Trans Mountain’s biggest obstacle looks set to drag the long-running pipeline saga well into 2022

Construction may have resumed and Trudeau has promised to see TMX through, but it’s the legal delays that look set to hold everything back

With the Federal Court of Appeal set to hold its second hearing on approval of the Trans Mountain Pipeline in December, it may seem that the end is near for the long-running saga.

But the perception could well be illusory. While Prime Minister Justin Trudeau’s promise that his minority government will see the pipeline through remains fraught with political difficulties, it is the inexorable delays in the legal process that may present the greatest obstacle to the project’s fruition.

In August 2018, the Federal Court of Appeal (FCA) overturned the cabinet’s November 2016 order-in-council approving the pipeline, which was based on recommendations made by the National Energy Board (now the Canadian Energy Regulator) some six months earlier.

While the court found that Canada had acted in good faith and selected an appropriate consultation framework, the duty to consult had not been adequately discharged and “fell well short of the mark” by failing “to engage, dialogue meaningfully and grapple with the real concern of the Indigenous applicants so as to explore possible accommodation of (their) concerns.”

As a result, the court remitted the matter back to cabinet “to address these flaws and, later, proper redetermination” — effectively mandating a new consultation process while leaving no doubt that the courts were quite willing to review the consultation process exhaustively and to its very end.

“The clear message from the decision is that cutting corners is not on, and that extensive and frequent meetings as well as sitting down and nodding won’t be nearly enough without some meat on the bones of the process,” said Maxime Faille of Gowling WLG in Vancouver, co-counsel for Tsleil-Waututh, one of the First Nations affected.

More than a year after the ruling, however, there’s no end in sight to the legal process.

In February 2019, the NEB again recommended approval of the project. About four months later, the cabinet adopted the Board’s recommendations for a second time.

Virtually immediately, 12 applicants, comprised of eight First Nations, three environmental groups and the City of Vancouver applied for leave to challenge the new approval. The FCA allowed six of the applications — all First Nations — to proceed with challenges to the new consultation that preceded the latest approval.

“The key question for the court is whether the federal government has corrected the defects found in the first round of consultation,” says Matthew Kirchner, counsel to the Squamish Nation, one of the successful applicants.

The FCA is scheduled to hear the case in December, and if the court takes as long to render a decision as it did the first time around — about 11 months — November 2020 will be on the horizon.

But even that may be optimistic.

It turns out that three applicants who didn’t get leave in the FCA as well as two of the applicants who succeeded but found the ruling too narrow in scope have sought leave to appeal the Federal Court’s refusal to hear them to the Supreme Court of Canada (SCC). That could well delay the hearing on the merits scheduled for December in the FCA.

The key question for the court is whether the federal government has corrected the defects found in the first round of consultationMatthew Kirchner, counsel to the Squamish Nation 

But whenever the FCA rules on the second consultation process, it’s unlikely that everyone will be satisfied with the decision, meaning that another round of applications for leave to appeal to the SCC will follow, adding at least six months to the process.

And if leave is granted, tack on another 12-24 months for the court to hear the appeal and render a decision. The upshot is that it’s likely to be near the end of 2022 before the court case is done.

Unfortunately, a favourable result for Trans Mountain in the courts won’t necessarily mark the end of the regulatory process.

What is known as the “detailed route hearing” process must follow approval. The NEB started this process after the first cabinet approval but suspended it after the FCA’s first decision overturned it. If the pipeline is finally approved by the courts, the CER will continue the process.

The Crown Corporation resumed construction on the expansion project in August, and work is under way at the Westridge and Burnaby Terminals and at pump stations in Alberta.

Construction is expected to begin shortly in Greater Edmonton and Yellowhead, as crews are finishing up pre-construction activities and environmental surveys in the area, the company said in an email to the Financial Post.

“We have received more than half of the pipe needed for construction and are staging it at storage yards along the route,” the company said, adding that the 2,200 workers have already been hired. “Our contractors have been ordering and receiving equipment, surveying and staking and doing everything possible to be ready to start construction in the other areas as soon as possible.”

As the Federal Court of Appeal case makes its way through the court, the company plans to continue with all aspects of planning and construction.

“The applications are challenging the decisions made by the Canada Energy Regulator and the Federal Government, but do not in and of themselves negate the pre-existing approvals provided by those governmental authorities until and unless the court rules otherwise,” the company said.

But it won’t be simple.

Both the Coldwater Indian Band, also represented by Kirchner, and the City of Chilliwack have filed statements of opposition to the routing of the project. Coldwater, supported by WaterWealth, a Chilliwack based citizen-driven advocacy group, maintains that the pipeline’s route will have adverse effects on the Band’s water sources.

In support, Coldwater’s expert hydrogeologist insists that a proper study of the pipeline’s effect on water sources need to be done over a period of time so that appropriate baseline data can be collected. Proponents of the pipeline, including the federal government, say that isn’t necessary.

That dispute could, in turn, set off its own run of legal proceedings.

Perhaps no one should be surprised at the plethora of twists and turns.

After all, as Thomas Issac in Cassels Brock & Blackwell LLP’s Vancouver office points out, Trans-Mountain is the “most consulted-upon project” in Canadian history.

“Even the highly controversial Northern Gateway pipeline didn’t have all the different and difficult maneuvering around Trans Mountain,” he said. “So the people who want to see this through are going to require a lot of fortitude — because the other side has plenty.”

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