Duty to Consult: an Aboriginal veto to modern development?

Urban planners and property developers have a seemingly never-ending list of studies, reports, approvals, consents, and other development hurdles to go through before the hundred acre lot of standing canola becomes the next Running Meadows subdivision (or any other intensification of use). Well, the list isn’t getting any shorter. The rights of Canada’s First Nations to be consulted when making decisions that may adversely affect lands subject to the claims of Aboriginal Peoples should be added to the list of development hurdles.

The Duty to Consult (DTC) is a constitutionally enshrined right of all Canadian Aboriginal Peoples to have the Crown consult with them and accommodate their legitimate interests whenever the Crown has knowledge (direct or indirect) of the potential Aboriginal rights or title claims, and the Crown is contemplating doing something that might adversely affect those Aboriginal rights or title claims. Typical examples of such Crown actions include the granting of licenses, permits, approvals, and resource claims.

Although the roots of DTC go back to the 1990s, the modern genesis of the DTC is much more recent, with most lawyers pegging the Supreme Court of Canada decision in Haida Nation in 2004 as the beginning of the “modern” DTC era. In Haida Nation, the British Columbia government issued tree farming licenses without allegedly adequately consulting and accommodating the Haida First Nation. The Supreme Court of Canada concluded that the DTC was not a fixed protocol, but rather a moving matrix that depended on: (i) the strength of the Aboriginal claims; and (ii) the severity of the action proposed by the Crown. Of course, it is almost trite to say that more DTC is required when the Aboriginal claim is rock solid and the proposed government actions potentially catastrophic, but the trick since Haida Nation has been to determine just how strong some Aboriginal claims really are, and just how significant some of these proposed government actions really are.

Luckily, the DTC does not always mean additional layers of bureaucratic complexity. In the Taku River Tlingit First Nations case, which was also decided concurrently with Haida Nation, a local resource company wanted to re-open an abandoned mine but the local Aboriginal nation objected to the lack of any efforts to satisfy the DTC. The Supreme Court of Canada agreed that there was certainly a DTC, but since the mine re-opening had already been subject to a gruelling and lengthy Environmental Assessment Act review process (a process which the Aboriginal claimants had been actively engaged throughout), that was good enough to satisfy the DTC and there was no need for yet another set of processes. Similarly, in Broken Ojibway, a 2009 Federal Court case, the Aboriginal claimants boycotted consultation opportunities then demanded a separate protocol to satisfy the DTC. The Federal Court held that the DTC had already been met and the Aboriginal claimants chose to squander their own rights by not fully engaging when they had the opportunity.

Likewise, the courts have not just treated the DTC as an automatic veto card handed to the First Nations. In the Mikisew Cree case, a Supreme Court case dealing with road access through Aboriginal lands, the court reminded Aboriginal claimants that the DTC also imposed on them a reciprocal duty to act in good faith and reminded the applicants that, even as far back as Haida Nation, there was always a duty on the Aboriginal claimants not to take unreasonable positions just to try and frustrate the Crown’s decision-making powers.

DTC also applies directly to real estate development and Neskonlith Indian Band v. Salmon Arm is an example of how DTC might come into play. A local developer wanted to construct a shopping centre near confirmed Aboriginal lands. The location of the parking posed alleged flood risks for the Aboriginal lands. Municipal staff supported the developer’s plan and the municipal council went ahead and approved the development of a shopping centre. The British Columbia Court of Appeal confirmed that, while the Crown had a DTC, the DTC was limited to the federal and provincial governments. Municipalities were free and clear of the DTC. This is a significant relief for most developers and urban planners since it is at the sub-provincial level (i.e. at the municipal and regional levels) that most infrastructure and servicing planning takes place.

Another concern for readers of Building should be the Crown’s preference for downloading its DTC obligations. In Wahgoshig First Nation re Solid Gold Resources, a 2012 Ontario decision relating to mining claims under the Ontario Mining Act, the issue wasn’t so much whether the Provincial government had a DTC. The Provincial government knew it had a DTC, but insisted that the private resource company do all the consulting and accommodating before staking out its mining claims near Aboriginal lands. The resource company did not do so, and proceeded to stake its claims. The Divisional Court agreed that the resource company, being a private entity, had no DTC. This is an obligation of the Crown (at the provincial and federal levels, but often they cannot agree amongst themselves who has to take the helm). In response, Ontario amended the Ontario Mining Act to force resource companies to consult and accommodate all potential Aboriginal claims before undertaking exploration activities.

There are other examples of the Crown’s attempts to delegate its DTC obligations. In 2013, in the Moulton Contracting case, a local logging operation won almost $2 million from the British Columbia government by suing it for failing to meet its DTC obligations, which in turn led to a First Nations blockade which severely affected logging operations. Likewise, in the still ongoing litigation involving Northern Superior Resources in Ontario, a resource company has essentially abandoned gold exploration in the Ring of Fire because of chronic disputes with the Sachigo Lake First Nations and is now suing the Ontario government for $110 million in damages arising from the Crown’s alleged failure to fulfil its DTC obligations.

While these cases make it abundantly clear that it is the Crown that has the DTC, not the private businesses, almost any developer will tell you that suing provincial and federal governments is not a sustainable business model for modern development and city planning. Furthermore, while it is also clear that the DTC is not an absolute veto in the hands of the First Nations, astute developers will tell you that, in the game of modern development, time-to-market is one of the principal determinants of success or failure. In a product development cycle that is already staggeringly long, waiting for the Crown to comply with its DTC obligations can result in fatal delays. For all practical intents and purposes, progressive private enterprises are now actively (although perhaps begrudgingly) embracing the opportunity to run with and satisfy the DTC obligations of the Crown, and chalking it all up to the cost of doing business.

Building readers should not dismiss the DTC as some curious legal phenomenon happening in a land far, far away (yes, the cases are predominantly coming out of British Columbia and usually arise from the extractive industries). Developers and urban planners should take a moment to consider how suddenly the development process has already changed in their own lifetimes (“What, we need a LEED consultant for this?!”), and how precious developable land is becoming. It may not be very long before what is seen as “prime” developable land runs very close to abutting Aboriginal titles. Couple this with the growing commercial
sophistication of Canada’s First Nations, and, at the very least, the next generation of developers and urban planners are going to have to become very versed with the DTC.

Jeffrey W. Lem is a partner in the Toronto/Markham offices of Miller Thomson LLP and is Certified by the Law Society of Upper Canada as a Specialist in Real Estate. He can be reached at [email protected].

Odysseas Papadimitriou is an Associate at Miller Thomson LLP, specializing in all aspects of condominium law.


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