Court declares British Columbia wrongfully abdicated environmental decision-making authority respecting Enbridge Northern Gateway

Summary

On January 13, 2016, the BC Supreme Court released a decision with guidance respecting a common feature of environmental assessment, namely provincial/federal harmonization of reviews and corresponding decisions. The case of Coastal First Nations v British Columbia (Environment), 2016 BCSC 34 involved a 2010 "Equivalency Agreement" between BC's Environmental Assessment Office and the federal National Energy Board respecting the Northern Gateway Project ("NGP"). Under this Agreement, the Province purported to remove the generic requirement that "reviewable projects", including NGP, must receive an environmental assessment Certificate to proceed; a Certificate is the ultimate approval document issued under BC's provincial environmental assessment legislation.

In short, the Court held that the Province was not authorized to abdicate its Certificate-issuing function under the Equivalency Agreement. In so doing, the Province wrongly constrained its ability to consult and potentially accommodate affected Aboriginal groups.

As a practical result, the Province must turn back the clock and consider whether to issue an environmental assessment Certificate, with or without its well-publicized 'five conditions' to NGP (the Province asserted these five conditions when it participated as an intervenor in the federal joint review process to oppose NGP). And, to effect the Court's declaration, the Province will need to consult with potentially affected Aboriginal communities about the potential impacts of a Certificate.

Grounds for review

The case was a judicial review brought by two sets of petitioners: Coastal First Nations - Great Bear Initiative Society and Gitg'at First Nation. The petitioners sought declaratory relief setting aside, in part, the Equivalency Agreement clause purporting to remove the need for reviewable projects to obtain a Certificate. The declarations were sought on two grounds: (1) BC legislation does not contemplate abdication of its decision-making power, and (2) the BC Crown failed to discharge its constitutional duties to consult Aboriginal peoples respecting the subject clause of the Agreement.

Decision on abdication of jurisdiction

By way of context, the BC Environmental Assessment Act, SBC 2002, c 43 requires that "reviewable projects" obtain a Certificate. Sections 27 and 28 permit the Province to avoid duplication and coordinate its assessment of reviewable projects with the federal government and other regulatory authorities. The Equivalency Agreement formalized the coordinated approach for NGP (and several other projects, as discussed below).

The Court was not troubled with the objective of avoiding duplication in the regulatory process, noting that the effort generally fell within the realm of "cooperative federalism". It concluded, however, that the BC Environmental Assessment Act did not go so far as to allow the Province to entirely divest itself of the ultimate responsibility to make a decision respecting a Certificate. That is, it is one thing for the Province to rely on a federal review (which it did here), but a different matter altogether when it seeks to step outside of the Act and tie its decision-making hands by impliedly deferring to the federal decision (which approved the NGP subject to 209 conditions in 2014).

The Court paid considerable attention to the respective constitutional powers held by the Province and the federal government when regulating NGP. The Court commented that the Province generally has a constitutional right to regulate environmental impacts within its provincial boundaries, which includes protecting the social, cultural and economic interests in its lands and waters. The Court stated that, without maintaining its right to make a decision on an NGP Certificate, the Province would have no mechanism to ensure it meets valid and pressing objectives and responsibilities falling within provincial jurisdiction. Ultimately, the Court concluded at paragraph 170 that "the EAO must maintain even some shred of discretion in respect of every project that has the potential to affect this province. Achieving this balance is of critical importance." As such, the Court declared the Agreement invalid, to the extent that it purported to remove the need for a Certificate.

The Court also unequivocally rejected NGP arguments that the interjurisdictional nature of the project implies exclusive or absolute federal jurisdiction which shields it from provincial law. The Court held that the federal laws in question were merely permissive in that the NGP is permitted to proceed so long as it complies with the federal conditions. The Court further stated (in paragraph 71) that "if [BC] chooses to issue further conditions, the provincial laws will also be permissive so long as certain further or more narrow conditions are complied with." An outstanding question, therefore, is whether a future Certificate and its conditions will be so onerous as to effectively "prohibit" the NGP and over-ride federal jurisdiction. Such aggressive conditions may be constrained by constitutional paramountcy arguments favouring the federal government.

Decision on the duty to consult

BC did not consult the petitioners before entering the Agreement - it responded to the petitioners' complaints about the Agreement only after the NGP received federal approval. The petitioners argued that the Provincial Crown had a duty to consult First Nations before entering into the Agreement. The Court held that the Province did not owe a duty to consult upon contemplating executing the Agreement.

A second line of argument was more successful for the petitioners. This argument was that the Province failed to consult over the petitioners' request to terminate the Agreement (termination being a right available to the Province under the Agreement). In agreeing with the petitioners, the Court noted that each Crown - provincial and federal - must consult First Nations respecting how the exercise of their respective jurisdictional powers might affect the Aboriginal constitutional guarantees. While interprovincial and international pipelines are federal jurisdiction, considerable provincial jurisdiction remains with the Province on matters that could nonetheless touch on the NGP, and the exercise of this jurisdiction may be cloaked with the duty to consult and perhaps accommodate Aboriginal groups. The Court held that the Province's failure to consult over termination of the Agreement breached the honour of the Crown.

Broader implications

The reasoning and disposition would appear to extend broadly to all projects in BC awaiting approval under the Equivalency Agreement. Other projects subject to the contested Equivalency Agreement include the Trans Mountain Pipeline Expansion Project (Kinder Morgan Canada), the Dawson Project (Westcoast Energy Inc.), the Fort Nelson North Gas Processing Facility (Westcoast Energy Inc.) and the Horn River Project (Nova Gas Transmission Ltd.).¹ Indeed, the declaration issued by the Court is not confined to the NGP, but rather declares the Agreement itself invalid "to the extent it purports to remove the need for an [EA Certificate]" by its terms.

This decision may not represent a fatal blow to the goal of harmonization of environmental assessments but is likely to put provincial environmental assessment authorities on greater notice when asked to discharge their decision-making powers - and related Aboriginal consultations - when relying on federal assessments. The same lesson applies to the converse circumstance where the federal government relies on provincial assessments.