VANCOUVER — The Federal Court of Appeal has overturned Ottawa's approval of the contentious Trans Mountain pipeline expansion.
In a unanimous decision by a panel of three judges, the court says the National Energy Board's review of the project was so flawed that the federal government could not rely on it as a basis for its decision to approve the expansion.
The court also concludes that the federal government failed in its duty to engage in meaningful consultations with First Nations before giving the project the green light.
Prime Minister Justin Trudeau's government approved the project in 2016 and is so determined to see the line built that it announced plans this spring to buy the pipeline and expansion project for $4.5 billion after Kinder Morgan Canada balked at moving ahead with construction.
Shortly after the court ruling Thursday, company shareholders voted more than 99 per cent in favour of the sale.
The ruling requires the energy board to conduct a new review —which the court suggests could be kept short — and means the government will have to redo part of its consultations with Indigenous groups.
The court combined into one case nearly two dozen lawsuits calling for the energy board's review to be overturned.
First Nations, including the Tsleil-Waututh and Squamish on British Columbia's south coast, argued that Ottawa did not adequately consult them before the review or the cabinet decision to approve the project.
The court found that the government's representatives "limited their mandate to listening to and recording the concerns of the Indigenous applicants and then transmitting those concerns to the decision-makers." There was no "meaningful two-way dialogue."
"The Indigenous applicants were entitled to a dialogue that demonstrated that Canada not only heard but also gave serious consideration to the specific and real concerns the Indigenous applicants put to Canada, gave serious consideration to proposed accommodation measures and explained how the concerns of the Indigenous applicants impacted Canada's decision to approve the project."
The Squamish Nation cheered the ruling as a recognition of Indigenous rights.
"This decision reinforces our belief that the Trans Mountain expansion project must not proceed and we tell the prime minister to start listening and put an end to this type of relationship. It is time for Prime Minister Trudeau to do the right thing," the band said in a statement.
The Coldwater Indian Band, which asserts traditional territories in south-central B.C., said the pipeline route passes an aquifer that is the sole supply of drinking water for its main reserve
"This is a major victory for my community," said Coldwater Chief Lee Spahan. "Thankfully, the court has stepped in where Canada has failed to protect and respect our rights and our water."
Environmental groups and the cities of Vancouver and Burnaby also challenged the project in Federal Court last fall. They were supported by the province of British Columbia, which acted as an intervener.
Alberta was also an intervener and the province's lawyer told the court Ottawa's decision to approve the pipeline expansion was based on broad evidence that considered environmental, economic and Indigenous interests.
The expansion would triple the capacity of the Trans Mountain pipeline from near Edmonton to Burnaby, B.C., to 890,000 barrels a day. It would also increase the number of tankers in Burrard Inlet sevenfold.
The court ruled that the energy board review contained a fatal flaw: it excluded the project's impact on marine shipping. That, in turn, meant that the energy board did not assess the potential impact of increased tanker traffic on the southern resident killer whale population.
That failure "was so critical that the Governor in Council could not functionally make the kind of assessment of the project's environmental effects and the public interest that the (environmental assessment) legislation requires," says the ruling written by Justice Eleanor Dawson.
Ecojustice, the Living Oceans Society and the Raincoast Conservation Foundation called the ruling a "critical win" for the climate and coastal ecosystems.
"Going forward, we urge politicians and other project proponents to shift their focus away from projects that lock us into dependence on fossil fuels," Ecojustice lawyer Dyna Tuytel said.
With as few as 75 southern resident orcas left, the population will be unsustainable if the project proceeds, said Paul Paquet, senior scientist with the Raincoast Conservation Foundation.
"The court has sent a clear signal that the rule of law will not accommodate environmental decision-making that fails to address these environmental risks," he said.
The Federal Court case was the most significant legal challenge facing the project and the decision may still be appealed to the Supreme Court of Canada.
Kinder Morgan had already won several court victories, including one last week when the Supreme Court of Canada dismissed an application from the City of Burnaby to overturn a lower court decision.
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