Elizabeth explains the Federal Court of Appeal ruling on Kinder Morgan

by Elizabeth May | September 4, 2018 8:02 pm

THE FEDERAL COURT OF APPEAL RULING ON KINDER MORGAN EXPLAINED

TSLEIL-WAUTUTH NATION, CITY OF VANCOUVER, CITY OF BURNABY, THE SQUAMISH NATION (also known as the SQUAMISH INDIAN BAND), XÀLEK/SEKYÚ SIÝ AM, CHIEF IAN CAMPBELL on his own behalf and on behalf of all members of the Squamish Nation, COLDWATER INDIAN BAND, CHIEF LEE SPAHAN in his capacity as Chief of the Coldwater Band on behalf of all members of the Coldwater Band, AITCHELITZ, SKOWKALE, SHXWHÁ:Y VILLAGE, SOOWAHLIE, SQUIALA FIRST NATION, TZEACHTEN, YAKWEAKWIOOSE, SKWAH, KWAW-KWAW-APILT, CHIEF DAVID JIMMIE on his own behalf and on behalf of all members of the TS’ELXWÉYEQW TRIBE, UPPER NICOLA BAND, CHIEF RON IGNACE and CHIEF FRED SEYMOUR on their own behalf and on behalf of all other members of the STK’EMLUPSEMC TE SECWEPEMC of the SECWEPEMC NATION, RAINCOAST CONSERVATION FOUNDATION and LIVING OCEANS SOCIETY

Above is the list of Applicants who won in the Federal Court of Appeal on August 30, 2018.  The Applicants sued the Government of Canada, the National Energy Board and Kinder Morgan.

If the decision had been delivered in February, there would never have been an injunction against protesters and there would have been no arrests. All the arrests happened when the permits were illegal, but had not yet been ruled to be so.

The cases from all the above applicants were filed as separate actions.  Since all the applicants attacked the legality of the permits that were issued to Kinder Morgan to build the expansion, the court made the decision to consolidate the cases and hear them together.

The applicants brought forward and pursued specific legal arguments on different grounds. Obviously, only First Nations could argue that under the Constitution, the respondents (Canada, the NEB and Kinder Morgan) had violated indigenous rights. The cities of Burnaby and Vancouver argued that their rights to a fair process as intervenors before the NEB had been violated and Burnaby further argued Cabinet had lacked the legal right to approve the NEB’s recommendations.  Living Oceans and Raincoast relied on the Species at Risk Act in their argument that, because the NEB report wrongly excluded the impact of increased tanker traffic, Cabinet erred in approving the expansion on the basis of that flawed report.

A three-judge bench considered the consolidated cases.  Each case was argued in Vancouver across eight days in October last year. It was the longest hearing in the history of the Federal Court of Appeal. The decision, running to 254 pages with additional appendices, was written by Mme Justice J.A. Dawson, with Justices De Montigny and Woods agreeing.

Reading the decision, we lose every legal argument until about page 130.  We win every legal argument from p 130-254.

Where we lost:

I was sure we would win on some grounds that the court ruled against.  The entire Vancouver case was based on the lack of procedural fairness before the National Energy Board. Part of Burnaby’s case made the same arguments. To my surprise, the court ruled that the NEB’s decisions were not open to judicial review.  In ruling against Burnaby and against Vancouver on the issue of judicial review, the court ruled that intervenors had no right to cross-examination. It ruled that although Burnaby made a strong case that the risks of a tank farm fire were dire, the NEB had acknowledged this and set further conditions in place to address it. The court ruled: “It is not for this Court to opine on the appropriateness of the policy expressed and implemented in the National Energy Board Act. Rather, the Court’s role is to apply the legislation as Parliament has enacted.” (Para 283, p 95)

If there were an appeal, I am sure Vancouver and Burnaby would ask the Supreme Court of Canada to reverse this finding. But since we won in getting the permits quashed, Vancouver will not appeal. If Canada appeals, then these issues could go the other way and we might win on other grounds.

 Where we won:

 We won on two quite different legal arguments.

1)       A failed duty to consult First Nations

 The First Nations arguments landed hard on a completely inadequate effort by the federal government. Kinder Morgan also violated First Nations rights to be properly consulted.

(Note: Canada should have refused to complete the purchase and sale agreement for the 65 year old Transmountain pipeline.  The fact that Kinder Morgan’s own actions were found to have violated FN’s rights and led to the cancellation of the permits would have been a good argument to get out of the contract).

 The Court found that the consultation process framework was well-conceived and should have worked.  They found the members of the federal team to be well-intentioned. They found most phases of consultation worked well.  But the court found that, in its rush to approve the permits, the government fell far short of the mark in dealing with Phase III.  On November 1, 2016, just weeks before granting the permit, Canada made a finding that all the First Nations concerns were for “a minor impact.”   Canada then gave First Nations two weeks to respond. The court found this wholly inadequate.

The court also made it very clear that in finding significant errors in the way the federal government handled Phase III it was not moving the goalposts or setting out new law. It drew attention to the decision rendered five months before in Gitxaala v Canada, 2016 as a clear reference for what the federal government needed to do vis-à-vis Kinder Morgan. At this point in the ruling, I wondered if we still have lawyers in the department of justice that bothered to read court decisions.   

Justice Dawson writes:

 “As this Court explained in Gitxaala at paragraph 279, Canada was required to engage, dialogue and grapple with the concerns expressed in good faith by the indigenous groups impacted by the Project. Meaningful dialogue required someone representing Canada empowered to do more than take notes – someone able to respond meaningfully to the applicants’ concerns at some point in time.” (Para 599, p 204)

And,

“…a review of the record of the consultation process discloses that Canada displayed a closed-mindedness when concerns were expressed about the Board’s report and was reluctant to depart from the findings and recommendations of the Board.  With rare exceptions, Canada did not dialogue meaningfully with the Indigenous applicants about their concerns about the Board’s review…Canada was obliged to do more than passively hear and receive the real concerns of Indigenous applicants.” (Para 603, p 206)

And again, Canada is dressed down:

“By letter dated November 28, 2016 (the day before the Project was approved), Canada, joined by the British Columbia Environmental Assessment Office, advised that ‘the Governor in Council [Cabinet] cannot impose its own conditions directly on the proponent as part of its decision’ on the certificate of public convenience and necessity [the permits].” (Para 633, page 214)

“This was incorrect. In Gitxaala, at paragraphs 163 to 168, this Court explained that when considering whether Canada has fulfilled its duty to consult, the Governor in Council necessarily has the power to impose conditions…” (Para 634)

“…The record does not contain any explanation as to why Canada did not correct its position after the Gitxaala decision.” (Para 636, p 214).

The Court found Canada was wrong to bunch together all indigenous concerns as generic, instead of dealing with each nation’s concerns separately, as they made strong cases based on the threat poses by the projects to each community and Nation.  For example, Coldwater First Nation was very concerned about its water supply, while others were concerned about the threat of a dilbit spill to marine resources.

2)       An unacceptable refusal to study impacts of marine tanker traffic:

The National Energy Board’s decision to exclude impacts from shipping in its review of Kinder Morgan was a fatal error. This omission effectively torpedoed the NEB’s report to Cabinet and the permits issued on its basis.  The court found that since the NEB report made it clear to Cabinet that any consideration of tanker traffic impacts was excluded, Cabinet should have known it did not have enough information on which to reasonably make a decision.

Canada’s efforts to deflect the risks of tanker traffic with the Oceans Protection Plan werealso rejected:

“I have considered the reference in the Explanatory Note to the Order in Council to the government’s commitment to the proposed Action Plan for the Southern resident killer whale and the then recently announced Oceans Protection Plan. These inchoate initiatives, while laudable and to be encouraged, are by themselves insufficient to overcome the material deficiencies in the Board’s report because the ‘report’ did not permit the Governor in Council to make an informed decision about the public interest and whether the project is likely to cause significant environmental effects as the legislation requires.” (Para 471, page 161)

The court found it wholly unacceptable that by (without reasons) refusing to consider the increased tanker traffic, the NEB went on to conclude that section 79 of the Species at Risk Act did not apply.

“This finding – that the Project was not likely to cause significant adverse environmental effects – was central to its report.  The unjustified failure to assess the effects of Project-related shipping under the Canadian Environmental Assessment Act 2012 and the resulting flawed conclusion about the environmental effects of the Project was critical to the decision of the Governor in Council [cabinet]. With such a flawed report before it, the Governor in Council could not legally make the kin of assessment of the Project’s environmental effects and the public interest that the legislation requires.” (Para 766, page 252)

What’s next:

 1)       Canada could appeal to the Supreme Court of Canada.  Noteworthy is that when the Federal Court of Appeal ruled against the northern Gateway project due to Harper Conservatives violating First Nations rights, the Trudeau government said that was the end of the pipeline. They denied the permit and did not appeal. They would be going against their own precedent by pursuing an appeal on the Kinder Morgan decision.

2)       Canada could follow the court’s ruling:

That would mean re-doing the consultation process found in Phase III as laid out by Canada, and

Re-submitting to the NEB the requirement to re-do the assessment, including re-starting the hearing, for a full examination of the environmental impacts of increased shipping, and

British Columbia potentially re-starting its own independent Environmental Assessment.

(Note: Former premier Christie Clark surrendered this right in her government’s equivalency agreement with Ottawa.  A full and independent environmental assessment is within British Columbia’s provincial jurisdiction.) 

 

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