On May 14, 2014 the British Columbia Supreme Court released its decision in Ehattesaht First Nation v British Columbia (Forests, Lands and Natural Resource Operations), 2014 BCSC 849. The case concerned an application for judicial review of a Ministerial decision (Decision) to allocate timber undercut within a Tree Farm Licence (TFL) held by Western Forest Products Inc. (Western) on the west coast of Vancouver Island.  The Decision reduced the unharvested volume potentially available to the Ehattesaht. The Crown did not consult the Ehattesaht regarding this Decision. The Court recognized that a duty to consult extends to this situation where the government decision may have a potential adverse effect on a First Nation’s economic interests, as opposed to an Aboriginal right.

The Ehattesaht First Nation (Ehattesaht) asserts Aboriginal rights and title to an area within a TFL held by Western. The Minister’s Decision retained 25% of timber undercut in the TFL and returned the remaining 75% to the TFL inventory, thereby capping the portion of undercut that could be allocated to Ehattesaht at 25%. Ehattesaht was not notified that the matter was under consideration. The issue before the Court was whether the province had a duty to consult Ehattesaht in respect of the Decision. The province and Western argued that there was no duty to consult because the affected Aboriginal interest was an economic interest as opposed to an Aboriginal right.

Since 2005, Ehattesaht has had the opportunity to harvest timber within the TFL through Forestry Accommodation Agreements with the province. The licences issued pursuant to these agreements began to expire in December 2012. During negotiations for a new tenure agreement, Ehattesaht advocated that the province should provide interim accommodation of its Aboriginal rights and title through the reallocation of TFL undercut to Ehattesaht.

The Forest Act, RSBC 1996, c 157, governs the harvesting of Crown timber in British Columbia. While the holder of a TFL has the exclusive right to harvest timber in the TFL area, the holder must obtain further authorizations to undertake harvesting activities. At the end of a cut control period, any undercut is returned to the Crown and cannot be harvested by the licensee. The undercut may be disposed of by way of certain types of tenure agreement specified under the Forest Act.

In assessing whether there was a duty to consult in respect of the Decision, the Court applied the three conditions established by the Supreme Court of Canada in Haida Nation v British Columbia (Minister of Forests): (1) the Crown’s knowledge, actual or constructive, of a potential Aboriginal claim or right; (2) contemplated Crown conduct; and (3) the potential that the contemplated conduct may adversely affect an Aboriginal claim or right.

With respect to the first condition, it was not disputed that the Crown had knowledge of Ehattesaht’s claims of Aboriginal right and title to the lands within the TFL. This was demonstrated by Ehattesaht’s interest in the allocation of the TFL undercut. As to the second condition, the events preceding the Decision clearly constituted “contemplated Crown conduct.” The Ministry had engaged in extensive consultation with Western prior to making the Decision; however, there was no consultation whatsoever with Ehattesaht. Regarding the third requirement, the Court held that the Decision had the potential to adversely affect Ehattesaht’s interest because it capped the portion of the TFL undercut that could be allocated to Ehattesaht at 25%. As a result, it would be impossible for Ehattesaht to be allocated any of the undercut that was returned to the inventory of the TFL. Based on these findings, the Court concluded that the Crown had a duty to consult Ehattesaht prior to making the Decision. In the result, the Decision was quashed.

The Court appears to focus on the fact that there was no consultation whatsoever in the circumstances of this case. Additionally, the Court noted that consultation may be triggered regarding strategic, higher level decisions and conduct “that sets the stage for further decisions that will have a direct adverse impact on the lands” (para. 59) and that government decisions triggering the duty to consult are not limited to solely those decisions causing physical effects. Further, this case highlights the risks that may be encountered when there is a complete lack of consultation between the Crown and a First Nation, regardless of the legal arguments being relied upon.