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Impacts on IBA Benefits Trigger Consultation

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Indigenous Law Bulletin

On July 19, 2021, the Federal Court released its judgment in Ermineskin Cree Nation v. Canada (Environment and Climate Change), 2021 FC 758. The Court ruled that the Minister of Environment and Climate Change (the “Minister”) breached the Crown’s duty to consult Ermineskin Cree Nation (“Ermineskin") prior to designating the Vista Coal Mine Phase II Expansion Project (“Phase 2 Expansion”) and an Underground Test Mine (the “Test Mine”, and together with Phase 2 Expansion, the “Project”) for the purposes of the federal Impact Assessment Act [1]. The Project was delayed as a result of the designation process, as were the economic, community and social benefits that Ermineskin had negotiated for itself in relation to the Project. In these circumstances, the Federal Court found that the Crown’s duty to consult extended to protect Ermineskin’s economic interest flowing from the benefits it had negotiated with the project proponent, Coalspur Mines (Operations) Ltd. (“Coalspur”), as compensation for the impacts of the Project on Ermineskin’s Aboriginal and Treaty rights.

Background

Ermineskin is a signatory to Treaty 6 in central Alberta. In December 2013, Ermineskin signed an Impact Benefit Agreement (the “2013 IBA”) with Coalspur regarding the Vista Coal Mine (“Phase 1”). Coalspur proposed to expand the Phase 1 footprint westward through the Phase 2 Expansion in 2018. In 2019, Coalspur proposed to add the Test Mine within the existing Phase 1 footprint. Ermineskin and Coalspur entered into a second Impact Benefit Agreement in October 2019 in respect of the Project (the “2019 IBA”), which provided economic, social and community benefits to compensate Ermineskin for potential impacts of the Project on their ability to exercise Aboriginal rights within their territory, including rights to participate in the ongoing environmental monitoring of the Project. [2]

Designation Process Under the Impact Assessment Act

Under Canada’s Impact Assessment Act [3], the Minister retains the discretion to “designate” a project for federal impact assessment purposes, where the Minister is of the opinion that physical activity may cause adverse effects within federal jurisdiction or adverse direct or incidental effects, or public concerns related to those effects warrant the designation, including potential adverse effects to Indigenous peoples. The designation process is designed to give the Minister the ability to consider whether or not a federal impact assessment is needed for a project, in circumstances where that project does not exceed the quantitative thresholds for “designated projects” prescribed by regulation [4]. Importantly, once the Minister issues a designation order in relation to a project, the proponent is barred from advancing physical activities in connection with the project until the federal impact assessment is complete or a determination is made that a federal impact assessment is not required.

In December 2019, the Minister considered whether the Project warranted designation under the Impact Assessment Act and decided that it did not.

However, in July 2020, after two Indigenous nations (Louis Bull Tribe and Stoney Nakoda Nations) had filed requests for the Minister to issue a designation order, supported by public interest groups, the Minister reversed course and decided to designate the Project for federal impact assessment (the “Minister’s Decision”).

The Court noted at several points that the process leading to the Minister’s Decision appeared “one-sided”. The two Indigenous nations requesting the designation not only initiated the process, but were also given the opportunity to reply to Coalspur’s responding submissions [5]. In contrast, Ermineskin was excluded from the process and was not given an opportunity to have any input or to comment on the submissions requesting the designation order or Coalspur’s response. [6]

The Federal Court Decision

Ermineskin sought judicial review of the Minister’s Decision, claiming that it constituted Crown conduct that had the potential to delay, lessen, and eliminate any economic interest that Ermineskin had in the Project, including the benefits it had negotiated pursuant to the 2019 IBA. Conversely, the Minister argued the Ermineskin’s economic interests were not treaty rights and therefore the duty to consult was not engaged. [7]

The Court rejected the Minister’s arguments. It found that Ermineskin had entered into the 2013 IBA and the 2019 IBA to obtain economic and community benefits in compensation for potential impacts to their Aboriginal and Treaty rights. These “valuable rights” under the two IBAs were an “economic interest … closely related to and thus derivative from [Erminskine’s] Aboriginal and Treaty rights.” [8] Since Ermineskin’s economic interest could be adversely impacted by the Minister’s Decision to subject the Project to federal impact assessment, including as a result of delays stemming from the designation process, Ermineskin should have been consulted. The fact that certain benefits had not yet materialized did not negate the Crown’s duty to consult. According to the Court:

Even if the benefits of [the] 2019 IBA may not have started to flow, that cannot negate [the] 2019 IBA’s value to Ermineskin. It also seems to me that the duty to consult regarding the loss of the 2019 IBA also results in value to the Crown in terms of its stated goals in relation to reconciliation. In addition, I find the fact obligations must be delivered in accordance with contractual terms, some of which may occur in the future, in no way diminishes the fact that the 2019 IBA was intended to benefit Ermineskin and its citizens. [9]

As a result, the consultation process was flawed, since it denied Ermineskin the right to participate and only considered the perspectives of Indigenous nations seeking the designation order. [10]

Implications

This case makes clear that if a project proponent enters into an Impact Benefit Agreement with one or more Indigenous nations in respect of a project, and the Crown then contemplates conduct that could delay or block that project, thereby resulting in the potential loss or diminishment of positive benefits or economic opportunities that an Indigenous nation has negotiated for itself, these economic interests are sufficient to trigger the Crown’s duty to consult the affected Indigenous nation prior to taking such action.

 


[1] Impact Assessment Act, SC 2019, c 28, s 1.

[2] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 68.

[3] Impact Assessment Act, SC 2019, c 28.

[4] Physical Activities Regulation, SOR/2019-285.

[5] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 34.

[6] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 35.

[7] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 6.

[8] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 107.

[9] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 116.

[10] Ermineskin Cree Nation v Canada (Environment and Climate Change), 2021 FC 758 at para 129.

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