Business·Analysis

Don't dig Trans Mountain's grave just yet

Despite a court ruling halting construction on the Trans Mountain expansion project, the reality is that the pipeline could still be built. The court ruling states "the end result may be a short delay."

Court ruling a blow to pipeline proposal, but it could be just another delay for project

A marker for the Trans Mountain pipeline as it passes near the Coldwater Reserve in B.C.'s interior. (CBC)

The knee-jerk reaction in Calgary to the Federal Court of Appeal's ruling to halt construction of the Trans Mountain project was ugly.

Oil company share prices plunged, fears were enflamed about further energy investment fleeing Canada, and hopes were dashed about Alberta ever getting another new oil export pipeline.

Basically, the $4.5-billion project the federal government is in the process of purchasing has been put on hold indefinitely.  

At the same time, some First Nations in B.C. celebrated Thursday morning's decision to put a stop to the pipeline and revelled in appreciation that the concerns they had voiced for years about the project's poor consultation were vindicated.

As both sides take a breath to digest the decision, the reality is the project may still be built. The court ruling itself even states "the end result may be a short delay."

'People should just calm down'

The Trans Mountain expansion project is synonymous with setbacks and the Federal Court of Appeal's decision may prove to be just another extension of its timeline.

The First Nations who fought Enbridge's Northern Gateway pipeline know that well, as that proposed project had a similar court ruling.

"It's not over, I know a lot of [the First Nations] are aware of that. Hopefully they can at least celebrate the victory today," said Peter Lantin, President of the Haida Nation.

Conversely, the negative reaction from some in the oilpatch may be misguided.

"I really do think there's an opportunity to see some positives in this decision and I do worry that there's an awful lot of hair on fire, wringing of hands and maybe people should just calm down a little bit," said Martha Hall Findlay with the Canada West Foundation, a think-tank in Calgary. 

With sober second thought, the court decision is not a fatal blow, just another hurdle.

The federal government plans to move ahead with the project and there is a path to resuming construction on the pipeline if the two issues raised by the court are overcome. So how big are the pair of problems?

The court, I think, gave the federal government a terrific opportunity to say, 'Yes, we need to do this better, we need to be effective at it. Let's start right now.'- Martha Hall Findlay, Canada West Foundation

Indigenous consultation

The federal government chose to do more consultation for Trans Mountain than it did for the Northern Gateway project, including a special three-member independent ministerial panel to engage local communities and Indigenous groups.

The court said that still wasn't enough.

There was plenty of talk with First Nations, but it was predominantly listening and documenting concerns, rather than actual dialogue to understand the complaints and find solutions.

"Canada was obliged to do more than passively hear and receive the real concerns of the Indigenous applicants," according to the court's ruling.

"We are winning. The NEB was a flawed process ... and the court recognized that today," said Tsleil-Waututh Chief Rubin George at a joint news conference in Vancouver on Thursday morning. (Nic Amaya/CBC)

For instance, the Coldwater First Nation in B.C.'s interior proposed an alternate route for the pipeline that would address certain issues they had. However, federal government representatives said that was up to the National Energy Board (NEB) and their role as a consultation team was to to collect information and pass it to "decision makers." 

The government repeatedly told First Nations that the NEB's findings were not going to be revisited. This approach goes against what the Supreme Court laid out several years ago — that consultation includes approaching talks in good faith with the view of substantially addressing concerns from Indigenous people.

"What we're seeing through these pipeline cases is that the crown is providing the opportunity for First Nations to bring forward their concerns, but there is no meaningful dialogue," said Jocelyn Stacey, a professor with the University of British Columbia's school of law.

The 1,150-kilometre Trans Mountain expansion pipeline aims to move oil from Edmonton to a terminal in Burnaby, B.C., near Vancouver, where it will be exported to markets in Asia. (Scott Galley/CBC)

The court ordered the federal government to re-do a portion of its consultation. However, the court specifically explained this need not be onerous.

"The concerns of the Indigenous applicants, communicated to Canada, are specific and focused. This means that the dialogue Canada must engage in can also be specific and focused," the court ruling said. 

Impact on whales

The court also took issue with how the NEB dealt with potential environmental impacts from marine shipping.

The regulator researched this topic extensively and openly acknowledged to journalists that increased marine traffic would have a "significant" impact on B.C.'s killer whale population.

This, however, was not considered when the NEB approved the project. The NEB said this issue was outside of its scope and other government agencies already regulate marine traffic — such as Transport Canada, Port Metro Vancouver, Pacific Pilotage Authority and the Canadian Coast Guard. Those agencies all took part in the NEB hearing process.

But the court found the NEB should have included those environmental impacts in its decision. That way, the federal government would have had a clearer picture of all the pipeline's implications.

Nigel Bankes, chair of natural resources law at the University of Calgary, said the court found the NEB failed to determine all of the steps that could be taken to avoid or reduce the adverse effects on whales. 

While unsure how easy it would be to address the court's concerns and re-do this assessment, he said it can be done.

This would result in an addendum to the NEB's initial report to the federal cabinet. Essentially, the government would then decide whether to re-approve the pipeline.

Decision is not a dead end

Bankes doesn't believe the court's ruling dead-ends the project because the federal government is now the owner.

"The only issue, of course, is the political commitment of the federal government to push on," the law professor said.

Bankes said the government has two options: take the advice of the court, re-do the environmental assessment and address concerns about consultations, or try to appeal to the Supreme Court. 

They could also proceed with both, he said.

Corporate officials, politicians and Enoch Cree Nation leaders take part in a blessing and groundbreaking of a Trans Mountain stockpile site located on the Enoch Cree Nation near Stony Plain, Alta., in July. (Emilio Avalos/CBC)

Bankes estimates that addressing the court's concerns would take at least nine to 12 months.

In that time another party could launch new court proceedings against the project, he said. 

While there may be no quick solution to the challenges facing the project, Canada West's Hall Findlay said there are some key positives for those wanting the pipeline built.

She said the court offers specific instruction, not vague generalities that would be hard to address. 

"The court didn't say the whole process was flawed," Hall Findlay said.

"The court, I think, gave the federal government a terrific opportunity to say, 'Yes, we need to do this better, we need to be effective at it. Let's start right now.'"

So another chapter begins in the long, unpredictable saga of the Trans Mountain pipeline expansion. One thing is clear, however: no one should start writing the project's obituary, just yet. 

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