On July 26, 2017, the Supreme Court of Canada (SCC) released its decisions in Hamlet of Clyde River, et al. v. Petroleum Geo-Services Inc. (PGS), et al. (Clyde River) and Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., et al. (Chippewas) (together, the Decisions). The Decisions concern the role of regulatory boards in fulfilling the Crown’s duty to consult, in the context of two separate project approval decisions of the National Energy Board (NEB). Our discussion of the facts of each case and initial analysis of the Decisions is available here.
The Decisions were released at a critical juncture in the Federal Government’s ongoing review of the NEB and other environmental and regulatory processes, and may provide timely guidance regarding the Federal Government’s proposed reforms regarding the participation of Indigenous peoples.
In the Decisions, the SCC confirmed its finding from Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council (Rio Tinto) that the Crown may rely on a regulatory agency to partially or completely fulfill its duty to consult, provided that the agency has sufficient statutory powers. The SCC reached different conclusions as to the adequacy of the NEB’s consultation efforts in Clyde River and Chippewas but concluded that the current NEB process can be relied upon for consultation and that it is in principle adequate to discharge the duty to consult. In so finding, the SCC provided clarity on certain notable aspects of the Crown’s duty to consult. This article provides our commentary on the most significant findings and their implications.
1. Crown Conduct that Can Trigger the Duty to Consult is Not Limited to Decisions by Ministers, Departments, and Agencies
In Haida, the SCC held that the duty to consult arises when (1) the Crown has knowledge of a potential Aboriginal claim or right; (2) the Crown contemplates conduct; and (3) there is the potential that the contemplated conduct may adversely affect such Aboriginal claim or right (the Haida Test). In Rio Tinto, the SCC commented on the type of Crown conduct that can trigger the duty to consult, noting that it is not confined to government exercise of statutory powers, or to decisions or conduct which have an immediate impact on lands and resources – a potential for adverse impact suffices, and the duty extends to strategic, higher level decisions.
However, the questions of who is the “Crown” and what constitutes “Crown conduct” for the purposes of triggering the duty to consult are aspects of the Haida Test that have remained somewhat elusive, and lower courts have struggled to achieve consensus in defining the scope of these terms. Faced with this issue in both Clyde River and Chippewas, the Federal Court of Appeal (FCA) concluded that only the actions of a minister of the Crown or a government department, or a Crown corporation (as in Rio Tinto) could constitute Crown conduct sufficient to trigger the duty to consult. In Clyde River, the FCA held that the duty to consult was narrowly triggered by a statutory requirement for ministerial approval of a benefits plan. In Chippewas, the FCA determined that since the Crown was not a party before the NEB, the only Crown conduct potentially in issue was the enactment of the NEB Act.
The SCC clarified this aspect of the Haida Test in Clyde River and Chippewas and took a more expansive approach than the FCA. The SCC held that in both cases, the NEB’s approval process was the conduct that triggered the duty to consult. The SCC held that for purposes of the duty to consult, the “Crown” refers in a broad sense to the exercise of executive power. Although the NEB operates independently of the Crown’s ministers and is not, strictly speaking, the “Crown” (in the sense of Her Majesty of the Canadian state, or the head of executive authority), or an agent of the Crown, the NEB does exercise executive power on behalf of the Crown pursuant to its statutory authority, and “is the vehicle through which the Crown acts”. By exercising such statutory authority, the NEB acts on behalf of the Crown when making a final decision on a project application. The SCC held that this clearly constitutes Crown action.
The SCC also addressed situations in which the Crown (in the strict sense of the word) is absent from a regulatory proceeding. In Chippewas, the FCA followed a 2009 decision of the FCA, Standing Buffalo Dakota First Nation v. Enbridge Pipelines, to conclude that, unless the Crown was a party before the NEB, the NEB was not required to evaluate whether the Crown’s duty to consult was triggered, or had been met, before granting an authorization. The SCC disagreed with this approach, finding that if the duty to consult has been triggered, when the NEB is the final decision maker in a project approval, it must ask whether the duty to consult has been fulfilled. If it has not been fulfilled, the NEB must withhold project approval, or the decision could be quashed on judicial review.
Further, the SCC stated that where a concern with the adequacy of consultation is raised before a regulatory agency such as the NEB, it will usually be obliged to address those concerns in reasons, particularly in project applications requiring deep consultation. However, this does not mean that the regulatory agency must apply a formulaic “Haida analysis” to assess the strength of claim and the appropriate degree of consultation, and explicit reasons may not be required in every case. In Chippewas, for example, the SCC was satisfied with the NEB’s approach; in written reasons, it did not explicitly assess the depth of consultation required, but expressly recognized the Aboriginal rights and interests at issue, considered the potential for negative impacts on such rights and interests, and considered whether all Indigenous groups had been adequately consulted.
2. Sufficiency of Regulatory Processes in Fulfilling the Duty to Consult
In both Clyde River and Chippewas, the Appellants argued that regulatory processes alone cannot fulfill the duty to consult and there has to be at least some direct engagement between the Crown and affected Aboriginal groups, particularly when deep consultation is required.
The SCC rejected these arguments and held that the Crown can rely on a regulatory agency or tribunal, in whole or in part, as long as the agency or tribunal possesses the statutory powers to do what the duty to consult requires in the particular circumstances. The SCC also provided two further caveats. First, where the regulatory process being relied upon does not achieve adequate consultation or accommodation, the Crown must take further measures to meet the duty to consult either on a case-by-case basis or through legislative or regulatory amendments. Second, where the Crown is relying on regulatory processes to fulfill the duty to consult, it must make that clear to affected Indigenous groups. The Court held that the Crown should provide guidance about the form of the consultation process in order for Indigenous peoples to know how consultation will be carried out to allow for their effective participation and allow them to raise concerns with the proposed form of consultation. However, the SCC did not provide detailed guidance on what this notice should entail and the sufficiency of this notice may become an issue of dispute in future cases. The issue of notice may also be raised in future cases where the Crown is relying upon proponents to fulfill the duty to consult.
In both cases, the SCC held that the NEB has the necessary procedural and remedial powers to completely or partially fulfill the duty to consult and has considerable institutional expertise. Although the Court held that the duty to consult had not been fulfilled in Clyde River, the deficiencies arose from the specific process deployed in that case and not with the NEB process as a whole. In particular, the SCC held that there were insufficient opportunities for Indigenous participation and consultation due to a lack of oral hearing, the lack of capacity funding, the inability of the proponents to answer basic questions at the consultation sessions, and an inaccessible data dump late in the process. The SCC also raised concerns about the adequacy of notice about the government’s reliance on the NEB process, the focus of the consultation inquiry (on environmental effects rather than impacts to rights) and the adequacy of accommodation.
The SCC’s acceptance of the NEB process in principle is timely given the different conclusions reached in the reports of the CEAA and NEB expert panel reviews. In particular, the CEAA Expert Panel concluded that “current EA processes are insufficient for fulfilling the duty to consult” which by implication would extend to the NEB process. This report preceded the SCC’s decisions in Clyde River and Chippewas but there had been several cases prior to this that have upheld the federal government’s reliance on EA processes to fulfill the duty to consult in whole or in part.
The NEB and CEAA expert panel reports and the federal government’s Discussion Paper released in June in response to these reports propose a number of changes that would go beyond what is required by the duty to consult. Although some of these changes may assist in reducing the number of consultation disputes, the SCC’s decisions in Clyde River and Chippewas provide a basis to question the extent of the changes required.
3. The appropriate focus of consultation is the potential impact on Aboriginal rights, rather than environmental impacts
In Clyde River, the SCC reaffirmed that consultation with Indigenous groups on a proposed project should not be undertaken with regard to the environmental effects of the project, per se, but rather, the impact that those environmental effects will have on proven or asserted Aboriginal rights. Certain environmental effects that may seem insignificant in themselves may severely affect the ability of Aboriginal groups to exercise their rights.
On this basis, the SCC held that one of the ways in which the consultation conducted in Clyde River was inadequate was that it failed to consider the impact of the seismic testing on the appellants’ rights, including their treaty right to harvest marine mammals. As noted by the appellants in their submissions, the NEB’s environmental assessment report made no reference to the rights of the Inuit groups affected by the proposed seismic testing. Rather, after summarizing the nature of the of consultative activities performed and the groups engaged, the NEB report moved to a discussion of the likely environmental effects of the seismic testing. According to the SCC, the NEB ignored the question of how these environmental effects would affect the Inuit groups being consulted, undermining the entire purpose of the consultation process.
In contrast, in Chippewas, the NEB’s reasons for decision expressly referred to Aboriginal rights and provided a review of the ways in which the proposed project might impact those rights. Accordingly, the SCC in Chippewas did not take issue with this aspect of the NEB’s decision. The NEB’s reasons included a section titled “Impacts on Aboriginal groups,” which analysed “[p]roject impacts on the rights and interests of Aboriginal groups.” This section considered the nature of the consultation process as conducted, the impacts of the proposed project, and proposed mitigation efforts on the rights of the Aboriginal groups affected by the project. As the project affected already-disturbed lands, and the NEB’s analysis was limited to the newly proposed changes rather than the current operations, the NEB held that the impacts of the project would be minimal and likely to be appropriately mitigated.
In our view, this approach is consistent with both the constitutional protection of Aboriginal and treaty rights under section 35, and with the federal government’s recently proposed legislative amendments to include express consideration of impacts on Indigenous peoples in regulatory decision-making without requiring an underlying biophysical impact. However, the SCC’s conclusions in Clyde River that the NEB did not assess the impact to the Inuit’s treaty right to harvest marine mammals is somewhat questionable. The Court did not use these words but it did assess impacts to marine mammals and impacts on Inuit traditional harvesting of marine mammals which align with the treaty right at issue.
4. The subject of consultation is the impact of the current decision, but a consideration of historical impacts and cumulative effects may play a contextual role
In Chippewas, the pipeline at issue was initially constructed in 1976 without consultation with First Nations. Although the project approval before the NEB concerned a pipeline modification and flow reversal on previously disturbed lands, the Chippewas of the Thames also raised concerns regarding the cumulative impacts on its Aboriginal rights and title that could result from the project. Another intervenor First Nation noted that there is no consultation process in place to address the broader impact of pipelines on First Nations in southern Ontario.
The SCC reiterated its findings in Rio Tinto that the duty to consult is not triggered by historical impacts, and consultation is not the appropriate vehicle to address historical wrongs or grievances. Further, the Crown is not required to consult on larger impacts of a project of which a particular decision is a part. The duty to consult “is not about resolving broader claims that transcend the scope of the proposed project.” Rather, the scope of the duty to consult is confined to “adverse impacts flowing from the specific Crown proposal at issue” and the “impact on claimed rights of the current decision under consideration.”
In Chippewas, however, the SCC made a further effort to address the role that historical impacts and cumulative effects may have in shaping the subject matter of consultation. The SCC stated that “it may be impossible to understand the seriousness of the impact of a project on s. 35 rights without considering the larger context.” Citing the British Columbia Court of Appeal’s 2011 majority decision in West Moberly First Nations v. BC (Chief Inspector of Mines), the SCC stated that both the cumulative effects of an ongoing project and the historical context may “inform the scope of the duty to consult.” A consideration of cumulative effects and historic context is not intended to redress past wrongs, but to recognize an existing state of affairs and to address potential consequences of a project.
In our view, the distinction that the BC Court of Appeal attempted to draw in West Moberly remains murky. Given the lack of guidance from the SCC on what this means in practical terms, there will likely be future litigation about how and what cumulative effects and historical context can impact the scope of consultation. As a practical matter, the SCC’s comments leave open the possibility that historical impacts and cumulative effects could become an inappropriate focus and potentially burdensome aspect of consultation in certain circumstances. It also raises questions about the responsibilities of proponents and what they can reasonably be expected to address in the context of an individual project review, particularly with respect to accommodation.
5. Duty to Consult Does Not Provide a Veto and Aboriginal Rights Can be Balanced with the Broader Public Interest
One of the key issues in both Chippewas and Clyde River was whether the NEB’s obligation to make decisions in the public interest, as required by the NEB Act, conflicted with its constitutional obligation to fulfil the duty to consult, as the constitutional nature of the latter prevented affected Indigenous interests from being balanced against broader public interests.
The SCC found that the duty to consult does not conflict with the broader public interest, but rather, properly understood, was one element of it. In both decisions, the SCC re-affirmed its holding in Rio Tinto that “the constitutional dimension of the duty to consult gives rise to a special public interest” that “surpasses economic concerns”, and which must be considered by a decision-maker whenever the duty to consult is triggered. Further, the SCC held that a decision cannot be in the public interest where the duty to consult is not satisfied, as “a project authorization that breaches the constitutionally protected rights of Indigenous peoples cannot serve the public interest.”
The SCC held that while a decision cannot be in the public interest without considering the “special public interest” of affected Indigenous groups that the duty to consult gives rise to, the SCC continued to find that this special public interest must also be balanced and weighed against other public interest considerations relevant to the decision. The special public interest that results from the duty to consult is therefore not determinative of the broader public interest, but is one factor that must be considered by a decision-maker when assessing it. As the SCC held, “it is for this reason that the duty to consult does not provide Indigenous groups with a “veto” over final Crown decisions.” Rather, it is one factor, among others, that must be considered and balanced when assessing a decision’s impact on the overall public interest.
The SCC’s re-affirmation that the duty to consult does not provide impacted Indigenous groups with a veto over development projects is noteworthy in light of the Government of Canada’s declaration of support for the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which includes the concept that states should obtain the free, prior and informed consent (FPIC) of Indigenous groups in a number of situations, including for resource development in their traditional territories.
While Canada has stated that it supports UNDRIP without qualification, the federal government has also said that it will interpret FPIC in line with the Canadian Constitution, including the duty to consult. The SCC’s decisions in Clyde River and Chippewas make clear that the Canadian Constitution does not provide Indigenous groups with a unilateral right to determine whether a development project proceeds or not (except in limited circumstances where Aboriginal title is established – per Tsilhqot’in). Rather, the duty to consult affords Indigenous groups the right to have their interests heard, considered, and balanced against other legitimate public interests that are relevant to a particular project. As the SCC held in Chippewas, Indigenous groups “are not entitled to a one-sided process, but rather, a cooperative one with a view towards reconciliation”, and that “balance and compromise are inherent in that process.”
 2017 SCC 40
 2017 SCC 41
 2010 SCC 43
 In Rio Tinto, the SCC also “left for another day the question of whether government conduct includes legislative action”; a question that it will answer in the upcoming Courtoreille appeal.
 Clyde River, para. 26
 Clyde River, paras 28, 29
 2009 FCA 308
 Clyde River, para. 39, Chippewas, paras. 35-37
 Clyde River, para. 41
 Clyde River, para. 42
 Chippewas, para. 43, 53, 54
 Clyde River, para. 23
 Yellowknives Dene First Nation v. Canada (Minister of Aboriginal Affairs and Northern Development),  F.C.J. No. 829 (CA), Adam v. Canada (Minister of the Environment),  F.C.J. No. 1248 (FC), Athabasca Regional Government v. Canada and Areva Resources Canada Inc. , Brokenhead Ojibway Nation v. Canada,  F.C.J. No. 608 (FC)
 Clyde River, para. 45
 Chippewas, para. 2
 Chippewas, para. 41
 Chippewas, para. 42
 Chippewas, para. 59
 Clyde River, para. 40
 Chippewas, para. 59
 Chippewas, para. 60