Trans Mountain pipeline scores another victory as court rejects news reports as 'hearsay'

Kinder Morgan has scored another legal victory after the Federal Court of Appeal rejected a request to consider new evidence from news reports that allegedly showed the Trudeau government rigged its review of the Trans Mountain pipeline expansion project.

The ruling was released on Thursday, two days after the federal government confirmed that it would offer $4.5 billion to buy the Texas-based company's Trans Mountain system and take control of its oil pipeline and tanker expansion project between Alberta oil producers and the B.C. west coast.

The Federal Court of Appeal has yet to rule on the main case launched by First Nations who allege that the Trudeau government failed in its legal duty to consult them, prior to approving the Trans Mountain project in November 2016. This decision could be released in the coming weeks.

The new court decision was prompted by a recent National Observer investigation that quoted unnamed public servants and internal federal documents that indicated the government had instructed departments to “give cabinet a legally-sound basis for saying yes” to the Trans Mountain pipeline expansion before concluding its consultations with affected First Nations.

Lawyers for the Tsleil-Waututh Nation in the Burrard Inlet of British Columbia and other First Nations said the news articles published by National Observer confirmed what they had suspected about a rigged federal review process to approve the project. They used these news articles as a basis for a motion asking the court to reopen its evidentiary record, more than six months after concluding hearings in the case, arguing that the new evidence was compelling.

“We disagree,” said the Federal Court of Appeal Justices Eleanor Dawson, Yves de Montigny and Judith Woods, in their May 31 ruling.

Scott Smith, a lawyer for the Tsleil-Waututh, said that the nation was disappointed with the decision, but still believes there is enough information on the record to support an eventual victory, including evidence that the government designed a website announcing the project approval during consultations with First Nations, several weeks before it made its decision public.

“There’s also lots of evidence on record of how the Crown engaged in sort of drive-by consultations, (it) provided Tsleil-Waututh with the opportunity to blow off steam and then barged ahead and made the decision that they always intended to make,” Smith said.

Tsleil-Waututh still wants to see secret documents

The Tsleil-Waututh is also calling on the government to release uncensored copies of its internal records and reaffirm its commitments to promote transparency in its environmental and regulatory approval processes for major projects, Smith said.

In April, National Observer released a number of the supporting documents from its investigation of the federal Trans Mountain review. This allowed Smith and co-counsel Paul Seaman to then ask the court to consider these documents as part of its judicial review of the Trudeau government’s decision, announced on Nov. 29, 2016, to approve the project. All of the parties involved in the case considered that the motion to reopen the evidentiary record was exceptional since hearings had already wrapped up on the case more than six months earlier.

National Observer opted not to publicly release copies of two key documents it reviewed as part of its investigation in order to protect the sources involved since these records have not yet been released through access to information legislation.

One of those documents showed that high-ranking public servants discussed watering down a 2015 Liberal Party election campaign promise in order to speed up the review of the Trans Mountain project in January 2016 after Kinder Morgan Canada president Ian Anderson had requested a phone call with the top public servant at the federal Natural Resources Department. Another document confirmed that a high-ranking official had given instructions to public servants to find a way to approve the project on Oct. 27, 2016, at a time when consultations with First Nations were still underway.

Without having access to these records and testimony from public servants, the Federal Court of Appeal said in its May 31 ruling that it was unable to consider this evidence as part of its review of the Tsleil-Waututh motion.

“In addition to relying on the content of the 15 documents provided to it by the National Observer, Tsleil-Waututh relies upon the content of the articles published in the National Observer and statements attributed to unknown persons described in the articles to be whistleblowers. These statements reported in news articles are hearsay, and there is no evidence that would permit us to conclude that the statements are sufficiently reliable so as to be given any weight. Accordingly, we have given no weight to the statements.”

The May 31 decision follows a string of victories in the courts for Trans Mountain, including a court injunction aimed at preventing opponents from disrupting construction activity, as well as a recent decision that confirmed the B.C. government had adequately consulted First Nations, prior to providing its own approval of the project.

Kinder Morgan is also celebrating its recent deal with the federal government that will allow it to unload its Trans Mountain assets for $4.5 billion before the end of the summer on Canadian taxpayers. The federal government has said it doesn't want to own the project long-term and is searching for a new buyer that could include an ownership stake for First Nations that support the Trans Mountain project.

The court also ordered the Tsleil-Waututh Nation to cover the federal government’s and Trans Mountain’s legal costs.

Decision could become part of Tsleil-Waututh appeal to Supreme Court, says lawyer

The federal government has a legal duty to consult First Nations, under the Canadian Constitution, on any decision that can affect their rights, their territory and way of life. Any failure to do so can result in the court reversing a government decision if the consultations weren’t meaningful.

In its legal submission, the Tsleil-Waututh had asserted that the documents show that the government had a discussion with Kinder Morgan about its timetable for reviewing the project in January 2016. It then asserted that this led up to an Oct. 27, 2016 meeting in which public servants were instructed to find a legal way to approve the project. Thirdly, their submission asserted, based on the federal documents, that government officials began circulating documents related to the approval of the project after that meeting “under the pretense of the topic ‘Critical Path for Pipelines and Related Announcements.’”

The lawyers also alleged that Canada was engaging in pipeline "gamesmanship" while seeking to "suppress evidence" about how it had acted in "bad faith."

The Federal Court of Appeal justices said they "carefully read each of the 15 documents" released by National Observer and "concluded that they fall far short of establishing any of the three assertions put forward by Tsleil-Waututh.”

The court also accepted an argument, submitted by Trans Mountain, which noted that some of the internal documents obtained by National Observer from November 2016 had indicated uncertainty about whether the pipeline expansion project would be approved, therefore indicating that a decision had not been made ahead of time.

Lawyers from all sides in the case have expected the court to release its final decision before the end of June, but the motion from the Tsleil-Waututh may have delayed this decision.

Smith, the Tsleil-Waututh lawyer, declined to comment on whether the nation had made a final decision on whether it was prepared to go all the way to the Supreme Court of Canada. He added that if the court sides with the government, the May 31 decision on the motion could become part of the basis for an appeal to the Supreme Court. This could lead to the release of some internal documents related to the Trudeau government's approval of the pipeline.

'Judge us by what we did'

Trans Mountain didn't respond to a request for comment about the May 31 ruling. Natural Resources Minister Jim Carr said through a spokesman that the government understands the importance of meaningful engagement with Indigenous peoples, which prompted them to pursue consultations and partnerships through a new Indigenous Advisory and Monitoring Committee that was created for the project.

"‎The (court) decision provides further certainty that this project can continue to move forward without delay," said spokesman Alex Deslongchamps. "‎The Trans Mountain Expansion Project is in the national interest and we are committed to seeing it built."

The expansion project would triple the capacity of the existing Trans Mountain system, allowing it to transport up to 890,000 barrels per day of diluted bitumen and other petroleum products from Alberta, home to the world's third largest reserves of crude oil, to a terminal in Burnaby, a city in metro Vancouver. The government said this would give Canada's oil producers access to new markets, stimulating jobs and growth.

Bitumen is a tar-like heavy oil that is mixed with sand and buried beneath the boreal forest in Northern Alberta. Although the deposits of oil are rich, they require vast amounts of energy, water and money to extract, making it difficult for Canadian producers to compete on a global market. The industry is also Canada's fastest growing source of greenhouse gas emissions.

Opponents have said this means the Trans Mountain expansion project would push Canada's climate change goals out of reach and lead to spills of a petroleum product that scientists haven't completely figured out how to clean up.

In April, Carr declined to comment directly on the allegations raised by public servants, but he told National Observer in an interview that the government wanted to avoid mistakes made by previous federal governments in cases where Crown decisions were reversed due to inadequate consultations with affected First Nations, such as former prime minister Stephen Harper's decision to approve the Enbridge Northern Gateway oil pipeline and tanker project to the northwest coast of British Columbia.

“I’m telling you what we had learned from court cases — Tsilhqot’in from the Supreme Court of Canada, and the Federal Court of Appeal in the Northern Gateway case — and that we wanted to discharge our obligations that we take very seriously and did then," Carr said in the April 19 interview. "So judge us by what we did and the extent of the consultation that was underway and completed.”

Carr also said he had made a promise to Tsleil-Waututh Chief Maureen Thomas to ensure that her territory in the Burrard Inlet would be left in better shape than how it was before the Trans Mountain expansion was approved. He said he intended to keep that commitment.