Challenges to Site C By First Nations Dismissed by the FCA and BCCA

On January 23rd and February 2nd 2017, the Federal Court of Appeal (“FCA”) and British Columbia Court of Appeal (“BCCA”) respectively rendered judgment on applications for judicial review brought by members of the Treaty 8 First Nations (the Prophet River First Nation and West Moberly First Nations) (2017 FCA 17, Prophet River, FCA; 2017 BCCA 58, Prophet River, BCCA). These applications were part of a series filed in provincial and federal courts in opposition to the issuance of permits for the Site C hydroelectric dam project on the Peace River in British Columbia.

These appellate decision join the list of lower court decisions dismissing applications challenging Site C (2015 BCSC 1129, 2015 BCSC 1682, 2015 FC 1027, 2015 FC 1030).

The Governor in Council’s Decision Under Review  

Site C is situated in northeastern BC around land that is encompassed within Treaty 8. Treaty 8 preserves the hunting, fishing, and trapping rights of the First Nations “signatories or adherents,” subject to the land being “taken up” from time to time by the Crown (Prophet River, BCCA, para 4). The project has been vigorously opposed by First Nations on the basis that it will infringe their treaty rights “to the point of essentially defeating them completely… impairing the way of life for their people now and in the future” (Prophet River, BCCA, para 4).

Site C’s history dates back to the 1980s, when it was shelved indefinitely following a series of hearings conducted by the BC Utilities Commission (“BCUC”). Site C was explicitly exempted from review by the BCUC in the Clean Energy Act, SBC 2010 c 22, s7. The project was revived by the BC Liberals in 2010 and moved to regulatory review.

In 2011, BC Hydro submitted its proposal for Site C to federal and provincial regulatory authorities, who opted for a harmonized environmental assessment process. A Joint Review Panel was established under the Canadian Environmental Assessment Act, 2012, SC 2012, c 19 s 52 (“CEAA”) and the British Columbia Environmental Assessment Act, SBC 2002 c 43 (“BCEAA”) as one of three stages of the assessment process. The Panel’s terms of reference barred it from making conclusions or recommendations related to “the nature and scope of asserted Aboriginal rights” and infringement of Treaty 8 rights. However, the Panel was tasked with describing any asserted or established rights (Prophet River, FCA, para 10).

The Panel’s final report found that the project was likely to cause “significant adverse effects” that could not be mitigated on fishing, hunting, and trapping rights along with other traditional land uses by the affected First Nations (Prophet River, FCA para 13). In accordance with s 52(2) of the CEAA, the project was referred to the Governor in Council (“GIC”) to determine whether it could be justified in light of these effects.

The GIC determined that while the project posed a risk of significant adverse effects on the environment and First Nations land use, it was justified in the circumstances under s 52(4) of the CEAA. Provincial Ministers subsequently issued an Environmental Assessment Certificate for the project.

The Treaty 8 First Nations launched an application for judicial review of these decisions in the BC Supreme Court and the Federal Court on two grounds. First, that the Ministers (in the BC application) and the GIC (in the FC application) were required to determine whether the project unjustifiably infringed their treaty rights when rendering their respective decisions under the CEAA and BCEAA. Second, that the Crown did not adequately discharge its duty to consult and accommodate.

The appeal before the FCA concerned only the first of these two grounds, while the appeal heard by the BCCA concerned both. The FCA’s judgment also addressed the issue of the appropriate forum to determine treaty rights and infringement (Prophet River, FCA, para 24).

The Lower Court Decisions

The Federal Court dismissed the application, holding that the GIC was owed a high degree of deference. The judge held that the appellants failed to establish a basis for a legitimate expectation that treaty rights infringement would be considered by the GIC and that the GIC did not have jurisdiction to make such a determination on treaty infringement (Prophet River, FCA, para 21-23).

The Supreme Court of BC similarly concluded that the provincial Minister did not have jurisdiction under the BCEAA to consider the treaty infringement and justification, holding that the Minister does not possess “effective fact-finding machinery and…expertise with regard to matters of Aboriginal law” (Prophet River, BCCA, para 23). The trial judge held that “the government made reasonable and good faith efforts to consult and accommodate” thereby discharging their duty. However, reconciliation could not be achieved due to a fundamental disagreement over whether the project should proceed at all (Prophet River, BCCA, para 39).

Standard of Review for s54(2) decisions rendered by the GIC

At the FCA, the appellant First Nations argued that the question of approval before the GIC was purely legal and related to constitutional obligations and jurisdictional limits, thereby attracting a standard of correctness on review. The FCA disagreed, emphasizing that the standard of review is determined with reference to the full context of the legislative scheme. The court characterized the GIC’s decision as being “highly discretionary, policy-based and fact driven,” thereby warranting deference under a reasonableness standard (Prophet River, FCA, para 30).

The BCCA did not engage in a similar analysis of the Minister’s decision, however it did consider the standard of review to be applied to determining the adequacy of consultation and accommodation discussed below.

Adequacy of the Consultation and Accommodation

The BCCA’s judgment considered the adequacy of the consultation and accommodation, both of which were challenged by the appellants.  On the issue of the standard of review, the appellants argued for a standard of reasonableness, while the Crown argued that the issue being a question of fact or mixed law and fact was subject to the standard of palpable and overriding error.

The court confirmed that the adequacy of consultation and accommodation is a question of mixed law and fact, however the Crown’s assertion failed to consider the distinction between appellate and administrative law standards of review. On an appeal from a lower court decision considering an application for judicial review, the court must determine (1) whether the lower court selected the appropriate administrative law standard of review; and (2) whether this standard was properly applied (Prophet River, BCCA, para 46). Acknowledging the divergence in the jurisprudence on the appropriate standard of review for the adequacy of consultation and accommodation, the BCCA ultimately did not engage in a de novo Dunsmuir analysis. Instead, it held that the balance of authorities suggests that review should proceed on a standard of reasonableness (Prophet River, BCCA, para 52).

The BCCA found that the record supported adequate consultation in both quality and quantity, holding that the adverse impacts that may flow from a project go to the process of consultation rather than the substance of its outcome (Prophet River, BCCA, para 65). With respect to the issue of accommodation, the court noted that appellant’s unwillingness to consider any form of accommodation beyond the province abandoning the project amounts to an effective “veto” which the duty does not afford to First Nations (Prophet River, BCCA, para 65).

The Applicability of the Sparrow Justification Analysis

The appellants argued that the GIC and provincial Ministers were obligated to determine whether the Site C project infringed their s35(1) treaty rights and whether the infringement was justified under the Sparrow, [1990] 1 SCR 1075, analysis.

Both courts rejected this argument, rendering their decisions primarily on the basis of deference to the original administrative decision makers. The courts held that the legislative schemes in question do not confer a power to determine infringement of treaty rights, nor are the GIC or the Ministers equipped to undertake such adjudication. Justice Lowry, writing for the unanimous panel of the BCCA, held that the appellants’ assertion that the Site C project constitutes unjustifiable infringement did not trigger a determination of the extent of the infringement, but rather a determination of the extent of consultation required to discharge the Crown’s duty to consult (Prophet River, BCCA, para 36).

While both courts held that it was not incumbent upon the respondents to make a determination regarding the infringement of rights, the decisions raise the question of the role of justification in the duty to consult and accommodate. The role of justification is particularly salient in cases, such as the Site C cases, where the rights in question are treaty rights and the First Nations contend infringement akin to extinguishment.

The FCA dedicated a significant portion of its decision to discussing the duty to consult and accommodate in the context of treaty rights. At the onset of this discussion, the FCA explained the doctrinal shift that took place between Sparrow and Haida Nation, 2004 SCC 511 in relation to the duty to consult and accommodate. The court highlighted that in Sparrow, a duty to consult was triggered by an infringement-based approach, while Haida Nation introduced the lower threshold test of adverse impacts on claimed rights. The move towards the lower threshold for triggering the duty evidenced in Haida Nation was justified because not all claimed Aboriginal rights may be proven at the point in time where consultation is aptly to be undertaken. Instead, a duty to consult arises when there is real or constructive knowledge of potential existence of Aboriginal right or title, thereby avoiding lengthy litigation to first establish claimed rights. Conversely, the Sparrow analysis was limited to situations in which Aboriginal rights are successfully proven and infringement is prima facie established. Where such an infringement is established, Sparrow requires the Crown to justify the infringement (Prophet River, FCA, para 33).

While Haida Nation lowered the threshold for triggering the duty, the content of the duty remains responsive to the context of the case and is determined based on the strength of the rights claim and the seriousness of the potential adverse effects (Haida Nation, para 38).

The FCA held that the appellants’ contention that the GIC had an obligation to determine infringement and justification in accordance with a Sparrow analysis was an invitation to revert to pre-Haida Nation jurisprudence. However, the FCA’s decision did not engage with the possibility that pre- and post-Haida Nation jurisprudence may be reconciled. Specifically, situations that meet the Sparrow threshold of analysis need not be mutually exclusive from those in which a Haida Nation duty to consult may be triggered. Treaty rights are one such case. As the FCA notes “although treaty rights can be defined as established rights as opposed to claimed rights…the scope of their use on Aboriginal peoples’ traditional territories still needs to be delineated” (Prophet River, FCA, para 36).

In Mikisew, 2005 SCC 69 the SCC extended the Haida Nation duty to consult to the context of treaty interpretation. In doing so, the SCC did not reject a role for the Sparrow test in this context. The decision raised two questions in this respect: (1) where, if at all, does the Sparrow analysis fit into the duty to consult and accommodate in cases involving treaty rights; and (2) when does Crown action rise to a level of prima facie infringement of treaty rights attracting a Sparrow justification analysis.

Like the case at bar, Mikisew also involved the Crown “taking up” Treaty 8 lands. Mikisew raised the question of whether a duty to consult arose in the context of the federal government approving construction of a road that would reduce the territory over which the Mikisew Cree First Nation could exercise their hunting, fishing, and trapping treaty rights.

When discussing the role of the Sparrow analysis in cases involving the “taking up” of treaty lands, the SCC held that Sparrow is not prima facie applicable. Instead, the court must first consider the process by which the “taking up” is planned and whether it is compatible with the honour of the Crown, rather than moving directly to a Sparrow analysis (Mikisew, para 59). In commentary following the Mikisew decision, it has been suggested that the SCC’s reasoning did not rebuff the applicability of Sparrow but rather invited two potential grounds for reviewing Crown action – (1) on procedural grounds relating to the discharging of the duty to consult; and (2) on substantive grounds involving a Sparrow analysis of proposed infringement (see Schwartz & Rettie). However, the SCC did not clearly delineate when Crown action rises to a level where substantive review under the Sparrow analysis is warranted.

The SCC in Mikisew held that in the circumstances of that case, it was not correct to move directly to the Sparrow analysis. Rather the appeal grounds invoked an analysis of the sufficiency of consultation. In my view, the arguments advanced by the appellants before the FCA and BCCA advance a claim for review on both of the procedural and substantive grounds articulated by Schwartz & Rettie in their interpretation of Mikisew.

Unlike Mikisew, the issue in the Site C cases is not whether a duty to consult was triggered. The BCCA and FCA judgments recognize that a process of consultation was undertaken and that the First Nations contested the sufficiency of consultation rather than the process. The focus of the argument advanced by the appellants was an assertion that the Sparrow analysis and corresponding burden on the Crown to establish justification for infringement has a role to play in fully discharging the duty to consult and accommodate in the context of treaty rights.

While the FCA endorsed a Haida Nation/Mikisew framework of review, the gaps in this framework that emerge on the facts of this case remain. As noted above, the SCC in Mikisew did not set a clear threshold for when a project meets the threshold of requiring a Sparrow justification. The Court in Mikisew suggested that where action amounts to rendering a treaty right meaningless a Sparrow analysis is warranted (Mikisew, para 48).

In the cases at bar, the appellants contended that the additional flooding of the Peace River would infringe their treaty rights “to the point of essentially defeating them completely” (Prophet River, BCCA, para 4). The Panel’s report and the decision of the GIC acknowledged the significant adverse effects on the affected First Nations groups that could not be mitigated. Further, the text of s 52(4) explicitly calls for the GIC to assess whether the adverse effects are justified in the circumstances.

The FCA briefly touched on the issue of de facto extinguishment left unresolved by Mikisew, but ultimately held that engaging with this issue was outside of the scope of the appeal (Mikisew, para 61). It remains unclear the level of adverse effects or legislative direction (if any) may meet a threshold of triggering an onus on the Crown to adduce a Sparrow type justification when rendering decisions on projects involving an acknowledgement of adverse impacts on treaty lands. However, the implicit suggestion by the decisions of the BCCA and FCA is that absent a clearly negotiation or court adjudicated finding as to the scope of treaty rights, it is unlikely that courts will invoke an element of Sparrow justification in the process of consultation and accommodation.

The Appropriate Forum to Determine Treaty Rights and Infringement

The FCA affirmed the Federal Court’s holding that judicial review is not the appropriate forum to determine infringement of treaty right primarily on the basis of the inadequacy of the evidentiary record before the court on judicial review. This point was emphasized in the court’s discussion of the reciprocal duty on the appellants to provide evidentiary support of their asserted rights, an obligation which the FCA held that the appellants failed to fully meet (Prophet River, FCA, paras 49-56). The court also stated that an applicant would not be barred from pursuing an action for treaty right infringement “in parallel to the GIC’s decision” (Prophet River, FCA, para 81).

While the FCA recognized that actions pertaining to Aboriginal rights are often lengthy and resource intensive, the court did not delve into the complexities associated with pursuing such an action in situations such as Site C where the Crown has commenced and committed to significant construction of the project. Particularly the financial burden on First Nations groups, the “partial imperfect relief” afforded by injunctions (see Haida Nation, para 14), and the potentially irreversible impacts in cases where construction of a project begins prior to adjudication of underlying infringement claims.

The hesitation on the part of the court to allow the GIC or Ministers to take on an adjudicative role in treaty rights determination and infringement in the context of a single project approval is arguably defensible. That said, the decision leaves open the challenge of clearly carving out an alternative for the content of treaty rights to be effectively determined and accounted for in cases such as Prophet River. The FCA emphasized a message of negotiation between the Crown and Aboriginal peoples as the preferred method of engagement—reflecting a thread that has been common throughout recent Canadian jurisprudence on the duty to consult.

However, the approach endorsed by the FCA may in effect result in a reversion to the same pre-Haida Nation state of affairs that it sought to avoid. The SCC’s reasons for lowering the threshold triggering consultation in Haida Nation recognized that “[w]hen the distant goal of proof is finally reached, the Aboriginal peoples may find their land and resources changed and denuded.  This is not reconciliation.  Nor is it honourable” (Haida Nation, para 33).

With the construction of the Site C damn well underway, the Treaty 8 First Nations are confronted with this exact possibility. The high degree of deference afforded to the respondents in the cases at bar may be viewed as an indication that civil suits for Aboriginal rights infringement should be par for the course when mounting an opposition to Crown projects—leaving open the question of how far the goal of reconciliation can be advanced by the duty to consult and accommodate in its current form.

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