 4, 2020, the Federal Court of Appeal ("FCA") issued its reasons in Coldwater Indian Band v. Canada (Attorney General) upholding the federal government’s approval of the proposed Trans Mountain Expansion Project (the “Project”). In a unanimous decision, the Court concluded that the federal government’s consultation with Indigenous groups affected by the Project was meaningful, reasonable and in accordance with the duty to consult. The Court noted that the second round of consultation undertaken by the federal government was “anything but a rubber-stamping exercise” (para. 77).

History of the Trans Mountain Pipeline Expansion Project

The history of the Project in advance of this decision can be summarized as follows:

  • On May 19, 2016, the National Energy Board (NEB) recommended that the Governor in Council (GIC) approve the expansion of the Project.
  • On November 29, 2016, the GIC (essentially the federal cabinet) approved the Project. Shortly thereafter, various Indigenous and environmental groups applied to the FCA for judicial review of the GIC’s decision to approve the Project.
  • On May 29, 2018, the federal government announced its intention to acquire the Project from Kinder Morgan Canada Limited. The sale was approved by its shareholders in August 2018.
  • On August 30, 2018, the FCA quashed the approval, finding among others issues, that the Crown’s consultation with Indigenous groups affected by the Project fell short of the constitutional standard originally articulated by the Supreme Court of Canada in the Haida decision.
  • The federal government commenced a period of engagement with Indigenous groups (over approximately nine months) to address significant but precise shortcomings in the consultation process.
  • On June 18, 2019, the GIC approved the Project for a second time. Twelve parties applied to challenge the approval by judicial review.
  • On September 4, 2019, the FCA agreed to hear challenges of the Project’s approval brought by six Indigenous groups, but in doing so, significantly narrowed the scope of review to an assessment of the adequacy of consultation after the original project approval and not the allegations of a conflict of interest and bias (stemming from the federal governments purchase of the Project) or specific environmental issues.

The Federal Court of Appeal Decision - Round Two

The FCA’s decision focuses on whether the GIC’s approval of the Project for a second time was reasonable. In particular, whether the GIC’s determination that consultation efforts undertaken by the federal government to address the flaws identified by the FCA in Tsleil-Waututh Nation v. Canada (Attorney General) (“Tsleil-Waututh”) were adequate to meet the Crown’s duty to consult. The Court concluded there was no basis for interfering with GIC’s decision to approve the Project, dismissing the applications for judicial review.

The second round of consultation was intended to be “reparative” and “focused". As such, the federal government was only required to address the “precise issues within the overall consultation process” as identified by the Court, and not required to undertake consultation anew. Moreover, the Court considered that the parties understood (or ought to have understood) that the time for further consultation was not open-ended.

The Court reinforced that the Crown’s duty to consult with Indigenous peoples does not amount to a veto over a Project, even when ‘deep consultation’ is required. As the Court explained, “although Indigenous peoples can assert their uncompromising opposition to a project, they cannot tactically use the consultation process as a means to try to veto it” (para. 54). Tactical behaviour on the part of Indigenous groups, aimed at ensuring discussions failed within the time available, was not consistent with reconciliation. As the Court stated:

[52] [T]he fact that consultation has not led the four applicants to agree that the Project should go ahead does not mean that reconciliation has not been advanced. The goal is to reach an overall agreement, but that will not always be possible….The process of consultation based on a relationship of mutual respect advances reconciliation regardless of the outcome.

The FCA also reiterated the importance of attempting to adequately address the concerns of Indigenous groups when engaging in the consultation process. The GIC implemented a number of additional binding “Proponent Commitments” as part of its decision. For example, the Coldwater First Nation had expressed concerns about its drinking water aquifer. In response, the GIC implemented a new condition that Trans Mountain would be required to justify its choice of route to the Canadian Energy Regulator using hydrogeological data from the area of concern; a condition that was absent in the GIC’s first approval decision. The Court held that these additional conditions met the accommodation standard required by section 35 of the Constitution Act, 1982.

This decision represents the final legal hurdle facing the Project and will alleviate some of the uncertainty surrounding its construction. Nonetheless, the parties have 60 days to seek leave to appeal this decision to the Supreme Court of Canada. Moreover, the parties who were refused permission by the FCA to challenge the GIC’s second decision in September 2019 have also sought permission to appeal from the Supreme Court. They await a decision in this regard. Although this is a step towards certainty for the Project, it may not be the last word on these issues.