Canadian Power - Aboriginal Law

Aboriginal law and policy relevant to energy and resource development projects continued to evolve in 2020. As discussed below, there were a number of notable duty to consult cases and both the federal and BC governments took further steps to implement the UN Declaration on the Rights of Indigenous Peoples.

Key duty to consult cases and developments

CONSULTATION IS NOT ASSESSED ACCORDING TO A STANDARD OF PERFECTION

The highest profile duty to consult case this past year was the Federal Court of Appeal’s decision in Coldwater First Nation v Canada (Attorney General) relating to the Trans Mountain Pipeline Expansion Project (“TMX Project”). This was a judicial review of the federal Cabinet’s decision to approve the TMX Project for the second time subject to numerous conditions. The TMX Project involves the twinning and expansion of an existing pipeline from Edmonton to Burnaby, BC. It would increase capacity from 300,000 to 890,000 barrels a day and the number of tankers from 5 to 34 per month.

The first decision was previously set aside by the Federal Court of Appeal in Tsleil-Waututh Nation v. Canada after the Court had found that the federal government had not met the duty to consult. The second approval was issued after the federal government had undertaken additional consultation and implemented further measures to address concerns of Indigenous groups, including amending six conditions and putting forward eight accommodation measures focused on addressing marine safety, spill prevention, response capacity, cumulative effects, fish and fish habitat, quieter vessels, and further terrestrial studies.

" Several Indigenous groups challenged the second approval, arguing that the Crown had still not fulfilled the duty to consult. The Federal Court of Appeal concluded that the Cabinet decision was reasonable and that the flaws identified with Indigenous consultation in Tsleil-Waututh decisions had been addressed through reasonable and meaningful consultation. "

The Coldwater decision provides a helpful summary of key principles relating to the duty to consult. The Federal Court of Appeal re-affirmed that consultation must be meaningful in that the Crown must show that “it has considered and addressed the rights claimed by Indigenous peoples in a meaningful way” and that it is more than just “a process for exchanging and discussing information”. The Court noted that the process of meaningful consultation can result in various forms of accommodation but that “the failure to accommodate in a particular way, including by way of abandoning the Project, does not necessarily mean that there has been no meaningful consultation.” The Court noted that goal is to reach an overall agreement but that will not always be possible and that “reconciliation does not dictate any particular substantive outcome”. The Court reiterated that Indigenous groups have reciprocal obligations to not frustrate the Crown’s reasonable good faith efforts to engage in consultation, that the duty to consult does not provide a veto over projects, and that Indigenous concerns can be balanced against “competing societal interests” when adequate consultation has taken place.

The Federal Court of Appeal undertook a detailed review of the various alleged deficiencies raised by the Indigenous applicants and determined that they did not render the process unreasonable. The Court underscored that perfection is not required or realistic and that imposing too strict of a standard of perfection, reasonableness, or meaningfulness could create a de facto veto right. In some instances, they found that the Indigenous applicants had hindered Canada’s consultation efforts or taken uncompromising positions that had effectively amounted to asserting a veto. The Court also noted the number of Indigenous groups that were either supporting or not opposing the project:

" Contrary to what the applicants assert, this was anything but a rubber-stamping exercise. The end result was not a ratification of the earlier approval, but an approval with amended conditions flowing directly from the renewed consultation. It is true that the applicants are of the view that their concerns have not been fully met, but to insist on that happening is to impose a standard of perfection, a standard not required by law. Significantly, the consultation process initiated by Canada invited the participation of 129 Indigenous groups potentially impacted by the Project and, in the end, more than 120 either support it or do not oppose it. As well, benefit agreements had been signed with 43 Indigenous groups as of June 22, 2019…. The Governor in Council was entitled under section 54 to take this broad consensus into account in concluding that the Project was in the public interest. This is a factor that also speaks to the fact that the process that has taken place is consistent with the objectives of reconciliation and honour of the Crown. "

Alberta graph

Similar themes were also seen in Sagkeeng v. Government of Manitoba et al decision of the Manitoba Court of Queen’s Bench. This was an application for judicial review by the Sagkeeng Anicinabe (“Sagkeeng”) of a Ministerial decision to grant Manitoba Hydro a license to construct the Manitoba-Minnesota Transmission Project. The Sagkeeng alleged that Manitoba breached its duty to consult in issuing the licence. The Court concluded that Sagkeeng’s application was premature (as they had not pursued an available statutory appeal to Cabinet) and had failed to establish that the Minister’s decision was unreasonable and in breach of the duty to consult.

The Sagkeeng argued that the consultation was devoid of any substance or meaning and was “nothing more than a smile”. The Court found that the Minister’s licensing decision was justified and reasonable and that the consultation was meaningful having regard to the government’s consultation efforts and various accommodation measures introduced to address concerns. The Court emphasized that while the consultation and accommodation may have fallen short from the Sagkeeng’s perspective, reasonableness assessed in the context, and not perfection, is the standard. This decision also highlights the risks of Indigenous groups not fulfilling their reciprocal obligations in consultation. The Court stressed that consultation “is a two-way street” and seemed to be influenced by the fact that the Sagkeeng was not responsive and timely. They found that the Province attempted to establish “a robust, funded, communitybased consultation process with Sagkeeng” but that the Sagkeeng “did not respond in a reasonable timely manner or show material interest in pursuing the process” and that “more could, and ought to have been done on its part”.

THE SCOPE OF CONSULTATION FOR ASSERTED ABORIGINAL TITLE CLAIMS

In Ross River Dena Council v Yukon,2 the Yukon Court of Appeal clarified the scope of consultation obligations in the context of Aboriginal title assertions. This was an appeal of a decision of the Supreme Court of Yukon. This decision had denied the Ross River Dena Council’s (“RRDC”) request for a declaration that the Yukon government’s issuance of hunting licences and seals might adversely affect their Aboriginal title claim by permitting conduct inconsistent with their claim and that there was a duty to consult with respect to potential adverse impacts on the incidents of Aboriginal title when issuing these licences.

On appeal, the RRDC argued that the issuance of hunting licences and seals interfered with their claimed right to exclusive use and occupation of the land and that the presence of hunters on the land would be a violation of the incidents of their asserted title claim.

The Court of Appeal dismissed the appeal for two reasons. First, the licences at issue did not itself give the licence holders the right to enter land that it could not otherwise enter. Second, the RRDC did not have proven title and as such did not have a right to control the use and occupation of the land at present or a veto over government action. The Court also noted that the RRDC had not identified any potential adverse impact to their asserted claim which could affect their ability to fully realize the benefits of Aboriginal title, if and when it is finally established. The Court noted that the RRDC’s objection to nonRRDC hunters entering the area was not evidence of an adverse impact on their title claim.

" This decision is consistent with prior Court decisions that consultation is intended to prevent irreversible damage to Indigenous interests pending proof or settlement of claims and is not intended to provide Indigenous groups with what they would be entitled to if they prove or settle their claims. "

RISKS OF UNADDRESSED CUMULATIVE IMPACTS

Cumulative impacts on Aboriginal and treaty rights is an issue that is being increasingly raised in consultation relating to energy and other resource development projects. The Fort McKay First Nation v. Prosper Petroleum Ltd4 decision of the Alberta Court of Appeal highlights the risks relating to unaddressed cumulative impacts and a new potential way to challenge projects where there are cumulative impact concerns.

In this case, the Alberta Court of Appeal set aside an approval of the Alberta Energy Regulator (“AER”) for Prosper Petroleum’s Rigel Bitumen Recovery Project after finding that the AER failed to consider certain issues relating to the honour of the Crown in granting the approval.

This project was within 5 km of the Fort McKay’s Moose Lake reserves and in an area where the Fort McKay has Treaty 8 harvesting rights. Before the AER, Fort McKay unsuccessfully argued that the AER should delay the approval until the Moose Lake Access Management Plan (“MLAMP”) was finalized. This was a plan that the Alberta government had committed to develop to address cumulative impacts in the Moose Lake area. Fort McKay had been in discussions with Alberta for many years about protecting the Moose Lake area due to significant cumulative impact concerns. In March 2015, then Premier Jim Prentice and Chief Jim Boucher signed a letter of intent to complete the MLAMP on an expedited basis and by September 30, 2015. The plan is still not finalized and has been the subject of ongoing negotiations.

The AER concluded that the absence of a finalized plan was not a valid reason to deny approval and Cabinet was the most appropriate place to assess this issue as the AER’s approval was subject to Cabinet authorization. Fort McKay argued that the AER failed to ensure Alberta’s obligation to act honourably with respect to treaty and Aboriginal rights when determining whether the approval was in the public interest.

The ABCA held that while the AER is not permitted by its legislation to consider issues of consultation it can consider issues of constitutional law as part of its determination of whether an application is in the “public interest”, which includes the honour of the Crown. The ABCA found that the AER took an unreasonably narrow view of what comprises the public interest and ought to have considered whether the honour of the Crown was engaged and required delay of the approval due to the ongoing MLAMP negotiations.

In concurring reasons, Justice Greckol went further stating, “The honour of the Crown may not mandate that the parties agree to any one particular settlement, but it does require that the Crown keep promises made during negotiations designed to protect treaty rights. It certainly demands more than allowing the Crown to placate [Fort McKay] while its treaty rights careen into obliteration. That is not honourable. And it is not reconciliation.”

This decision highlights the risks of unaddressed cumulative effects and the honour of the Crown as a separate and distinct basis to challenge projects where there are significant cumulative impacts concerns, particularly with respect to established rights. Notably, the duty to consult in the context of cumulative effects on Aboriginal and treaty rights is not about addressing impacts from other projects or activities (past, present, or future) but mitigating, avoiding, or offsetting any additional incremental impacts.

DENYING APPROVAL BASED ON INDIGENOUS CONCERNS DOES NOT NECESSARILY PROVIDE A VETO

In Redmond v. British Columbia (Forests, Lands, Natural Resource Operations and Rural Development5, the British Columbia Supreme Court was required to consider an appeal of a decision to deny an application to develop a small, independent run-of-river hydroelectric project that would have negative impacts on Cheam First Nation’s (“Cheam”) spiritual bathing sites. The Director of Authorisations for the BC Ministry of Forests, Lands, Natural Resource Operations, and Rural Development denied the application after concluding the impacts on the Cheam’s asserted Aboriginal right to cultural practices was serious and that the proposed mitigations did not adequately accommodate those impacts.

The Cheam had informed the proponent and the Director that the proposed location of the project was an area where significant cultural activities were practiced both historically and currently, including spiritual bathing practices that required unaltered flows of water and absolute privacy. The BC Supreme Court upheld the Director’s decision as reasonable and rejected the proponent’s arguments that this constituted an impermissible veto for the Cheam, among other arguments advanced. The Court found that the Director had engaged in a balancing of interests – considering the impact on asserted rights of many Cheam community members on the one hand with the benefits of the small hydroelectric project which would provide limited additional renewable energy to the grid (only enough energy for approximately eight homes) and could be built elsewhere. It appears both the Court and the Director were influenced by the limited benefits of the project. There was also evidence in the record that the Cheam were generally supportive of runof-the-river projects and would be prepared to consider other locations within their territory but the applicant was not willing to pursue alternate locations given that he had invested significant efforts in this specific location.

The Court noted that apart from the Director’s duty to consult, it was also within the scope of the Director’s statutory (section 11 of the Land Act) and policy framework to consider the overall impact and the “public’s interest” in achieving reconciliation with First Nations, as there is a deep and broad public interest in reconciliation with Indigenous peoples.

" In balancing the interests of both parties, the Court noted it was not unreasonable to find that the project should not be allowed in its entirety given its adverse impacts on Aboriginal rights that cannot be adequately accommodated. The Court noted that it is not unreasonable that the “balance and compromise…inherent in the notion of reconciliation” will sometimes result in a decision to disallow a project and that the “constitutional project of reconciliation is a ‘shared responsibility’ of all Canadians involving ‘complex and competing interests’, and will sometimes require administrative decision makers to make difficult decisions that impact the interests of proponents... "

The petitioner also argued that his section 2(a) Canadian Charter of Rights and Freedoms rights were violated, in part because the decision maker prioritized “Aboriginal spirituality” over his atheism and violated his right to a religiously neutral state. The Court found that the petitioner’s Charter rights were not violated or limited and that the decision did not impede his ability to act in accordance with his atheist beliefs as he could propose the project in another area. The Court also noted that such a broad definition of what constitutes an atheist practices would afford atheism a much broader scope of protection than other religious practices and thus lead to the prioritization of atheism to the detriment of other religious practices in the balance of public decision making processes.

COURT REJECTS MODIFYING HAIDA TEST FOR COMPETING ABORIGINAL AND TREATY RIGHTS

In Gamlaxyeltxw v. British Columbia (Minister of Forests, Lands & Natural Resource Operations),6 the BC Court of Appeal rejected the BC Supreme Court’s prior modification of the Haida test to address a conflict between asserted and established rights in consultation. In this case, the Gitanyow had an outstanding claim for section 35 Aboriginal rights in an area which overlapped with the territory subject to the Nisga’a Final Agreement. The Gitanyow challenged two decisions by the Minister of Forests, Lands & Natural Resource Operations under the Nisga’a Treaty to approve the total allowable harvest for moose and the annual management plan for Nisga’a hunters in the non-exclusive Nass Wildlife Area.

The Minister consulted with Gitanyow on the total allowable harvest but did not accept the Gitanyow’s position that the moose allocation should be divided between the Nisga’a and the Gitanyow. The Minister took the position that there was no duty to consult with Gitanyow on the management plan as it would not adversely affect Gitanyow interests. The Chambers judge, affirmed by the British Columbia Court of Appeal, found that consultation was adequate regarding the total allowable harvest and the Minister did not err in concluding that there was no duty to consult the Gitanyow regarding the management plan as the management plan was expressly not applicable to non-Nisga’a hunters and therefore did not have any potential to adversely affect the Gitanyow’s rights.

While the Court of Appeal largely upheld the BC Supreme Court’s decision, the Court rejected the notion that the Haida test for the duty to consult needed to be modified in certain situations involving competing asserted and established rights. The BC Supreme Court had found that the Haida test needed to be modified to preclude a duty to consult an Indigenous group claiming s. 35 rights where the recognition of such a duty would be inconsistent with the Crown’s duties to another Indigenous group with whom it has a treaty. In this case, the Gitanyow before the Minister and the BC Supreme Court sought a form of accommodation that would have required the Minister to contravene the Nisga’a Treaty. The Gitanyow modified their position on appeal and took issue with the BC Supreme Court’s modification of the Haida test which precluded consultation altogether.

The BCCA stated that “the existence of treaty rights may limit any accommodation a rights claimant may seek, as the Crown cannot be required to breach a treaty in order to preserve a right whose scope has not yet been determined”, but that it is unnecessary to modify the Haida test as it was sufficiently flexible to resolve conflicts between asserted and established rights. In other words, any conflict can be dealt with at the accommodation stage and such a conflict does not negate the existence of a duty to consult Indigenous groups with asserted claims that may be adversely impacted by the decision.

Policy Developments

FEDERAL GOVERNMENT INTRODUCES UNDRIP LEGISLATION

On December 3, 2020, the federal Minister of Justice introduced Bill C-15, An Act respecting the United Nations Declaration on the Rights of Indigenous Peoples. This legislation was introduced to fulfill an election commitment to introduce legislation to implement UNDRIP by the end of 2020.

The legislation is generally similar to the BC Declaration on the Rights of Indigenous Peoples Act (“DRIPA”, discussed in further detail below) and Bill C-262, the federal private member’s bill that died on the order paper prior to the last election. The legislation is designed to provide a framework to implement UNDRIP. It requires the federal government to “take all measures necessary to ensure the laws of Canada are consistent with the Declaration”, in consultation and cooperation with Indigenous peoples. It also requires the federal government to develop an action plan to achieve the objectives of UNDRIP. The action plan must be developed within three years of when the legislation comes into force and the Minister of Justice must prepare an annual public report on the implementation of the action plan. Unlike Bill C-262 and the BC DRIPA, Bill C-15 stipulates a number of requirements for the action, including that it contain provisions related to monitoring, oversight, recourse or remedy with respect to the implementation of UNDRIP.

Alberta graph

This is similar to DRIPA. Notably, the federal government backgrounder indicates that the legislation does not create new obligations or regulatory requirements for industry and would not impact Canada’s existing duty to consult or other consultation or participation requirements set out in other legislation such as the new Impact Assessment Act. These statements are consistent with the legislation being framework legislation – where any actual changes will come about at a later date through the implementation of the action plan.

The legislation does not address the issue of free, prior, and informed consent (“FPIC”) and how the FPIC provisions of UNDRIP will be interpreted. The federal government did address this issue in its backgrounder stating that:

“Free, prior and informed consent is about working together in partnership and respect. In many ways, it reflects the ideals behind the relationship with Indigenous peoples, by striving to achieve consensus as parties work together in good faith on decisions that impact Indigenous rights and interests. Despite what some have suggested, it is not about having a veto over government decision making.”

This language and prior government statements and actions suggest that the federal government is continuing to interpret Indigenous consent as an objective and not an absolute requirement in the context of resource development projects. However, the federal government is not being clear about whether there will be changes down the road that further enhance consultation requirements and scrutiny of efforts to achieve consent as part of the action plan. Notably, after indicating that the legislation would not change the duty to consult and other existing consultation requirements, the federal government stated in the C-15 backgrounder that it may “inform how the Government approaches the implementation of its legal duties going forward, without explaining how. The federal government also notes that FPIC may require “different processes or new creative ways of working together to ensure meaningful and effective participation in decision making but does not explain what those processes might be and how they could impact project decision-making.

These difficult questions have been deferred to another day - leaving considerable uncertainty about potential future changes to the rules of Indigenous engagement for projects and the timing any such changes.

UPDATE ON BC’S IMPLEMENTATION OF UNDRIP

BC became the first jurisdiction in Canada to adopt UNDRIP when it passed the Declaration on the Rights of Indigenous Peoples Act in November 2019. As a framework piece of legislation, DRIPA requires the Province to, among other things, take all measures necessary to ensure the laws of BC are consistent with UNDRIP, and prepare and implement an action plan to achieve the objectives of UNDRIP and prepare an annual report outlining its progress in implementing the action plan.

The BC government has stated that DRIPA is not intended to immediately affect or change any existing laws; rather, it is intended to be forward-looking, with a gradual and incremental implementation process as laws are introduced or amended in consultation with Indigenous peoples and stakeholders including business, industry and local government.

Like the proposed federal legislation, DRIPA does not address the issue of FPIC. The BC government’s position is that it does not view FPIC as an unqualified veto right. The BC government sees the new provincial EA process as a potential model for applying FPIC in a regulatory context. BC’s environmental assessment process was updated with the passage of the Environmental Assessment Act (“EAA) in November 2018. The new EAA introduced significant changes to the provincial EA process, including an early engagement process, increased opportunities for public participation, and prescriptive measures to meet the provincial government’s commitment to implement UNDRIP. Under the EA process, the concept of FPIC is framed as a consensus building process, which is undertaken through cooperation between the Environmental Assessment Office and participating Indigenous nations in order to achieve consensus on process decisions of recommendations. According to the EAO User Guide, consensus is defined as “an outcome or approach that is actively supported by all participating Indigenous nations and the EAO or is not objected to by a participating Indigenous nation, while reserving their right to ultimately indicate their consent or lack of consent for a project after an assessment based upon full consideration of the project."

Although DRIPA is intended to provide the BC government with an incremental approach to implementing UNDRIP, the challenge for the provincial government (and the federal government) will be to advance its commitments through the development of an action plan and priorities in a way that does not stifle investment or create additional uncertainty. To do so, they must manage the expectations that they have created while striking a balance between competing interests. 

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