Overview

On July 4, 2011, Mr. Justice Veale of the Supreme Court of Yukon issued a decision in Liard First Nation v. Yukon Government and Selwyn Chihong Mining Ltd., 2011 YKSC 55 dismissing a challenge to the environmental assessment of Selwyn Chihong's advanced exploration project pursuant to the Yukon Environmental and Socio-economic Assessment Act ("YESAA").

Chuck Willms and Kevin O'Callaghan of our Vancouver office acted for Selwyn Chihong on the judicial review.

In the first case to deal directly with the YESAA, Mr. Justice Veale held that work done by the Yukon Environmental and Socio-ecomonic Assessment Board ("YESAB") reasonably met the statutory requirements and that the decision of the Director of Mineral Resources was similarly reasonable in accepting the recommendation that the Selwyn Project proceed. Finally, the Court concluded that the Director had adequately fulfilled any duty to consult, statutory or constitutional, throughout the process.

Facts

Selwyn Chihong sought to commence an advanced exploration project in further development of a zinc-lead formation in the Howard's Pass area of Yukon (the "Selwyn Project"). The Selwyn Project is located in an area the Liard First Nation claims as its tradition territory.

Due to the nature and location of the Selwyn Project, it was subject to assessment under YESAA.  Selwyn Chihong submitted an application and, on December 23, 2009, the Designated Office commenced an assessment.

A number of parties, including the Liard First Nation, were notified of the Selwyn Project proposal and invited to submit comments. The deadline for submissions was extended numerous times and at one point Selwyn Chihong withdrew and resubmitted its proposal in order to restart the submission deadline clock. On May 30, 2010, Liard First Nation submitted comments and a detailed expert report (Report #1) raising issues related to water management.

On June 16, 2010, the Designated Office issued an Evaluation Report recommending that the Selwyn Project proceed subject to a number of terms and conditions to mitigate the potential for significant adverse affects that the Designated Office determined the Selwyn Project would otherwise have.

The final step in the YESAA assessment process is the issuance of a decision document by a Decision Body accepting, rejecting or varying the recommendations contained in the Designated Office's Evaluation Report. This decision document must be issued within 37 days of the Evaluation Report. The Decision Body in this case was the Director of Mineral Resources and the deadline to issue a decision document was July 23, 2010.

On June 29, 2010, and on July 9, 2010, Liard First Nation was faxed draft versions of the Decision Document. On July 22, 2010, a meeting was held between the Decision Body and Liard First Nation for the specific purpose of consultation on the Designated Office's Evaluation Report and the Decision Document drafts. Liard Fist Nation presented the Decision Body with a second detailed expert report (Report #2) addressing whether concerns related to water management raised in their first report had been met. Liard First Nation considered the Selwyn Project had significant environmental problems and thought that issuing a decision document would be premature.

On July 23, 2010, the Decision Body issued the Decision Document and accepted the recommendation that the Selwyn Project proceed. Liard First Nation applied to Supreme Court of Yukon for an order to quash, suspend or stay the Decision Document.

Decision

Mr. Justice Veale held that the appropriate standard of review for decisions made through the process set out in YESAA, including whether the duty to consult has been met, is the deferential standard of reasonableness. Justice Veale went on to make three additional key findings:

  • the Evaluation Report prepared by the Designated Office complied with the statutory requirements of YESAA and reasonably assessed the environmental impacts of the proposed program;
  • the Decision Document issued by the Director of Mineral Resources complied with the statutory requirements of YESAA and reasonably accepted, rejected or varied the recommendations set out in the Evaluation Report; and
  • the Yukon Government did not breach its duty to consult.

The Court's four part analysis is described briefly below:

1. What is the Appropriate Standard of Review for the Evaluation Report, the Decision Document and the Duty to Consult?

The standard of review is the measure by which the Court will review a decision such as the one made by the Director of Mineral Resources: in general the measure is either whether the decision was reasonable or whether it was correct. Justice Veale determined that the appropriate test was reasonableness for both of the issues: the environmental assessment and the duty to consult. A reasonable decision is one that falls "within the range of acceptable and rational solutions".

Justice Veale relied on previous jurisprudence to determine that some deference should be applied to the decision of a responsible authority upon receipt of a screening level environmental assessment. The expertise of the decision makers militated in favour of a deferential standard of review as the Designated Office and the Decision Body both had "considerable expertise in environmental matters". Deference was also given based on the fact that the decisions dealt with questions of mixed fact and law and required the decision maker to balance a multitude of policy objectives. 

With respect to the duty to consult, Justice Veale held that "because the issue is whether the duty has been met through the process used, reasonableness is the appropriate standard of review".  This is significant because it implies that the Court will defer to a public body's decision that they have met their duty to consult if the decision is made through the process of an environmental assessment.

2. Did the Designated Office Comply with the Statutory Requirements of YESAA and Reasonably Assess the Environmental Impacts of the Proposed Program?

Liard First Nation took the position that the Designated Office did not comply with the statutory requirements of YESAA because they were unable to make an evidentiary finding due to the fact that insufficient information or background data was provided by Selwyn Chihong. In other words, it failed to resolve uncertainties.

Section 42(1)(c) of YESAA requires that the Designated Office "shall take into consideration" the significance of any environmental effects of the proposal that have occurred or might occur.  Justice Veale emphasized the importance of the word "consideration" holding at paragraph 98 that "consideration means take into account but it does not require a resolution or determination of the significance of the environmental effects". Fundamentally, the Evaluation Report is a planning tool that balances the objectives of promoting and maintaining environmental quality at the same time as conducting an assessment in a timely, efficient and effective manner.

Section 56(1) of YESAA requires that the Designated Office "determine" whether a project will have significant adverse environmental effects that can or cannot be mitigated. Justice Veale did not interpret this to require a determination be made to a scientific certainty. He held that the Evaluation Report is not required to provide finality and resolve all uncertainty. The mandate of the Designated Office is broad and specific uncertainties related to water management, for example, would be resolved by licensing boards such as the Water Board.

Justice Veale found that the Designated Office reasonably considered the significance of the environmental effects of the Selwyn Project and determined that the potential significant adverse environmental effects could be mitigated by terms and conditions. The fact that the terms and conditions did not address every potential uncertainty did not constitute grounds to quash the decision. The terms and conditions fell within the range of acceptable and rational solutions and the recommendation was properly moved forward to the Decision Body.

3. Did the Decision Document of the Decision Body Meet the Statutory Requirements of YESAA and Did it Reasonably Accept, Reject or Vary the Recommendations?

YESAA requires that the Decision Body give "full and fair consideration to scientific information, traditional knowledge and other information that is provided with the recommendation" and issue a decision document "accepting, rejecting or varying the recommendation" (ss. 74-75). Justice Veale held that this required the Director of Mineral Resources to consider the submissions and reports submitted to the Designated Office but not necessarily to review every document. He noted that it will be extremely difficult in most cases for a Decision Body to comply with both their obligation to give full and fair consideration and their obligation to issue a decision document within 37 days. In this case, the Decision Body was able to meet its obligations because it was an active participant in the early stages of the YESAA process conducted by the Designated Office.

A Decision Body does not have an obligation to prepare a further assessment. Justice Veale suggested at paragraph 111 that a Decision Body should not, in most cases, reject a recommendation unless it found the evaluation "wanting or insufficient in failing to consider significant concerns".  It was therefore reasonable in this case for the Decision Body to vary some terms and conditions to "defer to the role and responsibility of the Water Board", while approving the overall the recommendation that the Selwyn Project proceed. 

4. Did the Yukon Government Breach its Duty to Consult?

Section 74(2) of YESAA statutorily imposes an obligation to undertake consultation on the Decision Body, where consultation is defined as providing notice in sufficient form and detail to allow the party to prepare its views on the matter, providing a reasonable period for the party to prepare its views, providing an opportunity to present its views, and by considering any views so presented fully and fairly.

Justice Veale made it clear that while the duty to consult is legislated in this case, the Court ought not ignore the principles coming from the Supreme Court of Canada (the Haida case and others[1]) in regards to the determination of the existence, scope and content of the duty. He held that each situation or context may require a different response or depth of consultation, depending on the matter in issue and that simply meeting the statutory requirements may not always be sufficient.

The Court accepted that the Liard First Nation had a strong prima facie case for a land claim as it had been involved in negotiations with the Yukon Government and Canada for a number of years. The Court similarly simply accepted that the Selwyn Project had the potential to significantly negatively impact Liard First Nation's claim. This led to the conclusion that Liard First Nation was "entitled to consultation significantly deeper then the minimum and accommodation where possible".  Specifically, there was an obligation to ensure that Liard First Nation had sufficient information to prepare its views, time to prepare them, and an opportunity to present them to the Decision Body. There was no obligation to reach an agreement.

Justice Veale found that Liard First Nation received notice of the Selwyn Project in December 2009 and had sufficient time to prepare its submissions by May 2009. These submissions were considered at the Designated Office's Evaluation Report stage. He also found that Liard First Nation received the Evaluation Report in sufficient time to have submissions prepared and submitted to the Decision Body. He noted that the 35 day timeframe was tight but found that it was manageable in this case. The fact that a meeting was held one day and the Decision Document was issued the next rightly raised concerns that Liard First Nation's views were not fully and fairly considered. 

However, Justice Veale found that in this case Liard First Nation's views were in fact fully and fairly considered. The Court also found that there had been some accommodation of the Liard First Nation's concerns in that changes were made to the terms and conditions as a result of the meeting on July 22, 2010 in Liard First Nation's community. On a standard of reasonableness, the duty to consult in this case was met.

Conclusion

This case provides important guidance on the amount of deference that the Court will afford the YESAB when it undertakes that complex balancing of interests that are involved in an environmental assessment. The Court does not consider that it was in a position to second guess that balancing, as long as the balancing is reasonable.

In a side comment, Justice Veale was somewhat critical of the timelines imposed by the YESAA process. He stated that these timelines will increasingly create a challenge for First Nations to participate in this process while the development of mining claims is proceeding at a fast pace. It was notable in this case that Selwyn Chihong had to withdraw and resubmit its application in order to ensure the assessment process was meaningful. Justice Veale suggested at paragraph 121 that it might be useful for the parties to the Umbrella Final Agreement to consider extending this timeframe. However, the Court was clear that in the circumstances of this case, the timelines were sufficient for the duty to consult to be met.