Ottawa is facing increasing pressure over a dispute at the Port of Prince Rupert in British Columbia, which threatens its goal of doubling non-U.S. exports. The conflict involves seven lawsuits filed by the Lax Kw’alaams and Metlakatla First Nations, collectively known as the Coast Tsimshian. They allege that the Crown misled them regarding developments on their traditional lands, particularly concerning a proposed propane export facility.

The situation has escalated to include lawsuits against the Ksi Lisims LNG project, a significant initiative announced by the prime minister last week. The ongoing dispute could also hinder plans by Ottawa and Alberta to construct an oil pipeline to the port. A source familiar with the matter stated, "(The propane dispute) is a root poisoning the whole tree. The First Nations feel their rights have been fundamentally violated and they’re not going to take it."

The Metlakatla's statement of claim, filed with the B.C. Supreme Court, highlights that the Port of Prince Rupert was established in 1914 after the Grand Trunk Railway was completed. Portions of the port are located on the band’s former reserve land. In 2019, Canada secured the Metlakatla’s consent for the divestiture of Ridley Terminals, a facility handling coal. The Coast Tsimshian were offered a 10 percent equity stake in the terminal’s new ownership and were informed by the Canadian Development Investment Corp. that the facility was well-positioned for growth in the liquefied petroleum gas market in Asia.

However, the claim asserts that the Coast Tsimshian were not informed about an exclusivity agreement between the Port of Prince Rupert and Dutch company Royal Vopak for the storage and loading of bulk liquids, including propane. They only learned of this deal in November 2023 when Trigon, the successor to Ridley Terminals, sought permission to expand its operations to include propane. The Port Authority denied this request due to the existing agreement with Vopak.

There are concerns that the Minister of Transport was unaware of the exclusivity deal until the Coast Tsimshian raised complaints. The claim states, "As a result, Canada did not meaningfully or adequately consult the Metlakatla, breaching its fiduciary duty." The Port Authority, a Crown corporation, has not filed a statement of defense and has refrained from commenting on ongoing legal matters.

The Department of Transport maintains that the port operates independently under the Marine Act, directing inquiries to the port authority. Legal experts suggest that the courts may not be sympathetic to the port authority, noting that previous cases have found inadequate consultation in less severe circumstances.

After two years of inaction, the situation gained attention in August when First Nations leaders met with Christiane Fox, deputy clerk of the Privy Council, in Ottawa. A source close to the Metlakatla stated, "They are furious. They have been trying to raise this issue for two years and they’ve been getting nowhere." The government now faces pressure to leverage its regulatory authority to address the dispute, as it recognizes the critical role of Prince Rupert in its pipeline plans.