Project Law Blog

Supreme Court of Canada Provides Further Commentary on the Crown’s Duty to Consult Aboriginal People

By Keith Bergner and Mélanie Power on Posted in Aboriginal, Consultation, Project Permitting
Comment

On May 9th 2013, the Supreme Court of Canada released its decision in Behn v Moulton Contracting Ltd, 2013 SCC 26.  The decision provides important commentary on the Crown’s duty to consult Aboriginal people.

Background

Moulton Contracting Ltd., a forestry company, was granted two timber sale licences and a road permit (the “Authorizations”) by the British Columbia Ministry of Forests.  These Authorizations entitled Moulton to harvest timber on two parcels of land within the Fort Nelson First Nation’s territory, both of which are within the Behn family trapline. The Behns are individual members of the Fort Nelson First Nation.  No legal challenge was brought challenging the validity of the Authorizations.  However, when Moulton attempted to access one of the sites, the Behns erected a camp that, in effect, blocked the company’s access to the logging sites.  Moulton commenced a court action.  As a defence to that action, the Behns argued that the Authorizations were void because they were issued in breach of the Crown’s duty to consult and because they violated the Behns’ hunting and trapping rights under Treaty No. 8.

The Decision

The decision addressed three issues:

  • First, can the Behns, as individual members of an Aboriginal community, assert a breach of the duty to consult?  This issue raises the question to whom the Crown owes a duty to consult.
  • Second, can treaty rights be invoked by individual members of an Aboriginal community?
  • Third, does it amount to an abuse of process for the Behns to challenge the validity of the Authorizations now that they are being sued by Moulton after having failed to take legal action when the Authorizations were first issued even though they objected to their validity at the time?

In addressing the first issue, the Court confirmed that the duty to consult exists to protect the collective rights of Aboriginal peoples and is owed to the Aboriginal group that holds them.  While an Aboriginal group can authorize an individual or an organization to represent it for the purpose of asserting its Aboriginal or treaty rights, no such authorization was given in this case.

In addressing the second issue, the Court noted that certain Aboriginal and treaty rights may have both collective and individual aspects, and it may well be that in appropriate circumstances, individual members can assert them.  However, the Court found it unnecessary (given its conclusion on the third issue) to make any definitive pronouncement in this regard in the circumstances of this case.

In addressing the third issue, the Court found that raising a breach of the duty to consult and of treaty rights as a defence was an abuse of process in the circumstances of this case.  Neither the First Nation nor the community members had made any attempt to legally challenge the licences when the Crown granted them and, in such circumstances, to allow the Behns to argue a defence based on treaty rights and on a breach of the duty to consult would be tantamount to condoning self-help remedies, and would also amount to a repudiation of the duty of mutual good faith that animates the discharge of the Crown’s constitutional duty to consult First Nations.

Implications

Many project proponents (and Crown decision-makers) have struggled in attempting to discern “who speaks for the Nation” in a consultation process.  Many observers had hoped that this decision would provide greater certainty regarding to whom the Crown owes a duty to consult.  The Court’s conclusion that the duty “is owed to the Aboriginal group that holds the s. 35 rights, which are collective in nature” provides some clarification.  However, there remains some legal uncertainty around identifying the Aboriginal group that holds s. 35 rights.  Other cases are pending before the Supreme Court of Canada that may provide further clarity on that issue.

The decision more clearly underscores the need for Aboriginal communities to follow proper procedures when challenging project authorizations based on a breach of the duty to consult or an assertion of treaty rights.  Here, although the Behns did object to the validity of the Authorizations, they did not initiate legal proceedings to challenge them—instead opting to erect a camp blocking access to the logging operations.  This decision makes it clear that the Court will not condone such self-help remedies.  This aspect of the decision should provide some comfort to the holder of an authorization (that is not subject to a legal challenge) that it should be entitled to rely on (and act on) that authorization.

Alberta Government Introduces Aboriginal Consultation Levy Legislation

By John Olynyk on Posted in Aboriginal, Consultation
Comment

On Wednesday, May 8, the Alberta government introduced Bill 22, the Aboriginal Consultation Levy Act, in the Alberta Legislature.  Bill 22 is being introduced as part of the Alberta government’s overhaul of regulatory and Aboriginal consultation processes in the province.

Consultation Levy Fund Established

Bill 22 would establish a Consultation Levy Fund, which would be used to make grants to First Nations and other aboriginal groups to assist them in developing capacity to participate in Crown consultations.  Under section 3 of Bill 22, proponents undertaking provincially-regulated activities will have to pay a consultation levy to the government.  The amount of the levy is not set out in Bill 22; it will be set by regulations yet to be released.  Payment of the levy would be required for proponents seeking approvals under the Environmental Protection and Enhancement Act, the Forests Act, the Historical Resources Act, Part 8 of the Mines and Minerals Act, the Public Lands Act and the Water Act.  Bill 22 would also allow the Alberta government to pass regulations extending the consultation levy obligation to other provincial statutes as well.

The Minister of Aboriginal Relations would be allowed to access the Consultation Levy Fund for grants to First Nations and other identified Aboriginal groups to help them develop capacity to participate in and meet the costs of Crown consultation associated with approvals under the designated statutes.  The Consultation Levy Fund may also be used “to pay the costs of administering this Act”.

Mandatory Disclosure of Private Agreements with Aboriginal Groups

Bill 22 would allow the Minister to require proponents to disclose to the Alberta government agreements they have entered into with Aboriginal groups that provide capacity funding for consultation.  These agreements have until now been negotiated on a confidential basis due to their commercial and competitive sensitivity.  Under Bill 22, disclosure of these agreements is apparently intended to help the Alberta government determine how much funding it should provide to First Nations and other identified Aboriginal groups, by indicating how much those groups are already receiving from industry.  The Minister will have a very broad discretion in determining what needs to be disclosed.  Under section 8, the Minister can require a proponent to provide any information “including third party personal information, records and other documents, including copies of agreements related to consultation capacity and other benefits pertaining to provincial regulated activities”.  Proponents would have very little ability to challenge disclosure orders of the Minister: under section 9, all decisions of the Minister under Bill 22 are final and binding and not subject to review.

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Province of Alberta Seeks Input on New Energy Regulator

By JoAnn Jamieson and Michelle Forrieter on Posted in Aboriginal, Environmental, Project Development, Regulatory
Comment

The Government of Alberta has announced that it is holding public consultations as part of its process to develop the new regulations under the Responsible Energy Development Act. These regulations will set out the details regarding how the new Alberta Energy Regulator will function in practice. The Calgary session will take place on February 25, 2013 from 9:00 a.m. to 12:00 p.m. Anyone wishing to participate but unable to attend a consultation session can complete an online survey.

This announcement also confirms that the Alberta Energy Regulator is expected to begin operations in June of 2013.  For more information on the Responsible Energy Development Act and the new Alberta Energy Regulator, see our previous posts on this topic: Alberta’s Responsible Energy Development Act Receives Royal Assent (January 4, 2013) and Alberta’s New Energy Regulator: What Does it Mean for Project Development? (November 16, 2012).

Yukon’s Free Entry Claim Staking Violates the Crown’s Duty to Consult Aboriginals

By Amy Jo Scherman and Michelle Jones on Posted in Aboriginal, Consultation, Mining
Comment

On December 27th, 2012, the Court of Appeal for Yukon released its decision in Ross River Dena Council v. Government of Yukon, 2012 YKCA 14.  The case dealt with the Yukon Government’s duty to consult with First Nations when allowing mineral claims to be recorded on land with asserted Aboriginal rights and title claims. The case arose as a result of the “open entry” claim staking system and in particular, as a result of the Yukon Quartz Mining Act, S.Y. 2003, s. 14 (the Act). The Act allows individuals to obtain mineral rights by physically staking a claim and then recording it with the Mining Recorder, who is obliged to record the claim and has no discretion in this respect. The individual is then entitled to carry out limited exploration activities without further authorization.

In the lower court decision, the Ross River Dene First Nation argued that the Act was not in line with the Government’s consultation obligations as set down in Haida since the Act did not allow for consultation prior to claims being recorded. The Supreme Court of Yukon acknowledged that the scheme violated the principles of consultation laid down in Haida. However, the Court found that giving notice to the First Nations after a claim had been recorded would be sufficient to remedy the situation, and would meet the Government’s consultation obligations.  It stressed that consultation after the claim was recorded was necessary due to the confidential nature of the “open entry” claim staking system.

On appeal, the main issue was whether the lower court had erred in finding that after-the fact notice with respect to claims recording under the Act was sufficient to meet consultation obligations. The Court of Appeal confirmed that the recording of a mineral claim pursuant to the Act triggered the duty to consult. In so finding, it rejected the suggestion by the Government that the lack of discretion with respect to the claims recording under the Act could relieve it of the duty to consult. Moreover, the Court went further and said that statutory schemes which do not provide an effective consultation “cannot be allowed to subsist”.

The Court then went on to find that the trial judge had erred in holding that after-the -fact notice was sufficient to meet the duty to consult, stressing that it was not appropriate to give priority to the “open claim” staking system. The Court held the Act had to be modified to meet the Crown’s obligations, which requires meaningful consultation before aboriginal claims are affected.

In the result, the Court of Appeal issued declarations stating that the Government has a duty to meaningfully consult before recording mineral claims under the Act, and before allowing any exploration to take place. However, the declarations were suspended for one year to allow the Government to consider how to incorporate appropriate consultation into the Act.

The case is significant in several respects. First, it will likely result in changes to the “open claims” staking scheme more generally in the Yukon, given that consultation must now occur prior to the recording of the mining claims. Furthermore, other provinces with similar staking systems, in particular those that permit automatic activities on the land, may also need reconsideration. This case marks the first time that a Court has required that a statute be amended to align with the Crown’s consultation obligations. It is worth considering whether this decision will have broader implications, such that governments going forward will be required to amend statutory schemes to ensure the duty to consult is met.

Federal Court Declares that Métis and Non-Status Indians are Federal Responsibility

By John Olynyk, Trevor Ference and Michelle Jones on Posted in Aboriginal, Constitutional Law
Comment

On January 8, 2013, the  Federal Court released its decision in Daniels v Canada, 2013 FC 6, a case involving the scope of the word “Indian” under section 91(24) of the Constitution Act, 1867.  The plaintiffs sought a declaration that Métis and non-status Indians (“MNSI”) are “Indians” for the purposes of section 91(24) of the Constitution Act, 1867.

The Court reviewed the evidence provided on the historical treatment and use of the term “Indian” dating from the time of Champlain in Passamaquoddy Bay in 1603 to the present day.  In so doing, the Court focused on the historical circumstances surrounding the drafting of section 91(24) and the related government conduct that followed the drafting of the Constitution Act, 1867.  The Court concluded that the balance of the evidence supported that MNSI comprised part of the class of aboriginal peoples that the federal government was assuming responsibility for and governed under the constitutional division of powers. As a result, the Court declared that MNSI are “Indians” for the purposes of section 91(24) of the Constitution Act, 1867.

The decision is significant because to date neither the federal nor provincial governments has accepted responsibility for these groups.  The decision holds that MNSI fall within the same scope of federal responsibility under the Constitution Act, 1867, as do Indians and Inuit.  The decision is likely to have significant implications for the federal government as it will now face MNSI expectations for programs and services (education, health care, etc.) comparable to those currently provided to status Indians and Inuit.

The decision will not have any immediate implications for private third parties like project proponents.  The decision was focused on constitutional jurisdiction over MNSI, and not on Aboriginal rights or consultation requirements for MNSI.  There may be indirect impacts in provinces that have enacted legislation in relation to MNSI.  For example, Alberta has passed legislation establishing a land base for Métis settlements and providing for governance of those settlements.  If, as the decision suggests, MNSI fall within exclusive federal legislative jurisdiction, legislation like the Alberta Métis Settlements Act, and rights granted to third parties under that legislation, may be put into question.  However, this issue was not addressed in the decision.

It is widely expected that Canada will appeal the decision to the Federal Court of Appeal and, if necessary, the Supreme Court of Canada.  While the Daniels decision therefore clarifies constitutional responsibility for MNSI, it is not likely to be the final word on the matter.

Canadian Environmental Assessment Act, 2012 – Training Materials Available

By Jennifer Nyland on Posted in Environmental
Comment

In previous posts we discussed several major changes to the federal environmental assessment process that were introduced when the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”) came into force in July 2012.

In November 2012, we delivered two seminars on the new environmental assessment process.  The seminars were very well attended, and many attendees have commented on the usefulness of the training materials, including a PowerPoint presentation and a CEAA 2012 process flowchart developed by our Environmental Law Group.  These materials are now available to friends and clients of Lawson Lundell LLP upon request.  If you wish to receive a copy of these materials please contact Brad Armstrong, JoAnn P. Jamieson, or Christine Kowbel.

Alberta’s Responsible Energy Development Act Receives Royal Assent

By John Olynyk, JoAnn Jamieson and Trevor Ference on Posted in Aboriginal, Environmental, Project Permitting, Regulatory
Comment

On December 10, 2012, the Responsible Energy Development Act (“REDA”) received royal assent.  Under REDA, the Alberta Energy Resources Conservation Board and certain regulatory functions of the Ministry of Environment and Sustainable Resource Development will be replaced with a new single provincial regulator for all oil, gas, oil sands and coal projects in the province of Alberta.  The new Alberta Energy Regulator will have expanded powers, including the consideration of permitting under the provincial Environmental Protection and Enhancement Act, the Water Act and the Public Lands Act.  REDA has implications that potentially affect all oil, gas, oil sands and coal projects in Alberta currently under development and planned for the future. For an overview of REDA’s changes, please see our earlier Energy Law Bulletin.

With royal assent, the Alberta government may now appoint a transition committee to be responsible for directing and overseeing the orderly transition from the Energy Resources Conservation Act to REDA. The transition committee will also be responsible for ensuring the full operation of the new Alberta Energy Regulator once the remainder of REDA comes into force, anticipated to be in June of 2013.

With REDA receiving royal assent, the Alberta government may now turn its attention to drafting regulations that will provide additional detail to the framework established by REDA, including details respecting the administration of applications, hearings and those proceedings that will not have been completed at the time REDA comes into force.

We will provide further updates when the regulations under REDA are released.

Federal Government Issues First Decision Statement Under CEAA 2012

By JoAnn Jamieson and Michelle Forrieter on Posted in Environmental
Comment

On November 30, 2012 the federal government denied approval for the EnCana Shallow Gas Infill Development Project in the Suffield National Wildlife Area (the “Project”), due to the likelihood of significant adverse environmental effects.

The federal environmental assessment (“EA”) for this Project was first commenced on October 26, 2005. The Joint Review Panel’s (“JRP”) report, issued on January 27, 2009, recommended that the Project not proceed until the critical habitat had been finalized for the Ord’s kangaroo rat and the Sprague’s pipit, as well as for three at risk plant species. The JRP found that this recommendation was justified because allowing further development to occur before the critical habitat was designated may have destroy some of this critical habitat, the consequences of which would have “far outweighed” the consequences to EnCana of a temporary delay to the Project, given Environment Canada’s evidence at the hearing that the critical habitat would likely be finalized within 24 months. (The identification of critical habitat in fact took much longer – final recovery strategies identifying critical habitat for each of these five species were not released until November 30, 2012 the same day as the federal government’s denial of the Project).

After the 2009 JRP report was issued, no further steps occurred in the Project’s EA process until timelines were established under the new Canadian Environmental Assessment Act, 2012 (“CEAA 2012”) setting a December 3, 2012 deadline for the federal government’s decision statement for this Project.

The federal government’s Decision Statement, the first one issued under CEAA 2012, provides little in the way of reasons for its denial of the proposed Project. It indicates simply that, in accordance with section 52 of CEAA 2012, the Minister of the Environment has concluded, after taking into account the JRP’s report and the implementation of any mitigation measures that he considered appropriate, that the Project is “likely to cause significant adverse environmental effects” on areas of the environment within federal jurisdiction (as set out in section 5(1) CEAA 2012). The Decision Statement adds that the Cabinet has decided that these significant adverse environmental effects that the Project is likely to cause are not justified in the circumstances. The areas of the environment within federal jurisdiction set out in CEAA 2012 include fish and fish habitat under the Fisheries Act, aquatic species under the Species At Risk Act, migratory birds, federal lands, trans-boundary environmental effects, and changes to the environment that may affect aboriginal peoples.

Because of this Decision Statement, under CEAA 2012 EnCana (now Cenovus) is prohibited from doing anything in connection with the Project that may cause environmental effects on any areas of the environment under federal jurisdiction.

Joint Review Panel Not Required to Determine Adequacy of Crown Consultation

By John Olynyk, Michelle Forrieter and Trevor Ference on Posted in Consultation
Comment

In a previous post, we highlighted the October 26, 2012 decision of the Joint Review Panel (“JRP”) in the Shell Jackpine Mine Expansion hearing regarding its jurisdiction to determine whether Crown consultation obligations had been discharged. The JRP concluded in that decision that its statutory jurisdiction did not include the authority to determine the adequacy of Crown consultation with First Nations. The JRP found that it did not have express authority or an implied duty to consider the adequacy of consultation, that Rio Tinto was distinguishable because there was no Crown agent involved in the proceedings, and that even if the JRP did have the necessary jurisdiction to consider the adequacy of consultation, any decision would be premature given the ongoing nature of consultation for the project.

The Alberta Court of Appeal has now weighed in on whether the JRP is required to consider the adequacy of Crown consultation for the Jackpine Mine Expansion, dismissing an application for leave by the Athabasca Chipewyan First Nation, the Métis Nation of Alberta Region 1, and the Fort Chipewyan Métis Local 125.

The key grounds on which these parties sought leave to appeal included that the JRP erred in (i) deciding that it has the jurisdiction to determine some questions of constitutional law, but not those raised in respect of the adequacy of Crown consultation, and (ii) deciding that, even if it had jurisdiction over those questions, it would be premature for the JRP to determine the adequacy of Crown consultation.

The Court denied leave to appeal the JRP’s decision on the grounds that the JRP was not required by its mandate (as established by the Agreement creating the JRP) to determine whether the Crown had met its duty to consult. The Court found that it was clear that the JRP’s mandate included consideration of aboriginal issues. However, the express language in the Agreement specified that the JRP was “not required… to make any determinations as to… whether the Crown has met its …duties to consult or accommodate…” With this language curtailing the scope of the JRP’s mandate with respect to aboriginal issues, the Court concluded that even if the JRP had the jurisdiction to assess the adequacy of Crown consultation, the JRP was not required to do so, and great deference was owed to the JRP’s discretionary decision not to consider those issues. Because of this finding, the Court also concluded that any determination of the jurisdictional issues raised by the First Nations and Métis groups would not affect the outcome of the hearing.

In response to the argument that after the JRP decision report is issued, meaningful opportunities to consult will be lost, the Court noted that if the Jackpine Expansion is ever set to proceed before the required consultation has been carried out, aboriginal groups can seek their remedies against the Crown in court.

The Court of Appeal’s decision is the next in a growing line of cases that can be argued to support the assertion by the ERCB that it is not correctly situated to assess the adequacy of Crown consultation. It now appears that the appropriate time for an aboriginal group to raise concerns with the adequacy of Crown consultation for a project may not be during a hearing conducted by an energy regulator, but rather through the courts, later in the process.

However, this Court of Appeal decision is likely not the last in this line of cases. The circumstances in this case were unique, given the express language in the JRP Agreement regarding its mandate over aboriginal issues. This ruling does not put these issues to rest as regards the ERCB, especially given the Court’s comment that it is not obvious why the ERCB should consider its ability to consider constitutional issues limited. As noted by the Court, these questions regarding the jurisdiction to assess the adequacy of Crown consultation are of general importance, and of interest to a wider audience of aboriginal peoples and participants in the resource extraction industry. Although the Responsible Energy Development Act settles this question for the new Alberta Energy Regulator, it is possible that this decision will not be the final word on the ERCB’s jurisdiction in this regard.

British Columbia Gives Utility Regulator New Fangs

By Jeff Christian on Posted in Administrative Law, Public Utility, Regulatory
Comment

British Columbia has become the latest North American jurisdiction to give utility regulators – in this case the BC Utilities Commission –  the power to impose “administrative penalties”.  Administrative penalties are like fines, but are imposed directly by the regulator outside the court process.  The fines can range from $25,000 to $1,000,000 per day, depending on the infraction, and in some cases can be imposed personally on officers and directors.  Read the entire bulletin here.