The Trans Mountain decision – hold the champagne

Last week the Federal Court of Appeal ( FCA) upheld the cabinet’s approval of the Trans Mountain Pipeline. The headlines have focused on how we now have finality. But do we? What if the case goes to the Supreme Court of Canada ( SCC)? Six years after Trans Mountain filed for approval with the National Energy Board, approval is still in doubt.

Almost every decision involving First Nations consultations is vulnerable on appeal because the relevant law is so unclear. The FCA decision said: “It is critical that we refrain from forming our own view about the adequacy of consultation as a basis for upholding or overturning the ( cabinet’s) decision. In many ways, that is what the applicants invite us to do. But this would amount to what has now been recognized as … an impermissible approach.”

That’s debatable. There are two questions here: whether consultation was adequate and whether approval of the pipeline is in the public interest.

Proper consultation with First Nations is a constitutional requirement. If it wasn’t done properly, the cabinet’s decision must be overruled. But the FCA refused to consider whether the consultation was done properly. It merely considered the reasonableness of the cabinet’s own opinion of its own efforts at consultation. In effect, the court allowed the cabinet to be the judge of the constitutional issue. In doing so, it followed a recent SCC decision ( Vavilov) requiring a court to show deference to decisions of an administrative decision- maker. But whether Vavilov is a precedent for this case is debatable.

There are complex rules about when a court should use deference and do a “reasonableness review” — i. e., defer unless the decision under review is unreasonable, and when it should do a “correctness review” — i. e., make sure the decision under review was correct. Arguably, making that constitutional law choice was the court’s job, not the cabinet’s.

How likely is it that a government would judge it had failed to comply with its constitutional responsibilities towards First Nations and therefore refuse to approve the pipeline? Is its self- judgment objective and disinterested? The cabinet’s interpretation of a constitutional duty should be more than just reasonable; it should be correct. For the FCA to review the correctness of the cabinet’s decision, far from being “impermissible,” may well be required.

In reaching its decision, the FCA cited several Supreme Court cases about the duty of consultation. Unfortunately, that case law is a confusing mess. If everyone knew what the law of consultation required, we wouldn’t be having this interminable litigation. The cases say “the honour of the Crown” must be upheld but who knows what “honour” means in any particular case? And “consultation” can also have different meanings. It is the judicial equivalent of a Rorschach test: you read into it what you want to get out of it.

The Supreme Court has said consultation requirements vary with the circumstances of each case — a judicial euphemism for, “There is no clear rule and we will just make it up as we go along.” Different Supreme Court comments in different cases go in different directions, allowing a lower court to cherry- pick comments to justify almost any position.

This absence of clear law encourages litigation. Many years have been taken up by First Nations issues on this pipeline, with toxic effect on private investment. Although the FCA repeatedly said First Nations do not have an effective veto, that horse had already left the barn. The effective veto was granted in the 2018 FCA decision overturning the first cabinet approval.

The private sector owners of the pipeline saw it coming and walked away from their project. The supposedly nonexistent veto was successfully exercised. If the federal government had not bought the pipeline, it would have remained vetoed.

Even a single opponent’s attack on the adequacy of consultation runs the risk of killing an investment. Yet private investors have no control over how well the Crown conducts its consultations or whether it seriously defends legal attacks on it by First Nations.

The duty of consultation is a costly legal mess that needs cleaning up. Unfortunately, the government can’t simply amend the Constitution by legislation. The Supreme Court having created the duty of consultation, only the Supreme Court can fix it. Until then, the lower courts have to do what they can with the law they have. That is why, although I have outlined a potential vulnerability of this FCA decision, I do not criticize the court. The opposite decision would have been equally vulnerable.

So long as consultation requirements remain unclear, investments in projects that could affect any First Nation anywhere in Canada will be deterred. It may be several years before a similar case rises this far up the judicial ladder. On the other hand, if Trans Mountain is appealed now, the Supreme Court could use the opportunity to repair the consultation mess. Or it could spend a year or two deciding to give us more of the “it varies with the circumstances of each case” kind of advice. Hold the champagne for a few more months, at least.

THE SUPREME COURT HAVING CREATED THE DUTY OF CONSULTATION, ONLY THE SUPREME COURT CAN FIX IT.