On September 24, 2012, in Neskonlith Indian Band v. Salmon Arm (City) (Neskonlith), the British Columbia Court of Appeal (BCCA) dismissed the appeal of the Neskonlith Indian Band (Band), confirming that the City of Salmon Arm (City) did not owe a constitutional duty to consult the Band in respect of the issuance of a development permit. In well-developed reasons that fully endorse the actions and approach taken by the City, the developer, and the Court below, the BCCA provided significant comfort and clarity for municipalities and developers in this province.

In this case, the Band sought to quash an Environmentally Hazardous Area Development Permit issued by the City to Salmon Arm Shopping Centres Limited, a developer seeking to build a shopping centre on fee simple land. The permit was required because the development is located in an area designated as an Environmentally Hazardous Development Permit Area due to the fact that it is in a floodplain.

On the appeal, the Band took the position that the City owed the Band a constitutional duty to consult with it before issuing the development permit, and that the City had failed to do so. The Band argued that the "honour of the Crown" imposes a constitutional constraint on municipal decision makers, and that the duty to consult automatically attaches to municipal decisions that affect First Nation’s rights or interests. The Band supported its argument by drawing an analogy to Supreme Court of Canada (SCC) case law that holds that statutory decision makers, including municipalities, are subject to, and constrained by, the Canadian Charter of Rights and Freedoms.1 The Band argued that the same approach should apply to First Nation’s rights that are constitutionally protected under section 35 of the Constitution Act, 1982.

The City, the developer and an intervener, the Union of British Columbia Municipalities, relied on the SCC’s decision in Haida Nation v. British Columbia (Minister of Forests) to argue that the duty to consult First Nations was a "non-delegable" duty owed by the Crown. Consequently, as a matter of law, the City did not owe a constitutional duty to consult the Band.

Other decisions rendered by British Columbia courts had considered this question to varying degrees,2 but Neskonlith is the first case in Canada to directly consider whether a municipality, as opposed to the Federal or Provincial Crown, can owe a constitutional duty to consult First Nations.

The developer also raised two arguments in the alternative:

  • Even if a duty to consult could be owed by the City, the harm alleged by the Band was speculative and therefore no duty would have been triggered; and
  • Even if such a duty had been triggered, the consultation that actually occurred was sufficient to satisfy any such duty.

While acknowledging that the Band raised strong constitutional arguments, the BCCA resoundingly rejected the Band’s position in favour of what it described as "even more powerful arguments, both legal and practical, that … militate against inferring a duty to consult on the part of municipal governments." In particular, the BCCA determined that:

  • Following the SCC’s decisions in Haida Nation and Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, and the "very clear statements" made therein, the appeal must fail as a matter of law.
  • Even if the City could owe a constitutional duty to consult First Nations, the potential adverse effect of the City’s decision on the Band was speculative, uncertain, and indirect.
  • Even if a duty could have been owed and even if triggered, the consultation that actually took place in this case was adequate to satisfy any such duty to consult: the Band was provided with copies of all relevant materials, they were heard at various meetings, their expert reports were reviewed and taken seriously and their objections lead to material modifications to the development.

An important aspect of the decision is the BCCA’s finding that, unlike the Provincial or Federal Crown, municipalities are not equipped to provide sufficient remedies that would make any consultation sought by the Band meaningful. In this regard, the BCCA held that the City lacked the necessary authority to "engage in the nuanced and complex constitutional process involving ‘facts, law, policy and compromise.’"

Practical arguments also resonated with the BCCA. It noted that municipalities lack the practical resources necessary to consult and accommodate First Nations, and expressed concern about the potential impact on daily life in the province if municipalities were engaged in constitutional consultation exercises, noting that it would be "completely impractical" if consultation and accommodation were to be "thrashed out in the context of the mundane decisions regarding licenses, permits, zoning restrictions and local bylaws."

It is currently unknown whether the Band will seek leave to appeal to the SCC. In the meantime, this decision adds to the growing jurisprudence debunking the myth that consultation with First Nations requires, in all circumstances, something more than a decision maker providing the First Nation with all relevant information and opportunities to voice its concerns, and then bona fide taking such concerns into consideration in arriving at a decision.