On October 28, 2010, the Supreme Court of Canada released its unanimous decision in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, which confirms that prior and continuing impacts on Aboriginal rights, including prior failures to consult, will only trigger a duty to consult if the present decision has the potential to cause a novel adverse impact on a present claim or existing right. Furthermore, so long as a tribunal has been given the power to determine questions of law and public interest, it will be able to decide constitutional questions before it, such as assessing the adequacy of consultation, unless this power has been specifically removed from its jurisdiction by the legislature.

Background

Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43 (the Decision), arose out of an application by Rio Tinto Alcan (Alcan) to the British Columbia Utilities Commission (the Commission) for approval of an Energy Purchase Agreement (EPA) between Alcan and the British Columbia Hydro and Power Authority (BC Hydro) with respect to power produced from Alcan’s existing Kemano hydro-electric facility. The Kemano facility had been built in an area claimed as Carrier Sekani Tribal Council (CSTC) traditional territory in the 1950s, and no consultation was undertaken at that time. The CSTC claimed that the Kemano facility impacted their Aboriginal fishing rights and that the Crown owed them a duty to consult prior to entering into the EPA. The Commission found that its decision on whether to approve the EPA had no potential to adversely affect CSTC interests, as the EPA would have no influence on how the Kemano facility was operated. Accordingly, the Commission held that the duty to consult was not triggered and approved the EPA. For a complete factual history of the case, please refer to Osler Update of February 26, 2009, Tribunals to Decide Adequacy of Crown’s Duty to Consult and Accommodate.

The CSTC appealed the Commission’s decision and the British Columbia Court of Appeal held that the Commission had the responsibility to assess the adequacy of consultation. While not bound to find a duty to consult in all cases, the Court of Appeal held that the Commission’s error was in not entertaining the issue of consultation within the scope of a full hearing when the circumstances demanded it. Alcan and BC Hydro successfully appealed the Court of Appeal’s decision.

When the Duty to Consult Arises

The Supreme Court of Canada (the Court) relied on the following well-established three-part test to determine whether a duty to consult exists: (1) the Crown must have actual or constructive knowledge of a potential Aboriginal claim or right; (2) there must be Crown conduct contemplated; and (3) the Crown conduct must have the potential to adversely affect the Aboriginal claim or right. The Court emphasized that prior and continuing breaches, including prior failures to consult, will only trigger the duty to consult if the present decision has the potential of causing a novel adverse impact on a present claim or existing right (i.e. the third prong of the test).

The Commission’s Findings

The Commission’s determination that the EPA could not adversely affect Aboriginal interests was a question of mixed fact and law; the Court applied the above three-part test to determine whether the duty to consult had been triggered. As the first two steps had clearly been met, the real issue was whether a fresh duty to consult had arisen. The Court had to determine whether approval of the EPA would create a novel adverse impact on current claims and rights.

The Court agreed with the Commission that the EPA would not result in any new physical impacts on the CSTC and, because the new management regime for the Kemano facility would include BC Hydro, CSTC’s rights to be consulted in the future regarding operational decisions that could impact their rights or interests would not be affected. The Court concluded that the Commission’s finding that the EPA will not adversely affect the claims and rights held by the CSTC was not unreasonable and should be upheld, and that the Commission correctly found that the duty to consult had not been triggered.

The Role of a Tribunal in Considering Adequacy of Consultation

The Court held that a tribunal’s duty to consider both the scope and adequacy of consultation and the scope of its inquiry depends on the mandate conferred by the legislation that creates the tribunal. The power to consider questions of law and the public interest requires a tribunal to consider the adequacy of consultation, unless that power is otherwise expressly excluded from the tribunal’s jurisdiction. Pursuant to the Administrative Tribunals Act, (the Act) the Commission does not have jurisdiction over constitutional matters. The term “constitutional question” is defined in the Act to include only challenges to the constitutional validity or constitutional applicability of a law. While the Act expressly excludes narrow constitutional questions from the Commission’s jurisdiction, the Court found that the Act does not indicate a clear intention on the part of the legislature to exclude the ability of the Commission to consider whether the Crown had discharged its duty to consult.

Implications for Proponents

This Decision is significant for natural resource developers as it confirms that the Crown’s duty to consult is confined to the potential adverse impacts flowing from the current government decision. Once a project is approved, it is unlikely that a subsequent approval for that project will trigger a further duty to consult unless the additional approval has the potential to create novel adverse impacts on Aboriginal rights.

While developers have long had a vested interest in managing the consultation process to ensure that the Crown meets its duty, this Decision also suggests that it is now more important than ever for proponents to include a strong consultation record at the application stage of a project, since the adequacy of consultation can be considered at the tribunal level prior to project approval. This also presents an opportunity for proponents to reduce project risk on the basis of a strong initial evidentiary record.