Canada: Saskatchewan Court Of Appeal: No Surface Activity Means No Duty To Consult First Nations

In its recent decision in Buffalo River Dene Nation v. Saskatchewan (Energy and Resources), the Court of Appeal for Saskatchewan held that the government was not required to consult the Buffalo River Dene Nation (BRDN) before granting exploration permits regarding minerals under land on which the First Nation claimed treaty rights.

BACKGROUND

The BRDN is the successor to the Clear Lake Band, signatory to Treaty 10 in 1906. Treaty 10 provides for the continued use by the members of BRDN of the lands covered under the treaty for traditional activities, such as hunting, trapping and fishing.

On September 27, 2012, the Ministry of Energy and Resources (Energy Ministry) posted oil sands exploration permits for sale by sealed bid. On the same day, the Energy Ministry provided a general public notice and notified in writing all First Nations in Saskatchewan, including BRDN, of the proposed disposition. Scott Land & Lease Ltd. (Scott) successfully bid on two exploration permits in respect of subsurface oil sands minerals, which were granted to Scott on December 3, 2012 (Permits). The Permits cover minerals located under Treaty 10 lands. Other than sending notice, the Energy Ministry did not consult with the BRDN prior to posting and issuing the Permits.

The BRDN applied for judicial review of the Energy Ministry's decision, alleging that the Crown had breached its duty to consult arising out of Treaty 10 and sought a declaration that the Minister of Energy and Resources had a constitutional duty to consult and, if appropriate, to accommodate BRDN in relation to potential adverse effects on its treaty rights prior to granting the Permits. The lower court held that the duty to consult had not been triggered, due to the fact that the issuing of the Permits did not have the potential to adversely affect the BRDN's treaty rights.

 COURT OF APPEAL DECISION

The Court of Appeal upheld the decision rendered by the Court of Queen's Bench from March 2014. Justice Neal Caldwell, writing for the Court of Appeal, commented as follows:

"In short, I would dismiss this appeal. Buffalo River DN's assertion that the Crown's duty to consult has been triggered here, chiefly because of the possibility of impact on the rights of its members under Treaty 10, amounts to no more than mere speculation at this juncture. While the threshold for proof of interference and a consequent triggering of the duty to consult is low, the law requires more than a merely speculative impact before the duty is triggered."

The court, referring to the Supreme Court of Canada's decisions in Haida Nation v. British Columbia (Minister of Forests) and Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, set out the now well-established three-prong test for triggering the duty to consult as follows:

  1. Crown knowledge: The Crown's knowledge, actual or constructive, of a potential claim or right which attaches to a resource or land;
  2. Contemplated Crown conduct: Crown conduct or a Crown decision that engages a potential aboriginal right and that may adversely impact the claim or right in question, which conduct includes strategic, higher-level decisions that may have an impact on aboriginal claims and rights, where a potential for adverse impact suffices; and
  3. Causal link: The potential that the contemplated conduct may adversely affect an aboriginal claim or right, namely, a possibility that the Crown conduct may affect the aboriginal claim or right where the claimant has established a causal relationship between the proposed government conduct or decision and a potential for adverse impacts on pending aboriginal claims or rights.

When the potential claim or right is set out in a treaty—as it is in this case—the Crown always has knowledge, so this first prong of the test was met. In addition, the Crown conceded that the second prong of the test had been satisfied in this case, as the first-stage decision to post and issue the Permits is considered conduct within the broad meaning of the second part of the test.  Note that with respect to whether or not one can classify the granting of the Permits as a "strategic, higher-level decision," the Court of Appeal agreed with the Court of Queen's Bench in finding that the granting of the Permits was a straightforward, administrative-level decision devoid of strategic thinking or planning.

The third part of the test was not met in this case. The first-stage decision to post and issue the Permits to Scott did not have the required potential to adversely affect an aboriginal claim or right. The causal relationship had not been established. Consequently, the Court of Appeal held that the low threshold for demonstrating an adverse impact had not been met in this case, as the sale of the Permits had "no obvious and immediate physical impact" on the BRDN's treaty rights.

In practical terms, the Permits only granted their holder with exclusive subsurface rights in a specified area, in this case providing Scott with "security of tenure," without granting any access rights or rights to extract oil sands or other minerals from the lands they cover. Furthermore, the granting of an exploration permit does not guarantee in any way that its holder will be granted further permits necessary to carry out exploration or development work. The Court of Appeal confirmed that once additional permits to enter the land and perform exploration work were granted, the duty to consult would be engaged.

 IMPLICATIONS

The BRDN case has brought some clarity to the issue of when the duty to consult is engaged; if there are no possible surface impacts that result from a Crown granting subsurface rights then there is no duty to consult.

This decision contrasts with the 2012 decision of the Court of Appeal for Yukon in Ross River Dena Council v. Government of Yukon (see our January 2013 Blakes Bulletin: Duty to Consult Fosters Change to Yukon Mineral Claims Regime), whereby the court held that Yukon's "open entry" registration system for quartz mineral claims was subject to the Crown's obligation to consult with First Nations. The difference between these two cases is that under the Saskatchewan exploration permit regime, a separate surface disposition permit must be obtained before any physical work can be conducted on the lands subject to an exploration permit.

The BRDN decision is therefore relevant in provinces that have a regime for resource extraction similar to that of Saskatchewan, such as Ontario or British Columbia. By contrast, Quebec and Alberta do not impose a two-step process for resource exploration and so some uncertainty still exists as to when the duty to consult is engaged under their respective resource exploration regimes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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