The Federal Court of Appeal has quashed the approval of the $9.3-billion Trans Mountain oil pipeline expansion

Vancouver Sun
Updated: August 30, 2018

The Federal Court of Appeal on Thursday released its long-anticipated decision on the Kinder Morgan Trans Canada pipeline. The ruling pleased environmentalists and other anti-pipeline protesters, and shocked proponents of the project such as business and trade organizations. Here are five key details:

 What happened

 The Federal Court of Appeal quashed approval of the $9.3-billion Trans Mountain oil pipeline expansion on two grounds. First, the court found Canada had inadequate consultation with First Nations at the final stage, concluding Ottawa “failed to engage dialogue meaningfully and grapple with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns.” Second, the scope of the review “unjustifiably” did not include project-related tanker traffic, even though the National Energy Board was “legally obligated” to consider environmental effects. “The unjustified exclusion of project-related marine shipping from the definition of the project rendered the board’s report impermissibly flawed,” the court ruled.

 What’s at stake financially

 The pipeline is owned by U.S. and Canada-based Kinder Morgan Ltd., but the federal Liberal government announced in the spring it’s plans to buy Trans Mountain and Kinder Morgan Canada’s core assets for $4.5 billion to ensure the oilsands pipeline expansion gets built. Also on Thursday, Kinder Morgan’s shareholders voted more than 99 per cent in favour of the sale to Ottawa. The company said the court decision was not a condition of the sale to the federal government. Finance Minister Bill Morneau continued to insist Thursday that is was still in the “national interest” to get the pipeline completed, although Conservative Leader Andrew Scheer criticized his political opponents for spending “taxpayer money to buy a pipeline (they) can’t even build.”

 What’s next?

 The court decision was clear that Ottawa must re-do its consultations with First Nations before the project can be considered for approval again. Morneau said his government will review the court’s decision and will “respond promptly,” but added it was too soon to comment on whether Ottawa would appeal. He said both the court ruling and the Kinder Morgan shareholders’ vote were both “important next steps” in this project. As soon as the ruling was issued, Trans Mountain started to take measures to suspend construction-related activities on the pipeline. The company says it is reviewing the decision and will take time to “assess next steps,” but remains committed to building the pipeline “in consideration of communities and the environment, with meaningful consultation with Indigenous Peoples.”

 What’s at stake provincially

 Premier John Horgan said Thursday that the ruling vindicates the criticisms that the National Energy Board approval process was flawed because, in part, marine traffic was not adequately considered. He said it was a good day for the Tsleil-Waututh and other First Nations who mounted this fight. When asked if the pipeline project is dead, he said it will no longer be “top of mind for British Columbians.” Alberta Premier Rachel Notley, with whom Horgan has vehemently disagreed about this pipeline, waited until Thursday evening to make a live broadcast to her constituents. Political analysts in Alberta predicted the ruling will be disastrous for Notley’s NDP, and could have a major impact on the provincial election less than a year away. In B.C., Green leader Andrew Weaver, whose support allows the NDP government to remain in power, called it “a very exciting day.”

 Who’s happy and who’s not

 The Union of B.C. Indian Chiefs applauded the ruling, and demanded the pipeline be shutdown immediately, even though some First Nations were supporters of the project. Environmental groups celebrated the decision because it requires new consultations with First Nations and new environmental assessments. The cities of Burnaby and Vancouver both oppose the pipeline, and Vancouver Mayor Gregor Robertson on Thursday hailed the court’s conclusion because the project “put our coast at huge risk of oil spills.” On the other hand, the Greater Vancouver Board of Trade lamented the ruling had “essentially halted” the pipeline. The Surrey Board of Trade said it was shocked, arguing the project will now likely be in “legal limbo” for years and insisted the alternative — moving crude oil by rail — was far more hazardous. And the Progressive Contractors Association of Canada said the decision was disappointing to companies involved in building the project, calling it a lost opportunity “to generate thousands of jobs and billions in revenue.”

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