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On July 26, 2017, the Supreme Court of Canada (“SCC”) released its decisions in two cases: Clyde River (Hamlet) v. Petroleum Geo‑Services Inc. and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc.  In these cases Indigenous Nations argued that the Crown had breached its duty to consult when the National Energy Board (“NEB”) approved oil and gas activities that impacted their rights.  In Clyde River, the SCC provided clarity regarding the NEB’s role within the Crown’s obligation to consult and accommodate.  The SCC then assessed the NEB process on the facts of each case, with different outcomes.

Clyde River (Hamlet) v. Petroleum Geo‑Services Inc.

In 1993, the Inuit and Canada entered into the Nunavut Land Claims Agreement (“Agreement”).  The Agreement protects Inuit rights to hunt, fish and trap, including the right to harvest marine mammals.  In 2011, three companies applied to the NEB for authorization under s. 5(b) of the Canada Oil and Gas Operations Act (“COGOA”) to conduct offshore seismic testing for oil and gas resources.  The Inuit of Clyde River (“Clyde River”) opposed this proposed  testing and raised questions regarding its effects on marine mammals in the area, and concerns regarding impacts to their harvesting rights.  The NEB issued an environmental assessment (“EA”) report that concluded that the proponents made sufficient efforts to consult with potentially-impacted Aboriginal groups and to address their concerns. The NEB’s EA report also concluded that Aboriginal groups had an adequate opportunity to participate in the NEB’s process. The NEB issued the authorization.  Clyde River applied for a judicial review of the NEB’s decision to issue the authorization alleging that the Crown had failed to meet its duty to consult.

One of the issues raised in the appeal before the SCC was whether the NEB’s approval process could trigger the duty to consult.  The SCC reasoned that the NEB acted on behalf of the Crown when it made final decisions on a project application and these decisions triggered the duty to consult (regardless of whether the Crown had participated in the NEB process or not).  Here, the SCC saw the NEB as the “vehicle through which the Crown acts” and it did not matter whether the final decision maker was Cabinet or the NEB, in either case the decision constitutes Crown action that may trigger the duty to consult.

The SCC also ruled that while the Crown can rely on steps undertaken by a regulatory agency, such as the NEB, to fulfill its duty to consult, the Crown holds ultimate responsibility for ensuring consultation is adequate.  Whether a regulatory body’s process is sufficient to meet the duty to consult will depend on whether that body has sufficient statutory powers to discharge the obligation.  In the case of the NEB, under the COGOA, it had sufficient procedural powers (to conduct hearings, gather information, conduct assessments and fund participants), and remedial powers (to accommodate Indigenous groups through the imposition of terms and conditions) to carry out consultations.

The SCC went on to say that if the Crown is going to rely on a regulatory process to fulfill its duty to consult, this should be made clear to Indigenous groups.  When a regulatory process has not met the duty to consult, the Crown will be responsible to fill in the gaps.

Because the duty to consult is a constitutional duty and the NEB as a body with the power to decide questions of law must comply with the Constitution, the NEB cannot issue an authorization if the duty to consult has not been met.  While the depth of consultation will depend on the circumstances, where Indigenous Nations have raised concerns, the NEB will be required to substantively address those concerns, usually in written reasons.

In response to arguments that the NEB, who has a mandate to decide issues in the public interest, cannot properly account for Aboriginal rights and the duty to consult, the SCC stated it did not see the public interest and the duty to consult as operating in conflict: a project authorization that breaches the constitutionally protected rights of Indigenous peoples cannot serve the public interest.

The SCC determined that deep consultation at the highest end of the Haida spectrum was required in this case because Clyde River had rights to harvest marine mammals as protected in the Agreement, these rights were extremely important to their economic, cultural and spiritual well-being, and the testing posed great risks to these rights.  However, the consultation that took place fell short in several respects:

  • the Crown failed to notify Clyde River that it was relying upon the NEB process to fulfill its duty to consult;
  • the NEB failed to inquire into Clyde River’s rights and specific impacts on their rights (focussing instead on possible environmental effects); and
  • no oral hearing was provided and no participant funding was offered.

Given this, the SCC found that the quality of consultation was impaired.  The SCC noted that the proponent never clearly or succinctly answered Clyde River’s questions about the impact of the testing on marine mammals.  Instead, its answer came in the form of a “practically inaccessible document dump” consisting of several thousand pages, that was difficult to download and not translated into Inuktitut.

Moreover, the SCC judged the accommodations provided to Clyde River (a commitment to ongoing consultation, a community liaison officer, a traditional knowledge study, and acoustic monitoring) to be “insignificant concessions” given the potential impairment to their rights.  The SCC concluded that none of these concessions gave Clyde River “reasonable assurance that their constitutionally protected treaty rights were considered as rights, rather than as an afterthought to the assessment of environmental concerns.”

As a result, the SCC quashed the NEB’s decision.  The SCC was clear that project approvals that do not conform with the duty to consult should be quashed.  The SCC also strongly encouraged substantive project reviews prior to project approvals to avoid litigation:

… judicial review is no substitute for adequate consultation. True reconciliation is rarely, if ever, achieved in courtrooms. Judicial remedies may seek to undo past infringements of Aboriginal and treaty rights, but adequate Crown consultation before project approval is always preferable to after-the-fact judicial remonstration following an adversarial process. …No one benefits — not project proponents, not Indigenous peoples, and not non-Indigenous members of affected communities — when projects are prematurely approved only to be subjected to litigation.

Chippewas of the Thames First Nation v. Enbridge Pipelines Inc.

In 2012, Enbridge applied to the NEB for approval under s. 58 of the National Energy Board Act (“NEBA”) to reverse the flow and increase the capacity of the Line 9 pipeline that runs through the traditional territory of the Chippewas of the Thames First Nation.  The changes would permit the pipeline to carry heavy crude and increase the risk of oil spills.  There had not been any consultation with the First Nation when Line 9 was originally constructed.

The First Nation requested direct Crown consultation but was notified that the Crown was relying upon the NEB’s public hearing process to meet the duty to consult.  After the NEB approved the changes, the First Nation brought a judicial review alleging a breach of the duty to consult.

As in Clyde River, the SCC determined that the NEB’s decision triggered the duty to consult, that the NEB had the power to carry out consultations pursuant to its broad powers under its legislation and that the NEB had to assess the adequacy of consultation before approving the changes.  The SCC also followed the precedent of its decision in Carrier Sekani that the NEB had to assess the adequacy of consultation even if the Crown did not participate in the NEB process.

In response to submissions from the First Nation that the duty to consult should take into account the broader and cumulative impacts of the pipeline on its rights, the SCC stated that the duty to consult is not the vehicle to address historical grievances.  It added:

 That said, it may be impossible to understand the seriousness of the impact of a project on s. 35  rights without considering the larger context (J. Woodward, Native Law (loose-leaf), vol. 1, at pp. 5-107 to 5-108). Cumulative effects of an ongoing project, and historical context, may therefore inform the scope of the duty to consult (West Moberly First Nations v. British Columbia (Chief Inspector of Mines), 2011 BCCA 247, 18 B.C.L.R. (5th) 234, at para. 117). This is not “to attempt the redress of past wrongs. Rather, it is simply to recognize an existing state of affairs, and to address the consequences of what may result from” the project (West Moberly, at para. 119).

Though the First Nation did not receive explicit notice that the Crown was relying on the NEB process for consultation, the SCC ruled that it was sufficiently clear to the First Nation given that the Crown invited the First Nation to participate in the NEB process and the First Nation understood that there was no other Crown entity involved that would be carrying out consultation.

The Court determined that the process provided by the NEB in this case was sufficient to satisfy the duty to consult.  First, the First Nation was provided an adequate opportunity to participate.  Unlike in Clyde River, the NEB provided the First Nation with participant funding, an oral hearing, and the opportunity to make information requests to the proponent and to make submissions to the NEB.  Second, the NEB sufficiently assessed the potential impacts on the First Nation’s rights.  The NEB recognized the rights advanced by the First Nation and considered the potential negative effects on these rights.  The NEB found that the potential negative effects were minimal and provided appropriate accommodation through conditions that mitigated the potential risks.

In response to the argument that the NEB cannot properly carry out consultation and assess the adequacy of consultation because it has a mandate to make decisions in the public interest, the SCC stated that the duty to consult gives rise to a special public interest which supercedes other public interest concerns, but that:

…this does not mean that the interests of Indigenous groups cannot be balanced with other interests at the accommodation stage. Indeed, it is for this reason that the duty to consult does not provide Indigenous groups with a “veto” over final Crown decisions (Haida, at para. 48). Rather, proper accommodation “stress[es] the need to balance competing societal interests with Aboriginal and treaty rights” (Haida, at para. 50).

Lastly, the SCC determined that the written reasons provided by the NEB were sufficient.  What is required in written reasons “is an indication that the NEB took the asserted Aboriginal and treaty rights into consideration and accommodated them where appropriate.”  Unlike in Clyde River, here the NEB did not subsume its discussion of consultation within an environmental assessment and it reviewed the First Nation’s evidence, identified its rights and interests at stake, and developed sufficient conditions/accommodations.

As a result, the SCC dismissed the First Nation’s appeal.

Potential Implications

Through these decisions, the SCC has brought some much needed clarity regarding the Crown’s duty to consult when regulatory bodies are empowered to review and make decisions regarding projects that impact the title and rights of Indigenous Nations.  Decisions by quasi-judicial regulatory bodies are not shielded from the constitutional requirements of the duty to consult and accommodate.  In addition, provided these regulatory bodies have power to decide questions of law, they must assess whether consultation and accommodations have been adequate before they make a decision that impacts concerned First Nations.  Moreover, while regulatory processes can be used to carry out the duty to consult, the Crown must make its reliance on these processes clear and cannot hide behind the limitations of regulatory processes should such consultations prove inadequate.

These SCC decisions strengthen the constitutional imperative and substantive requirements of the duty to consult and accommodate by clarifying that:

  • the rights of Indigenous groups and the impacts of proposed projects on these rights must be particularly considered by the Crown and regulatory decision makers and cannot be subsumed within more general considerations of environmental effects;
  • as was stated in Haida, the duty to consult is not just a procedural duty but requires the Crown to take Aboriginal rights into “consideration and accommodate them where appropriate” before decisions approving projects are made;
  • the duty to consult, being a constitutional imperative, gives rise to a special public interest that supersedes other concerns typically considered by tribunals tasked with assessing the public interest; and
  • a project that is authorized in circumstances where there is non-compliance with the duty to consult, breaches the constitutionally protected rights of Indigenous peoples and cannot serve the public interest;, if challenged, such an authorization ought to be quashed.

Clearly, making premature project approvals is not in the interests of project proponents, the public, Indigenous peoples or the Crown.  The SCC empowers courts to quash approvals that have been made prematurely, i.e. before adequate consideration of the Indigenous rights, the potential impacts to the exercise of those rights and the substantive accommodations required to address the impacts.

It is also clear that regulatory bodies with expertise on specific matters (such as oil and gas) need the expertise to understand and consider Indigenous title and rights.  That’s a different skill set than typically sought by Crown governments appointing the members of these regulatory boards.

This case summary provides our general comments on the case discussed and should not be relied on as legal advice. If you have any questions about this case or any similar issue, please contact any of our lawyers.