Ken Coates is Canada Research Chair in regional innovation at the Johnson-Shoyama Graduate School of Public Policy in Saskatchewan, and a senior fellow at the Macdonald-Laurier Institute.

The government of Canada has made an obvious and much-anticipated decision on the Northern Gateway pipeline, but the debate is far from over. Based on the report of the Joint Review Panel, which recommended approval subject to important modifications and conditions, and the government's strong commitment to resource development, few expected the plan to be rejected.

Now the real work begins. The criticism of the Northern Gateway project is broad and comprehensive, but there are three main opponent groups who have to be addressed:

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First are the environmentalists, who oppose the expanded development of the oil sands and see the northern Alberta resource as a climate-change danger. This group is substantially unreconcilable. Their critique is well-known, and the federal government has rejected their intervention on many occasions. There is no federal effort to mollify this group.

Second are the environmentalists concerned about the potential effects of an oil spill on northern British Columbia and the coastal waterways outwards from Kitimat. The worries expressed by this group are widely held and would mobilize many residents to take action. Here, the government is making a commitment to world-leading standards of construction, supervision, emergency response and remediation.

The third group of critics are the First Nations along the proposed pipeline route. Some First Nations are in the first two groups. But there is a large group – the relative size is unknown – that insists on proper attention to aboriginal rights, an appropriate level of consultation (much higher than has been used to present), adequate and substantial participation, and a fair return to First Nations from the project, should it proceed.

It is with the latter group that the fate of the project, in political terms, rests. First Nations are upset about how the Northern Gateway proposal has unfolded to this point. They are far from reconciled to the idea of a major bitumen pipeline through their traditional territories. With land claims unresolved throughout this territory and with widely different views of the meaning of the Supreme Court orders on "duty to consult and accommodate," First Nations believe – and assert – that they hold the power to determine if the Northern Gateway Pipeline proceeds.

The First Nations' position is legally tenuous – many years of court hearings would be needed to determine the final answers – but practically realistic. It is difficult to imagine the pipeline proceeding in the face of strong and angry First Nations opposition. The political and logistical challenges – imagine Caledonia times five or 10 – would be formidable and the political fallout so substantial that it could easily prove to be destabilizing on a national scale. For a variety of reasons, First Nations people have come to see the Northern Gateway as the turning point in their role in national economic development and environmental protection. In its announcement, the government requires the company to undertake additional consultations with First Nations.

It is not difficult to imagine the pipeline proceeding, however. To a degree that governments have been reluctant to say, perhaps for fear of skewing the national debate, governments need the revenue from the oil sands. Greater understanding of the relationship between the oil sands, Northern Gateway and the sustainability of health care, educational and social services would perhaps provide Canadians with a greater sense of the real choices at hand.

With a sustained and collaborative approach to First Nations by government and businesses, it is possible to imagine an appropriate and mutually acceptable strategy for moving forward. This model would likely include aboriginal equity investment, training and job creation opportunities, a key role for First Nations in environmental monitoring, protection and remediation, and long-term payments to First Nations for their participation in a project that crosses their traditional lands.

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There are two possible outcomes from the Northern Gateway Pipeline approval: sustained aboriginal opposition that would generate nationwide support and challenge resource development across the country, or an inclusive and collaborative approach that recognizes aboriginal rights and interests, that is creative and forward-looking, and that respects First Nations as long-term partners in Canadian prosperity. Canada's economic future may rest, to a surprising degree, on making sure that government and the affected businesses opt for the second option.

Ken Coates is co-author of the MLI paper "The Way Out: New Thinking about Aboriginal Engagement and Energy Infrastructure to the West Coast."