On Friday, November 28, 2008 the Honourable Mr. Justice Grauer of the Supreme Court of British Columbia released his reasons in Klahoose First Nation v. Sunshine Coast Forest District (District Manager), 2008 BCSC 1642. At issue was the Ministry of Forests and Range (“MoF”) approval of a Forest Stewardship Plan (“FSP”) for Tree Farm Licence 10 (“TFL 10”), dated February 15, 2008.  

Hayes Forest Services Limited (“Hayes”), submitted the FSP to the MoF on July 3, 2007. Two days later, Hayes wrote to Klahoose First Nation (“Klahoose”) with a copy of the FSP and requested a meeting to discuss the plan. Subsequently, Klahoose met with the MoF with respect to the FSP but refused to meet with Hayes, taking the position that it did not need to consult with Hayes on the FSP.  

Klahoose sought to quash the approval of the FSP alleging inadequate consultation under the requirements set by the Supreme Court of Canada in Haida Nation v. British Columbia (Minister of Forests), [2004] 3 S.C.R. 511, (“Haida”), as well as in the Interim Agreement on Forest and Range Opportunities (“FRO”) between Klahoose and the Province of British Columbia (hereinafter the “Crown”). Mr. Justice Grauer found that the Crown had failed to fulfill its duty to engage in appropriately deep consultation and to adequately accommodate Klahoose’s interest, in part because it had not come to any conclusions concerning the strength of Klahoose claim to aboriginal rights or title or the seriousness of the potentially adverse effect upon those rights if the FSP was approved. In addition, the learned chambers judge confirmed that the duty to consult lies with the Crown alone.  

Instead of quashing the approval of the FSP, however, Grauer J. directed the parties to consult on an amendment to the FSP which was submitted by Hayes in February, 2008.  

Discussion

In making his decision to approve the FSP, the District Manager had not formally expressed any analysis of the strength of the claims of Klahoose.

This was of particular concern to Grauer J. since there was no evidence on the record as to what assessment the Crown made of the scope of its duty to consult:  

[18] I observe that, as will be discussed in more detail below, there is no evidence in the record before me as to what assessment, if any, the Crown made concerning the scope of its duty to consult in this case, other than acknowledging that it had such a duty. Yet, as pointed out by Neilson J., as she then was, in Wii'litswx v. British Columbia (Minister of Forests), 2008 BCSC 1139, the Crown is obliged to make such an assessment.  

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[119] Nowhere in the materials is there any indication of to what conclusion Mr. Shaw, Mr. Hawrys or anyone else within the Ministry came concerning the strength of the case supporting the existence of Klahoose’s right or title, or the seriousness of the potentially adverse effect upon it. As noted in Haida, supra at para. 39, such an analysis would be necessary to establish the scope of the Crown’s duty to consult. There is no evidence of the analysis having been undertaken here, although I infer that the Ministry paid at least some attention to the concept when it concluded that it would be prudent for some alterations to be made to the FSP, and for the Temporary Accommodation Area to be put in place.  

Mr. Justice Grauer undertook his own analysis of Klahoose strength of claims and held as follows:  

[58] On the basis of the evidence before me, I find that Klahoose has established on a balance of probability the following:  

  • a strong prima facie case for aboriginal rights and an arguable case for aboriginal title, throughout the entirety of the Toba River watershed, including all of TFL 10;  
  • a strong prima facie case for aboriginal title to the shores of the upper reaches of Toba Inlet, and to the floor of the Toba River Valley;  
  • a reasonable prima facie case for aboriginal title to the upland areas immediately surrounding the Toba River Valley and the valleys of Toba River tributaries, including those portions that make up the FDU covered by the FSP.  

The learned chambers judge also found that the potentially adverse effect of approving the FSP in Klahoose traditional territory was serious. No logging had occurred in the Toba River Valley portion of TFL 10, in which the FSP was located, for 20 years because the only access had been through Indian Reserve #1 and Klahoose had refused access since 1988. Grauer J. concluded that every step in the process - from obtaining the right to harvest timber in the TFL to exercising that right - carried the potential of adversely affecting Klahoose aboriginal interests to a serious degree. Consequently, the learned chambers judge found that the duty to consult and accommodate fell toward the higher end of the spectrum of consultation.  

This finding did not, however, translate into an ability to control harvesting in the Toba River Valley or veto decisions such as the approval of an FSP. Additionally, Grauer J. again affirmed that the duty to consult is reciprocal:  

[81] I pause to observe that, while Klahoose’s expressed desire to have exclusive control of the harvesting of timber in the Toba River watershed is both understandable and commendable, Klahoose has no legal right or entitlement to such control (pending the conclusion of a treaty) in the absence of acquiring the rights under TFL 10 from Hayes. On the other hand, Klahoose is entirely within its rights to deny access to the watershed through IR #1 to Hayes or anyone else.  

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[132] …Both the Haida case and the FRO Interim Consultation Protocol make it clear that the obligation is indeed reciprocal. [145] … Klahoose is not entitled to a veto in relation to the granting of an FSP to Hayes.  

In assessing sufficiency of consultation, the Mr. Justice Grauer addressed one of the key areas of dispute between the Crown and Klahoose in the consultation process: a claim that Klahoose was entitled to information beyond that required by the forest legislation in respect of FSPs. In particular, Klahoose asserted that it was entitled to information somewhat similar to the information required in the past for forest development plans under the Forest Act. It appears that Grauer J. accepted this argument:  

[128] In many other instances, the Ministry’s response to the Klahoose’s requests for information consisted of advice that the licensee was not required to provide such information when submitting an FSP for approval, or that the more appropriate time for deal[ing] with such requests would be in the context of operational decisions such as applications for cutting permits, when opportunities for further consultation would arise.  

[129] I do not consider that to be an adequate response. The relationship of an FSP to the harvesting of timber or construction of a road (the two acts which have the potential for negative impact on the landscape) is made clear by s.3(1) of the FRPA. Where the duty to consult is deep, it is not an answer to say that there will be further opportunities for consultation when the process that may lead to harm is further advanced, or that the information sought, while important, is not part of the process at this stage.  

In the background of Hayes’ FSP application and the consultation process was the parties’ competing commercial interests in TFL 10. Hayes, as the holder of TFL 10, was attempting to build the value of the TFL by bringing it into commercial operation, while Klahoose was interested in purchasing the TFL and was attempting to increase its position by continuing to deny access to the watershed through IR #1. Mr. Justice Grauer found that both parties were entitled to their positions and did not act unreasonably. This conclusion was premised on the learned chambers judge’s affirmation that the duty to consult and accommodate was not Hayes’ duty:  

[134] …What Klahoose insisted on was information that related to the whole of the TFL, as opposed to a piecemeal approach, and operational information that would permit it adequately to assess the impact. I do not consider that to be unreasonable; see Tzeachten First Nation v. Canada (Attorney General), 2008 FC 928 at para. 64-69.  

[135] That is not to say that Hayes was in any way unreasonable. Indeed, some of the information requested by Klahoose in Mr. Howard’s letter to the Ministry of January 9 was provided by Hayes in a letter to Mr. Shaw of the SCFD dated January 18, 2008. The record does not indicate, however, any transmission of that information from Mr. Shaw to Klahoose before the approval occurred. It must be remembered, of course, that the duty to consult and accommodate belongs to the Crown. It is not Hayes’ duty.  

Mr. Justice Grauer was, however, fairly critical of the Crown. In addition, to the concern that the record did not show what was analysed by the Crown in making its decision, as set out above, Grauer J. did not approve of the Crown’s consideration of a research report conducted by the Attorney General of British Columbia on a preliminary assessment of Klahoose strength of claims, or the temporary accommodation area that was set aside as a result of the report. The learned chambers judge took issue with the fact that this approach did not involve Klahoose in any way:  

[126] …It will be recalled that the Ministry's reaction to that letter was to carry out research, none of which was shared with Klahoose, including a review of the research report. It is as though the Ministry had not given any thought to the issue of strength of claim before this. But instead of consulting with Klahoose about the results of that research, the Ministry dealt hastily with Hayes to make revisions to the FSP of which Klahoose was unaware, and then swiftly approved it. The Ministry never did articulate an assessment of Klahoose's strength of claim. It certainly never discussed it with Klahoose.  

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[136] Turning to the Temporary Accommodation Area that was agreed to between the Ministry and Hayes, setting aside a temporary no-go zone on the Toba River valley floor, I am satisfied that it was a genuine attempt by both the Ministry and Hayes to respond to concerns raised by Klahoose, and to accommodate them. It demonstrates the sort of step that can be taken in his process of attempting to find a satisfactory solution. The problem is that Klahoose was not involved in the process. Nobody asked Klahoose whether it was satisfactory. Klahoose had no input into it at all.  

As a result of these concerns, Grauer J. concluded there was inadequate accommodation. Nonetheless, given the circumstances of the parties and the decision, the learned chambers judge declined to quash the FSP and instead ordered further consultation and a stay on all further operations or activities under the FSP, with the exception of an amendment application that Hayes had submitted:  

[142] In the circumstances before me, it is difficult to see how the district manager’s decision approving the FSP can stand given that it was taken without meeting what I have found to have been the Crown’s constitutional duties. Because of that failure, there was inadequate accommodation, and the decision therefore did not appropriately balance societal and aboriginal interests.  

[143] Nevertheless, I am cognizant of my obligation to be flexible and to approach this case individually: Haida, supra at para. 45. In that context, I note the following relevant factors.  

[144] First, Hayes is the lawful holder of TFL 10 until such time as it comes up for renewal, or Hayes transfers the licence to another party. This tree farm license gives it the right to harvest timber in the Toba River watershed, which right is not in issue in this proceeding. It does not give Hayes any right to access through IR #1.

[145] Second, Klahoose is not entitled to a veto in relation to the granting of an FSP to Hayes.  

[146] Third, one of the objections of Klahoose to the FSP was the piecemeal approach taken by Hayes by focusing on an FDU that covered only a small part of TFL 10, whereas Klahoose’s interests run through the entire watershed that TFL covers. On February 29, 2008, Hayes submitted an application to amend its FSP by expanding the proposed FDU over the entirety of TFL 10. This would, among other things, enable the AAC to be harvested over a large area, and would go some distance to meeting Klahoose’s piecemeal approach objection.  

[147] Fourth, since the FSP was approved on February 15, 2008 (if not before as maintained by Klahoose), Hayes has developed a good deal of the operational information that Klahoose had sought, including access plans and maps showing detailed cutblock layouts.  

[148] Fifth, I anticipate that both Klahoose and Hayes may have developed further archaeological and ethno-historical data in recent months.  

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[150] In these circumstances, I conclude that rather than setting aside the impugned FSP, the appropriate remedy would be to order a stay of all further activity and operations occurring under it, with the exception of the amendment application to extend the FDU to the entirety of TFL 10. That application, in my mind, should now be considered by the district manager as a new FSP (which is how I understand the application for such an amendment is approached in any event), in accordance with what I have found to be the Crown’s duty of deep consultation, aimed at finding a satisfactory interim solution.  

[151] Such a solution would, one hopes, permit appropriate harvesting of timber resources while adequately protecting the economic, cultural, spiritual and social interests of Klahoose in the Toba River watershed. Klahoose’s interest, after all, has not been to eliminate forestry operations in the watershed, but rather to ensure that they are sustainable, environmentally sound and consistent with a long-term vision for the future. Klahoose’s desire to have complete control of forestry operations in TFL 10 is not an outcome that can be forced through this process. Although it is an attractive solution, it must be achieved, if at all, through other means.  

[152] The consideration of the application to amend the FSP would, I expect, involve an appropriate sharing of information, including information that may not be statutorily required in relation to an FSP, such as operation and access information. It would also involve Klahoose directly in the decision-making process concerning any accommodation of Klahoose’s rights.  

Conclusion  

The Court’s analysis of the requirements of consultation and accommodation can be summarized into the following guiding principles:  

  • consultation and accommodation do not translate into a veto right;  
  • the duty to consult is reciprocal;
  • the duty to consult lies with the Crown alone;  
  • the Crown must have a record of the analysis and decision it makes with respect to the strength of claim and the potential adverse effect of the impugned decision;  
  • a legislative scheme cannot be used or relied on to preclude the provision of relevant information necessary for the process of consultation;  
  • accommodation is not reasonable if it occurs without consultation regarding the specific accommodation; and  
  • where appropriate, the Court has the discretion to decline to quash a decision, despite the Crown’s failure to discharge its duty to consult, and where necessary accommodate.  

More specifically, for the Province of British Columbia, it now remains to be seen what the effect of the judgment will be on Forest Stewardship Plans, generally. Certainly, if the judge’s decision is followed, much more information that is statutorily required in such a plan will be required in order to meet the Crown’s duty of consultation for timber harvesting in the Province of British Columbia.