Canada Gazette, Part I, Volume 152, Number 39: ORDERS IN COUNCIL

September 29, 2018

DEPARTMENT OF NATURAL RESOURCES

NATIONAL ENERGY BOARD ACT

Trans Mountain Expansion Project Reconsideration

P.C. 2018-1177 September 20, 2018

Whereas, on December 16, 2013, Trans Mountain Pipeline ULC (“Trans Mountain”) applied to the National Energy Board (“the Board”) pursuant to Part III of the National Energy Board Act for a certificate of public convenience and necessity in respect of the proposed construction and operation of the Trans Mountain Expansion Project (“Project”);

Whereas, on May 19, 2016, having reviewed Trans Mountain’s application and conducted an environmental assessment of the Project, the Board submitted its report on the Project entitled Trans Mountain Expansion Project OH-001-2014 (“the Board’s Report”) to the Minister of Natural Resources, pursuant to section 29 of the Canadian Environmental Assessment Act, 2012 and section 52 of the National Energy Board Act;

Whereas, on November 29, 2016, the Governor in Council issued Order in Council P.C. 2016-1069, which accepted the Board’s recommendation that the Project will be, if the terms and conditions set out in Appendix 3 of the Board’s Report are complied with, required by the present and future public convenience and necessity under the National Energy Board Act and will not likely cause significant adverse environmental effects under the Canadian Environmental Assessment Act, 2012;

Whereas, on December 1, 2016, at the direction of the Governor in Council, the Board issued Certificate of Public Convenience and Necessity OC-064 to Trans Mountain, in respect of the Project, making it subject to the terms and conditions set out in Appendix 3 of the Board’s Report;

Whereas, on August 30, 2018, the Federal Court of Appeal (“the Court”) quashed Order in Council P.C. 2016-1069 in its decision Tsleil-Waututh Nation v. Canada (Attorney General) (2018 FCA 153) (“Tsleil-Waututh Nation”) and remitted the issue of Project approval to the Governor in Council for prompt redetermination;

And whereas, in Tsleil-Waututh Nation, the Court concluded, among other things, that the Board ought to reconsider on a principled basis whether Projectrelated marine shipping is incidental to the Project, the application of section 79 of the Species at Risk Act to Project-related shipping, the Board’s environmental assessment of the Project in light of the Project’s definition, the Board’s recommendation under subsection 29(1) of the Canadian Environmental Assessment Act, 2012 and any other matter the Governor in Council should consider appropriate;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to section 53 of the National Energy Board Act and section 30 of the Canadian Environmental Assessment Act, 2012,

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal and objectives

This order in council reflects the Governor in Council’s (GIC) decision to refer, pursuant to section 53 of the National Energy Board Act (NEB Act) and section 30 of the Canadian Environmental Assessment Act, 2012 (CEAA, 2012), the National Energy Board’s (“Board”) recommendations as set out in its report of May 19, 2016, entitled Trans Mountain Expansion Project OH-001-2014 (“Report”), in respect of the proposed construction and operation of the Trans Mountain Expansion Project (“Project”), back to the Board for reconsideration. In carrying out the reconsideration, the GIC has also directed the Board to take into account specified factors regarding the issue of Project-related marine shipping, all of which is to be completed within the time limit specified by the GIC.

Reconsideration of the Report by the Board responds to the Federal Court of Appeal (“Court”) decision in Tsleil-Waututh Nation v. Canada (Attorney General) (2018 FCA 153) (“Tsleil-Waututh Nation”), which quashed Order in Council P.C. 2016-1069 and remitted the issue of Project approval to the GIC for prompt redetermination.

In the Tsleil-Waututh Nation decision, the Court concluded, among other things, that the Board ought to reconsider on a principled basis whether Project-related marine shipping is incidental to the Project, the application of section 79 of the Species at Risk Act (SARA) to Project-related marine shipping, the Board’s environmental assessment of the Project in light of the Project’s definition, the Board’s recommendation under subsection 29(1) of the CEAA, 2012, and any other matter the GIC should consider appropriate.

Background

Trans Mountain Expansion Project background

Trans Mountain submitted its application to the Board for a certificate for the Project on December 16, 2013. The purpose of the Project is to increase capacity of the pipeline system from 300 000 barrels per day (bbl/d) to 890 000 bbl/d by twinning the existing Trans Mountain pipeline that currently transports oil from Edmonton to Burnaby. The Project has the potential to unlock large-scale access to world markets, including in the Pacific basin and Asia and create shipping options for Canadian oil producers to multiple markets. The proponent submitted that the largest contribution of the Project to tax revenues and investment is expected to come from higher prices that oil producers will receive when selling it to overseas markets.

The pipeline would follow an existing right-of-way for 89% of its 1 147 km length. The Project would also expand the Westridge Marine Terminal (WMT) by adding two berths to allow the terminal to increase, from 5 to 34, the number of tankers it receives per month. This would increase Project-related tanker traffic through the Burrard Inlet by up to 13.4% and in the Juan de Fuca Strait by 6.6% over current levels.

Trans Mountain commenced construction on the Project on September 26, 2017. On May 29, 2018, the Government of Canada announced that it has reached an agreement with Kinder Morgan to purchase the company’s Trans Mountain Expansion Project and related pipeline and terminal assets. The Government has now completed the purchase agreement.

NEB review process

In April 2014, the Board issued Hearing Order OH-001-2014, setting out the process for the public review of the Project. The Board received and considered a total of 2 118 applications to participate in the OH-001-2014 hearing for the Project. The Board granted standing to participate to 1 650 applicants. Out of these 1 650 hearing participants, 400 participated as intervenors and the remaining as commenters. Hearing participants were from various groups, including federal and provincial governments, business, Indigenous peoples, landowners, individuals and non-governmental organizations. A total of $3,085,370 in participant funding was allocated to 72 intervenors.

On May 19, 2016, the Board found that the Project was in the public interest and recommended that a Certificate be issued under section 52 of the NEB Act for the construction and operation of the Project. The Certificate is subject to 157 terms and conditions that the Board considered necessary or desirable in the public interest. Pursuant to section 29 of the CEAA, 2012, the Report also stated that the Board is of the view that with the implementation of Trans Mountain’s environmental protection procedures, and full compliance with the Board’s recommended terms and conditions, the Project is not likely to cause significant adverse environmental effects.

On November 29, 2016, following seven months of consultations, which included a four-month extension of the legislated timeline to allow for deeper Indigenous consultations and public engagement on the Project, the Governor in Council issued Order in Council P.C. 2016-1069, accepting the Board’s recommendation that the Project will be required by the present and future public convenience and necessity under the NEB Act and will not likely cause significant adverse environmental effects under the Canadian Environmental Assessment Act, 2012.

Under the January 2016 interim approach for major projects review, five principles were used to guide the Government’s decision: (i) no project proponent will be asked to return to the starting line; (ii) decisions will be based on science, traditional knowledge of Indigenous peoples and other relevant evidence; (iii) the views of the public and affected communities will be sought and considered; (iv) Indigenous peoples will be meaningfully consulted and, where appropriate, impacts on their rights and interests will be accommodated; and (v) direct and upstream greenhouse gas emissions (“GHG emissions”) linked to the projects under review will be assessed.

At the direction of the Governor in Council, on December 1, 2016, the Board issued Certificate of Public Convenience and Necessity OC-064 to Trans Mountain Pipeline ULC in respect of the proposed construction and operation of the Trans Mountain Expansion Project, subject to terms and 157 conditions set out in Appendix 3 of the Board’s Report of May 19, 2016, entitled Trans Mountain Expansion Project OH-001-2014, and issued to Trans Mountain Pipeline ULC Amending Orders AO-002-OC-49 and AO-003-OC-2.

Indigenous consultations

Seventy-three Indigenous groups (representing 83 Indigenous communities) participated as intervenors in the hearing and provided their comments, views and evidence through written submissions and oral evidence to the Board. A total of 35 Indigenous groups and individuals provided oral traditional evidence to the Board during the hearing. To date, the proponent concluded benefit agreements with 43 Indigenous groups.

Federal officials began consulting on this Project with Indigenous groups in 2013. The Crown identified a legal duty to consult with 117 Indigenous groups potentially impacted by the Project and offered these groups $2 million in participant funding. Consultations following receipt of the Board’s Report were carried out in partnership with British Columbia given the need for a provincial environmental assessment decision on the Project. Concerns from Indigenous groups expressed during the consultation process included cumulative impacts from increased marine shipping, risks related to land-based and marine spills, impacts to asserted title and need for consent, uncertainty around proponent compliance with NEB conditions, and concerns with the existing pipeline. To respond to what was heard during these consultations, the Government committed $64.7 million in funding for an Indigenous Advisory and Monitoring Committee that has been working with federal regulators and the proponent to oversee environmental aspects throughout the Project’s life cycle.

Federal Court of Appeal decision

On August 30, 2018, the Federal Court of Appeal quashed Order in Council P.C. 2016-1069 in its decision in Tsleil-Waututh Nation and remitted the issue of Project approval to the GIC for prompt redetermination.

The Court decision noted the following: “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.” However, the Court ruled that the Board’s decision to exclude Project-related shipping from its environmental assessment under CEAA, 2012 was not adequately justified. The Court concluded, among other things, that the Board ought to reconsider on a principled basis whether Project-related marine shipping is incidental to the scope of the Project, the application of section 79 of the Species at Risk Act to Project-related shipping, the Board’s environmental assessment of the Project in light of the Project’s scope, the Board’s recommendation under subsection 29(1) of the Canadian Environmental Assessment Act, 2012 and any other matter the Governor in Council should consider appropriate. In addition, the Court concluded that Canada must redo its Phase III Indigenous consultation on the Project. Once that consultation is completed as well as any necessary accommodation, the Project will be put before the GIC for a decision on whether it should be approved.

Review of marine shipping impacts

The Board found that with the implementation of Trans Mountain’s proposed environmental protection procedures and mitigation measures, and the Board’s recommended conditions, pursuant to its authority under the CEAA, 2012, the Project is not likely to cause significant adverse environmental effects. However, The Board’s scope assessment of the Project under the CEAA, 2012 encompassed Edmonton to Burnaby, up to and including the WMT — the extent of the Board’s regulatory oversight of the Project. Under the NEB Act, the Board determined that potential environmental and socio-economic effects of Project-related tanker traffic, including the potential effects of accidents or malfunctions that may occur, are relevant to the Board’s consideration of the public interest.

While the Board did not include Project-related marine shipping activities in the Project under the CEAA, 2012, since it considered that these are not regulated by the Board and are outside its authority, the Board considered the potential effects of increased marine shipping activities as part of its overall public interest determination under the NEB Act. For instance, the Report found that GHG emissions from Project-related marine vessels are likely to be significant given the absence of emissions reporting thresholds for vessels. Marine shipping is primarily regulated by Transport Canada under the Canada Shipping Act, 2001 and through international conventions.

Marine shipping safety was also considered separately through a Technical Review Process of Marine Terminal Systems and Transhipment Sites (TERMPOL) process. TERMPOL is an extensive yet voluntary review process that proponents involved in building and operating a marine terminal system for bulk handling of oil, chemicals and liquefied gases can request. The review process was chaired and led by Transport Canada, with participation from other federal departments and stakeholders. The TERMPOL committee made 17 recommendations, which Trans Mountain supported. The TERMPOL report formed part of Transport Canada’s written evidence before the National Energy Board.

Under the NEB Act, the Board was of the view that the operation of Project-related marine vessels would contribute to the total cumulative effects on the Southern resident killer whales, and would further impede the recovery of the Southern resident killer whale population, an endangered species that lives in the Salish Sea. The Board found that, as a result, the operation of Project-related marine vessels would likely result in significant adverse effects on the Southern resident killer whale, and on Aboriginal cultural uses associated with these marine mammals.

The Board encouraged other regulatory authorities, such as Transport Canada and the Department of Fisheries and Oceans, to explore initiatives that would aim to reduce the potential effects of marine vessels on marine mammals. In addition, Trans Mountain committed to a series of actions supporting the recovery of the Southern resident killer whale. For example, as part of its Marine Mammal Protection Program (Condition 132), Trans Mountain has committed to support the objectives and recovery measures identified in the action plan for the species.

In the Board’s Report, there are conditions that relate to marine shipping, including Condition 91, Plan for implementing, monitoring and complying with marine shipping-related commitments; Condition 131, Marine Public Outreach Program; Condition 133, Marine shipping- related commitments, including spill response regime, tanker tug escort; Condition 134, Updated Tanker Acceptance Standard; Condition 144, Ongoing implementation of marine shipping-related commitments; and Condition 151, Post-construction environmental monitoring reports, among others. These and other conditions required the proponent to file plans, designs and reports on mitigation measures being implemented to address impacts from marine shipping. The proponent must also monitor and comply with all marine shipping-related commitments it made during the Board review process.

Oceans Protection Plan

On November 7, 2016, the Government of Canada launched the $1.5 billion Oceans Protections Plan (OPP), the largest investment Canada has ever made to protect the country’s coasts and marine environments. This funding will enhance marine safety along Canada’s entire coastline — the longest in the world — supporting new and ongoing prevention, preparedness and response measures. The marine safety improvements from the Oceans Protection Plan, building on the robust system already in place, are putting extraordinary safeguards in place for all vessels, including those carrying petroleum products. To complement Canada’s world-leading marine safety regime and response capacity, the Oceans Protection Plan will add to the already significant body of scientific knowledge concerning petroleum products in the marine context and incorporate Indigenous knowledge.

Action to support the recovery of the Northeast Pacific southern resident killer whale

The Government of Canada is taking action to support the recovery of the Northeast Pacific southern resident killer whale (SRKW) off the coast of British Columbia. Under the Oceans Protection Plan, Transport Canada has been working closely with industry stakeholders, Indigenous peoples, environmental non-governmental organizations, academia, the scientific community, and international partners to identify, test and analyze options to reduce underwater noise from vessels in order mitigate the increase in vessel traffic resulting from the Project. Building on this work, in June 2018, the Government of Canada announced the Whales Initiative, a $167.4M investment in actions and necessary scientific research on the key threats affecting the SRKW, including prey availability, contaminants and underwater noise from vessels. DFO implemented fisheries management measures to provide more prey to SRKW in critical habitat and increased the mandatory distance for vessels. The Government is also strengthening research into cumulative effects to establish baselines to inform further actions.

Implications

Following the direction issued by the GIC pursuant to section 53 of the NEB Act and section 30 of the CEAA, 2012, the Board must

At the conclusion of the reconsideration process, the Board may revise its previous Recommendation Report entitled Trans Mountain Expansion Project OH-001-2014, to reflect its environmental assessment of Project-related marine shipping under the CEAA, 2012, its recommendation under subsection 29(1) of the CEAA, 2012, the application of section 79 of SARA, and its recommendation under the NEB Act on whether a certificate should be issued for any or all portions of the Project and any condition it considers necessary or desirable in the public interest.

The Board is directed to submit a report on its reconsideration to the Minister of Natural Resources no later than 155 calendar days from the issuance of the order.

Conclusion

The order in council is issued in consideration of, among other things, the Court’s decision, the existing evidence on the record following the Board’s Trans Mountain Expansion hearings and recommendation report, certificate conditions and proponent commitments, progress to date in the implementation of the Oceans Protection Plan and actions to support the recovery of SRKW.

Departmental contact

For more information, please contact

Tim Gardiner
Acting Director General
Petroleum Resources Branch
Natural Resources Canada
Telephone: 343-292-6165