On February 12, 2024, the Federal Court issued its decision, Benga Mining Limited v. Canada (Environment and Climate Change), 2024 FC 231, which addressed three applications for judicial review of the federal government's refusal to issue environmental assessment approvals of the Grassy Mountain Steelmaking Coal Project ("Grassy Mountain Project").
The project proponent's application was unsuccessful, but the applications brought by the Piikani Nation ("Piikani") and the Stoney Nakoda Nations ("Stoney Nakoda"), were allowed, sending the decisions back to the federal government for additional consultation and re-determination. These applications are unusual as Piikani and Stoney Nakoda support the proposed project and seek that it be approved.
The Grassy Mountain Project still faces multiple hurdles in order to proceed, but this decision illustrates that supportive First Nations can be strong allies in the environmental assessment and project approval process.
Background
The proposed Grassy Mountain Project would be located in the Crowsnest Pass area of Southwest Alberta, on land covered by Treaty 7. Stoney Nakoda (comprised of three First Nations) and Piikani are signatories to Treaty 7. Piikani and Stoney Nakoda entered into confidential impact benefit agreements with Benga, under which Benga will provide project-specific economic and social benefits.
The Project requires environmental assessment approvals from both Alberta and Canada. In 2018, a joint federal-provincial review panel was established to conduct the environmental assessment for both governments.
The joint review panel had the authority as the Alberta Energy Regulator to decide whether to approve the Project under Benga's provincial application. On June 17, 2021, the Joint Review Panel denied Benga's application for provincial environmental assessment approvals. Benga, Piikani and Stoney Nakoda are involved in ongoing litigation seeking to overturn the provincial decisions.
On August 6, 2021, the federal government decided the significant adverse effects of the Project are not justified in the circumstances, thereby denying Benga federal environmental assessment approval. Benga, Piikani and Stoney Nakoda also challenged the federal government's denials. It is these challenges that are the subject of this Federal Court decision.
The Decision
Piikani and Stoney Nakoda Applications Allowed
Piikani and Stoney Nakoda advanced arguments based both on the duty to consult and procedural fairness, and were ultimately successful on the latter ground. The Court declined to address the arguments based on the duty to consult, and on the soundness of a previous decision of the Court (Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758), which found adverse impacts to economic benefits flowing from an impact benefit agreement gave rise to the duty to consult. This remains an open question.
Piikani and Stoney Nakoda were successful, however, in arguing that a duty to consult arose from a news release issued by the federal government after the project was denied provincial environmental assessment approval. In this news release, the federal government stated: "Prior to the Government of Canada's decision on the project, the Impact Assessment Agency of Canada (the Agency) will consult with Indigenous groups on the Joint Review Panel's report". This commitment gave rise to legitimate expectations on behalf of Piikani and Stoney Nakoda that they would be consulted, regardless if the decision was to approve or deny the project.
Because consultation with Piikani and Stoney Nakoda did not occur, the Court quashed the government's decision denying the project federal environmental assessment approval and sent the decision back to the federal government for re-determination pending further consultation with Piikani and Stoney Nakoda.
All the other grounds raised by the First Nations and the project proponent, based both on the merits and fairness of the decision, were rejected by the Court.
Implications
The federal government's commitment in a press release gave rise to the duty to consult affected First Nations. While this decision was based on principles of procedural fairness, and not the Haida duty to consult, the consultation must nonetheless be meaningful.
While the Grassy Mountain Project still faces major hurdles, this decision emphasizes the value that supportive First Nations can provide to a project. The project proponent's application for judicial review was denied, but the applications of Piikani and Stoney Nakoda were successful, giving the project a lifeline.
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