VANCOUVER—Prime Minister Justin Trudeau promised a different relationship with Indigenous people from his Tory predecessors, one based on nation-to-nation respect.

Thursday’s pivotal pipeline ruling by Canada’s second highest court — considered a major win for First Nations and environmental groups — has thrown that commitment into question.

Three Federal Court of Appeal judges unanimously ruled Ottawa’s attempts to consult First Nations were flawed and called ignoring oil tanker risks an “unjustified failure.”

In response to the court’s decision, Alberta premier Rachel Notley announced her government would pull out from the national climate change plan. The Notley government had previously argued that their focus on reducing greenhouse gas emissions helped provide the necessary social license required to get pipelines built.

Experts say the decision will send ripple effects beyond British Columbia and Alberta, potentially forcing Trudeau’s Liberal government to rethink its entire approach to pipelines, resource development, and reconciliation.

“For years Trudeau has been standing by their consultation plan and it failed — it failed completely,” said Squamish Nation Councillor Khelsilem, also known as Dustin Rivers, as he stood Thursday against a backdrop of the Burrard Inlet, a waterway and food source of vital concern to his and other Coast Salish communities fighting the project.

“Stop picking fights with Indigenous people, behave honourably, respect us,” he told reporters. “That’s all we’re asking for.”

The court quashed the project’s go-ahead until the National Energy Board conducts further environmental assessment and a new consultation process is undertaken, which would delay the already-stalled project by several years, experts said.

Minutes after the ruling, an overwhelming 99 per cent of Kinder Morgan shareholders voted to finalize their pipeline’s sale to Canada.

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Albertans reacted with dismay to the court’s decision, which many said will cause serious damage the energy industry, oilpatch and construction workers, and possibly Alberta Premier Rachel Notley’s re-election hopes.

Premier Rachel Notley will give a live address to the province regarding the Federal Court of Appeal’s decision on the Trans Mountain Pipeline expansion project.

But federal Finance Minister Bill Morneau assured the province his government remains staunchly committed to completing the 1,100-kilometre project, which would nearly triple the flow of diluted bitumen through the pipeline to the West Coast, and increase oil tanker traffic sevenfold.

Speaking in Toronto Thursday, Morneau said his government is reviewing the court’s decision carefully but reiterated that the pipeline is in the national interest and would bring “thousands of good, well-paying jobs for the middle class.”

He laid blame for the “flawed environmental review process” with the previous Conservative government and said his government “made efforts to improve it.”

“We take our responsibilities seriously. While we want to make sure that the project proceeds, we also want to make sure it moves ahead in the right way,” he said.

It’s possible Canada may seek leave to appeal the court’s ruling, but analysts said a Supreme Court of Canada case could take years.

While the decision is being called a victory for First Nations and environmental groups, Richard Masson, an executive fellow of the University of Calgary’s School of Public Policy, said “it’s really bad news for Alberta.”

Any delays or outright cancellation of the project means Alberta’s economy won’t benefit from the additional oil exports the pipeline would have facilitated.

“This pipeline is in the national interest and it should get built,” he said.

The Federal Court of Appeal ruled both that Canada did not fulfil its obligation to consult with the Indigenous communities that would be affected by the project, and failed to fully assess its impact.

In particular, the court said it was an “unjustifiable failure” that the National Energy Board did not consider the environmental impacts of the increased oil tanker traffic.

That has been a major issue for communities and organizations concerned about both the fate of the endangered southern resident killer whales, of which 75 remain, and the threat of a major diluted bitumen spill.

Ian Anderson, the president of Kinder Morgan Canada, said the company is taking steps to suspend construction activities following the court’s decision. He added that the ruling was not a condition of the pipeline sale to the Canadian government.

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“It sure does make Kinder Morgan shareholders and CEO Rich Kinder look pretty smart,” said George Hoberg, professor at the University of B.C.’s School of Public Policy and Global Affairs, in a phone interview. “They had a better understanding of the risks in court on this issue than the Government of Canada.

“We now own the existing project — revenues will flow from that — but the big question is what to do about the expansion … It’s turning out to be very hard to get a pipeline to the West Coast.”

Hoberg said the ruling was “a complete shock,” but if Ottawa ultimately decides to double-down and build it, it will add “a couple years’ delay at minimum” before construction can resume, adding costs.

“They need to have a serious rethink about their strategy with respect to pipelines and oilsands generally,” Hoberg argued.

The project, which is expected to cost at least $7.4 billion to complete and possibly much more, caused significant strife: on one side of the fight are B.C.’s NDP government, the cities of Burnaby and Vancouver, numerous First Nations and environmental organizations; on the other, the pro-pipeline Alberta NDP, the federal Liberals, and people dependent on oil-sector jobs for their livelihoods.

In a reaction Thursday evening, Alberta Premier Rachel Notley said Trudeau’s entire gambit — to buy and push the pipeline through in exchange for Alberta joining his signature national climate plan and controversial carbon tax — was all for nought.

“With the Trans Mountain halted and the work on it halted, until the federal government gets its act together, Alberta is pulling out of the federal climate plan,” she said. “And lets be clear, without Alberta that plan isn’t worth the paper its written on.”

Kinder Morgan has maintained its pipeline and associated oil tankers would meet world-class safety standards and that First Nations were consulted, with dozens even signing benefit agreements for it to proceed. The federal government meanwhile, has repeatedly said its multibillion dollar Oceans Protection Plan would significantly reduce the risks of an oil spill.

Opponents of the pipeline, though, say the risks to the environment remain too high.

Dyna Tuytel, an Ecojustice lawyer who represented the Living Oceans Society and Raincoast Conservation Foundation in the case, said the decision is a “really resounding victory for the environment, for First Nations, for communities.”

It reaffirms the importance of environmental legislation, she said: “The court is reminding Cabinet that it has to follow the law.”

While the decision was met with some disappointment, particularly in Alberta, Tsleil-Waututh Nation Chief Maureen Thomas urged Canadians to find the positive.

“Today is a day for all of us to come together to build a strong relationship,” she said, “to work together to find a way to ensure your children, my children have a world that is going to sustain them in the future.”

B.C. maintains the risk of a catastrophic oil spill would devastate the province’s economy and environment, and is continuing its own legal reference case asking a judge whether it has the authority to restrict oil flow until it studies diluted bitumen cleanup.

For his part, B.C. Premier John Horgan, who campaigned in 2017 on a pledge to oppose the pipeline with “every legal tool” possible, acknowledged the decision’s impacts on Albertans dependent on oil-sector jobs and revenue.

“I understand this is going to be a devastating decision for many in Alberta — I respect that — but my responsibility is to the people of B.C.,” he told reporters. “I don’t think it’s about winning or losing, it’s about the rule of law.

“Today the Tsleil-Waututh have helped all Canadians understand the importance of Indigenous rights, and how much we have to do … to rectify the impacts on First Nations people.”

Alberta Premier Rachel Notley announced she would make a live address at 6 p.m. in Alberta.

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