The Federal Court of Appeal has rejected a challenge by a Vancouver-area First Nation, which argued its rights were violated by the National Energy Board during the agency's review of Kinder Morgan Inc.'s TransMountain expansion project.
In the decision posted last week, the court declared that the Tsleil-Waututh First Nation of Burnaby had numerous opportunities to engage in consultations prior to and during the hearing process, but failed to take them.
The aboriginal community is located near Kinder Morgan's export terminal at the end of the TransMountain pipeline from Alberta, which the company proposes to triple in capacity to nearly 900,000 barrels per day. As a result, the number of tankers plying the Burrard Inlet would grow from five per month to 34, depending on market conditions.
The National Energy Board concluded in May that the project would be in Canada's national interest despite some environmental impacts and risks, and it recommended that federal cabinet should approve the pipeline expansion, subject to 157 conditions.
Earlier this year, the Liberal government appointed a separate panel to conduct further consultations with First Nations and other communities that would be affected by the project, and has promised to make a decision by Christmas.
Opposition from First Nations and local political leaders threatens to derail not only the Kinder Morgan pipeline expansion but TransCanada Corp.'s proposed Energy East project, which would carry 1.1-million barrels per day of western crude to eastern refineries and an export terminal in New Brunswick.
In a report Monday, bond-rating agency DBRS Ltd. said a lack of export pipeline capacity could throttle growth in the oil and gas industry. "Accessing export markets is crucial for Canada's energy future and developing pipeline infrastructure continues to be the key to unlocking the economic potential of Canada's vast energy resources," the agency said.
The Tsleil-Waututh has opposed the expansion project since its inception and challenged the NEB review process, arguing it failed to recognize the community's jurisdiction and or its rights to government-to-government consultation.
In its ruling, the appeal court suggests the First Nation must engage in the prescribed process – including consultations with project proponents and federal review agencies – before they can assert a failure to consult by government.
However, the court also noted the federal cabinet will have to assess whether its duty to consult was met before reaching a final decision on the pipeline proposal. It said the Tsleil-Waututh can revisit the issue – arguing the same principles – once the entire process is completed.