Canada: Recording Of Mineral Claims In The Yukon Attracts A Duty To Notify First Nations

Last Updated: December 6 2011
Article by Kevin O'Callaghan

In a recent decision, the Supreme Court of Yukon held that the Yukon Government owes a duty to consult to the Ross River Dena Council ("RRDC") regarding the recording of mineral claims in the traditional area claimed by the RRDC – a duty that could be met by notifying the RRDC of the claims once they were recorded. Mr. Justice Veale, in Ross River Dena Council v. Government of Yukon, 2011 YKSC 84, issued a declaration that the duty was owed, but suspended the effect of that declaration for one year to give the parties an opportunity to negotiate how to implement the decision.

Fasken Martineau's Kevin O'Callaghan appeared as counsel for the intervenor, Yukon Chamber of Mines, on the hearing.

To view the decision click here.

Background

The RRDC is one group within a broader Kaska Nation and does not yet have a modern land claim agreement, unlike the majority of First Nations in the Yukon. Although negotiations have taken place in the past, a formal comprehensive offer to settle the land claims of Ross River Dena Council and Liard First Nation was made in 2002 and was not accepted. The RRDC claimed aboriginal rights and title throughout the Kaska Traditional Territory, but restricted their claim for the purposes of this action to a smaller area in the north-western corner of Yukon – the Ross River Area, which encompasses approximately 13% of Yukon land. RRDC and the Governments of Canada and Yukon have entered into a number of agreements on different issues, in which there is recognition by government of the claims of the RRDC (or the Kaska) to aboriginal rights and title within the Kaska Traditional Territory.

The Court noted that Yukon has experienced such an explosion of quartz claim staking in recent years that "it is often referred to as the second gold rush". In 2010, 79,993 quartz claims were staked and exploration expenditures topped $160 million. There are currently three operating mines in Yukon and one is in Kaska Territory.

Mineral claims in Yukon are acquired by physically staking the claim in the field. The Quartz Mining Act provides at s.12 that "any individual 18 years of age or older may enter, locate, prospect, and mine for minerals on . . . any vacant territorial lands".  In order to record a mineral claim, that individual must provide the mining recorder with three things: a plan of the location, the fee, and an sworn application. The individual then automatically receives a Record of Mineral Claim, assigning a Grant Number and, if the claim is within Kaska Territory – the miner is notified that "[t]he land in which this mineral claim is located is subject to unsettled aboriginal land claims". The mineral claim is held indefinitely as long as certain assessment work is undertaken (or payment made in lieu).

This system is based on what is called the "free entry system", the hallmarks of which the Court held were:

[30]  The Quartz Mining Act is based upon the "free entry system", which consists of:

  1. the right of entry onto lands owned by the Crown or Commissioner (s. 12);
  2. the right of the miner to stake a claim in order to receive the mineral rights (s. 41); and
  3. the right to lease and enter into production (s. 70).

The importance of the free entry system was recognized by the Court:

[33] From the perspective of the Yukon Chamber of Mines, deciding to stake a mineral claim is a strategic and highly confidential activity. The Chamber points out that there is considerable expense and financial risk in prospecting and staking a quartz mineral claim under the free entry system. The advantage of the free entry system is that a prospector can locate a mineral showing, after considerable research and on-the-ground activity, and maintain its confidentiality until the mineral claim is recorded. It is common knowledge in the mining industry that only a small portion of the claims staked will ever proceed to the development or mining stage.

The Court recognized that the act of staking "a quartz mineral claim causes minimal environmental disturbance".  However, the holder of a mineral claim, who is required by the Act to record the claim,  is at liberty to undertake certain activities without any permit or licence from the Crown.  Pursuant to the Quartz Mining Land Use Regulation, Class 1 activities may be undertaken. These activities include: the clearing of trees, trenching, removal of bulk samples and use of explosives. Pursuant to the regulations, there are specific operating considerations, which are very comprehensive and, if followed, are designed to rehabilitate or reclaim the land to its pre-activity state. The Court held however, without pointing to any direct evidence, that the Class 1 activities "may have significant impact depending on which activity is proceeding."  Significantly, the Court also recognized, that "the Government of Yukon, and presumably Ross River Dena Council, may have no knowledge of a Class 1 exploration program activity, either in location or extent."

The RRDC applied to the Court for a declaration that the Government of Yukon has a duty to consult prior to recording the grant of quartz mineral claims within the lands comprising the Ross River Area. The Court recognized that the case was "somewhat unique as the recording of a quartz mineral claim by the Mining Recorder is not a discretionary act under the "free entry" system".

The Decision

Justice Veale recognized the leading cases from the Supreme Court of Canada – Haida and more recently Rio Tinto – have clearly articulated the test regarding the duty to consult, which arises when:

  1. the Crown has knowledge of a claim for aboriginal rights;
  2. the Crown contemplates conduct;
  3. the conduct has the potential to adversely effect the claimed right.

Regarding the first part of the test, the Court dealt with a claim from the RRDC that the fact that the Crown had, in past agreements, recognized the claim of the RRDC or Kaska to their territory meant that their claim should be treated as if it was a proven claim to title. The Court rejected this argument, concluding that the governments had only recognized that the Kaska had made a claim, not whether that claim had any validity. The Court held:

[46] ... I conclude that the acknowledgements by the Government of Yukon in the three agreements are in the context of an assertion rather than an acceptance of an established aboriginal title to the Ross River Area. However, the Ross River Dena Council claim is not tenuous but in the category of a strong case sufficiently credible to meet the threshold required by the first element of the test for the duty to consult.

The second part of the test was the critical issue in the case. Yukon and the Chamber argued that since there was no discretion, there was no actual Crown conduct – without the ability to exercise some decision, there was no duty. The Court did not accept the argument, instead finding that:

[54] ... The duty to consult is a constitutional principle that applies "upstream" of a statute like the Quartz Mining Act. It would be surprising if a statute could be sheltered from a constitutional principle merely by eliminating discretion in government action or conduct. Haida Nation and Rio Tinto are not limited to discretionary decisions but are expressly meant to apply to Crown conduct overall. ... The Government of Yukon does take action through the issuance of a Record of Mineral Claim, albeit without the exercise of discretion. As stated in the Klahoose First Nation case, the government cannot follow a legislative mandate in a manner that offends the Constitution.

As a result the recording of a mineral claim is conduct that is capable of attracting the duty to consult.

The third part of the test has to do with the potential for impacts of the conduct on the claimed rights. Here the Court recognized the arguments that there was no evidence of effects, but notwithstanding that found that "it is not difficult to see the potential for adverse impact on hunting and trapping and fishing rights, for example, if all of the activities permitted in a Class 1 exploration program took place on a staked and registered claim."  However, the Court agreed with Yukon's submission that there was no way to meaningfully consult prior to recording the claim due to practical, and secrecy, concerns relating to the free entry system.

As a result, the Court held that the duty to consult regarding the recording of a mineral claim would arise after the claim had been recorded, "when the holder of the claim has some security of tenure and the First Nation is able to determine its potential adverse impact." At this stage in the exploration process, the Court recognized that there would be no plans for development upon which the Crown could consult – "a duty to consult after the recording of the claim could only extend to notice, because in the absence of proposed exploration there is no context that would expand the duty beyond this." The Court found that this obligation to provide notice to the RRDC would not be too burdensome on the Crown and likely could be accomplished by a monthly report.

Finally, the Court held that in order to give the parties an opportunity to dialogue, that the declarations of a duty to consult be suspended for one year.

Conclusion

The Yukon Court has come up with a very practical solution to the issues it had before it.  The Court itself commented that there was a certain "utility" to the declaration. The Court saw its decision as providing a remedy to the dispute between the First Nation and Yukon.  Whether this decision leads, as the Court clearly hopes, to "judicial economy" – or leads to the Court of Appeal – remains to be seen.

www.fasken.com

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