Canada’s regulatory system is a mess. And it just got messier.

The politically charged national debate on pipelines and a recent B.C. Supreme Court decision are adding to the confusion.

In the case, the Court ruled that the B.C. government did not uphold its duty to consult the Gitga’at and neighbouring First Nations on the Northern Gateway project. The ruling, though expected to be appealed, is likely to have repercussions for future projects.

Federal, provincial and Aboriginal governments all have some degree of authority to have an impact on resource development and transportation. Any attempt to weave a thread of clarity or efficiency into this web is challenging.

Efforts to streamline procedures and reduce duplication are commendable and necessary if we are to compete and provide the energy and materials that the world requires. However, they also come with risk. In particular, work to streamline processes can reduce public trust and erode perceived legitimacy of the approval process.

The recent Supreme Court case decision in B.C. is a clear example of the potential peril.


The case was brought forward by the Gitga’at and Coastal First Nations (an alliance of nine First Nations communities on British Columbia’s North and Central Coast, including the Gitga’at First Nation).

At the heart of the issue was the equivalency agreement between the National Energy Board (NEB) and the B.C. government that was made to reduce overlap and duplication in the federal and provincial environmental assessment processes.  In 2008 and again in 2010, the Environmental Assessment Office (EAO) in B.C. and the NEB entered into equivalency agreements regarding projects, subject to approval under both the NEB Act (federal) and the Environmental Assessment Act (EAA, provincial). Under this equivalency agreement, the province accepted the results of the federal environmental assessment as an equivalent assessment.

The petitioners argued that the B.C. government should have consulted with the First Nations communities before they entered into an agreement with the NEB and after the panel approved the project (with 209 conditions). By not doing so, court ruled: “. . . that there has been a breach of the Province’s duty to consult, and thus the honour of the Crown, by the failure of the Province to consult with the petitioners prior to June 2014.”

“Maybe this will be that final straw that will make British Columbia realize that you don’t just agree with First Nations when they like your project,” Art Sterritt with the Coastal First Nations said, in a media interview. “You basically have to listen to them and work with them even when they don’t like your project.”

Despite the fact that pipelines fall under federal jurisdiction and B.C. has no constitutional authority to reject the project the B.C. Court highlighted the importance of the provincial government’s independent decision-making ability. The court ruled that: “British Columbia, within its own jurisdiction, has unique objectives, political and social goals, and legal obligations” that can be met only if the province has the ability to review the project.


“You’re talking about a whole new review process here,” Sterritt told a CBC reporter. “I’m not sure that Northern Gateway or anyone else would have the appetite for that.

“We’ve said it before: the Enbridge Northern Gateway pipeline is dead.”

Northern Gateway has already been labeled “dead,” given the Federal government’s ban on oil tanker traffic in B.C. and B.C.’s five conditions. However, it has implications for the Trans Mountain pipeline that is undergoing NEB consultation process.

The factors relevant to the Trans Mountain project are:

> First Nation communities, Tsleil-Waututh and Squamish Nation, oppose the project.

> The equivalency agreement applies to this project, as well, and B.C. has not withdrawn from it.

> The B.C. government is opposing the project because of a lack of a plan to respond to an oil spill.

After the consultations are complete, the review panel has three months to make a recommendation. The final decision will be made by the federal cabinet 90 days after that, which takes the timeline to fall 2016.

This is a high-stakes discussion – given the importance of getting Canada’s resources to tidewater. The Canadian Energy Strategy is a good start to have an approach that is focused on collaboration to shape Canada’s energy future.

Restoring trust in our regulators is one of the single most important things we can do to move forward. It is important to get this right and, thus, any attempt to modernize the NEB needs to be based on strong evidence. The Centre for Natural Resources Policy at the Canada West Foundation recognizes this need and is partnering with the University of Ottawa to provide this evidence.

Let’s find evidence-based solutions aimed at rebuilding trust in public institutions in 21st century market conditions. If we get this right, we can open the door to economic prosperity across the West and the rest of Canada.

– Shafak Sajid is a policy analyst

This is the first in a series of blogs the Canada West Foundation will be writing exploring issues surrounding Canada’s regulatory system and restoring public trust.