Overview

On July 13, 2011, the Supreme Court of British Columbia issued a decision in Halalt First Nation v. British Columbia (Environment), 2011 BCSC 945. Madam Justice Wedge allowed a challenge by the Halalt First Nation (the "Halalt) to an environmental assessment certificate issued to the District of Cowichan (the "District") on the basis that the Province failed to discharge its duty to consult the Halalt and accommodate its asserted interests.

Facts

The Halalt challenged the environmental assessment certificate issued for a project known as the Chemainus Wells Project (the "Project").  The Project, as originally designed, involved the construction and operation of a well field adjacent to the Halalt's Reserve to extract groundwater from the Chemainus Aquifer.  It was intended to replace the surface water supply system with a groundwater supply in order to provide a secure and reliable year-round source of drinking water to Chemainus. 

The environmental assessment was lengthy and complex, exceeding the statutory timeframe by over five years.  The Project as originally proposed, and throughout much of the environmental assessment process, consisted of three groundwater extraction wells operating simultaneously year round. Tests and studies conducted during the environmental assessment led experts to conclude that groundwater extraction could reduce river flows and have significant adverse effects on fish and fish habitat during the drier summer months.  As a result, the scope of the Project was narrowed to the operation of one well during only the winter months, although it included the ability to apply to remove restrictions on summer groundwater extraction if future testing demonstrated that the adverse effects could be mitigated.  The Halalt was not consulted about the proposed modifications to the scope of the Project before they were made.

The Province acknowledged that it owed a duty to consult with the Halalt in the course of the environmental assessment, and seek to accommodate potential impacts to its asserted Aboriginal rights and title in the Project area.  The Province took the position that the Environmental Assessment Office (the "EAO") engaged in deep consultation with the Halalt during the environmental assessment and that the modification of the Project constituted reasonable accommodation of the Halalt's interests by reducing the amount of groundwater extraction and restricting the months of the year during which extraction may occur. 

The Halalt took the position that the EAO did not engage in a process of deep consultation and that the modification of the Project was not an accommodation of the Halalt's interests.  

Decision

The decision is lengthy and there were many issues before the Court for consideration.  After setting out the applicable legal principles in regards to the duty to consult and the standard of review, the Court held that the consultation and accommodation process was inadequate.  Justice Wedge made the following key findings:

  1. the EAO did not conduct a proper strength of claim assessment at the outset of the environmental assessment or at any time before completing the assessment;
  2. the EAO failed to engage in adequate consultation by failing to consider, and consult with respect to, the impact of year-round operation of the well field; and
  3. the Province's accommodation of the Halalt's interests was inadequate.

The content of the Crown's duty to consult is proportionate to a preliminary assessment of the strength of the case for title or rights and to the seriousness of the potential adverse impact on the title or right claimed.  Correctly determining the extent or scope of its duty to consult requires the Province to assess the prima facie strength of the Aboriginal group's claim.  The Court held that the EAO, as the Province's representative, was required to conduct a preliminary assessment of the strength of those claims.  In this case, the Court held that the assessment did not occur early enough in the environmental assessment process and, in the end, was incorrect. In addition, the Court was critical that the EAO did not discuss its views on the Halalt's strength of claim with the Halalt before the environmental assessment was complete.

In assessing the scope of the duty owed to the Halalt, the Court held that the assessment of adverse impacts had to extend to future potential impacts and to "strategic, higher level decisions".  This finding primarily flowed out of the Court's view that the Project modification was really designed to avoid the review of inevitable aspects of the Project.  Justice Wedge found that although the EAO was narrowing the scope of the environmental assessment, the District still intended to operate the well field on a year-round basis, noting that the District was not about to invest millions in a groundwater extraction system to provide potable water for only two-thirds of the year.  As a result,  the Court viewed the "strategic decision" as the replacement of the surface water supply with a groundwater supply.

In light of its view that the Project had the potential to significantly and adversely affect the Halalt's interests and of the prima facie strength of the Halalt's claims, the Court held that the Province had a duty to engage in deep consultation.  Justice Wedge found that the process that unfolded did not amount to deep consultation because the EAO failed to consider and consult with respect to the year-round operation of the well field.

The Court went on to discuss whether the accommodation offered was adequate, noting that it will be difficult to show adequate accommodation of Aboriginal interests in the wake of inadequate consultation.  The Province took the position that modifications to the scope of the Project constituted reasonable accommodation of the Halat's interests.  The Court disagreed, finding that the modifications to the Projects were not made in consultation with the Halalt, and in essence removed the most potentially harmful aspects of the Project from the environmental assessment process, without truly removing those aspects from future plans for the Project.

The Halalt also submitted that should the Project have received approval, it should have been provided with financial compensation as accommodation.  Without making a determination on the issue, as the Court had found the consultation was inadequate, Justice Wedge stated that there "is no rule or principle of law which suggests that financial compensation as a form of accommodation in pre-proof circumstances is not available to First Nations".  Since the Halalt was seeking to discuss a means of addressing potential infringement of its Aboriginal rights and title, financial compensation was a potential option that should have been available as a means of accommodation for discussion between the Halalt and the Province.

The Court also provided comments on the role of third parties in the duty to consult.  The Court stated that while the Crown can delegate procedural aspects of consultation to industry proponents, it should do so explicitly and with a clear delineation of the areas of the Crown's responsibilities being delegated.  In this case, both the District and the Halalt were found to have no clear understanding of the District's role in consultations or its ability to respond to the Halalt's claims.

In the end, the Court found ordered a stay of any actions or decisions under the provisions of the environmental assessment certificate as a result of the Province's inadequate consultation and accommodation.

Implications of the Decision

Many of the comments in this decision are influenced by the Court's view that the Project was modified during the environmental assessment process in order to receive approval and to remove the most adverse impacts of the originally proposed Project, without a real intention of only proceeding with the modified Project in the long-term.  In addition, the decision does not reference the courts' recent decisions in Upper Nicola Indian Band v. British Columbia (Environment), 2011 BCSC 388 and Nlaka'pamux Nation Tribal Council v. British Columbia (Environmental Assessment Office), 2011 BCCA 78, both of which considered different aspects of the current British Columbia environmental assessment process.  Nonetheless, the decision provides several comments that can be taken away more generally to help guide consultation on future projects.

This decision underscores the importance of the Crown correctly conducting a preliminary assessment of the strength of claim of asserted Aboriginal rights and title.  Further, where the assessment is different than the extent of rights asserted by the First Nation, those differences should be raised in consultation with the First Nation.  If the assessment of strength of claim is incorrect, then the assessment of the scope of the duty owed will likely be incorrect and lead to a flawed consultation process. 

The Court has again reiterated the need to consult on proposed accommodation measures.  What is of interest in this decision is the Court's comment regarding the availability of financial compensation as an accommodation measure – a point that has been disputed in pre-proof aboriginal consultation cases and has received very little judicial comment to date.

Lastly, the Court's statement regarding the delineation of responsibilities when delegating procedural aspects of consultation to project proponents will require greater communication between project proponents, First Nations and the Crown throughout the consultation process.

To view the decision, click here.