Yellowknives Dene First Nation v. Canada (Attorney General), 2010 FC 1139

Federal Court, November 12, 2010

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The Facts

The Applicants, the Yellowknives Dene First Nation (Yellowknives) and the Lutzel K’e Dene (Lutzel K’e), brought a judicial review of the decision of the Mackenzie Valley Land and Water Board (the Board) to issue a land use permit for mineral exploration to North Arrow Minerals Inc. (North Arrow) . The exploration was to occur on lands that formed part of the traditional territory of the Applicants.

In December 2008, North Arrow approached the Board and was advised to consult the affected First Nations. North Arrow provided information to the Chiefs and Councils of the Yellowknives and the Lutzel K’e. In response, North Arrow was presented with a template Exploration Agreement developed under the Akaitcho Exploration Guidelines. The template included ongoing consultation, employment and business opportunity, possible archeological study and other mitigation measures. Costs were to be born by the proponent North Arrow.

While the communities indicated that an Agreement must be signed, they also indicated willingness to negotiate. Both First Nations were informed by North Arrow that their proposed agreements were unacceptable. No further consultation occurred. North Arrow advised the Board that consultation with the Bands was complete and filed its application for the permit .

The Board notified the First Nations of the application and requested written comments. Both First Nations responded by informing the Board that the permit would infringe their constitutional rights and that they had not been properly consulted. The Board took the position that it is not responsible for determining whether Crown consultation has occurred. INAC advises the Board when consultation is complete and the Board then issues the land use permit. The Board consulted with INAC and was informed that the legal duty to consult had been met. The Board issued North Arrow the land use permit.

The Decision of the Court

The principal issues on review were whether the Board had a responsibility to evaluate the adequacy of the Crown’s efforts to consult and whether the Applicants had been adequately consulted.

The Federal Court rejected the Respondent’s submission that it had no statutory jurisdiction to consider whether the duty to consult had been met. Following the ruling of the Federal Court Appeal in Standing Buffalo, the Court held that a federal board must act in accordance with s. 35 of the Constitution and must take the concerns of Aboriginal people into account in the exercise of its jurisdiction. While the Court found that the Board was justified in inquiring of INAC whether consultation had taken place, it was not justified in relying on the word of one party alone.

In evaluating the adequacy of the consultation, the Court held that the Board was right to consider the efforts undertaken by North Arrow. However, the Court found that North Arrow’s efforts had been entirely inadequate, that it had unilaterally cut off negotiations at the first offer and that it had failed to follow the Board’s own guidelines on consultation. Finally, the Court stated that even if the Board’s guidelines had been followed, it is not sufficient to establish a framework, process or system to facilitate negotiations and then place it on autopilot and hope for success. Rather it is necessary to evaluate the actual implementation and processes in each case.

The land use permit was quashed.

The decision serves as a reminder that project proponents and private sector entities must always be mindful of the potential impact of the Crown’s duty to consult and accommodate. Failure to get it right can lead to significant delays as well as potential litigation and reputational costs.

This case is also a strong reminder for governments and industry that a consultation process without a face to face meeting is unlikely to be upheld by the courts.

Finally, this case reaffirms the earlier caselaw that emphasizes that consultation must take place before decisions are made and prior to any impact on potential rights.