Back to the Future: Amendments to the Fisheries Act

Authors: Sean Parker and Ainslie Fowler, Student-at-Law

On February 6, 2018, the Federal Government introduced proposed amendments to the Fisheries Act with Bill C-68 (the “Bill”).  The Bill seeks to reverse several provisions of the current Fisheries Act that was amended in 2012 when the Harper government was in power. The Trudeau government states they are reversing the cuts made by the previous government to restore lost protections and incorporate new safeguards.

The Pre-2012 Fisheries Act

A significant feature of the pre-2012 Fisheries Act was that is protected fish habitat, including waters capable of supporting fish.  It was not required to prove that fish actually occupied the waters and that those waters contributed to fish habitat.  If water had the potential to be fish-bearing, then they were a protected fish habitat.

Under the pre-2012 Fisheries Act, “fish habitat” was defined as “any spawning grounds and nursery, rearing, food supply and migration areas on which fish depend directly or indirectly in order to carry out their life processes,” and applied to all fish.  Section 35 contained a broad prohibition on any work, undertaking or activity that resulted in the harmful alteration or disruption, or the destruction (“HADD”), of fish habitat.  This was generally considered to be a powerful provision that protected fish bearing waters and those bodies of waters that could be fish bearing, or attributed to fish habitat.

Current Fisheries Act (Post 2012)

Perhaps the most significant change made to the Fisheries Act in 2012 was to the provisions relating to fish and fish habitat.  Under the current Act, protection for fish only applies in certain specified fisheries including commercial fisheries, aboriginal fisheries, and designated recreational fisheries.  Moreover, the current Act gives the Governor in Council the power to make regulations providing for exemptions from the Act, including, for example, excluding fisheries from the definitions of Aboriginal, commercial, and recreational fisheries.

 

Bill C-68, the Proposed Changes to the Fisheries Act

The propose amendments to the current Act seek to restore previous measures protecting all fish and fish habitat, and, according to the Government, to introduce new modern safeguards in order to improve the protection of fisheries and their ecosystem. The proposed amendments are intended to achieve several objectives, some of which include:

• restoring lost protections by returning to comprehensive protection against harming all fish and fish habitat;
• strengthening the role of Indigenous peoples in project reviews, monitoring and policy development;
• allowing for the better management of large and small projects impacting fish and fish habitat through a new permitting framework and codes of practice; and
• promoting restoration of degraded habitat and rebuilding of depleted fish stocks.

In addition, when making decisions under the Act the Minister may consider such things the application of a “precautionary approach and an ecosystem approach” and the “sustainability of fisheries”.

While these are laudable objectives, the effectiveness of the proposed amendments is yet to be demonstrated. 

 

        i.            New Definitions to Support Amendments
Under the Bill, many definitions are changed, repealed, or returned to their pre-2012 iteration. Notable changes include the following:

• The definition “fish habitat” is broadened to mean any water frequented by fish, as opposed to only areas where fish depend directly or indirectly in order to carry out their life processes.
• The definition of “fishery” is replaced.  It is now a broad definition including all species and fish-bearing waters, not just a place where fishery appliances are used.
• The definition “serious harm to fish” is repealed as the broadened protections eliminate the severity of harm as a criterion for the application of the Act’s protections.

 
     ii.            A Robust “Purpose” of the Fisheries Act
Another notable change is with respect to the purpose of the Act.  The current and previous versions of the Act did not contain a purpose section. The Bill states that the purpose of the Act will be to provide a framework for the “proper management” of fisheries and “the conservation and protection of fish and fish habitat, including by preventing pollution.”

 

    iii.            Protection of All Fish and Fish Habitat
Under the Bill, the Governor in Council must consider many factors before making a recommendation that a regulation be made, including the contribution to the productivity of relevant fisheries by the fish or fish habitat, measures and standards to avoid fish death and avoid the harmful alteration, disruption or destruction of fish habitat, how the decision affects fish banks, the traditional knowledge of Indigenous peoples, and other important considerations.

Perhaps the most significant change is the restoration of the HADD provisions similar to those in the pre-2012 Fisheries Act. Under the Bill, it is prohibited to carry on any work, undertaking or activity that results in the harmful alteration, disruption or destruction of fish habitat. The current Act only protects fish in designated fisheries.  Since the proposed definition of “fish habitat” is also broadened to include any water frequented by fish, or waters where fish depend directly or indirectly to carry out their life process, this amendment would protect all fish.

Other notable changes include the enhanced Ministerial powers to rebuild depleted fish stock and take “prompt measures” to address threats to the proper management and control of fisheries and the conservation and protection of fish, make a fisheries management order.

     iv.            Consideration of Indigenous Peoples of Canada
Under the Bill, when making a decision under the Act the Minister must consider the adverse effects that decision may have on the rights of Indigenous peoples of Canada.  In addition, the Minister may consider traditional knowledge of the Indigenous peoples of Canada, community knowledge, “social” and “cultural factors” in the management of fisheries, and may cooperate with an Indigenous governing or other body (including a co-management body) established under a land claim agreement.
 

       v.            Penalties
The Bill does not alter any of the penalty provisions in the current Act, which makes a distinction between individuals, corporations, and small revenue corporations for purposes of penalties and fines.  With respect to corporations, the minimum fine for a first offence is $500,000 (by way of indictment) and the maximum is $6 million.  For a corporation’s second offence, the fine is a minimum of $1 million to a maximum of $12 million (see section 40(1)(ii)).  The amendments to the penalty provisions in 2012 were generally considered to be enhanced from the previous versions.

     vi.            Conclusion
Bill C-68, if enacted, will significantly change the protections in place under the current Act by broadening protection to all fish and fish habitat, providing Indigenous peoples of Canada an enhanced role in the process, and broadening the considerations for decision making and drafting regulations to consider other factors, such as traditional knowledge.

 

The proposed amendments will reverse many of the changes that were made to the Act in 2012 and appear to support  habitat and other protections while maintaining the enhanced penalty regime introduced in 2012.  The procedures for permitting under the Act, engagement of Indigenous peoples and other practical implementation processes are not currently known.

 

For information on how Bill C-68 may affect your operation please contact Sean Parker, Ainslie Fowler or another member of our Energy, Environmental and Regulatory Practice Group.

 

A Table of Key Changes

 

Provision	Pre-2012 Fisheries Act	Current Fisheries Act	Bill C-68
“Fishery”	"fishery" includes the area, locality, place or station in or on which a pound, seine, net, weir or other fishing appliance is used, set, placed or located, and the area, tract or stretch of water in or from which fish may be taken by the said pound, seine, net, weir or other fishing appliance, and also the pound, seine, net, weir, or other fishing appliance used in connection therewith;	No change.	Fishery with respect to any fish, includes, (a) any of its species, populations, assemblages and stocks, whether the fish is fished or not, (b) any place where fishing may be carried on, (c) any period during which fishing may be carried on, (d) any method of fishing used, and (e) any type of fishing gear or equipment or fishing vessel used;
“Fish Habitat”	"fish habitat" means spawning grounds and nursery, rearing, food supply and migration areas on which fish depend directly or indirectly in order to carry out their life processes;	“fish habitat” means spawning grounds and any other areas, including nursery, rearing, food supply and migration areas, on which fish depend directly or indirectly in order to carry out their life processes.	Fish habitat means water frequented by fish and any other areas on which fish depend directly or indirectly to carry out their life processes, including spawning 20 grounds and nursery, rearing, food supply and migration areas.
“Waters Frequented by fish”	“water frequented by fish" means Canadian fisheries waters	No change.	Subsumed by definition of Fish habitat and Fishery
“Canadian Fisheries Waters”	Canadian fisheries waters means all waters in the fishing zones of Canada, all waters in the territorial sea of Canada and all internal waters of Canada	No change.	Subsumed by definition of Fish habitat and Fishery
Purpose Section	Repealed	Repealed	Purpose of Act 2.1 The purpose of this Act is to provide a framework for (a) the proper management and control of fisheries; and (b) the conservation and protection of fish and fish habitat, including by preventing pollution.
Section 35	Harmful alteration, etc., of fish habitat 35. (1) No person shall carry on any work or undertaking that results in the harmful alteration, disruption or destruction of fish habitat.	Serious harm to fish 35 (1) No person shall carry on any work, undertaking or activity that results in serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or to fish that support such a fishery.	Harmful alteration, disruption or destruction of fish habitat 35 (1) No person shall carry on any work, undertaking or activity that results in the harmful alteration, disruption or destruction of fish habitat.

 

 

 

 

 

 

Sweeping Changes Proposed to Canada’s Environmental Assessment Legislation

Author: Sarah Levine

The parliamentary review of Canada’s federal environmental assessment and regulatory processes, initiated by the Trudeau government in 2016, has culminated in proposed sweeping changes to the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”), the Fisheries Act, the Navigation Protection Act, and the National Energy Board (“NEB”).  

Bill C-69, which was tabled last week, proffers the notion of "One project. One assessment", which reflects Ottawa’s goal of creating a more streamlined process for the review of designated projects.  This change seems aimed at pleasing project proponents. 

On the other hand, the Bill introduces the concept of a “planning phase” to the impact assessment process before an actual impact assessment is done, with attendant consultation obligations.  It also widens the type of impacts that will be assessed.  These changes seem aimed at pleasing stakeholders such as landowners, environmental groups and Indigenous peoples.  It will be interesting to see whether this new regime is successful in achieving these different aims, which if not inherently contradictory certainly can be in contentious cases.

So what exactly is in Bill C-69 and what will Canada’s federal environmental assessment process look like, assuming these proposed changes become law?

Enacting the Impact Assessment Act and the Canadian Energy Regulator Act

The CEAA 2012 was introduced under the Harper Conservatives and, while touted as industry-friendly legislation, has been the subject of much criticism from both environmental groups and industry alike due to both the perceived scaling back of environmental protections as well as its review process which critics charge is inefficient. In response to this, the Trudeau government is proposing to repeal the CEAA 2012 and replace it with the Impact Assessment Act.

Currently, there are three separate agencies (“responsible authorities”), each with their own set of rules, responsible for conducting environmental assessments: the NEB, the Canadian Nuclear Safety Commission (“CNSC”) and the Canadian Environmental Assessment Agency (“CEAA”).  All designated projects, as defined in the Regulations Designating Physical Activities (or as designated by the Minister of Environment), undergo an environmental assessment by one of these responsible authorities. 

Bill C-69 seeks to streamline these multiple agencies by creating the Impact Assessment Agency of Canada (“IAA”), a single body designed to carry out the review of all major projects in Canada.  In addition, the NEB will be replaced by the “Canadian Energy Regulator”.  The IAA will bring the impact assessment (“IA”) process under the authority of a single agency, scrapping the NEB’s and CNSC’s assessment powers. The IAA would work with the Canadian Energy Regulator, the CNSC and Offshore Boards to ensure that safety and other important regulatory criteria are considered in the new IA review process.

Key features of the IA process

Arguably the most significant change in the proposed IA process is the shift away from decisions based solely on a determination of adverse environmental impacts to one that takes an integrated approach to considering whether a designated project’s adverse effects are in the “public interest.”  This public interest determination will not only take into consideration the potential environmental impacts of the project, but also incorporate considerations such as the effect of the project on the government’s ability to meet its climate change commitments, the extent to which the designated project contributes to sustainability, the impacts on Indigenous groups and rights and “the intersection of sex and gender with other identity factors”.  Impact assessments under the IAA must also consider “any alternatives to the designated project”, a requirement that had been in the old Canadian Environmental Assessment Act but was excluded in the CEAA 2012.

The new IAA mandates an initial “Early Planning” phase of up to 180 days that will engage Indigenous communities and the public in meaningful discussion to determine whether or not they will be affected by the proposed project.  The Minister will have the power to decide that a project not even proceed to an impact assessment if the Minister is of the opinion that “it is clear that the designated project would cause unacceptable effects”.  This appears to be intended to allow the government to reject a project on broad policy grounds before a proponent invests significant time and money.

The IAA will have set timelines for the review of projects: a maximum of 300 days for smaller projects with fewer assessment requirements (so that they can be carried out in a "timely manner"); and 600 days for bigger projects that are subject to a panel review, a tighter turnaround than the current 24 months (730 days) under CEAA 2012.  Following the Impact Assessment, there will be a maximum 30 day window for a decision to be rendered if the Minister determines a public interest component, or 90 days if Cabinet makes the public interest determination.

The existing "standing test," which acts as a threshold that is determinative of who can participate in the regulatory review process, is being eliminated in order to give members of the public a greater chance to provide input. The legislation emphasizes the critical need for the IAA to meaningfully consider impacts on Indigenous rights and culture early on in the review process, for which the federal government will be providing financial support.

Canadian Energy Regulator- the New NEB

The National Energy Board is slated to be replaced by the Canadian Energy Regulator (“CER”), whose job it will be to oversee the regulation of pipelines and the traffic, tolls and tariffs relating to the transmission of oil and gas through them.

The NEB’s ability to satisfy the Crown’s duty to consult with First Nations or to undertake environmental assessments in general was the subject of criticism for many years. Among other things, the creation of the CER is intended to bolster capacity in areas such as environmental science, community development and Indigenous traditional knowledge.

However, Minister McKenna has indicated that the federal cabinet will retain its right to approve projects that it feels are in the national interest, even if an assessment process determines a project could cause significant environmental, health, or socio-economic effects.  This veto power of the federal government to approve projects that have not passed a review will no doubt disappoint certain environmental and Indigenous groups, but Minister McKenna asserts the need for balancing all Canadians’ interests, noting that “Canadians want a modern environmental regulatory system that protects the environment, supports reconciliation with Indigenous people and attracts investment.”

Next Steps

The federal government is presently seeking input from Indigenous peoples and the broader public on regulations and policy changes required to accompany the legislation. In particular, the government is seeking public comment on two key proposed regulations under the IAA by April 15, 2018: a revised “Project List” to identify the major projects to be subject to the IAA and the Proposed Information and Time Management Regulations which will replace the current requirements for a designated project’s description.

The tabling of Bill C-69 flows from the Trudeau government’s commitment to engage in a critical review of Canada’s federal environmental and regulatory processes to address concerns from various groups about meaningful engagement, inefficiencies, and balancing the country’s environmental goals with its desire to remain competitive in getting Canadian resources to market.

With promises of "more predictable and consistent timelines", decisions based on "robust science, evidence and Indigenous traditional knowledge" and more coordination with the provinces "to support one project one assessment", we will be closely following the progress of this draft legislation, as its potential to usher in a new era of federal project impact assessment might have significant impacts on the future of Canada's industries and economy, but also on federal-provincial and Crown-Indigenous relations.

Treaty Rights and the Crown’s Duty to Consult Remain at Forefront of Legal Discourse

By Sarah Levine and JoAnn P. Jamieson

In 2017, several significant decisions were released that keep the treaty rights of Indigenous peoples and the Crown’s duty to consult at the forefront of legal discourse.  While the importance of treaty rights is now consistently espoused by all levels of courts in Canada, the scope of those rights, and exactly what it takes to fulfill the Crown’s duty in any given situation, continues to be a hotbed of litigation.  

Regulatory Tribunals Must Heed Crown Consultation Obligations

In June 2017, the Supreme Court of Canada delivered two rulings with respect to the scope of the duty to consult, Clyde River (Hamlet) v. Petroleum Geo-Services Inc. (“Clyde River”)¹  and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc. (“Chippewas of the Thames”).²  These decisions clarify that the Crown’s duty must be fulfilled prior to a project’s final approval.  If the Crown’s duty remains unfulfilled, the decision maker must withhold the approval.

Both Clyde River and Chippewas of the Thames concerned appeals of project approvals by the National Energy Board (“NEB”) on the grounds of inadequate consultation.  In both instances, the appeals to Canada’s Federal Court of Appeal were dismissed.  Given the similar legal issues involved, the Supreme Court of Canada released its decisions on the two cases concurrently. 

The two cases differed on the facts.  In Clyde River, minimal effort was made to assess the potential impact of the proposed seismic project on the rights of the affected Inuit and the NEB did not hold a public hearing.  In Chippewas of the Thames, the First Nation participated fully in a public hearing held by the NEB, for which they applied for and received participant funding.  The Supreme Court allowed the Inuit’s appeal in Clyde River, finding that the consultation carried out by the NEB on the Crown’s behalf was inadequate due to the lack of opportunity to participate meaningfully in the environmental assessment and regulatory review processes.  In contrast, the appeal in Chippewas of the Thames was dismissed as the Court found that the First Nation’s full participation in the NEB public hearing process constituted effective consultation, which discharged the Crown’s duty to consult. 

The differing results in these two cases do not take away from the overarching message, namely that the Crown’s consultation obligation must be fulfilled prior to a final decision on a project. In Chippewas of the Thames, the First Nation’s receipt of participant funding and full participation in the NEB’s public hearing fulfilled this requirement, but in Clyde River, the lack of a meaningful consultation process on the potential environmental impacts as well as the absence of a public hearing process in which the Inuit could participate was found by the Supreme Court to be inadequate consultation.

In British Columbia, the Fort Nelson First Nation filed a judicial review of a decision by the British Columbia Oil and Gas Commission (“OGC”) to approve a 39 kilometre gas pipeline and storage facility located in an area of British Columbia known as the Fortune Core, traditional territory of the First Nation. In its judicial review, the First Nation cited an “inadequate, unlawful and wholly unacceptable approach to consultation” by the OGC.  The First Nation challenged the OGC’s consultation process on the basis that the OGC refused to seriously consider and address its concerns regarding the health and abundance of the Maxhamish caribou herd present in the area and the ongoing disturbance to its habitat.

On December 15, 2017, the British Columbia Supreme Court delivered an oral ruling,³  finding that the Fort Nelson First Nation was not properly consulted by the OGC, nor were their concerns about the environmental impacts of the project properly addressed.  The Court pointed to the fact that, at the outset of the OGC’s communications with the First Nation, the OGC improperly limited the scope of consultation by indicating they would not comment on the expert report on caribou population health and migration submitted to them by the First Nation.  By not being willing to engage the First Nation in a discussion of the potential cumulative impacts of the project on treaty rights or the specific impact that the project could have on the health of the caribou population or linear density, the Court found that the OGC acted unreasonably.  As a result, and following the Supreme Court of Canada’s guidance in Clyde River, the Court quashed the OGC’s approval of the pipeline. 

The OGC has responded with an information bulletin indicating that it will study the judicial review decision and is committed to making any necessary improvements to its consultation and decision-making processes.

Modern Treaties Are To Be Adhered To and Respected

In December 2017, the Supreme Court of Canada also reiterated the importance of modern treaties in, First Nation of Nacho Nyak Dun v. Yukon,⁴  making it clear that they are constitutional documents to be respected and adhered to.  This case centered around the Peel Watershed region in the Yukon, which is not only a pristine swath of sub-Artic wilderness, but it is also home to a biodiverse cross-section of fish, plants and wildlife, significant mineral wealth and is the traditional territory of the Tr'ondëk Hwëch'in, Na-Cho Nyäk Dün, and Vuntut Gwitchin First Nations.

The Peel Watershed is also the subject of a land-use plan with the Yukon government.  A land-use commission (“Commission”) was established by the Yukon government and the First Nations to govern the Peel Watershed, as required by the Umbrella Final Agreement between the Government of Canada, the Council for Yukon Indians, and the Government of the Yukon (“UFA” or “treaty”).  In 2011, after several years of consultation and work, the Commission settled on a Final Recommended Plan that would see 80% of the region protected from development (55% would be permanently protected and a further 25% would have interim protection).  Upon receipt of the Final Recommended Plan, the territorial government had the power to approve, modify, or reject the plan.  The dispute arose when the government proceeded to significantly modify the land-use plan by determining that 70% of the watershed would instead be open to development, effectively usurping the planning process and the role of the Commission.

At trial, the Yukon government conceded that it had failed to uphold its treaty obligations and attempted to overhaul the land-use planning process to achieve their desired result.  The lower court found that the Yukon government disrupted the planning process by disregarding the Commission's Final Recommended Plan in favour of its own and ordered the parties to return to the second round of consultation.

On appeal, the Yukon Court of Appeal found that Yukon had failed to properly exercise its rights to propose modifications to the Recommended Plan and directed the return of the parties to an earlier stage in the planning process than what was ordered at the trial level.  This direction to return to an earlier stage of planning is what the Supreme Court of Canada took issue with.

The Supreme Court of Canada unanimously overturned the Yukon Court of Appeal decision, holding that the appeal court “improperly inserted itself into the heart of the ongoing treaty relationship between Yukon and the First Nations”.  Instead, the Supreme Court upheld the trial judge’s ruling to quash the government's final land-use plan and ordered the planning process to resume from the consideration stage of the Final Recommended Plan.

The Supreme Court stated that the relevant portion of the UFA, dealing with the land-use planning process, was to be interpreted in light of modern treaty interpretation principles.  These espouse interpretations that are deferential to the treaty text. Section 11.6.3.2 of the UFA sets out Yukon’s right to modify a Final Recommended Plan and authorizes Yukon to make modifications that are based on those it proposed earlier in the process or respond to changing circumstances.  This is not a green light for Yukon to completely overhaul the Final Recommended Plan. Yukon’s power to modify in accordance with section 11.6.3.2 is also subject to “prior consultation”.

The Court went on to proclaim that the government’s unilateral overhauling of the Final Recommended Plan not only disrespected the land-use planning process, but it was conduct “not becoming of the honour of the Crown”.  These strong statements made by Canada’s highest court not only assert the authority of Yukon's land claim agreements, but serve as a reminder to provincial and territorial governments, as well as the federal Crown, of the government’s obligations under the treaties.

No Injunction for Cumulative Effects

While the Courts have recently handed down some strong commentary on the Crown’s duty to consult and the protections owed to the treaty rights of Indigenous peoples, the Courts are also demonstrating a willingness to uphold limits on the protection of treaty rights. 

In late 2017, the BCSC denied a second interim injunction application by the Blueberry River First Nations ("BRFN"), who sought an order against the Province prohibiting further industrial development on the BRFN’s traditional lands.⁵   The BRFN put forward evidence of the cumulative effects of industrial disturbance on their traditional territory and the corresponding impacts on the exercise of their treaty rights to hunt and trap.  The Province, in response, tendered evidence showing that granting the injunction would have a significant impact on government revenue and the regional economy in and around Fort St. John.

While the Court in Yahey v. British Columbia⁶ agreed that the BRFN was being irreparably harmed by the cumulative effects of industrial development on its treaty right to hunt, fish, and trap, the Court ultimately concluded that the balance of convenience did not favour the granting of an injunction. On the facts of this case, the Court found that, on balance, the irreparable harm  and cumulative effects of energy development on the ability to exercise treaty rights did not outweigh the economic harm an injunction would have on the Province and third party businesses. 

While an injunction was denied in this case, with the right facts, it is possible that the cumulative impact on the treaty right to hunt, fish, or trap may be found to tip the balance of convenience away from development and in the Indigenous community’s favour. 

Whether Duty to Consult Extends to Legislation

In thinking about what the future holds for the treaty rights of Indigenous peoples, an appeal currently before the Supreme Court of Canada is certainly one to watch.  Canada’s highest court began hearing an appeal by Alberta’s Mikisew Cree First Nation (“MCFN”) on January 15, 2018, that has the potential to make Canada’s lawmakers give Indigenous peoples a seat at the drafting table when it comes to legislation that affects their treaty rights.  The case Chief Steve Courtoreille on behalf of himself and the members of the Mikisew Cree First Nation v. Governor General in Council, et al. (“Courtoreille”) poses a fundamental question about the scope of the Crown duty to consult:  Does the duty to consult extend to consultation on proposed legislation?

Courtoreille challenges the government’s amendments (under the prior Conservative government) to  key pieces of federal environmental protection legislation that the MCFN argue were likely to affect their treaty rights.  The MCFN assert that the government had a duty to consult the MCFN on these changes.  This is a novel and interesting legal argument, as the Crown’s duty to consult is typically only considered and extended in situations where a specific decision potentially affecting treaty rights is being made by a government department or regulatory body.

In 2014, the Federal Court agreed with the MCFN and found that governments have a legally binding duty to consult First Nations when they are developing legislation that may impact their treaty rights. This finding was overturned by the Federal Court of Appeal in late 2016. The MCFN is now appealing this decision to the Supreme Court of Canada.

The MCFN’s position is that if First Nation voices can be heard and the protection of their rights incorporated at the drafting stage of legislation, rather than when they appear before regulatory boards who are applying legislation that is already the law, First Nations might be able to ensure that their treaty rights are truly and meaningfully considered.  However, the government’s stance is that forcing First Nations involvement upon them will fetter Parliament’s law-making process and will not necessarily lead to better legislation, but may impede or otherwise negatively affect their ability to govern.  Canada also argues that allowing the MCFN’s appeal would improperly send a message that there is a higher value on treaty rights than other constitutionally-protected rights, such as Charter rights.

This appeal has potentially serious and sweeping implications not only for the law-making process and the protection of treaty rights in Canada, but also for the future of reconciliation.  In the context of this appeal, the MCFN’s Chief Archie Waquan provided an emphatic caution against not considering consultation with First Nations at the drafting table, where they can have the power to ensure their treaty rights are protected as new laws are created:

Law making is the most important form of Crown decision making. It is corrosive to the process of Reconciliation for the government to say that it does not need to consult with First Nations on legislation that may adversely affect our Treaty Rights. It is our hope that the Supreme Court of Canada will confirm that the federal government and all other governments in Canada must consult with First Nations on legislation that may adversely affect our rights. Ultimately, this will benefit all Canadians.

There is no question that how the rights of Indigenous peoples are reconciled with the process of law-making will be a significant and historical finding for our Canadian democracy.  The direction we take is now in the hands of the Supreme Court of Canada.


¹2017 SCC 40.
²2017 SCC 41.
³The written decision has since been released:  The Fort Nelson First Nation v. BC Oil and Gas Commission, 2017 BCSC 2500.
⁴2017 SCC 58.
⁵Note that the application for an injunction was made in the context of their underlying lawsuit for the breach of treaty rights, which is scheduled to be heard in March 2018.
⁶2017 BCSC 899.

Some Thoughts on BC's Plan to Restrict Increased Transportation of Bitumen

Author: Gavin Fitch

On January 30, 2018, the government of British Columbia announced that it intends to further regulate oil spill response in the province.  As part of the announcement, BC said that it may restrict the increase of diluted bitumen transportation through the province “until the behaviour of spilled bitumen can be better understood and there is certainty regarding the ability to adequately mitigate spills”.

The government of Alberta reacted swiftly.  First, Premier Rachel Notley announced that Alberta was immediately cancelling further talks with BC on the import of electricity from that province, including from the Site C project currently under construction on the Peace River.  Following that, the Premier announced a ban on the import of wine from BC.  As well, the Premier has publicly called on the Prime Minister to intervene in the dispute, on the basis that BC’s actions are unconstitutional because they trench on federal jurisdiction.

What, exactly, is going on and what does it mean for major pipeline projects, in particular the Kinder Morgan TransMountain project approved by the federal government in 2016?

What did BC announce, exactly?

On one view of things (BC’s view), all that was announced was that BC intends to consult on “proposing a second phase of regulations to improve preparedness, response and recovery from potential spills” (a first phase of regulations was approved in October 2017).  The regulations would be made under BC’s Environmental Management Act.

The announcement, made by BC’s Minister of Environment and Climate Change Strategy, stated that BC is “looking for feedback” in five areas:

1. Response times, to ensure timely responses following a spill;
2. Geographic response plans, to ensure resources are available to support an immediate response, that take into account unique characteristics of a given sensitive area;
3. Compensation for loss of public and cultural use of land, resources or public amenities in the case of spills;
4. Maximizing application of regulations to marine spills; and
5. Restrictions on the increase of diluted bitumen transportation until the behaviour of spilled bitumen can be better understood and there is certainty regarding the ability to adequately mitigate spills.

BC says that an independent scientific advisory panel will be established to make recommendations to the Minister on “if and how heavy oils can be safely transported and cleaned up, if spilled”.  Specifically, the panel will help address the scientific uncertainties outlined in the report, The Royal Society of Canada Expert Panel: The Behaviour and Environmental Impacts of Crude Oil Released into Aqueous Environments.  The recommendations of the advisory panel will inform future regulatory development and approaches to spill response.

The process to receive feedback on the proposed regulations will feature engagement with First Nations, to begin as soon as possible.  BC says it will also meet with industry, local governments and environmental groups “over the coming weeks and months”.  As well, the general public will be able to provide input online through written comments, once an “intentions paper” is released. The intentions paper will provide an overview of the proposed regulations and is expected to be posted before the end of February 2018. 

No timeline is included as to how long BC expects it will take to receive and consider this feedback, nor how long it will take for the independent scientific advisory panel to make its recommendations.

The part of the announcement that has caught everyone’s intention is this:

“In order to protect B.C.’s environmental and economic interests while the advisory panel is proceeding, the Province is proposing regulatory restrictions to be placed on the increase of diluted bitumen (“dilbit”) transportation.”

This has been interpreted almost universally as being directed at the TransMountain Pipeline Expansion (TMX), a project that would increase the amount of diluted bitumen shipped from Alberta’s oil sands to 890,000 barrels per day from 300,000 barrels per day.  The current BC government has previously stated that it will use every legal means possible to block the TransMountain expansion.

Is further review/study of spill response warranted?

While this is ultimately a policy decision, and opinions will differ widely, it is worth remembering that the issue of the potential for, and ability to clean up, a marine spill of bitumen was considered and assessed by the National Energy Board (“NEB”) when it reviewed the TMX project; it was also considered by the NEB in its review of Enbridge’s Northern Gateway project.

As noted by the NEB in its report on TMX, the Board completed a comprehensive environmental assessment of the Project in accordance with its authority under the National Energy Board Act (NEB Act) and the Canadian Environmental Assessment Act, 2012.  Although marine shipping is not regulated by the Board, as part of its overall public interest determination under the NEB Act, the Board considered the potential environmental effects of Project-related marine shipping.  Specifically, the NEB considered the likelihood and potential consequence of a spill from the Project or from a Project-related tanker.

The evidence before the NEB was that the TransMountain project would result in an increase in the number of tankers calling at the Westridge Marine Terminal in Burnaby from 5 per month to up to 34 per month.  Trans Mountain said that the Project-related increase in marine traffic within Burrard Inlet would represent approximately 16.4 per cent of total marine traffic volume, compared to the current 3.0 per cent.  It also said that within Juan de Fuca Strait, Project related tanker traffic would increase to about 6.6 per cent of total marine traffic volume as compared to the current 1.1 per cent.

The NEB examined that existing regulatory framework for marine shipping and found that while the federal government has constitutional authority for navigation and shipping, both the provincial and federal governments have shared authority over the environment.  The NEB stated:

“The evidence before the Board indicates that there are competent authorities responsible for this regime and that these jurisdictions cooperate with each other and other organizations in facilitating the safety of marine shipping. The evidence indicates that the regime is functioning appropriately.”

The NEB’s key findings on marine oil spills may be summarized as follows:

“The Board is satisfied that sufficient evidence has been placed on the record regarding the fate and behavior of an oil spill to support assessment of potential spill-related effects and spill response planning”.

The Board found that while the consequences of large spills could be high, the likelihood of such events occurring would be very low given the extent of the mitigation and safety measures that would be implemented:  “The Board finds that there is a very low probability of a marine spill from a Project-related tanker that may result in a significant effect (high consequence). The Board finds this level of risk to be acceptable.”

It is obvious that many people, including presumably the province of BC, do not agree with these findings made by the NEB in its report on TMX.  While that may be the case, it is not fair to say that the issue of marine oil spill was not reviewed and assessed by the NEB.  In other words, it’s not that the issue has not been reviewed and assessed by the NEB, it’s that some people reject that assessment.

Report of the Royal Society of Canada Expert Panel:  The Behaviour and Environmental Impacts of Crude Oil Released into Aqueous Environments

As noted above, one of the justifications made by BC for striking an independent scientific advisory panel is that the panel “will help address the scientific uncertainties” outlined in the report, The Royal Society of Canada Expert Panel: The Behaviour and Environmental Impacts of Crude Oil Released into Aqueous Environments (“Royal Society Report”).

The Royal Society Report arose as a result of the NEB’s review of the Northern Gateway project.  In its Northern Gateway report, the NEB ordered Enbridge to “establish a research program regarding the behavior and cleanup (including recovery) of heavy oils spilled in freshwater and marine aquatic environments”.  In mid-2014, the Royal Society was approached by the Canadian Energy Pipeline Association and the Canadian Association of Petroleum Producers about carrying out an independent, arm’s length assessment of the state of the science in this area.

The Royal Society Expert Panel (“Panel”) was composed of international experts on oil chemistry, behaviour and toxicity.  It reviewed the current science relevant to crude oils spilled into Canadian marine waters, lakes, waterways and wetlands.  The Panel relied on scientific literature, key reports and selected oil spill case studies, including well-known tanker spills (e.g., the Exxon Valdez spill in 1989), the Deepwater Horizon spill of 2010, pipeline spill ruptures and train derailments.

The Panel found that the dozens of crude oil types transported in Canada exist along a chemical continuum, from light oils to bitumen and heavy fuels, and the unique properties of each of these oil types determine how readily spilled oil spreads, sinks, disperses, and impacts aquatic organisms and what proportion ultimately degrades in the environment.  Despite the importance of oil type, the Panel concluded that the overall impact of an oil spill, including the effectiveness of an oil spill response, depends mainly on the environment and conditions (weather, waves, etc.) where the spill takes place and the time lost before remedial operations.

Interestingly, the Panel also said:

The good news is that transporting oil at sea is safer than it has ever been. According to the International Tanker Owners Pollution Federation, large tanker spills occurred almost 14 times more often during the 1970s on average than they do today. Undersea blowouts during oil production and exploration are also rare (although Canadian offshore exploration and drilling is expected to increase). Less known is how much oil spilled from pipelines, trains and trucks reaches our lakes, rivers and wetlands (where oil can become trapped and remain concentrated causing more harm or creating more concern because towns and cities are nearby). However, while big oil spills from grounded tankers, oil rigs, pipeline ruptures or train wrecks are guaranteed newsmakers, in truth most of the oil-related chemicals that make it into our oceans arrive from natural seepage, routine tanker maintenance and runoff from land.  [emphasis added]

The main thing the Panel did in the Report was to identify (many) gaps in the current state of knowledge and recommend further research required to fill those gaps.  The Panel prioritized the research into that it believes is required within the next 5 year, 5-10 years and +10 years. 

It is clear that the research proposed by the Panel will, if undertaken, be ongoing for likely decades.  A moratorium on increased shipments of bitumen while this research is conducted would effectively mean no more pipelines for the foreseeable future.

The Federal Government’s Approval of TransMountain

The NEB Report on TMX was issued May 2016.  Later that month, the Minister of Natural Resources Canada, Jim Carr, named a three-member Ministerial Panel for the proposed project.  The objective of the Ministerial Panel was to hear from Canadians and local communities and Indigenous groups along the proposed pipeline and shipping route to hear views that may not have been considered as part of the NEB review.

The federal government announced its approval of TMX on November 29, 2016.  This approval was based on the 157 conditions recommended by the NEB.  In addition, approval of TMX was tied by the federal government to its announcement, earlier in November 2016, of a new national “Oceans Protection Plan”. 

According to the federal government, its Oceans Protection Plan will improve marine safety and responsible shipping and protect Canada's marine environment.  The government attached a $1.5 billion price tag to this plan, which it said is designed to achieve a world-leading marine safety system for Canada that will increase the federal government’s capacity to prevent and improve response to marine pollution incidents.

Again, whether you think the Ocean Protection Plan will really make marine shipping of bitumen safer or not, it cannot be denied that in approving TMX the issue of increased risk of oil spills was addressed by the federal government.

The Billion Dollar Question:  Is BC’s proposal to restrict increases in the transportation of diluted bitumen unconstitutional?

It is beyond the scope of this post to provide legal analysis of the constitutionality of what BC is proposing.  However, we offer the following thoughts.

Under section 91 of the Constitution Act 1867, the federal government has specific jurisdiction over:

The regulation of trade and commerce

While this power has been interpreted restrictively with respect to intraprovincial trade and commerce, federal jurisdiction over interjurisdictional trade and commerce is clear.  To the extent that the “pith and substance” of BC’s proposed ban on increased bitumen transportation within the province is to restrict imports from Alberta, it could be unconstitutional.

Navigation and shipping

Sea coast and inland fisheries

While the federal government has constitutional authority for navigation and shipping and seacoasts, jurisdiction over the environment is shared between the federal and provincial governments.  The regulations that BC is proposing would be made under the province’s environmental jurisdiction. 

In a “Backgrounder” to its announcement, the BC government stated:

“The Province seeks to broaden existing ministry authority to ensure provincial interests are fully addressed in marine spill prevention, preparedness, response and recovery. While the primary responsibility for marine spills lies with federal agencies, a spill of any significance will impact and involve all orders of government. The provincial government has a responsibility to ensure there is a regulatory framework in place that protects its coastal resources.”

It seems clear that the BC government is aware that there is a fine constitutional line between its jurisdiction over the environment and the federal government’s jurisdiction over navigation and shipping and seacoasts.  For example, the federal power over navigation and shipping has been held to give it the power to regulate the discharge of oil and other harmful substances into the sea.

In addition, the federal government has jurisdiction to make laws for the “peace, order and good government of Canada” in relation to all matters not coming within the classes of subjects assigned exclusively to the provinces.  Finally, under the doctrine of “paramountcy”, where there are inconsistent (conflicting) federal and provincial laws, the federal law prevails.

Under sections 92 and 92A of the Constitution, the provinces have jurisdiction over:

Local works and undertakings other than ships, railways, canals, telegraphs and other works and undertakings connecting the province with any other or extending beyond the limits of the province—hence, for example, the NEB’s jurisdiction over interprovincial pipelines.

Property and civil rights in the province—this power has been held to authorize the regulation of land use, including the regulation of emissions that could pollute the environment.

Non-renewable natural resources, forestry resources and electrical energy

With respect to non-renewable natural resources, a province may make laws in relation to the export from the province to another part of Canada of the primary production from such resources in the province, but such laws may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada.  Arguably, the logical corollary of this is that a province may not make laws which discriminate in the supply of a non-renewable resources imported from another part of Canada.

Conclusion

If BC’s proposed new regulations relating to marine spill response did not include the potential restriction on increased bitumen transportation, it is likely there would be little controversy as to its constitutionality (notwithstanding the federal jurisdiction over marine spills).  However, it will be interesting to see how BC justifies the constitutionality of the restriction of increased bitumen transportation given that the transportation network is interprovincial.