By Rod Nickel and Steve Scherer
WINNIPEG, Manitoba/OTTAWA (Reuters) - Canada's Federal Court of Appeal on Tuesday dismissed a challenge to government approval of the Trans Mountain oil pipeline expansion (TMX), clearing some uncertainty from the project.
The court said Prime Minister Justin Trudeau's government held "reasonable and meaningful" consultations with indigenous groups as required by law.
Parties have 60 days to appeal to Canada's Supreme Court. At least one other legal challenge is underway.
Congested pipelines have forced the Alberta provincial government to curtail production to reduce a glut that has pressured prices, leading to layoffs.
In 2018, Ottawa bought the 67-year-old pipeline, which runs from Alberta to the British Columbia coast, to ensure expansion proceeded. The project under construction would nearly triple capacity to 890,000 barrels per day by the third quarter of 2022.
"The evidentiary record shows a genuine effort in ascertaining and taking into account the key concerns of the applicants, considering them, engaging in two-way communication, and considering and sometimes agreeing to accommodations," the court's three-judge panel wrote.
"This was anything but a rubber-stamping exercise."
The duty for governments to consult indigenous people on resource projects does not amount to a veto, the panel said.
Natural Resources Minister Seamus O'Regan said the ruling shows that "if consultations are meaningful and in good faith ... you get stuff done" in Canada.
Four indigenous groups had alleged that Ottawa listened half-heartedly to concerns, which include potential spills and harm to endangered killer whales.
"Our work is not done," said Chief Leah George-Wilson of Tseil-Waututh Nation. "We’re going to feel the disappointment today, but that isn’t going to define us and stop us."
A court ruled in 2018 that Ottawa had failed to properly consult indigenous people, prompting new consultations before the government reapproved the expansion in June 2019. In September, the Court of Appeal agreed to hear fresh allegations that the government fell short again.
"This is a victory for common sense and the rule of law," said Alberta Premier Jason Kenney. "TMX will result in billions of dollars of economic prosperity for Canadians."
Trans Mountain is one of three projects, along with TC Energy's Keystone XL and Enbridge's Line 3, that have been stalled for years.
On Monday, Line 3 cleared some regulatory hurdles.
"We can move forward, but we expect opponents to find ways inside and outside the law to work against the projects," said Tim McMillan, chief executive of the Canadian Association of Petroleum Producers.