Enbridge’s Northern Gateway Project: cabinet approval but complex court proceedings

The Joint Review Panel (JRP) for Enbridge’s Northern Gateway Project (NGP) issued its Final Report on the project on December 19, 2013.1 The JRP had the responsibility to assess under the Canadian Environmental Assessment Act, 20122 (CEAA, 2012) what significant effects the project could have on people and the environment and how these effects might be mitigated, and whether the project met the public convenience and necessity test of the National Energy Board Act (NEB Act).3 The JRP decided to recommend approval of the project subject to 209 conditions. In reaching that assessment the JRP concluded that the project would (in combination with the effects of other projects) have a significant effect on certain populations of woodland caribou and populations of grizzly bear (listed species under the Species at Risk Act4) even after all of Northern Gateway’s mitigation efforts. Nevertheless the JRP recommended that these significant effects could be justified in the circumstances.5 The particular circumstances that led to this conclusion included the ability of the Project to diversify Canada’s oil markets and condensate supply, and the other economic and social benefits of the project.6

Under the terms of both CEAA, 2012 and NEB Act the JRP’s report serves simply as a recommendation to the federal Cabinet. Thus, and focusing here on NEB Act, under the amendments to that Act enacted in 2012,7 the Governor in Council must respond to the NEB’s report directing the Board to issue a certificate of public convenience and necessity subject to the terms and conditions of the report, or dismiss the application.8 Section 54(2) of NEB Act stipulates that “The order must set out the reasons for making the order.” By Order in Council on June 17, 20149 cabinet accepted the JRP’s recommendations and directed the NEB to issue the two certificates of public convenience and necessity for which Enbridge had applied, including the terms and conditions recommended by the NEB. The Board has since complied with that direction.

Both the JRP Report and the Order in Council attracted numerous applications for appeal or judicial review. There were five applications for judicial review of the Report. These applications were consolidated by Justice Sharlow10 following which Justice Noël ordered a stay of these applications pending the resolution of any application for judicial review of the subsequent cabinet decision (which at the time Justice Noël’s order was still outstanding).11

Issuance of the Order in Council spurred nine further applications under s.55 of NEB Act:12 14-A-39 (Forestethics Advocacy Association, Living Oceans Society and Raincoast Conservation Foundation v. Attorney General of Canada and Northern Gateway Pipelines Limited Partnership), 14-A-41 (Gitxaala Nation v. Attorney General of Canada, Northern Gateway Pipelines Inc. and Northern Gateway Pipelines Limited Partnership), 14-A-42 (Kitasoo Xai’Xais Band Council on behalf of all members of the Kitasoo Xai’Xais Nation and Heiltsuk Tribal Council on behalf of all members of the Heiltsuk Nation v. Her Majesty the Queen and Northern Gateway Pipelines Limited Partnership), 14-A-43 (Federation of British Columbia Naturalists carrying on business as B.C. Nature v. Attorney General of Canada and Northern Gateway Pipelines Limited Partnership), 14-A-44 (Unifor v. Attorney General of Canada and Northern Gateway Pipelines Limited Partnership), 14-A-45 (Haisla Nation v. Attorney General of Canada, Northern Gateway Pipelines Limited Partnership and Northern Gateway Pipelines Inc.) 14-A-46 (Gitga’at First Nation v. Attorney General of Canada and Northern Gateway Pipelines Limited Partnership) 14-A-47 (The Council of the Haida Nation and Peter Lantin, suing on his own behalf and on behalf of all citizens of the Haida Nation v. Attorney General of Canada, Northern Gateway Pipelines Limited Partnership and Northern Gateway Pipelines Inc.) 14-A-48 (Martin Louie, on his own behalf and on behalf of all Nadleh Whut’en, and Fred Sam, on his own behalf, on behalf of all Nak’Azdli Whut’en, and on behalf of the Nak’Azdli Band v. Attorney General of Canada and Northern Gateway Pipelines Inc. on behalf of Northern Gateway Pipelines Limited Partnership). A  further application has been brought under NEB Act s.22(1), 14-A-38 (Forestethics Advocacy Association, Living Oceans Society and Raincoast Conservation Foundation v. Attorney General of Canada, National Energy Board and Northern Gateway Pipelines Inc.).

The 2012 amendments to NEB Act expressly dealt with the judicial supervision13 of the new procedure envisaged by the Act pursuant to which the NEB makes a recommendation (with terms and conditions) to cabinet and any certificate of public convenience and necessity is issued by the NEB on the instruction of an Order in Council. By contrast with the procedure contemplated by s.22 of NEBA which provides for an appeal, with leave, to the Federal Court of Appeal,14 of a Board decision, the new s.55 of NEB Act contemplates an application for judicial review of the Order in Council, with leave, to the Federal Court of Appeal. The application for leave must be commenced within 15 days of notice in the Gazette and is to be disposed of “without delay and in a summary way … and without personal appearance.”15 An appeal under s.22 of NEB Act must be on a question of law or jurisdiction whereas an application for judicial review is governed by the terms of s.18.1 of the Federal Court Act which provides, inter alia, for review on the basis of an erroneous finding of fact.16 There is no privative clause protecting the Order in Council from judicial review.

In order to coordinate these applications Justice Sharlow, the Acting Chief Justice for the Federal Court of Appeal, issued directions for these applications.17 These directions have been modified in some respects by Justice Stratas’ Order of July 24, 2014 in Forestethics Advocacy Association, Living Oceans Society and Raincoast Conservation Foundation v. Attorney General of Canada, National Energy Board and Northern Gateway Pipelines Inc18 on the application of Northern Gateway. In his Order Justice Stratas ordered the consolidation of all ten applications on the grounds that “They all arise from the same matter and they have similar facts and law.”19 Justice Stratas also noted that while the applications “have different perspectives and circumstances, many of the issues that they raise are similar if not identical.”20 If any of the applications are granted Justice Sharlow’s Direction contemplates that the actual application must be filed within five days of leave being granted.21

My review of the various leave applications suggests that the applicants will seek to challenge the Order in Council both on grounds internal to the order itself as well as on grounds that will seek to question the validity or sufficiency of the JRP report on which the Order in Council is based.22 As to the first, many of applications contest the validity of the Order in Council on the grounds that the Governor in Council failed to provide reasons in support of the Order as required by s.54(2) and specifically with respect to the conclusion that the significant environmental effects of the project on woodland caribou and grizzly bear are justified in the circumstances.23 Others allege that the Crown generally breached its duty to consult and accommodate First Nation interests24 (or failed to obtain consent or established constitutional justification for not doing so).25 As to the second, the different applicants focus on various aspects of the JRP’s report in suggesting that it fails to meet the requirements of either or both of NEB Act or CEAA, 2012. For example, BC Nature’s application refers to the JRP’s reasoning for the conclusion that the significant impacts on grizzly and caribou could be justified but also, for example, to the JRP’s treatment of cumulative effects for marine birds.26 Other parties chose to emphasise that the JRP had failed to take account of the upstream environmental effects of oil sands exploration and production activities as well as the fate of spilled bitumen in marine areas,27 while others have suggested that the JRP failed to take a precautionary approach in its assessment of the evidence.28 Finally, some of the First Nation applicants critique the JRP for failing to properly assess the impact of the project on cultural heritage or more generally that it failed to take into account the effect of the project on aboriginal rights and interests in its assessment of public interest29 as well as for its failure to address the inadequacy of Crown consultation,30 or more generally for its failure to uphold the honour of the Crown.31 Thus the applicants will seek to question both the conduct and decision of the JRP as well as that of the Crown generally or more specifically the Governor in Council.

Comments

It is of course too early to assess what the outcome will be of all of these proceedings. I am, of necessity, finalizing this comment just before the leave to seek judicial review applications will be heard in the summer of 2014. Several comments however are in order. First, the 2012 amendments to the NEB Act were designed to ensure ultimate political accountability for pipeline decisions under NEB Act and thus designed to remove the provision under the old legislation which allowed the NEB to make a final decision to reject a pipeline application (a decision to approve an application always required the concurrence of the Governor in Council). While the government has achieved this result it has in the course of doing so created significant complexity as to the role of the other branch of government, the Court, in supervising all of this. In particular, the amendments have created two opportunities for judicial supervision of the proceedings, first with respect to the NEB\JRP recommendations to cabinet, and second with respect to the review of the Order in Council (and perhaps a third locus is the NEB’s certificate of public convenience and necessity issued in response to the Order in Council). The complexity is enhanced by the adoption of different terminology (judicial review as opposed to appeal) for the judicial supervision of the Order in Council – possibly engaging different standards and grounds of review. Second, at least to this point, the Federal Court has handled the complexity with some dexterity by ordering consolidation and by putting the requests to review the JRP report on hold until the applications to review the Order in Council have been dealt with. This makes sense since, as noted above, some if not all of the applications under s.55 of NEB Act also question aspects of the JRP Report. Third, while it may be difficult to characterize some of the attacks on the JRP Report and\or the Order in Council as giving rise to questions of law or jurisdiction, the argument about the absence of reasons accompanying the Order in Council would seem to raise a pure point of law. One of the issues that will need to be dealt with here is whether the same rules on “reasons” apply to the Governor in Council in drafting an Order in Council as apply to more conventional administrative tribunals which have a statutory duty to provide reasons. But regardless of how that is resolved on the merits it is a question on which we should expect leave to be granted. The same must be true of at least some of the claims made by First Nations especially in light of the Supreme Court’s recent decision in Tsilhqot’in Nation v British Columbia.32 There is no case law on the test for leave under s.55 of NEB Act but the applicants are surely on strong ground in asserting that the threshold is low and requires them only to show an arguable case related to at least one head of s.18.1 of the Federal Court Act.

* Nigel Bankes is a Professor at the University of Calgary Faculty of Law and is the current Chair of Natural Resources Law. Since 1984 he has taught courses in property law, Aboriginal law, natural resources law, energy law, oil and gas law and  international environmental law. He writes widely on energy law and regulation.

  1. Connections, Report of the Joint Review Panel for the Enbridge Northern Gateway Project, 2013, [Connections].
  2. Canadian Environmental Assessment Act,2012, SC 2012, c 19, [CEAA, 2012].
  3. National Energy Board Act, RSC 1985, c N-7, s.52 [NEB Act].
  4. Species at Risk Act SC 2000, c 29.
  5. Connections, volume 1, supra note 1 at 57.
  6. Ibid at 74.
  7. CEAA, 2012, supra  note 2.
  8. NEB Act , supra note 3 s 54. The Order must be made within three months unless extended. Cabinet may also (s 53) refer the report and any terms and conditions back to the Board for its reconsideration.
  9. Certificates of Public Convenience and Necessity OC-060 and OC-061 to Northern Gateway Inc. for the Northern Gateway Pipelines Project, PC 2014-809, (2014) C Gaz I, 1646, National Energy Board Act.
  10. Order of February 17, 2014.
  11. Order of May 29, 2014 on the application of the Gitxaala Nation. These developments are outlined in BC Nature’s Notice of Motion on the cabinet decision filed July 14, 2014 at paras 16 – 19. The Orders are included in BC Nature’s filings.
  12. All as listed in Forestethics Advocacy Association, Living Oceans Society and Raincoast Conservation Foundation v Attorney General of Canada and Northern Gateway Pipelines Limited Partnership, 2014 FCA 182.
  13. I use the term “judicial supervision” to refer compendiously to either or both judicial review or statutory appeal to the courts.
  14. NEB Act, supra note 3, s 22(1). Furthermore, s 22(4) provides that a report submitted to cabinet under s 52 or 53 is not a decision or order of the Board that is subject to appeal under s 22(1).
  15. Ibid, s 55(2).
  16. Federal Court Act, RSC 1985, c F-7.
  17. The Directions are available on the NEB’s website, online: NEB <https://docs.neb-one.gc.ca/ll-eng/llisapi.dll?func=ll&objId=2485286&objAction=browse&viewType=1>.
  18. Forestethics Advocacy Association, Living Oceans Society and Raincoast Conservation Foundation v. Attorney General of Canada, National Energy Board and Northern Gateway Pipelines Inc , 2014 FCA 182.
  19. Ibid at para 13.
  20. Ibid at para 26, and thus, for this and other reasons, Justice Stratas declined to grant Northern Gateway’s request that it be allowed to file a more extensive memorandum of fact and law than contemplated by the Rules of Court.
  21. Direction of July 3, 2014 at para 14.
  22. Richard Neufeld QC counsel for Enbridge and Chris Tollefson counsel for BC Nature kindly provided me with copies of the pleadings.
  23. It should be noted that these are two separate grounds. See BC Nature’s notice of motion for application for leave to seek judicial review of the Order in Council, at paras 29 – 40; paras 41 – 61.
  24. Haida Nation, Notice of Motion, at para 15; Martin Louie on behalf of Nadleh Whut’en, Notice of Motion, at paras 37–54.
  25. Gitga’at Notice of Motion at paras 25 – 28 and evidently drawing on the Supreme Court of Canada’s judgement in Tsilhqot’in Nation v British Columbia, 2014 SCC 44.
  26. BC Nature’s application for leave to seek judicial review of  the Order in Council, at para. 67 and BC Nature’s application for leave to appeal the JRP at paras 32 et seq.
  27. Application of Forestethics Advocacy Association, Living Oceans Society and Raincoast Conservation Foundation for leave to appeal the JRP report at paras 33 – 35 and 38 – 40. For further exploration of the upstream activities point see Martin Olszynski, “The Not Quite Twelve Days of Northern Gateway” Ablawg, January 15, 2014 available here http://ablawg.ca/2014/01/15/the-not-quite-twelve-days-of-northern-gateway/
  28. Application of Haisla Nation for leave to appeal the JRP Report, at para 21 [Haisla Nation]; Application of Gitxaala Nation for leave to appeal the JRP Report at paras 77 – 79 [Gitxaala Nation].
  29. Haisla Nation, ibid at paras 18,23; Application of Gitxaala Nation for leave to appeal the JRP Report, at para 74.
  30. Gitxaala Nation, ibid at para 71.
  31. Application of Gitga’at Nation for leave to appeal the JRP Report, at para 37.
  32. Supra, note 25. It seems well understood in the jurisprudence that the existence of the duty to consult and accommodate and the intensity of the consultation required gives rise to questions of law and the standard of correctness the assessment of the actual consultation and accommodation engaged in by the Crown gives rise to mixed questions of law and fact and the standard of reasonableness: Haida Nation v British Columbia (Ministry of Forests), [2004] 3 SCR 511 and Rio Tinto Alcan Inc v Carrier Sekani Tribal Council, 2010 SCC 43.

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