Meaningful Consultation Requires Grappling with Indigenous Concerns

By: JoAnn P. Jamieson and Brittany J.A. Scott

On August 30, 2018, the Federal Court of Appeal (the Court) issued a decision that quashed the Governor-in-Council (GIC) approval for the Trans Mountain Expansion Project (the TMX). See Tseil-Waututh Nation v Canada (Attorney General) 2018 FCA 153. One of the reasons the approval was quashed was that the federal government failed to fulfill its duty to consult and accommodate Indigenous peoples potentially impacted by the TMX. The Court held that the government failed to “engage, dialogue meaningfully and grapple with the real issues raised by the Indigenous peoples so as to explore accommodation of those concerns” ( at para 6). 

The Court’s other ground for the quashing the approval was that the National Energy Board (NEB or Board) unjustifiably defined the scope of the project to exclude project-related tanker traffic such that the government could not rely on the NEB’s report. We have already discussed the NEB’s “critical error” in not including project-related tanker traffic in an earlier post A Triumph of Form over Substance? The Federal Court of Appeal's Decision to Quash the Trans Mountain Expansion Approval. In this post, we will focus on the Court’s analysis of the government’s duty to consult obligation.

Consultation Process Adequate 
 

The Court commenced its review of federal consultation for the TMX by examining the well-established jurisprudence of the Supreme Court of Canada (SCC) on the scope and content of the duty to consult. With respect to the standard to which Canada is to be held to in fulfilling its duty, the Court concluded that this standard is not one of perfection. The Court noted that so long as “every reasonable effort was made to inform and to consult” its efforts would suffice (at para 226). Further, agreement of all parties is not necessary to fulfill the duty.

 The Court also reiterated the well-established principle that meaningful Crown consultation can be carried out wholly or in part through a regulatory process. Where the regulatory process relied upon does not achieve adequate consultation or accommodation, then the Crown is expected to take further steps to meet its duty to consult by, for example, filling in any gaps in consultation on a case-by-case basis.

The Court then proceeded to examine the design of the consultation process set out by the federal government at the outset of the TMX, which basically set out four phases: 

• Phase I – early engagement, from the submission of the TMX description to the start of the NEB hearing;
• Phase II – commencing with the start of the NEB hearing and continuing until the close of the hearing record;
  
• Phase III – commencing with the close of the hearing record and continuing until the GIC rendered its decision in relation to the TMX; and
  
• Phase IV – commencing with the decision of the GIC and continuing until the issuance of all regulatory authorizations, if approved. 

Canada’s stated objective for Phase III was to fill the gaps left by the Phase II regulatory process and, in particular, to focus on outstanding concerns about the TMX-related impacts upon potential or established Indigenous or treaty rights, and any incremental accommodation measures that Canada should address. Of note to the Court was that Phase III was the first opportunity for the Indigenous applicants to directly engage with the Crown about matters of substance, not process. 

Upon review of the record, the Court found that the Crown’s consultation process was appropriate for the task at hand on the basis that, inter alia:

·       Indigenous groups received early notice of the Project and the NEB’s hearing;

·       participant funding was provided;

·       the Board’s process permitted written evidence and oral traditional evidence;

·       the regulatory framework permitted the Board to impose conditions capable of mitigating risks to the rights and title of the Indigenous groups; and

·       that after the Board’s hearing record closed, a further consultation phase was provided to enable Canada to address those concerns not addressed by the hearing or the Board’s proposed conditions. 

The Court concluded that the consultation framework selected was “reasonable and sufficient”. The Court commented that if Canada had properly executed it, Canada would have discharged its duty to consult (at para 753). However, in the Court’s view, this did not happen.  

Failure to Execute Phase III  
 

In a detailed examination of the evidence presented by the Indigenous applicants, the Court concluded that the federal Crown failed in the execution of Phase III of consultation. Specifically, the federal Crown failed to “engage, dialogue meaningfully and grapple with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns” (at para 6). 

The Court acknowledged that the Canada’s consultation team worked in good faith to understand and document the concerns, and to report those concerns to the GIC in its Crown Consultation report. However, the Court heavily criticized the Crown because, in its view, the consultation team failed to engage in a “considered, meaningful two-way dialogue” with the Indigenous applicants (at para 559). In support of this conclusion, the Court identified three major shortcomings:

1.      Missing was a genuine and sustained effort to pursue meaningful, two-way dialogue. Very few responses were provided by Canada’s representatives in the consultation meetings. Too often the response was that the consultation team would put the concerns before the decision-makers for consideration;

2.      The inadequacies of the consultation process flowed from the limited execution of the mandate of the Crown consultation team. The mandate of the team was essentially one of “note-taking” and the team did not engage in any active and meaningful dialogue with the Indigenous applicants. Missing from the team was someone with the confidence of Cabinet who could discuss, at least in principle, required accommodation measures; and

3.      The inadequacies also flowed from Canada’s unwillingness to meaningfully discuss and consider possible flaws in the Board’s findings and recommendations and its erroneous view that it could not supplement or impose additional conditions on TMX. 

The Court found that these three systemic limitations thwarted meaningful, two-way dialogue and concluded that the Phase III consultation for TMX was unacceptably flawed and fell short of the required mark for reasonable consultation. The Court opined that Indigenous applicants: 

"…were entitled to a dialogue that demonstrated that Canada not only heard but also gave serious consideration to the specific and real concerns the Indigenous applicants put to Canada, gave serious consideration to proposed accommodation measures, and explained how the concerns of the Indigenous applicants impacted Canada’s decision to approve the Project (at para 563)."

This conclusion is similar to the Court’s decision on the Northern Gateway project in Gitxaala v. Nation 2016 FCA 187 (Gitxaala) where the Court found that the Crown also failed to execute at the same stage of consultation. In Gitxaala – a 2016 decision also written by Dawson JA – the Court also quashed the GIC’s Order-in-Council on the basis of inadequate consultation, thereby rendering the approval for the Northern Gateway a nullity. The ultimate result being that the Northern Gateway did not proceed. 
 

What’s Next for the TMX?  
 

The TMX cannot proceed for GIC approval until consultation is adequate. The Court suggests that there are some distinctions between the TMX and Northern Gateway projects in that the TMX consultation deficiencies can be rectified in fairly short order. In particular, the Court found that the federal government may “specify a time limit” for the NEB to reconsider and that the Court’s concerns over consultation are “specific and focused” such that this “may serve to make the corrected consultation process brief and efficient while ensuring it is meaningful”. 

In addition, the Crown has sixty (60) days to appeal this decision to the SCC. The Government of Canada has not yet announced whether it will seek leave to appeal the decision to the SCC, or attempt to remedy the deficiencies identified by the Court instead. 
 

What’s Next for Crown Consultation? 
 

The Court’s conclusions on the sufficiency of consultation may be viewed as disconcerting given the Court’s finding that the framework was reasonable and that the Crown’s consultation team worked in “good faith and assiduously” to understand and report concerns to the GIC. It can also be argued that the Court, in effect, imposed a standard of perfection on the Crown in its fulfilment of its duty to consult and therefore that the case was wrongly decided. This may be so. On the other hand, this may be an unfair criticism of the decision given the ample and specific evidence that the Court reviewed and used to support its findings. 

There is also no question that Crown consultation over a long, linear project with dozens of Indigenous communities is a huge and difficult task. The Court expressed some sympathy for the exercise. However, the bottom-line message from the Court to the federal government is either consult meaningfully or don’t bother; and by consult meaningfully we mean get in there and grapple with the difficult issues. The days of “record and report” are over.

In our view, resource development in Canada cannot afford any more of these decisions. The legal framework on the duty to consult and accommodate is clear; the SCC constructed it in 2004 with the trilogy of cases (Haida, Taku River and Mikisew Cree). These subsequent cases are almost all about the implementation of that legal framework. The federal Crown simply needs to start getting this right. It would go a long way towards creating the regulatory certainty that is needed here in Canada.

A Triumph of Form Over Substance? The Federal Court of Appeal’s Decision to Quash the Trans Mountain Expansion Approval

Author: Gavin Fitch, Q.C.

On August 30, 2018, the Federal Court of Appeal (the Court) released its decision[1] on the federal government’s approval of the Trans Mountain Expansion Project (TMX). The Court quashed the approval on two grounds:

1. The National Energy Board (NEB or Board) unjustifiably defined the scope of the project not to include project-related tanker traffic, such that the government could not rely on the NEB’s report; and  
2. The federal government’s consultation with Indigenous peoples after the NEB issued its report, but before it made its decision to approve the project, was inadequate.

In this post, we will discuss the first of these reasons for the Court quashing the approval (exclusion of marine shipping). We will discuss the second reason (inadequate Indigenous consultation) in a subsequent post.

Introduction

Under section 52 of the National Energy Board Act (NEB Act), Trans Mountain was required to apply to the NEB for a “certificate of public convenience and necessity” (CPCN) and the NEB was required to submit to federal cabinet a report which set out the NEB’s recommendation as to whether the CPCN should be granted and any terms and conditions the NEB considered the CPCN should be subject to. In doing so, the NEB was required to take into account “whether the pipeline is and will be required by the present and future public convenience and necessity”.[2] This is essentially a broad, public interest assessment.

The TMX was also a “designated project” pursuant to section 2 of the Canadian Environmental Assessment Act, 2012 (CEAA), which meant that the NEB was also required to carry out an environmental assessment (EA) of the TMX under CEAA. Under CEAA, a “designated project” is defined, in section 2, by reference to the carrying out of “physical activities” and any physical activity “that is incidental to those physical activities”. The construction of an on-shore pipeline greater than 40 kilometres in length is listed as a designated project.[3]

The Scoping Decision

The question was whether increased marine shipping related to the construction of the pipeline was properly part of the “designated project” under CEAA. In a preliminary “scoping decision” (Scoping Decision), the NEB determined that it was not. However, the NEB stated “it would consider the effects of increased marine shipping under the [NEB Act]. To the extent there was potential for environmental effects of the designated project to interact with the effect of the marine shipping, the NEB would consider those effects under the cumulative effects portion” of CEAA.[4] In other words, project-related marine shipping was considered by the NEB, just not as part of the EA under CEAA. 

Should marine shipping have been included as being part of the “designated project” under CEAA?

At the outset, the Court stated that the parties agreed that the issue of whether project-related marine shipping ought to have been included as part of the designated project “turns on whether Project-related marine shipping is a “physical activity that is incidental” to the pipeline component of the Project”.[5] The Court then went on to say that question “is not a pure issue of statutory interpretation. Rather, it is a mixed question of fact and law heavily suffused by evidence” [emphasis added].[6] This is interesting because it should have meant that the Court would accord some deference to the NEB’s decision, when it does not appear to have done so.

First, the Court addressed the NEB’s explanation that it did not include project-related marine shipping as part of the “designated project” under CEAA because it does not have “regulatory oversight” over marine vessel traffic; other agencies such as Transport Canada do.[7]  The Court rejected the Board’s rationale, on the basis that there is no authority for the proposition that a responsible authority conducting an EA under CEAA “must itself have regulatory oversight of a particular subject matter”.[8]

The Court also criticized the Board for failing to address the core issue of whether project-related marine-shipping is in fact an activity “incidental” to the project (i.e., building the pipeline).  The Court suggested that had the Board done so, it would have come to a different conclusion.[9]

Whether you agree with this Court’s analysis or not, in our view it is clear that notwithstanding its preliminary comment about the issue being one of mixed fact and law “heavily suffused by evidence”, the Court did not accord the NEB any deference on this point.  One cannot escape the feeling that the Court believed that assessing the environmental effects of marine shipping under the NEB Act was markedly inferior to assessing them under CEAA and its conclusion on this issue was driven by that view.

Was the NEB’s assessment of marine shipping “substantially adequate”?

Trans Mountain and the federal government also argued — and this, in our view, was really the crux of the case — that in any event the NEB did conduct an extensive review of marine shipping, as part of the exercise of its public interest jurisdiction under section 52 of the NEB Act. In other words, the NEB’s assessment of marine shipping was substantively adequate, such that federal government was entitled to rely on it.

In addressing this argument, the Court began by making the following observation about the NEB’s assessment of marine shipping:

“It noted that while it assessed the potential environmental and socio-economic factors of increased marine shipping as part of its public interest determination under the [NEB Act], the Board “followed an approach similar to the environmental assessment conducted under [CEAA] … to the extent it was appropriate, to inform the Board’s public interest determination”.[10] [emphasis added]

Further, while the direct environmental effects of project-related marine shipping were considered under the NEB Act, but following an approach similar to that followed under CEAA, there were indirectly considered under CEAA as part of the cumulative effects of the TMX.

The Court then spent eight pages of its decision canvassing how the NEB addressed project-related marine shipping in its report, including its potential environmental effects both generally (e.g. spill prevention) and on the endangered Southern resident killer whale population in the Salish Sea (Georgia Strait) specifically. Following this, the Court summarized:

“[438] This review of the Board’s report has shown that the Board in its assessment of Project-related marine shipping considered:

• the effects of Project-related marine shipping on Southern resident killer whales;
• the significance of the effects;
• the cumulative effect of Project-related marine shipping on the recovery of the Southern resident killer whale population;
• the resulting significant, adverse effects on the traditional Indigenous use associated with the Southern resident killer whale;
• mitigation measures within its regulatory authority; and,
• reasonable alternatives to Project-related marine shipping.

[439] Given the Board’s approach to the assessment and its findings, the Board’s report was adequate for the purpose of informing the Governor in Council about the effects of Project-related marine shipping on the Southern resident killer whales and their use by Indigenous groups. The Board’s report adequately informed the Governor in Council of the significance of these effects, the Board’s view there were no direct mitigation measures Trans Mountain could apply to reduce potential adverse effects from Project-related tankers, and that there were potential mitigation measures beyond the Board’s regulatory authority and so not the subject of proper consideration by the Board or conditions.”

Yet this was not good enough for the Court, in large part because it found that the NEB’s assessment of the environmental effects of marine shipping under the NEB Act did not allow for a proper consideration of the Species at Risk Act (SARA).

The Species at Risk Act

Section 79(2) of SARA requires every person who is required to ensure that an assessment of the environmental effects of a project is conducted to (i) identify the adverse effects of the project on species at risk and their critical habitat; and (ii) if the project is carried out, ensure that measures are taken to avoid or lessen those effects and to monitor them.

Trans Mountain and the federal government argued, and the Court accepted, that in its report the NEB considered the adverse impacts of marine shipping on species at risk and their critical habitat; all reasonable alternatives to marine shipping that would reduce impact on the species at risk critical habitat; and measures to avoid or less any adverse impacts.

The problem is that the NEB lacks authority to impose conditions or otherwise ensure that measures will be taken to avoid or lessen the effects of marine shipping on species at risk:  “Thus, while the NEB could identify potential mitigation measures, and encourage the appropriate regulatory authorities to take further action, it could not ensure compliance with” section 79(2) of SARA.[11] Therefore, the NEB’s consideration of the project’s impact on resident killer whales failed to “substantially comply” with its obligations under section 79.[12]

Conclusion

There seems no doubt but that the NEB heard substantial evidence on, and gave significant consideration to, the potential adverse effects of project-related marine shipping on the environment in general and killer whales specifically. All of this is laid out clearly in its report to the federal government. However, because the NEB’s assessment was conducted under the NEB Act rather than CEAA, the Court found it to be deficient.

With respect, the Court failed to articulate compelling reasons why the NEB’s assessment of marine shipping under the NEB Act was so inferior to the EA conducted under CEAA. Therefore, the Court’s finding that the NEB’s consideration of project-related marine shipping was not “substantially adequate” is hard to accept. Finally, given that the NEB’s report laid out all of its findings on the issue in some detail, it also difficult to accept that the report was so deficient the federal government could not rely on it. The Court’s decision appears to be a triumph of form over substance.

 

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[1] Tsleil-Waututh Nation et al v Canada et al, 2018 FCA 153 [Tsleil-Wauthuth].

[2] Ibid, at para. 55.

[3] Regulations Designating Physical Activities SOR 2012-147, Schedule, sec. 46.

[4] Tsleil-Wauthuth, at para. 83.

[5] Tsleil-Wauthuth, at para. 391.

[6] Ibid.

[7] Tsleil-Waututh, at para. 398

[8] Tsleil-Waututh, at para. 401

[9] Tsleil-Waututh, at paras. 403-408.

[10] Tsleil-Waututh, at para. 420.

[11] Tsleil-Waututh, at para. 452.

[12] Tsleil-Waututh, at para. 453.