In a unanimous decision, the Supreme Court of Canada in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, overturned the decision of the British Columbia Court of Appeal (BCCA) and upheld approval by the British Columbia Utilities Commission (the Commission) of an Energy Purchase Agreement (EPA) between BC Hydro and Rio Tinto Alcan Inc. (Alcan). The decision of the Supreme Court of Canada provides some clarity regarding when the Crown’s duty to consult First Nations is triggered. However, perhaps more importantly, it provides some long awaited clarification of the role of regulatory tribunals in decisions considering the Crown’s duty to consult with First Nations.

We had previously issued an Alert on this case following the decision of the BCCA.

BACKGROUND

The Kenney Dam was built on the Nechako River in the 1950s for production of hydroelectric power to run an aluminum smelter. Since the 1960s Alcan has sold excess power generated by the Dam to BC Hydro under EPAs. The 2007 EPA, which is the subject of this appeal, committed Alcan and BC Hydro to a commercial contract for the sale and purchase of excess power from the Kemano site until 2034.

The Carrier Sekani Tribal Council First Nations (CSTC) claim the Nechako Valley as their ancestral homeland. The CSTC also claim an Aboriginal right to fish in the Nechako River. The dam affects the amount and timing of water flows into the Nechako River, consequently impacting the fisheries which the CSTC claim they have traditionally accessed.

THE DECISION OF THE BRITISH COLUMBIA UTILITIES COMMISSION

The 2007 EPA was submitted to the Commission by BC Hydro and Alcan, for approval. The first step in the Commission’s process was a preliminary decision regarding the scope of the hearing. In this case, the Commission’s scoping order determined that Aboriginal consultation was relevant to the same extent as consultation of all stakeholder interests. The CSTC was not a participant in the original scoping decision, but successfully applied for late intervener status and applied to the Commission to reconsider its scoping decision.

On the reconsideration application the Commission first considered the issue of its jurisdiction to consider issues of Crown-Aboriginal consultation. The Commission held that pursuant to its general power to consider issues of law it was empowered to consider constitutional issues, including whether the Crown had met its constitutional duty to consult with the CSTC. The Commission then went on to consider the issue of whether a duty to consult arose in this case.

The CSTC argued that the duty to consult arose on the basis that the 2007 EPA was a decision in relation to the larger hydroelectric project, and the original building of the dam, for which the government had failed to consult the CSTC and which continued to impact their rights and interests.

The Commission rejected the CSTC’s argument and held that an underlying infringement was not sufficient to trigger the duty to consult and the government conduct at issue, the 2007 EPA, would not have any direct adverse physical impact on the Nechako River or its fishery. Consequently, the Commission dismissed the CSTC’s application and declined to rescope the hearing to include consultation issues.

DECISION OF THE BRITISH COLUMBIA COURT OF APPEAL

The CSTC appealed the Commission’s decision to the BCCA. The BCCA upheld the Commission’s finding on the issue of jurisdiction, but held that the Commission erred in deciding the issue of consultation as a preliminary matter in the context of the scoping decision.

The BCCA did not make any findings with respect to the Commission’s substantive decision that the 2007 EPA did not raise any potential for direct adverse impacts on the rights and interests of the CSTC, and consequently that the duty to consult was not triggered in this case. Rather, the BCCA held that the Commission erred in determining the issue of consultation as a preliminary issue and should have conducted a full hearing into whether the Crown’s duty to consult was triggered and subsequently met. The BCCA reversed the Commission’s orders and remitted the matter back to the Commission for a full hearing on the issue of consultation. Leave to Appeal to the Supreme Court of Canada was sought and granted.

DECISION OF THE SUPREME COURT OF CANADA

The SCC articulated the main issues to be decided as:  

  1. whether the commission had jurisdiction to consider consultation;  
  2. if so, whether the Commission’s refusal to rescope the inquiry to consider consultation should be set aside.  

i. Jurisdiction of the Commission

In considering the Commission’s jurisdiction to consider issues of Aboriginal consultation, the SCC noted that the parties and prior decision makers in this case appeared to have merged the issues of whether a tribunal has the jurisdiction to consider the sufficiency of the Crown’s duty to consult, as opposed to whether the tribunal itself has a duty to consult.  

The argument was put before the Court that where a tribunal finds that consultation has not been adequate, it must itself fulfill the duty on the basis of its jurisdiction to consider questions of law. The SCC rejected this argument and held that a tribunal’s role in consultation is restricted by the powers that are conferred on it by statute. The SCC held that although the Crown could expressly delegate the duty to consult to a tribunal, the power to engage in consultation could not be inferred from a tribunal’s power to consider questions of law.  

The SCC concluded that that the BCCA did not err in finding that the Commission had the power to consider the issue of consultation. The Commission’s power to decide questions of law, under s.71 of the Utilities Commission Act, was broad enough to include the issue of Crown consultation with Aboriginal groups. Further, s.44(1) of the Administrative Tribunals Act, did not oust the Commission’s jurisdiction. Section 44(1) provides that “the tribunal does not have jurisdiction over constitutional questions,” however, constitutional question is narrowly defined in the Administrative Tribunals Act to include only circumstances where legislation is being challenged for constitutional validity or applicability or on an application for a constitutional remedy.

By comparison, in Alberta the Alberta Utilities Commission and the Energy Resources Conservation Board are expressly granted the authority to determine questions of constitutional law under the Designation of Constitutional Decision Makers Regulation. Therefore, the SCC’s decision supports the argument that these tribunals also have the jurisdiction to decide the adequacy of Crown consultation as the need arises.

ii. Triggering the Duty to Consult – Refining the T est

The SCC confirmed the three part test set out in Haida as the correct test to establish whether the Crown’s duty is triggered: 1) whether the Crown had knowledge of a potential Aboriginal claim or right; 2) whether Crown conduct was contemplated; and 3) whether the Crown conduct at issue may adversely impact the claimed Aboriginal right.

On the first two branches the SCC held that the test was met. The Crown was well aware of CSTC’s claims in respect of the Nechako Valley and the Nechako River. Further, the government conduct at issue (a proposal by a Crown Corporation to purchase electricity from Alcan), was clearly the kind of government conduct sufficient to trigger the duty to consult with First Nations.

However, the critical issue at the centre of this case was whether the decision or conduct at issue might adversely impact claimed Aboriginal rights or interests. In particular, the question before the Court at all levels was whether a historic breach of the duty to consult and ongoing impacts on First Nations interests, stemming from the breach, was sufficient to trigger the duty to consult. Here the Court held that a duty to consult is not triggered merely by historic breaches or ongoing impacts arising from that breach. The claimant must establish a causal link between “the conduct or decision and potential adverse impacts on pending Aboriginal claims or rights.” A continuing breach to consult will not suffice to trigger a duty to consult if the present decision does not have the “potential of causing a novel adverse impact on a present claim or existing right.”

Finally, the SCC reiterated that the purpose underlying the duty to consult is to facilitate reconciliation between First Nations and the Crown. The duty to consult is intended to protect the interests of First Nations from impacts of development while negotiations to settle their claims are ongoing. In this context, the SCC noted that it does not make sense to consult in respect of past breaches of the duty to consult. The issue “is not consultation about the further development of the resource, but negotiation about compensation for its alteration without having properly consulted in the past.” The SCC determined that the Commission had applied the correct legal test and overturned the BCCA’s decision.