Canada: BC Hydro Site C Litigation Update – Appeals Pending

This post provides an update on the latest developments in the litigation proceedings involving BC Hydro's Site C Clean Energy Project (Site C). Please see our earlier posts on July 21, August 14, and September 2 for additional background on the proceedings.

At the outset, we note that on November 25, 2015, BC Hydro and the BC Government announced the awarding of a $1.5 billion construction contract for Site C to Peace River Hydro Partners (which includes Petrowest Construction, ACCIONA Infrastructure Canada Inc. and Samsung C&T Canada Ltd.). There will be an emphasis on hiring local workers, including First Nations. However, as construction crews continue to carry out site preparation activities, litigation proceedings involving Site C continue to work their way through the courts.

It is also worth noting that the Treaty 8 First Nations involved in the litigation as well as various environmental groups have recently asked the new federal government to reconsider Canada's position on Site C as part of an overall climate strategy, and Canada's position on the Site C appeals. To date, the new federal government has not taken a public position in respect of Site C, but the First Nations have indicated that they would view such steps as part of the federal government's stated commitments to rebuild relationships and increase cooperation with Aboriginal communities.

BC Supreme Court Dismisses Petition of West Moberly and Prophet River First Nations

On September 18, 2015, the BC Supreme Court dismissed the petition brought by the Prophet River and West Moberly First Nations seeking an order quashing the Environmental Assessment Certificate (Certificate) issued by the Minister of the Environment and the Minister of Forests, Lands and Natural Resource Operations.

The First Nations had argued that the Ministers were required to decide whether Site C infringed their constitutional Treaty 8 rights; that they did not receive adequate consultation from the government; that the Ministers were not sufficiently thorough in considering alternative projects; and that the Ministers entered the process with their minds closed to alternative projects.

On the Treaty 8 infringement question, the Court held that the Ministers were not required to consider the question of infringement in reaching their decision to issue the Certificate. The Court noted that the Ministers' decision was a political and policy decision, rather than a rights-based decision, and further, the issuance of the Certificate is not a licence to proceed with a project, but only one step in the overall approval process. The Court further held that the issue of determining whether infringement had occurred was suitable for determination through an action commenced by notice of civil claim and conducted in accordance with the Supreme Court Civil Rules, rather than by the Ministers in the environmental assessment process, or in a judicial review proceeding such as the one before the court. A trial is the appropriate forum for resolving the factual complexity of the issues and conflicting evidence.

In respect of the adequacy of consultation, the Court concluded that based on the record of consultation, the government had made reasonable and good faith efforts to consult and accommodate the First Nations with respect to Site C and that the First Nations were provided a meaningful opportunity to participate in the environmental assessment process. Ultimately, the parties could not reconcile their differences in respect of Site C, considering that the First Nations took the position that the project should not proceed at all, whereas the government concluded it was in the best interests of the province. The Court noted that the process of consultation does not require acceptance of the First Nation's position, but rather that there has been a respectful consideration of affected First Nations' positions.

On the administrative issues, the Court found that the First Nations failed to establish that the Ministers had no reasonable basis for reaching their conclusions. The Court also found that there was no evidence of bias by the Ministers in issuing the Certificate or that they had closed their minds to alternatives before issuing the Certificate.

The First Nations filed a notice of appeal of this decision in the BC Court of Appeal on October 19, 2015.

Additional Petition Filed by Treaty 8 First Nations

As mentioned in our last update, the Prophet River and West Moberly First Nations filed a further petition in the BC Supreme Court on August 4, 2015 against the Minister of Forests, Lands and Natural Resource Operations; the Regional Manager & Regional Water Manager, Northeast Region; and the Chief Inspector of Mines (collectively, the Crown Respondents) and BC Hydro.

The new petition alleges a breach by the Crown Respondents of their duty to consult and accommodate at common law, as well as a breach of their duties under a custom consultation process negotiation agreement. The Crown Respondents and BC Hydro have filed responses, but the petition has not yet been heard by the Court.

Other Pending Appeals

The Peace Valley Landowner Association (PVLA) is appealing the dismissal of its petition on July 30, 2015 by the BC Supreme Court. The PVLA filed a notice of appeal on July 30, 2015 and an appeal record on September 24, 2015. The central issue in the litigation was whether the BC Minister of Environment and Minister of Forests, Lands and Natural Resource Operations (Ministers) gave adequate consideration to the recommendations of the Joint Review Panel, and in particular the recommendations to address various economic considerations relating to the costs, benefits, need for and alternatives to Site C.

Conversely, the PVLA has apparently not initiated an appeal of the Federal Court's dismissal of its notice of application on August 28, 2015. In that case, PVLA asked the Court to consider the extent of the reasons (if any) that the Federal Cabinet must provide when making a justification decision under the Canadian Environmental Assessment Act, 2012. PVLA took issue with the Federal Cabinet's justification decision on the basis that it failed to address whether there is a present need for Site C (as opposed to a future need).

However, on October 15, 2015, the Doig River, Prophet River, and West Moberly First Nations and the McLeod Lake Indian Band filed a notice of appeal in the Federal Court of Appeal appealing the Federal Court's dismissal of their application on August 28, 2015, which was heard contemporaneously with the PVLA's notice of application. The First Nations sought an order setting aside the Governor in Council's justification decision, raising the question of Cabinet's obligation to consider the impacts on Treaty 8 First Nations when making a justification decision that could significantly affect their Treaty rights.

Update on Blueberry River First Nations Treaty 8 Infringement Claim

In connection with its Treaty 8 infringement claim against the Province of British Columbia, discussed in our previous blog post, BRFN sought an interlocutory injunction that would prevent the BC Government from proceeding with an auction of 15 Timber Sale Licences that would permit logging within BRFN's traditional territory. In a decision on July 27, 2015, the BC Supreme Court dismissed the application for injunctive relief, finding that the balance of convenience did not support the granting of the injunction. BRFN filed a notice of leave to appeal on August 25, 2015, which was granted by the BC Court of Appeal in November 2015. The full appeal has not yet been heard.

The underlying treaty rights infringement claim has not yet been heard in the BC Supreme Court. The claim is significant because it is one of the first treaty rights infringement claims to be argued primarily on the basis of cumulative impacts on a First Nation's entire traditional territory. BRFN's traditional territory overlaps with Site C and is also located in an area important for natural gas extraction.

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