On July 26, 2017, the Supreme Court of Canada (SCC) released its decisions in Hamlet of Clyde River, et al. v. Petroleum Geo-Services Inc. (PGS), et al. and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., et al. These appeals, which were heard on November 30, 2016 and previously discussed here, relate to the permissible scope of Crown reliance on regulatory processes and proponents to discharge the duty to consult and the role of the National Energy Board (NEB) and other regulatory tribunals in Aboriginal consultation and accommodation.

In both decisions, the SCC affirmed that the Crown can rely in whole or in part on regulatory processes to fulfill the duty to consult but that the Crown must take further measures to meet its duty to consult if the regulatory process being relied upon does not achieve adequate consultation or accommodation. The SCC also clarified that decisions of regulatory tribunals and agencies can constitute “Crown conduct” for the purposes of triggering the duty to consult if they are in effect acting on behalf of the Crown when making a final decision through delegated authority, even if they are not strictly speaking the “Crown” or an agent of the Crown at law.

While both cases relied upon NEB processes, the SCC reached very different conclusions regarding the adequacy of consultation for each decision based on the particular facts. In Clyde River, the Court found that the duty to consult had not been met and quashed the NEB approval at issue for a seismic testing program in Nunavut. In contrast, it concluded in Chippewas of the Thames that there had been adequate consultation for the proposed pipeline reversal and capacity expansion project and dismissed the appeal.

The following short summary of both decisions will be followed by a more detailed analysis of these decisions on our blog in the next several days.

Hamlet of Clyde River v. TGS-NOPEC Geophysical Company ASA (TGS)

The first appeal, Clyde River, arises from an alleged failure to adequately consult before the NEB granted a Geophysical Operations Authorization to conduct a two-dimensional seismic survey program in Baffin Bay and the Davis Strait during the open water season for up to five years. The program had the potential to impact the Inuit of Clyde River’s treaty rights to harvest marine mammals under the Nunavut Land Claims Agreement (1993).

The Hamlet of Clyde River (Kanngiqtugaapik) brought an application for judicial review of the NEB’s decision before the Federal Court of Appeal (FCA) on the basis, among other things, that the Crown had failed to fulfill its duty to consult with the Inuit of Clyde River and other Baffin Island communities. The Crown did not undertake any consultation outside the NEB process and the appellants argued that the NEB process was not a substitute for formal consultation and that the proponents’ consultation efforts were inadequate, among other things. The FCA agreed with Clyde River that the Crown’s duty to consult was at the deep end of the spectrum, but held that it had been discharged by the NEB’s environmental assessment and regulatory process. Clyde River appealed the FCA’s decision to the SCC.

The SCC overturned the decision of the FCA, quashing the NEB’s Authorization. The SCC held that the NEB’s decision-making process constituted Crown conduct that triggered the duty to consult. As the final decision-maker, the NEB was responsible for ensuring that consultation had been adequately fulfilled, before reaching its decision. In this case, consultation was inadequate and the decision must therefore be quashed.

In reaching its decision, the Court made the following notable findings:

  • The SCC provided some long-anticipated clarity since Rio Tinto on the questions of what constitutes the Crown and Crown action for the purposes of fulfilling the duty to consult in the context of regulatory tribunals. The Court held that the “Crown” for the purposes of the duty to consult refers to the exercise of executive power. Although the NEB is not strictly the “Crown” or an agent of the Crown, it does exercise executive power on behalf of the Crown pursuant to its statutory authority, and “is the vehicle through which the Crown acts”. Therefore, the action of the NEB to make final decisions clearly constitutes Crown conduct. It does not matter whether the final decision maker on a resource project is Cabinet or the NEB. (paras. 28-29)
  • Given the flexible nature of the duty to consult, a process that was originally designed for a different purpose may be relied on by the Crown to carry out the duty, so long as it affords an appropriate level of consultation. The Court held that the NEB has a significant array of procedural and remedial powers as well as institutional expertise that permit extensive consultation and accommodation. Accordingly, the Crown may rely on the NEB to partially or completely fulfill the duty to consult, including to determine whether the duty to consult has been fulfilled. (paras. 31-37)
  • If the regulatory process being relied upon does not achieve adequate consultation or accommodation, the Crown must take further measures to meet its duty. This may involve filling any gaps on a case-by-case basis or through legislative or regulatory amendments, or through other measures such as making submissions to the regulatory body, requesting reconsideration of a decision, or seeking a postponement to allow for further consultation in a separate process before the decision is reached. (para. 22)
  • Where the NEB is the final decision maker, it must withhold project approval if the duty to consult remains unfulfilled. Any decision affecting Aboriginal or treaty rights made on the basis of inadequate consultation will not be in compliance with the duty to consult, and if challenged, should be quashed on judicial review. (para. 24)
  • In this case, deep consultation was required, considering the Inuit’s established treaty rights to hunt and harvest marine mammals and the potentially high risk of the seismic testing affecting such rights. (para. 43) Consultation fell short in the following ways:
    • The focus of the NEB’s assessment was on adverse environmental impacts and mitigation measures, rather than on the specific effects of the activities on the appellants’ traditional resource use.
    • It was not made clear to the Inuit that the Crown was relying on the NEB’s process for fulfilling the duty to consult. The Crown should make it clear to affected Indigenous groups if it is relying on the processes of a regulatory body to fulfill its duty, whether in whole or in part, including providing guidance on the form of the consultation process to allow for their participation and to raise concerns.
    • Lastly, the Inuit had insufficient opportunities to participate in the consultation process, which lacked oral hearings and did not provide participant funding. (paras. 23, 45-47)

Chippewas of the Thames v. Enbridge Pipelines Inc.

The second appeal, Chippewas of the Thames, stems from the NEB’s approval of an application to reverse the flow and increase the capacity of part of an existing pipeline in Ontario pursuant to s. s. 58 of the National Energy Board Act. The NEB granted the approval after concluding that any impact on the Appellants’ asserted or established Aboriginal or treaty rights would be minimal and mitigated, and that the approval of the Project was in the public interest. The NEB also indicated that it was satisfied with the level of Aboriginal engagement that the proponent conducted for the project.

The Chippewas of the Thames First Nation (the COTFN) brought an application for judicial review before the FCA, arguing that these it had not been consulted by the Crown (the NEB was the final decision-maker) and that the NEB erred by, among other things, failing to specifically determine whether the Crown had fulfilled the duty to consult. The majority of the Federal Court of Appeal dismissed the appeal, holding that the NEB was not required to discharge the duty to consult for the Crown and was not required to determine whether the Crown fulfilled the duty to consult prior to rendering a decision.

Unlike Clyde River, the approval at issue was dealing with a change to an existing project with virtually all of the required construction taking place on previously disturbed lands owed by the proponent or on the proponent’s existing right-of-way. The rights at issue were also asserted Aboriginal rights versus established treaty rights.

In dismissing the appeal, the SCC disagreed with the majority of the Federal Court of Appeal and found that the duty to consult had been triggered by the NEB decision even though there was no separate Crown decision or Crown involvement in the process. Similar to Clyde River, the SCC concluded that “the Crown’s constitutional obligation does not disappear when the Crown acts to approve a project through a regulatory body such as the NEB” (para. 36). However, the SCC went on to determine that the Aboriginal consultation and accommodation undertaken for this project through the NEB process was sufficient to meet the duty to consult. In dismissing the appeal, the SCC made a number of notable findings some of which reaffirmed existing law including:

  • In the context of existing projects, the subject of consultation is the impact of the current decision at issue on asserted or established rights. The duty to consult is not triggered by historical impacts and is not the vehicle to address historical grievances but the historical context and cumulative effects of an ongoing project may inform the scope of the duty to consult. (paras. 41-42)
  • Given its expertise in supervising and approving federally regulated pipeline projects, the NEB is “particularly well-positioned to assess the risks posed by such projects to Indigenous groups” and its existing statutory powers which afford it broad jurisdiction to impose conditions and oversee compliance were capable of satisfying the duty to consult in this particular case. (para. 48)
  • The process undertaken by the NEB was sufficient because the COTFN were provided an adequate opportunity to participate in the decision-making process (including as an intervener in oral hearing with capacity funding and an opportunity to tender evidence, pose information requests to the proponent, and make closing oral submissions), the NEB sufficiently assessed the potential impacts on the rights of Indigenous groups, and provided appropriate accommodation through the imposition of conditions on the proponent (paras. 51-57)
  • The NEB’s reasons on the Aboriginal consultation undertaken in this case were sufficient, which unlike Clyde River were not subsumed within the environmental assessment and specific to impacts on asserted and established rights. The NEB was not required in this case to engage “in a formulaic Haida analysis” in its reasons regarding the depth of consultation required. Instead, the NEB was required to show in its reasons that it “took the asserted Aboriginal and treaty rights into consideration and accommodated them where appropriate,” which it did. (para. 63-64)
  • A decision to approve a project “cannot be in the public interest if the Crown’s duty to consult has not been met” but “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.” (para. 59)

As noted above, stay tuned to our ERA blog for a more detailed analysis of these decisions and their implications which will be posted in the next several days.