In two decisions arising from legal challenges by Indigenous communities against National Energy Board (“NEB”) project approvals, the Supreme Court of Canada confirmed that projects approved by regulatory tribunals that could impact Aboriginal or Treaty rights trigger the Crown’s duty to consult and accommodate.

The Court said that a tribunal cannot approve a project until the duty is met. If an approval is granted before the duty is met, then the approval is at risk of being quashed by the court. Tribunals must consider the project’s impacts on Aboriginal rights as rights and not simply as an afterthought to an environmental assessment. In some circumstances, the Crown can rely on the regulatory process to discharge its duty.

Background

In Clyde River (Hamlet) v Petroleum Geo-Services Inc, 2017 SCC 40, an Inuit community in Nunavut challenged an approval granted by the NEB to conduct offshore seismic testing for oil and gas resources. It was undisputed that the Inuit had a Treaty right to harvest marine mammals and that the testing could negatively affect that right. The NEB conducted an environmental assessment and approved the seismic testing.

In Chippewas of the Thames First Nation v Enbridge Pipelines Inc, 2017 SCC 41, a First Nation challenged the NEB’s approval of an Enbridge application to modify an existing pipeline to reverse its flow, increase its capacity, and enable it to carry heavy crude. The pipeline, first built in 1976, crossed the Chippewas of the Thames’ traditional territory. Following an oral hearing that the First Nation participated in, the NEB approved the application.

Decision

The Court found that the Crown had not satisfied its duty to consult the Inuit of Clyde River and quashed the NEB approval for seismic testing.

The Chippewas of the Thames’ appeal was unsuccessful. The Court concluded that the NEB process satisfied the Crown’s duty to consult.

The cases provide much-needed clarity on the application of the duty to consult with respect to projects approved by regulatory tribunals. The Court fully rejected arguments that the duty to consult is not triggered by approvals issued by the NEB because the NEB is not the “Crown.” The Court said that the Crown’s constitutional duty to consult does not “disappear” when a project is approved through a regulatory tribunal, such as the NEB. In these cases, the Court held that the NEB approval process triggered the Crown’s duty to consult.

In addition, the Court confirmed the following:

  • The NEB, as a quasi-judicial decision maker, is required to carry out its responsibilities in a manner consistent with section 35 of the Constitution Act, 1982.[1]
  • A decision to authorize a project cannot be in the public interest if the Crown’s duty to consult has not been met. The duty to consult gives rise to a special public interest that surpasses economic concerns. This does not mean that the interests of Indigenous groups cannot be balanced with other interests at the accommodation stage. Indigenous groups do not have a veto power over project applications.
  • Unless the power to decide whether consultation is adequate has been clearly excluded from its powers, tribunals with the power to decide questions of law, such as the NEB, must determine whether consultation was sufficient, so long as the issue is put before them.
  • The Crown can rely on a tribunal’s process to fulfil the duty to consult so long as the tribunal has the power to do what the duty to consult requires (for example, the power to impose conditions on a project approval to accommodate Aboriginal rights).
  • If a tribunal’s powers are insufficient, or if the tribunal does not provide adequate consultation and accommodation, then the Crown must provide further avenues for meaningful consultation and accommodation before the project is approved.
  • Importantly, the Court emphasized that Aboriginal and Treaty rights must be protected as rights, not as an afterthought to the assessment of environmental concerns. In the Clyde River case, the NEB’s environmental assessment had failed to assess the potential impacts on Treaty rights independent from the assessment of environmental effects.
  • With respect to cumulative effects, the Court said that the effects of an ongoing project and the historical context may inform the scope of the duty to consult. However, it reiterated that the duty to consult is forward-looking. The duty to consult is rooted in the need to avoid the impairment of rights that flow from the implementation of the specific project at issue. It is not about resolving historical grievances or other broader claims that transcend the scope of the proposed project.

The Court outlined the procedural safeguards that, depending on the circumstances, may be required for meaningful consultation:

  • Formal participation by the community in the decision-making process, including, in some cases, participation in an oral hearing;
  • Funding for the community to participate in the process; and
  • If the issue is raised in the proceeding, the provision of written reasons on whether consultation was adequate.

In addition, the Crown should provide Indigenous communities with guidance on how the consultation process will be carried out, so that communities can effectively engage in the process. If the Crown intends to rely on the regulatory process to fulfil its duty to consult, then it should provide notice to the affected Indigenous community at the outset.

The Court also admonished the practice of “document dumping” and said it was not “true consultation.” The project proponent in the Clyde River case had responded to the community’s questions about impacts by providing practically inaccessible lengthy technical documents to the community.

Implications

The cases highlight the risk that projects face in being delayed or rejected if governments and regulatory tribunals do not ensure that consultation processes are meaningful at the outset.

The key principles in Clyde River and Chippewas of Thames will no doubt inform NEB processes as well as project applications before other regulatory tribunals such as the Alberta Utilities Commission, the British Columbia Utilities Commission and the British Columbia Oil and Gas Commission. They may also inform the Alberta Energy Regulator’s (“AER”) processes to an extent; however, the AER’s legislation expressly excludes from its jurisdiction the power to determine whether consultation is adequate.

Directions from the top Court may result in changes in federal and provincial consultation and regulatory processes, including greater participation opportunities for Indigenous communities.