The Northern Gateway Pipeline project has been proposed to carry bitumen diluted with natural gas condensate from northern Alberta to Kitimat, BC, as well as carrying condensate in the opposite direction. Of the proposed 660km of pipeline 90% of it would lie on purportedly provincial Crown lands, including lands currently and traditionally used by First Nations, as well as 850 watercourses throughout the province. The diluted bitumen transported through the pipeline would then be shipped by tanker along the north coast of the province, where many First Nations, including Gitga’at, both currently and traditionally use the coastal land and waters.
The provincial Environment Assessment Act obliges a proponent to obtain an environmental assessment certificate prior to undertaking a “reviewable project” as defined through regulations. A certificate is also required prior to the issuance of any further permit or approval for such a project.
The Environmental Assessment Office and the National Energy Board entered into equivalency agreements, first in 2008 and then again in 2010, agreeing that where reviewable projects require environmental assessments from both agencies the Board’s approval will be sufficient and a parallel provincial assessment will not be necessary. These agreements provided that such projects could proceed without a certificate from the provincial agency.
The Northern Gateway Pipeline project was the first project to proceed under the terms of the equivalency agreements. It triggered a federal environmental assessment and required a Certificate of Public Convenience and Necessity from the Board. A joint review panel was established to review the project and it ultimately recommended approval of the project, determining that certain significant environmental effects of the project were justified in the circumstances. The BC government participated as an intervenor before the joint review panel and at the same time set out five conditions that would need to be met before it could support any heavy oil pipelines in the province:
- Successful completion of the environmental review process;
- World-leading oil spill response, recovery, and prevention systems for the BC coastline;
- World-leading practices for land oil spill response, recovery, and prevention systems;
- Legal requirements regarding Aboriginal and treaty rights be addressed and First Nations are provided with opportunities to participate and benefit from the project; and
- British Columbia receives a fair share of the economic benefits of the project that appropriately reflect the risk borne.
In final submissions to the joint review panel the province stated that it opposed approval of the project as the proponent had failed to provide evidence that it could meet the requirement for a world-class spill response. The province went on to recommend various additional conditions for the project if it were to be approved. The federal government ultimately approved the project in June 2014 and chose not to adopt several of the conditions proposed by the province in the terms of its approval. Four out of five of the province’s conditions for supporting the project went unsatisfied.
Constitutionality of the Act
The Court first dealt with a constitutional question raised by Northern Gateway, which pre-emptively challenged the constitutionality of any conditions or requirements under the provincial Environmental Assessment Act applying to its proposed project. Northern Gateway asserted that the project was a federal undertaking as it would involve a pipeline that was clearly interprovincial in nature. However, both provincial governments and the federal government share legislative authority over environmental regulation. The Court found it would be premature to speculate as to the constitutionality of hypothetical conditions under the provincial statutes but proceeded with a constitutional analysis of the specific provision of the Act authorizing a provincial assessment of the project.
The Court found that in pith and substance the Act’s aim was the regulation of environmental impacts within the province. The Court held that the project would disproportionately impact the interests of British Columbians over other Canadians, and stated that to deprive the province of its powers of environmental regulation over the project would significantly limit its ability to protect social, cultural and economic interests within its boundaries and would go against the current trend in Canadian jurisprudence favouring co-operative federalism. The Act was held to be constitutionally valid even when applied to an interprovincial undertaking. The Court went on to reject Northern Gateway’s arguments on inter-jurisdictional immunity and paramountcy as being premature without having any provincial conditions to evaluate. Both the federal and provincial environmental laws were permissive in that the project would be permitted to proceed so long as it complied with these conditions. The mere existence of a provincial condition on an interprovincial pipeline does not amount to a prohibition.
Abdication of the province’s jurisdiction
Gitga’at and the Coastal First Nations contended that the agreement was invalid to the extent that it purports to relinquish the province’s jurisdiction to make a decision on whether or not a certificate should be issued for a project. The Court addressed this argument through statutory interpretation. As the project was a “reviewable project,” as defined in the regulations, the Court held that a provincial environmental assessment was mandatory unless the executive director considered the project not to have adverse environmental, economic, social, heritage or health effects. Based on the joint review panel’s conclusion that the project would have significant environmental effects, in addition to the province’s own expression of concerns while acting as an intervenor, the Court held that the significant potential for adverse effects from this project was never in dispute.
The Court went on to examine the Minister’s discretion to enter into agreements with other jurisdictions regarding environmental assessments under section 27 of the Act. It held that this section allowed the Minister to enter into an agreement with respect to any aspect of a provincial environmental assessment other than a final decision on whether a certificate ought to be issued for a reviewable project.
The Crown’s duty to consult
The province argued that it was not obliged to consult with the petitioner in relation to the project because it had no decision making authority over the project by virtue of the equivalency agreement. However, the Court held that because both the federal and provincial governments had overlapping environmental jurisdiction in this case, both jurisdictions were required to maintain and discharge its duty to consult and accommodate. In reaching this conclusion, the Court cited Tsilhqot’in Nation v British Columbia where the Supreme Court of Canada held that effective regulation in the modern world requires cooperation between federal and provincial schemes and that jurisdictional cooperation should be encouraged until conflict arises between the two.
The province argued that there was no duty to consult the petitioners before entering into the equivalency agreement as there was no causal connection between the agreement and any potential adverse impacts on the petitioner’s Aboriginal rights. The Court agreed that the province did not have a duty to consult prior to entering into the 2008 and 2010 equivalency agreements. However, it went on to find that the province did owe a duty to consult once it knew about the petitioners’ concerns with the project, which were brought to its attention between December 2013 and June 2014 and were “entirely consistent” with the concerns that the province itself raised before the joint review panel. Those concerns went unaddressed in the conditions placed on the project’s conditional approval of the project by the federal government. The province chose not to consult the petitioners during this period and the petitioners’ written requests for consultation went unanswered. The province also chose not to terminate the equivalency agreement, although had it terminated the agreement it would have been in the position to exercise its own decision making powers to either impose no further conditions on the project or to require its version of a world-leading spill response for land and marine environments, had it chose to.
The province argued that it had been working on a world-leading spill response since 2012 and had therefore not given anything up that would impact adversely on the petitioners’ exercise of their Aboriginal rights. However, the Court rejected this argument on the basis that the Crown’s duty with respect to consultation and accommodation of Aboriginal peoples requires early and meaningful dialogue rather than imposed solutions (paragraph 209):
Consultation does not mean explaining, however fulsome, however respectfully, what actions the government is going to take that may or may not ameliorate potential adverse effects. Such a means of dealing with an admittedly difficult issue looks very like "we know best and have your best interests at heart". First Nations, based on past experience, quite rightly are distrustful and even offended at such an approach. In any event, the Supreme Court of Canada has made abundantly clear, this is a paternalistic and now discredited means of attempting to give meaning to s. 35 rights. Consultation, to be meaningful, requires that affected First Nations be consulted as policy choices are developed on how to deal with potential adverse effects of government action or inaction. Hobson's choices are no longer sufficient.
The Court also noted that the province had given up a significant tool for accommodation of the petitioners by failing to terminate the equivalency agreement since it could have used its powers under the Act to ensure its own mitigating conditions on the project were enforceable. Having given up this power, the province could do no more than ask the federal government or the proponent to do more to protect British Columbians and in particular, the First Nations residing in such places as Douglas Channel.
Editor’s note: The province took measures to implement this decision on April 8, 2016 when it ordered that the project requires an environmental assessment certificate and the proponent may not proceed with the project without completing an assessment. The province has also advised Northern Gateway that it accepts the joint review panel's report as an assessment report under the remaining provisions of the equivalency agreement but it will be undertaking its own Aboriginal consultation process on the project before issuing a certificate.