Introduction

On April 23, 2013, the Government of Newfoundland and Labrador (NL) released its updated "Aboriginal Consultation Policy on Land and Resource Development Decisions" (Policy). A copy of the Policy can be found here.1

The Policy provides guidance regarding the process and expectations for proponents where the Crown’s duty to consult is triggered. The Policy also imposes new, onerous requirements on proponents, and in some respects, it significantly shifts the burden of consultation and accommodation from the Crown onto proponents. Certain requirements in the Policy appear to be at odds with Canadian law, including decisions of the Supreme Court of Canada (SCC) regarding consultation and accommodation, and in particular, the obligations of proponents in consultation.

In our view, the Policy is an unprecedented and alarming departure from the governing legal principles of the Crown’s duty to consult, and this "hands off" approach of the Crown differs markedly from other Aboriginal consultation policies that have been implemented by other provinces across Canada. The Policy’s focus on economic accommodation and imposing the responsibility for such accommodation on proponents is not only at odds with the law, it upsets the balance between proponents and Aboriginal groups negotiating what should be voluntary agreements between them.

Overview of the Policy

The Policy was informed by consultations with Aboriginal organizations and industry stakeholders. Public comments on a draft of the Policy were invited by the NL Ministry of Intergovernmental and Aboriginal Affairs in May and June 2012. The Policy states that it is intended to develop "a practical consultation process that helps to ensure that land and resource development decisions minimize or, where reasonably practicable, eliminate potentially adverse impacts on asserted rights" and to "maintain, foster and improve effective working relationships among Aboriginal organizations, project proponents and NL."2

Notable highlights of the Policy include:

  1. Proponents to pay costs of consultation

The Policy expressly requires proponents to pay the costs of consultation for Aboriginal groups. The Policy states: "Where appropriate and necessary, any consultation support or capacity required by a consulted party will be the responsibility of the proponent."3 This funding requirement is a new obligation that gives rise to considerable uncertainty for proponents.

As part of best practices, proponents may choose to provide some amount of capacity funding and financial support to facilitate Aboriginal groups’ participation in consultation processes and to assist the Crown in meeting its duty to consult. However, there is currently no requirement in case law for proponents to cover such costs, since the duty to consult is ultimately the responsibility of the Crown. If capacity funding and the costs of consultation are now required to be paid by proponents, as set out in the Policy, potential effects may include decreasing the incentive on the Crown and Aboriginal groups to limit the scope of reasonable consultation and associated costs.

It is also cause for concern if proponents are required to cover the costs of consultation activities between Aboriginal groups and the Crown where proponents are not directly involved. There is a potential risk that the Crown will be more willing to approve consultation-related activities requested by Aboriginal groups, which proponents must then fund. This may also have the effect of raising Aboriginal expectations relating to such funding. The Policy does not address whether proponents will have an opportunity to provide input regarding the scope or costs of consultation or whether expenses will be the responsibility of proponents, regardless of whether they agree with such costs. The Policy also does not address whether proponents will have the opportunity to negotiate such expenses with the Crown and does not impose any standard of reasonableness on such costs or expenses.

The Policy elaborates on this requirement by stating that "proponents are required to provide reasonably necessary capacity-funding to facilitate the provision by Aboriginal organizations of pertinent information on potential impacts of project specific activities on asserted Aboriginal rights and any required financial accommodation."4 This appears to pertain to data collection by Aboriginal groups, such as traditional knowledge studies, which would be the proponents’ responsibility to fund. Again, while proponents currently may offer to provide such capacity funding as part of best practices, the provision of such capacity funding by proponents has never been a requirement at law. The requirement for proponents to pay financial accommodation is addressed below.

  1. Consultation regarding future activities

Under the Policy, proponents are expected to provide information to NL and to Aboriginal organizations regarding their proposed activities to ensure they are reasonably informed, including providing information regarding "short-term and long-range land use or development plans for an area."5 The Policy also states: ‘To the extent possible in a "Primary Permit", proponents should indicate the location, schedule, scale and scope of works intended to be authorized by a future ancillary authorization. This will allow the Province to confirm that Aboriginal organizations have been sufficiently notified of such ancillary activity.’6

The requirement for proponents to provide information to Aboriginal groups at an early stage of a project regarding potential future activities or development is novel and, in many circumstances, will also be impractical. For projects such as mineral exploration programs, the potential for future development and what such development might eventually look like is difficult, if not impossible, to determine and describe at an early stage. The purpose of mineral exploration is to determine the potential for future activities, rather than to define them.

Furthermore, this requirement imposes an obligation on proponents to consult in respect of theoretical, future impacts of a project, contrary to the guidance provided by the SCC. In its latest decision concerning the duty to consult, Rio Tinto Alcan v. Carrier Sekani Tribal Council,7 the SCC held that speculative future impacts of a project or Crown decision do not attract the duty to consult.8 Rather, the duty to consult only attaches to "the current government conduct or decision in question."9

Consequently, the requirement for proponents to provide information to Aboriginal groups regarding their long-range land use and development plans, as well as the details of future ancillary obligations, has the effect of expanding the scope of the duty to consult and shifting this burden from the Crown onto proponents. This expansion of the scope of consultation may also give rise to practical issues, such as delay and additional costs to be paid by proponents.

  1. Proponents to pay for accommodation

The Policy states: "Any financial consideration in regard to accommodation of the infringement of Aboriginal rights will be the responsibility of the proponent."10 In our view, this requirement significantly shifts the burden and duty of accommodation from the Crown onto proponents and raises serious questions. We also note that the Policy appears to use "infringement" and the concepts relating to consultation on asserted but unproven rights interchangeably. These are two distinct legal regimes and should be treated as such.

While courts have commented that financial compensation as a form of accommodation may be an option in certain circumstances, financial consideration as a form of accommodation by the Crown for the potential infringement of an Aboriginal or treaty right is not required at law. It has also never been a requirement at law for proponents to provide compensation in the form of accommodation for the Crown’s infringement of an Aboriginal or treaty right.

Accommodation at law is the Crown’s burden. In Haida Nation v. British Columbia (Minister of Forests), the SCC held that the Crown’s duty to consult and, if appropriate, accommodate could not be discharged by delegation to the third-party proponent.11 The expectation that proponents must cover the costs of any infringement of an Aboriginal right also has the potential to dangerously overreach. Ultimately, it is the Crown’s burden to determine whether consultation and accommodation has been adequate, and this new requirement means that the proponents could theoretically be liable for the Crown’s misjudgment in the case of infringement.

Further, the potential costs of infringement of an asserted Aboriginal or treaty right that is later proven could be enormous (for example, in a case where Aboriginal title is later established), and in our view, proponents could not reasonably be expected to pay such costs. However, the Policy makes no distinction between the types of infringement for which proponents would be liable.

This requirement may also confuse the meaning of "accommodation at law" with the business side of resource development and private agreements between industry and Aboriginal groups. It is a common practice in the resource industry for project proponents to enter into agreements with Aboriginal groups that may be or are affected by their projects. Such agreements may form part of proponents' overall business strategy and may be entered into for a number of reasons, including the establishment of a long-term relationship with an Aboriginal group in respect of a project, to provide benefits or to gain support for a project. Such agreements are not required at law (with the exception of some of the modern northern treaties) and are not entered into by proponents as a form of accommodation at law. However, this requirement could create the expectation that these agreements are now required as a form of accommodation.

In our view, the Policy should be clarified regarding whether the "accommodation" referred to in the Policy is accommodation at law or whether it is a reference to benefits provided by proponents. In either case, this represents a significant shift in the principles of accommodation that is not supported by the case law and fundamentally changes the dynamics of negotiating agreements between proponents and Aboriginal groups.

  1. Proponents to discuss project-specific opportunities

The Policy also states that proponents are expected to "enter into a dialogue with Aboriginal organizations to address project-specific opportunities, with the goal of achieving a positive, sustainable, mutually beneficial outcome."12

As with accommodation, while many proponents seek to engage local Aboriginal peoples by providing project-related opportunities and benefits to them as part of best practices, this is not a legal requirement. The Policy now imposes an obligation on proponents to engage in this dialogue, and could therefore increase the expectation that Aboriginal groups are entitled to project-related benefits by virtue of a project being located in their asserted traditional territory.

  1. Creation of Consultation Guidelines

The Policy states that: "NL will create Consultation Guidelines that specify how consultation regarding land and resource development decisions should occur in relation to specific activities, such as mineral exploration, environmental assessment of resource developments and post-environmental assessment permitting."13 The Consultation Guidelines "will implement the Policy, as will any additional department-, proponent- or project-specific Aboriginal consultation processes."14

The Consultation Guidelines are not yet available, therefore the manner and extent to which they will expand or clarify the principles developed in the Policy is currently unknown. However, it is notable that the Policy states that consultation "will occur within timelines identified in any applicable Consultation Guidelines."15 This is important because permitting processes will be subject to the timelines set out in the Consultation Guidelines, whereas in other provinces, timelines are set out in applicable laws and regulations. Case law to date has focused, and in our view appropriately, on the timelines set out by applicable laws and regulations as opposed to policy. This adds considerable uncertainty to NL’s regulatory regime and for proponents generally doing business in NL. The Policy should clarify that any such consultation timelines will be consistent with existing regulatory and approval regimes set out in NL laws and regulations.

  1. Reference to "Aboriginal organizations"

The Policy uses the phrase "Aboriginal organizations" to refer to Aboriginal groups to whom the Policy applies. This language is very broad and should be clarified to ensure that consultation under the Policy applies only to the duly authorized representatives of an Aboriginal group or a First Nation that is rights bearing and not simply a broad representative body. "Aboriginal organizations" could also refer to broader organizations with an Aboriginal affiliation.

Discussion

While the Crown may delegate procedural aspects of consultation to third parties, the duty to consult and, where appropriate, accommodate, cannot be delegated and remains with the Crown. In our view, the Policy imposes significant obligations on proponents that risk upsetting the critical balance so carefully developed under Canadian law with respect to the Crown's duty to consult, and it appears on its face that NL is overreaching in its powers to delegate with this Policy.

In keeping with the honour of the Crown, the Crown also owes duties to proponents to ensure that government decision-making and consultation processes are reached "with procedural fairness within a reasonable time."16 In implementing the Policy and in creating the Consultation Guidelines, it would be advisable for NL to ensure that it does not impose conditions on proponents that may be unreasonably burdensome or inconsistent with the honour of the Crown. At a minimum, if NL imposes these new and significant burdens upon proponents, there should necessarily be more opportunities for proponents to provide input and make decisions regarding consultation and accommodation. This may involve ensuring that the proponents have opportunities to be involved in decision-making regarding contemplated consultation activities and are sufficiently informed at all stages where their interests (financial and otherwise) may be affected.

We note that the Government of Alberta is currently seeking views on its own Aboriginal Consultation Policy until May 17, 2013. A copy of Alberta’s draft policy is available here.17 The contrast between the two policies is significant. In our view, Alberta’s draft policy is more consistent with applicable legal principles and good business practices. On its face, the NL Policy is unprecedented and will understandably cause proponents to rethink their strategies in terms of doing business in NL and dealing with Aboriginal issues generally.