Canada: Legal Challenges To Site C Dam By BC First Nations Dismissed By Federal Court Of Appeal And BC Court Of Appeal

Two separate court challenges of the federal and provincial environmental assessment approvals for the Site C hydropower project in British Columbia have recently been dismissed by the federal and BC appellate courts. The two appellate courts separately upheld earlier decisions of the BC Supreme Court and the Federal Court which had dismissed applications for judicial review by the Prophet River First Nation and the West Moberly First Nation (the First Nations) of the provincial and federal environmental assessment decisions approving Site C. The First Nations argued that the approvals infringed their treaty rights under Treaty 8 and that there was inadequate consultation and accommodation.

These decisions provide important clarification that project reviews and judicial reviews related thereto are not the appropriate fora to determine alleged infringements of treaty rights. The decisions also further underscore the reciprocal obligations of Aboriginal groups in both consultation and accommodation and, in the case of the BC Court of Appeal decision, affirm once again that Aboriginal groups do not have a veto over resource development.

Project Background

BC Hydro's Site C project will be a third dam and hydroelectric generating station on the Peace River in northeast BC. It is expected to provide 1,100 megawatts of capacity and produce about 5,100 gigawatt hours of electricity each year. Construction of the project started in summer 2015 and will be completed in 2024. The Site C project was the subject of a joint review panel hearing that combined federal and provincial environmental reviews. The Joint Review Panel determined in its report that the Aboriginal consultation undertaken for the project had been carried out in good faith and that the process had been reasonable and appropriate in the circumstances.

The project was subsequently approved by the federal Governor in Council (GIC) in October 2014, which acknowledged that the project would have an adverse effect on traditional First Nation activities but determined that it was justified pursuant to section 52(4) of the Canadian Environmental Assessment Act, 2012 (CEAA 2012). On the same day that the federal Order in Council was issued, the BC Minister of the Environment and Minister of Forests, Lands, and Natural Resource Operations issued an Environmental Assessment Certificate for the project, which included 77 conditions aimed at addressing the concerns of First Nations and other impacts of the project.

The Prophet River First Nation and West Moberly First Nations are signatories to Treaty 8, which covers parts of northeastern BC, northern Alberta, Saskatchewan, and the Northwest Territories. Treaty 8 provides for traditional hunting, fishing and trapping rights to its signatories; however it also includes the right of the Crown to "take up" lands when needed "for settlement, mining, lumbering, trading or other purposes". The First Nations have long opposed Site C, mainly because they believe, among other things, that the environmental and ecological impacts from creating the reservoir for the dam will infringe their treaty rights to practice various traditional activities like hunting and fishing and this will impair their way of life now and into the future.

The First Nations alleged both a breach of the duty to consult and an infringement of their treaty rights. Prior to discussing the decisions, it is important to underscore that "infringement" and "impact" are not synonymous terms. Infringement has a distinct legal meaning in Aboriginal law and not every action that impacts an Aboriginal or treaty right constitutes an infringement. The impact must result in a meaningful diminution of the right, which must take into account the characteristics and incidents of the right at issue.1 As stated by the Supreme Court of Canada in Grassy Narrows:

"Not every taking up will constitute an infringement of the harvesting rights set out in Treaty 3. This said, if the taking up leaves the Ojibway with no meaningful right to hunt, fish, or trap in relation to the territories over which they traditionally hunted, fished, and trapped, a potential action for treaty infringement will arise."2

Infringements can be constitutionally justified if the Crown can demonstrate that it is related to a valid legislative or government objective and that the actions are consistent with the Crown's fiduciary duty towards Aboriginal peoples.3

Federal Court of Appeal Decision

As noted above, the Federal Court of Appeal's (FCA) decision (2017 FCA 15) delivered on January 23, 2017 arose from an appeal of an earlier Federal Court decision denying the First Nations' application for judicial review of the GIC's decision (2015 FC 1030). At the Federal Court level, several issues were under consideration including: (i) whether the GIC has jurisdiction under section 52(4) of CEAA 2012 to decide whether the project would constitute an infringement of the First Nations' treaty rights, (ii) whether the First Nations had a legitimate expectation that the issue of infringement would be addressed by the GIC, (iii) whether the Crown's duty to consult and accommodate the First Nations was met, and (iv) the reasonableness of the GIC's decision. This judicial review was heard along with the one brought by the Peace Valley Landowner Association, which challenged the GIC's decision on the basis that any decision would need to be based on an unambiguous need for power, and that the Order in Council failed to address the economic value of the project as required.

The Federal Court dismissed both applications for judicial review, focusing in both cases on the level of deference owed to the GIC. In particular, the Federal Court emphasized that the GIC makes decisions based on polycentric considerations and a balancing of individual and public interests (including Aboriginal interests and concerns), meaning the GIC's decisions are afforded considerable deference and the GIC is entitled to privilege. Also, the Federal Court found held that the Crown did not need to make a determination on the First Nations' infringement claim and went on to suggest that if the First Nations wanted a determination on whether their treaty rights were infringed, they should pursue an action on the merits of the infringement question, on a full evidentiary record.

In a unanimous decision, the FCA upheld the Federal Court's decision and found that the Federal Court did not err in concluding that the GIC is not empowered to adjudicate rights and determine whether there is an unjustified infringement of the appellants' treaty rights. The FCA held that the GIC makes decisions based on polycentric considerations and a balancing of individual and public interests. The FCA found that the fact that the GIC is not equipped to determine contested questions of law and fact and does not possess any expertise demonstrates that it cannot exercise adjudicative functions, including the determination of whether an infringement of a s. 35 right meets the justification test.

Notably, the First Nations did not appeal the Federal Court's determination that the Crown had not breached its duty to consult and accommodate. That said, the Federal Court of Appeal did discuss the underlying consultation and accommodation that took place and found that the First Nations had not fulfilled their reciprocal obligations in consultation because they had not provided adequate information to the Joint Review Panel to support their allegations. The Court held that it was insufficient, among other things, for the First Nations to assert treaty rights in the impacted area without sufficient information about their specific traditional and current land use of the impacted area.

BC Court of Appeal Decision

Unlike the FCA appeal, the First Nations appealed both the infringement and duty to consult determinations of the BC Supreme Court (2015 BCSC 1682). In a decision released by the BCCA (2017 BCCA 58), Justice Lowry acknowledged that the BCCA was in the unusual, if not awkward, position of having to consider the discharge of the Crown's duty to consult and accommodate in the face of a final order of another Canadian court establishing there was no breach of that duty (with the order having been made when that court was considering the same issue on essentially the same evidence).

On the infringement issue, the BCCA held the Ministers were not required to determine whether the project constituted an unjustifiable treaty infringement before issuing the certificate. In particular, the BCCA concurred with the BCSC judge that such a requirement was not within the Ministers' statutory mandate and as such, they did not have the means to make a proper determination.

On the consultation issue, the BCCA upheld the BCSC's finding that the process of consultation in which the First Nations were engaged was adequate and that the Ministers were not required to make a determination on the adequacy of consultation and accommodation before exercising their statutory discretion. In this case, the appellants acknowledged that there had been significant consultation but argued that it was inadequate primarily because alternatives to the project, such as deriving electrical power from other sources like wind, natural gas, geothermal resources, and smaller hydroelectric projects at other sites, were not considered.

Justice Lowry found that there were in fact discussions between BC Hydro and the First Nations about alternatives and that BC Hydro had determined that the project was the preferred option. He noted that the appellants position of suggesting only one form of accommodation (not proceeding with the project) was tantamount to asserting a veto, which is inconsistent with Canadian law:

"....The duty to consult and accommodate does not afford First Nations a 'veto' over the proposed activity: Mikisew at para. 66. Here, the appellants have not been open to any accommodation short of selecting an alternative to the project; such a position amounts to seeking a 'veto'. They rightly contend that a meaningful process of consultation requires working collaboratively to find a compromise that balances the conflicting interests at issue, in a manner that minimally impairs the exercise of treaty rights. But that becomes unworkable when, as here, the only compromise acceptable to them as to abandon the entire project."4

Justice Lowry went on to hold that the fact that the First Nations' position was not accepted does not mean the process of consultation in which they were fully engaged was inadequate, and that although the First Nations maintained that the record is one only of quantity, it was apparent to the court that it is one of quality as well.

The First Nations have not yet announced whether they will be seeking leave to appeal the FCA or BCCA decisions.

Footnotes

[1] See R. v. Sparrow, [1990] 1 S.C.R. 1075 (S.C.C.); Tsilhqot'in Nation v. British Columbia, [2014] 2 S.C.R. 257 (S.C.C.) at para. 122; Grassy Narrows First Nation v. Ontario, [2014] 2 S.C.R. 477 (S.C.C.) at para. 52.

[2] Grassy Narrows at para. 52.

[3] R. v. Sparrow, [1990] 1 S.C.R. 1075 (S.C.C.) and R. v. Gladstone, [1996] 2 S.C.R. 723 (S.C.C.) at paras. 54-56.

[4] Prophet River First Nation v. British Columbia, [2017] B.C.J. No. 182 (C.A.) at para. 65.

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