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The Slow Way to Tidewater

National Post (Latest Edition) | Dennis McConaghy
Recently, the Trudeau government announced a 5½-month supplemental process for the National Energy Board to examine the impact on whales in Burrard Inlet by the proposed Trans Mountain Expansion project (TMX). This is intended to remedy the inadequacy of TMX’s 2016 approval, as judged by the Federal Court of Appeal (FCA) in August. That decision has suspended the entire project, which was the only remaining pipeline option that could get Alberta oil directly to tidewater from entirely within Canadian territory.The National Energy Board (NEB) must now seek out whether any incremental impact on the whales attributable to what would be a minor increase in tanker traffic is material enough to undermine the government’s approval of the Trans Mountain expansion. The FCA has demanded this rather than accepting the previous scoping decision by the NEB, Transport Canada and the Department of Fisheries pursuant to their existing jurisdictions made almost five years ago that the assessment was unnecessary to proceed. It also ignored that the decision about the pipeline’s ecological impact had been de facto made already when the government determined that Trans Mountain was in the best interests of the country and approved its construction back in 2016.This supplemental NEB process will face litigation from those implacably opposed to the project. They will surely argue that too much has changed since 2016, and that Ottawa’s new ultra-inclusive, ultra-subjective regulatory process, as laid out in Bill C-69 — currently making its way through the Senate — must now be applied. What are three more years of redundant process in the cause of “getting it right”?

Even if the NEB does contain itself to the prescribed 5½ months, it will generate yet another recommendation, which can only be considered by the federal government only after further consultations. The cycle time will likely extend through most of 2019. Notably, the federal government has offered no guidance on when it will reach a decision, and restore the halted project back to construction. And even after all that, a decision of the elected government of Canada may or may not conform to the expectations of the FCA.

Moreover, the Aug. 30 FCA decision cited another deficiency: the failure of the Trudeau government to provide adequate consultation with certain First Nation entities between May and November 2016, the period between the NEB recommendation to approve TMX and the actual cabinet decision doing so. The FCA judged that the federal government’s actions did not conform to its conception of adequate consultation. In its view, the government was obliged to do more than inform and understand outstanding grievances and concerns: it was obliged to “grapple” with them — a standard that implies extra efforts to find consensual accommodation. But the courts have provided no practical, objective guidance on how to appropriately “grapple” with opposed First Nations. And the Trudeau government has not yet clearly spelled out how this second deficiency will actually be remedied, other than hiring a former Supreme Court justice to renew consultations with First Nations.

The FCA’s assault on a scoping decision made almost five years ago by competent regulators and agencies with statutory authority is something the federal government should confront, not placate. The same applies to conflating consultation to an open-ended negotiation where anything less than consensual agreement on accommodation is judged inadequate.

The Trudeau government must reconsider its decision to try to remedy the FCA decision through more consultations and assessments. At this point, legislation is the only option to restore TMX back to construction by first quarter of 2019 to avoid further loss of economic value to the country. Alberta’s government should have demanded such federal legislation, but, incredibly, it has not. The Canadian hydrocarbon industry should have done the same — as should any Canadian that recognizes the destructive impact the FCA decision is having on the credibility of the Canadian regulatory approval system, and, in turn, investor confidence.

The Trudeau government spent at least $4.5 billion to acquire the TMX project from its owner, Kinder Morgan, just as the court was ruling that the project could not proceed. If Canadian taxpayers are ever to salvage any value from that troubled investment, the project must be built. One can only hope the Trudeau government realizes that.

Unless endless delay is what the Trudeau government actually prefers. By refusing to even try appealing the FCA’s decision to the Supreme Court, and ruling out the option of restarting construction through legislation — dismissing a legitimate option as an unacceptable “trick” that would upset too many people — time is the only thing this government has bought. Perhaps it has decided it prefers to drag out the process until the next election, as it is apparently focused more on political considerations right now than on getting Canadian oil to world markets.