Canada: Federal Court Upholds Consultation For NWT Land Use Permit

Last Updated: June 1 2012
Article by Kevin O'Callaghan

On March 8, 2012, Justice de Montigny released his reasons in Ka'A'Gee Tu First Nation v. Canada, 2012 FC 297. The decision was a sequel to two previous Federal Court cases, Chicot v. Canada, 2007 FC 763 , and Chicot v. Minister of Indian and Northern Affairs, 2007 FC 764 (collectively "the Chicot decisions"). In the Chicot decisions, the Court quashed a land use permit issued in the Northwest Territories by the Mackenzie Valley Land and Water Board to Paramount Resources Ltd. on the basis of a failure to properly consult with the Ka'a'Gee Tu First Nation ("KTFN"). The Court ordered Canada and the KTFN to revisit a portion of the consultation process.

As a result of the Chicot decisions, the parties entered into a consultation process that lasted nearly two years. Despite the extensive nature of the consultations, the parties failed to reach a consensus, primarily with regard to the amount and form of compensation owed to the KTFN due to its potential land claim in the proposed development area. The KTFN brought the matter back to the Court, alleging that Canada failed to act in accordance with the Chicot decisions, and failed to engage in good faith consultations with them to address the impacts of the Extension Project.

The Court held that Canada had in fact discharged its consultation obligation and made genuine efforts to address the KTFN's concerns in the renegotiation process.

This case reinforces the principle that the duty to consult does not translate into a duty to accommodate or a duty to agree on any specific measure to alleviate the potential impact of a project or decision. The Court held that while the KTFN's potential land claim was relevant for determining the nature of the Crown's duty to consult, it did not necessarily create an obligation for the Crown to compensate. The duty to consult is not an alternative to comprehensive land claims settlements, but a means to ensure that the land and the resources that are the subject of the negotiations will not have been irremediably depleted or alienated by the time an agreement is reached. The Crown was found to have adequately addressed these concerns in this case.

Background

The KTFN is a 60-member community of the Deh Cho First Nations ("DCFN"). Paramount Resources Ltd. is a Calgary-based energy company that was granted a discovery licence in the Cameron Hills Area, and by the year 2000 had begun intensive development of oil and gas resources in the area. The development proceeded in phases, beginning with drilling well sites to prove the resources, and then constructing a pipeline and gathering system, which was completed in 2002. The third, and final, stage of the project, known as the "Extension Project", requires fifty new well sites to be drilled, and would result in large scale oil and gas production. This case focused on whether the government properly consulted with the KTFN before issuing permits allowing the Extension Project to proceed. 

The KTFN claims stewardship over the Cameron Hills area, though there are other Aboriginal groups who also claim the land is part of their traditional territory.

The KTFN's right to the land is the subject of an ongoing dispute. As part of the DCFN, the KTNF falls within Treaty 11, which contains provisions for the cession of land and surrender of rights, as well as guarantees to the Aboriginal signatories that they will be allowed to continue to hunt, trap and fish. However, Canada did not set aside reserve lands in the Northwest Territories, as promised in Treaty 11. Consequently, while Canada views Treaty 11 as an extinguishment treaty, the DCFN and KTFN view it as a peace and friendship treaty, which did not extinguish Aboriginal title. Canada and the Government of the Northwest Territories, have been in ongoing negotiations since 1998 with the DCFN to resolve this outstanding land question.

Development in the Mackenzie Valley, including Cameron Hills, involves a complex regulatory approval process involving the National Energy Board ("NEB"), the Mackenzie Valley Land and Water Board ("Land and Water Board"), and the Mackenzie Valley Environmental Impact Review Board ("Review Board"). As stipulated in the Mackenzie Valley Resource Management Act, 1998 c. 25 ("MVRMA"), an integral part of this process is community and Aboriginal consultation. However, the MVRMA also provides that the final decision on the approval of development projects rests with the responsible Ministers.

In April 2003, Paramount applied to amend some of its existing land use permits and water licences in order to proceed with the Extension Project. The Land and Water Board referred Paramount's application to the Review Board for an environmental assessment. Having conducted the requisite assessment, which included significant consultations with KTFN, the board issued its report on June 1, 2004. The Review Board made 17 recommendations to mitigate the potential negative environmental impacts of the Extension Project.

In the Chicot decisions, the Federal Court found that up until this point the consultation process had been adequate, and the Review Board's 17 recommendations were the result of meaningful consultation. However, the Minister sent the Review Board's recommendation back with directions to modify – this is called the "consult to modify" process. The consult to modify process resulted in the modification of 12 of the Review Board's 17 recommendations, without consultation with the KTFN. The Court held that the KTNF should not have been excluded from the following consult to modify process, which took place between the Review Board, the NEB and the responsible Ministers. The Court quashed the land use permits that had been issued to Paramount, and ordered the parties to renegotiate.

In coming to this conclusion, the Court held that in addition to the undisputed right of the KTFN to hunt, trap and fish, the KTFN raised a "reasonably arguable case" regarding its asserted Aboriginal title over the Cameron Hills. This finding was coupled with the prediction that the Extension Project would have a "significant and lasting impact" on the lands. Consequently, the Court ordered the parties to engage in a "process of meaningful consultation with the view of taking into account the concerns of the KTFN and if necessary accommodate those concerns".

The Most Recent Action

As a result of the Chicot decisions, the parties entered into an extensive renegotiation process, which lasted close to two years. Canada provided the KTFN with funding to prepare and participate in the consultation framework, and also agreed to fund a traditional knowledge study, which the KTFN considered to be an essential first step to understanding their concerns. Additionally, Canada agreed to fund an environmental monitoring and mitigation plan; to facilitate an information sharing process between the KTFN and Paramount; and to support a traditional land use program and provide the KTFN with funding to draft a proposal for its design and implementation.

Where the negotiations failed was with regards to the KTFN's asserted Aboriginal title interest and right to economic compensation by way of direct compensation or employment and training opportunities for local residents.

The KTFN argued that the negotiations should focus on the final decision of whether to approve the Extension Project, and disagreed with Canada's view that the Chicot decisions only required the Crown to discuss the modifications made to the Review Board's 17 mitigation measures. More specifically, the KTFN held that its strong case for Aboriginal title entitled them to economic accommodation from either Paramount or Canada.

Canada took the position that the nature of the KTFN's Aboriginal title claim was beyond the scope of the Chicot decisions, and should be dealt with through the ongoing negotiations between the government and the DCFN.

The Court agreed with Canada's interpretation of the scope of the Chicot decisions, and held that Canada had fulfilled its duty to consult. The Chicot decisions required Canada to address the deficiencies of the consult to modify stage, during which the Review Board's recommendations were modified without the participation of the KTFN. While the KTFN were largely focused on securing accommodation for their title concerns in this second round of negotiations, the parties did agree to accommodating measures with regards to four of the five areas of concern the KTFN initially raised during the consult to modify process in 2008. The only request raised in 2008 that was not accommodated was the KTFN's request for resource revenue sharing. The traditional land use study, traditional practices program, integrated environmental monitoring program (with the KTFN's participation in its design), and the offer to host and fund an annual open house to share information relating to development in the Cameron Hills demonstrated to the Court that Canada made genuine efforts to address the KTFN's concerns in the renegotiation process.  While there was a significant duty owed to the KTFN, the KTFN had been heavily involved in the consultations done under the MVRMA, up until the consult to modify process. The Court held that the KTFN could not use the Chicot decisions to reopen the entire decision-making process mandated by the MVRMA.

In coming to the conclusion that Canada had met is duty to consult, the Court added three general caveats with regards to the judicial review process. First, the Court reiterated that the duty to consult is heavily dependent upon the facts of any case. Second, the Court will not hold the Crown's conduct to a standard of perfection, in order to find it discharged its duty to consult. In the words of the Court (para 91):

...[T]he best outcome is not necessarily the benchmark; as long as it can be shown that reasonable efforts have been made to consult and accommodate and that the result is within the range of possible, acceptable outcomes which are defensible in respect of the facts and law, there will be no justification to intervene.

Lastly, the Court made it clear that the focus of judicial review is on the process of consultation and seeking workable accommodation, and not the outcome of that process.

It should also be noted that the Court held that Canada had good reasons to refuse to address the KTFN's claim to title in this context. According to the Court, a judicial review proceeding is ill-suited to assess the weight of the evidence or make any detailed findings of fact on the strength of the KTFN's claim of Aboriginal title. This was especially salient because the KTFN's claim was disputed by other Aboriginal communities, and the government was currently in a comprehensive land claim negotiation with the DCFN.

Conclusion

Reinforcing the findings from the earlier Chicot decisions, this decision supports the conclusion that with Crown involvement in consultation, the process laid out in the MVRMA is a procedure that can fulfill the Crown's duty to consult. This is reassuring to those project proponents going through the sometimes lengthy and comprehensive process. Increases in certainty and confidence in the reliability of the outcome of the MVRMA process, even if incremental, is of benefit to all involved in project development in the Northwest Territories. Similarly, it is encouraging that the Court made clear that accommodation of potential effects on Aboriginal title in terms of revenue sharing could be left to the treaty table, and were not necessary to fulfill the duty to consult.

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