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Just two days before the devastating Federal Court of Appeal's decision last week that cast the Trans Mountain pipeline project into limbo, the federal minister of natural resources was sure that all was well.

“We are very confident that we have done extensive consultation,” Amarjeet Sohi told the Calgary Herald’s Chris Varcoe. “We went beyond what the NEB [National Energy Board] has done. We took six months extra to consult with Indigenous communities and affected communities on the route.”

So much for that. The judges weren’t impressed. In a 263-page decision , the court found the federal government had not adequately consulted each of six First Nations that had challenged the project. Nor had it considered the role of tanker traffic on the killer whale population.

And with that, the court consigned the whole project into limbo until these deficiencies are remedied. Construction halted immediately. As First Nations and environmental groups celebrated their stunning victory, a furious Rachel Notley pulled out of her climate deal with Ottawa. Everything the Alberta Premier had fought for had just gone down in flames — including her re-election hopes.

Meantime, as Ottawa tries to figure out what to do next, it looks spectacularly incompetent. It owns a $4.5-billion pipeline that as of now does not have a valid permit to go ahead. Prime Minister Justin Trudeau’s master climate strategy has turned to ashes, too. “This pipeline will get built,” he has assured us more than once. But nobody knows when.

How could a deal – one that involved a record amount of consultation and appeared to have cleared all the regulatory hurdles – get so suddenly undone? The short answer is our activist court system. According to Howard Anglin, “The court is looking over the shoulder of the negotiators and micromanaging the process – second-guessing it at a lower level of oversight than in the past. ”

Mr. Anglin, who is the executive director of the Canadian Constitution Foundation , was also deputy chief of staff and senior legal adviser to former prime minister Stephen Harper. So was the government side in the Trans Mountain case negligent? Not in his view. He believes no government, no matter how well-intentioned, could have reasonably anticipated this decision. “The government was the victim of a court that has decided it’s going to micromanage this process to a degree never contemplated five years ago, much less when the Constitution was repatriated,” he told me in an interview. “The courts are moving the goalposts.”

The “duty to consult” Indigenous groups is enshrined in the Constitution. It is also an area where the courts have created cloudiness instead of clarity. Today the precise meaning of “duty to consult” is, if anything, more unclear than ever. This uncertainty means that "yes" is never final. Courts can and do frequently find that this duty wasn’t met. Even if, like the Trudeau government, you think you’ve made good-faith efforts to go above and beyond, some court can always say you haven’t gone far enough.

“It’s a fundamental breakdown in the process,” Mr. Anglin said.

All this uncertainty is bad for business and particularly for investment. As a peaceful democracy, Canada offers stability and predictability to investors – except in cases involving Indigenous rights. In those cases, “it’s more the rule of judges than the rule of law,” Mr. Anglin indicated.

In their Trans Mountain ruling, the three Federal Court of Appeal judges laid out a road map to remedy their objections, which they optimistically claim are not too onerous. (Real life, however, may prove to be a different matter.) It’s even possible that the project could be back on track in time for the federal election a year and a bit from now. But what won’t be back on track is Justin Trudeau’s promise of a grand bargain – carbon tax for pipelines – and the optimism that he can get everyone in line on the climate file. In fact, he has the worst of both worlds – people are repudiating his carbon taxes, and we’re no closer to market access for our oil than we ever were. Environmentalists have repudiated him, and his closest ally, Premier Notley has deserted him.

Nor is there any prospect that our activist courts will reform their ways. Until they stop trying to do everybody else’s job, uncertainty and confusion will be the order of the day. As Greg D’Avignon, president of the Business Council of British Columbia said the other day in a tweet, “We cannot govern a country, meaningfully reconcile with First Nations or build the economy through the courts. ”