Regulatory changes leave Trans Mountain process in legal limbo.

• The process for reviewing pipeline projects in Canada is in flux, creating severe legal complications for lawyers on both sides of the Trans Mountain pipeline expansion project.

Changes are coming to the regulatory process that will affect Kinder Morgan Inc.’ s Trans Mountain pipeline expansion, adding new regulatory hurdles for a project nearing the end of its current review process.

A spokesperson for Natural Resources Minister Jim Carr confirmed Friday that the federal government is developing a transition plan that will affect Trans Mountain’s application, just as the regulatory panel is hearing final arguments whether or not to approve the project.

“We would be very concerned about anything that would push back the deadlines for construction and the in- service date,” said Kinder Morgan’s senior director of aboriginal and legal affairs, Peter Forrester.

The federal department did not provide details on the new regulatory requirements, but lawyers for aboriginal groups along the Trans Mountain pipeline route argued this week before an NEB panel that the current process does not adequately satisfy the federal government’s obligations to First Nations.

In a heated final argument Thursday, Squamish First Nation lawyer Aaron Bruce told the NEB that it cannot recommend the Trans Mountain expansion project’s approval because t he f ederal government “recognizes the current process is deficient to address First Nations concerns. We shouldn’t be here today.”

That argument was repeated by lawyers and chiefs of multiple First Nations, who argued the current review process is flawed and the NEB can’t recommend the project’s approval because the federal government has not “fully discharged its duty to consult” with affected aboriginals.

“The Crown is relying on the National Energy Board process and Squamish has big concerns with that,” Bruce said.

Similarly, Stz’uminus First Nation lawyer Melinda Skeels told the NEB panel in a final argument hearing on Wednesday: “By any measure, the Crown has failed to discharge its duty to consult Stz’uminus in relation to the project.”

The federal government’s duty to consult with First Nations was established in a Supreme Court of Canada decision from 1990.

The NEB panel seemed to push back, asking lawyers for both the Stz’uminus and Squamish whether or not the current NEB review process for Trans Mountain fits into a wider consultation process the federal government has been undertaking for several years, and will continue for years in the future.

First Nations l awyers argued that any consultation after the NEB has made its decision on Trans Mountain would be effectively meaningless, because the conditions for the project’s construction would already be set.

As a result, the consultation up to this point in the process is critical and has been insufficient, they argued.

“The conditions are everything. If we can’t have an opportunity to have our interests represented in those conditions regarding impacts to our aboriginal rights and title, how can you say this process is fair? I don’t understand that,” Bruce said.

NEB spokeswoman Tara O’Donovan said the federal government relies on the regulator’s process “to the extent that it can” to fulfil its obligation to consult with First Nations.

However, she said Ottawa’s Major Projects Management Office has been overseeing a multipleagency consultation effort on the Trans Mountain expansion since the company first filed a project description back in 2013.

“Recognize that we have consulted over 130 groups and you’re seeing some of those groups have said there is a lack of consultation,” Forrester said, adding that Kinder Morgan has been consulting with First Nations along the expanded pipeline route since at least the beginning of 2012.

He added the president of Kinder Morgan’s Canadian arm, Ian Anderson, has personally met with the “vast majority” of affected aboriginal groups along the pipeline.

The NEB is hearing final arguments for the current regulatory process this week and next in Burnaby, B. C., before shifting to Calgary in February.