JurisdictionUnited States
Natural Resources Development in Indian Country
(Nov 2005)


Thomas Isaac
McCarthy T´cmb;etrault LLP
Vancouver, British Columbia, Canada

Thomas Isaac, B.A., M.A., LL.B., LL.M., is a nationally recognized authority in aboriginal law and has published numerous books and many articles in the area. His published work has been cited with approval by numerous Canadian courts including the Supreme Court of Canada. His new book entitled Aboriginal Title will be published later this fall. He has advised industry and business and provincial, territorial, and municipal governments on aboriginal issues across Canada.

He is a former Chief Treaty Negotiator for the Government of British Columbia and prior to that was Assistant Deputy Minister for the Government of the Northwest Territories responsible for establishing Nunavut. He has taught aboriginal, constitutional and business law at a number of universities across Canada and is a member of the Bars of British Columbia, New Brunswick, Northwest Territories and Nunavut. He is a Partner in the Vancouver office of McCarthy T´cmb;etrault LLP.

1. Introduction

Major legal developments have occurred in Canada in 2004 and 2005 that directly affect mining and exploration in this country. This paper focuses on three decisions from the Supreme Court of Canada ("SCC") dealing with the constitutionally protected rights of aboriginal peoples and their access to, or influence on, resources and the ability of the federal and provincial governments (together, the "Crown") to govern in the face of such rights. The three decisions are (a) Haida Nation v. B.C. and Weyerhaeuser, 1 (b) Taku River Tlingit First Nation v. B.C. (Project Assessment Director), 2 and (c) R. v. Marshall; R. v. Bernard. 3

These recent legal developments have increased the level of legal certainty in aboriginal law generally, and the authority of government to regulate and provide access to resources. These developments have also clearly confirmed that governments cannot pursue such regulation or access without considering the affects of such actions on the rights of aboriginal peoples. While these developments offer a certain level of progress for the resource development community, the extent of this progress will only be known once governments fully engage in implementing their constitutional obligations to aboriginal peoples in a manner that also preserves governments' authority to govern and manage natural resources.

2. Major Case Law Developments

(a) Haida Nation v. B.C. and Weyerhaeuser4
(i) Facts and Lower Courts

Haida concerned a petition by the Council of the Haida Nation for a declaration that a number of replacements of a tree farm licence ("TFL") replacements were invalid because the Crown's duty to consult with the Haida Nation respecting their asserted but unproven claims of aboriginal title to the land subject to the TFL replacements had not been met. The Haida Nation alleged that the Minister of Forests ("Minister") made decisions in 1981, 1995, and 2000, to replace TFL 39, and to approve a transfer of the TFL 39 from MacMillan Bloedel Ltd. to Weyerhaeuser Company Limited ("Weyerhaeuser"), and in doing so, the Minister acted without, or in excess of, his jurisdiction.

On November 21, 2000, the Chambers Judge dismissed the Haida Nation's petition. 5 On February 22, 2002, three judges of the B.C. Court of Appeal unanimously allowed the Haida's appeal and held that the Crown and Weyerhaeuser each owed a duty to consult the Haida Nation and to seek workable accommodations with them. 6 Weyerhaeuser was granted a re-hearing by the British Columbia Court of Appeal which confirmed the result of its original decision, but now with a two-one split, with Low J. dissenting. 7 Haida and Taku were heard together by the SCC on March 24 and 25, 2004.

(ii) Supreme Court of Canada

Weyerhaeuser and the Minister appealed the B.C. Court of Appeal decisions to the SCC, which held a hearing in March 2004, and on November 18, 2004 the SCC delivered its unanimous seven-member panel decision. 8 McLachlin C.J. held that the provincial Crown has a legal duty to consult with aboriginal peoples, and that such consultation may, in appropriate circumstances, lead to a duty to accommodate. Any consultation undertaken by the Crown must be "meaningful," cannot be discharged in substance by delegation to third parties, and does not require that an agreement be concluded between the Crown and the aboriginal peoples so consulted. 9

The SCC held that the Crown's duty to consult with aboriginal peoples and, where appropriate, accommodate their interests is based on the concept of the "honour of the Crown," introduced by the SCC in earlier decisions. 10 The Court held that the "honour of the Crown" is a "core precept that finds its application in concrete practices" 11 and requires the Crown to always act honourably when dealing with aboriginal peoples in order for the preexistence of aboriginal societies to be reconciled with Crown sovereignty. While the "honour of the Crown" may, in appropriate circumstances, include a fiduciary component, the fiduciary aspect was not engaged in this case. While there may be a duty to consult aboriginal peoples in circumstances where the Crown's fiduciary duty is triggered, the duty to consult is not based on fiduciary principles. The "honour of the Crown" also applies to the conduct of treaty negotiations and treaty interpretation. 12

The Crown's duty to consult is triggered when the Crown has "knowledge, real or constructive", of the potential existence of aboriginal rights or aboriginal title and contemplates conduct that might adversely affect such rights or title. 13 Constructive knowledge places a significant burden on the Crown to ensure that its internal communication mechanisms between departments and ministries is coordinated. That is to say, courts will likely assume that the Crown, as a whole, is aware of any knowledge it may possess, regardless of where within the Crown such knowledge resides.

While judicially established rights are not required to trigger the duty to consult, this duty does not unduly fetter the Crown's ultimate authority to govern and manage Canada's natural resources. McLachlin C.J. wrote:

The Crown, acting honourably, cannot cavalierly run roughshod over Aboriginal interests where claims affecting these interests are being seriously pursued in the process of treaty negotiation and proof. It must respect these potential, but yet unproven, interests. The Crown is not rendered impotent. It may continue to manage the resource in question pending claims resolution. 14 emphasis added.

The Crown's duty to consult and accommodate aboriginal peoples is part of a "process of fair dealing and reconciliation" that starts with the assertion of Crown sovereignty and continues beyond formal claims resolution. Reconciliation, therefore, in the words of McLachlin C.J. is "a process flowing from the rights guaranteed by subsection 35(1) of the Constitution Act, 1982." 15

The SCC also confirmed that the content of the Crown's duty to consult and accommodate will vary with the circumstances, but the scope of the duty will be proportionate to a preliminary assessment of the strength of the case supporting the existence of the aboriginal right or title and the potential of a serious adverse effect on the aboriginal right or title so asserted. In all cases though, the Crown must act in good faith to provide meaningful consultation appropriate to the circumstances and, in doing so, should put in place procedural safeguards consistent with the principles of natural justice and administrative law. 16

Aboriginal peoples also have duties when dealing with the Crown's attempts to consult with them, including obligations to (a) deal in good faith, (b) not frustrate the Crown's reasonable good faith efforts to consult, and (c) not take unreasonable positions to thwart the Crown from making decisions or acting when an agreement is not reached. While there is no duty on the Crown to reach an agreement with aboriginal peoples, there is a duty to have a "meaningful process of consultation" but such a process does not prevent the Crown from "hard bargaining." 17

McLachlin C.J. accepted that there is a spectrum of consultation, first elaborated on in Delgamuukw v. B.C., 18 in respect of the Crown's duty to consult. At one end of that spectrum are cases in which the claim of an aboriginal right is weak and the potential infringement is minor. In such a case, the only duty that the Crown likely has is to provide notice, disclose information, and discuss aboriginal responses to such notice and information. At the other end of the spectrum are cases in which there is a strong prima facie case for an aboriginal right, the potential infringement is of high significance to aboriginal peoples and where the risk of non-compensable potential damage may be high. In such cases, the SCC stated that "deep consultation" may be required and may include: (a) finding an interim solution, (b) providing the aboriginal peoples with an opportunity to make submissions for consideration, (c) allowing formal participation by aboriginal peoples in the decision making process and (d) providing written reasons to show that the aboriginal concerns were considered. Between these two poles lie the remainder of cases that require a case-by-case approach 19 and is likely where most consultation, where triggered, will occur.

The SCC stated that there is a two stage process relating to the duty to consult for the Crown to consider: (a) at what point along the spectrum is the duty to consult engaged, or how seriously is the Crown taking the asserted aboriginal interest, and (b) once engaged, the procedural question of whether the process so utilized is fair and reasonable. If the Crown comes to the wrong...

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