Canada: Site C Survives Another Legal Challenge

On January 23 the Federal Court of Appeal dismissed an appeal by two First Nations relating to the federal government's approval of the Site C hydroelectric dam project under the Canadian Environmental Assessment Act, 2012 (CEAA 2012). The court clarified the Governor in Council's (GIC) decision-making authority under CEAA 2012, finding that section 52(4) does not give the GIC the power to determine whether likely "significant adverse environmental effects" constitute an infringement of treaty rights when determining whether such effects are "justified in the circumstances."

This decision reiterates the courts' commitment to the consultation and accommodation process for projects that have expected impacts on lands subject to claims of rights and title by First Nations, and the importance of conducting good faith consultation and accommodation to help insulate a project from future challenges.


The appellants, the Prophet River First Nation and the West Moberly First Nations, are Treaty 8 First Nations. Treaty 8 covers 840,000 square kilometres spanning three provinces and one territory. Under the treaty, all beneficiaries are granted hunting, trapping and fishing rights within the treaty territory, while the Crown is granted the right to "take up" lands when needed for settlement, mining, lumbering, trading or other purposes.

The Site C project will involve the construction of the third dam and hydroelectric generating station on the Peace River, located in the area covered by Treaty 8. Previous hydroelectric projects have already flooded 70% of the Peace River Valley, and the Site C project will flood roughly another 55 square kilometres, half of the remaining Peace River Valley land base.

The environmental assessment process

The Site C project was subject to an environmental assessment (EA) under CEAA 2012. Once a project is reviewed, CEAA 2012 requires the minister of the environment to consider the EA to determine whether a proposed project will likely have significant adverse environmental effects. If so, section 52(4) requires the GIC to then determine whether the project is nevertheless "justified in the circumstances."

Because the Site C project was also subject to BC's Environmental Assessment Act, a joint review panel (JRP) conducted the EA of the project, which took three years, under both the federal and provincial regimes.

Aboriginal consultation, described at the "deep end" of the spectrum for the project, was integrated in the EA from the outset. The proponent and the Crown consulted 29 aboriginal groups potentially affected by the project, including the appellants. At each stage of the EA, the JRP invited discussion and proposals from potentially affected First Nations. However, the JRP's mandate was only to receive information on how the project may adversely affect asserted or established aboriginal and treaty rights, and not to consider whether the project constituted an infringement of treaty rights.

The JRP found that the project would likely cause significant adverse effects in the Treaty 8 area, including on fishing opportunities and practices, hunting and non-tenured trapping, and other traditional uses of the land, many of which could not be mitigated. Based on the JRP's report, the minister determined that the Site C project was likely to cause significant adverse environmental effects and established conditions for the project relating to the use of lands and resources for traditional purposes. Due to the significance of the environmental effects, the minister referred the matter to the GIC for its approval.

The GIC determined that the effects associated with the project were justified in the circumstances and approved the project. The GIC noted the Crown's "reasonable and responsive consultation process" which "provided...opportunity for dialogue" and "opportunities for the Aboriginal groups to review and comment on conditions." The concerns and interest of First Nations were "reasonably balanced with other societal interests," the GIC added.

Judicial review and appeal

The appellants unsuccessfully brought an application for judicial review of the GIC's decision, alleging its decision was unreasonable because it failed to determine whether the significant adverse environmental effects from the project constituted an infringement on their treaty rights and, if so, whether that infringement was justified. Notably, the appellants did not challenge the adequacy of the consultations undertaken. In dismissing the judicial review, the Federal Court found that the GIC was not required to consider whether the anticipated environmental effects amounted to an infringement of the appellants' treaty rights.

The Federal Court of Appeal upheld the lower court's finding, confirming that CEAA 2012 does not confer to the GIC the power to determine infringement of treaty rights because the legislation did not expressly or implicitly grant the GIC the power to decide questions of law. In the court's view, the GIC decision-making role is discretionary, not adjudicative, and is focused on the balancing of interests based on fact and policy. That role is inconsistent with determining the complex issues of law and fact required in an infringement analysis.

The court similarly found that judicial review is not the proper forum to determine whether treaty rights have been unjustifiably infringed because the summary nature of judicial review precluded the development of the full evidentiary record needed to assess infringement claims.

In reaching its conclusion, the court emphasized that the appellants' approach would unfavourably lead to a reversion from the Supreme Court of Canada's current consultation and accommodation framework developed in the Haida Nation and Taku River cases, to the prior approach found in R. v Sparrow, which required aboriginals to first prove the existence of a particular right. The court was clearly uninterested in weakening the Crown's duty to consult and to expand the use of the expensive and inefficient process provided in R. v Sparrow.

The court, however, parenthetically noted that an action for treaty infringement remained available in the event the Crown's "taking up of land" under the treaty renders the treaty right "meaningless," leaving open the door to a claim that the cumulative effect of the Crown's takings up over time amount to a de facto extinguishment of treaty rights. The court also made clear that its decision was made in the absence of a direct challenge to the adequacy of the consultation process, by which the GIC's decision could have been invalidated, though the court nonetheless implied it was satisfied with the consultation undertaken.

The court's decision reiterates the need for the Crown and project proponents to engage in constitutionally appropriate, good faith consultation and accommodation with affected First Nations. Although the decision at issue in this case was insulated by the strict legal powers delegated to the GIC by legislation, the court reiterated the commitment to consultation to achieve reconciliation and made clear that the adequacy of consultation could nevertheless have affected the validity of the GIC's order.

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