Adam Pankratz is a lecturer at the Sauder School of Business at the University of British Columbia. He is on the board of directors at Rokmaster Resources and ran for the federal Liberal Party in the riding of Burnaby South in 2015.
Last week, the Supreme Court of Canada declined to hear an appeal from several B.C. First Nations of the federal government’s second approval of the Trans Mountain pipeline (TMX). For supporters of the project, this marked, at long last, the desired end of what must have felt a Sisyphean task: With the court’s refusal the boulder is finally atop the hill. TMX will be built.
TMX, after all, has been a contentious project, and recent years have been racked with high emotion in the passionate legal dispute from both sides. It would be easy, then, to now simply divide the two sides into winners and losers.
But that would be unfair and wrong. We must consider the process as a whole and what it portends for the future of resource development. Viewed in this way, the TMX process and its ultimate approval, should be viewed as a win for all Canadians – even if some disagree with the final result.
Most importantly, the TMX effort has affirmed the duty to meaningfully consult First Nations on resource development projects or face the consequences. It has cemented the message that projects that ignore First Nations concerns and shirk meaningful engagement will fail. Initial consultations fell well short of the expected standard and, in its 2018 ruling, the Federal Court of Appeal chastised the government for not engaging in a real and meaningful dialogue. This affirmation of First Nations’ rights and the supremacy of rule of law in resource development was a positive for all Canadians.
For environmental groups and First Nations, the battle also brought about developments that augur well. For many, specific concerns included potential disruption to B.C.’s coastal waters, the risk of tanker spillage and any threat to the area’s southern resident killer whales. Initially, the National Energy Board had ruled tanker traffic and coastal waters were outside the scope of the pipeline project and thus did not consider them in its approval, but this was deemed insufficient; spill and wildlife impact-mitigation strategies are now an important part of the project. Pipeline opponents should feel proud that their efforts produced some of the most stringent environmental protection requirements in the world.
The pipeline will also have an enormous positive economic impact. It is impossible to ignore this: The energy industry is essential for Canada, accounting for more than 10 per cent of GDP; more than two-thirds of that comes from the oil and gas sector, which contributes more than $50-billion a year to Canada’s balance of payments. TMX will triple the current pipeline’s capacity and will have a significant positive effect in terms of opening pipeline access for Canadian oil producers. This capacity increase will get crude oil to international markets, where it can earn the highest possible return.
TMX’s approval sends a welcome signal to the international investment community as well. For several years, the news has tended toward the gloomy, with investors increasingly bemoaning Canada’s inability to get things built, its regulatory complexity, and the financial risk that comes with getting tangled in its bureaucracy. TMX proves that, in fact, Canada is a safe and simple place to invest, if the rules and regulations are followed and respected from the start. Our competitive advantage and reputation as a reliable and profitable business partner stands.
The decision also comes at a fortunate time. The COVID-19 pandemic has severely battered our economy, and Canadians will need jobs just as much as governments will need revenue. The construction of TMX promises to provide more than 5,000 good-paying jobs and, longer term, more than $46-billion to provincial and federal coffers. Canada won’t be able to escape the coronavirus doldrums without a strong oil and gas industry, and the pipeline will be an important part of that recovery.
It’s been a long and contentious decade since the project was first proposed. And while there were growing pains, the process was necessary for future stability. The conflict and the ensuing ruling have affirmed the consultation rights of Indigenous people, strengthened environmental standards and sent positive signals to the investment community – and it all arrives at a time when we need this the most.
Such projects are often fraught – so why not cherish a win-win-win when we get one?
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