Canada: BC Hydro Site C Litigation Update – Two Challenges To Site C Heard In Federal Court

This post provides an update on recent developments in the litigation commenced in respect of BC Hydro's Site C Clean Energy Project (Site C). Please see our earlier post for an overview of each of the Federal Court and Provincial Court proceedings.

The Provincial Court judicial review proceedings were heard by Justice Sewell in the BC Supreme Court between April 20 and May 6, 2015. Since our last update: a) the Peace Valley Land Owner Association (PVLA) has filed an appeal of the BC Supreme Court's decision to dismiss its petition; and b) two petitions brought in Federal Court by the Mikisew Cree First Nations and Athabasca Chipewyan were discontinued by the two petitioners prior to being heard.

The other two challenges to Site C were heard in Federal Court the week of July 21, 2015, both by Justice Manson. The challenges took the form of two separate applications: one brought by the PVLA, which focused on administrative issues (PVLA Petition); and the other brought by the Doig River, Prophet River and West Moberly First Nations, which centered on both administrative and aboriginal law issues (First Nation Petition). In both applications the respondents were the Attorney General of Canada (AG Canada) and BC Hydro.

Below is an overview of the arguments advanced in the Federal Court hearings.

Background

Both Federal Court applications challenge the Governor in Council (Federal Cabinet)'s decision made on May 1, 2014 that the significant adverse environmental effects that will likely be caused by Site C, as identified by the Federal Minister of the Environment, are justified in the circumstances (Justification Decision). In accordance with the Canada Environmental Assessment Act, 2012 (CEAA 2012), the Cabinet issued the Justification Decision following the Minister's issuance of a decision statement outlining the significant adverse environmental effects of the project (Decision Statement). It is the Cabinet's Justification Decision (rather than the Minister's Decision Statement) that was challenged in both petitions.

PVLA Petition

One of the issues in this proceeding is whether the Federal Cabinet must provide written reasons when making a justification decision under CEAA 2012.

PVLA took issue with the Justification Decision on the basis that the Cabinet failed to address whether there is a present need for Site C (as opposed to a future need). PVLA argued that Cabinet was required to assess the issue of present need, and the fact that Cabinet's Order in Council does not refer to this issue suggests that Cabinet did not consider it. PVLA argued that courts should not consider the reasons that might have been provided by Cabinet—if the required analysis is not present in the Order, the decision should be set aside.

BC Hydro and AG Canada, in response, argued that Cabinet has no obligation to provide reasons for discretionary decisions made under CEAA 2012. They argued that Cabinet considered the evidence of the Joint Review Panel, the positions of various stakeholders, and the broader public interest, and then made a discretionary policy decision that should be owed a large degree of deference by the courts. They argued that, so long as the decision is tenable in substance, given the record and evidence available, it should not be disturbed.

The court has, in effect, been asked to consider the extent of the reasons (if any) that Cabinet must provide when making important policy decisions. The court's decision on this issue could have policy implications if Cabinet is required to provide a greater degree of transparency in relation to the issuance of Orders in Council.

First Nation Petition

The key issues in this proceeding relate to the substantive and procedural limits on the Crown's right to "take up" Treaty 8 lands. The First Nation applicants asked the court to determine whether Cabinet is required, before making its Justification Decision, to make a determination of whether all of the development projects it authorized would have the cumulative effect of eroding the First Nations' Treaty 8 rights to the point where no meaningful rights remain (i.e. infringement).

The First Nation applicants argued that before deciding whether the adverse environmental effects of Site C were justified, the Federal Cabinet had to determine whether the development of Site C would infringe the applicants' Treaty 8 rights. They argued that Treaty 8 places both procedural and substantive limits on the Crown's ability to "take up" land under Treaty 8.

Procedurally, the Crown has a well-established duty to consult with First Nations whenever there is a possibility that Aboriginal rights will be affected by a Crown action or decision. In this case, the applicants argued that the Crown did not engage in sufficiently deep consultation. Substantively, the applicants argued that Treaty lands must not be taken up by the Crown if the result will be that no meaningful Aboriginal rights will remain (as such taking up would amount to an infringement of Treaty rights). They asserted that the Crown failed to consider whether all of the development in the Peace Valley—including the proposed Site C dam—would have the cumulative effect of constituting infringement by eroding their Treaty rights to the point where no meaningful rights remain.

BC Hydro and AG Canada argued that Cabinet did not, and cannot be, required to determine whether Site C would infringe the applicant's Treaty 8 rights. They accepted that, procedurally, the Crown needed to engage in deep consultation with the applicants. They also accepted that Cabinet needed to consider Aboriginal rights in coming to its Justification Decision. However, they maintained that Cabinet is not required to make a substantive determination as to Treaty rights infringement, and that doing so would be beyond the scope of Cabinet's jurisdiction. (We also note that the taking up of Treaty 8 lands in the province falls within the provincial Crown's constitutional jurisdiction).

The respondents further argued that the decision-making process undertaken by Cabinet is wholly unsuited to adjudicating disputed rights and Treaty infringement claims. Instead, they argued that a legal action in the provincial Supreme Court with discovery and a full trial on the merits would be the appropriate means of adjudicating such a claim of Treaty infringement.

Also noteworthy was Amnesty International's appearance as an intervenor in this petition. The Amnesty International representative argued that principles of international law obligated Cabinet, in making its Justification Decision, to ensure that Aboriginal rights were respected. In particular, Amnesty International referred to the United Nations Declaration on the Rights of Indigenous Peoples, arguing that although the UN Declaration is non-binding in Canada, it does not necessarily conflict with Canadian domestic law and is persuasive in establishing that Cabinet must determine whether Site C would infringe treaty rights. (The counterpoint to this position is the argument that certain principles of the UN Declaration are overbroad on a plain language reading, and as such are at odds with Canada's constitutional framework for the protection of Aboriginal and treaty rights).

The First Nation Petition raises important considerations about the scope of Cabinet's obligations to consider impacts on Treaty First Nations when making a Justification Decision that could significantly affect their Treaty rights.

Conclusion

Judgment is reserved in both of the Federal Court petitions.

Meanwhile, the BC Ministry of Forests, Lands and Natural Resource Operations issued certain initial authorizations for Site C on July 7, 2015 under the Land Act, Forest Act, Water Act and Wildlife Act, authorizing commencement of construction activities such as timber removal, road building and other preparatory work. In late July, contractors selected to work on Site C began to mobilize for construction. BC Hydro issued a statement that it expected preliminary construction—for instance, building worker camps and roads—to begin in early August.

The West Moberly and Prophet River First Nations have since filed an injunction application seeking to halt construction pending determination of their claims.   It reamins to be seen how the application will be determined and what, if any, impact it may have on the construction schedule. We will continue to keep you updated.

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