Overview

On July 26, 2017, the Supreme Court of Canada (“SCC”) released the companion decisions of Clyde River (Hamlet) v. Petroleum Geo-Services Inc.[1] (“Clyde River”) and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc.[2] (“Chippewas”). The SCC in the Clyde River and Chippewas cases addressed the important question of whether the Crown can fulfill its duty to consult by relying on the steps undertaken by a regulatory agency, as opposed to directly participating in the consultation process. The SCC also provided guidance on what practices would be sufficient to make the process of consultation adequate.

Background

Clyde River

In Clyde River, TGS-NOPEC Geophysical Company ASA, Multi Klient Invest As and Petroleum Geo-Services Inc. (the “Proponents”) applied to the National Energy Board (the “NEB”) for approval to conduct offshore seismic testing in Baffin Bay and Davis Strait, Nunavut (the “Project”). The Project was to consist of towing an air-gun that produces underwater sound waves through Baffin Bay and Davis Strait in an effort to locate underwater oil and gas resources. Baffin Bay and Davis Strait are adjacent to an area in which the Inuit, including the Hamlet of Clyde River (“Clyde River”), have the treaty right to harvest marine mammals under the Nunavut Land Claims Agreement.

The NEB launched an environmental assessment of the Project. Clyde River was opposed to the Project and filed a petition against it with the NEB. Two years after the petition was filed by Clyde River, the NEB and the Proponents carried out meetings in a number of communities to collect comments on the Project. During the meetings, the Proponents were unable to answer many of the basic questions asked by community members regarding the effects of the Project on marine mammals.

Following the community meetings, the NEB suspended the environmental assessment to allow the Proponents the opportunity to gather additional information. In response, the Proponents produced and filed with the NEB a 3,926 page technical document. The Proponents purported that the document contained sufficient information to address the concerns that had been raised to that point. However, the document was not translated to Inuktitut and there was no meaningful follow-up by the NEB or the Proponents with the affected communities to determine if the document was accessible and understood or whether it provided sufficient answers to address their concerns about the impacts to marine mammals. Without holding any formal hearing, the NEB ultimately granted approval for the Proponents to carry out the Project, despite the concerns of Clyde River and other communities and stakeholders.

Chippewas

In Chippewas, Enbridge Pipelines Inc. (“Enbridge”) applied to the NEB to modify its existing Line 9 pipeline in order to reverse its flow, increase its capacity, and enable it to transport crude oil (the “Application”).

Upon receiving the Application, the NEB provided notice to the affected First Nations including the Chippewas of the Thames (the “CTFN”) and other stakeholders, informing them of the project, the NEB’s role, and the NEB’s upcoming hearing process. The CTFN was provided with funding to participate in the NEB’s hearing process. They filed evidence and delivered oral arguments at the hearing.

Ultimately, the NEB granted approval for the Application and imposed conditions on the approval to accommodate the concerns of the affected Indigenous groups.

SCC Decisions

Clyde River

In Clyde River, the SCC considered the following four issues:

  1. Can the NEB approval process trigger the duty to consult?
  2. Can the Crown rely on the NEB’s process to fulfill the duty to consult?
  3. What is the NEB’s role in considering Crown consultation before approval? and
  4. Was the consultation adequate in this case?

On the first issue, the SCC held that the NEB approval process triggered the duty to consult. Although the NEB is an independent regulatory agency, the NEB had acted on behalf of the Crown as its agent when making a final decision on whether to approve the Project, triggering the duty to consult.

On the second issue, the SCC held that the Crown can rely on the steps undertaken by a regulatory agency to fulfill its duty to consult in part or in full, so long as the regulatory agency possesses the statutory powers to do what the duty requires in the particular circumstances. However, the ultimate responsibility for ensuring the adequacy of consultation remains with the Crown. If the regulatory agency’s powers are insufficient or the regulatory agency does not provide adequate consultation, the Crown must take further measures to meet its duty. In this case, the NEB has broad powers to carry out consultation and accommodation, which include: holding hearings, requesting additional information, requiring studies to be completed, providing funding for participation, and imposing conditions on any approval. Based on the NEB’s powers to consult, accommodate, and its institutional knowledge and expertise, the SCC determined that the Crown could rely wholly or in-part on the NEB to carry out consultation and accommodation in respect of the Project.

On the third issue, the SCC held that what is required to review the adequacy of consultation by a regulatory agency will be determined on a case-by-case basis. Where a deep duty of consultation is owed, generally, written reasons that explain how the concerns of the Indigenous groups were considered by a regulatory agency will be required.

On the fourth issue, the SCC held that the consultation was inadequate and misdirected. As for the adequacy of consultation, the SCC found that the NEB approval process did not meet the requirements for deep consultation. For example, the NEB did not provide participant funding or hold oral hearings with respect to the Project. For the focus of consultation, the SCC determined that whereas the NEB considered the environmental effects of the Project, it did not properly address the effect of the Project on the treaty rights at stake. In addition to these factors, the SCC also determined that the NEB did not make it clear to Clyde River that the Crown was relying on the NEB to fulfill its duty to consult in respect of the Project.

Chippewas

In Chippewas, in addition to affirming the principles that it had outlined in Clyde River, the SCC considered the following issues:

  1. What is the scope of the duty to consult?
  2. Was the CTFN provided with an adequate notice that the Crown was relying on the NEB’s process to fulfill its duty to consult?
  3. Was the Crown’s consultation obligation fulfilled in this case? and
  4. Were the NEB’s reasons on the Application sufficient?

On the first issue, the SCC reiterated that the degree of consultation depends on the strength of the Aboriginal claim and the seriousness of the potential impact. The SCC also affirmed that the duty to consult is not triggered by and is not a vehicle to address historical grievances. The subject of the consultation is limited to the current decision under consideration. Nonetheless, cumulative effects of an ongoing project and historical context may inform the scope of the duty to consult.

On the second issue, the SCC held that although the Crown did not explicitly advise the CTFN that it intended to rely on the NEB process to fulfill its duty to consult until after the NEB’s hearing process was complete, the circumstances of the case made it sufficiently clear to the CTFN that the NEB process was intended to constitute Crown consultation. In this case, the NEB informed the CTFN and other affected Indigenous groups of the project in advance of a formal hearing. The CTFN was invited to participate in the NEB process and appeared as an intervenor. A letter from the CTFN also indicated that they knew that no other Crown entity was involved in the process of consultation.

On the third issue, the SCC determined that the consultation carried out by the NEB was adequate because:

  • the CTFN was provided with an adequate opportunity to participate in the NEB process;
  • the NEB sufficiently assessed the potential impacts on the rights of the CTFN and determined that the risk of negative consequences was minimal and could be mitigated; and
  • the NEB provided appropriate accommodation by imposing conditions on Enbridge.

On the final issue, the SCC held that the NEB’s reasons were sufficient. The SCC affirmed that where deep consultation is required and the issue of Crown consultation is raised, the regulatory agency will be obligated to explain in writing how it considered and addressed the concerns of the Indigenous groups. In this case, the NEB reviewed the asserted Aboriginal and treaty rights of the CTFN, considered the risks of the project on those rights and interests, and provided accommodation to minimize the negative impact on those rights and interests.

Implications for Resource Development in Canada

Through these companion cases, the SCC provided guidance on the following matters:

  1. What is the scope of the duty to consult?
  2. Under what circumstances can the Crown’s duty to consult be fulfilled by a regulatory agency? and
  3. What factors may be considered to assess the adequacy of Crown consultation carried out by a regulatory agency?

Scope of the duty to consult

The duty to consult is not triggered by historical impacts and should be limited to the impacts on the claimed rights of the current decision under consideration. Consultation on a specific project is not an opportunity to address historical grievances. However, when assessing the impacts of a project on the claimed rights, a decision maker may be required to consider the historical context in order to properly understand the impacts to the rights.

Circumstances to allow a regulatory agency to fulfill the Crown’s duty to consult

The Crown will be able to rely on the consultation process of a tribunal or regulatory agency, so long as the regulatory agency has the statutory powers to conduct adequate consultation. If the statutory powers are limited or the consultation is inadequate, the Crown must provide alternative measures for meaningful consultation and accommodation.

Where affected Indigenous groups have raised concerns about the adequacy of consultation before a tribunal or regulatory agency, the tribunal or regulatory agency must consider and address these concerns in written reasons. There needs to be indication that they considered the asserted Aboriginal and treaty rights and any negative consequences on those rights and accommodated them where appropriate.

Factors to assess the adequacy of Crown consultation carried out by a regulatory agency

In these two cases, the SCC outlined the following factors that may indicate adequacy of the consultation process:

  • the Crown provides timely notice to the affected Indigenous groups that the Crown is relying on the process of a regulatory agency to fulfill its duty to consult;
  • the regulatory agency holds an oral hearing;
  • the regulatory agency provides an early notice to the affected Indigenous groups of the hearing and formally invites the affected Indigenous groups to participate in the hearing;
  • the regulatory agency provides participant funding to allow the affected Indigenous groups to prepare and tender evidence at the hearing;
  • the affected Indigenous groups are allowed to make oral submissions;
  • the regulatory agency considers not only the environmental impacts of a proposed project but also any impacts on the asserted Aboriginal and treaty rights; and
  • the regulatory agency provides written reasons for its decision and imposes conditions on its approval, if necessary, to accommodate the concerns of the affected Indigenous groups.

While these factors were all present in Chippewas, the consultation process in Clyde River lacked a number of the factors. The NEB did not provide participant funding or hold oral hearings with respect to the Project. The NEB also did not make it clear to Clyde River that the Crown was relying on the NEB to fulfill its duty to consult in respect of the Project. Most importantly, the NEB’s consultation process was only focused on the environmental impacts of the Project and did not give adequate consideration to the source of the claimed treaty rights and the impacts on those rights.

While these cases do provide some certainty as to what constitute the outer boundaries for what will likely be considered to be adequate consultation, time will tell how those cases that fall somewhere in the middle-ground will be interpreted.