As pipeline politics begin anew, Ottawa must fast-track the courts

Thomas Isaac and Jeremy Barretto are the co-chairs of the Cassels National Major Projects Team and authors of the book The Law of Indigenous Ownership & Projects by Thomson Reuters.

History appeared to be repeating itself last week. Ottawa and Alberta were nearing an agreement on an oil pipeline to the northwestern coast. And the B.C. Premier was not too happy.

Premier David Eby appeared to offer Alberta something else in lieu of that pipeline. He offered to help increase the capacity of the Trans Mountain Pipeline again, a concession made “through gritted teeth” but which Alberta Premier Danielle Smith said was not good enough. Mr. Eby also raised the spectre of legal challenges, saying Alberta was “playing with fire.”

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These events evoke Canada’s fraught bid to build pipelines that began in the mid-2000s. Another northwestern pipe, another Trans Mountain expansion and a third route to the East Coast were bogged down in lengthy regulatory and legal processes. Only Trans Mountain was built, though the cost increased to $34-billion, from $5.4-billion, and it was years behind the initial schedule.

Today, with the U.S. trade war, governments from coast to coast to coast in this country are reaching a consensus: We need to speed up building major projects to unleash Canada’s full economic potential. Toward that end the Carney government has passed the Building Canada Act and established a Major Projects Office.

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But plainly we now see, the past still echoes. Major projects can be contentious. While in a democracy we value our disagreements, this means that many proposed projects might end up in court, just as they have in the past. There is a risk of more court challenges if expedited regulatory processes are not properly implemented. To address approval delays for projects of national interest, Canada needs to not only speed up project approvals but also the courts and our dispute-resolution processes.

Ensuring fair, fast and efficient court processes requires more government resources, and this is a worthwhile area for spending. This will provide the necessary timely access to justice that a top-tier economic power must have to attract capital and ensure predictability in major projects approval processes.

The impetus for doing so can be found in the history of the very two pipeline projects that were in the news the past week.

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Enbridge Inc.’s Northern Gateway, a pipeline from Alberta to the northwestern coast, was first proposed in 2005. The regulatory process was long, but after the project was initially approved in 2014, the battle continued in court. It took a further two years before the Federal Court of Appeal ruled against it. The Canadian government formally rejected the pipeline later that year, ending an 11-year process.

The federally-owned Trans Mountain expansion project, which Mr. Eby wants to expand further, was proposed in 2013. The court process continued after the initial regulatory process was completed in 2016. Courts cancelled the Trans Mountain expansion project’s approval mid-construction in 2018, then upheld it in 2020. By the time first oil flowed, 11 years had passed since the pipeline was proposed. The original proponent, the U.S. company Kinder Morgan Inc., had sold the pipeline and abandoned Canada altogether.

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Major natural resource and infrastructure projects in Canada often face challenges in the courts owing to concerns about the adequacy of consultation duties to Indigenous peoples. The Supreme Court of Canada has written hundreds of pages on Indigenous consultation requirements, and we still have much work to do to properly understand the full legal considerations for Indigenous rights and title.

Now with projects fast-tracked under the Major Projects Office, the tidal wave in new approvals will likely face a seawall of court processes and disputes. This is to be expected even under the best of circumstances and attempts at obtaining agreements. In order to fast-track projects Ottawa must also fast-track the courts.

The number of pending cases on judicial review before federal courts has more than doubled since 2021. Meanwhile, vacancies on the bench spiked to a record 92 out of 1,000 full-time positions in 2023, prompting Supreme Court Chief Justice Richard Wagner to send a rare rebuke to Ottawa. It was only mid-March that data showed the vacancies had come down to 13.

Federal Court committees have recognized that backlogged cases have created delays in Canadian courts – recommending increased dispute-resolution and case-management processes to address these delays. Judicial reviews of federal permits for major projects could be stuck in these backlogs, leaving proponents with federally approved projects in limbo.

The resources that Ottawa is now putting into major projects should be complemented by a material investment in Canada’s judicial and dispute-resolution processes. At the very least, all vacancies on the Federal Court must be filled. And Ottawa should consider sparing the Justice Department from its across-the-board, 15-per-cent budget cuts. This would ensure that courts are well funded with project-related decision makers ready to go for urgent matters.

Court processes are not rubber stamps for government project approvals. Instead, all we seek is that well-resourced courts can ensure fast, fair and efficient processes for all parties, including Indigenous and non-Indigenous governments, project proponents and civil society as a whole.

Of course, the other way to shorten court processes is to ensure fewer cases get there to clog it up. An alternative to adversarial court processes is collaboration. Indigenous governments are increasingly seeking equity stakes in major projects. While disputes cannot be eliminated, collaboration must be maximized through fair, commercial and balanced partnerships. Building up the courts’ capacity must be accompanied by backing broadly supported Indigenous-owned projects. That is Ottawa’s best option to avoid consultation-related court delays and positions Canada as a magnet for capital investment.

This matters. For too long, Canada has overly depended on a market that is now threatening to close itself off. Yet for the most part, this country lacks the infrastructure to sell to anywhere but south. One can only look to the Saskatoon-based Nutrien Ltd.’s decision last week to ship fertilizer from Longview, Wash., instead of any Canadian port, to know that we must better support export infrastructure for Canadian resources.

But one can also look to the fraught Trans Mountain expansion to see there is light at the end of the tunnel: the significant benefits to the Canadian economy from major export infrastructure projects. According to a Bank of Canada estimation, the expansion added 0.25 per cent to Canada’s economy in the second quarter of 2024 alone. That is roughly $7-billion.

To stand on its own two feet in this new world, Canada must build and build quickly, and we must make court processes fast, fair and efficient.

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