Northern Gateway: Round No.1

The release of the Report of the Joint Review Panel for the Enbridge Northern Gateway Project,1 on December 19, 2013 will likely prove to be a watershed moment in the history of Canada’s federal pipeline regulation regime. The range and complexity of the issues raised by the Project2 presented unprecedented challenges for the Review Panel, compounded by unparalleled expectations for participation in the hearing process. The submission of the Report to the Governor in Council also initiated the recently revised process for approval of federal pipeline projects directly by Cabinet, rather than by the National Energy Board. Perhaps not surprisingly, a challenge to the Report has been filed in the Federal Court of Appeal.3

The mandate of the Joint Review Panel (JRP), as defined in the Joint Review Panel Agreement between the National Energy Board and the Minister of the Environment (JRPA),4  was to conduct a review, under the Canadian Environmental Assessment Act, 2012,5  of the environmental effects of the project and to make a recommendation to the Governor in Council on whether the project should be approved, based on the Panel’s determination, under the National Energy Board Act,6  of whether the project is in the public interest. The JRPA defined the Project for this purpose to include two proposed pipelines between Bruderheim, Alberta and Kitimat, British Columbia and a terminal at Kitimat including tanker berths and storage tanks. Marine transportation of oil and condensate within a defined assessment area was also included.7

The three-member Panel was appointed on January 20, 2010. The application for the necessary approvals for the Project was filed in May 2010. In August and September 2010, the Panel conducted sessions to receive comments on the scope of the issues to be considered in the hearing. The Panel Hearing Order was issued on May 5, 2011 and oral hearings commenced in January 2012. Final arguments were heard in May and June 2013.8  As noted, the Panel Report was released on December 19, 2013.

In its Report, the Panel described concerns regarding the project in four main areas:

  • The likelihood and consequences of malfunctions and accidents;
  • Effects of construction and routine operations on the environment;
  • Economic soundness, costs, benefits, design, construction, and operations; and
  • Effects of the project on society, culture, and Aboriginal people.9

The Panel concluded that several matters that it had been urged by many people to consider in its assessment were beyond the scope of the Project and outside its mandate. These included both “upstream” oil development effects and “downstream” refining and use of the products. With respect to upstream effects, the Panel found that there was not “a sufficiently direct connection between the project and any particular existing or proposed oil sands development or other oil production activities to warrant consideration of the effects of these activities.”10  The effects of downstream emissions “were outside our jurisdiction,” although the Panel did consider emissions from construction and operation of the project, as well as from tankers in Canadian territorial waters.

The Panel summarized its role in the following terms:

Some people said economic development like the Enbridge Northern Gateway Project could harm society and the environment, while others told us a strong economy was necessary to sustain and enhance environmental and social values. They all recognized the linkages among people, economy, and environment, and that these are all aspects of a shared ecosystem.

Our task was to recognize these connections. We weighed and balanced them to answer the fundamental question: Would Canada and Canadians be better or worse off if the project goes ahead?11

In the Panel’s view, the question was to be answered by weighing the potential burdens and benefits of the Project “as they affect the environment, society, and economy at the local, regional, and national levels”:

These three dimensions of the public interest interact and overlap, and we considered them in an integrated manner.

*              *              *

In our view, environmental protection and economic activity that benefits society are important aspects of the determination of the public interest. When we speak of environmental protection, we consider all facets of the environment including humans, animals, plants, our geographic surroundings, and areas of cultural significance. In this context, there is no differentiation between the environment and the economy. They are inextricably connected and are integral aspects of the public interest.12

In approaching its task, the Panel stated that it had considered the evidence “in a careful and precautionary manner,”13 which it was required to do under the JRPA.14  Noting that the Project could operate for 50 years or more, the Panel added that sustainable development was an important factor in the environmental assessment and in considering the public interest:

The project would have to meet today’s needs without compromising the ability of future generations to meet their needs.15

The Panel concluded that Canada and Canadians would be better off with the Northern Gateway Project than without it. It therefore recommended that the Project be approved, subject to 209 conditions.

The Panel found that project effects, in combination with cumulative effects, would likely be significant for certain populations of woodland caribou and grizzly bear, due to uncertainty over the effectiveness of proposed mitigation to control access and achieve the goal of no net gain, or net decrease, in linear feature density. The Panel recommended, however, that the Governor in Council find that these significant effects would be justified in the circumstances.16

As the Panel noted, the Northern Gateway Project would traverse extensive areas in Alberta and British Columbia that Aboriginal groups use for traditional activities and practices and for exercising Aboriginal and treaty rights. The marine areas that would be potentially impacted by the Project are also used for traditional purposes and claimed as part of traditional territories.17 Accordingly, the Panel paid particular attention to consultation with Aboriginals, Aboriginal participation in the review process and the effects of the Project on Aboriginals. The Panel concluded that, during construction and routine operations, there would not be a significant adverse effect on the ability of Aboriginal groups to continue to use lands, waters or resources for traditional purposes or to maintain, pursue and strengthen their traditional and cultural activities.18 In the unlikely event of a large oil spill, adverse effects on Aboriginal groups would not be permanent and widespread. The Panel found that, with Northern Gateway’s commitments and compliance with the Panel’s conditions, “Northern Gateway can effectively continue to engage and learn from Aboriginal groups that chose to engage, and address issues raised by Aboriginal groups throughout the project’s operational life.”19

With respect to the Crown’s duty to consult, the Panel noted the position of the Government of Canada that “it will rely on the Joint Review Panel process to the extent possible to assist in fulfilling its legal duty to consult Aboriginal groups.”20 The federal government had stated that, if project-related issues that required Crown consultation could not be addressed through the Panel’s process, it would consult directly with the potentially-affected Aboriginal groups.21 The Canadian Environmental Assessment Agency noted that it was responsible for coordinating the federal government’s consultation with Aboriginal groups and that it had appointed the Crown Consultation Coordinator for that purpose. The Panel added that it offered “no views in relation to the consultation activities undertaken by the Government of Canada to date, or any future consultation that it will undertake, with Aboriginal groups.”22

The Northern Gateway Project review process attracted widespread participation. Specifically, 206 parties registered as interveners, with a further 12 as Government Participants. The Panel heard evidence and oral statements from more than 1,500 participants in 17 communities. It also received more than 9,000 letters of comment.  Remote participation was enabled through video and telephone links.23

The Panel was required by the JRPA to conduct its review “in a manner which will facilitate the participation of the public and Aboriginal peoples…”24 Consequently, the Panel’s process set minimal requirements for participation. However, the resulting extent of participation in the review process was criticized by many observers, including the federal Minister of Natural Resources,25 resulting in legislative amendments to restrict participation in future proceedings under both the CEA Act26  and the NEB Act.27  Henceforth, participation is restricted to those who are “directly affected” or who have “relevant information or expertise.”

The Panel Report must now be considered by the Governor in Council. Under the CEA Act, 2012, the Governor in Council must decide whether the Project is likely to cause significant adverse environmental effects and, if so, whether those effects can be justified in the circumstances.28  Under the NEB Act as amended in 2012, the Governor in Council must decide, with reasons, whether to direct the NEB to issue a certificate of public convenience and necessity for the Project.29  His decision must be made by mid-June.30  However, the Governor in Council can refer the matter back to the Panel31 and may extend the time limit by “any additional period or periods of time.”32  This is an as yet untested process and will be watched closely by both project proponents and other interested parties.

Meanwhile, application has been made to the Federal Court of Appeal for orders, inter alia, prohibiting the Governor in Council from making the decisions or orders required by the CEA Act or the NEB Act arising from the Panel’s Report or “taking any other action to enable the Project to proceed…”33 The application was made by Forestethics Advocacy, the Living Oceans Society and the Raincoast Conservation Foundation, all of which were intervenors in the JRP hearings. The principal grounds are that the Panel failed to meet the requirements of the Species at Risk Act34 and that it considered irrelevant evidence by considering upstream economic benefits while refusing to hear evidence with respect to or to consider the induced upstream environmental impacts of the Project.35

Whatever the final outcome, the Report of the Joint Review Panel for the Enbridge Northern Gateway Project is a significant milestone in the development of the regulatory framework. Its comprehensiveness in addressing the wide range of complex issues that the Gateway Project presents is likely to establish the Report as a touchstone for future assessments of major projects. The Panel’s discussion of the public interest – with its focus on the core question of whether Canada and Canadians would be better or worse off if a project were approved and with its emphasis on balancing benefits and burdens in answering this question – will provide helpful guidance in future proceedings. The emphasis on integrating the three elements of environment, society and economy – as interconnected aspects of the public interest – provides a valuable model for assessing major resource development projects that present increasingly complex issues and challenges for the regulatory process.

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*  Rowland J. Harrison Q.C. is the TransCanada Chair in Administrative and Regulatory Law at the University of Alberta, Edmonton and Co-Managing Editor of Energy Regulation Quarterly. He is also an arbitrator in energy-related matters. From 1997 to 2011, he served two successive terms as a permanent member of the National Energy Board, making him one of the longest-serving members in the Board’s history.

See The Report is in two volumes: Volume 1, Connections and Volume 2, Considerations (together referred to herein as the Gateway Report or Report). Page and Volume references herein are to the printed edition of the Report.

The Northern Gateway Project is a proposed oil pipeline from a point near Edmonton, Alberta to Kitimat, British Columbia, a distance of 1,177 kilometers. There are two parallel pipelines proposed in the same right-of-way, a 36-inch pipeline to carry an average of 525,000 barrels per day of petroleum west for export by ship and a 20-inch pipeline to carry an average of 193,000 barrels per day of condensate east. Condensate is used to thin petroleum products for transport by pipeline. The Project is described in the Gateway Report, supra note 1, Volume 1, section 1.1 and Volume 2, section 1.1.

3 Forestethics Advocacy, Living Oceans Society and Raincoast Conservation Foundation v. Attorney General of Canada, Minister of the Environment, National Energy Board and Northern Gateway Pipelines Limited Partnership, Federal Court of Appeal A-56-14, filed January 17, 2014. Since the date of writing, applications for judicial review have been filed by several other groups, as well as applications for judicial review by First Nations groups on the ground, inter alia, that the review process has not complied with the Crown’s duty to consult where Aboriginal rights may be affected.

4  Dated 4 December 2009, as amended 3 August 2012. See Appendix 4 of the Gateway Report, supra note 1.

5  Canadian Environmental Assessment Act, SC 2012, c 19 (CEA Act 2012).

6  RSC 1985, c N-7, as amended 6 July 2012 (NEB Act).

7  Gateway Report, supra note 1 Volume 1 s 1.1.

8  Gateway Report, supra note 1 Volume 2 App 3.

9  Gateway Report, supra note 1 Volume 1 at 18.

10  Ibid at17.

11 Ibid at 1.

12 Ibid at 74.

13 Ibid at 11.

14 JRPA, supra note 4 at para 6.3.

15 Gateway Report, supra note 1 Volume 1 at 11.

16 Ibid at paras 72-73.

17 Gateway Report, supra note 2 Volume 2 at 26.

18 Ibid at 50.

19 Ibid at 41.

20 Ibid.

21 Ibid at 36.

22 Ibid at 41.

23 Gateway Report, supra note 2 Volume 1 at paras 14-15.

24 RPA, supra note 4at para 6.4.

25 See for example, Natural Resources Canada, An Open Letter from the Minister on energy markets and the regulatory process (9 January 2012) online: Natural Resources Canada <>.

26 Supra note 5, s 2(2).

27 Supra note 6, s 55.2.

28 CEA Act, supra note 5 ss 31, 52.

29 Supra, note 6 s 54.

30 Future Governor in Council decisions on National Energy Board recommendations for pipeline approvals must be made within three months, although that period may be extended.

31 NEB Act, supra note 6 s 53.

32 Ibid s 54(3).

33 Notice of Motion, supra note 3 at para 1(k).

34Species at Risk Act, SC 2002, c 29.

35 Notice of Motion, supra note 3 at para 34.

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