December 2011

Economic and resource development on aboriginal lands by either government or private sector interests continues to be a controversial and divisive topic. Although there are many examples across Canada of collaborative projects that have created jobs and other opportunities and raised income levels for aboriginal communities, there are many other examples of failures, court cases and lost opportunities.

For governments and private enterprises alike, there is a need to tread carefully and respectfully after fully understanding the Crown's duty to consult with aboriginal communities. Ongoing legislative changes will continue to have a dramatic impact on resource development and energy projects in which billions of dollars are at stake.

For example:

• In March, 2011, the federal government issued revised consultation and accommodation guidelines to federal officials for consulting and accommodating with Aboriginal Peoples.
• In August, 2011, the Ontario government released for comment its draft aboriginal consultation guide for use by applicants seeking renewable energy project approval in Ontario and in 2009, amendments to Ontario's Mining Act included aboriginal communities being given the opportunity to provide input as to how mining exploration activities will impact their aboriginal and treaty rights. Further details are pending.
• British Columbia recently overhauled its policy on consultation with First Nations.
• Quebec's proposed Plan Nord and Ontario's Far North Act contemplate new procedures and controls implementing current attitudes relating to consultation and accommodation with Aboriginal Peoples.

Despite differences in approach and details, these and other guidelines reflect a continually evolving legal reality – the Crown has a legal duty to consult and accommodate, depending upon the circumstances, with aboriginals.

How did the duty to consult and accommodate evolve?

The modern basis for this duty is contained in Canada's Constitution Act, 1982. Section 35 recognizes and affirms the existing aboriginal and treaty rights of the Aboriginal Peoples of Canada. It is the "honour" of the Crown to uphold the Constitution. The intent included facilitating the reconciliation of pre-existing aboriginal societies and their prior occupation with the concept of Crown sovereignty.

"Aboriginal Peoples" includes Indians, Inuit, and Metis. Aboriginal Peoples have inhabited the lands of Canada for thousands of years. Court decisions over the years resolved that aboriginal rights are those practices, traditions and customs central to the aboriginal societies that existed in North America prior to contact with Europeans. An extensive protocol developed to analyze claims of aboriginal rights and translate them into modern legal rights.

Treaty rights, on the other hand, arise as a result of treaties entered into (beginning in the 1870s) between Canada and certain Aboriginal Peoples. Treaty interpretation has also spawned a number of court decisions.

Subsequent court decisions extended the "honour" of the Crown to a duty to consult and accommodate if appropriate and this area of the law will continue to evolve.

Key precedents

For instance, in the Haida Nation decision (2004), the Supreme Court of Canada (SCC) held that the legal duty to consult rest with the Crown and is triggered when:

1. the Crown;
2. has actual or constructive knowledge;
3. of the potential existence of an aboriginal right or title; and
4. contemplates conduct that might adversely affect it.

In Delgamuukw (1997), the SCC ruled that "the minimum acceptable standard is consultation (that) must be in good faith, with the intention of substantially addressing the concerns of the Aboriginal Peoples whose lands are at issue."

Consequently, if there is no causal relationship between the proposed conduct and the potential for adverse impact on the claim or right, consultation is not triggered. Such things as past wrongs, or speculative impacts or adverse effects on future negotiations, have been held to not trigger consultation.

Conversely, if a causal relationship does exist then the extent of the consultation/accommodation is assessed.

How far does the duty to consult and accommodate extend?

To assess the extent of consultation required, consider the process to be a form of spectrum analysis – that is to the extent that the asserted claim or right is tenuous or weak, the actual or potential adverse impact is minor and the underlying governing promises or agreements were general, then the extent of consultation is low. On the other hand, if the asserted claim or right is credible, the extent of the actual or potential adverse impact is major and the underlying governing promises or agreements are specific, then the extent of consultation is high and accommodation may be necessary.

As the SCC put it in Haida, "the scope of the duty is proportionate to a preliminary assessment of the strength of the case supporting the existence of the right or title and to the seriousness of the potentially adverse effect upon the right or title claimed."

For their part, the Aboriginal Peoples involved owe a reciprocal duty of good faith and do not have a "veto." Furthermore, accommodation does not necessarily mean monetary compensation.

Interestingly, in Haida, the SCC held that although the Crown cannot delegate its legal duty to consult or accommodate, industry and other third parties can perform the procedural aspects included in the duty. Federal and provincial governments have utilized this element, as is evident by the procedural elements contained in various consultation guidelines. This trend is expected to continue.

The Crown typically monitors the processes via various permitting and approval processes. It is the Crown, though, that must decide whether the duty exists, the extent of consultation required and whether it was satisfied. Court decisions and legislation will continue to evolve and refine the process.

What form can the accommodation take?

As a practical matter, however, industry and other third parties on their behalf, are and must remain involved in the consultation process not solely due to the context of government cutbacks and other austerity measures. Theoretically, the Crown could offer land, resources and funding but that is not likely under any practical analysis. Typically, for the industry proponent the matter is also time sensitive and there is a need for legal certainty. As such, industry involvement becomes part of their risk identification, mitigation and management protocol.

Further, the company can offer innovation, collaboration and entrepreneurial wealth building. It is the company that has the "currency" to effect collaborative relationships with the aboriginal community.

Historically, these collaborative relationships were effected between the company and the Crown (on behalf of itself and the relevant aboriginal community). Now the aboriginal community and the company are contracting directly as the community seeks to earn economic, employment and other benefits, plus respect for its cultural and other values, beyond what was traditionally provided by the Crown.

Further, although the consultation/accommodation duty rests with the Crown, the failure to do so adequately is borne by the company and the aboriginal community. Consequently each of the latter has a vested interest in ensuring that the process is done properly and successfully creates a "win-win" relationship.

Brian McIntomny is an experienced business lawyer who has worked extensively on strategic alliances and business relationships involving private companies, Crown corporations and First Nations, is available to comment.