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On June 30, 2016, the Federal Court of Appeal (“FCA”) effectively halted the progress of the Northern Gateway pipeline (the “Project”) despite successful completion of the Joint Review Panel and Cabinet processes.1 The decision is important because it illustrates the uncertainty surrounding the use of quasi-judicial tribunal processes to satisfy the Crown’s duty to consult with potentially affected Aboriginal groups, particularly in the context of natural resources projects. The decision comes at a time when public scrutiny of environmental proceedings is higher than ever, and in the face of pending legislative reform to the federal environmental assessment (“EA”) regime. This article therefore explores several questions that result.
In particular, the 2–1 majority decision quashed the federal government’s order for the National Energy Board to issue project approval certificates on the basis that the Crown failed to discharge its duty to consult. The majority identified inadequacies in the Crown’s consultation efforts during “Phase IV” of a complex five-part consultation framework, which followed the release of the Joint Review Panel’s Report on the Project. The dissenting judgment flatly disagreed with short, pointed reasons.
The FCA’s decision followed the blow dealt to Northern Gateway Pipelines (“Northern Gateway”) in January 2016 when the BC Supreme Court declared as invalid the equivalency agreement between the BC Environmental Assessment Office and National Energy Board that removed the need for a provincial environmental assessment certificate and determined that the honor of the Crown had been breached by the province’s failure to consult First Nations.2
While the FCA’s decision endorsed the EA process before the Joint Review Panel, including Northern Gateway’s consultation efforts, the extent to which the Crown can rely on quasi-judicial tribunal processes (distinct from more administrative processes) to fulfill its duty to consult is now less clear. Because of the broad implications of the decision, both the majority and dissenting reasons warrant a close look by proponents and stakeholders alike.
The Crown’s Five-Phase Consultation Process
The FCA decision consolidated 18 applications for judicial review, which included judicial reviews of the Joint Review Panel’s Report, the Order in Council requiring the National Energy Board (“NEB”) to issue approval certificates, and the NEB’s approval certificates. The appellants comprised seven First Nations groups affected by the proposed Project and a number of environmental organizations with a strong interest in the Project, which involves the construction of a 1,200-kilometer pipeline, marine terminal, and associated facilities. The respondents to the application were the Crown, Northern Gateway, and the National Energy Board.
In response to the enormity of the proposed Project and its potential effects on diverse groups, the Government of Canada designed and implemented a five-phase Aboriginal consultation framework, with Phases I and II occurring at the preliminary stage and before the hearing. At Phase III, the Hearing Phase, Aboriginal groups were encouraged to participate in the hearing and to provide information to help the Joint Review Panel in its process and deliberations. During Phase IV, the Post-Report Phase, the Crown engaged in Aboriginal consultation concerning the Report and on any Project-related concerns outside of the Joint Review Panel’s mandate, and prepared a Crown Consultation Report with its recommendations to the Governor in Council (“GIC”). Phase V contemplated further consultation concerning permits and authorizations to be granted for the Project, if approved.3 Both the Joint Review Panel’s Report from Phase III and the information gathered and shared during Phase IV informed the GIC’s decision on whether to order the NEB to issue approval certificates.
The majority focused on distinguishing between Phases III and IV in the consultation framework. While the majority commended the work of the Joint Review Panel and, in particular, the proponent’s Phase III consultation efforts, it found the Joint Review Panel’s mandate “narrower than the scope of Canada’s duty to consult.”4
Having made this determination, the majority did not answer the question of whether there could be an instance where the Joint Review Panel hearing process alone could satisfy the Crown’s responsibilities when “deep consultation is required” (an issue addressed by the Supreme Court of Canada in 2010, and at issue again later this year). The majority implied that active participation on the part of the Crown in “direct consultation” with First Nations is always a requirement to satisfy the duty to consult,5 but decided the issue by simply stating that the Crown never intended the process to do so.6
The majority also implied that no matter how thorough Phase III, there would always be issues outside of the Joint Review Panel’s mandate that would require further Crown consultation with First Nations, in addition to consultation on the Report, and these additional concerns would be addressed in Phase IV. The majority emphasized that the Crown had the discretion to set up the consultation framework as it saw fit7 and that it was the express intention of the Crown, through Phase IV, to require further consultation with First Nations after the Joint Review Panel hearing.
Looking at Phase IV consultation specifically, the majority determined that Crown actions at this crucial stage were inadequate to satisfy its duty to consult, pointing to multiple shortcomings, including:
- Canada’s emphasis on the short timeline throughout its consultation efforts, which was used as a justification for not holding further meetings or providing information or responding to requests from First Nations. Canada gave affected First Nations 45 days to advise Canada in writing of their concerns and allocated 45 days to meet with all affected Aboriginal groups. Although several First Nations requested an extension of time for further consultation, there was no evidence that Canada considered seeking an extension from the GIC or that it could not have completed its consultation within the allotted time.8
- Canada’s repeated assertions to First Nations that its representatives had an information-gathering function only and had no authority to make decisions or provide the information or responses requested by First Nations.9
- Canada’s unwillingness to share its legal strength of claim assessments or the information underlying them with First Nations, despite an earlier promise by the Minister to provide a description of the legal analysis that informed Canada’s strength of claim and depth of consultation assessment.10
- Canada’s assertion that it had to accept the findings of the Joint Review Panel’s Report, although it was not required to do so.11
- Canada’s Crown Consultation report to the GIC failing to accurately portray the concerns of affected First Nations. The information put before the GIC contained factual errors, misrepresented First Nation’s concerns and positions, described First Nations concerns generically without detailing specific concerns, and contained information gaps. Canada did not indicate that any steps were taken to correct these errors despite requests from First Nations to do so.12
- The GIC’s Order in Council did not express whether Canada had fulfilled the duty to consult, which raised for the majority “the serious question whether the Governor in Council actually considered that issue and whether it actually concluded that it was satisfied that Canada had fulfilled its duty to consult.”13 The majority noted that there was nothing on the record to suggest the GIC received information from the consultations and considered it, calling this “a troubling and unacceptable gap.”14
The majority summarized the deficiencies in Canada’s Phase IV consultation as follows:
Canada failed in Phase IV to engage, dialogue and grapple with the concerns expressed to it in good faith by all of the applicant/appellant First Nations. Missing was any indication of an intention to amend or supplement the conditions imposed by the Joint Review Panel, to correct any errors or omissions in its Report, or to provide meaningful feedback in response to the material concerns raised. Missing was a real and sustained effort to pursue meaningful two-way dialogue. Missing was someone from Canada’s side empowered to do more than take notes, someone able to respond meaningfully at some point.15
For all of these reasons, the majority found that Canada had failed to discharge its duty to consult.
Justice Ryer’s dissent responded directly to the majority reasons, tersely addressing four alleged flaws in the Phase IV consultation. In his view they were simply not made out. Further, he found they would still be insufficient to render the Phase IV consultation inadequate even if they were established, given the content of Phase III.
Ryer J.A. rejected the allegation that the timelines for Phase IV consultation were too short, emphasizing that the timelines were statutorily imposed and Canada had no obligation to request an extension. He also rejected the majority’s view that a four-month extension would have permitted sufficient dialogue to take place and to fill “information gaps” (the majority reasons provide the example of new oil spill modeling studies), on the grounds it was speculative.16
The dissent also rejected the allegation that the Crown Consultation Report’s inaccuracies resulted in the GIC having insufficient information to render its decision.17 Ryer J.A. ruled that because the materials before the GIC were subject to Cabinet confidence, the FCA was unable to assess the adequacy of the materials presented and any inaccuracies in the Crown Consultation report would have been apparent from a review of the Joint Review Panel’s Report, as well as the First Nations’ letters appended to the Crown Consultation Report.18
Ryer J.A. also rejected the allegation that the Phase IV consultations were not meaningful because some First Nations sought further information on Project impacts and Canada did not address their concerns regarding consultation. In his view the requested information related primarily to matters that either were or should have been placed before the Joint Review Panel (presumably, spill modeling, etc.), and were essentially challenges to the adequacy of the Joint Review Panel’s Report.
Lastly, in opposition to the majority judgment, Ryer J.A. held that Canada’s unwillingness to share its strength of claim assessment with First Nations was not an error because strength of claim assessments are protected by solicitor-client privilege.
The dissenting reasons concluded that Canada’s participation in the Phase IV consultation was sufficient to fulfill the honor of the Crown. Any obligation to explain why the duty to consult had been fulfilled rested with the Crown, not only the GIC’s decision statement. The Crown’s overall reasons for reaching its conclusion that the duty had been satisfied were apparent upon considering the totality of the 5-part consultation framework, First Nations’ participation and participant funding, the Crown’s acknowledgement of the potential impacts of the Project on usage rights, and the accommodations of First Nation’s concerns in the Joint Review Panel’s conditions in its Report.
The two sets of reasons contain stark differences. While the majority reasons criticize Phase IV on a host of grounds, the minority reasons not only dispute those failings, they make a broader conclusion: when Phase III and other outcomes are considered with those of Phase IV, the required standard of consultation has been met, imperfections notwithstanding.
Whether Phase III of the consultation framework can inform the adequacy of Phase IV is perhaps the most critical divide between the majority and dissenting reasons. It reflects the current uncertainty surrounding the role of quasi-judicial tribunals in meeting the Crown’s duty to consult (as distinct from more administrative Crown-led processes). Yet the majority’s reasons suggest Phase IV processes may require the receipt of additional expert evidence and in turn, procedurally fair steps (i.e., where the proponent has an opportunity to respond to new evidence and submissions) – which is what Phase III is supposed to do in the first place. We briefly canvas three related questions arising from the decision before offering some conclusions.
Must Phase IV duplicate aspects of Phase III?
As mentioned, there is a continued lack of clarity surrounding the role of quasi-judicial tribunals in fulfilling the Crown’s duty to consult.
In Haida Nation v. British Columbia (Minister of Forests), the Supreme Court of Canada ruled that where deep consultation is required, the Crown can fulfill its duty to consult by creating specific processes, provided what is done maintains the honor of the Crown and effects reconciliation between the Crown and Aboriginal peoples:
While precise requirements will vary with the circumstances, the consultation required at this stage [in cases where deep consultation is required] may entail the opportunity to make submissions for consideration, formal participation in the decision-making process, and provision of written reasons to show that Aboriginal concerns were considered and to reveal the impact they had on the decision. This list is neither exhaustive, nor mandatory for every case. The government may wish to adopt dispute resolution procedures like mediation or administrative regimes with impartial decision-makers in complex or difficult cases.19
The Supreme Court of Canada elaborated on this in Rio Tinto Alcan v. Carrier Sekani, finding that tribunals may carry out procedural aspects of consultation if delegated such responsibilities by the Crown:
The legislature may choose to delegate to a tribunal the Crown’s duty to consult. As noted in Haida Nation, it is open to governments to set up regulatory schemes to address the procedural requirements of consultation at different stages of the decision-making process with respect to a resource.20
Similarly, in Prophet River First Nation v. Canada (Attorney General) the Federal Court ruled that the Crown had satisfied its duty to consult in relation to the Site C hydroelectric project (note, however, that an appeal of this decision was heard on September 14, 2016).21 In reasons conceptually similar to Ryer J.A.’s dissent, the trial judge ruled that the Joint Review Panel process, report, and post-panel consultation efforts, taken together, showed that the Crown had met its duty. Both Rio Tinto Alcan and Prophet River feature BC Hydro as applicant, however, who is a representative of the Crown for consultation purposes. The issue of whether the process itself (i.e., Phase III), absent direct engagement by a Crown actor can satisfy the duty to consult is clouded.
More specifically, in 2015 the FCA reached seemingly inconsistent conclusions on whether NEB processes, without any other direct Crown representative, are capable of satisfying the Crown’s duty to consult. In Clyde River (Hamlet) v. TGS-NOPEC Geophysical Co. ASA, the FCA determined that the Crown could rely on NEB processes, at least in part, and that the nature and the scope of the process afforded by the NEB was sufficient to uphold the honor of the Crown.22 In contrast, in Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., the FCA reached the opposite conclusion. The majority held that the NEB was not required to determine whether the Crown’s duty to consult was engaged and that it had not been delegated the power to fulfill the duty to consult.23 Appeals of both decisions are scheduled to be heard by the Supreme Court of Canada on November 30, 2016.
For Northern Gateway, Phase IV was arguably intended to mitigate the risk that the hearing process could not satisfy the duty to consult. Phase IV was a final opportunity for Aboriginal concerns about the Project to reach the Crown before approval. It is therefore ironic that a process set up to supplement consultation efforts is the reason consultation was found to be inadequate.
The majority reasons suggested that Phase IV should have been the venue to allow for the “dialogue” between Canada and the affected First Nations, with input from Northern Gateway, and that all of this information would then be placed before the GIC:
However, the Phase IV consultations did not sufficiently allow for dialogue, nor did they fill the gaps. In order to comply with the law, Canada’s officials needed to be empowered to dialogue on all subjects of genuine interest to affected First Nations, to exchange information freely and candidly, to provide explanations, and to complete their task to the level of reasonable fulfilment. Then recommendations, including any new proposed conditions, needed to be formulated and shared with Northern Gateway for input. And, finally, these recommendations and any necessary information needed to be placed before the Governor in Council for its consideration. In the end, it has not been demonstrated that any of these steps took place.”24
In contrast, the dissent found the process, as a whole, adequate in discharging the Crown’s duty to consult, and criticized the majority reasons for effectively requiring the Crown to return to issues already addressed in the hearing stage. Ryer J.A.’s dissenting reasons suggested that many of the concerns raised by First Nations were matters that either were or should have been considered by the Joint Review Panel, and “[t]he assertion of such imperfections in the Phase IV consultations represented an attack on the Report in a forum neither designed nor equipped to adjudicate its merits.”25 In other words, Phase IV should focus on understanding responses to the Report produced in Phase III — including any perceived gaps between the Report and the scope of the duty to consult and not reflect an attempt to re-litigate Phase III with items like new scientific studies.
Requiring major projects to undergo a Phase IV with elements that, in practice, revisit earlier hearing issues is not only at odds with the existing statutory scheme for EAs, it amplifies existing concerns about the efficacy of existing EA processes and concerns about a burgeoning approval process.
Does the duty to consult include the duty to disclose?
Another interesting divergence between the two sets of reasons is the differing views on whether the Crown has a duty to disclose its strength of claim information in the course of consultation. The majority reasons cited Halalt First Nation v. British Columbia26 for the principle that Canada was not obliged to share its legal assessment of the strength of claim because it is subject to solicitor-client privilege.27 However, the majority also stated that First Nations “were entitled to know Canada’s information and views concerning the content and strength of their claims so they would know and would be able to discuss with Canada what was in play in the consultations, the subjects on which Canada might have to accommodate, and the extent to which Canada might have to accommodate.”28 The majority reasons draw a distinction between a legal assessment of the strength of claim and the information and evidence that underlie it, suggesting that while Canada has no legal duty to share the former, it may be required to share the latter to conduct consultation in good faith, or as a practical requirement. This distinction does not appear in Halalt
In contrast, Ryer J.A.’s dissenting reasons stated:
in my view, there is little, if anything, to distinguish between the Crown’s “legal” assessment of a First Nation’s claim and “information” the Crown has about the strength of such a claim … the Crown’s legal assessment of the strength of a First Nation’s claim is inherently subject to solicitor-client privilege. In my view, that privilege extends to the Crown’s information upon which its legal assessment is based.29
To require the disclosure of the information base for a strength of claim assessment invites debate about the accuracy of the information and the extent of the Aboriginal rights or title asserted. That may distract from the reason the preliminary strength of claim assessment is relevant in the first place: to establish the depth of the Crown’s consultation obligation and understand potential interference with asserted rights. In this case, there was no dispute that deep consultation was appropriate based on the rights asserted.
The majority appears to prioritize understanding the “content and strength of [rights] claims” over understanding potential Project effects on asserted rights. The relevance of the former may lie in whether proposed accommodation is sufficient to compensate for infringements, and Aboriginal groups “knowing the case they have to meet”. If so, the majority reasons imply that a procedural back-and-forth that includes the proponent should be built into processes that resemble Phase IV.
Who must represent the Crown?
Lastly, the decision raises the question of what Canada’s representatives in the post-hearing phase are empowered to do. The majority reasons identified as a fatal flaw the absence of someone from Canada’s side “empowered to do more than take notes, someone able to respond meaningfully at some point.”30 It is unclear whether the court’s criticism is limited to the Crown actors in Phase IV misunderstanding their mandate, or whether the court is suggesting that a different representative (such as a minister or deputy minister) was required to carry out the consultation mandate and legitimize the Phase IV discussions. Ultimately, as the Supreme Court of Canada stated in Mikisew Cree First Nation v. Canada: “[c]onsultation that excludes from the outset any form of accommodation would be meaningless.”31 It is important to bear in mind that the Crown is not the proponent, and technical matters will often demand the proponent’s perspective.
Conclusions and Implications
This decision is likely bittersweet for proponents of large energy projects. On one hand, the FCA lauded Northern Gateway’s efforts in consultation, recognizing that Northern Gateway had engaged with over 80 different Aboriginal groups using different methods of engagement, granted capacity funding, and funded Aboriginal traditional knowledge studies. On the other hand, despite best efforts, the project cannot proceed. In an ironic twist, it is the process design selected by the Crown, arguably to minimize consultation risk, that is at the root of the failure to satisfy the duty to consult.
Following the FCA’s decision, the federal government has three options:
- direct the NEB to issue an approval certificate subject to the terms and conditions set out in the Joint Review Panel’s Report;
- direct the NEB to dismiss Northern Gateway’s application for an approval certificate; or
- ask the NEB to reconsider its recommendations in its report or any terms and conditions, or both, after which the federal government will consider the NEB’s reconsideration report and decide again among these three options.
On September 20, 2016, Northern Gateway announced that it would not appeal the decision to the Supreme Court of Canada, and would instead focus on further consultation to remedy the deficiencies identified by the majority. Northern Gateway publicly stated: “We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process.”32 But on September 31, 2016, Raincoast Conservation Foundation filed an application for leave to appeal the EA aspects of the decision (favorable to Northern Gateway) to the Supreme Court of Canada.33
Going forward, all parties in the EA process should expect the Crown to reconsider whether a more active role is required to ensure direct and meaningful dialogue with affected Aboriginal peoples. Whether that means direct Crown involvement in the Joint Review Panel hearing process or better discussions with Aboriginal peoples after the hearing process concludes remains to be seen. Despite the FCA describing Canada’s five-part consultation framework as well-designed,34 the Crown might well design something different in the future to better manage risks to its decision making.
Similarly, it is unclear how proponents will adjust their approaches to Phase III and IV type processes. One option would be to address more concerns that would otherwise be out of scope in the hearing phase, rather than potentially leaving them solely in the hands of the Crown in the post-hearing phase. Another tactic could be to find a way to participate more actively in Phase IV, perhaps explicitly redirecting some issues from Phase III.
What is clear, however, is that efforts of project proponents can only go so far to secure project approval absent First Nations support, and that project approval will require more care by the Crown in discharging its duty to consult.
- Gitxaala Nation v. Canada, 2016 FCA 187 (“Gitxaala Nation”).
- Coastal First Nations v. British Columbia (Environment), 2016 BCSC 34.
- Gitxaala Nation, para. 26.
- Gitxaala Nation, para. 240.
- Gitxaala Nation, para. 215.
- Gitxaala Nation, paras. 238-243.
- Cold Lake First Nations v. Alberta (Tourism, Parks & Recreation), 2013 ABCA 443, para. 39.
- Gitxaala Nation, paras. 328-329.
- Gitxaala Nation, para. 264.
- Gitxaala Nation, para. 222.
- Gitxaala Nation, para. 274.
- Gitxaala Nation, para. 262.
- Gitxaala Nation, para. 321.
- Gitxaala Nation, para. 323.
- Gitxaala Nation, para. 279.
- Gitxaala Nation, para. 356.
- Gitxaala Nation, para. 356.
- Gitxaala Nation, para. 355.
- 2004 SCC 73, para. 44.
- 2010 SCC 43, para. 56.
- 2015 FC 1030.
- 2015 FCA 179.
- 2015 FCA 222.
- Gitxaala Nation, para. 327.
- Gitxaala Nation, para. 357.
- 2012 BCCA 472.
- Gitxaala Nation, para. 224.
- Gitxaala Nation, para. 309.
- Gitxaala Nation, para. 358.
- Gitxaala Nation, para. 279.
- 2005 SCC 69, para. 54.
- Newswire, “Northern Gateway announces it will not appeal recent Federal Court of Appeal decision that reversed project approval”, Sept. 20, 2016. http://www.newswire.ca/news-releases/northern-gateway-announces-it-will-not-appeal-recent-federal-court-of-appeal-decision-that-reversed-project-approval-594138911.html
- Supreme Court of Canada File 37201.
- Gitxaala Nation, para. 8.