Most readers of this column appreciate that in Canada, the Crown and all of its agencies have a duty, when making decisions that may adversely affect lands subject to the claims of Aboriginal Peoples, to first consult with them and then to reasonably accommodate their legitimate concerns.
This duty is now statutory but has its genesis in the royal proclamation of 1763 wherein the British Crown “pledged its honour to the protection of aboriginal peoples from exploitation.”
Being constitutional in character, the jurisprudence considering the duty would appear to most real estate lawyers as truly sui generis because its nature and the remedy for its breach seem to vary so greatly from situation to situation.
The duty to consult arises when the Crown has knowledge, real or constructive, of potential aboriginal rights or title and is proposing some course of action that might adversely affect such claims. These claims are quite varied in nature, including, without limitation, traditional rights to use land, interests in burial grounds and other cultural sites, treaty rights, land claim agreements, unresolved land claims, and reserves.
Furthermore, the duty isn’t limited to specific projects or initiatives and can, under certain circumstances, extend to strategic higher-level decisions that may have an indirect or downstream impact on aboriginal claims so long as such government conduct is a true causa causans of such adverse effects.
Although the duty to consult doesn’t actually require the Crown and the affected First Nations to reach consensus, the consultation must be substantive and conducted in good faith.
The jurisprudence shaping the scope of the duty is very thick. Chief Justice Beverley McLachlin’s decision in
Haida Nation v. British Columbia (Minister of Forests) frequently comes up as the seminal case on the interpretation of the duty, although there have been many appellate decisions both before and after Haida Nation.
At the end of last year, the Supreme Court of Canada released two more decisions into this jurisprudential cornucopia. In the first case,
Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, the top court analyzed an application of the so-called Haida duty in the context of non-treaty First Nations.
Although a modern case, the true government action giving rise to the current situation actually took place in the 1950s when the Kenney Dam was constructed across the Nechako River to provide electricity for Alcan.
As part of the arrangements for the dam, Alcan was allowed to sell excess electricity to other industrial clients and BC Hydro for the provincial grid. In 2007, BC Hydro entered into a long-term bulk-purchase agreement with Alcan for future electricity.
Eight separate First Nations led by the Carrier Sekani Tribal Council challenged BC Hydro’s right to contract with Alcan for future electricity without first consulting those who, for decades leading up to the 2007 contract, had suffered because of the damming of the river.
The Rio Tinto Alcan decision itself was actually an administrative law case considering whether or not the British Columbia Utilities Commission was ultra vires in taking it upon itself to pass judgment on the duty to consult.
But in deciding this narrow issue, the top court also provided a significant narrowing of the duty to consult. Greatly paraphrased, it held that the duty to consult doesn’t apply to past wrongs, including previous breaches of it; and where the resource has long since been altered and the current government action doesn’t have any further marginal impact on potential aboriginal claims, the current activity doesn’t require consultation.
In its unanimous decision, the top court held that the damming of the river was a past event and that continuing contracts for electricity didn’t exacerbate the harm that such actions may have already wrought on the First Nations along it. As such, BC Hydro had no duty to consult the First Nations before contracting for electricity from Rio Tinto Alcan.
In light of Rio Tinto Alcan and other decisions, lawyers not yet persuaded of the importance of the duty to consult or the relevance of such obligations to their practices should think again. While the duty rests solely with the Crown and its various agencies, it often arises in transactions involving private-sector parties.
While the government can’t download the duty itself to the private sector, procedural compliance aspects may ultimately rest with it as part of the overall allocation of responsibilities in the deal.
In any event, litigation over the failure to discharge such a duty to consult can only bring delays and additional costs to any given project even if the responsibility rested at all times with the government.
If any part of your client base deals with infrastructure related to public-private partnerships, alternative energy, mining or even real estate development anywhere on or near lands affected by or subject to aboriginal claims, the duty to consult needs to be part of your legal repertoire.
Jeffrey W. Lem is a partner in the real estate group at Davies Ward Phillips & Vineberg LLP. His e-mail address is [email protected].
