Hearing Without Listening

The recent appeal court decision in Gitxaala takes government to task for attempting to reduce Aboriginal consultation to a bureaucratic exercise. Rather, consultation must be meaningful

IT’S A CENTRAL TRUTH of Canadian Confederation that the standing of First Nations has been determined far more by hard-fought court battles than by fair-minded government legislation.

In the face of government inertia, Aboriginal groups have waged a seemingly endless fight to define and protect their traditional territories and hereditary rights. In recent years that fight has been marked by a string of First Nations’ victories. Among the most notable have been the 2014 Tsilhqot’in decision of the Supreme Court of Canada, the first recognition of Aboriginal title over specific lands, and by the Federal Court of Appeal’s Gitxaala decision in June of this year, overturning Ottawa’s approval of the $7.9-billion Northern Gateway pipeline project.

In Gitxaala, the Federal Court excoriated the previous federal government for its failure to fulfill its legally binding obligation to consult First Nations before cabinet approved Gateway: “Missing was a real and sustained effort to pursue meaningful two-way dialogue,” the court said. “Missing was someone from Canada’s side empowered to do more than take notes — someone able to respond meaningfully at some point.” Examining those notes, the court found important errors in documenting the concerns of First Nations. Most damningly, the court found no evidence First Nations’ outstanding concerns were considered or responded to in any way by cabinet prior to making its decision to approve Gateway.

Caught between Aboriginal aspirations and government prevarication are the prime movers of the Canadian economy — companies whose huge resource projects are stalled by court challenges that can frequently take a decade to resolve. Hundreds of billions of dollars worth of Québec and Ontario mining and power projects, Alberta oil sands developments, British Columbia liquefied natural gas ventures and oil pipelines spanning the nation are mired in a morass of land claims and treaty rights.

Case law has provided “de facto and piecemeal guidance” as to the way forward but leaves “a large policy gap that only bold government action can fill,” says Radha Curpen in the Vancouver office of Bennett Jones LLP. Curpen adds that the diverse and sometimes conflicting interests of Aboriginal groups “have often been used as an excuse for government inaction.

“This inaction results in missed opportunities — projects being delayed, investment windows being missed and continued socio-economic inequality [between] some Aboriginal groups and the wider Canadian society,” she says. In a written review of the court’s decision, Curpen and colleagues conclude that constant reference to the courts “diminishes Canada’s global competitiveness.”

In the absence of government action, industry has, for several decades, been forced to lead by default. Project proponents were told by federal and provincial governments to consult all affected communities, native and non-native, document concerns, propose mitigation measures and present socially acceptable project applications to regulatory agencies. Regulators were empowered to hold hearings, review all the issues in detail, impose development conditions to mitigate outstanding concerns and approve or, in very rare cases, deny project applications. In the established order of things, regulatory agencies were relied upon to fulfill the obligations of the Crown to consult Aboriginal groups and accommodate their concerns.

The logic of this scheme was straightforward: proponents knew the most about their projects, properly bore the considerable costs of consultation, and were the only ones who could modify project plans to address public concerns. Quasi-judicial regulatory agencies, meanwhile, had the technical expertise and legally valid processes to ensure thorough and fair hearings.

Experts in energy and Aboriginal law agree that Gitxaala makes no new law. Indeed, the court in its decision writes, “… we have not extended any existing legal principles or fashioned new ones.”

“Projects can still be done,” says Valerie Helbronner of Torys LLP in Toronto, and the Crown’s duty to consult can still be delegated to regulators. Far from remaking the legal landscape, Helbronner says, Gitxaala contributes to the ongoing evolution of Aboriginal law by underscoring that “the duty to consult and the honour of the Crown have meaning.”

From the 1970s onward, a growing body of case law has found that the federal Crown owes a fiduciary duty to Aboriginal peoples, including the duty to consult and accommodate before approving any development on land subject to treaty or land claim, proven or pending. Courts have found that this duty can never be adversarial toward Aboriginal groups and always engages the honour of the Crown.

“Successful proponents are the ones who look at [consultation] from a principled perspective,” Helbronner says. “It’s not a check-the-box exercise. Developers should ask themselves, what’s the project, what are the Aboriginal rights at issue and how are these reconciled? It’s not an us-versus-them situation. Any healthy relationship has to have respect at its core.”

Corporate schedules that are too aggressive can frequently clash with the timelines of First Nations, “who’ve been on that land since time immemorial,” says Helbronner, and may be in no hurry to conclude a deal. Wherever issues arise, however, proponents need to be able to “take a step back” and find a solution that is mutually satisfactory.

As Gitxaala demonstrates, the result of a hurried consultation can be a court challenge, and though it seems unlikely that Gitxaala will be appealed, many such cases find their way to the Supreme Court of Canada. Even when there’s no such challenge, consultation takes time. “Very often,” Helbronner says, “the process takes much longer than [proponents] expected. But if they follow a respectful consultation process, they’re much more likely to come to a mutually satisfactory conclusion.”

She advises that companies who are first-timers to the consultation process must not allow themselves to become bystanders, going through the motions of the regulatory process. They should understand both the legal requirements of adequate consultation and that each affected Aboriginal group will have its own distinct interests. “The right outcome is going to be the result of a proper consultation process,” Helbronner says.

The negotiation of impact benefits agreements (IBAs), in which companies provide Aboriginal groups with specific training, employment, revenue-sharing or other incentives in return for contractual support of projects, has become standard operating procedure in recent years — not least of all because it helps to satisfy regulators. But Al Hudec, an Aboriginal representative with Farris, Vaughan, Wills & Murphy LLP in Vancouver, says IBAs aren’t magic.

“I would not go and offer a band a benefits package and think that that’s sufficient,” he warns. IBAs deal primarily with economic issues, while regulatory processes tend to focus on environmental concerns. But Hudec says cultural and social issues can’t be glossed over in the rush to launch a project. As Gitxaala shows, every substantive impact requires meaningful consultation, and Hudec emphasizes that companies have to commit to the long haul.

“For lots of reasons, it can become an interminable process,” he admits. Reasons include the potential for a project to affect several bands with divergent interests, disputes between elected band councils and hereditary chiefs and Indian Act requirements for council elections every two years. “Councils don’t tend to have institutional memories,” he notes, so any unfinished negotiation starts over every two years. The longer it takes to conclude a deal, he says, the more potential there is for agreement to erode, so companies need to think in terms of a constant process of building and maintaining the support of Aboriginal partners.

Curpen says companies must continue to take the lead in negotiations with Aboriginal groups and ensure that all consultations are properly planned, implemented and, vitally, documented.

“We often find that the Crown is not able to properly document consultation,” she says, and it may fall to the company to fill this and other gaps. “What actually happens is, the company has to make sure the Crown is doing its duty. If they don’t … projects are at risk. [The government has] to be at the table but [industry has] to insist that they be adequately at the table.”

In Gitxaala, the court points out that the federal government of the day amended the National Energy Board (NEB) Act in the middle of the Northern Gateway hearing process, making cabinet the final decision maker on projects before the NEB, and that cabinet then failed to honour the specified five-phase consultation process for Gateway. “In this scheme, no one but the Governor-in-Council [cabinet] decides anything,” the court writes.

“[Under] this legislative scheme the Governor-in-Council [cabinet], when considering a project under the National Energy Board Act, must consider whether Canada has fulfilled its duty to consult,” the court says. “At the end of Phase IV of the consultation process is the Governor-in-Council. … [The] ultimate responsibility for considering whether the duty to consult has been fulfilled … rests with the Governor-in-Council and no one else.”

Curpen says this should not be taken to mean that the entirety of cabinet or key ministers must somehow be dragged into final consultations with Aboriginal groups in order to ensure the validity of a project approval under the NEB Act. Nor does it mean that appointed Crown representatives must read the minds of cabinet.

“I think the court’s point was that … 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 fulfillment,” Curpen says. It will now, presumably, fall to each project proponent to somehow ensure that Crown negotiators are sufficiently empowered to fulfill their duties.

There’s also the looming issue raised by Tsilhqot’in, which makes clear the immense disparity between the economic prospects of First Nations who’ve maintained land claims, as compared with those who accepted meagre treaty benefits up to 100 years ago. Treaties cover essentially all of Canada except BC, and federal and provincial governments insist they’re valid. But they may not have the last word.

“Ontario First Nations are constantly thinking of challenging these treaties as contrary to the honour of the Crown,” Hudec observes.