Canada: Duty To Consult Fosters Change To Yukon Mineral Claims Regime

Introduction

At the end of 2012, the Yukon Court of Appeal, a court which is comprised of British Columbia Court of Appeal judges, issued its decision in Ross River Dena Council v. Government of Yukon, confirming that the Yukon government's "open entry" registration system for quartz mineral claims is subject to the Crown's obligation to consult with First Nations. Interestingly, and consistent with the lower court's decision, the Court of Appeal suspended its ruling for one year to allow the government to consider statutory and regulatory changes to the mining regime which would provide for appropriate consultation.

One of the most salient aspects of this decision is the court's consideration of the responsibility of the legislature to address the duty to consult when legislation is introduced – a currently unresolved issue before the courts. The Ross River Dena case provides a timely discussion of this issue given that 2013 has started with the high-profile "Idle No More" campaign by First Nations, ignited by their view that federal environmental legislation and changes to the Indian Act introduced in 2012 were done without consultation. On January 8, 2013, a judicial review application was filed by the Frog Lake First Nation in Alberta, seeking to confirm that the federal government has a duty to consult with the Nation both in the development of environmental policies and the introduction of two omnibus statutes namely, the Jobs, Growth and Long-term Prosperity Act (also known as Bill C-38) and the Jobs and Growth Act (also known as Bill C-45). In its application, the Frog Lake Nation alleged that Canada "has abdicated its core obligation under Treaty 6 (i.e., to protect and manage the lands comprising Frog Lake's traditional territory to ensure the Nation has a meaningful ability to exercise its treaty rights) and acted contrary to the honour of the Crown".

The Ross River Dena case will be of interest to businesses dealing with the development of natural resources, as the case (1) prompts an examination of a particular legislative scheme to ensure it provides for adequate consultation with First Nations; and (2) draws a bright line between a duty to consult in relation to the introduction of legislation versus its implementation, thus potentially preventing the success of applications like that of the Frog Lake First Nation.

Key Facts

The plaintiff, the Ross River Dena Council, is a member of the larger Kaska First Nation, which is one of three Yukon First Nations that has not entered into a modern treaty to resolve its land claims. Their claim area extends over 63,000 km² of the southwestern Yukon (the Ross River Area).

Under the Yukon Quartz Mining Act (the Act), an individual can acquire hard rock mineral rights simply by physically staking a claim and subsequently recording it with the mining recorder. Once the claim is recorded, the claimant is entitled to the minerals and may conduct certain exploration activities on the land without further authorization and notice to the government. This is referred to as an "open entry" system. The mining recorder cannot refuse to record a claim that complies with the statutory requirements.

Under the Act and its related regulation, the holder of a mineral claim is entitled to undertake a Class 1 exploration program without providing notice to the government or its officials, and without obtaining permission from any person. Class 1 activities can include the clearing of land, the construction of lines, corridors and temporary trails, the use of explosives and removal of subsurface rock. Furthermore, pursuant to the applicable Yukon environmental assessment regime, Class 1 exploration activities take place without notice to or consultation with First Nations. However, this automatic exploration right with the mineral grant is not the standard across Canada. It is more typical that an additional permit be obtained, thus separately triggering the duty to consult.

Lower Court Decision

The Ross River Dena Council brought an application in the Yukon Territory Supreme Court for a declaration that the government had a duty to consult prior to recording a grant of quartz mineral claims within the Ross River Area. The court held that the government's practices in respect of new mineral claims under the Act did not meet the consultation requirements as required by the Haida case. Having said this, the court held that these requirements would be satisfied by a scheme under which the government provided notice, after registration, to the Ross River Dena Council of newly recorded quartz mining claims within the Ross River Area. The Ross River Dena Council appealed this decision.

Court of Appeal Decision

The court commenced its analysis by referring to the Supreme Court of Canada's ruling in the Haida case and highlighting that the duty to consult is founded on the Crown's duty to act honourably in its dealings with First Nations (see our Blakes Bulletin: Supreme Court of Canada Decisions in Haida and Taku River). The Court of Appeal then dealt with two main issues in applying the three-pronged test described in Haida/Rio Tinto (see our Blakes Bulletin: Historical Infringements Do Not Trigger Current Consultation Duty) for the duty to consult:

  • Does the Crown have knowledge, actual or constructive, of a potential aboriginal claim or right?
  • Is there contemplated Crown conduct?
  • Is there a potential that the contemplated conduct may adversely affect an aboriginal claim or right?

Does the Recording of a Mineral Claim Trigger Consultation?

The court stated that there is no doubt that the first element of the test (i.e., the Crown's knowledge, actual or constructive, of a potential aboriginal claim or right) is present when a mineral claim is recorded within the Ross River Area. The court acknowledged that the parties had a long history of land claims negotiations and interim agreements in respect of the area. The government itself conceded that it has knowledge of the plaintiff's asserted aboriginal rights.

Similarly, the court stated that there is no doubt that the third element of the test (i.e., the potential that the contemplated Crown conduct may adversely affect an aboriginal claim or right) is met where the Crown registers a mining claim within the Ross River Area. In transferring mineral rights to mining claim holders, the Crown engages in conduct that is inconsistent with the recognition of aboriginal title. As well, the claimholder's right to engage in Class 1 exploration programs may adversely affect claimed aboriginal rights. While Class 1 exploration programs are limited, they may still seriously impede or prevent the enjoyment of some aboriginal rights in more than a transient or trivial manner.

The crux of the litigation was whether the second element of the test (i.e., the contemplated Crown conduct) is engaged. The government argued that the recording of a mineral claim is not "contemplated Crown conduct" (where the government is actively making a decision) because the statute does not give the mining recorder any discretion in respect of the recording of the claim – if the quartz mining claim formally complies with the requirements of the statute, the mining recorder must record it. The Court of Appeal did not accept that the statutory regime in the Act was devoid of discretion given the ability of the government to prohibit quartz mining claims on particular lands (such as protected areas set aside). The government further said that because the granting of a mineral claim is automatic when the statutory requirements are met, there is no duty to consult. In support of its argument, the government pointed out that the Supreme Court of Canada has expressly left open the question of whether legislative action constitutes government conduct for the purposes of the test. In this regard, the Court of Appeal stated:

[37] The duty to consult exists to ensure that the Crown does not manage its resources in a manner that ignores Aboriginal claims. It is a mechanism by which the claims of First Nations can be reconciled with the Crown's right to manage resources.Statutory regimes that do not allow for consultation and fail to provide any other equally effective means to acknowledge and accommodate Aboriginal claims are defective and cannot be allowed to subsist.
...

[39] I acknowledge that in Rio Tinto the Supreme Court of Canada left open the question of whether "government conduct" includes legislative action. I read that reservation narrowly, however. It may be that the doctrine of parliamentary sovereignty precludes the imposition of a requirement that governments consult with First Nations before introducing legislation (...) Such a limitation on the duty to consult would, however, only apply to the introduction of the legislation itself, and could not justify the absence of consultation in the carrying out of a statutory regime. [our emphasis]

Is Giving Notice Sufficient?

In the end, the Court of Appeal stated that it is not necessary or appropriate, in this proceeding, to specify precisely how the Yukon regime can be brought into conformity with the requirements of Haida. Instead, the court stated that what is required is that consultations be meaningful, and that the system allow for accommodation to take place, where required, before claimed aboriginal title or rights are adversely affected. Specifically, the court added that at least where Class 1 exploration activities will have serious or long-lasting adverse effects on claimed aboriginal rights, the Crown must be in a position to engage in consultations with First Nations before the activities are allowed to take place and that affected First Nations must be provided with notice of the proposed activities and, where appropriate, an opportunity to consult beforehand.

In this vein, the court held that mere notice of a newly recorded quartz mineral claim cannot suffice as the sole mechanism of consultation and a more elaborate system must be incorporated into the statutory regime.

Conclusions

The Ross River Dena decision is noteworthy for two main reasons. First, this case prompts an examination of a particular legislative scheme, such as the Act, to ensure that it provides adequate consultation for First Nations in its design. This issue appears to be topical in other jurisdictions, especially as it relates to legislative schemes concerning mining. In fact, as recently as November 1, 2012, Ontario amended its Mining Act to ensure that affected First Nations are consulted prior to substantive exploration work based on litigation in Ontario similar to the Ross River Dena case. It remains to be seen whether the Yukon government will follow or expand on Ontario's example in a way that balances and protects the right of free entry for mineral tenures.

Second, the court illuminates a grey area in the current case law by distinguishing between the necessity of consultation in relation to the introduction of legislation as opposed to consultation in relation to the implementation of legislation. As such, the case seems to close the door to legal challenges like that of Frog Lake First Nation, wherein the applicant is asserting that a duty to consult is required in relation to the introduction of legislation.

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