Canada: A Triumph Of Form Over Substance? The Federal Court Of Appeal's Decision To Quash The Trans Mountain Expansion Approval

On August 30, 2018, the Federal Court of Appeal (the Court) released its decision1 on the federal government's approval of the Trans Mountain Expansion Project (TMX). The Court quashed the approval on two grounds:

  1. The National Energy Board (NEB or Board) unjustifiably defined the scope of the project not to include project-related tanker traffic, such that the government could not rely on the NEB's report; and  
  2. The federal government's consultation with Indigenous peoples after the NEB issued its report, but before it made its decision to approve the project, was inadequate.

In this post, we will discuss the first of these reasons for the Court quashing the approval (exclusion of marine shipping). We will discuss the second reason (inadequate Indigenous consultation) in a subsequent post.


Under section 52 of the National Energy Board Act (NEB Act), Trans Mountain was required to apply to the NEB for a "certificate of public convenience and necessity" (CPCN) and the NEB was required to submit to federal cabinet a report which set out the NEB's recommendation as to whether the CPCN should be granted and any terms and conditions the NEB considered the CPCN should be subject to. In doing so, the NEB was required to take into account "whether the pipeline is and will be required by the present and future public convenience and necessity".2 This is essentially a broad, public interest assessment.

The TMX was also a "designated project" pursuant to section 2 of the Canadian Environmental Assessment Act, 2012 (CEAA), which meant that the NEB was also required to carry out an environmental assessment (EA) of the TMX under CEAA. Under CEAA, a "designated project" is defined, in section 2, by reference to the carrying out of "physical activities" and any physical activity "that is incidental to those physical activities". The construction of an on-shore pipeline greater than 40 kilometres in length is listed as a designated project.3

The Scoping Decision

The question was whether increased marine shipping related to the construction of the pipeline was properly part of the "designated project" under CEAA. In a preliminary "scoping decision" (Scoping Decision), the NEB determined that it was not. However, the NEB stated "it would consider the effects of increased marine shipping under the [NEB Act]. To the extent there was potential for environmental effects of the designated project to interact with the effect of the marine shipping, the NEB would consider those effects under the cumulative effects portion" of CEAA.4 In other words, project-related marine shipping was considered by the NEB, just not as part of the EA under CEAA.

Should marine shipping have been included as being part of the "designated project" under CEAA?

At the outset, the Court stated that the parties agreed that the issue of whether project-related marine shipping ought to have been included as part of the designated project "turns on whether Project-related marine shipping is a "physical activity that is incidental" to the pipeline component of the Project".5 The Court then went on to say that question "is not a pure issue of statutory interpretation. Rather, it is a mixed question of fact and law heavily suffused by evidence" [emphasis added].6 This is interesting because it should have meant that the Court would accord some deference to the NEB's decision, when it does not appear to have done so.

First, the Court addressed the NEB's explanation that it did not include project-related marine shipping as part of the "designated project" under CEAA because it does not have "regulatory oversight" over marine vessel traffic; other agencies such as Transport Canada do.7 The Court rejected the Board's rationale, on the basis that there is no authority for the proposition that a responsible authority conducting an EA under CEAA "must itself have regulatory oversight of a particular subject matter".8

The Court also criticized the Board for failing to address the core issue of whether project-related marine-shipping is in fact an activity "incidental" to the project (i.e., building the pipeline).  The Court suggested that had the Board done so, it would have come to a different conclusion.9

Whether you agree with this Court's analysis or not, in our view it is clear that notwithstanding its preliminary comment about the issue being one of mixed fact and law "heavily suffused by evidence", the Court did not accord the NEB any deference on this point.  One cannot escape the feeling that the Court believed that assessing the environmental effects of marine shipping under the NEB Act was markedly inferior to assessing them under CEAA and its conclusion on this issue was driven by that view.

Was the NEB's assessment of marine shipping "substantially adequate"?

Trans Mountain and the federal government also argued — and this, in our view, was really the crux of the case — that in any event the NEB did conduct an extensive review of marine shipping, as part of the exercise of its public interest jurisdiction under section 52 of the NEB Act. In other words, the NEB's assessment of marine shipping was substantively adequate, such that federal government was entitled to rely on it.

In addressing this argument, the Court began by making the following observation about the NEB's assessment of marine shipping:

"It noted that while it assessed the potential environmental and socio-economic factors of increased marine shipping as part of its public interest determination under the [NEB Act], the Board "followed an approach similar to the environmental assessment conducted under [CEAA] ... to the extent it was appropriate, to inform the Board's public interest determination".10 [emphasis added]

Further, while the direct environmental effects of project-related marine shipping were considered under the NEB Act, but following an approach similar to that followed under CEAA, there were indirectly considered under CEAA as part of the cumulative effects of the TMX.

The Court then spent eight pages of its decision canvassing how the NEB addressed project-related marine shipping in its report, including its potential environmental effects both generally (e.g. spill prevention) and on the endangered Southern resident killer whale population in the Salish Sea (Georgia Strait) specifically. Following this, the Court summarized:

"[438] This review of the Board's report has shown that the Board in its assessment of Project-related marine shipping considered:

  • the effects of Project-related marine shipping on Southern resident killer whales;
  • the significance of the effects;
  • the cumulative effect of Project-related marine shipping on the recovery of the Southern resident killer whale population;
  • the resulting significant, adverse effects on the traditional Indigenous use associated with the Southern resident killer whale;
  • mitigation measures within its regulatory authority; and,
  • reasonable alternatives to Project-related marine shipping.

[439] Given the Board's approach to the assessment and its findings, the Board's report was adequate for the purpose of informing the Governor in Council about the effects of Project-related marine shipping on the Southern resident killer whales and their use by Indigenous groups. The Board's report adequately informed the Governor in Council of the significance of these effects, the Board's view there were no direct mitigation measures Trans Mountain could apply to reduce potential adverse effects from Project-related tankers, and that there were potential mitigation measures beyond the Board's regulatory authority and so not the subject of proper consideration by the Board or conditions."

Yet this was not good enough for the Court, in large part because it found that the NEB's assessment of the environmental effects of marine shipping under the NEB Act did not allow for a proper consideration of the Species at Risk Act (SARA).

The Species at Risk Act

Section 79(2) of SARA requires every person who is required to ensure that an assessment of the environmental effects of a project is conducted to (i) identify the adverse effects of the project on species at risk and their critical habitat; and (ii) if the project is carried out, ensure that measures are taken to avoid or lessen those effects and to monitor them.

Trans Mountain and the federal government argued, and the Court accepted, that in its report the NEB considered the adverse impacts of marine shipping on species at risk and their critical habitat; all reasonable alternatives to marine shipping that would reduce impact on the species at risk critical habitat; and measures to avoid or less any adverse impacts.

The problem is that the NEB lacks authority to impose conditions or otherwise ensure that measures will be taken to avoid or lessen the effects of marine shipping on species at risk:  "Thus, while the NEB could identify potential mitigation measures, and encourage the appropriate regulatory authorities to take further action, it could not ensure compliance with" section 79(2) of SARA.11 Therefore, the NEB's consideration of the project's impact on resident killer whales failed to "substantially comply" with its obligations under section 79.12


There seems no doubt but that the NEB heard substantial evidence on, and gave significant consideration to, the potential adverse effects of project-related marine shipping on the environment in general and killer whales specifically. All of this is laid out clearly in its report to the federal government. However, because the NEB's assessment was conducted under the NEB Act rather than CEAA, the Court found it to be deficient.

With respect, the Court failed to articulate compelling reasons why the NEB's assessment of marine shipping under the NEB Act was so inferior to the EA conducted under CEAA. Therefore, the Court's finding that the NEB's consideration of project-related marine shipping was not "substantially adequate" is hard to accept. Finally, given that the NEB's report laid out all of its findings on the issue in some detail, it also difficult to accept that the report was so deficient the federal government could not rely on it. The Court's decision appears to be a triumph of form over substance.


1 Tsleil-Waututh Nation et al v Canada et al, 2018 FCA 153 [Tsleil-Wauthuth].

2Ibid, at para. 55.

3Regulations Designating Physical Activities SOR 2012-147, Schedule, sec. 46.

4Tsleil-Wauthuth, at para. 83.

5Tsleil-Wauthuth, at para. 391.


7 Tsleil-Waututh, at para. 398

8 Tsleil-Waututh, at para. 401

9 Tsleil-Waututh, at paras. 403-408.

10 Tsleil-Waututh, at para. 420.

11 Tsleil-Waututh, at para. 452.

12 Tsleil-Waututh, at para. 453.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions