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The Cacouna pipeline port ruling

A Quebec ruling halting TransCanada exploratory drilling in the St. Lawrence spells trouble for Canada's pipeline projects.

picture of ocean water

Ottawa just can’t catch a break.

In a decision that environmentalists say will protect Quebec’s threatened beluga whale population, the Quebec Superior Court has undercut the federal government’s authority to unilaterally approve resource development projects.

The case, Centre québécois du droit de l'environnement v. Oléoduc Énergie Est, pits a contingent of environmentalist groups against the company determined to get Canada’s Energy East pipeline up and running. The Attorney General of Canada intervened to defend the federal government’s decision to green light the project.

TransCanada, the company building the pipeline, had filed application to the federal government to do seismic testing and drilling off the coast of Cacouna, Quebec — Northeast of Quebec City — in order to build an oil terminal, which would allow them to ship oil sands output that had been pumped by the cross-Canada pipeline. Under provincial law, the Quebec Environment Minister had to issue a permit to the company to conduct the testing.

Environmental groups argued that the testing further endangered the endangered population of beluga whales that live in the St. Lawrence area.

Normally, this sort of case would be utterly moot. As both Transport Canada and the Department of Fisheries and Oceans approved the project — which falls squarely under federal jurisdiction, given that it is a trans-provincial pipeline and a project relating to shipping — the provincial permit was a mere formality.

What’s more, Quebec and Ottawa had signed an agreement to move forward on this project.

But, in a surprise decision, the court slapped a temporary injunction on the project, in finding that the minister erred in granting the application, citing a lack of information provided by the federal government and TransCanada.

“For inexplicable reasons at that stage in the file, the Minister decided to issue the certificate of authorization. The Court estimates that, this time, the applicants have demonstrated a serious issue of law raising serious doubt about the reasonableness of the Minister’s decision,” writes Justice Claudine Roy. [our translation]

While the project is essentially of federal concern, Roy found that the Minister had an authority to, if not block the application, at least to obtain all relevant information about its impacts on the environment.

“The agreement signed between the Government of Canada and the Government of Quebec doesn’t modify the functions, obligations, and powers conferred by one or another’s laws,” writes Roy.

Given that both the province and the federal government consider the beluga an endangered species in need of protection, both have a responsibility to asses potential impacts of development could have on those populations.

Roy found that the province never had the information required to assess whether or not the beluga would be put at risk, thanks to the federal government’s withholding of scientific information studying exactly that. It the Quebec minister’s issuing the permit without obtaining the adequate information that the Superior Court justice found unreasonable.

Somewhat confusingly — if the Quebec minister had found that the project, indeed, would harm the beluga population and approved it anyway, his decision likely couldn’t be challenged.

“If the Ministry considers and examines the potential consequences of a project subject to section 22 [of the Environmental Quality Act], then it fulfills its duty under the law, and the decision to award an authorization cannot be challenged, as long as it is not unreasonable,” says Hugo Tremblay, a Quebec lawyer, researcher and lecturer in the University of Montreal law faculty.

As section 22 lays out, “the Minister may also require from the applicant any supplementary information, research or assessment statement he may consider necessary to understand the impact the project will have on the environment and to decide on its acceptability.”

In this case, notes Roy, TransCanada contended that their work wouldn’t negatively impact the belugas yet, “refused to sign an agreement assuring that the work would have no important negative effects on the belugas.”

Roy continues: “the Minister decided he needed scientific advice from the Environmental Science department of the Department of Fisheries and Oceans. He didn’t obtain that advice. He received only a letter sending documents that were already in his possession, but this time, signed by the director of Environmental Science.”

Since the belugas are only in the seaway until mid-October, Roy ordered a temporary injunction until October 15 for the project.

While this may sound like a one-off case of political malfeasance resulting in a negative ruling for the government, it may have much broader implications for future projects.

In a year where the government has lost a landmark court case (in Tsilhqot’in Nation v. British Columbia) that effectively turned over all resource development authority to First Nations on several land claims across the country, this is a second front to do battle with Ottawa’s pro-development agenda.

Environmental groups have largely fought resource development projects on the federal plane. Taking a detour through provincial legislation may well prove more fruitful, however.

“To be honest, this is a major fault line for environmental law in the future,” says Tremblay.

And he says that this pipeline won’t be the only one affected. Until now, he says, opponents of the Northern Gateway project have only invoked federal law to block it in the courts.

“To my understanding, I don’t think that anyone contesting the project in B.C. decided to go ahead with arguments based on provincial legislation. So this is really a door-opening to more possibilities to oppose pipeline projects,” says Tremblay.

While the provinces may not have authority to make decisions that could strike to the “pith and substance” of a project under federal control, says Tremblay, if the courts can find overflows that impugns provincial legislation, it could well affect those projects.

He offers an example: the neighbourhood near the Port du Quebec, a federally-managed port, has been found to have elevated levels of nickel in the air. The spillover effect of that federal project has impacts on areas covered under provincial authority. In light of the Energy East decision, Tremblay raises the point that provincial courts may well flex their muscle more than in the past.

“It’s something that will be tested in the future,” he says.

“If there’s absolutely no protection for people because of this problem of cooperation between two levels of government, I think the judges will probably find a way to give people some form of protection,” Tremblay adds that it’s just gros bon sens — common sense.