Introduction

On July 26, 2017 the Supreme Court of Canada (“SCC”) released its decisions in two companion cases: Clyde River (Hamlet) v. Petroleum Geo‑Services Inc., 2017 SCC 40 (“Clyde River”) and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2017 SCC 41 (“Chippewas of the Thames”). The SCC found that the National Energy Board (“NEB”) has a legislative mandate to engage in Haida consultation and that consultation undertaken by the NEB can be relied on to completely or partially fulfill the Crown’s duty to consult.

Background

The SCC decisions arose from two decisions of the NEB. The first was a decision granting authorizations to TGS-NOPEC Geophysical Company (“TGS”) to conduct an offshore seismic survey program in Baffin Bay and the Davis Straight. The second was a decision approving an application by Enbridge, under section 58 of the NEB Act, to reverse the direction of the flow of oil in a pipeline located between North Westover and Montréal.

Hamlet of Clyde River applied for judicial review of the NEB’s decision to grant the authorization to TGS, alleging the Crown had failed to discharge its duty to consult. Similarly, Chippewas of the Thames First Nation launched an appeal of the NEB’s decision to approve Enbridge’s application, arguing that the Crown had failed to fulfill its duty to consult.

Federal Court of Appeal

In both cases, appeals were made to the Federal Court of Appeal. For more information on the Federal Court of Appeal decisions, see our bulletin.

In Hamlet of Clyde River, the Federal Court of Appeal found that the NEB has a legislative mandate to engage in a consultative process on the basis of the principles in Rio Tinto and Taku River. The Federal Court of Appeal found that the consultative process by the NEB was, in that case, sufficient to fulfill the Crown’s duty to consult.

In Chippewas of the Thames First Nation¸ a majority of the Federal Court of Appeal found that the NEB had no mandate to assess whether the duty to consult was triggered and whether it had been discharged prior to considering an application with respect to a project. The dissent disagreed, finding the NEB was required to determine whether adequate consultation had occurred prior to issuing an approval. The Court unanimously agreed that the NEB did not have the duty or power to perform the consultation and that the NEB is incapable of actually fulfilling the duty to consult.

These decisions by the SCC resolve the conflict between the two Federal Court of Appeal decisions and clarify the role of the NEB and tribunals generally with respect to the duty to consult.

Decision

The SCC allowed the appeal in Clyde River and quashed the NEB authorization finding that the Crown breached the duty to consult.

The SCC dismissed the application in Chippewas of the Thames, finding that the Crown’s duty to consult was met through the consultative process undertaken by the NEB.

Triggering the Duty

In both cases, the SCC found that the duty to consult may be triggered by decision of the NEB, and in both circumstances, the duty to consult was triggered. The SCC clarified that while the NEB operates independently and is not strictly speaking an agent of the Crown, it acts on behalf of the Crown when making a final decision on a project authorization. The SCC described the NEB as “the vehicle through which the Crown acts.”

Role of the NEB

Undertaking Consultation

The SCC found that the NEB is empowered to undertake consultation. In particular, the NEB has:

  1. the procedural powers necessary to implement consultation; and
  2. the remedial powers to, where necessary, accommodate affected Aboriginal claims, or Aboriginal and treaty rights.

In considering whether Crown consultation can be conducted through a regulatory process more generally, the SCC reiterated the long standing principle that the ultimate responsibility for consultation lies with the Crown.

Although the ultimate responsibility lies with the Crown, the Crown may rely in whole or in part on steps taken by a regulatory body, like the NEB, to fulfill the duty to consult. However, the SCC went on to find, in Chippewas of the Thames:

if the agency’s statutory powers are insufficient in the circumstances or if the agency does not provide adequate consultation and accommodation, the Crown must provide further avenues for meaningful consultation and accommodation in order to fulfill the duty prior to project approval.

In undertaking consultation, the SCC confirmed that only the decision before the NEB must be consulted on. However, past state of affairs will also be taken into account.

Assessing the Adequacy of Consultation

The SCC also addressed the conflict between the majority and the dissent at the Federal Court of Appeal in Chippewas of the Thames with respect to whether the NEB was required to consider the adequacy of consultation prior to making a decision. The SCC found that when a tribunal is empowered to decide questions of law it must exercise its decision making power in accordance with the Constitution Act, 1982. The NEB is a body that is empowered to decide questions of law, therefore, it must ensure that it’s decision is made in compliance with s. 35 of the Constitution Act, 1982, by evaluating the adequacy of consultation.

Further, the SCC commented that a “document dump” is not adequate to satisfy the requirement for deep consultation. In Clyde River, though ample information was submitted by the proponent to the NEB and was available on the NEB’s website, it was inaccessible to those potentially impacted by the project. The SCC stated that, to “put it mildly”, furnishing answers to questions that went to the heart of treaty rights in the form of a practically inaccessible document was not true consultation.

Written Reasons

In Chippewas of the Thames, the SCC found that the NEB was required to provide written reasons. Similarly, in Clyde River, the SCC found that when Indigenous peoples have raised issues about consultation that the Crown usually provides written reasons. With respect to written reasons the SCC found that when deep consultation was required and the issue of consultation was raised, the NEB must explain how it considered and addressed Indigenous concerns. This requirement however, does not require a formulaic “Haida analysis” in all circumstances. In Chippewas of the Thames, the SCC found that the NEB had reviewed written and oral evidence of Indigenous interveners and identified in writing the interests at stake. Ultimately the NEB concluded that the risks were minimal and provided written and binding conditions of accommodation to address the potential impacts. In the circumstances the SCC found that the reasons provided by the NEB were sufficient to satisfy the Crown’s duty to consult.

Implications

Most significantly, these decisions dispel the uncertainty regarding the NEB’s jurisdiction in dealing with the duty to consult. It is now clear that the NEB can determine the adequacy of consultation and may also conduct consultation that can be relied on by the Crown, regardless of whether the project proponent is the Crown. These principles will apply beyond the NEB, to other administrative decision-makers.

Of interest to project proponents is that the SCC confirmed that a “data dump” will not satisfy the requirements of deep consultation. Proponents are required to provide accessible, responsive information to parties potentially affected by the project. Making volumes of information available to the regulator and the public online does not amount to consultation. There must be a mutual understanding of core issues.