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CALGARY – The federal government has vowed to build the Trans Mountain expansion project despite a major setback Thursday from a Federal Court of Appeal decision overturning the pipeline’s construction permits.

Appeals Court judge Eleanor Dawson ruled Thursday that the federal government did not carry out its duty to consult with affected First Nations on the project and that the National Energy Board’s report was flawed because it did not consider the issue of tanker traffic.

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She described the consultation process as insufficient in part because it was “missing a genuine and sustained effort to pursue meaningful, two-way dialogue.”

Now, the project will need to undertake new reviews if it is to move forward.

The decision is not what the Calgary oilpatch was expecting — with many analysts and executives expressing both surprise and vexation at the decision because, they said, the Trans Mountain project had gone through the most extensive consultations and reviews to date.