On November 4, 2015, in The First Nation of Nacho Nyak Dun v. Yukon, 2015 YKCA 18 (the “appeal decision”), the Yukon Court of Appeal unanimously allowed the Yukon government’s appeal, but only in part. The Court reinforced the trial judge’s findings by concluding that the Yukon government did not act in accordance with its treaty obligations, as set out in the Umbrella Final Agreement’s required land-use planning processes. As a result, the Yukon still does not have the power to unilaterally introduce a land-use plan for the Peel Watershed (the “Watershed”). However, the Court of Appeal did find that the remedy given by the trial judge was improper. The process will now be remitted back to the planning stage that was previous to the Peel Watershed Planning Commission’s (the “Commission”) Final Recommended Report (“Final Recommended Plan”), instead of being remitted back to the stage which actually considers the Final Recommended Plan.

Background

The Watershed is a remote and relatively undeveloped region in the Yukon that spans an area of 67,431 square kilometres. The Government of Yukon (“Yukon”) manages 97.3% of the Watershed, which is Crown land. Four First Nation governments, including the First Nation of Na-Cho Nyak Dun, the Tetlit Gwich’in Council, Tr’ondëk Hwëch’in, and the Vuntut Gwitchin First Nation, hold traditional territories in the region and own and manage the remaining 2.7% of the Watershed.

The Yukon has several First Nation Final Agreements (“Final Agreements”) with various Yukon First Nations. These Final Agreements adopt terms from what is called the Umbrella Final Agreement (“UFA”) and are considered constitutionally-protected treaty “land claims agreements” within the meaning of s. 35 of the Constitution Act, 1982. Chapter 11 of the UFA establishes a blueprint for land-use planning processes and requires that consideration be given to both the interests of the Yukon and First Nations. First Nations have primary authority over settlement lands, and the Yukon has primary authority over non-settlement lands. The UFA also established the Commission. The Commission’s purpose was to create land use plans for the Watershed – plans that the Yukon and/or First Nations governments could “approve, reject, or modify”.

In July 2011, after several years of consultation with the Yukon and First Nations governments, the Commission produced the Final Recommended Plan for non-settled lands within the Watershed. The Final Recommended Plan called for 55% of the region to be fully protected as Special Management Areas, 25% to be designated as wilderness areas, and 20% to be used for encouraging “industrial development and access” opportunities, subject to key land-use and environmental management considerations, including enhanced community consultation where specified.

In 2014, the Yukon exercised its power to “modify” the plan under the UFA, and produced a revised land-use plan, called the Peel Watershed Regional Land Use Plan of January 2014 (the “Government Approved Plan”). The Government Approved Plan was significantly different from the Final Recommended Plan. It offered 30% protection and allowed 70% development of the non-settled lands, subject to some restrictions.

Trial Decision

In The First Nation of Nacho Nyak Dun v. Yukon (Government of), 2014 YKSC 69 (the “trial decision”), certain First Nations and environmental groups (collectively, the “Plaintiffs”) brought suit against the Yukon on the basis that the Government Approved Plan represented a breach of its UFA land-use planning obligations. The Plaintiffs sought a declaration that the Government Approved Plan be quashed and that the final consultation be re-conducted with specific court direction limiting the Yukon’s ability to modify the Final Recommended Plan. The Yukon responded first that the Government Approved Plan was valid. If the Government Approved Plan was not valid, the Yukon submitted that the appropriate remedy would be to remit the process all the way back to the initial consultation step that occurred before the Final Recommended plan (the Yukon’s “alternative argument”).

On December 2, 2014, the trial judge Veale J. released his decision and allowed the Plaintiffs’ action. The decision was not concerned with the Watershed’s proper land-use, but rather the proper interpretation of the parties’ power to “approve, reject, or modify” land-use plans made pursuant to the UFA.

In his analysis, Veale J. assessed the Yukon’s actions on a standard of correctness. He found that the UFA land-use planning provisions referred to in the applicable Final Agreements require a large, liberal and contextual approach that furthers the objective of reconciliation and upholds the honour of the Crown, as per the oft-cited cases of Haida Nation v. BC (Minister of Forests), 2004 SCC 73 and Manitoba Metis Federation Inc. V. Canada, 2013 SCC 14. Veale J. also found that the purpose of the UFA contemplates a collaborative and consultative approach to developing land-use plans on both settlement and non-settlement land located in First Nations' traditional territories.

The Court ultimately found that the Yukon’s previous steps, including those prior to the Final Recommended Report, had included meaningful consultation between the parties, whereas the final step, immediately following the Final Recommended Report, did not. The Yukon did not consult with or consider the First Nations’ response before submitting their modifications, which “betrayed the spirit” of the UFA. The Yukon also failed to consult with the Commission about their proposed modifications and failed to set out sufficient details to explain how they would accomplish the proposed modifications. The Yukon's "Eight Core Principles", which supposedly guided the completion of the Watershed land-use plan, were found to be insufficient and too vague.

In giving its remedy, the Court decided to quash the Government Approved Plan. The Court then dismissed the Yukon’s alternative argument, and held that the process should be remitted back to the consultation stage that considered the Commission’s Final Recommended Plan.

Appellate Decision

The Yukon appealed the trial decision to the Yukon Court of Appeal, arguing again that the Government Approved Plan was valid and that it had fulfilled its obligations to consult under the UFA. The Yukon also re-advanced its alternative argument. The respondent First Nations and environmental groups again responded that the negotiations should be remitted to the Final Recommended Plan stage, as per the trial decision.

Speaking unanimously for the Court, Chief Justice Bauman held that the Yukon “failed to honour the letter and spirit of its treaty obligations”, as required by the UFA land-use planning terms adopted in Final Agreements with First Nations. More specifically, the Yukon failed to reveal its extensive plan modifications, as set out in the Government Approved Plan, to both the Commission and the applicable First Nations. The Yukon also failed to provide sufficient details or reasons in support of its general comments on the modifications. These failures ultimately were found to have undermined the Commission’s role and ability to advance the process forward.

Bauman C.J. also reiterated that the Final Agreements envisioned a consultative and collaborative process between government and First Nations. Bauman C.J. reinforced that the Yukon, by unilaterally introducing the Government Approved Plan, had “derailed” the meaningful dialogue that was essential to reconciliation between the government and First Nations. This derailment, caused by the unilateral introduction of the Government Approved Plan, was again held to have “disconnected” the continuous consultation process. This disconnection prevented the Commission from fulfilling its obligations under the UFA because it could not properly develop a land-use plan for the Watershed.

However, the Court allowed the appeal in part by accepting the Yukon’s alternative argument. In doing so, the Court of Appeal decided to return the process back to the point where the consultation process became “derailed”. The Court found that the point of derailment was earlier than the point decided upon in the trial decision. The matter will now be remitted to a stage prior to the implementation of the Commission’s Final Recommended Plan. Much to the chagrin of First Nations and environmental groups, this means that the Commission’s Final Recommended Plan is not applicable and will not necessarily be implemented.

Summary

Although this decision could be characterized as a win by both parties, it represents a large step backwards in time for the Watershed land-use negotiation and consultation process. The decision clarifies that the power of Yukon to “modify” a land use plan is limited by the government’s constitutional duty to consult throughout the land-use planning process.

The Peel Watershed matter will now be returned back to the point where the Court has found that Yukon ceased to engage in meaningful consultation and dialogue with First Nations groups. This point is now prior to the introduction of the Commission’s Final Recommended Plan; a plan which was favoured by the plaintiffs. Yukon now has an opportunity to consult and then respond to the Commission’s Recommended Plan. Only time will tell if the parties decide to get down to that consultation or to the appeal the decision to the Supreme Court of Canada.