The Federal Court of Appeal has overturned Ottawa鈥檚 approval of the contentious Trans Mountain pipeline expansion, but Finance Minister Bill Morneau is pledging to push ahead with his government鈥檚 purchase of the project.

In a unanimous decision by a panel of three judges, the court says the National Energy Board鈥檚 review of the proposal was so flawed that the federal government could not rely on it as a basis for its decision to approve the expansion.

The court also concludes that the federal government failed in its duty to engage in meaningful consultations with First Nations before giving the project the green light.

Prime Minister Justin Trudeau鈥檚 government approved the project in 2016 and is so determined to see the line built that it announced plans this spring to buy the pipeline and expansion project for $4.5 billion after Kinder Morgan Canada balked at moving ahead with construction.

Shortly after the court ruling Thursday, company shareholders voted more than 99 per cent in favour of the sale.

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Even with the court decision, Morneau said the project is in the national interest and needs to go ahead.

鈥淭aken together, today鈥檚 decisions from the Federal Court of Appeal and Kinder Morgan shareholders are important next steps in getting this project built in the right way for the benefit of all Canadians,鈥� he said in Toronto.

鈥淎s we move ahead with the project and the purchase, our government remains committed to ensuring the project proceeds in a manner that protects the public interest. That means ensuring the highest level over governance 鈥� including environmental protection. It means upholding or commitments with Indigenous peoples and it means responsibly protecting Canada鈥檚 and Canadians鈥� investment.鈥�

The ruling requires the energy board to conduct a new review 鈥攚hich the court suggests could be kept short 鈥� and means the government will have to redo part of its consultation with Indigenous groups.

The court combined into one case nearly two dozen lawsuits calling for the energy board鈥檚 review to be overturned.

First Nations, including the Tsleil-Waututh and Squamish on British Columbia鈥檚 south coast, argued that Ottawa did not adequately consult them before the review or the cabinet decision to approve the project.

The court found that the government鈥檚 representatives 鈥渓imited their mandate to listening to and recording the concerns of the Indigenous applicants and then transmitting those concerns to the decision-makers.鈥� There was no 鈥渕eaningful two-way dialogue.鈥�

鈥淭he Indigenous applicants were entitled to a dialogue that demonstrated that Canada not only heard but also gave serious consideration to the specific and real concerns the Indigenous applicants put to Canada, gave serious consideration to proposed accommodation measures and explained how the concerns of the Indigenous applicants impacted Canada鈥檚 decision to approve the project.鈥�

The Squamish Nation cheered the ruling as a recognition of Indigenous rights.

鈥淭his decision reinforces our belief that the Trans Mountain expansion project must not proceed and we tell the prime minister to start listening and put an end to this type of relationship. It is time for Prime Minister Trudeau to do the right thing,鈥� the band said in a statement.

The Coldwater Indian Band, which asserts traditional territories in south-central B.C., said the pipeline route passes an aquifer that is the sole supply of drinking water for its main reserve

鈥淭his is a major victory for my community,鈥� said Coldwater Chief Lee Spahan. 鈥淭hankfully, the court has stepped in where Canada has failed to protect and respect our rights and our water.鈥�

Environmental groups and the cities of Vancouver and Burnaby also challenged the project in Federal Court last fall. They were supported by the province of British Columbia, which acted as an intervener.

Alberta was also an intervener and the province鈥檚 lawyer told the court Ottawa鈥檚 decision to approve the pipeline expansion was based on broad evidence that considered environmental, economic and Indigenous interests.

The expansion would triple the capacity of the Trans Mountain pipeline from near Edmonton to Burnaby, B.C., to 890,000 barrels a day. It would also increase the number of tankers in Burrard Inlet sevenfold.

The court ruled that the energy board review contained a fatal flaw: it excluded the project鈥檚 impact on marine shipping. That, in turn, meant that the energy board did not assess the potential impact of increased tanker traffic on the southern resident killer whale population.

That failure 鈥渨as so critical that the Governor in Council could not functionally make the kind of assessment of the project鈥檚 environmental effects and the public interest that the (environmental assessment) legislation requires,鈥� says the ruling written by Justice Eleanor Dawson.

Vancouver Mayor Gregor Robertson said the decision validates his city鈥檚 concerns about marine impacts and Indigenous consultation.

鈥淭his decision is a monumental win for the rights of Indigenous Peoples and all of us who stand with them in firm opposition to a project that would massively increase climate pollution and put our coast at huge risk of oil spills,鈥� Robertson said in a statement.

Ecojustice, the Living Oceans Society and the Raincoast Conservation Foundation called the ruling a 鈥渃ritical win鈥� for the climate and coastal ecosystems.

鈥淕oing forward, we urge politicians and other project proponents to shift their focus away from projects that lock us into dependence on fossil fuels,鈥� Ecojustice lawyer Dyna Tuytel said.

With as few as 75 southern resident orcas left, the population will be unsustainable if the project proceeds, said Paul Paquet, senior scientist with the Raincoast Conservation Foundation.

鈥淭he court has sent a clear signal that the rule of law will not accommodate environmental decision-making that fails to address these environmental risks,鈥� he said.

The Federal Court case was the most significant legal challenge facing the project and the decision may still be appealed to the Supreme Court of Canada.

Kinder Morgan had already won several court victories, including one last week when the Supreme Court of Canada dismissed an application from the City of Burnaby to overturn a lower court decision.

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The Canadian Press

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