Aboriginal Rights – Duty to Consult
In this decision, the Federal Court decided that the Minister of Environment and Climate Change Canada (the “Minister”) had a duty to consult with Ermineskin Cree Nation (“Ermineskin”) before designating the Vista Test Underground Mine and Vista Phase II thermal coal projects of Coalspur Mines (Operations) Ltd. under the federal Impact Assessment Act (“IAA”) (the “Designation Order”). The Court found that the Designation Order would adversely impact Aboriginal and Treaty rights (“Aboriginal Rights”), including economic opportunities from the Operations. The designation was quashed.
Ermineskin holds and exercises Aboriginal Rights throughout both the Treaty 6 territory and traditional territory that is approximately 25,000 acres in size (“Traditional Territory”). Ermineskin entered into an Impact Benefit Agreement (“2019 IBA”) with Coalspur Mines (Operations) Ltd. (“Coalspur”). Under the 2019 IBA, Coalspur agreed to provide valuable economic, community and social benefits to Ermineskin as compensation for potential impacts resulting from natural resource development on the ability of Ermineskin members to exercise Aboriginal Rights within their Traditional Territory.
Ermineskin’s concern was that the Designation Order would adversely impact Aboriginal Rights, including economic opportunities created by its contractual relationship with Coalspur under the 2019 IBA. Ermineskin submitted that the honour of the Crown imposes a duty to consult with Ermineskin on the Minister before making the Designation Order.
The Minister rejected this concern stating that loss of economic, social and community benefits is not an adverse impact related to an Aboriginal or Treaty right. The Minister argued that any connection is indirect, concerns a third party, speculative and contingent compensation for potential adverse impacts to the asserted rights.
2019 and 2020 Designation Processes
In December 2019, the Minister conducted a designation review process and determined that Phase II without the limited Underground Test Mine did not warrant designation under the IAA. Ermineskin and 30 other Indigenous groups and federal and provincial agencies were notified and requested to comment. The Minster’s decision was consistent with the recommendation of the Impact Assessment Agency (the “Agency”) and with concerns raised by Indigenous groups involved.
In July 2020, the Minister issued the Designation Order central to this decision. Ermineskin was not given notice of, nor was it consulted in any way during the process leading to the order designating the Vista Test Underground Mine and Vista Phase II.
The designation process in 2020 was initiated by letters from the Louis Bull Tribe First Nation and the Stoney Nakoda Nation. Several Letters supporting the reversal were submitted. Despite the information from the recent 2019 designation that indicated that Ermineskin was affected by the Designation Order, the Agency and the Minister did not consult Ermineskin or any other potentially impacted Indigenous groups. The consultation was limited to the two Indigenous groups that requested the Designation Order. Against the recommendation from the Agency, the Minister decided to designate the Vista Test Underground Mine and Vista Phase II.
Statutory Scheme for Designation
The IAA imposes federal decision-making and the possibility of a requirement for federal impact assessments on “designated projects”. Designation under the IAA applied to physical activities rather than projects. Physical activities do not come within the scope of the IAA unless they, on their own or in conjunction with other physical activities, meet the definition of a designated project set out in the IAA.
The IAA assesses a wide range of impacts. This includes effects on Indigenous peoples, such as Ermineskin, outlined in the Operational Guide: Designating a Project under the Impact Assessment Act. This Operational Guide declares that the Agency will consider, among other things, whether it requires further information from a requester, or federal departments, other jurisdictions, and “potentially affected Indigenous groups” to determine whether the physical activity has the potential to cause adverse effects on “the environment that could affect the Indigenous peoples of Canada” or “the health, social or economic conditions of the Indigenous peoples of Canada,” and the potential of the physical activity to cause “adverse impacts on the section 35 rights” of Indigenous peoples.
Analysis of Issues
In its consideration of the Designation Order, the Court applied the correctness standard. It determined, and the Minister agreed, that the Crown has a duty to consult with and, if appropriate, accommodate the interests of Indigenous communities where the conduct contemplated by the Crown may intrude on an Aboriginal right.
In the Court’s view, the critical issue, in this case, was whether the duty to consult was triggered by the 2020 designation requests and the process leading to the Designation Order. The Crown was found to have a duty to consult, as it knew its decision can affect a potential Aboriginal claim or right. The Crown had this knowledge because Treaty rights were involved in this case.
However, there was disagreement on whether there was the possibility that the Crown’s conduct could affect the Aboriginal claim or right, which would require that the claimant show a causal relationship. Ermineskin argued the Designation Order will “delay, lessen, or eliminate Ermineskin’s economic interest” in Phase II and the limited Underground Test Mine. The Minister rejected this submission, arguing that such loss of economic, social and community benefits is not an adverse impact related to an Aboriginal or Treaty right, and does not relate either to Aboriginal title to the land that may be developed, or to the ownership of the coal resource.
In agreeing with Ermineskin, the Court disagreed with the Minister’s submission that lost economic benefits do not give rise to any duty to consult. The Court noted that this approach to the duty to consult is too narrow. The Court specified that the duty to consult can be engaged when broader economic interests may be adversely impacted. This was determined to be the case in connection with the 2019 IBA, which creates economic interest related to and derivative from Aboriginal Rights.
Contrary to submission from the Minister, the Court found that potential adverse impacts were not speculative. It found that social, economic and community benefits secured under 2019 IBA were threatened with possible adverse effects by the Designation Order. It also found that losses had already been incurred because the Designation Order was made more than a year prior and had delayed the Phase II and the Test Mine.
Accordingly, the Court determined that the requirements triggering the duty to consult were fulfilled. Therefore, the Crown was required to consult with Ermineskin regarding the Designation Order and its potential adverse impacts on Ermineskin’s economic rights.