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The Northern Gateway pipeline, politics and the law

After years of preparation, a project that would reshape the geography of Canada's energy landscape is entering public hearings. But with the tremendous rancour already stoked by Enbridge Inc.'s proposed Northern Gateway pipeline, it's likely some of the most important decisions that will clear – or block – the path for its construction won't be made by the three-person federal joint review panel that expects to render a verdict by the end of 2013.

Instead, it's possible the courts – and perhaps even Parliament – will be called on to play defining roles. The pipeline represents such an important confluence of issues – Canada's future energy development versus its commitment to environmental obligations and first nations rights – that legal and political intervention could set important national precedents.

There are several ways this could happen, and several important possible outcomes – both if the National Energy Board approves Gateway, angering opponents, or if it denies a project the Harper government has vocally supported.

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Legal challenge

First nations and environmental groups are almost certain to appeal any approval of Northern Gateway. They could do so on numerous grounds. If the NEB gives its blessing, that decision can be challenged in the Federal Court of Appeal on procedural grounds. First nations groups could also mount constitutional challenges, arguing that they have not been accorded sufficient consultation or accommodation. First nations do not have a veto on resource projects, but legal wrangling can force substantial delays.

Creative federal intervention

Ottawa has been loath to directly interfere with the National Energy Board, which is supposed to operate independently. But there are several examples of how it has used more creative means to overturn a decision, without doing so directly. For example, when the NEB came out with a restrictive policy on natural gas exports, Ottawa asked the board to reconsider – and the NEB came back with a less restrictive policy. The NEB also said no to a natural gas pipeline to Atlantic Canada, saying it didn't make financial sense. After Ottawa implemented the National Energy Plan, which included provisions that changed the economics of the pipeline, the NEB reconsidered and approved. The Harper government has already shown its willingness to intervene in similar ways with the CRTC and Investment Canada.

Direct federal intervention

Parliament has often intervened in major pipeline projects. It was Parliament that cleared the way for construction of the initial TransCanada Corp. Mainline pipeline, which delivers western gas to eastern markets by way of Northern Ontario. And Parliament also stepped in to pass legislation for an Alaska gas pipeline through Canada, drafting and passing the Northern Pipeline Act. Legislation could be used to overturn an NEB decision not to approve – a move that would, according to multiple sources, be unprecedented and susceptible to legal challenge. But Ottawa could also use legislation to strengthen an approval. Legislation can still be challenged on some grounds, but it's a more ironclad method to approve a pipeline, since there are fewer grounds for appeal. It would be an unusual method, but it's been done before with pipelines.

The stakes

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A Supreme Court ruling on first nations consultation and accommodation could provide an important clarification of how aboriginal people should be treated in relation to resource projects and industrial development. That's something lawyers have been begging for, since there is no neat prescription of what needs to be done to meet those principles. But if Ottawa forces through a project that either the NEB turns down or first nations continue to stridently oppose, it risks damaging the credibility of the NEB – or opening a major conflict with aboriginal people. "One of the things I've always looked at as a key to this case is whether or not this is the issue on which Prime Minister Harper wants to pick a battle with the first nations," said George Hoberg, a professor in environmental and natural resource policy and governance at the University of British Columbia. The Gateway case is fraught with so many issues that Prof. Hoberg is already using it as a classroom case study. Lawyers with first nations expertise are also watching closely.

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About the Author
Asia Bureau Chief

Nathan VanderKlippe is the Asia correspondent for The Globe and Mail. He was previously a print and television correspondent in Western Canada based in Calgary, Vancouver and Yellowknife, where he covered the energy industry, aboriginal issues and Canada’s north.He is the recipient of a National Magazine Award and a Best in Business award from the Society of American Business Editors and Writers. More

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