Canada: Ontario Court Overturns Quarry Licence Due To Government Failure To Adequately Consult First Nations

The Ontario Divisional Court (Court) has set aside a quarry licence issued to a private company on the basis that the Ontario government failed to fulfil its constitutional obligation to consult with local First Nations impacted by the project.

The Court's July 14, 2017 decision in Saugeen First Nation v. Ontario (MNRF) provides valuable guidance as to the scope of the government's duty to consult and accommodate First Nations in projects that may impact their traditional territories and the risks companies face in choosing not to partake in this process.

DUTY TO CONSULT

In Haida Nation v. British Columbia (Minister of Forests) (Haida Nation) the Supreme Court of Canada (SCC) provided a framework for the government's duty to consult and accommodate the rights and claims of First Nations. The SCC held that this duty arises as part of the "process of honourable negotiation" required of the government under section 35(1) of the Constitution Act, 1982, which states that "[t]he existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed."

In general, the SCC held that governments must: determine whether a duty to consult arises; make a preliminary assessment of the scope of the duty to consult; consult with the First Nation; and during this consultation, assess whether a duty to accommodate arises.

Since Haida Nation, many cases at the SCC? and lower courts have refined and applied the requirements to consult and accommodate Aboriginal Peoples in connection with resource development.

THE PARTIES

T&P Hayes Investments Ltd. (Hayes) is a private company that owns lands in the municipality of Northern Saugeen/Bruce Peninsula. In 2008, Hayes applied to the Ministry of Natural Resources and Forestry (MNRF) for a licence for a limestone quarry (Project) on Saugeen/Bruce Peninsula. The MNRF issued a licence to Hayes on March 8, 2016 (Licence).

The Chippewas of Nawash Unceded First Nation and Saugeen First Nation are two First Nations bands that collectively make decisions through the Saugeen Ojibway Nation (SON) Joint Council. The bands established the SON Environment Office to engage with government and proponents about projects, decisions or conduct in the SON's traditional territory that could affect the SON's rights, culture, resources, lands and waters.

CONSULTATION PROCESS

In 2008, the MNRF added Hayes' project to a list (to which SON had access) of outstanding aggregate applications on SON's traditional territories, but did not give specific notice to the SON's Environmental Office, which was staffed with one individual.

Pursuant to its obligations under the Aggregate Resources Act, Hayes posted notices about the Project in a local paper and held a public information session about the Project in 2008. No objections were made about the Project at the time.

In 2011, the Court determined that the MNRF provided formal notice of the Project to the SON by responding to the SON's inquiry about a zoning notice. From 2011 to 2013, officials from the SON and the government engaged in a series of discussions, where the SON requested consultation and funding for a technical expert to conduct an assessment of the Project. The MNRF agreed to provide some funding but none was provided.

In 2013, the government affirmed it had a duty to consult with the SON, but delegated this responsibility to Hayes, under the supervision of MNRF. According to the Court, Hayes objected to this delegation and with limited exceptions, did not directly engage with the SON thereafter.

DIVISIONAL COURT DECISION

Based on the facts of the case, the Court held that the government was obliged to:

  1. Give notice to the SON, by giving formal notice of the Project to the SON Environment Office
  2. Give information to the SON about the Project
  3. Provide the SON with the promised funding
  4. Communicate with the SON about the SON's concerns regarding the Project after the SON had the benefit of its expert advice
  5. Follow a reasonable process thereafter to complete adequate consultations and, where appropriate, accommodation.

The Court added that steps one and two were not completed in a timely way, while steps three through five did not occur. Hayes' licence application was set aside, without prejudice to the MNRF's ability to re-issue the licence following proper consultation.

IMPLICATIONS

This decision provides important guidance to companies to ensure First Nations are given proper notice at the outset of an application for a project and are involved in the project consultations for the remainder of the application process.

In this case, while Hayes did fulfil its statutory obligations to provide the public with notice of the proposed quarry, the Court determined that specific notice was not immediately provided by MNRF to the SON. Proponents must ensure that the government has provided such notice to the band office that deals with project negotiations at the outset of a project to avoid risk of a similar finding. Proponents need to be aware that while the duty to consult is a government responsibility, the government's failure will result in the proponent's loss of time and cost and can threaten the overall project. As such, proponents should be proactive in assessing consultation responsibility and having a plan in place to ensure these responsibilities are fulfilled.

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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