Federal Government to Acquire Trans Mountain Pipeline

The Federal Government has agreed to purchase the Trans Mountain Pipeline system and the expansion project (“TMX”) from Kinder Morgan Canada for C$4.5 billion.  The Federal Government will also indirectly fund Kinder Morgan resuming TMX planning and construction work until the transaction is complete – thus ensuring that construction will continue this summer as planned. This announcement is a major step towards the TMX being completed and comes on the heels of Kinder Morgan publicly threatening to abandon the project.

This post is not intended to advocate for or against the merits of the TMX.  There are pro-TMX governments, Indigenous groups and individuals that are justified in their views, just as there are anti-TMX governments, Indigenous groups and individuals that are justified in their views.  On this issue, reasonable people can – and do – disagree.

Legal Obligations to Indigenous Peoples

What is not up for debate, however, are the Federal Government’s legal obligations to Indigenous peoples.  The law in Canada is clear that consultation with Indigenous peoples is required whenever the Crown contemplates a decision that may impact asserted Aboriginal rights and title.  Failure to meet these obligations can result in a Crown’s decision being set aside.  This principle is what caused the Northern Gateway approval to be overturned and is why the Federal Government delayed approving the TMX by four months in 2016 to allow for additional Indigenous consultation.  In fact, the jury is still out on whether the Federal Government met its legal obligations prior to approving the TMX – an issue currently before the Federal Court of Appeal and one that could further complicate the Federal Government’s decision.

Regardless…

Regardless of whether the Federal Government has met its legal obligations to Indigenous peoples to-date, the decision to effectively intervene in the TMX’s development now likely creates new legal obligations.  There is no question that the TMX will have significant adverse effects on strong claims of Aboriginal rights and title and, based on the available evidence, it is apparent that the fate of the TMX had become entirely dependent on a new decision being made by the Federal Government.  Put another way: if not for the Federal Government’s decision to purchase the TMX, the project would likely have either been delayed or abandoned – an outcome that has materially different impacts on Aboriginal rights and title than what Indigenous peoples are now faced with.

Despite the Federal Government having consulted with the leaders of British Columbia and Alberta prior to its recent decision, to our knowledge no Indigenous groups were consulted as part of the acquisition decision making process.  This is a failure by the Crown to meet its most basic legal obligations to Indigenous peoples.

Opportunity for Immediate Consultation + Accommodation

Yet in this failure there is an opportunity for the Federal Government to reframe its approach to the project and economic participation by Indigenous peoples.  The Federal Government should immediately engage with Indigenous communities impacted by the TMX with a view to meaningful consultation and accommodation.  Depending on the stakeholder, a host of unresolved issues remain on the table: marine protection, environmental protection, unjustified infringements, shared jurisdiction, FPIC (free, prior and informed consent), inadequate consultation and accommodation, etc.  The list is long.

An important component of this accommodation can and should be economic accommodation.   Shared economic benefits help Indigenous communities who bear the most risk and impact to also participate in the reward.  These benefits can include sharing of resource revenues and equity ownership.  Today, Indigenous groups do not have a framework for the sharing of economic benefits from federal pipelines outside of private agreements with the proponent.  Moreover, as things currently stand, a significant number of Indigenous groups impacted by the TMX will not receive shared economic benefits from any source.

By presenting an opportunity for Indigenous groups to be full partners on the TMX – through shared jurisdiction, through project ownership, and through resource revenue sharing – the road to the Federal Government meeting its legal obligations and avoiding further legal challenges will be a much easier one to travel.  A failure to do so will undoubtedly result in further legal challenges to the TMX and will fly in the face of the Federal Government’s commitment to reconciliation.

If the Federal Government is serious about its intention to complete the TMX, it will seize on this opportunity.

Share Your Thoughts

Please feel free to contact us if you have any questions, concerns or comments about our thoughts above.